An introduction to Global Marketing

1. PRESENTED BY:
Daksha Shukla
(11DCP017)
Nishant Puri
(11DCP029)
Amritanshu Mehra
(11DCP008)
Ravi Gupta
•(11DCP038)

2. What is Global
Marketing
The decision to
Internationalize
Scanning the Global
Marketing Environment
Factors determining the
entry mode decision
Entry Mode Strategies
Deciding on the Global
Marketing Program
Deciding on the Global
Marketing Organization

3.  Basically ‘global marketing’ consists of finding and satisfying global
customer needs better than the competition, and of coordinating
marketing activities within the constraints of the global environment.
OR
 The process of conceptualizing and then conveying a final product or
service worldwide with the hopes of reaching the international marketing
cmmunity
OR
 Global marketing is defined as the firm’s commitment to coordinate
its marketing activities across national boundaries in order to find and
satisfy global customer needs better than the competition.
This implies that the firm is able to:
o develop a global marketing strategy, based on similarities and differences
between markets
o exploit the knowledge of the headquarters (home organization) through
worldwide diffusion (learning) and adaptations
o transfer knowledge and ‘best practices’ from any of its markets and
use them in other international markets.

5.  Expanding sales into foreign markets
Ranbaxy
 Access to new and potentially more profitable markets
Coca-Cola and Pepsi receive more than half of their revenues
from operations outside the United States
 Increasing the firm’s competitiveness
Mobil, Texaco, and Exxon also realized they had to increase their
international market share to keep pace with foreign competitors
such as British Petroleum and Royal Dutch Shell
 Access to new product ideas, manufacturing innovations and the
latest technology

6.  Industry globalism
The more culturally unbounded the product is, the
more a global clustering can take place and the more a
standardised approach can be made in the design of
marketing programmes

8.  Preparedness for internationalization
The degree of preparedness is dependent on the firm’s
ability to carry out strategies in the international marketplace,
i.e. the actual skills in international business operations. These
skills or organizational capabilities may consist of personal
skills (e.g. language, cultural sensitivity, etc.), the managers’
international experience or financial resources.

9. P
r
e
p
a
r
e
d H
n
e
i Prepare for Strengthen your global
Enter new business
s g globalization position
s
h
F
o
r M Consolidate your export Consider expansion in
I e Seek global alliances
markets international markets
n d
t
e
r
n
a Seek niches in
ti L Stay at home Prepare for a buy-out
o o international markets
n
a
w
li
z
a Low Medium High
ti
o
n
Industry Globalism

10.  Lack of international experience and a weak position in the
home market
 If the firm finds itself in a global industry as a dwarf
among large multinational firms, it may seek ways to
increase its net worth so as to attract partners for a future
buyout bid.
 If the firm has already acquired some competence in
international business operations it can overcome some of its
competitive disadvantages by going into alliances with firms
representing complementary competences

12.  “Think globally but act locally’
 Local flexibility while exploiting the benefits of global
integration and efficiencies, as well as ensuring
worldwide diffusion of innovation
 ‘Glocalization’ tries to optimise the ‘balance’
between standardization and adaptation of the
firm’s international marketing activities

13. Japan
chicken tatsuta
teriyaki chicken
Teriyaki McBurger
Thailand India
Kiwi Burger Aloo Tikki
Maharaja Mac
Singapore Germany
Kiasuburger Chicken Beer
Breakfast McCroissants
Thailand
Samurai Pork Burger

15.  Proactive motives
o Profit and growth goals
o Managerial urge
o Technology competence/unique product
o Foreign market opportunities/market information
o Economies of scale
o Tax benefits

16.  Reactive motives
o Competitive pressures
o Domestic market: small and saturated
o Overproduction/excess capacity
o Unsolicited foreign orders
o Extend sales of seasonal products
o Proximity to international
o customers/psychological distance

18. Saturated Korean Markets
Japanese market saturated
with Toyota and Nissan - >
Honda moving to American
markets

19. The Chinese manufacturer of home appliances ,Haier
Group, was near bankruptcy when Mr Zhang Ruimin was
appointed plant director in 1984, the fourth one that year.
Proactive Motives Reactive motives
Zhang Ruimin had an Entry of global home appliance
internationalization mindset manufacturers into the Chinese
market forced Haier to seek
international expansion
Since China joined the WTO almost
every international competitor had
invested in China, establishing wholly-
owned companies.
Saturation of the Chinese home
appliance market
Price wars – potential for further
development was limited

20.  Insufficient finances
 Insufficient knowledge
 Lack of foreign market connections
 Lack of export commitment
 Lack of capital to finance expansion into foreign markets
 Lack of productive capacity to dedicate to foreign markets
 Lack of foreign channels for distribution
 Management emphasis on developing domestic markets
 Cost escalation due to high export manufacturing,
distribution and financing expenditures.

21.  Comparative market distance;
 Competition from other firms in foreign markets;
 Differences in product usage in foreign markets;
 Language and cultural differences;
 Difficulties in finding the right distributor in the foreign
market;
 Differences in product specifications in foreign markets;
 Complexity of shipping services to overseas buyers.

22.  Exchange rate fluctuations when contracts are made in a
foreign currency
 Failure of export customers to pay due to contract dispute,
bankruptcy, refusal to accept the product or fraud
 Delays and/or damage in the export shipment and distribution
process;
 Difficulties in obtaining export financing

23.  Foreign government restrictions
 National export policy
 Foreign exchange controls imposed by host governments
that limit the opportunities for foreign customers to make
payment
 Lack of governmental assistance in overcoming export
barriers
 Lack of tax incentives for companies that export
 High foreign tariffs on imported products
 Confusing foreign import regulations and procedures
 Complexity of trade documentation
 Enforcement of national legal codes regulating exports
 Civil strife, revolution and wars disrupting foreign markets

24.  Lack of familiarity with customers, competitors and the
market environment in other countries, coupled with the
growing complexity and diversity of international markets
makes it increasingly critical to collect information in relation
to these markets.
 The term ‘marketing research’ refers to gathering, analysing
and presenting information related to a well-defined
problem. Hence the focus of marketing research is a specific
problem or project with a beginning and an end.

26.  Primary data.
This can be defined as information that is collected first-
hand, generated by original research tailor-made to answer
specific current research questions.
Secondary data
This can be defined as information that has already been
collected for other purposes and is thus readily available.
Advantages : Less expensive and less time consuming
Disadvantages : Data reliability and comparability

27.  Internal data sources
Total sales , Sales by country, Sales by products , Sales
volume by market segment , Sales volume by type of channel
distribution , Pricing information , Communication mix
information
External data sources
Electronic databases

28.  Those variables , largely out of the organizations control but
which it must account for , within which it conducts its
business globally.

29. i. Reduce Risk
ii. Isolate most important variables so that highest attention can
be payed to those.
iii. Aids in strategy planning and decision making
iv. Aids in deciding which are the markets to enter and plan on
the appropriate marketing mix.
v. Evaluate and assess the risk of doing business with different
countries.

30.  Cultural Environment
o Culture is the collective programming of the mind which
distinguishes the members of one human group from
another . Culture, in this sense, includes systems of values.
o Some cultural differences are easier to manage than others.
o Greater problem is to understand the underlying attitudes
and values of buyers in different countries.

