Chapter Sixteen Copyright, John Wiley and Sons, Inc. Chapter Sixteen Learning Concepts – Chapter Understand how to determine market potential of a foreign country. 2. Understand there are adaptations that are necessary for a product to sell in another country. …/… Global Marketing and Supply Chain. Global Marketing and Supply Chain.

Chapter Sixteen Copyright, John Wiley and Sons, Inc. three Learning Concepts – Chapter 16 (cont) 3. Understand there can be domestic manufacturing influence, translating to product demand. 4. Understand that channel decisions are very important in international marketing. Global Marketing and Supply Chain. Global Marketing and Supply Chain. Chapter Sixteen

Copyright, John Wiley and Sons, Inc. Marketing Domino’s Internationally Domino’s opened its first foreign store (Winnipeg) in Japan was in 1984; United Kingdom was in 1985, Mexico was in It hit Taiwan in 1987, and Hong Kong in Per store sales volume in Asia is more than twice the United States. Their secret: product adaptation (corn and squid on pizza??), pricing determination, national promotion and advertising, and customized transportation (the scooter in Asia).

Chapter Sixteen Copyright, John Wiley and Sons, Inc. The International Marketing Challenge International markets offer vast opportunities for firms with a product or service in high demand. Newness, cultural adaptation, attractiveness, and appropriate marketing strategies can help tremendously.

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Assessing Market Potential To assess market potential, firms seek to identify the aggregate demand for a product and estimate the costs associated with product introduction and distribution. Population growth provides a coarse estimate of future market potential. So do consumption patterns.

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Globalization and Localization in International Markets Striking a balance between globalization and localization is a key challenge. Generally, the more closely defines the market segment, the less important are national stereotypes (Germans and ecology, Italians on performance). Across national markets, there is a trend toward greater similarity on product specifications, price, and packaging. On the other hand, cultural and national differences exist and require flexibility in communication with customers.

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Globalization Forces Global Brands (Kellogg’s, McDonalds, Budweiser, Coke) are products that enjoy worldwide recognition and are relatively unaltered in terms of brand and appearance when sold abroad.

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Localization Forces Localization forces represent pressures towards adjustment in product marketing or distribution to make it more appealing or to meet requirements particular to a foreign market.

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Product Adaptation Faced with a foreign market with different characteristics, a firm may choose not to offer a product or a service in that market, to offer the same product it offers in other markets, or to adapt it to regional or country requirements. The Benefit/Cost approach and the User/Needs approach help determine whether adaptation is necessary. …/…

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Product Adaptation McDonald’s Product Adjustments: The Veggie Mac (Switzerland), Chicken Rice (Singapore), no pork (Saudi), McMacos and McFiesta (Paraguay), McKroket (Netherlands), Teriyaki McBurger (Japan), Curry Pie (Hong Kong), McRoyal (Germany), McCafe (Argentina), McCafe (Australia), McPalta (Chile). Hey, you deserve a break today!!

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Country-of-Origin Effect This is the influence of the country of manufacturing image on the buying decision. The effect consists of innovativeness; design; and workmanship. There is strong evidence that country of origin influences buyer’s decisions.

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Branding is the process of creating and supporting positive perceptions associated with a product or service. Branding is especially complex in the international market. Some issues:  Selecting the right name  Understand the local market  Fine tune the size, price, value construct  Quality/reliability at competitive price  Holistic marketing using multiple channels …/…

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Branding  Turning trademarks into “trustmarks”  Establishing leadership brands, and changing social habits  Selecting allies and partners

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Channel Decisions  Export Intermediary choice is very important  Direct Marketing is a potential channel  Niche marketing is also very viable

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Promotion It is important to choose the right mix marketing communications like advertising and direct marketing.

Chapter Sixteen Copyright, John Wiley and Sons, Inc. Marketing Alliances Marketing Alliances are frequently very important because they serve as partners in the marketing communications effort.