The International

Marketing Mix

 We

have to bring in the concept of

international marketing mix as any
advertising whether local or
international is dependent on the
marketing mix.
Companies operating in foreign
markets must decide whether or not
to adapt their marketing mix to local
conditions and to what degree?

Product: Design, development, branding

and packaging.
Place: channels used to move the product
from manufacturers to consumers.
Price: product offer at certain level of profit.
Promotion: advertising, personal selling,
sales promotion, direct marketing, publicity,
sponsorships, trade fairs etc.
2001 was the turnaround year for Samsung.
It earned US $2.5 billion profit and became
premium producer of cell phones.
But this was a relatively simple product with
simple deliverables.

 With

a global approach to the

marketing mix, a firm utilizes a common
marketing plan for all the markets.
This means selling same product in the
same way every where in the world.
Such standardization bring lower
production, management and promotion
costs.

Consumers used to buy Samsung when they

could not afford Sony or Toshiba.
o Now it is the name which consumers
specially
young ones seek out for most fun and style.
o Samsung was producing some cool products
but
nobody was noticing mainly due to fuzzy
image
from market to market.
o They had 55 advertising agencies.
o Single shop Foote, Cone and Belding.
o

The other school of thought advocates

Specialization.
Consumers and marketing environments in
different countries vary so greatly, it is
necessary
to tailor the marketing mix elements.
Although this results in higher cost, still
marketers believe that higher returns will
offset
the additional cost elements.

 They altered
Do you think

tastes and elements.

PIZZA in its original Italian form
would have clicked. Today we are eating Chicken
Tikka in a PIZZA.
They also had to move to Halal food elements.
Walmart Example. Locals Know Best Model.
Local managers have a say in what to stock.
They have the authority to buy and stock locally.
Discussion Point Which products should?

 Selling

same product in different markets

eliminates duplication of cost related to
research and development, product design
and
package design.
Economies of scale.
Coca Cola, Kellogs corn flakes, ponds cold
cream,
Gillette razor blades are few examples who
sell
same product worldwide.

Durable and in durable goods.

Customization is more seen in in durable
segment of goods mainly due to human tastes,
habits and customs involved where cultures are
more relevant.
Similarly industrial products are usually more
into standardization.
Product standardization is also effective where
target markets are similar. Youth all over the
world
are surprisingly similar. Marketers of jeans,
hair products and colas find that they can sell
same product world over.

High tech / high touch products are essentially

more towards standardization.
Electrical appliances have to customize in
certain markets.
Government regulations also play an important
role. For example in US Cars manufacturers
and importers have to strictly follow emission
standards. Germany has strict guidelines for
purity of beers sold in that country.
International food outlets seem to offer
products matching our tastes. Isnt that the
case?
Country of origin effect.

Pricing Standardization or Specialization

Corporate objectives.
Competition.
Consumer demand. Consumer satisfaction. Size of
the market. Markets ability to purchase a product.
Revenue equation P x Q.
Government and regulatory considerations.
Initially the prices may be low to penetrate the
market and later raised. Why?
Skim the cream strategy. Initially the prices are kept
high. This happens when there is no competition or
product is new in that market as competition walks
in prices are reduced.

Prestige pricing strategy

Competitive pricing.
Pricing is dependent on :
Product modification in that market.
Any additional operational cost such as
transportation and insurance.
Costs incurred in entering that market. Like govt
duties and taxes etc. pharma example. PIA example.
Export pricing. Freight and shipping, insurance, tariffs,
taxes, storage costs, doc cost, middlemen margins all
add
up.
Prices may be low due to movement of
overproduction. May be no storage capacity in the
country of origin.
Dumping. Goods sold at a price lesser than the
production cost.????

 Goods

produced abroad. Lower labor and

material cost may be. That gives flexibility.
Promotion.
Saatchi & Saatchi and BBDO believe in
globalization whereas Grey believe in
customization.
Cultural aspects at times compel to
customize msg. islamic values and pepsodent
example.
Language and creative driven by literacy
rate.
Research plays a vital role in deciding
standardization or localization of advertising
message.