32. • Takes into account Time, Space , Material Possessions ,
friendship patterns and business agreements.
o Thumbs up after a deal
- US – OK
- South France – The deal was worthless
- Japan – Little bribe has been asked for the deal
o Herman Miller did an office installation for Monsanto in
India Workers wanted to work more collaboratively, but
their arrangement of cubicles was an obstacle.

34.  Nike offended Muslims in June, 1997
 “Flaming air” logo for its Nike Air sneakers looked too similar
to the Arabic form of God’s name, “Allah”.
 Nike pulled more than 80,000 pairs of sneakers from the
market

35.  Differences in Gift giving behaviour
 Differences in eating habbits

37.  HUL learned that low income Indians usually forced to settle
down for lower quality products wanted to buy high end
detergents and personal care products, but could not afford
them in the quantities available
 In response the company developed extremely low cost
packaging material and other innovations that allowed for a
product priced in pennies instead of the $4 to $15 price of the
regular containers.

38. Forced out of India as Indian
government was trying to prevent its
own soft drink industry
•Japanese law prevents foreign companies to
open branches in Japan
•For example, the only foreign bank allowed to
have "almost" regular operations in Japan is
Citibank (but there are restrictions; e.g. no
business bank account can be open there).
•Other foreign bank may have a representative
branch (HSBC, Lloyds, BNP-Paribas, etc. have
one) but people can't open a bank account there.
•Until about some years ago, it was not even
allowed for a foreign company to purchase (take
over) a Japanese company.

39. The launch of the international liquor
brands of Seagram & W D Gilbey coincided
with prohibition being imposed in some of the
high potential states like Andhra Pradesh &
Haryana , giving them a run for their money.
A federal court ruled that American Airlines was not
guilty of trying to drive weaker competitors out of
business when it slashed fares in 1992. In contrast, a
state court in Arkansas found Wal-Mart guilty of
predatory pricing by selling pharmacy products below
cost to drive out competitors.

40.  Embargoes or sanctions by the UN or individual governments to
limit trade to specific countries, a popular political weapon in recent
years.
 Example : US participated in embargoes against Iraq, South Africa,
Libya, and Vietnam.
 An embargo, of course, eliminates many potential market
opportunities.
 In contrast, the lifting of trade sanctions, as in the case of South
Africa, can release pent-up demand and produce tremendous
opportunities.
 A case in point involves Vietnam, against which the US had a near
total economic embargo for 18 years.
 When the embargo was lifted in February 1994, Boeing, Marriott,
Johnson & Johnson, Coca-Cola, Kodak, Du Pont, Kellogg, and
American Express initiated efforts to enter the Vietnamese market.

41.  The competitive environment consists of all the organizations
that attempt to serve similar customers.
o Brand competitors
Nike is a brand competitor of Reebok, LA Gear, and other firms that
market different brands of the same types of sport shoes.
o Product competitors offer different types of products to satisfy the
same general need. Domino's Pizza, McDonald's, and Kentucky
Fried Chicken are product competitors. They attempt to satisfy a
consumer need for fast food, but they offer somewhat different
menus and services.

43.  Internal Factors
 External Factors
 Desired Mode Characteristics

44.  Firm Size
 International Experience
 Product/Service

45.  More the Size  More the resource availability 
Provides basis for increased International Involvement
over time
 For instance SMEs

46.  Another important factor, refers to the international
experience of the managers and thus of the firm
 Uncertainty in the international markets is reduced through
actual operations in the foreign market

47.  The nature of the product affects channel selection because
products vary widely in their characteristics and use
 For Instance -
• Products with high value/weight ratios, such as expensive
watches, are typically used for direct exporting.
• However soft drinks and beer industry, companies typically
establish licensing agreements, or invest in local bottling or
production facilities because of high shipment costs.

48.  Hard services are those where production and consumption
can be decoupled. For example software services can be
transferred into a CD, or some other tangible medium, which
can be mass-produced, making standardization possible.
 On the other hand Soft Services are those where production
and consumption occur simultaneously and decoupling is not
viable. The soft-service provider must be present abroad from
their first day of foreign operations.

49.  Sociocultural Distance
 Country Risk/Demand Uncertainty
 Market Size and Growth
 Direct and Indirect Trade Barriers

50.  The greater the perceived distance between the home and
host country in terms of culture, economic systems and
business practices, the more likely it is that the firm will shy
away from direct investment in favor of joint venture
agreements.
 They’ll prefer entry modes that involve relatively low resource
commitments and high flexibility.

51.  When planning its method of entry the firm must do a risk
analysis of both the market and its entry mode.
 Exchange rate risk is another variable.
 Risks are not only economic they could be political as well.
 So when the country risk is high, firms favor entry modes that
involve relatively low resource commitments (export modes).

52.  The larger the country and the size of its market, and the
higher the growth rate, the more likely it is that the firms
would commit resources & consider establishing a wholly-
owned sales subsidiary or participate in a majority-owned
joint venture.
 Small markets, on the other hand, especially if they are
geographically isolated and cannot be serviced efficiently from
a neighboring country, may not warrant significant attention
or resources. Consequently they may be best supplied via
exporting or a licensing agreement

53.  Tariffs or quotas on the import of foreign goods and
components is one important factor.
 Product or trade regulations and standards have an impact on
mode of entry and operation decisions.
 Preferences of local suppliers, or tendencies to ‘buy national’,
often encourage companies to consider a joint venture or
other contractual arrangements with a local company as the
local partner helps in developing local contacts, negotiating
sales and establishing distribution channels.
 In some instances product regulations and standards
necessitate significant adaptation and modification so the firm
may have to establish local production, assembly or finishing
facilities.

54.  In such a case the market field is subject to the opportunistic
behavior of the few export intermediaries, and this will favor
the use of hierarchical modes in order to reduce the scope for
opportunistic behavior.
 For Instance -

55.  Distribution channels in Japan are very different. They are as
inefficient as they are complex.
 The system is characterized by multiple layers of wholesalers
who have developed close, personal relationships with other
wholesalers, manufacturers, importers, and retailers.
 Moreover, these intimate relationships often serve as an
informal barrier to U.S. companies wishing to sell directly to
end-users or retailers.

56.  Risk Averse
 Control
 Flexibility

57.  If the decision maker is risk averse they will prefer export
modes (e.g. indirect and direct exporting) or licensing because
they typically entail low levels of financial and management
resource commitment.
 A joint venture provides a way of sharing risk, financial
exposure and the cost of establishing local distribution
networks and hiring local personnel.
 However, modes of entry that entail minimal levels of resource
commitment and hence minimal risks are unlikely to foster the
development of international operations.

58.  Control is often closely linked to the level of resource
commitment.
 Exporting, provide little or no control over the conditions
under which the product or service is marketed abroad.
 In the case of licensing and contract manufacturing
management needs to ensure that production meets its
quality standards.
 Joint ventures also limit the degree of management control
over international operations.
 Wholly-owned subsidiaries provide the most control, but also
require a substantial commitment of resources.

59.  There’s always a flexibility associated with every mode of
entry
 Modes like Wholly owned Subsidiaries (involving substantial
equity investment) are typically the most costly but the least
flexible and most difficult to change in the short run.
 Then modes like Contractual Agreements and Joint Ventures
limit the firm’s ability to adapt to or change strategy when
market conditions are changing rapidly.

