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To what extent must the company adapt its products and marketing program to each foreign country?
Standardized marketing program developing same marketing program for multiple countries
Adapted marketing programModifying marketing programto reflect characteristics of a market
Economies of scaleLower marketing costsPower and scopeBrand ConsistencyLeverage ideas quickly and efficientlyUniformity of marketing practicesStandardized Marketing
DisadvantagesIgnores differences in:Consumer needs, wants, and usage patternsConsumer responseBrand and product developmentLegal environmentMarketing institutionsAdministrative procedures
Global Similarities and Differences
The development of the Web and global linking of telecommunications networks have led to a convergence of lifestylesSimilaritiesSoft Drink ConsumptionDifferences
Americans 760Mexicans674Brazilians315Russians 149Chinese 39Median Age
Cultural Differences
Individualism
Collectivism
Uncertainty avoidancePower distance
Consumer behavior differences as well as historical market factors lead marketers to position brands differently in different markets.
Netherlands - Mid-tier
Toyota Camrymiddle-class car - United States high end - China
Marketing Adaptation
Product features
Best global brands are consistent in theme but reflect significant differences in consumer behavior,brand development and competitive forces
Global Product StrategiesPRODUCT STANDARDIZATION Standardization - developing same productfor multiple countries
High-end products also benefit from standardization,because quality and prestige often can be marketed similarly across countriesFood and beverage marketers find it more challenging to standardize given widely varying tastes and cultural habitPRODUCT ADAPTATION STRATEGIES Product Adaptation - modifying product to reflect characteristics of a market
Straight extension introduces the product in the foreign market without any changeNo additional R&D expense, No manufacturing retoolingNo promotional modificationsuccessful for cameras, consumer electronics, and many machine tools
Product adaptation alters the product to meet local conditions or preferences Nokia customized its 6100 series phone for every major marketProduct invention Backward invention Forward invention
Creates a new product to meet a need in another country
Reintroduces earlier product forms well adapted to a foreign countrys needs
BRAND ELEMENT ADAPTATION When they launch products and services globally,marketers may need to change certain brand elementsA laundry soap ad claiming to wash really dirty parts was translated in French-speaking Quebec to read a soap for washing private parts.
When Coors put its brand slogan Turn it loose into Spanish, some read it as suffer from diarrhea
Global Communication Strategies
Changing marketing communications for each local market is a process called communication adaptation. If it adapts both the product and the communications, the company engages in dual adaptation
The company can use one message everywhere, varying only the language, name, and perhaps colors to avoid taboos in some countriesge
The second possibility is to use the same message and creative theme globally but adapt the execution coce
Developing a global pool of ads from which each country selects the most appropriate.
Global Pricing Strategies
PRICE ESCALATIONA Gucci handbag may sell for $120 in Italy and $240 in the United States. Why? Gucci must add the cost of transportation, tariffs, importer margin, wholesaler margin, and retailer margin to its factory price
Companies have three choices for setting prices in different countries:Set a uniform price everywhereSet a market-based price in each country.Set a cost-based price in each country
TRANSFER PRICES A different problem arises when one unit charges another unit in the same company a transfer price for goods it ships to its foreign subsidiaries.If the company charges a subsidiary too high a price, it may end up paying higher tariff duties, If the company charges its subsidiary too low a price, it can be accused of dumping,
GRAY MARKETS Selling products made for low price in high price countriesRisk to the customersGray market activity accounts for billions of dollars in revenue each year and makes up about 8 percent of total global IT sales of $725 billion
COUNTERFEIT PRODUCTS
Counterfeiting is estimated to cost over a trillion dollars a year
Global Distribution StrategiesCHANNEL ENTRYSellerChannels within foreign nationsChannels between nationsSellers marketing headquartersFinal buyer
