International Business Environments & Operations Daniels ● Radebaugh ● Sullivan International Business Environments and Operations 15e by Daniels, Radebaugh, and Sullivan Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. Chapter 17 Marketing Globally Chapter 17: Marketing Globally Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. Learning Objectives Understand the difference between domestic and international marketing Comprehend the strategies and policies related to the four P’s in international marketing. Explain how they vary internationally. Product policy considerations Pricing considerations Promotion considerations Distribution considerations The Learning Objectives for this chapter are To understand a variety of international product policies and their appropriate circumstances To discuss the pros and cons of product alterations when deciding between standardized and differentiated marketing programs among countries To appreciate the pricing complexities when selling in foreign markets To recognize differences that may necessitate alterations in promotional practices Copyright © 2015 Pearson Education, Inc.

Copyright © 2015 Pearson Education, Inc. Introduction International marketing defined: the performance of a wide range of business activities directed at satisfying needs and wants through the exchange process, internationally Distinction between Domestic and International Marketing Marketing principles in foreign markets are similar to those in domestic markets. However, some or all elements may need to be adapted to better fit local markets Global market segmentation International marketing is like domestic marketing in that a firm needs a desirable product or service, must tell people about it, price it at an acceptable level, and offer it in the right location. However, because international marketing managers operate in an unfamiliar environment each of these activities becomes more complex. Copyright © 2015 Pearson Education, Inc.

The Marketing Environment Economic Social Demographic Marketing Mix Product Price Promotion Place Marketer Target Market Political Cultural Feedback Technological Legal

Global Market Segmentation Dividing and subdividing markets into homogenous subsets. Segmentation helps in identifying target/niche markets Firms can segment and target markets By country By global segment Using multiple criteria Companies have to segment markets and identify specific segments to target. Three basic ways to do this is are by country, by global segment, and using multiple criteria. Copyright © 2015 Pearson Education, Inc.

Standardization-Adaptation Debate Standardization Adaptation Debate and Continuum Standardization______________Adaptation Product 5______4______3______2______1 Price 5______4______3______2______1 Promotion 5______4______3______2______1 Distribution 5______4______3______2______1 Planning 5______4______3______2______1 Factors favoring Standardization or Adaptation

Product Policy Considerations Legal Considerations Cultural Considerations Economic Considerations Product Line/Mix-width and depth of product lines Product Life Cycle Considerations

Pricing Considerations Domestic vs. international pricing Governmental Intervention - Price controls - Legal and Tax consideration Diversity of Markets: skimming vs. penetration Price Escalation Currency Value and Inflation Gray market Fixed vs. Variable Pricing

Pricing Strategies Why Cost-Plus Pricing Pushes Up Prices This Figure shows why cost-plus pricing pushes up prices. Keep in mind that export price escalation can make it difficult to compete in foreign markets. Copyright © 2015 Pearson Education, Inc.

Pricing Strategies Negotiating Import-Export Prices This Table shows ways that exporters can negotiate prices more effectively. Copyright © 2015 Pearson Education, Inc.

Promotion Considerations International Promotion Mix: personal selling, advertising, sales promotion activities and publicity/public relations Push vs. Pull Mix Advantages of a worldwide brand global image Identification-safety, security, trust, expectations Problems with global brands language brand acquisition country-of-origin generic and near-generic names

Distribution Considerations Factor affecting the designing of channel-distributor and channel Distribution intensity: intensive, selective and exclusive distribution Factors that can contribute to distribution cost differences among countries include Infrastructure conditions The number of levels in the distribution system Retail inefficiencies Size and operating hour restrictions Inventory stock-outs Hidden costs in foreign distribution

Internet and Global Commerce Opportunities created by Internet E-commerce offers firms a unique opportunity to market their products worldwide. The Internet permits suppliers to deal more quickly with their customers. Challenges Customers worldwide can quickly compare prices from different distributors, thus intensifying price competition. Differentiation is difficult because the same web ads and prices reach customers everywhere. Internet ads and prices must comply with the laws of each country where a firm markets its products.

Discussion Questions Define international marketing and explain how it differs from domestic marketing. Explain the standardization adaptation debate in international marketing Explain Product Considerations in international marketing. I may ask you to explain any of the four P’s in marketing. How does Internet affect marketing? Explain.

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