61.  EXPORTING
• DIRECT
• INDIRECT
 LICENSING
 FRANCHISING
 TURNKEY PROJECTS
• WHOLLY OWNED SUBSIDARIES
• JOINT VENTURE
• STRATEGIC ALLIANCE

62.  Indirect exports is the process of exporting through
domestically based export intermediaries.
 The exporter has no control over its products in the foreign
market.

63. i) Domestic-based export merchants
 Buy the manufacturer’s products and then sell them abroad.
ii) Domestic-based export agents
 Including trading companies, seek and negotiate foreign purchases
for a commission.
iii) Cooperative organizations
 Carry on exporting activities on behalf of several producers and are
partly under their administrative control. They are often used by
producers of primary products such as fruits or nuts.
iv) Export-management companies
 Agree to manage a company’s export activities for a fee.

64. Advantages
 Less Investment : The firm does not have to develop an export
department, an overseas sales force, or a set of foreign
contacts.
 Low Risk : Because international marketing intermediaries
bring know-how and services to the relationship, the seller will
normally make fewer mistakes.
Disadvantages
 Little or no control over distribution, sales, marketing, etc. as
opposed to direct exporting
 Wrong choice of market and distributor may lead to
inadequate market feedback affecting the international
success of the company

65.  Direct exporting involves selling directly to your target
customer in market. This could be from your home country
through the internet and regular trade visits, or by setting up a
branch, office or company in the target country.
 Selling directly to customers prevents other businesses taking
parts of your margin. However this approach requires a large
commitment of financial and human resources. It takes time
to make contacts and build relationships, negotiate deals,
understand the market and carry out marketing.

66. Advantages :
 You are in control of pricing, your brand.
 You get a direct understanding of buyers' or end users' needs
and an ability to customize accordingly
 You maintain the customer relationship
Disadvantages :
 Greater information requirements
 Longer time-to-market as opposed to indirect exporting

67.  Is a simple way to engage in international marketing.
 The licensor issues a license to a foreign company to use a
manufacturing process, trademark, patent, trade secret or
other item of value for a fee or royalty.
 The licensor gains entry at little risk ; the licensee gains
production expertise or a well known product or brand name.

68.  The licensor has less control over the licensee than if it had set
up its own production and sales facilities.
 Furthermore, if the licensee is very successful, the company
might find that it has created a competitor.

69.  Now to avoid a situation like this, Coca-Cola usually supplies
some proprietary ingredients or components needed in the
product
 But the best strategy is for the licensor to lead in innovation so
that the licensee will continue to depend on the licensor.

71.  Some examples

72. Companies such as Hyatt and Marriot sell management
contracts to owners of foreign hotels to manage these
businesses for a fee.
The management firm may even be given the option to
purchase some share in the managed company within a
stated period.

74.  The firm hires local manufacturers to produce the product.
 When Sears opened department stores in Mexico and Spain, it
found qualified local manufacturers to produce many of its
products.

75. Advantages :
• Definitely there’s chance to start faster.
• Less risk
• There’s opportunity to form a partnership or buy out the local
manufacturer later.
Disadvantages :
• The company has less control over the manufacturing process
• There is loss of potential profits on manufacturing.

76.  A system in which semi-independent business owners
(franchisees) pay fees and royalties to a parent company
(franchiser) in return for the right to become identified with its
trademark, to sell its products or services, and often to use its
business format and system.

77.  Compared to licensing, franchising agreements tends to be
longer and the franchisor offers a broader package of rights
and resources which usually includes: equipments, managerial
systems, operation manual, initial trainings, site approval and
all the support necessary for the franchisee to run its business.
 A licensing agreement involves things such as intellectual
property, trade secrets and others while franchising is limited
to trademarks and operating know-how of the business.

78. Some
examples

79.  Wholly Owned Subsidiaries(WOS)
 Joint Venture (JV)
 Strategic Alliance

80.  A turnkey project refers to a project in which clients pay
contractors to design and construct new facilities and train
personnel. A turnkey project is way for a foreign company to
export its process and technology to other countries by
building a plant in that country
 Industrial companies that specialize in complex production
technologies normally use turnkey projects as an entry
strategy

81. Can be further classified into :
 Greenfield Investments
 Acquisitions

82.  It is the establishment of a new wholly owned subsidiary. It is
often complex and potentially costly, but gives full control to
the firm and has the most potential to provide above average
return.
 It is preferred where close contact with end customers, high
levels of professional skills, specialized know how, and
customization are required.
 Also, its more likely preferred where physical capital intensive
plants are planned.

83.  Some Examples :

84.  Hyundai Motor Company planned a major greenfield
investment in Nošovice in the Moravia-Silesia region of the
Czech Republic.
 They opened a new manufacturing plant to begin operations
in October 2008 and employed 3,000 people. Both the Czech
government and Hyundai signed an agreement outlining the
conditions of this investment.
 It’s one of the largest investment in the Czech Republic’s
modern history.
 Hyundai also got subsidies amounting to CZK 4.3 billion

85.  Mercedes Benz began its Indian production in the mid-1990s from a
plant based in the small town of Pimpri.
 In 2007 it acquired 100 acres for a greenfield plant in the Pune,
Maharashtra, India. The investment was a whopping Rs. 250
Crores & it took just over a year to be completed.
 The production capacity could now turn out almost 5000 vehicles,
hence reducing the amount of competition Mercedes faced in the
Indian market from brands like BMW & Audi.
 Clearly, this provided a competitive edge.
 The idea to setup a facility in India to exploit the cheap resources &
make use of relatively cheap investment worked very well in favor of
the auto-giant.
 Production started in Q1 of 2009 &
has really helped the company in making the presence of its cars felt on
the Indian roads.

86.  Carrefour’s South Korean Investment
 Riding on its successful retail history, Carrefour chose to venture
into a completely different area on its own without a local partner,
due to which it failed to understand the market.
 Although the country in question was South Korea, Carrefour
employed most of the top management personnel from France and
this did not go down well with local employees.
 The company failed to localize its stores and the products sold
according to the needs and preferences of Korean consumers.
Although bulk purchases were offered at cheap prices, the research
was not done properly. They failed to realize that there weren’t
many customers who preferred bulk purchases.
 As such, in April 2006, Carrefour shut down its operations in South
Korea by selling of its stores for an estimated $1.3 billion.

87.  It has become a popular mode of entering foreign markets
mainly due to its quick access.
 It offers the fastest, and the largest, initial international
expansion of any of the alternative.
 It leads to greater market power and market share is usually
affected by market power.
 Acquisition is lower risk than Greenfield Investment because
of the outcomes of an acquisition can be estimated more
easily and accurately. In overall, acquisition is attractive if
there are well established firms already in operations or
competitors want to enter the region.

88.  Some Examples :

89.  Volkswagen’s acquisition of Skoda
 Skoda, set up in the 1895 is one of the oldest car companies in
the world. It was a well recognized car brand in the early half
of the 1900s after which it lost its value, mainly due to being
outdated in terms of technology, quality & unreliability. In
1991, VW took over a part (30%) of Skoda & went about
restoring brand’s pride which it enjoyed many decades ago.
More than £2 billion was invested in upgrading plants, R&D
facilities & training employees to make sure the product meets
the quality standards of the targeted markets.

