International Marketing Mix

Product Decisions
 Marketing Mix Adaptation

In India, McDonald’s serves chicken, fish, and vegetable burgers, and the
Maharaja Mac—two all-mutton patties, special sauce, lettuce, cheese,
pickles, onions, on a sesame-seed bun.
 Deciding on the Global Marketing
Program
 Standardized Marketing Mix:
• Selling largely the same products and
using the same marketing approaches
worldwide.
 Adapted Marketing Mix:
• Producer adjusts the marketing mix
elements to each target market, bearing
more costs but hoping for a larger
market share and return.
 Global Products
 Localisation of a product or service to fit
local regulation and usage requirements
e.g. local voltages and safety laws
 Adaptation fits the product to buyer
preferences e.g. Air-conditioning in USA
 Standardised global products are not
adapted to local preferences, but must
still be localised. E.g Coca-Cola obey
local hygiene laws
 Standardisation Vs Adaptation

 Standardisation policy: offering a uniform version of

a product in all of its foreign markets.

 Adaptation policy: offering a product to targeted

foreign consumers altered to specific tastes,
preferences and needs. Adaptation can concern all
the characteristics of the product.
 Decision between standardisation and adaptation is
not mutually exclusive rather it is a matter of degree
 A certain degree of adaptation of a product is
required in international markets.
 Standardisation Vs Adaptation

 McDonalds example: Pork in India!

 Advantages to pursuing a standardised approach: cost
economies, a consistent brand image and simplification of
planning and control.
 Standardising a product can ultimately lead to failure.
 Main advantage of an adaptation policy is probability that
sales and revenue will be increased due to
appropriateness to the specific needs of the markets.
 The major drawback is the complex organisation and
implementation issues of a product adaptation policy in all
foreign markets.
 Ultimately, the individual company will decide
 Advantages of standardisation
 Cost reduction - e.g. economies of scale
 Improved quality - resources can be
focussed
 Enhanced customer preference - positive
experiences lead to global brand loyalty
 Global customers - uniform quality and
services
 Global segments - e.g. software, cameras.
 Disadvantages of
Standardisation
 Lack of uniqueness - exclusivity may be
behind purchase decision
 Off-target - miss the customer target
completely
 Vulnerable to trade barriers - local
production may be necessary, so
economy of scale benefits are lost
 Strong local competition - customisation
by competitors, lack of local knowledge
 Problems with global
standardisation
 Insufficient market research
 Overstandardisation

 Poor follow-up

 Narrow vision

 Rigid implementation
Five Global Product and Promotion
Strategies
 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.
 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.
 Polaroid SX-70
 Insufficient market
research
 Used US
campaign/agency in
European launch
 TV testimonials from
‘unknown’ people
 hence local lack of
awareness
 Canon AE-1
 Overstandardisation
 First ‘positioned’ as
the expert’s choice in
all markets
 Then endorsed by
John Newcombe
(Tennis Champion)
 Created a much
bigger market for
single-lens reflex
cameras world-wide
Discover that different markets need
some degree of adaptation -Toyopet
 focus globally and supply from
domestic market e.g Harley Davidson
Henkel Pritt
 Poor follow-up
 Pritt stick launched as
an umbrella brand
 failed to capitalise on
initial momentum
 local business units
were under resourced
 weak results had to be
turned around
Unilever - Domestos
 Narrow Vision
 Vision lead from HQ
 UK took lead in
promoting Domestos
 In Germany positioned
as dirt remover, not
germ killer
 UK ignored this -
consumers confused
 Branding Decisions

 Developing new products

 Degrees of product newness
 Brand vs. No brand
 Private label vs. Manufacturer’s own brand
 Co-branding vs. Ingredient branding
 Single brand vs. Multiple brands
 Local brand vs. Global brand
 Global Brands
A key strategic issue that appears on international marketer’s
agendas is whether or not there should be a global
brand.

