Group members

Mariam Zahid
Anum Khan
Saba Sheikh
Saim Ashfaq
Azadar Hussain
Abdul Razzaq

Abdul Razzaq

What is international marketing?

International marketing is the process of planning
and conducting transactions across national borders
to create exchanges that satisfy the objectives of
individuals and organizations (Czinkota and
Ronkainen)
International marketing focuses its resources on
global market opportunities and threats (Keegan and
Green)
International marketing is the motor of the
internationalization process of the firm (Usunier)
It is a tool used to obtain improvement of the firms
position in the global market

Scope of International Marketing

No longer enough to look at domestic market
Markets across the world being sought after by more
competitors
Explosion of international trade
Global linkages become important

International Marketing Decisions

Decidingwhethertogoabroad
Decidingwhichmarketstoenter
Decidinghowtoenterthemarket
Decidingonthemarketingprogramandmix
Decidingonthemarketingorganization

Domestic Marketing
A domestic market is a financial market. Its trades are
aimed toward a single market. A domestic market is also
referred to as domestic trading. In domestic trading, a
firm faces only one set of competitive, economic, and
market issues and essentially must deal with only one
set of customers, although the company may have
several segments in a market.

Domestic Vs International Marketing

Similarity:
- Both carry out transactions that meet the
needs of individuals and organizations

Differences:
- International markets have greater growth
potential
- Some tasks associated with international
marketing not included (or less intense )
than in domestic marketing (e.g., cultural
research, political factors, exchange rates,
trade laws, long distance distribution.)

Importance of IM
International expansion helps firm:
Keep pace with competition
Reach a larger market (e.g. US with
25% of worldwide products/services)
Reap higher profits
Prolong the lifecycle of their
products
Also an option for small and medium
sized companies

International marketing concepts

Ethnocentric
Policentric
Regiocentric
Geocentric

ERPG Model
Ethnocentric: everything is centered
on the domestic market.
Polycentric: several important foreign
markets exist.
Regiocentric: the market is composed
of several large economic regions.
Geocentric: the world is one large
global market.

Ethnocentric Orientation
Guided by domestic market extension concept
Domestic strategies, techniques, and personnel are
perceived as superior.
International markets are secondary, regarded primarily as
outlets for surplus domestic production.
International marketing plans are developed in-house by
the international
division.
E.g. Disney resort in France: Disneyland Resort Paris had
to adapt it to local preferences: European fairy tales, food,
and dress code for staff.

Polycentric Orientation
Guided by the multi-domestic marketing concept
Focuses on the importance and uniqueness of each
international market
Firms establish independent businesses in each target
country.
Fully decentralized, minimal coordination with
headquarters
Marketing strategies are specific to each country.
Outcomes:
No economies of scale
Duplicated functions
Higher final product costs

Regiocentric Orientation
Guided by the global marketing concept
World regions that share economic, political, and/or
cultural traits are perceived as distinct markets. (e.g.
EU, NAFTA*)
Divisions are organized based on location.
Regional offices coordinate marketing activities.

Geocentric Orientation
Guided by the global marketing concept
Marketing strategies aimed at market segments,
rather than geographic locations
Maximizes efficiencies worldwide and provides
standardized product or service throughout the world
E.g. McDonalds

Benefits of International Marketing

International marketing daily affects consumers in many

ways, though its importance is neither well understood
nor appreciated.
Survival
Diversification
Sales and profits
Standards of living
Driving forces

International Expansion Drivers

Competition
Regional Economic and Political Integration
Technology
Improvements in Transportation and Telecommunication
Economic Growth
Transition to Market Economy
Converging Consumer Needs

Obstacles to Internationalization
within the company
Finances
Psychological:
unknown
environment
Self-Reference
Criterion

outside
Government
Barriers
Barriers imposed
by International
Competition

Self-Reference Criterion
Conscious and unconscious reference to own national
culture while operating in the host country. (e.g. eye
contact US-Japan)
To counter the impact of the self-reference criterion,
the corporation must select appropriate personnel for
international assignments and engage in sensitivity
training.