90.  In 2005, eBay, the multibillion dollar internet auction site
decided it was time to purchase Skype for a whopping US$2.6
billion. That seemed a little out of place as Skype generated
revenues of around US$60 million. Obviously, the acquisition
would have to be justified after paying such a huge bill.
 Skype is renowned for its free VoIP services enabling members
to make free calls over the internet along with paid calls at
negligible rates from PC to phones. By the time of its purchase,
it was estimated to have almost 54 million subscribers.

91.  Foreign investors may join with local investors to create a joint
venture company in
 which they share ownership and control. For instance
 The foreign firm might lack the financial, physical, or
managerial resources
 to undertake the venture alone.
 The foreign government might require joint ownership as a
condition for entry.
 Even corporate giants need joint ventures to crack the
toughest markets

93.  Coca-Cola and Nestle joined forces to develop the
international market for “ready to drink” tea and coffee, which
currently sell in significant amounts only in Japan.
 Procter & Gamble formed a joint venture with its Italian arch-
rival Fater to cover babies’ bottoms in the United Kingdom and
Italy

94.  Whirlpool took a 53 percent stake in the Dutch electronics
group Philips’s white goods business to leapfrog into the
European market.
 GE Money – views joint ventures as one of its “most powerful
strategic tools” . It has formed JVs with financial institutions in
S Korea, Spain, Turkey etc.

95.  It’s a term used to describe a variety of cooperative
agreements between different firms, such as shared research,
formal joint ventures, or minority equity participation.
 The modern form of strategic alliances is becoming
increasingly popular and has three distinguishing
characteristics.

96.  This is an extensive, far-ranging partnership, bringing together
each company’s respective strengths today and extending
them ambitiously into the future.
 The highlight of the partnership is the companies’
commitment to jointly develop and market a suite of next-
generation, cloud-based, managed security solutions for
enterprise & government customers.
 It has the potential of providing a secure foundation for the
widespread adoption and proliferation of enterprise-class
cloud computing.

97. MARKETING MIX
PRODUCT
PRICING
PLACING
PROMOTION

98. MARKETING MIX
PRODUCT
PRICING
PLACING
 A company’s customers and competitors PROMOTION
are defined by the products it offers.
 The challenge facing a company with global
horizons is to develop product policies and
strategies that are sensitive to market
needs, competition, and company
resources on a global scale.

99. MARKETING MIX
PRODUCT
GLOBAL
LOCAL PRODUCT PRICING
PRODUCT
PLACING
PROMOTION
TYPES OF
PRODUCT
INTERNATIONAL NATIONAL
PRODUCT PRODUCT

100. MARKETING MIX
PRODUCT
PRICING
PLACING
PROMOTION

101. NATIONAL MARKETING MIX
PRODUCT
PRODUCT
PRICING
PLACING
PROMOTION

102. MARKETING MIX
INTERNATIONAL PRODUCT PRODUCT
PRICING
PLACING
PROMOTION

103. MARKETING MIX
GLOBAL PRODUCT PRODUCT
PRICING
PLACING
PROMOTION

104. MARKETING MIX
PRODUCT POSITIONING
PRODUCT
PRICING
PLACING
 Positioning refers to an act of locating a PROMOTION
brand in the customers’ mind over and
against other products in terms of product
attributes and the benefits that a brand
does and does not offer.

105. MARKETING MIX
PRODUCT POSITIONING
PRODUCT
PRICING
ATTRIBUTE/BENEFIT
PLACING
PROMOTION
QUALITY/PRICE
USE/USER
HIGH-TECH
HIGH-TOUCH

106. MARKETING MIX
ATTRIBUTE/BENEFIT
PRODUCT
PRICING
 In global marketing, the fact that a
PLACING
product is imported itself represents
benefit positioning. PROMOTION
 Economy, reliability and durability are
other frequently used attribute/benefit PRODUCT POSITIONING
positions.
ATTRIBUTE/BENEFIT
QUALITY/PRICE
USE/USER
HIGH-TECH
HIGH-TOUCH

107. MARKETING MIX
ATTRIBUTE/BENEFIT
PRODUCT
PRICING
Example:
PLACING
In the on-going Credit card wars,
VISA’s advertising focuses on the PROMOTION
benefit of worldwide merchant
acceptance. PRODUCT POSITIONING
ATTRIBUTE/BENEFIT
QUALITY/PRICE
USE/USER
HIGH-TECH
HIGH-TOUCH

108. MARKETING MIX
QUALITY/PRICE
PRODUCT
PRICING
PLACING
 This strategy focuses on providing the
customers high fashion/quality goods at PROMOTION
a high price rather than providing them
the low quality goods at a low price. PRODUCT POSITIONING
ATTRIBUTE/BENEFIT
QUALITY/PRICE
USE/USER
HIGH-TECH
HIGH-TOUCH

109. MARKETING MIX
QUALITY/PRICE
PRODUCT
PRICING
Example:
The American express card has traditionally PLACING
been positioned as an upscale card whose PROMOTION
prestige justifies higher annual fees than a
VISA or Master card. The Discover card
positions itself at the other end by charging no PRODUCT POSITIONING
annual fee and a cash rebate to card holders ATTRIBUTE/BENEFIT
each year.
QUALITY/PRICE
USE/USER
HIGH-TECH
HIGH-TOUCH

110. MARKETING MIX
USE/USER
PRODUCT
PRICING
PLACING
 Positioning can also be achieved by
describing how a product can be used or PROMOTION
by associating a product with a user or
class of users the same way in every PRODUCT POSITIONING
market.
ATTRIBUTE/BENEFIT
QUALITY/PRICE
USE/USER
HIGH-TECH
HIGH-TOUCH

111. MARKETING MIX
USE/USER
PRODUCT
PRICING
Example:
Marlboro’s success as a global brand is due PLACING
in part to the product’s association with PROMOTION
cowboys – the archetypal symbol of rugged
independence, freedom and space.
Smoking Marlboro is a way of getting in PRODUCT POSITIONING
touch with a powerful urge to be free and
ATTRIBUTE/BENEFIT
independent. Lack of physical space may
be a reflection of the Marlboro user’s own QUALITY/PRICE
sense of ‘macho-ness’ or a symbol of
freedom and independence. The message USE/USER
is reinforced in advertising with an image
HIGH-TECH
carefully calculated to appeal to the
universal human desire for those things HIGH-TOUCH
and urges smokers to ‘join that rugged,
independent cowboy in the Old West’.

