Companies go global through the following three routes: 1. 2. 3. Domestic Market Extension Multi Domestic Marketing Global Marketing Implicit in the development of any marketing program is the question: "Which products should we sell in this market?" There is a recurring debate relative to product planning and development that focuses on the question of standardized or global products marketed worldwide versus differentiated products adapted, even redesigned, for each culturally unique market.
Companies go global through the following three routes: 1. 2. 3. Domestic Market Extension Multi Domestic Marketing Global Marketing Implicit in the development of any marketing program is the question: "Which products should we sell in this market?" There is a recurring debate relative to product planning and development that focuses on the question of standardized or global products marketed worldwide versus differentiated products adapted, even redesigned, for each culturally unique market.
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Companies go global through the following three routes: 1. 2. 3. Domestic Market Extension Multi Domestic Marketing Global Marketing Implicit in the development of any marketing program is the question: "Which products should we sell in this market?" There is a recurring debate relative to product planning and development that focuses on the question of standardized or global products marketed worldwide versus differentiated products adapted, even redesigned, for each culturally unique market.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
GLOBAL MARKETS CONSUMER PRODUCTS FOR GLOBAL MARKETS Companies go Global through the following three routes: CONSUMER PRODUCTS FOR GLOBAL MARKETS Companies go Global through the following three routes:
1. Domestic Market Extension
2. Multi Domestic Marketing 3. Global Marketing CONSUMER PRODUCTS FOR GLOBAL MARKETS Companies go Global through the following three routes:
1. Domestic Market Extension
2. Multi Domestic Marketing 3. Global Marketing
Implicit in the development of any marketing program is the
question: “Which products should we sell in this market?” CONSUMER PRODUCTS FOR GLOBAL MARKETS Companies go Global through the following three routes:
1. Domestic Market Extension
2. Multi Domestic Marketing 3. Global Marketing
Implicit in the development of any marketing program is the question: “Which
products should we sell in this market?”
1. Answers with “Whatever we sell locally, of course!”
2. Develops a different product to fit the uniqueness of each market 3. Ignores frontiers and seeks commonalities in needs among sets of country markets and responds with a Global Product CONSUMER PRODUCTS FOR GLOBAL MARKETS There is a recurring debate relative to product planning and development that focuses on the question of standardized or global products marketed worldwide, versus differentiated products adapted, even redesigned, for each culturally unique market. CONSUMER PRODUCTS FOR GLOBAL MARKETS There is a recurring debate relative to product planning and development that focuses on the question of standardized or global products marketed worldwide, versus differentiated products adapted, even redesigned, for each culturally unique market.
Standardized products can utilize economies of scale to the
fullest extent permitting more attractive prices to the global market. Cultural variations and specific needs of different markets would feel that products they do not need are being thrust upon them through standardization. There is no clear yes/no solution to this problem. CONSUMER PRODUCTS FOR GLOBAL MARKETS Hand in hand with global products go global brands. Coca Cola, for instance, means the same to all persons around the world. When the Coca Cola Company came out with “Diet Coke” it was easily accepted by Western clients. But “Diet” in Japan is closely identified with illnesses, and so its name was changed worldwide to “Coke Light” to get away from the negative image, yet convey the same message. CONSUMER PRODUCTS FOR GLOBAL MARKETS Hand in hand with global products go global brands. Coca Cola, for instance, means the same to all persons around the world. When the Coca Cola Company came out with “Diet Coke” it was easily accepted by Western clients. But “Diet” in Japan is closely identified with illnesses, and so its name was changed worldwide to “Coke Light” to get away from the negative image, yet convey the same message.
Products need to be differentiated with cultural differences. A
product is the sum of the physical and psycologcal satisfaction given to the customer. This is ably demonstrated in the case of the breakfast cereal case as described in the next slide. CONSUMER PRODUCTS FOR GLOBAL MARKETS Innovation
An important first step in adapting a product to a foreign
market is to determine the degree of newness perceived by the intended market. How people react to newness and how new the product is in a market must be clearly understood. Products may be in the mature stage or even declining in the home market, while new in the host market. It has to be placed in the appropriate slot. CONSUMER PRODUCTS FOR GLOBAL MARKETS Innovation
An important first step in adapting a product to a foreign market is to
determine the degree of newness perceived by the intended market. How people react to newness and how new the product is in a market must be clearly understood. Products may be in the mature stage or even declining in the home market, while new in the host market. It has to be placed in the appropriate slot.
