Chapter 17 Global Marketing and R&D

marketing mix
the choices the firm offers to its targeted market
marketing mix is comprised of:
1. Product attributes
2. Distribution strategy
3. Communication strategy
4. Pricing strategy
Market segmentation
involves identifying distinct groups of consumers whose purchasing behavior differs from others in important ways
Markets can be segmented by:
1. geography
2. demography
3. socio-cultural factors
4. psychological factors
How Do Product Attributes Influence Marketing Strategy?
1. Level of economic development
2. Product and technical standards
3. Culture
Reasons for altering the product attributes?
1.Legal
2.Cultural (Tastes/habits and religious)
3.Economic
International Branding Decisions
1.Brand versus no brand
2.Manufacturer’s brand versus private brand
3.One brand (umbrella-brand) versus multiple brands
4.Worldwide brand versus multiple local brands
Distribution strategy
refers to the means the firm chooses for delivering the product to the consumer
How a product is delivered depends on the firm’s market entry strategy?
-firms that manufacturer the product locally can sell directly to the consumer, to the retailer, or to the wholesaler
-firms that manufacture outside the country have the same options plus the option of selling to an import agent
How Do Distribution Systems Differ?
1.Retail concentration
2.Channel length
3.Channel exclusivity
Retail concentration
concentrated or fragmented in a concentrated retail system
concentrated retail system
a few retailers supply most of the market – common in developed countries
Channel length
the number of intermediaries between the producer and the consumer
short channel
when the producer sells directly to the consumer – common with concentrated systems
Channel exclusivity
Channels may be exclusive because retailers like to carry well established brands
How Do Firms Communicate With Customers?
Firms have to choose between two types of communication strategies:
1.”Mass media advertising”
2.”Personnel selling”
What is a Pull Strategy?
A “pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product.
What happens if the pull strategy is successful?
consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.
What is a Push Strategy?
A “push” promotional strategy makes use of a company’s sales force and trade promotion activities to create consumer demand for a product.
Which Is Better -Push Versus Pull?
The choice between strategies depends on:
1.Product type and consumer sophistication
2.Channel length
3.Media availability
Product type and consumer sophistication
-a pull strategy works well for firms in consumer goods selling to a large market segment
-a push strategy works well for industrial products
Channel length
a pull strategy works better with longer distribution channels
Media availability
-a pull strategy relies on access to advertising media
-a push strategy may be better when media is not easily available
In general, a push strategy is better:
-for industrial products and/or complex new products
-when distribution channels are short
-when few print or electronic media are available
A pull strategy is better:
-for consumer goods products
-when distribution channels are long
-when sufficient print and electronic media are available to -carry the marketing message
Price discrimination
occurs when firms charge consumers in different countries different prices for the same product
Price elasticity of demand
measure of the responsiveness of demand for a product to changes in price
Advantages of Standardized International Marketing
1.Lower Marketing Costs
2.Centralized Control
3.Efficient R&D
4.Economies of Scale
5.Global Marketplace
Disadvantages of Standardized International Marketing
1.Different Product Uses
2.Local Legal Differences
3.Local Buyer Behavior
4.Local Marketing
5.Market Differences
Advantages of Customized International Marketing
1.Different Product Uses
2.Local Legal Differences
3.Local Buyer Behavior
4.Local Marketing
5.Market Differences
Disadvantages of Customized International Marketing
1.Higher Marketing Costs
2.Less Central Control
3.Inefficient R&D
4.Less Economies of Scale
5.Ignores Global Market
Where Should R&D Be Located?
New product ideas come from the interactions of scientific research, demand conditions, and competitive conditions
The rate of new product development is greater in countries where:
1.more money is spent on basic and applied research and development
2.demand is strong
3.consumers are affluent
4.competition is intense
How Can R&D, Marketing, And Production Be Integrated?
Since new product development has a high failure rate, new product development efforts should involve close coordination between R&D, marketing, and production
Integration will ensure that:
1.customer needs drive product development
2.new products are designed for ease of manufacture
3.development costs are kept in check
4.time to market is minimized