112. MARKETING MIX
HIGH-TECH
PRODUCT
PRICING
 There are certain products for which the PLACING
buyers wish to acquire considerable PROMOTION
technical information.
PRODUCT POSITIONING
 The positioning of the technical products
such as Computers, tires, financial ATTRIBUTE/BENEFIT
services, adidas and nike sports
equipments, fuji bicycles, Canon QUALITY/PRICE
cameras, Sega video games, etc. is USE/USER
classified under the High-tech
positioning which should be informative HIGH-TECH
and emphasize features.
HIGH-TOUCH

113. MARKETING MIX
HIGH-TECH
PRODUCT
PRICING
Example: Computer
buyers in Russia and PLACING
the United States PROMOTION
are equally
knowledgeable
about Pentium PRODUCT POSITIONING
microprocessors,
hard drives, and ATTRIBUTE/BENEFIT
RAM requirements.
QUALITY/PRICE
USE/USER
HIGH-TECH
HIGH-TOUCH

114. MARKETING MIX
HIGH-TOUCH
PRODUCT
PRICING
PLACING
 Marketing of high touch products
requires less emphasis on the specialized PROMOTION
information and more emphasis on the
image. PRODUCT POSITIONING
ATTRIBUTE/BENEFIT
 Buyers of such products share a common
language and set of symbols relating to QUALITY/PRICE
themes of wealth, materialism, and USE/USER
romance.
HIGH-TECH
HIGH-TOUCH

115. MARKETING MIX
HIGH-TOUCH
PRODUCT
PRICING
Example:
The American-ness PLACING
of Levi’s , PROMOTION
Marlboro,
McDonald’s and
Harley-Davidson PRODUCT POSITIONING
enhances their
appeal to the ATTRIBUTE/BENEFIT
cosmopolitians
QUALITY/PRICE
around the world
and offers USE/USER
opportunities for
HIGH-TECH
benefit positioning.
HIGH-TOUCH

116. PRODUCT SATURATION MARKETING MIX
LEVELS IN MARKET PRODUCT
PRICING
PLACING
 The sale of the products in the market
does not depend only on the income of PROMOTION
the consumers.
 Other companion factors are also taken
into account.

117. PRODUCT SATURATION MARKETING MIX
LEVELS IN MARKET PRODUCT
PRICING
Example: PLACING
1) The sale of air conditioners is explained by
PROMOTION
income and climate. In a low-income country,
many people cannot afford an air conditioner no
matter how hot it is. Affluent people in a
Northern climate can easily afford an air
conditioner but have no need for one.

118. PRODUCT SATURATION MARKETING MIX
LEVELS IN MARKET PRODUCT
PRICING
 2) During the 1960s, the ownership PLACING
of vacuum cleaners in the European
common market ranged from a high PROMOTION
of 95 percent in Netherlands to a
low of 7 percent in Italy. An
important factor in explaining the
ownership levels is the type of floor
covering used in the homes of the
country. Almost every home in
Netherlands contains rugs, whereas
in Italy the use of rugs is uncommon.

119. MARKETING MIX
PRODUCT
PRICING
PLACING
PROMOTION
FACTORS AFFECTING
PRODUCT DESIGN

120. MARKETING MIX
PRODUCT DESIGN
PRODUCT
PRICING
PREFERENCES
PLACING
PROMOTION
COST
COMPATABILITY
LAWS AND REGULATION
HIGH-TOUCH

121. MARKETING MIX
PREFERENCES
PRODUCT
PRICING
 Color PLACING
 Taste
 Heavyness PROMOTION
Example:
Italy’s Olivetti Corporation had gained a
considerable distinction for its award-winning PRODUCT DESIGN
modern consumer typewriters. But these designs
did not enjoy the commercial success in the U.S.
The U.S. consumer wanted a heavy, bulky PREFERENCES
typewriter that was ugly by the U.S. standards.
COST
COMPATABILITY
LAWS AND
REGULATION

122. MARKETING MIX
COST
PRODUCT
PRICING
 Design-related costs
 Labour cost PLACING
 Repair services
PROMOTION
Example:
British approach – Engine inside the wing. PRODUCT DESIGN
Benefits – Less wind resistance and higher fuel
economy
Disadvantage – Less accessible engines. Higher PREFERENCES
time required for maintenance and repair.
COST
American approach – Hang the engine from the
wing COMPATABILITY
Benefits – Lesser time required for maintenance
and repair LAWS AND
Disadvantage – Less efficiency and fuel economy REGULATION
REASON: Cost of labor required to repair the
engine.

123. MARKETING MIX
COMPATABILITY
PRODUCT
PRICING
 Language
 System PLACING
Example: PROMOTION
The companies manufacturing the electrical
equipments have to take into consideration the
power system in the country of use. Three PRODUCT DESIGN
different television broadcast systems are
found in the world today: the French SECAM PREFERENCES
system, the German PAL system and the U.S.
COST
NTSC system. The companies that are targeting
global markets design multisystem TVs that COMPATABILITY
allow users to simply flip a switch for proper
LAWS AND
orientation with any system. Companies that REGULATION
do not aim for the global market design
products that comply with a single type of
technical requirements.

124. MARKETING MIX
LAWS AND REGULATIONS
PRODUCT
PRICING
 Compliance with the laws and regulations of
PLACING
different countries has direct impact on the
product design decisions, leading to the PROMOTION
adaptations in the design thus increasing the
price of the product.
PRODUCT DESIGN
Example:
In the food industry in Europe there were 200 PREFERENCES
legal and regulatory barriers (such as prohibitions
COST
or taxes on products with certain ingredients,
and different packaging and labelling laws) to COMPATABILITY
cross-border trade within the European-Union in LAWS AND
the food categories. REGULATION

125. MARKETING MIX
GEOGRAPHIC EXPANSION
PRODUCT
PRICING
PLACING
PRODUCT
PROMOTION
STANDAR ADAPT NEW
D
PRODUCT
STRAIGHT
STANDARD ADAPTATIO
EXTENSION
N
PROMOTIO PRODUCT
INVENTIO
N N
PROMOTIO
DUAL
N
ADAPT ADAPTATIO
ADAPTATIO
N
N

126. MARKETING MIX
STRAIGHT EXTENSION
PRODUCT
PRICING
 The straight extension strategy involves
PLACING
introducing a standard product with the
same promotion strategy throughout the PROMOTION
world market. By implementing this
strategy successfully major savings can be
done on market research and product
development.

127. MARKETING MIX
STRAIGHT EXTENSION
PRODUCT
PRICING
Example:
When Campbell tried to sell its tomato PLACING
soup in the UK, it discovered, through
substantial losses, that the English prefer PROMOTION
a more bitter taste than Americans.
Campbell learned its lesson and
subsequently succeeded in Japan by
offering 7 soup varieties – for example,
corn potage – designed specifically for
the Japanese markets. Another example
of successful extension is Unilever’s
Organic shampoo, which was first
launched in Thailand and then its sales
were extended to Bangkok, Paris and
various other countries. The basic
advertising concept all over the world
has been ‘Organics – The first ever root-
nourishing shampoo’.

128. MARKETING MIX
PROMOTION ADAPTATION
PRODUCT
PRICING
 Use of this strategy involves leaving a product
PLACING
unchanged but fine-tuning promotional activity
to take into account the cultural differences PROMOTION
between markets.
Example:
Bi-cycles and motor scooters are examples of
products that have been marketed with this
approach. They satisfy the recreational needs in
the US but serve as the basic need for
transportation in many other countries.

129. MARKETING MIX
PRODUCT ADAPTATION
PRODUCT
PRICING
• By modifying only the product a
PLACING
manufacturer intends to maintain the core
product function in different markets. PROMOTION
Example:
The electrical appliances have to be
modified to cope with different electrical
voltages in different environmental
conditions. Exxon changed the chemical
composition of petrol to cope with the
extremities of climate, but still used the ‘Put
a tiger in your tank’ campaign unchanged
around the world.