Government Barriers
Restriction placed on foreign corporations by imposing
tariffs, import quotas and other limitations, such as
restrictive import license awards.

Barriers imposed by International Competition

Blocked channels of distribution

Exclusive retailer agreements
Cutting prices
Advertising blitzes

Azadar hussain

International Strategic
Marketing Planning

Developing an International Marketing Strategy

Requirements:
Strategic fit between the companys
objectives,
competencies,
and
resources and the challenges of its
international market or markets.
Link between the companys resources
and its international objectives in a
complex, international environment.
The strategic planning process must
be systematic and continuous
Companys
commitment
to
its
international markets.

Developing the International Marketing Plan

Develop strategies for the target market:
Product mix, Distribution, Promotion mix, Pricing

Plan international marketing programs

Manage the international marketing effort
Organize
Implement
Control

International Target Marketing

The process of identifying and focusing on
those international market segments that the
company
can serve most effectively
and designing products,
services, and marketing programs
with these segments in mind.

International Target Marketing

Is Used by Companies to:
Identify consumer segments with similar traits
(International market segmentation).
Select segments company can serve efficiently.
Develop products tailored to each segment
(International market targeting).
Offer products to the target market, communicating
through the marketing mix, product traits and
benefits that differentiate it in the consumers mind
(Positioning).

International Segmentation
The process of identifying countries and/or consumers that
are similar with regard to key traits, such as product-related
needs and wants, that would respond to a product and
related marketing mix.
Must be performed at country (macro segmentation) level
AND at the consumer level (micro segmentation).

Positioning the Brand

Placing the brand in the consumers mind in relation to other

competing products. Six possible positioning strategies to reach a
unique selling proposition
Attribute/Benefit Positioning
Price/Quality Positioning
Use or Application Positioning
Product User Positioning
Product class Positioning
Competitor Positioning

The structure of the

international marketing plan

The structure of the international marketing plan

1. Brief summary of the manager/owner
Reader - employee, partner, auditor, financial institution
Objective, reason
2. The company
History
Parameters
3. Motivators and obstacles
Macro and micro motivators
Internal and external obstacles
4. International market research
Objective
Methods

5. Review of the micro and macro environment

5. Review of the micro and macro environment

Micro environment

competitors,

new entrants,

substitutes,

power of the clients

power of the suppliers

Macro environment

Geographical

economic

Political

Legal

Technological

Cultural

6. International market selection

International market segmentation
International targeting
7. Mode of entry
8. Marketing mix
Product / service
Price (cost)
Promotion
Distribution channel
9. Organisational framework
10. Scheduling
11. Budgeting
12. Effect study
13. Conclusion

Mariam Zahid

Expansion Strategies
and Entry

Reasons for Going Global

Need for growth

Need to seek inputs
Need to gain competitive advantage
Need to diversify
Need to increase workforce

Factors in the entry mode decision

Target country
market factors

External factors

Target country
environmental
factors

Target country
production
factors

Home country
factors

Entry mode
decision

Internal factors

Company product
factors

Company resource
and commitment
factors

Deciding Which Markets to Enter

Before going abroad, the company should try to define
its international marketing objectives and policies.

What Volume of Foreign Sales is Desired?

How Many Countries to Market In?
What Types of Countries to Enter?
Choose Possible Countries and Rank Based on
Market Size, Market Growth, Cost of Doing
Business, Competitive Advantage, and Risk Level

Colgate Goes to China

Using aggressive promotional and educational programs, Colgate has

expanded its market share from 7% to 35% in less than a decade.

Going International: Evaluating Opportunities

Consider drivers of international expansion in the environment:

Competition
Regional economic and political integration
Economic growth
Technology
Converging consumer needs
Consider firm-related international expansion drivers:
Product life-cycle considerations
New product development costs
Experience transfers
Labor costs

Control and Risk in International Expansion

Control/Risk
Low
Indirect
Export

High
Direct
Export

Licen- Franchi- Joint

Branch
sing
sing Venture

in home country

Capital and Management

Subsidiary

in host country

Control and Risk in International Expansion

Companies need to decide whether to use

middlemen in the process of taking their
products internationally or to market
directly to the international market:
Using middlemen requires a company
to relinquish control: Distributors or
agents sell the product .
Direct international involvement
exposes the company to substantial
risk, but it also affords the company
significant control of the marketing
mix.

