Chapter Seventeen
Marketing
Internationally
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
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

Explain why there are differences between
domestic and international marketing
Discuss why international marketing managers may
wish to standardize the marketing mix
Explain why standardizing the marketing mix
globally is often impossible
Discuss the importance of distinguishing among the
total product, the physical product, and the brand
name
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Learning Objectives
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



Explain why consumer products generally require
greater modification for international sales than do
industrial products or services
Discuss the product strategies that can be formed
from three product alternatives and three kinds of
promotional messages
Explain “glocal” advertising strategies
Discuss the effect of the Internet on international
marketing
Discuss the distribution strategies of international
marketers
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International Marketing

To develop marketing strategies the international
marketing manager assesses the firm’s foreign
markets and analyzes the many alternative
marketing mixes
 Plans and controls a variety of marketing
strategies rather than a single unified and
standardized one
 Coordinates and integrates multiple strategies
into a single marketing program
LO1
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Standardize, Adapt,
or Formulate Anew?

Global standardization of the marketing mix
 Significant cost savings
 Longer production runs
 Standardized advertising, promotional materials,
and sales training
 Standardized corporate image
 Standardized pricing strategies
 Easier control and coordination
 Reduction of preparation time
 Often not possible
LO2
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Product Strategies


Product is central to marketing mix
The total product includes the
 physical product
 brand name
 accessories
 after-sales service
 warranty
 instructions for use
 company image
 packaging
LO2
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Types of Products

Industrial Products
 Many can be sold unchanged worldwide
 If changes are required, they may be cosmetic
(language of instructions)
 In developing countries problems with
 overload of equipment
 maintenance
 Local legal requirements limit standardization
LO3
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Types of Products

Consumer Products
 Require greater modification to meet local
market requirements
 Some can be sold unchanged to certain market
segments
 Large automobiles, sporting equipment, and
perfumes
 Greater dissimilarity as you go down the
economic strata
LO5
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Types of Products

Services
 Marketing similar to that of industrial products
 Services easier to market globally compared to
consumer products
 Laws and customs may force changes
LO5
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Foreign Environmental Forces
Sociocultural
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
Dissimilar cultural patterns generally require
changes in food and other consumer goods
May require
 Redesign of product
 Different meanings of colors
 Different meanings of brand name
 Translation of instructions or labels
LO5
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Foreign Environmental Forces
Legal
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
Laws concerning
 pollution
 consumer protection
 operator safety
Laws prohibiting classes of imports
 Food and pharmaceuticals are affected by
laws concerning purity and labeling
Laws may prevent use of brand name worldwide
 In some countries a brand may be registered
to someone else
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Foreign Environmental Forces
Economic



Disparity in income throughout world
Obstacle to product standardization
Many industrialized country products are too
expensive for developing country consumers
 Need to simplify the product or produce a
different, less costly one
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Foreign Environmental Forces
Physical

Climate and terrain prevent international product
standardization
 Heat
 High humidity
 Special packaging
 High altitudes
 Baking products and motors
 Rough roads
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Promotional Strategies

Promotion refers to any form of communication
between a firm and its publics
 Brings about a favorable buying action
 Achieves long-lasting confidence in the firm and
the product or service it provides
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Promotional Strategies

Distinct promotional strategies based on
combination of three alternatives
1. Marketing the same physical product
everywhere
 Same message
2. Adapting the physical product for foreign
markets
 Adapted message or
3. Designing a different physical product
 Different message
LO6
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Six Common
Promotional Strategies
1.
2.
3.
Same product-same message
 Avon, Maidenform
Same product-different message
 Honda’s campaign in America is different
than in Brazil
Product adaptation-same message
 In Japan, Lever Brothers puts Lux soap in
fancy boxes to encourage gift sales
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Six Common
Promotional Strategies
4.
5.
6.
Product adaptation-message adaptation
 In Latin America, Tang is sweetened and
promoted as mealtime drink
Different product-same message
 Customers can’t afford product in a market
 Companies produce distinct product
 Message similar
Different product for the same use-different message
 Welding torches rather than automatic welding
machines are sold in developing countries
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The Promotional Mix
Advertising


Advertising refers to the paid, non- personal
presentation of ideas, goods, services
Cultural dimensions
 Directness vs. indirectness
 Humor
 Gender roles
 Explicitness
 Sophistication
 Popular vs. traditional culture
 Information content vs. fluff
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Advertising

