1. Chapter 14 Developing and Marketing Products

2. © Prentice Hall, 2008International Business 4e Chapter 14 - 2 Chapter Preview Explain the key considerations in choosing international product strategies Identify the five international communication strategies Describe each element that impacts international distribution strategies Identify various international pricing strategies and the factors that influence selection

3. © Prentice Hall, 2008International Business 4e Chapter 14 - 3 Globalization and Marketing Standardized product and promotion Adapted product and/or marketing Consistent image and message Contain costs Consistent image and message Contain costs Respond well to local needs Obey local laws Respond well to local needs Obey local laws

4. © Prentice Hall, 2008International Business 4e Chapter 14 - 4CulturaldifferencesCulturaldifferences Laws and regulations regulationsNationalimageNationalimageCounterfeitgoodsCounterfeitgoods National Business Environments

5. © Prentice Hall, 2008International Business 4e Chapter 14 - 5 Brand and Product Names Brand name  Competitive advantage  Consistent image  Consider connotation Product name  Select carefully  Respect cultures  Obey local laws

6. © Prentice Hall, 2008International Business 4e Chapter 14 - 6 Product Life Cycles New-product development efforts  Result is shorter product life cycles Consecutive market introductions  Technology and travel make obsolete

7. © Prentice Hall, 2008International Business 4e Chapter 14 - 7 Push and Pull Strategies Push StrategyPull Strategy Pressure channel members to carry a product and promote it to final users Create buyer demand that will encourage channel members to stock a product

8. © Prentice Hall, 2008International Business 4e Chapter 14 - 8 Choosing Push or Pull Powerful channel members make push difficult Fewer media outlets in emerging markets makes pull difficult Brand loyalty makes pull easier

9. © Prentice Hall, 2008International Business 4e Chapter 14 - 9 Global Sales Force Management Research local customer base Obtain feedback from salespeople Adapt to local compensation Adjust to local motivation tactics

10. © Prentice Hall, 2008International Business 4e Chapter 14 - 10 Marketing Communications

11. © Prentice Hall, 2008International Business 4e Chapter 14 - 11 Communication Strategy I Extend product and communications Simple and profitable profitableGlobalconsumergoodsGlobalconsumergoods Luxury items

12. © Prentice Hall, 2008International Business 4e Chapter 14 - 12 Communication Strategy II Extend product / adapt communications Satisfies different need Satisfies Appeals to different buyer Appeals to different buyer Serves different function Serves

13. © Prentice Hall, 2008International Business 4e Chapter 14 - 13 Communication Strategy III LocalinfrastructureLocalinfrastructureLocal content laws Local Can be costly Adapt product / extend communications

14. © Prentice Hall, 2008International Business 4e Chapter 14 - 14 Communication Strategy IV RatheruncommonRatheruncommon Can be expensive expensive Requires large profitablesegment profitablesegment Adapt product and communications

15. © Prentice Hall, 2008International Business 4e Chapter 14 - 15 Communication Strategy V PurchasingpowerPurchasingpowerEconomicdevelopmentlevelEconomicdevelopmentlevelVaryinginfrastructureVaryinginfrastructure Product invention

16. © Prentice Hall, 2008International Business 4e Chapter 14 - 16 Distribution Strategy Planning, implementing, and controlling the physical flow of a product from origin to consumption Physical goods Consulting services News providers

17. © Prentice Hall, 2008International Business 4e Chapter 14 - 17 Distribution Channels Cost implications Number of intermediaries intermediaries Channel length Intensive channel Many resellers Many resellers Intensive channel Many resellers Many resellers Exclusive channel One / few resellers One / few resellers Exclusive channel One / few resellers One / few resellers Degree of exposure

18. © Prentice Hall, 2008International Business 4e Chapter 14 - 18 Product Characteristics ValuedensityValuedensity Product’s value relative to its weight and volume Product’s value relative to its weight and volume The lower a product’s value density, the more localized is its distribution system The lower a product’s value density, the more localized is its distribution system

19. © Prentice Hall, 2008International Business 4e Chapter 14 - 19 Distribution Problems  Financial loss  Strategic impact  Lack of market understanding understanding  Theft and corruption corruption

20. © Prentice Hall, 2008International Business 4e Chapter 14 - 20 Pricing Strategy Must match overall firm strategy Low-cost leadership Low-cost leadership Differentiation Differentiation Focus Focus

21. © Prentice Hall, 2008International Business 4e Chapter 14 - 21 Worldwide Pricing Single selling price for all international markets Difficulties Local production cost Export, distribution cost Local purchasing power Exchange rates

22. © Prentice Hall, 2008International Business 4e Chapter 14 - 22 Dual Pricing Different selling price abroad than at home Price escalation Lower local price Separate international from domestic buyers If not, arbitrage possible

23. © Prentice Hall, 2008International Business 4e Chapter 14 - 23 Pricing Issues Intra-company transfer Intra-company transfer Free-market price Free-market price Upper or lower limits Upper or lower limits Unfairly-low export price Unfairly-low export price Transfer price Arm’s length price Price controls Dumping

24. © Prentice Hall, 2008International Business 4e Chapter 14 - 24 Chapter Review Explain the key considerations in choosing international product strategies Identify the five international communication strategies Describe each element that impacts international distribution strategies Identify various international pricing strategies and the factors that influence selection