130. MARKETING MIX
DUAL ADAPTATION
PRODUCT
PRICING
PLACING
 By adapting both product and promotion
for each market the firm is adopting a PROMOTION
completely differentiated approach.
 This strategy is often adopted by firms
when it is not in a leadership position
and is therefore reacting to the market or
following competitors.

131. MARKETING MIX
DUAL ADAPTATION
PRODUCT
PRICING
 Example:
PLACING
Kellogg’s Basmati flakes was specially
created to suit Indian tastes, India being PROMOTION
a rice-eating country . The advertising
campaign was a locally adapted concept
based in international positioning.

132. MARKETING MIX
PRODUCT INVENTION
PRODUCT
PRICING
 Product invention is the strategy in which the
products are specifically developed to meet the PLACING
needs of the individual markets. PROMOTION
 Existing products may be technologically
sophisticated to operate in less developed countries,
where power supplies may be intermittent and local
skills limited.
Example:
Colgate pursued this strategy in developing Total, a
toothpaste brand whose formulation, imagery and
ultimate consumer appeal were designed from the
ground up to translate across national boundaries.

133. MARKETING MIX
PRICING
PRODUCT
PRICING
 In any country, three basic factors determine the
boundaries within which the market prices should PLACING
be set. PROMOTION
 The first is product cost, which establishes the
price floor, or minimum price.
 Second, competitive prices for comparable
products create a price ceiling, or the upper
boundary.
 Between the lower and the upper boundaries for
every product there is an optimum price which is
the function of the demand for the product as
determined by the willingness and ability of
customers to buy.
 The interplay of these factors is reflected in the
pricing policies adopted by the companies.

134. MARKETING MIX
PRICING
PRODUCT
PRICING
Questions that arise before the company --
PLACING
 Should the firm pursue market penetration, market PROMOTION
skimming or any other pricing objective?
 What type of discount or allowance should the
company offer its international consumers?
 Are the firm’s prices likely to be viewed by the host-
country government as reasonable or exploitive?
 Do the target country’s dumping laws pose a
problem?

135. GLOBAL PRICING OBJECTIVES MARKETING MIX
AND STRATEGIES PRODUCT
PRICING
PLACING
MARKET SKIMMING PROMOTION
PENETRATION
PRICING
MARKET HOLDING

136. MARKETING MIX
MARKET SKIMMING
PRODUCT
PRICING
 In this strategy a high price is charged to
PLACING
‘skim the cream’ from the top end of
the market, with the objective of PROMOTION
achieving the highest possible
contribution in a short time.
GLOBAL PRICING OBJECTIVES
AND STRATEGIES
 For a marketer to use this approach the
MARKET
product has to be unique, and some SKIMMING
segments of the market must be willing
to pay the high price. PENETRATION
PRICING
MARKET
HOLDING

137. MARKETING MIX
MARKET SKIMMING
PRODUCT
PRICING
Example:
PLACING
When Sony first began selling Betamax
videocassette recorders (VCRs) in the U.S., PROMOTION
it used a skimming strategy. Harvey
Schein, the then president of Sony of
GLOBAL PRICING OBJECTIVES
America at that time, recalled the AND STRATEGIES
response to the $1,295 tag.
MARKET
SKIMMING
PENETRATION
PRICING
MARKET
HOLDING

138. MARKETING MIX
PENETRATION PRICING
PRODUCT
PRICING
 A penetration pricing policy is used to
PLACING
stimulate market growth and capture
market shares by deliberately offering PROMOTION
products at low prices.
GLOBAL PRICING OBJECTIVES
 This approach requires mass markets, AND STRATEGIES
price-sensitive customers and reduction in
MARKET
unit costs through economies of scale and SKIMMING
experience curve effects.
PENETRATION
PRICING
MARKET
HOLDING

139. MARKETING MIX
PENETRATION PRICING
PRODUCT
PRICING
 Japanese companies have used penetration pricing
intensively to gain market share leadership in a PLACING
number of markets, such as cars, home
PROMOTION
entertainment products and electronic
components.
Example:
When Sony developed the portable compact disc GLOBAL PRICING OBJECTIVES
AND STRATEGIES
player, the cost per unit at initial sales was
estimated to exceed $600. Since this was a ‘no-go’ MARKET
price in the U.S. and other target markets, the SKIMMING
competitors like Akio Morita gained the market
share by pricing the unit in the $300 range. PENETRATION
PRICING
MARKET
HOLDING

140. MARKETING MIX
MARKET HOLDING
PRODUCT
PRICING
PLACING
 The market holding strategy is frequently
adopted by the companies that want to PROMOTION
maintain their share of the market.
 In global marketing, currency fluctuations
GLOBAL PRICING OBJECTIVES
often trigger price adjustments. AND STRATEGIES
MARKET
 If the competitive situation in market SKIMMING
countries is price sensitive, manufacturers
PENETRATION
must absorb the cost of currency PRICING
appreciation by accepting lower margins in
order to maintain competitive prices in MARKET
HOLDING
country markets.

141. MARKETING MIX
MARKET HOLDING
PRODUCT
PRICING
 Example: IKEA, the Swedish home
PLACING
furnishing company sourced 50% of its
products in the U.S. in 1992, compared PROMOTION
with only 10% in 1989.
GLOBAL PRICING OBJECTIVES
AND STRATEGIES
MARKET
SKIMMING
PENETRATION
PRICING
MARKET
HOLDING

142. GLOBAL MARKETING CHANNELS AND MARKETING MIX
PHYSICAL DISTRIBUTIONS PRODUCT
PRICING
• Distribution is the physical
PLACING
flow of goods through
channels. PROMOTION
• Channels are comprised of
coordinated groups of
individuals or firms that
perform functions adding
utility to a product or a  The American Marketing Association defines
service. channel of distribution as ‘an organized
network of agencies and institutions, which, in
combination, perform all the activities required
to link producers with users to accomplish the
marketing task’.
 Hypermarkets like Carrefour and Euromarche
are one of the many elements that constitute
distribution channels around the globe.

143. MARKETING CHANNELS - MARKETING MIX
PURPOSE PRODUCT
PRICING
 The purpose of the marketing channels is to PLACING
create utility for the customers. The major PROMOTION
categories of utility are –
1. Place – The availability of a product or service
in a location that is convenient to a potential
customer
2. Time – The availability of a product or service
when desired by a customer.
3. Form – The product is processed, prepared and
ready to use when desired by a customer.
4. Information – Answers to questions and
general communication about useful product
features and benefits are available.

144. MARKETING CHANNELS - MARKETING MIX
PURPOSE PRODUCT
PRICING
Coke’s leadership position
in world markets is based PLACING
on its ability to put coke PROMOTION
‘within an arm’s reach of
desire’, which is, in
marketing channel
terminology, ‘place utility’.
Dell’s rise to number-three position in
the world computer industry is based
on its innovative channel strategy:
Direct marketing and Build to Order
(BTO) i.e. build the computers with
exact configurations as ordered by the
customers.

145. SELECTION OF CHANNEL MARKETING MIX
DECISIONS PRODUCT
PRICING
 Some of the questions which help the company to PLACING
identify its channel arrangement may be –
PROMOTION
1. Where are the potential customers located?
2. What are their information requirements?
3. What are their preference for service?
4. How sensitive are they to price?

