Selected issues on international marketing programme

Focused on Product and Services The opportunities for international marketers of consumer goods and services today have never been greater New consumers are springing up in many emerging markets, which promise to be huge markets in the future In the more mature markets consumers´ tastes become more sophisticated and complex due to increase in purchasing power The difference between tangible products and services The difference between business-to-consurmer and business-to- business markets

Product policy: Analyzing Product Components A product is multidimensional, and the sum of all its features determines the bundle of satisfaction (utilities) received by the customer The many dimensions of products can be divided into three distinct components: –Core components –Packaging components –Support services components These components include all a product´s tanglible and intangible elements and provide the bundle of utilities the market receives from use of the product.

Which products for international markets? The same as for home market Adapted products Standardized products New products Define the reasons for each option!

Four degrees of adaptation: combinations: product and promotion Non- customization Adapting the message Adapting the portfolio Custom product design Fully leverage global product and marketing Customize Marketing message and language Customize mix of product and services based on local needs Create market specific products and services

Branding for international markets Branding dimensions: –Global brands –Regional brands –Local brands –Producer´s brand –Private brands –Brand partnership –Brand portfolio

International product life cycle

The international product life cycle Macroeconomic approach: –Typically, demand first grows in the innovating country. Production, consequently, takes place first in the innovating country. As the product matures and technology is diffused production occurs in other industrialised countries and then is less developed countries. Microeconomic approach: –Due to different economic levels in different countries, a specific product can be in different PLC stages in different countries.

Pricing methods Cost-plus. Strategic pricing: penetration pricing, skimming. Demand-based pricing. Psychological pricing.

Influences on international pricing Desired brand position Government price controls Responsiveness of sales to price changes Local credit periods Stability of exchange rates Consumer response to promotional activities Local inflation rates Distributors’ markups Rate of market growth Nature of local competition Selling points of the product Supply costs Consumer characteristics Overall corporate strategy Price

Factors affecting the price setting External factors??? Internal factors???

A.Reasons for lowering prices in foreign markets Lower consumer incomes. Intense local competition. R&D costs have already been covered. Weak demand for the product. B.Reasons for increasing prices in foreign markets ????

Price escalation Price escalation affects all firms involved in cross-border transportation. Due to additional shipping or other kinds of transportation, insurance, tarrifs and distribution charges, the exported product costs more in the export market than at home.

Distribution decision Channel decisions – external factors –Customer characteristics –Nature of product –Nature of demand (location) –Competition –Legal regulations/local business practice Channel decisions – internal factors –Decisions concerning structure of the channel –Managing and controlling distribution channels –Managing logistics

Objectives of international advertising Increasing sales. Attracting new customers. Altering customer behaviour. Communicating brand values.

The case for standardization Consumer characteristics are becoming homogeneous across borders. Urbanization is increasing. Internationalization of media has led to converging lifestyle choices.

The case for customization Cultural differences between markets. Language differences. Differences in educational backgrounds. Non-availability of some media. Different attitudes towards advertising. Legal requirements in different markets.

Advantages of using a local agency Gives the foreign firm a local image. Closer links between agency and media. More commitment to the market. Local flair and creativity.

International media planning problems Differing definitions of terms such as circulation and readership. Differing segmentation of media. Large number of possible media to screen. Absence of reliable information on ‘pass- alongs’ of magazines.

Objectives of international advertising Increasing sales. Attracting new customers. Altering customer behaviour. Communicating brand values.

The case for standardization Consumer characteristics are becoming homogeneous across borders. Urbanization is increasing. Internationalization of media has led to converging lifestyle choices.

The case for customization Cultural differences between markets. Language differences. Differences in educational backgrounds. Non-availability of some media. Different attitudes towards advertising. Legal requirements in different markets.

Advantages of using a local agency Gives the foreign firm a local image. Closer links between agency and media. More commitment to the market. Local flair and creativity.

International media planning problems Differing definitions of terms such as circulation and readership. Differing segmentation of media. Large number of possible media to screen. Absence of reliable information on ‘pass- alongs’ of magazines.

Objectives of international PR Establish a brand image. Create awareness of the enterprise. Overcome prejudice. Increase number of enquiries. Improve sales closing rate. Reduce selling costs. Raise corporate profile. Damage control in crises.

Factors contributing to the growth of Public Relation Ability to contact opinion leaders. Large-scale privatizations. Escalating costs of advertising. General increase in promotion. Rising interest in corporate image. Wider share ownership. High cost of bad publicity.

Tools of PR Sponsorship. Press releases. Publicity stunts. Brochures and reports. Media events.

Drivers for growth in direct marketing New technology. Escalating costs of mass media. Availability of good-quality lists. Developments in IT. Improved mail infrastructure. Improved telecomms infrastructure.

Considerations in transport Cost vs. speed. Nature of the product (weight, perishability, dimensions). Customer preferences. Value of the goods. Intermediate handling and storage charges. Working capital tied up in goods in transit.

Documenting a consignment Electronic data interchange. Pre-shipment inspection. Contract of sale. Cargo insurance. Customs declarations. Credit insurance.

Elements in the export plan Reasons for exporting. Markets to be entered. Competitive situation in the target markets. Products to be offered. Research methods. Promotional methods. Export formalities. Organization. Human resource requirements. Transport and distribution. Objectives and budgets. Contingency plans.

Finance tools in foreign trade Bills of exchange. Documentary collections. Acceptance credits. Documentary letters of credit. Performance guarantees. Back-to-back letters of credit. Standby credit.