Chapter 14
Developing and
Marketing Products
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
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 2
Globalization and Marketing
Standardized product
and promotion
Adapted product
and/or marketing
• Consistent image
and message
• Respond well to
local needs
• Contain costs
• Obey local laws
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 3
National Business Environments
Cultural
differences
Laws and
regulations
National
image
Counterfeit
goods
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 4
Brand and Product Names
Brand name
 Competitive advantage
 Consistent image
 Consider connotation
© Prentice Hall, 2008
Product name
 Select carefully
 Respect cultures
 Obey local laws
International Business 4e
Chapter 14 - 5
Product Life Cycles
Consecutive market introductions
 Technology and travel make obsolete
New-product development efforts
 Result is shorter product life cycles
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 6
Push and Pull Strategies
Push Strategy
Pull Strategy
Pressure channel members to carry a Create buyer demand that will encourage
product and promote it to final users
channel members to stock a product
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 7
Choosing Push or Pull
Powerful channel
members make push difficult
Fewer media outlets in emerging
markets makes pull difficult
Brand loyalty makes pull easier
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 8
Global Sales Force Management
Adapt to local
compensation
Research local
customer base
Adjust to local
motivation tactics
Obtain feedback
from salespeople
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 9
Marketing Communications
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 10
Communication Strategy I
Extend product and communications
Global
Simple and
Luxury items consumer
profitable
goods
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 11
Communication Strategy II
Extend product / adapt communications
Satisfies
Serves
Appeals to
different need different function different buyer
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 12
Communication Strategy III
Adapt product / extend communications
Local
infrastructure
© Prentice Hall, 2008
Local
content laws
International Business 4e
Can be costly
Chapter 14 - 13
Communication Strategy IV
Adapt product and communications
Rather
uncommon
© Prentice Hall, 2008
Can be
expensive
International Business 4e
Requires large
profitable
segment
Chapter 14 - 14
Communication Strategy V
Product invention
Purchasing
power
© Prentice Hall, 2008
Economic
development
level
International Business 4e
Varying
infrastructure
Chapter 14 - 15
Distribution Strategy
Planning, implementing, and controlling the physical
flow of a product from origin to consumption
Physical goods
Consulting services
News providers
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 16
Distribution Channels
Degree of exposure
Exclusive channel
• One / few resellers
Intensive channel
• Many resellers
© Prentice Hall, 2008
Channel length
Number of
intermediaries
Cost implications
International Business 4e
Chapter 14 - 17
Product Characteristics
Value
density
© Prentice Hall, 2008
Product’s value relative
to its weight and volume
The lower a product’s value
density, the more localized
is its distribution system
International Business 4e
Chapter 14 - 18
Distribution Problems
 Lack of market
understanding
 Financial loss
 Theft and
corruption
© Prentice Hall, 2008
 Strategic impact
International Business 4e
Chapter 14 - 19
Pricing Strategy
Must match overall firm strategy
• Low-cost leadership
• Differentiation
• Focus
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 20
Worldwide Pricing
Single selling price for all international markets
Difficulties
• Local production cost
• Export, distribution cost
• Local purchasing power
• Exchange rates
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 21
Dual Pricing
Different selling price
abroad than at home
• Price escalation
• Lower local price
Separate international
from domestic buyers
• If not, arbitrage possible
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 22
Pricing Issues
Transfer price Intra-company transfer
Arm’s length price Free-market price
Price controls Upper or lower limits
Dumping Unfairly-low export price
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 23
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
© Prentice Hall, 2008
International Business 4e
Chapter 14 - 24