To what extent must the company

adapt its products and marketing

program to each foreign country?

Standardized marketing
program
developing same marketing
program for multiple
countries

Adapted marketing
program
Modifying marketing program
to reflect characteristics of a market

 Economies of scale
Lower marketing
costs
Power and scope
Brand Consistency
Leverage ideas
quickly and efficiently
Uniformity of
marketing practices

Standardized
Marketing

Disadvantages
Ignores differences in:
Consumer needs,
wants, and usage
patterns
Consumer response
Brand and product
development
Legal environment
Marketing institutions
Administrative

Global Similarities and

Differences

Similarities

The development of the Web and global linking of

telecommunications networks have led to a
convergence of lifestyles

Differences
Median Age

Soft Drink Consumption

Americans
Mexicans
Brazilians
Russians
Chinese

76
674
315
149
39

Cultural Differences
Collectiv
ism

Individual
ism

Uncertainty avoidance

Power distance

Consumer behavior differences as

well as historical market factors lead
marketers to position brands
differently in different markets.

Netherlands - Mid-tier

Toyota Camry
middle-class car - United
States
high end - China

Marketing Adaptation

Product features

Best global brands are consistent in theme

but reflect significant differences in
consumer behavior,brand development and
competitive forces

Global Product Strategies

PRODUCT STANDARDIZATION

Standardization - developing same product

for multiple countries

High-end products also benefit from

standardization,because quality and
prestige often can be marketed
similarly across countries

Food and beverage marketers find it

more challenging to standardize given
widely varying tastes and cultural habit

PRODUCT ADAPTATION STRATEGIES

Product Adaptation - modifying product

to reflect characteristics of a market

Straight extension

introduces the
product in the foreign market without any
change
No additional R&D expense,
No manufacturing retooling
No promotional modification

successful for cameras,

consumer electronics, and
many machine tools

Product adaptation

alters the
product to meet local conditions or
preferences

Nokia customized its

6100 series phone for
every major market

Product invention
Backward invention

Forward invention

Reintroduces earlier product

forms well adapted to a foreign
countrys needs

Creates a new product to meet

a need in another country

BRAND ELEMENT ADAPTATION

When they launch products and services

globally,marketers may need to change certain brand
elements
When Coors put its
brand slogan Turn
it loose into
Spanish, some read
it as suffer from
diarrhea
A laundry soap ad claiming
to wash really dirty parts
was translated in Frenchspeaking Quebec to read a
soap for washing private

lobal Communication Strategie

Changing marketing communications for each local

market is a process called

communication

adaptation. If it adapts both the product and the

communications, the company engages in

adaptation

dual

The company can use one message

everywhere, varying only the language,
name, and perhaps colors to avoid
taboos in some countries

ge

The second possibility is to use the same

message and creative theme globally but
adapt the execution

coce

Developing a global pool of ads from

which each country selects the most
appropriate.

Global Pricing Strategies

PRICE ESCALATION

A Gucci handbag may sell for $120 in Italy

and $240 in the United States. Why?
Gucci must add the cost of transportation,
tariffs, importer margin, wholesaler margin,

Companies have three choices for

setting prices in different countries:
Set a uniform price everywhere

Set a cost-based price in each country

Set a market-based price in each country.

TRANSFER PRICES

A different problem arises when one unit

charges another unit in the same company a
transfer price for goods it ships to its foreign
subsidiaries.
If the company charges a subsidiary too high a price, it
may end up paying higher tariff duties, If the company
charges its subsidiary too low a price, it can be accused
of dumping,

GRAY MARKETS
Selling products made for low price in high
price countries

Risk to the customers

Gray market activity accounts for billions of
dollars in revenue each year and makes up
about 8 percent of total global IT sales of $725

COUNTERFEIT PRODUCTS

Counterfeiting is estimated to cost

over a trillion dollars a year

Global Distribution Strategie

Seller

CHANNEL
ENTRY

Sellers
marketing
headquarters
Channels
between
nations
Channels within
foreign nations
Final buyer