Direct Exporting
Firm handles its exporting function usually using its own inhouse export department.
Provides more control over the marketing mix than indirect
exporting.
Involves the use of middlemen such as:

Freight forwarders
Shipping lines
Insurers
Internet boosted this
Merchant middlemen
kind of entry mode
Retailers
Other marketing service providers, such as consultants,
researchers and advertising companies

Indirect Exporting
Company uses home country intermediaries who, in turn,
sell product overseas.
Lowest risk - Lowest control
Often first step to a greater involvement
Companies can use cooperative exporting
using the distribution system of exporters with
established systems for selling abroad who agree to
handle the export function of a non-competing
company on a contractual basis.

Licensing
An international entry mode that involves a licensor, who
shares brand name, technology, and know-how with a
licensee in return for royalties.
Licensor:
A book published in the U.S. and
its licensed Chinese reprint (for
Offers know-how
sale in Mainland China only)
Shares technology
Allows for the use of its brand name
Licensee:
Pays royalties for the rights to use licensors technology,
know-how, and brand name

Licensing

Advantages:
Lower-risk entry mode (specially Licensing without the name
Limits exposure to economic, financial, and political instability
Permits the company access to markets that may be closed or
that may have high entry barriers.
Disadvantages:
Can produce a new competitor: the licensee
Can be problematic if licensee cannot guarantee qualityit
affects the brands overall reputation

Franchising
Franchising refers to the methods of practicing and using
another person's philosophy of business. Primary
international entry mode in the service industry.
Franchisor:
Gives franchisee right to use brand name, trademarks
and business know-how in return for royalties.
Franchisee:
Pays royalties for the right to use the
know-how, trademarks, and brand name.

Franchising

Advantages:

Lower-risk entry mode

Limits exposure to economic, financial, and political instability
Higher level of control
Very rapid market penetration
Disadvantages:

Can be problematic if franchisee cannot guarantee quality

Can produce a new competitor: the franchisee
Problematic if the concept can be easily copied

Franchising
Example: McDonalds

The McDonalds restaurant on the left finds that the Quick imitation
on the right has a comparable offering, including the Gant (giant) to
compete with the Big Mac. (Here in France)

Joint Venture
A corporate entity created with the participation of two companies that
share equity, capital, and labor, among others.
Preferred entry mode in developing countries, where they contribute to
developing local expertise and to the countrys balance of trade if
production is exported.
International firm provides expertise, know-how, most of the capital,
brand name reputation, trademark.
Local partner provides the labor, the infrastructure, local expertise and
relationships, and connections to the government

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Examples of joint venture

Joint Venture
Advantages:
Higher control entry mode, potentially resulting in higher profits.

Costs and risks shared with joint-venture partner.

Local partner shares local market expertise, relationships, as well

as connections to government decision-making bodies.
Disadvantages:

Repatriation of profits may be difficult if local government has

control over/stake in the local joint-venture partner.
Can produce a new competitor: the joint-venture partner
70% of all joint ventures break up within 3.5 years

Joint Ownership

KFC entered Japan through a joint ownership venture with Japanese

conglomerate Mitsubishi.

Consortia

Consortia are similar to joint ventures and could be classified as

such except for two unique characteristics:

They typically involve a large

number of participants, and
They frequently operate in a
country or market in which none of
the participants is currently active

Consortia are developed to pool financial and managerial resources

and to lessen risks.

