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 Adapted product

and promotion and/or marketing

Consistent image Respond well to

and message local needs

Contain costs Obey local laws

Prentice Hall, 2008 International Business 4e Chapter 14 - 3

 National Business Environments

Cultural Laws and

differences regulations

National Counterfeit
image goods

Prentice Hall, 2008 International Business 4e Chapter 14 - 4

 Brand and Product Names

Brand name Product name

Competitive advantage Select carefully
Consistent image Respect cultures
Consider connotation Obey local laws

Prentice Hall, 2008 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 Research local

compensation customer base

Adjust to local Obtain feedback

motivation tactics 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 Local
Can be costly
infrastructure content laws

Prentice Hall, 2008 International Business 4e Chapter 14 - 13

 Communication Strategy IV

Adapt product and communications

Requires large
Rather Can be
profitable
uncommon expensive
segment

Prentice Hall, 2008 International Business 4e Chapter 14 - 14

 Communication Strategy V

Product invention

Economic
Purchasing Varying
development
power infrastructure
level

Prentice Hall, 2008 International Business 4e 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 Channel length

Exclusive channel Number of

One / few resellers intermediaries

Intensive channel
Cost implications
Many resellers

Prentice Hall, 2008 International Business 4e Chapter 14 - 17

 Product Characteristics

Products value relative

to its weight and volume
Value
density The lower a products value
density, the more localized
is its distribution system

Prentice Hall, 2008 International Business 4e Chapter 14 - 18

 Distribution Problems

Lack of market
understanding Financial loss

Theft and Strategic impact

corruption

Prentice Hall, 2008 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

Arms 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