146. FACTORS CONSTRAINING THE SELECTION MARKETING MIX
OF SHAPING INTERNATIONAL CHANNELS PRODUCT
PRICING
CUSTOMER CHARACTERISTICS PLACING
PROMOTION
PRODUCT CHARACTERISTICS
MIDDLEMAN CHARACTERISTICS
ENVIRONMENTAL
CHARACTERISTICS

147. MARKETING MIX
CUSTOMER CHARACTERISTICS
PRODUCT
PRICING
 The number of customers, geographic
distribution, income, shopping habits and PLACING
reactions to different selling methods all PROMOTION
vary from country to country and
therefore require different channel FACTORS CONSTRAINING THE
SELECTION OF SHAPING
approaches. INTERNATIONAL CHANNELS
CUSTOMER
EXAMPLE: CHARACTERISTICS
If there are only 10 customers for an
industrial product in each national market, PRODUCT
CHARACTERISTICS
these 10 customers must be directly
contacted by either the manufacturer or MIDDLEMAN
CHARACTERISTICS
an agent. For mass-market products
bought by millions of customers, retail ENVIRONMENTAL
CHARACTERISTICS
distribution outlets or mail-order
distribution is required.

148. MARKETING MIX
PRODUCT CHARACTERISTICS
PRODUCT
PRICING
 Certain product attributes such as
standardization, perishability, bulk, service PLACING
requirements and unit price have an PROMOTION
important influence on channel design and
strategy. FACTORS CONSTRAINING THE
SELECTION OF SHAPING
INTERNATIONAL CHANNELS
Example:
Products with a high unit price are sold CUSTOMER
CHARACTERISTICS
through a company sales force because the
selling cost of this expensive distribution PRODUCT
CHARACTERISTICS
method is a small part of the total sale price.
Moreover, the high cost of such products is MIDDLEMAN
usually associated with complexity or product CHARACTERISTICS
features that must be explained in some
ENVIRONMENTAL
detail and this can be done most effectively CHARACTERISTICS
by a controlled sales force.

149. MARKETING MIX
PRODUCT CHARACTERISTICS
PRODUCT
PRICING
Example: PLACING
Mainframe computers are expensive,
PROMOTION
complicated products that require both
explanation and applications analysis FACTORS CONSTRAINING THE
focused on the customer’s needs. A SELECTION OF SHAPING
INTERNATIONAL CHANNELS
company-trained sales-person or a sales-
CUSTOMER
engineer is well suited to the task of CHARACTERISTICS
creating information utility for the
PRODUCT
computer buyers. CHARACTERISTICS
MIDDLEMAN
CHARACTERISTICS
ENVIRONMENTAL
CHARACTERISTICS

150. MARKETING MIX
MIDDLEMAN CHARACTERISTICS
PRODUCT
PRICING
 Middlemen are in business to maximize PLACING
their own profit and not of the PROMOTION
manufacturer.
FACTORS CONSTRAINING THE
SELECTION OF SHAPING
 They have a tendency of taking orders from INTERNATIONAL CHANNELS
the manufacturers whose products and
brands are in demand to avoid any real CUSTOMER
CHARACTERISTICS
selling effort for a manufacturer’s products
that may require push. PRODUCT
CHARACTERISTICS
MIDDLEMAN
CHARACTERISTICS
ENVIRONMENTAL
CHARACTERISTICS

151. MARKETING MIX
MIDDLEMAN CHARACTERISTICS
PRODUCT
PRICING
Example:
The RF division of Harris achieved a great PLACING
success in international market with its PROMOTION
shortwave radios. One of the reasons for
its success was the quality of agents in key FACTORS CONSTRAINING THE
SELECTION OF SHAPING
markets and their commitment to the INTERNATIONAL CHANNELS
Harris product. Also Harris offered CUSTOMER
commissions of 33 percent on all sales – at CHARACTERISTICS
least 15 percent higher than commissions PRODUCT
offered by any other competitor. CHARACTERISTICS
MIDDLEMAN
CHARACTERISTICS
ENVIRONMENTAL
CHARACTERISTICS

152. ENVIRONMENTAL MARKETING MIX
CHARACTERISTICS PRODUCT
PRICING
 The variety of economic, social and political
environments internationally, create a need to PLACING
delegate a large degree of independence to local
PROMOTION
operating management or agents.
Example:
FACTORS CONSTRAINING THE
In the U.S., several factors combine to make the SELECTION OF SHAPING
supermarket or the self-service, one-stop food INTERNATIONAL CHANNELS
store the basic food retailing unit. These factors
CUSTOMER
include high incomes, large capacity CHARACTERISTICS
refrigerator/freezer units, automobile ownership,
acceptance of frozen and convenience foods and PRODUCT
attitude toward food preparation. Many shoppers CHARACTERISTICS
want to purchase a week’s worth of groceries in
MIDDLEMAN
one trip to the store. They have money, ample CHARACTERISTICS
storage space in the refrigerator and hauling
capacity of the car to move this large quantity of ENVIRONMENTAL
food from the store to the home. CHARACTERISTICS

153. MARKETING MIX
DISTRIBUTION CHANNELS
PRODUCT
PRICING
PLACING
 Distribution blocks are the links that link the
manufacturers to the customers. PROMOTION
 Consumer channels are designed to put the
products in the hands of the people for their own
use.
 Industrial channels deliver the products to the
manufacturers or the organizations that use them
in the production process or in day-to-day
operations.

154. MARKETING MIX
DISTRIBUTION CHANNELS
PRODUCT
PRICING
PLACING
CONSUMER PRODUCTS
PROMOTION
INDUSTRIAL PRODUCTS
GLOBAL RETAILING

155. MARKETING MIX
CONSUMER PRODUCTS
PRODUCT
PRICING
 A consumer products manufacturer can
PLACING
sell to customers directly, through mail-
order selling, through manufacturer- PROMOTION
owned or independent retailers, or the
internet.
Example:
DISTRIBUTION
IKEA, the world’s largest furniture CHANNELS
retailer, relies primarily on its
CONSUMER
company-owned retail stores, but it PRODUCTS
also has a catalog that supports both INDUSTRIAL
the retail stores and the expanding PRODUCTS
on-line store as well as direct mail- GLOBAL
RETAILING
order selling.

156. MARKETING MIX
INDUSTRIAL PRODUCTS
PRODUCT
PRICING
PLACING
 SCAN IMAGE
PROMOTION
DISTRIBUTION
 Before deciding which pattern to use and CHANNELS
which wholesalers and agents to select, CONSUMER
managers must study each country individually. PRODUCTS
INDUSTRIAL
PRODUCTS
GLOBAL
RETAILING

157. MARKETING MIX
INDUSTRIAL PRODUCTS
PRODUCT
PRICING
Example:
PLACING
Kyocera Corporation of Kyoto, Japan, has
successfully used its own sales force at home PROMOTION
and in the U.S. to achieve leadership in the
$1.2 billion global market for certain ceramic
microchip covers.
DISTRIBUTION
CHANNELS
CONSUMER
PRODUCTS
INDUSTRIAL
PRODUCTS
GLOBAL
RETAILING

158. MARKETING MIX
GLOBAL RETAILING
PRODUCT
 Global retailing is any retailing activity PRICING
that crosses national boundaries. PLACING
 Retail stores can be divided into
PROMOTION
categories according to the amount of
square feet of floor space, the level of
service offered, and width and depth of
product offerings.
 A variety of terms used to refer large
stores are – Hypermarkets, mass DISTRIBUTION
CHANNELS
merchandisers, discounters,
supermarkets and superstores. CONSUMER
PRODUCTS
 The critical question for the would-be
INDUSTRIAL
international retailer is ‘What profit do PRODUCTS
we have relative to the local GLOBAL
RETAILING
competition?’

