LECTURE

10

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14

Developing and
Marketing
Products

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Chapter Objectives

Explain the impact globalization is having on

international marketing activities

Describe the types of things managers must consider

when developing international product strategies

Discuss the factors that influence international

promotional strategies and the blending of product and
promotional strategies

Explain the elements that managers must take into

account when designing international distribution
strategies

Discuss the elements that influence international

pricing strategies

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Red Bull
Identical product is sold worldwide
Promotes brand on college campuses
Sponsors extreme sporting events

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Globalization and Marketing

Standardized product
and promotion

Adapted product
and/or marketing

Consistent
Consistentimage/message
image/message

Respond
Respondto
tolocal
localneeds
needs

Contain
Containcosts
costs

Exploit
Exploitunique
uniqueimage
image

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National Business
Environments
Cultural
differences

Laws and
regulations

National
image

Counterfeit
goods

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Brand and Product Names

Brand name
Competitive advantage
Consistent image
Consider connotation

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Product name
Select carefully
Respect cultures
Obey local laws

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Product Life Cycles

Consecutive market introductions
Technology and travel make obsolete

New product development efforts

Result is shorter product life cycles

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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
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Choosing Push or Pull

Powerful channel members
make push difficult
Fewer media outlets in emerging
markets makes pull difficult
Brand loyalty makes pull easier

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International Advertising
Consider cultural
nuances

Standardize where
possible

Exploit global
advertising outlets

Lessons from the

European Union

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Marketing Communications

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Communication Strategy 1
Extend product and communications

Simple and
profitable

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Global
strategy

Luxury
goods

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Communication Strategy 2
Extend product / adapt communications

Different
buyer, need,
or function

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Can help
contain
costs

Level of
economic
development

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Communication Strategy 3
Adapt product / extend communications

Local
content
laws

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Safety codes,
infrastructure

Can be
expensive

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Communication Strategy 4
Adapt product and communications

Satisfy
preferences
or needs

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Explain
product
benefits

Needs large,
profitable
segment

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Communication Strategy 5
Product invention

Low
Level of
Different
purchasing
economic
infrastructure
power
development

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Distribution Strategy
Planning, implementing, and controlling the physical
flow of a product from origin to consumption

Physical goods
Consulting services
News providers
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Distribution Channels
Degree of exposure

Exclusive channel
One / few resellers

Intensive channel
Many resellers

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Channel length

Number of
intermediaries

Cost implications

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Product Characteristics

Value
density

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Products value relative

to its weight and volume

The lower a products value

density, the more localized
is its distribution system

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Distribution Problems

Lack of market
understanding

Financial loss

Theft and
corruption

Strategic impact

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Pricing Strategy
Must match overall firm strategy
Low-cost leadership
Differentiation
Focus
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Worldwide Pricing
Single selling price for all international markets

Difficulties

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Local production cost

Export / distribution cost

Local purchasing power

Exchange rates
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Dual Pricing
Different selling price
abroad than at home
Price escalation
Lower local price

Separate international
from domestic buyers
If not, arbitrage possible
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Pricing Issues
Transfer price Intra-company transfer
Arms length price Free-market price
Price controls Upper or lower limits
Dumping Unfairly low export price

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All rights reserved. No part of this publication may be reproduced,

stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, photocopying, recording, or
otherwise, without the prior written permission of the publisher.
Printed in the United States of America.

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