In this context, Innovations can be of four types:
– Congruent Innovation – an exact duplicate of an existing product – Continuous Innovation – an alteration of an existing product – Dynamically continuous Innovation – creation of a new product or a major alteration of an existing product to fulfill needs of the new market – Discontinuous Innovation – establishment of a completely new product previously unknown CONSUMER PRODUCTS FOR GLOBAL MARKETS Crucial elements in the diffusion of new ideas are: CONSUMER PRODUCTS FOR GLOBAL MARKETS Crucial elements in the diffusion of new ideas are: An Innovation… CONSUMER PRODUCTS FOR GLOBAL MARKETS Crucial elements in the diffusion of new ideas are: An Innovation… … which is communicated through certain channels… CONSUMER PRODUCTS FOR GLOBAL MARKETS Crucial elements in the diffusion of new ideas are: An Innovation… … which is communicated through certain channels… … over time ... CONSUMER PRODUCTS FOR GLOBAL MARKETS Crucial elements in the diffusion of new ideas are: An Innovation… … which is communicated through certain channels… … over time ... … among the members of a social system CONSUMER PRODUCTS FOR GLOBAL MARKETS Crucial elements in the diffusion of new ideas are: An Innovation… … which is communicated through certain channels… … over time ... … among the members of a social system
Resistance to accept Innovations
CONSUMER PRODUCTS FOR GLOBAL MARKETS Crucial elements in the diffusion of new ideas are: An Innovation… … which is communicated through certain channels… … over time ... … among the members of a social system
Resistance to accept Innovations
Attributes of a product which cause market resistance to
its acceptance can be determined if a product is analyzed by the following characteristics of an innovation: CONSUMER PRODUCTS FOR GLOBAL MARKETS Crucial elements in the diffusion of new ideas are: An Innovation… … which is communicated through certain channels… … over time ... … among the members of a social system
Resistance to accept Innovations
Attributes of a product which cause market resistance to its
acceptance can be determined if a product is analyzed by the following characteristics of an innovation: – The perceived marginal value of the new product as compared to the old – Its compatibility with the accepted norms, values etc. – The degree of complexity associated with the product use – The ease with which product benefits can be communicated to the consumer CONSUMER PRODUCTS FOR GLOBAL MARKETS A product is multidimensional, and the sum of all its features determines the bundle of satisfaction received or perceived to be received by the consumer. To identify all possible ways a product may be adapted to a new market, it helps to separate the many dimensions of the product into three distinct components: CONSUMER PRODUCTS FOR GLOBAL MARKETS A product is multidimensional, and the sum of all its features determines the bundle of satisfaction received or perceived to be received by the consumer. To identify all possible ways a product may be adapted to a new market, it helps to separate the many dimensions of the product into three distinct components:
– The core component
– The packaging component
– The support services component
MARKETING INDUSTRIAL PRODUCTS The inherent nature of Industrial Goods and similarities in motives among industrial customers worldwide create a market environment where product and marketing mix are more standardized than for consumer goods. MARKETING INDUSTRIAL PRODUCTS The inherent nature of Industrial Goods and similarities in motives among industrial customers worldwide create a market environment where product and marketing mix are more standardized than for consumer goods.
Since an Industrial Product is purchased for business use and
thus sought, not as an entity in itself, but as a part of a total process, the buyer values service, dependability, quality performance and cost. In the international environment, these are further complicated for the marketer by the cultural and environmental differences of the countries. MARKETING INDUSTRIAL PRODUCTS Stages of Economic Development of a country MARKETING INDUSTRIAL PRODUCTS Stages of Economic Development of a country
Perhaps the most significant economic factor affecting
the industrial goods market is the degree of industrialization of a country. The degree of economic development of a country is a good gauge of it being a market for industrial goods. MARKETING INDUSTRIAL PRODUCTS Stages of Economic Development of a country
Perhaps the most significant economic factor affecting
the industrial goods market is the degree of industrialization of a country. The degree of economic development of a country is a good gauge of it being a market for industrial goods.
