1. Ch 09 - International Marketing and counter trade òDomestic Market Extension òMulti-domestic òGlobal Marketing

2. Domestic Market Extension òSales of domestic products in int. markets. òDomestic orientation òInternational Market secondary òFirm seeks markets similar to domestic. òLittle adaptation of product or marketing mix. òUsually produced domestically

3. Multi-Domestic Orientation òSeparate operations in each country - production, marketing etc. òDifferent strategies and marketing mixes òVery little interaction òMarkets could be very different.

4. 03/09/98 Global-Marketing Orientation òViews the world as one market. òDevelop product and marketing strategies for world markets. òStandardize as far as possible, adapt where necessary. òEconomies of scale, transfer of knowledge and technology, global image, and better competitive position.

5. International vs. Domestic - Marketing Mix. òStandardization/Differentiation mainly in terms of Product and Promotions. òProduct and Promotion Extension (Standardization) òProduct Extension/Promotion Adaptation òProduct Adaptation/Promotion Extension òDual Adaptation (Differentiated) òProduct Invention

6. Five International Product and Promotion Strategies Product Straight extension Dual adaptation Communi- cation adaptation Product adaptation Adaptproduct Promotion Do not change product Develop new product Do not change promotion Adaptpromotion Product invention

7. Pricing. òObjectives depend upon company orientation òStandard worldwide Pricing – Based on average unit costs of fixed, variable and export related costs. òDual Pricing – Domestic and export prices are differentiated. Cost-plus pricing and marginal cost method. Cost-plus – full allocation of domestic and foreign costs. Marginal cost – Fixed costs for plants, R&D, Domestic overhead, and domestic marketing are disregarded. òMarket-differentiated pricing – demand–oriented. Marginal costs and export-related costs considered.

8. Variables that influence international pricing òTaxes and tariffs - Specific duty, Combination. òInflation - Time, Payment terms, possible price control. òExchange rate Fluctuation - Prices of products and profits. òMiddlemen and transportation costs - Longer, diverse, underdeveloped, smaller order quantities, could all increase costs.

9. Creative challenges. òCultural diversity - Symbols, colors, tastes, values and beliefs etc. - subcultures. òProduction and cost limitations - Poor quality printing, lack of high grade paper, film editing and processing facilities, high comparative cost for quality. òMedia - Availability, Audience data, international media.

10. Counter trade òThose transactions which have as a basic characteristic a linkage, legal or otherwise, between imports and exports of goods and services in addition to or in the place of financial settlements.

11. Reasons for Countertrades. òEconomic Circumstances. òDispose of excess goods. òGain entry into new markets or differentiation. òGrowth opportunity.

12. 2/3/2016 Growth of Countertrade. òGrown tenfold over the past 20 years. òUsed by firms in 100 countries. òIn 2000 50% of all international trade linked to some form of countertrade. òDeveloping countries or countries with foreign exchange problems.

13. 2/3/2016 Types of countertrades - Barter. òBarter - Direct exchange of goods of approximately equal value. òNot used very often because difficult to find goods of equal value. òAssessing value and disposing of goods is also a problem. òParallel barter - they sign two separate contracts that specify the goods and services to be exchanged at different times.

14. 2/3/2016 Types of countertrades - Counterpurchase. òSeller gets paid but agrees to purchase goods worth the same amount from the buyer. òMore flexibility in selecting goods and in assessing value.

15. 2/3/2016 Types of countertrades - Compensation deals òPart payment in goods and part in cash. òSome cash involved, flexibility in assessing value of goods involved.

16. Types of countertrades - Buy-back òSeller agrees to accept as payment a portion of the output or buy it back. òTechnology transfer, quality assurance, and assured payment. òUsually developing or newly-industrialized nations.

17. U.S. Policy òStrongly against counter trade. òNot conducive to a competitive market. òAssessment of taxes is difficult. òHowever, Dept. of commerce is supportive and congress has passed bills that permit and support counter trade.

18. Policy of other governments òMost emerging market economies have favored countertrade for economic reasons. òNewly Industrialized Countries favor for competitive reasons. òWestern Europe, Japan, New Zealand, and Australia participate actively.