Branch Offices

Branch Offices:

Entities are part of the international company, rather than

a new company (as in the case of the subsidiary).
Involves substantial investment
Sales office
Showroom
High level of control

Wholly Owned Subsidiaries

Wholly Owned Subsidiaries:

Involve long-term market commitment

High cost
High control of operations
Greatest level of risk
Can be developed by the company (green fielding) or can be
purchased (acquisition or merger)

International Strategic Alliances

Sometimes licensing, franchising and joint ventures are called
Strategic Alliances. But in general the Strategic Alliances are
more short term and have not the same level of international
commitment than the named entry modes.
Strategic Alliance: a relationship between two or more
companies attempting to reach joint corporate and market
related goals - while remaining independent organizations.
Typically, the term refers to no equity alliances.

Outsourcing
The strategic use of outside resources to perform activities
that are usually handled by internal staff and resources.
E.g. customer service and billing.
Outsourcing grew fast and further growth us expected. The
outsourcing market its about US $100 billion.
+effective cost cutting technique
+ accessibility 24/7
Note: Many outsourcing alliances
have failed in recent years
(nearly half of them).

Saim Ashfaq

The macroenvironment

Geographical environment
Political environment
Legal environment
Economic environment
Technological environment
Cultural environment

Geographical environment

Climate and topography

Raw materials
Environmental protection
Urbanisation - suburbanisation - Reurbanisation
Population

Political environment

Political system
Changes of the government
Political philosophy
Possible problems with respect to the property:
- Confiscation
- Nationalisation
- Expropriation
- Domestication

How to protect against the political risks?

Good selection of the country

Good selection of the industry
Good selection of the partner
Licensing or franchising?
Planned domestication

Economic environment

Globalisation
Localisation
Interdependency
Internationalisation of markets, companies and
products
Diversification
Assortment of products

Technological environment

Role of human resource

Changes in power
R and D costs
Innovations
Launching the products
Partnerships

Cultural environment
What is culture?
Three modes of
defining culture:
General aspects
Enumeration
Classification

Cultural differences in business

Structure of decision making
Participants
Objectives of the participants

Two levels of cultural diversity

in international business
External cultural diversity
Cultural determinants influencing purchasing and
consumption behaviors (Who buys? What? Where?
How? Why?)
Cultural determinants influencing negotiations
(relationships with suppliers, buyers, partners)
Internal cultural diversity
Observed within all MNCs (identity and corporate culture)
Cultural differences that affect the way subsidiaries work
together

How do we measure cultural distance?

Five different poles make up the cultural index:
- Power distance
- Uncertainty avoidance
- Individualism
- Masculinity
- (Long term orientation)

American culture

Classical dimensions: M-time culture, linear

time-pattern, low-context, low PDI, individualistic,
high MAS, low UAI, short-term orientation

Other dimensions: success, obsession with

change (new and better), credit card culture,
education for competitiveness, independence,
ethnocentrism, strong role differentiation,
innovativeness, creativity, private opinions
expressed, education teaches students to be
critical (ask why not how), man must conquer
nature, (De Mooij)

Japanese culture

Classical dimensions: P-time culture,

circular time concept, high-context, high PDI,
collectivistic, masculine, strong UAI, longterm orientation

Other dimensions: pressure to behave like

neighbors, shame-based society, avoid
jolting social harmony, dependence, private
opinions not expressed, status is important
(success) but avoid standing out in a crowd,
cash culture, thrift and perseverance, strong
role differentiation, education (how instead
of why), education has an intrinsic value,
obsession with cleanliness, harmony with
nature (De Mooij)

How does culture affect

international marketing?
Languages and the use of language in communicating,
advertising, negotiating
Marketing research is much more difficult to conduct
from a methodological perspective
Buying patterns and behaviors will vary in different
cultural contexts
Marketing mix will be perceived differently from one
country to another
Management styles will be directly related to culture

Proactive vs. Reactive Approach

A proactive approach is one where one actually starts a
trend which is later on followed by others. Such a
methodology is termed as a proactive one. The proactive
approach talks about creating and starting a trend or
idea.
A reactive approach is the exact opposite of the
proactive approach. The reactive approach believes in
following a new trend or more precisely adapt to the
newest changes happening in the society.