Among promotional mix elements, advertising
 has the greatest similarities worldwide
 is formulated and executed through global ad
agencies that have wholly owned subsidiaries,
joint ventures, and working agreements with local
agencies
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Global and Regional Brands

Global, regional brands
 Higher cost
 Allow one regional source for quality work
 Suggest that a single image in the region is
important
 Allow for regionalized organizations with
centralized functions
 Are facilitated through the growth of global and
regional satellite and cable television
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Global Brand Values
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Advertising

Branding
 Global, regional or national
 Managers may convert or use a
combination
 Private brands
 Serious competitors
 Alliances with international retailers
 Trend common in Europe
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Advertising

Media
 Satellite TV expands the availability of media
 International print media available
 Reader’s Digest has 48 foreign editions
 Cinema and billboards are used heavily in Europe
 In developing countries, vehicles equipped with
loudspeakers may be used
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Advertising

Internet Advertising
 An affluent, reachable audience
 Web contacts feature interactivity, shrinks distance
 Involve customers in determining which messages
and information they receive
 For some groups, the Internet may be among the
best media choices
LO8
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Advertising

Foreign environmental forces
 Basic cultural decision for marketer: position the
product as foreign or local
 Depends on the country, the product types, and
the target market
 Language often an issue
 back translation
 plenty of illustrations with short copy
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Advertising

What should be the approach of the international
advertising manager?
 Think globally, but act locally
 Neither global nor local -”glocal”
 Pan regional approach
 Latin America
 Middle East
 Africa
 Atlantic
LO7
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Personal Selling
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

Firms may choose personal selling instead of
advertising because of
 relative cost
 funds available
 media availability
 type of product
Manufacturers of industrial products rely on personal
selling
Firms may increase personal selling for consumer
products in developing countries
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Personal Selling
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
The Internet
 would seem to eliminate the need for
personal selling, but perhaps not
Successful personal selling depends on
establishing trust
 Evolving approaches to trust building in a
virtual environment
LO8
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Selling
International Standardization
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
An overseas sales force is similar to the home
country in
 organization
 sales presentation
 training methods
Recruitment of salespeople in foreign countries can
be difficult
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Sales Promotion
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
Sales promotion includes any selling aids including
displays, premiums, contest, and gifts
Sociocultural and economic constraints make some
sales promotions difficult to use
 If a premium is to fulfill the sales aid objective, it
must be meaningful to the purchaser
 Sales promotion is generally less sophisticated
overseas than in the U.S.
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Public Relations
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
Public relations includes various methods of
communicating with the firm’s publics to secure a
favorable impression
Public relations
 markets the firm
 improves the firm’s image and overcomes negative
perceptions
 may work through government agencies
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Pricing
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Pricing is important in formulating marketing strategy
It is the only element in the marketing mix that can be
varied to achieve firm’s marketing objectives
Made more complex by
 interaction with the other functional areas
 environmental forces
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Interaction Between Marketing
and Other Functional Areas
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Managers must consider how the marketing function
interacts with other functional areas
Finance wants prices that are profitable and produce
steady cash flow
Production supervisors want prices that create large
sales volumes, which permit long production runs
The legal department worries about possible
antitrust violations when different prices are set
according to type of customer
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Interaction between Marketing
and Other Functional Areas
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
The tax department is concerned with the
effects of prices on tax loads
The domestic sales manager wants export
prices to be high enough to avoid parallel
importing
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Standardizing Prices Is Difficult
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Foreign national pricing
 Local pricing in another country
International pricing
 Setting prices for unrelated and related firms
Transfer pricing
 Intracorporate price -the price of a good or service
sold by one affiliate to another - the home office to
an affiliate, or vice versa
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Distribution Strategies


Distribution decisions are often
interdependent with other marketing mix
variables
Standardizing distribution is not always
possible
 The availability of channel members varies
in each market
 Environmental forces present in different
markets can influence distribution choices
LO9
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Standardizing Distribution

Disintermediation refers to the unraveling of
traditional distribution structures
 Most often the result of being able to
combine Internet with fast delivery services
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Channel Selection


Direct or indirect marketing
 The first decision: use middlemen or not?
 Export sales may be done by local agents if
 management believes this is politically
expedient
 a country’s laws demand it
Factors influencing channel selection
 Market
 Product
 Company
 Middlemen
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