International Business

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International Business
International Business 10e Daniels/Radebaugh/Sulli
van

• Chapter Sixteen
• Marketing

2004, Prentice Hall, Inc
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What is Marketing?

• The process by which the firms abilities,
  products, and services are
• brought to the attention of customers,
• then sold and
• delivered
• Much more than just advertising and selling

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Coke vs. KFC

• Globally integrated marketing vs.
• Multidomestic (locally responsive) marketing

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• Today
• Forecasting demand
• Basic product policy
• In two weeks
• Pricing
• Promotion
• Distribution
• Dental News and Hotresponse case

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For next time

• Read to end of chapter
• Think about the Dental News and Hotresponse
  case (pp. 500-502)
• a basis for thinking about the difficulties of
  international marketing
• Study questions
• Why is Dental News so popular among advertisers?
• Can you think of other ways to market dental
  products in developing countries?

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Forecasting Potential Demand

• Basic procedure How much will we sell (can we
  hope to sell) per 1,000 people?
• Multiply by population (in thousands)

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Demand per 1,000 people is often proportional to
income
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But other variables play big roles

• Leapfrogging
• Emerging countries may use more advanced products
  China cell phones
• Costs affect prices, which affect consumption
• All food and housing prices are high in Japan
• Japanese consume less of everything else
• Norwegian fruit prices high (not a necessity)
• They just consume less fruit
• Substitutes vary from country to country

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• Income inequality dramatically affects
  consumption
• Louis Vuitton, Christian Dior sell in India
• You wouldnt forecast anyone would buy just by
  looking at Indias per capita income

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Gap Analysis studies opportunities in areas where
you are now selling
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Gap Analysis

• Gap analysis identifies market segments you are
  not serving adequately
• Types of gaps
• Distribution What sales do we lose because
  people get others products more easily?
• Product line What sales do we lose because
  others have the kinds of products people want?
• Competitive What sales do we lose because
  people just like others products better?
• Usage Are people using less of the product than
  elsewhere?

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Product Policy

• Your basic attitude toward what you offer the
  consumer

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• Production Orientation little emphasis on
  marketing
• Assumes customers want lower prices or higher
  quality (or both)
• Used for
• commodity sales products where you cant create
  differentiation
• Passive exports, reducing surpluses in home
  market
• Small markets
• Sales orientation You decide on the product,
  then try to sell it
• Tends to work poorly in international trade

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• Customer orientation What can we sell in
  Country A?
• Strategic marketing Try to use whichever of the
  others will maximize profits

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Societal marketing creates products to address
social needs

• Use recycled products
• Use local resources
• Fill nutritional needs

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Why will you alter products from one nation to
another?

• Legal requirements
• When foreign laws are less strict people
  poorer, should you sell a cheaper product?
• Indirect effects
• High gas taxes leadto smaller cars

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• Cultural reasons
• Toyota builds big pickup truck, it doesnt sell
  till its redesigned with space for a 10-gallon
  hat
• Toyota sent standard seatbelts to US, faced
  safety recall because McDonalds french fry
  grease dissolved the fabric
• Religious
• Economic
• Cheaper Barbies for poorer nations

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Alteration costs vary, but can be high

• A common approach is to standardize basic
  elements, design the final product so it can be
  cheaply customized
• PCs
• Operating systems
• Appliances use same compressors, casings, sealant
  systems
• Have features to address different kinds of
  clothes in different nations

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