Saba sheikh

International Marketing Mix

The four Ps of the marketing mix

Product

Productvariety,quality,design,features,
brandname,packaging,sizes,services,
warranties,returns

Price

Listprice,discounts,paymentperiod,credit
terms

Promotion

Salespromotion,advertising,salesforce,
publicrelations,directmarketing

Place

Channels(direct,indirect,exclusive,selective,
intensive),coverage,assortments,locations,
inventory,logistics,transport

Deciding on the Global Marketing Program

Standardized Marketing Mix:
Selling largely the same products and using the same
marketing approaches worldwide.
Adaptive Marketing Mix:
Producer adjusts the marketing mix elements to each
target market, bearing more costs but hoping for a
larger market share and return.

Standardized Marketing Mix

Standardization of products across markets and of the
marketing mix worldwide.
Advantages:
Allows for economies of scale
Encourages global branding
using the same brand name, logo, image and
positioning everywhere in the world. (Ralph Lauren,
Escada, Donna Karan, Pepsi, Coca Cola, Camel)
Global brands are more prestigious, signaling that
the company has the resources to back the brand.
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Advantages (contd.):
Effective in meeting the needs of global consumers (same
usage of media (internet, music), international travel)
Effective in meeting consumer needs of higher quality and
lower price.
Facilitated by international travel
Disadvantage:
Cannot meet the needs of all target consumers.

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Adapted Marketing Mix

An international marketing strategy for adjusting
the marketing mix elements to each
international target market, bearing more costs
but hoping for a larger market share and return
It requires adjustment for each new geographic
segment

Marketing Mix Adaptation

In India, McDonalds serves chicken, fish, and vegetable burgers, and the
Maharaja Mactwo all-mutton patties, special sauce, lettuce, cheese,
pickles, onions, on a sesame-seed bun.

Standardization versus Adaptation

Factors encouraging
standardization
Economies of scale in
production
Economies in product R&D
Economies in marketing
Greater profitability
Global competition

Factors encouraging
adaptation
Differing use conditions
Differing consumer
behavior patterns
Local competition
True to the marketing
concept

Product
Product usually controlled by the
exporter.
However, localization often required:

approvals and certificates

packaging & labeling

measures, etc

The International Product Life Cycle

Introduction
and Growth
Stages:

Early
Maturity:

Late
Maturity

Decline

International Corp.
IC manufactures
product in developed
countries; exports to
developing countries

IC moves
production to
developing
country; begins
importing to
home country

Developing
country
competitor
exports product
to IC home
country;
competes
with IC
imports

Developing country
markets remain valuable
target Markets for IC;
IC home
country market Is
diminishing

Sales

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Time

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International product policy

Planning of the products (services)
Developing the products (services)
Managing the products in the foreign markets

Dimensions of the International

Product Mix

Product mix/portfolio
The total number of products that a company offers its target
markets.
Product line
All the brands the company offers in one product category.
Product length
Total number of brands in the product mix.
Product width
Total number of product lines the company offers to its target
international consumers.
Product depth
Total number of different offerings in a product line.
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New Product Development

Generating new product ideas
Screening new Product ideas
Developing and evaluating concepts
Product Business analysis
Designing/Developing the product
Test marketing
Lancing product internationally
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Types of Test Marketing

Simulated Test Marketing
Controlled Test Marketing
Actual test Marketing

Branding Policies
Three choices of branding:
Manufacturer vs. Private Brands
Individual vs. Family Brands
Trademarks
Global brands are a key way of creating consistency and impact.
May be completely standardized or some elements of the
product may be adapted to local conditions.

Packaging Considerations
Three major functions: protection, promotion, user
convenience.
Eye-catching appearance.
Material - What is printed on board is read particularly willingly,
while what is packaged in board sells particularly well.
Design, shape and colour The purpose of well-considered
design, creative printing and finishing is to entice the consumer
to devote attention to the pack.
Regulations.

