1. Global Marketing and R&D Chapter 17
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2. Procter & Gamble in Japan
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3. Globalization and Markets
“Globalization seems to be the exception rather than the rule in many consumer goods markets and industrial markets; and,
Procter and Gamble …still customizes the final product offering and market strategy to the conditions that pertain in individual national markets.” - Charles W. Hill -
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4. Market Segmentation
Identifying distinct groups of consumers whose purchasing behavior differs from others in important ways.
Segmented markets:
Sex, age, income, race, education.
Social-cultural factors.
Psychological factors.
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5. Product Attributes Cultural differences. Economic differences.
Product and technical standards.
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6. Cultural Differences Most important - the impact of tradition.
Impact is greatest in foodstuffs and beverages.
Scent preferences differ from country to country.
Some tastes and preferences becoming cosmopolitan:
Coffee (Japan).
American-style frozen dinners (Europe).
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7. Campbell’s International
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8. Economic Differences
Consumer behavior is influenced by economic development.
Consumers in highly developed countries tend to have extra performance attributes in their products.
Consumers in less developed countries tend not to demand these extra performance attributes.
Cars: no air-conditioning, power steering, power windows, radios and cassette players.
Product reliability is more important.
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9. Product and Technical Standards
Government standards can prevent the introduction of global products.
Different technical standards impede global markets, as well.
Come from idiosyncratic decisions made long ago.
Different television signal frequencies.
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10. Distribution Strategy
Three different distribution systems:
Retail consideration.
Channel length.
Channel exclusivity.
Choice of channel:
Cost/benefit of each alternative vary from country to country.
Concentrated
Fragmented
Short
Long Channel
No Outsiders
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11. A Typical Distribution System
Manufacturer Inside the Country
Manufacturer Outside the Country
Import Agent
Wholesale Distributor
Retail Distributor
Final Customer
Figure 17.1
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13. Communications Strategy
Effectiveness of international communications can be impacted by:
Cultural barriers.
Need to develop cross-cultural literacy.
Source effects.
Emphasize/De-emphasize foreign origin.
Noise levels.
Developed countries - high.
Less developed countries - low.
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14. Foreign vs Domestic Products
Depends on perception.
Hide
Emphasize
Premium pricing
French wines
Country Influence on Purchase
Age Percentage Influenced
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15. Push versus Pull Push Pull
For industrial products and/or complex new products.
Short distribution channels.
Few print/electronic media available
For consumer goods.
Long distribution channels.
Sufficient print/electronic media to carry message
Push
Pull
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16. Global Advertising Standardized: Non-standardized:
Significant economic advantages.
Scarce creative talent.
Many global brand names.
Non-standardized:
Messages in one country may fail in another.
Advertising regulations can be a restriction.
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18. Marketing Laws Premiums: Product comparisons:
No in Austria and France and Germany. Yes in Finland.
Product comparisons:
Germany - competitor can take you to court to prove claims made about product.
Canada - no ‘puffery’, use the credulous person standard.
United States - ‘puffery’ is ok.
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19. Pricing Strategy Price discrimination:
Must keep national markets separate.
Different price elasticities
Arbitrage:Charging different prices in different countries for same product.
Doesn’t always work.
Ford in Germany and Belgium
Sometimes it does.
Ford in UK and Belgium
Using Arbitrage
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20. Determinants of Demand Elasticity
Income level and competitive conditions determine elasticity.
Elasticity tends to be be greater in countries with low income levels.
Elasticity tends to be greater in countries where there are many competitors.
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21. Elastic and Inelastic Demand Curves$
Elastic Demand Curve
Figure 17.2
Output
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22. Price Discrimination Japan United States World 17-21 Figure 17.3
Revenue and Costs
Revenue and Costs
Revenue and Costs
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Figure 17.3

23. Strategic Pricing Predatory pricing: Multipoint pricing strategy:
Using price as a competitive weapon.
Multipoint pricing strategy:
When two or more international firms compete against each other in two or more national markets.
A firm’s pricing strategy in one market may impact a rival in another market.
Experience curve pricing:
Firms price low worldwide to build market share. Incurred losses are made up as company moves down experience curve.
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24. Regulatory Influences on Prices
Antidumping regulations:
Selling a product for a price that is less than the cost of producing it.
Antidumping rules place a floor under export prices and limit a firm’s ability to pursue strategic pricing.
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25. Dumping: GATT and the U.S.
GATT:Sale of an imported product at ‘less than fair value’ and causes ‘material injury to a domestic industry’.
US: An unfair trade practice that results in injury, destruction, or the prevention of the establishment of an American industry.
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26. Configuring the Marketing Mix
Standards
Differences Here
Competition
Distribution
Economy
Culture
Gov’t Regs
Product Attributes
Pricing Strategy
Requires Variation Here
Communications Strategy
Distribution Strategy
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27. The Location of R&D New product development is greater where:
More money spent on R&D.
Underlying demand is strong.
Consumers are affluent.
Competition is intense.
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28. The Need to Integrate R&D, Marketing and Production
High failure rate ratio between new products development and profit goals.
Reasons for failure:
Limited product demand.
Failure to adequately commercialize product.
Inability to manufacture product cost-effectively.
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29. Cross-Functional Integration
Integrating R&D, production and marketing ensures:
Project development is driven by customer need.
New products are designed for ease of manufacture.
Development costs are kept in check.
Time to market is minimized.
Use cross-functional development teams.
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