The stages of economic development of a country are:
MARKETING INDUSTRIAL PRODUCTS Stages of Economic Development of a country
Perhaps the most significant economic factor affecting the
industrial goods market is the degree of industrialization of a country. The degree of economic development of a country is a good gauge of it being a market for industrial goods.
The stages of economic development of a country are:
– Pre-industrial or commercial stage with little or no manufacturing
– Development of primary manufacturing or partial processing raw materials – Growth of manufacturing facilities for non durable and semi durable consumer goods – Well industrialized economy with small manufacturers having relative mass appeal – Complete industrialization with world leadership in production of the latest generation of a large variety of goods. MARKETING INDUSTRIAL PRODUCTS Technology and Market Demand
Countries at a higher level of growth can supply goods
and services to those at lower echelons. The level of technological assimilation increases with increase in the stage of development. However, countries closer in stage of development to the host country are in a better position to transfer technology relevant to the host country. MARKETING INDUSTRIAL PRODUCTS Technology and Market Demand
Countries at a higher level of growth can supply goods and
services to those at lower echelons. The level of technological assimilation increases with increase in the stage of development. However, countries closer in stage of development to the host country are in a better position to transfer technology relevant to the host country.
Factors governing Host Country “Demand”
MARKETING INDUSTRIAL PRODUCTS Technology and Market Demand
Countries at a higher level of growth can supply goods and services
to those at lower echelons. The level of technological assimilation increases with increase in the stage of development. However, countries closer in stage of development to the host country are in a better position to transfer technology relevant to the host country.
Factors governing Host Country “Demand”
– Technology and Markets
– Demand and Technology – Attributes of Product Quality – ISO 9000 Certification MARKETING INDUSTRIAL PRODUCTS Factors relevant to International Industrial Buying MARKETING INDUSTRIAL PRODUCTS Factors relevant to International Industrial Buying
– Price Quality Leadership
MARKETING INDUSTRIAL PRODUCTS Factors relevant to International Industrial Buying
– Price Quality Leadership
– Product design MARKETING INDUSTRIAL PRODUCTS Factors relevant to International Industrial Buying
– Price Quality Leadership
– Product design – Local service and replacement part availability MARKETING INDUSTRIAL PRODUCTS Factors relevant to International Industrial Buying
– Price Quality Leadership
– Product design – Local service and replacement part availability – Meeting Universal Standards MARKETING INDUSTRIAL PRODUCTS Factors relevant to International Industrial Buying
– Price Quality Leadership
– Product design – Local service and replacement part availability – Meeting Universal Standards
Marketing Services Globally
MARKETING INDUSTRIAL PRODUCTS Factors relevant to International Industrial Buying – Price Quality Leadership – Product design – Local service and replacement part availability – Meeting Universal Standards
Marketing Services Globally
• Characteristics of Services • Entering Global Markets • Market Environment for Business Services INDUSTRIAL DISTRIBUTION There exists in each market a a distribution network with a variety of channel choices whose structure is unique and, in the short term, fixed. A global marketer is limited by this existing structure within which to operate. In this search of an effective and direct distribution system, brand and product efficiencies achieved through a global marketing strategy can be severely limited if they do not reach the market because of ineffective distribution. INDUSTRIAL DISTRIBUTION There exists in each market a a distribution network with a variety of channel choices whose structure is unique and, in the short term, fixed. A global marketer is limited by this existing structure within which to operate. In this search of an effective and direct distribution system, brand and product efficiencies achieved through a global marketing strategy can be severely limited if they do not reach the market because of ineffective distribution.
Criteria in International Channel Decisions
INDUSTRIAL DISTRIBUTION There exists in each market a a distribution network with a variety of channel choices whose structure is unique and, in the short term, fixed. A global marketer is limited by this existing structure within which to operate. In this search of an effective and direct distribution system, brand and product efficiencies achieved through a global marketing strategy can be severely limited if they do not reach the market because of ineffective distribution.