Global Product Strategies

Straight Product Extension:
Marketing a product in a foreign market without any
change.
Product Adaptation:
Adapting a product to meet local conditions or wants
in foreign markets.
Product Invention:
Creating new products or services for foreign
markets.

Placement
Place(Distribution) the most important
for international business entry:
providing the product at a place which is
convenient for consumers to access
Transportation to international freight carrier,
freight, insurance, documentation, customs
clearance, local transportation, logistic
management in the market, currency risk

Place

Optimal channel a company chooses to deliver the

product

The most locally responsive element of marketing

mix because distribution channels vary dramatically
across countries
Retail system: concentrated-fragmented
Channel length: long, short

Issues Related to International Distribution

Using Established Channels: Channels that already
exits
Could charge high prices
Could be blocked by competition
Channel partnership is a long-term decision:
Company may be bound indefinitely to the channel
choice.
Building Own Channels:
Necessary if there are no channels/ or existing
channels do not conform to company needs.
Expensive
Time-consuming

International Distribution
Using Home-Country Middlemen
Export Management Companies:
EMC functions as an external export sales department, which represents
your product along with various other non-competitive manufacturers.

Trading Companies

The Japanese Model: sogo shoshas

The U.S. Model and the Export Trading Company Act

International Distribution
Using Foreign-Country Middlemen
Merchant Middlemen :Merchant middleman buys and sells goods at a
profit. They undertake ownership and possession of goods and deal in their
own names. They work for profit and bear the risks of trade. Merchant
middlemen include wholesalers and retailers. In other words, the home trade of
a country consists of wholesale trade and retail trade.

Agents and Brokers

Many types of agents and brokers in foreign markets, such as manufacturer's representatives
and managing agents

- Could act as the manufacturers sales representatives and are paid on

commission
- Or they could take on the role of managing agents (also known as compradors),
with an exclusive arrangement with the company, representing it in the foreign
market; the latter are paid as a percentage of sales

Top 10 Global Retailers

R

Country

Retailer

Format

Sales /US$
millions

U.S.

Wal-Mart

Discount, Hypermarket, Supermarket,

Superstore Warehouse

France

Carrefour

Cash & Carry, Convenience, Discount,

Hypermarket, Specialty, Supermarket

92,778

U.S.

Home Depot

DIY, Specialty

81,511

Germany

Metro

Cash & Carry, Department, DIY,

Hypermarket, Specialty, Supers tore

69,134

U.K.

Tesco

Convenience, Department Hypermarket,

Supermarket, Superstore

68,866

U.S.

Kroger

Convenience, Discount, Specialty,

Supermarket, Warehouse

60,553

U.S.

Target

Department, Discount, Superstore

52,620

U.S.

Costco

Warehouse

51,862

U.S.

Sears

Department, Specialty, Mail, E-commerce

49,124

10

Germany

Schwartz

Discount, Hypermarket,
Supercenter/Superstore

45,891

312,427

Anum afzal

Promotion
Promotion success at home leads to
interest from potential importers, licensors,
joint venture partners
Local knowledge essential on initial
entries:
Integrated market communication
Trade and consumer sales promotion
Sales management
Trade shows

International Promotional Mix

Understanding the norms,
motivations, attitudes,
interests, and opinions of
the target market is
crucial to company
success in marketing to
and communicating with
different cultures around
the globe.

Salespromotion

Advertising

Promotional
Mix
Sales force
PR and
MangePublicity
ment

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International promotion policy

Three different levels of communication:

Corporate communication: inform firms partners

(shareholders, administrations, suppliers, press, etc)

Institutional communication: communicate the firms values to

the public and inside the organization

International Communication Challenges

Media infrastructure
Unreliable mail
Limited broadcast media
Media is not used for advertising
Translation deficienciesmeanings intended
may not be the meanings conveyed.
Illiteracy
Status of promotion
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Lessen Communication Challenges

Hire research firm to evaluate message in

multiple international markets.
Evaluate effectiveness of the communication
using recall tests and other memory-based
procedures.
Evaluate effectiveness of communication in
getting different international target markets to
purchase the product.
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Elements of promotion