What is the case for global branding:

a) Economies of scale. The development costs for

products launched under the global brand name can be
spread over large volumes.
b) Global brand has much more visibility than a local
brand. Easier to develop brand awareness
c) Prestige Factor. It signals that you have the resources
to compete globally. Global brands that can claim
worldwide leadership in their product category have
even more clout
 Local Branding

There are also substantial benefits of using a local

brand:

a) Legal Constraints: localization

b) Cultural barriers
c) Patriotism
d) Keeping the local brand can be
preferable to changing it into a global
brand
 Global or Local Brands ?
Although there is often a drive to build up global
brands, there are solid reasons to make an in-depth
analysis before converting local brands into regional or
global ones.

Checklist for Analyzing Globalization Propositions:

What is the cost of creating and maintaining awareness

and associations for local brand versus a global one?

Are there significant economies of scale in the creation

and running of a communication program globally
Is there value to associations of a global brand or a
brand associated with the source country?

What local associations will be generated by the

global name?

Is it culturally and legally doable to use the brand

name, symbol, slogan across the different countries?
 Brand globalisation potential
 Does the brand name make sense
outside of the country? Nokia from
Finland is aware name sounds Japanese
(same roots)
 Does the name have a positive, country
specific image? E.g GM’s Opel and
Chevrolet
 Is the name available legally in many
countries? Dutch Philips, Phillips Oil
registered in USA
 Does the brand complement other global
brands in the portfolio(or not)? E.g. Sony
supports Aiwa at a lower price
 Should the growth be limited to the
creation of a regional brand? E.g.
Strasbourg beer maker, ‘Kronenbourg’
in global markets, as ‘1866’ in S.
Europe. Local brand can be difficult to
remove.

Johnny K. Johansson (1999)

 Cultural Differences

When Nike learned

that this stylized
“Air” logo resembled
“Allah” in Arabic
script, it apologized
and pulled the shoes
from distribution.
Product Life Cycle
International Product Life Cycle (IPLC)

(USA)
(Advanced Nations)
(LDCs)
 Stage of International Product Life Cycle (IPLC)
Stage Export/Import Target Market Competitors Production Cost
(0) Local Few : Local
Innovation None USA Firms Initially high
Increasing Few: Local
(1)Overseas Export USA and Firms Decline due to
Innovation   Advanced Nations   economies of scale
Advanced Nations Advanced
(2)Maturity Stable export and Nations Stable
    LDCs    
Declining Advanced Increase due to no
(3)Worldwide export LDCs Nations lower
Imitation       economies of scale
Increasing Advanced
(4)Reversal Import USA Nations Increase due to
comparative
      and LDCs disadvantage
 New Product Development
 New product development
• High risk / high return
• Technological innovation
• Creative destruction
 Location of R&D
• Disperse R&D to trend/technology leading
markets
 High investment on basic and applied research
 Strong underlying demand; affluent consumers
 Intense competition
 New Product Development
 Integrate R&D, marketing and
Production
 Ensure:
• Product development driven by customer
needs
• New products can be manufactured
efficiently/effectively
• Time to market is minimized
 Plan clearly: goals, milestones, budgets
 New Product Development
 Use cross-functional, multinationally diverse teams
 Span: initial concept development to market
introduction
 Team composition critical
• Assign heavyweight project manager
 High status in organization; high power and

authority
 Dedicated to fullest possible extent to project

• Team should have representative from each function

 Physical co-location
• When appropriate?
• Build team culture
• Communication and conflict resolution processes
 New product planning process
Customer
needs analysis

Idea Screening and Business

generation evaluation analysis

Marketing Product
strategy development
development

Testing

Commercialization
Ansoff’s Product-Market Development Model

Existing Product New Products

Existing
Market Market Penetration Product Development

New
Market Market Development Diversification
 TUGAS
 Sumber : Text Book
 Manajemen Pemasaran Global
(Warren J. Keegan)
 Jawab pertanyaan untuk diskusi pada
Bab : Keputusan Produk