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International Marketing

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International Marketing ­ MKT630
VU
Lesson # 39
INTERNATIONAL MARKETING MIX - PRODUCT POLICY
International Product Strategies
In international markets managers need to decide the level of standardization and adaptation they have
to achieve in terms of their products and related communication.
Standardization of product strategies:
Standardization means offering a uniform product on regional or worldwide base may be with minor
-
changes.
-  Customization leverages cross-border differences in needs & wants of the firm's target customers.
-  Forces that favor a globalized product strategy are:
­ Common customer needs & buying behavior
­ Economies of scale in production, R&D, marketing and cost savings
­ Lesser time required in introducing into new markets
­ Global consumers & consumer mobility
­ Home country image
­ Similar technical specs for industrial & consumer products
­ Operating via exports of uniform products
­ Better marketing performance
­ Consistency in product design & selling techniques
­ Establishes a common image
­ Success in one market can be duplicated in other markets
Standardization may lead to substantial opportunity lost
Adaptation of product strategies:
·
Obligatory adaptation due to laws and regulations of foreign countries
·
Discretionary adaptation (on the choice of the marketer)
­ to better suit varying customer needs
­ differing use conditions
­ due to different market factors
­ company's resources / product objectives
­ product life-cycle stage
International product and communication strategies:
International marketers may choose on of the flowing five product and communication strategies in the
international markets:
1. Product & Communication Extension:
Dual Extension
-  Early entrants often opt for this strategy.
-  Small companies with few resources typically prefer this option.
-  Also works for the company which targets a
"global" customer with similar
needs.
-  Offers substantial savings coming from economics of scale.
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International Marketing ­ MKT630
VU
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The downside is that it might alienate foreign customers who may switch to
another competing brand that is more tuned with their needs.
2. Product Extension ­ Communication Adaptation
-
takes care of difference across countries in the cultural or competitive
environment.
-
retains scale economics on manufacturing side, the firm sacrifices potential
savings on the
advertising front.
3. Product Adaptation ­ Communication Extension
-
local market circumstances often favor or require case of product adaptation (may
be due to Govt. regulations)
-
Many companies add to their product portfolio via acquisition of local  companies
adding
new brands as an expansion strategy
-
While product may differ, cultural similarities that stretch to consumers using the
product present an opportunity for a harmonized communication.
-
Within such control, clever marketing ideas can be transferred from one country  to
another,
despite the product-related differences.
4. Product & Communication Adaptation ­ Dual Adaptation
-
Differences in both cultural & physical environment across
countries call for a
dual adaptation strategy.
-
Many be due to different Govt. regulations regarding products as well as
communication.
5. Product Invention
-
Develop new products from scratch from common need & opportunities around
the world ­ instead for simply adapting existing products or services to the local
market conditions.
-  Produce products of global scope.
Today managers focus on degree of Globalization rather than striving for standardized or localized
products. What elements of a product should be tailored to local market needs & which ones to leave
unchanged?
Two approaches that are being commonly used in international product design are;
Modular Approach:
-
This approach consists of developing a range of product parts that can be used  worldwide.
-
Scale economics flow from the mass-production of more or less standard product
components at a few sites.
-
Popular in automotive industry
Core-Product Approach:
-
Design of mostly uniform core-product
-
Attachments are added to core-product to match local market needs
Balancing act between Standardization and adaptation is very tricky.
-
Too much standardization (over standardization) stifles initiative &
experimentation at the
local subsidiary level
-
Too much customization may lose the foreigness appeal of imported brands hence
becoming me-too brands.
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Table of Contents:
  1. OVERVIEW OF INTERNATIONAL MARKETING:Domestic marketing, Multinational marketing, Globalization of markets
  2. INETRNATIONAL MARKETING PROCESS:Situation Analysis, Implementation and Control, Relationship
  3. INETRNATIONAL MARKETING PROCESS:The Product Concept, The Societal Marketing Concept
  4. INETRNATIONAL MARKETING PROCESS
  5. ENGAGING IN INETRNATIONAL MARKETS:Expansion of technology, Merchandize export and import
  6. INTERNATIONAL TRADE & INVESTMENT THEORIES:Theory of Comparative Advantage, Country Similarity Theory
  7. INTERNATIONAL TRADE & INVESTMENT THEORIES:Global Strategic Rivalry Theory,
  8. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:Foreign exchange info
  9. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:The Product
  10. FOREIGN NATIONAL ENVIRONMENTS:Political systems in the world, Political risks in international markets
  11. FOREIGN NATIONAL ENVIRONMENTS:Types of legal systems,
  12. FOREIGN NATIONAL ENVIRONMENTS:Conciliation, Mediation, Global relevance
  13. ROLE OF GOVERNMENTS IN INTERNATIONAL MARKETS:Industry-level needs, Promotion of exports by governments
  14. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:The concept of culture, Attitudes & beliefs,
  15. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:Culture is a human medium
  16. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Political Environment
  17. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Product Potential
  18. INTERNATIONAL MARKETING RESEARCH PROCESS:market structure, Implementing the research plan
  19. INTERNATIONAL MARKETING RESEARCH PROCESS:Identify alternative information sources
  20. INTERNATIONAL MARKETING RESEARCH PROCESS:Issues with primary global research:
  21. INTERNATIONAL MARKETING RESEARCH PROCESS:Problems with data, Comparative Analysis
  22. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Export intermediaries, Export and import management
  23. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Licensing contract, Licensing risks
  24. MODES OF ENTRY INTO INTERNATIONAL MARKETS:The franchiser’s balance,
  25. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Forms of countertrade, Specialized entry modes
  26. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Demand factors, Political factors
  27. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Drivers behind successful joint ventures
  28. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Distribution agreements, Critical mass & optimism traps
  29. INTERNATIONAL STRATEGIC ALLIANCES:Impetus for international alliances, Management of strategic alliances
  30. INTERNATIONAL CONSUMER MARKETS:Model of Consumer BehaviorThe Buyer Decision Process
  31. INTERNATIONAL BUSINESS MARKETS:Nature of buying unit, Major influences on international business buyers
  32. INTERNATIONAL TARGET MARKETING:Market segmentation, Market positioning
  33. INTERNATIONAL MARKET SEGMENTATION:Geographic, Behavioral, Situational factors
  34. INTERNATIONAL MARKET SEGMENTATION:Basis for country segmentation, Stages of economics development
  35. INTERNATIONAL MARKET SEGMENTATION:Cultural Variables,
  36. INTERNATIONAL MARKET SEGMENTATION:Market coverage strategy, Socio-economic variables
  37. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Individual product decisions, Branding
  38. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:
  39. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Modular Approach
  40. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:Issues in labeling, Pricing, Distribution
  41. INTRODUCING NEW PRODUCTS IN INTERNATIONAL MARKETS:The new product development process
  42. PRICING IN INTERNATIONAL MARKETS:Factors influencing international pricing,
  43. ITERNATIONAL MARKETING CHANNELS:Channel membership, Vertical marketing, Control over distribution
  44. PROMOTING IN INTERNATIONAL MARKETS:Advertising, Direct marketing, Public Relationing
  45. REVISION