Criteria in International Channel Decisions
The following basic points need to be considered in
making International Channel decisions: INDUSTRIAL DISTRIBUTION There exists in each market a a distribution network with a variety of channel choices whose structure is unique and, in the short term, fixed. A global marketer is limited by this existing structure within which to operate. In this search of an effective and direct distribution system, brand and product efficiencies achieved through a global marketing strategy can be severely limited if they do not reach the market because of ineffective distribution.
Criteria in International Channel Decisions
The following basic points need to be considered in making
International Channel decisions: – Channel Structures – Available Alternative Middlemen – Locating/Selecting/Motivating/Terminating Middlemen – Controlling the Channel Process. INDUSTRIAL DISTRIBUTION
Channel Distribution Structures
INDUSTRIAL DISTRIBUTION
Channel Distribution Structures
Regardless of how well a product meets the target
market needs or how well it is promoted, it has to be made accessible to the target market at a price it is able/willing to pay to meet expected goals. An aggressive and reliable channel of distribution may therefore be the most critical task facing the international marketer. INDUSTRIAL DISTRIBUTION Channel Distribution Structures
Regardless of how well a product meets the target market
needs or how well it is promoted, it has to be made accessible to the target market at a price it is able/willing to pay to meet expected goals. An aggressive and reliable channel of distribution may therefore be the most critical task facing the international marketer.
Each country market has a channel structure through which
goods typically pass from the producer to the user. A variety of middlemen with diverse functions and services operate within this structure. Channel structures range from simple channels of the LCDs to the highly complex multi-layered system developed by Japan to give it a global edge. INDUSTRIAL DISTRIBUTION
Import Oriented Distribution Structure
INDUSTRIAL DISTRIBUTION
Import Oriented Distribution Structure
Traditional channels in developing countries evolve from
economies dependent on imported manufactured goods. Typically, the “importer” controls a fixed supply of goods, and the entire marketing system develops around the philosophy of selling a limited supply of goods at high prices to a few affluent customers. INDUSTRIAL DISTRIBUTION Import Oriented Distribution Structure
Traditional channels in developing countries evolve from economies
dependent on imported manufactured goods. Typically, the “importer” controls a fixed supply of goods, and the entire marketing system develops around the philosophy of selling a limited supply of goods at high prices to a few affluent customers.
The Import Oriented Distributed Structure thrives on the
market being throttled of the goods, resulting (artificially) in a strong seller’s market, permeating all aspects activities and behaviour. Economies of scale need not necessarily apply with a one-deal mentality existing in the retail and wholesale levels, constantly pressurizing price levels upwards. Foreign marketers trying to bypass the system pose a threat to the local interest groups, and therefore meet with a lot of resistance. INDUSTRIAL DISTRIBUTION
Japanese Distribution Structure
INDUSTRIAL DISTRIBUTION
Japanese Distribution Structure
The industrialized nations’ consumption/distribution
philosophy, on the other hand, results in the supplies not being dominated by one supplier, and profit maximization occurs at near product capacity. A buyer’s market exists and producers strive to penetrate the market and push goods to the customer through a highly developed channel structure. At the other extreme of the above is the Japanese distribution structure, considered to be the most effective non-tariff barrier to the Japanese market. INDUSTRIAL DISTRIBUTION Japanese Distribution Structure
The industrialized nations’ consumption/distribution philosophy,
on the other hand, results in the supplies not being dominated by one supplier, and profit maximization occurs at near product capacity. A buyer’s market exists and producers strive to penetrate the market and push goods to the customer through a highly developed channel structure. At the other extreme of the above is the Japanese distribution structure, considered to be the most effective non-tariff barrier to the Japanese market.
Distinguishing Features of the Japanese Distribution
Structure INDUSTRIAL DISTRIBUTION Japanese Distribution Structure
The industrialized nations’ consumption/distribution philosophy, on the
other hand, results in the supplies not being dominated by one supplier, and profit maximization occurs at near product capacity. A buyer’s market exists and producers strive to penetrate the market and push goods to the customer through a highly developed channel structure. At the other extreme of the above is the Japanese distribution structure, considered to be the most effective non-tariff barrier to the Japanese market.
Distinguishing Features of the Japanese Distribution
Structure
– Channel structure dominated by many small wholesalers
– Channel controlled by manufacturers – A business philosophy shaped by a unique culture – Laws that protect the small retailer is the foundation of the system