159. MARKETING MIX
GLOBAL RETAILING
PRODUCT
PRICING
 Basically, a retailer has two things to offer
PLACING
to the consumers – One is the selection of
goods at a price, and the second is the PROMOTION
overall manner in which the goods are
offered in the store setting.
 This includes such things as the store site,
parking facilities, in-store setting and the
customer service. DISTRIBUTION
 One of the important aspects of global CHANNELS
retailing is the ability to develop an CONSUMER
environment that invites the customer to PRODUCTS
the shop. INDUSTRIAL
PRODUCTS
 Example: In Istanbul, Turkey, a visiting team
GLOBAL
noted that one store featured lingerie next RETAILING
to plumbing equipment.

160. CHANNEL STRATEGY FOR NEW MARKETING MIX
MARKET ENTRY PRODUCT
PRICING
 The company entering a market for the PLACING
first time uses either the established
channels or builds its own channels. PROMOTION
 There is little immediate incentive for an independent channel agent
to take on a new product when established names are accepted in
the market and are satisfying current demands.
 The global company seeking to enter such a market must either
provide some incentive to channel agents or establish its own
direct-distribution system.

161. CHANNEL STRATEGY FOR NEW MARKETING MIX
MARKET ENTRY PRODUCT
PRICING
 By using a sales force, the manufacturer can ensure
aggressive sales activity and attention to its products. PLACING
PROMOTION
 Sufficient resource commitment to sales activity,
backed up by appropriate communications programs,
may in time allow a manufacturer with competitive
products and prices to obtain a reasonable share of
the market.
 When market share objectives have been reached, the manufacturer may
consider shifting from the direct sales force to reliance on independent
intermediaries.
 This shift becomes a possibility when market share and market recognition
make the manufacturer’s brand attractive to independent intermediaries.

162. CHANNEL STRATEGY FOR NEW MARKETING MIX
MARKET ENTRY PRODUCT
PRICING
PLACING
PROMOTION
Example:
Kyocera achieved great success in the U.S. market by custom-tailoring
ceramic chip housings to each customer’s needs. Kyocera also has become
legendary for its service among California’s Silicon Valley chipmakers.
Instead of following the electronics industry norm of using distributors for
its products, Kyocera relies on a salaried sales force. Kyocera backs up its
$100 million-per-year research and development (R&D) expenditures with
sales forces in both the U.S. – 50 direct salespersons at 12 direct sales
offices – and Japan that place unwavering emphasis on quality and
customer service. Early on, Kyocera earned a reputation for answering
customer questions overnight, whereas American suppliers often took
weeks to respond. Employees would work around the clock to satisfy
customer requests for samples.

163. MARKETING MIX
PRODUCT
PRICING
 The promotion P of the marketing mix refers to all
forms of communication used by the organization PLACING
to inform, remind, explain, persuade and influence PROMOTION
the attitudes and buying behavior of the customers.
 The primary purpose of marketing communications
is to tell customers about the benefits and values
that a product or service offers.
Advertising
Direct Public
marketing relations
Sales Personal
promotion selling

164. MARKETING MIX
PRODUCT
PRICING
 Advertising may be defined as any PLACING
sponsored, paid message placed in a
PROMOTION
mass medium.
 Global advertising is the use of the same
appeals in multiple-country markets.
Advertising
Direct Public
marketing relations
Sales Personal
promotion selling

165. MARKETING MIX
PRODUCT
PRICING
 Global campaigns attest to PLACING
management’s conviction that unified
PROMOTION
themes not only spur short-term sales
but also help build long term product
identity and offer significant savings in
production costs. Advertising
 Global advertising also offers companies Direct
marketing
Public
relations
economies of scale in advertising as well
as improved access to distribution Sales Personal
channels. promotion selling

166. Coca-Cola, the most global brand in the world, MARKETING MIX
records radio spots in 40 languages with 140
PRODUCT
different music backgrounds. Coca-Cola asserts that
consumers still differ from country to countryand PRICING
must reach by advertising tailored to their respective
PLACING
countries.
PROMOTION
Advertising
Direct Public
marketing relations
Sales Personal
promotion selling

167. MARKETING MIX
PRODUCT
PRICING
A company’s public relations (PR) effort PLACING
should foster goodwill and
PROMOTION
understanding among constituents both
inside and outside the company.
 Public relations practices in specific
countries can be affected by cultural Advertising
traditions, social and political contexts, Direct
marketing
Public
relations
and economic environments.
Sales Personal
promotion selling

168. MARKETING MIX
PRODUCT
PRICING
 In 1994, intel showed a poor understanding of
public relations basics after a college professor PLACING
discovered a technical defect in the company’s
flagship Pentium chip. The professor, contacted PROMOTION
intel and asked for a replacement, but his request
was rejected. Word about the intel flaw spread
quickly through internet. After weeks of negative
publicity around the world. Intel finally announced
that new Pentium chips would be available to Advertising
anyone who requested them.
Direct Public
marketing relations
Sales Personal
promotion selling

169. MARKETING MIX
PRODUCT
PRICING
 Personal selling is a two-way, personal
communication between a company PLACING
representative and a potential customer as well PROMOTION
as back to the company.
 The salesperson’s job is to correctly understand
the buyer’s needs, match those needs to the
company’s product(s), and then persuade the Advertising
customer to buy.
 Effective personal selling in a salesperson’s home Direct
marketing
Public
relations
country requires building a relationship with the
customer, global marketing presents additional
challenges because the buyer and seller may Sales
promotion
Personal
selling
come from different nationalities and
backgrounds.

170.  In 1993,a Malaysian developer, YTL Corp, sought MARKETING MIX
bids on a $700 million contract for power-
generation turbines. Siemens AG of germany and PRODUCT
GE were among the bidders. The MD of YTL
requested meetings with the executives from PRICING
both the companies. Siemens complied with the
request, GE did not send an executive. Siemens PLACING
was awarded the contract.
PROMOTION
Advertising
Direct Public
marketing relations
Sales Personal
promotion selling

171. MARKETING MIX
The selling process is typically divided into PRODUCT
several stages PRICING
 Prospective: process of identifying potential
PLACING
purchasers and assessing their probability of
purchases. PROMOTION
 Preapproach: problem solving stage to gather
information on a prospective customer’s problem
areas and tailor a presentation that demonstrates
how the company’s product can solve these Advertising
specific problems.
 Approach and Presentation: involve one or more Direct
marketing
Public
relations
meetings between seller and buyer in order to
understand cultural norms and protocols.
Presentation comes only after rapport has been Sales
promotion
Personal
selling
firmly established.