Advertising
Sales promotion
Publicity
Direct selling

Personal selling
Involves high costs per contact.
Provides immediate feedback
on customer reaction as well as
information on markets.
Can be used for consumer
selling in low-wage markets

Advertising
Strength of source
Credibility of source
Prestige of source

Object of advertising

Brand
Product
Firm
Country

New phenomena in adertising

Pattern advertising

Factors to determine
What to say
What to advertise
How to say it
Rational or emotional messages
With the usage of who or what to say it
Famous or every day people or things
How to determine what to do

Sales promotion

Price reduction
Sale
Cupons
Trial
Pay for one, receive
two
Gift
Game

When to use sales promotion?

When launching a new product or service on the market
To make the people try the product
Make the people try a new retail shop or selling form
Convince the retailers to hold the product or offer the
service
Short term effect
Used together with advertising
Influence the timing of the buying
Efficiency of the usage of sp can be reduced if often
used

Sponsoring

Good choice of the event what we sponsor

Positive in the eye of the cust.
Connection between the event and offer
Conn. Between the event and target market

Publicity
Cheap way of making the
people talk and write about
our offer or company
Timing is of critical
importance
Direct payment is missing

Direct selling
Direct - personal - communication
The channel is the person - who has to sell
him(her)self
Active participation is needed as the checking of
the customers understanding and acceptance is
necessary.

International promotion strategies

Push strategies - Focuses on personal selling;
considered useful for marketing industrial goods which
have shorter channels of distribution.
Pull strategies - Depend on mass communications to
reach target audiences over long distribution channels.
Integrated marketing communications - Coordinated
use of a broad range of promotional tools to reach a
target market.

Global Promotion Strategies

Can use a standardized theme globally, but may
have to make adjustments for language or
cultural differences.
Communication Adaptation:
Fully adapting an advertising message for
local markets.
Changes may have to be made due to media
availability.

Pricing
Pricing : What tasks need to
be performed to get the
product from place of
manufacture to foreign
customers?
The remainder of the
marketing mix needs to be
determined in order to set
prices

Pricing
Select pricing
objective

Select pricing
method
Select final
price

Determine
demand

Estimate
costs

Analyze competitors
costs, prices, and offers

International pricing policy

International price escalation problem
Four types of strategies
Uniform price everywhere: different profit rates, too high in
some countries
Market-based price: ignores costs, parallel importations
Cost-based price: standard markup everywhere, too high in
some countries
Identical pricing position: compare to local competition in
each market

Global Pricing Strategies

Companies face many problems in setting their
international prices.
Possible approaches include:
Charge a uniform price all around the world.
Charge what consumers in each country will pay.
Use a standard markup of costs everywhere.
International prices tend to be higher than domestic
prices because of price escalation.
Companies may become guilty of dumping a foreign
subsidiary charges less than its costs or less than it
charges in its home market.

Pricing Considerations
Political
And Legal
Environment

Economic
financial
Environment

Production
Facility

Pricing
Decisions
Ability to
keep track

Competitive
Environment
122

International Pricing

Twelve European Union countries have adopted the euro as a common

currency, creating pricing transparency and forcing companies to
harmonize their prices throughout Europe.

Whole-Channel Concept for

International Marketing

The structure of the international marketing plan

1. Brief summary of the manager/owner
Reader - employee, partner, auditor, financial institution
Objective, reason
2. The company
History
Parameters
3. Motivators and obstacles
Macro and micro motivators
Internal and external obstacles
4. International market research
Objective
Methods

5. Review of the micro and macro environment

5. Review of the micro and macro environment

Micro environment

competitors,

new entrants,

substitutes,

power of the clients

power of the suppliers

Macro environment

Geographical

economic

Political

Legal

Technological

Cultural

6. International market selection

International market segmentation
International targeting
7. Mode of entry
8. Marketing mix
Product / service
Price (cost)
Promotion
Distribution channel
9. Organisational framework
10. Scheduling
11. Budgeting
12. Effect study
13. Conclusion