Global Marketing

and R&D

PREPARED
BY:
GROUP 17 1
 The previous chapter looked We focus on how

at the roles of global marketing and R&D can be

production and logistics in an performed so they will

international business. This reduce the costs of value

chapter continues our focus on creation and add value by

specific business functions by better serving customer

examining the roles of needs.

marketing and research and

development (R&D) in an
international business.
Marketing
Market Segmentation
- Is the set of choices the
Mix firm offers to its targeted
Market segmentation
markets. Many firms vary
-refers to identifying
their marketing mix from
distinct groups of consumers
country to country,
whose purchasing behavior
depending on differences
differs from others in
in national culture,
important ways. Markets can
economic development,
be segmented in numerous
product standards,
ways: by geography,
distribution channels, and
demography
so on.
 A product can be viewed as a bundle of
attributes. For example, the attributes that
make up a car include power, design, quality,
performance, fuel consumption, and comfort;
the attributes of a hamburger include taste,
texture, and size; a hotel's attribute

Countries differ along a whole range of

dimensions, including social structure, language,
religion, and education. These differences have
important implications for marketing strategy. For
example, hamburgers do not sell well in Islamic
countries, where the consumption of ham is forbidden
by Islamic law. The most important aspect of cultural
differences is probably the impact of tradition.
 PRODUCT AND TECHNICAL STANDARDS

Consumer behavior is Even with the forces that

influenced by the level of are creating some
economic development of a convergence of consumer
country. Firms based in tastes and preferences
among advanced,
highly developed countries
industrialized nations, Levitt's
such as the United States vision of global markets may
tend to build a lot of extra still be a long way off
performance attributes into because of national
their products. differences in product and
technological standards.
\
g
n
i
t
e
k Differing government- The way the product is
r mandated product standards can delivered is
\ rule out mass production and determined by the firm's
a\\marketing of a standardized entry strategy, This section
\\product.
Mi\ \
Differences in technical examines a typical
\\standards also constrain distribution system, discuss
the globalization of market. how its structure varies
 
between countries, and
A critical element of a firm's
marketing mix is its distribution looks at how appropriate
strategy: the means it chooses distribution strategies vary
for delivering the product to the from country to country.
consumer.
 The Four Main Differences
Between Distribution
Systems
• Retail Concentration,
• Channel Length
• Channel Exclusivity
• Channel Quality.
Retail Concentration
In some countries, the retail
system is very concentrated, but it
is fragmented in others. In a
concentrated retail system, a few
retailers supply most of the
market.
A fragmented retail system is
one in which there are many
retailers, no one of
which has a major share of the
market.
\
g
n
i
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e
Channel length Exclusive distribution
channel
k
r
refers to the number is one that is difficult for
outsiders to access. For
\\of intermediaries
\
a example, it is often difficult for
\\between the producer or a new firm to get access to
Mi\ \
\\manufacturer and the shelf space in supermarkets.
consumer. If the producer This occurs because retailers
sells directly to the tend to prefer to carry the
products of established
consumer, the channel is manufacturers of foodstuffs
very short. with national reputations
.
rather than gamble on the
products of unknown firms.
 Channel quality
refers to the expertise,
competencies, and skills of
established retailers
in a nation, and their ability to
sell and support the products of
international businesses.
A choice of distribution strategy
determines which channel the
firm will use to reach
potential consumers.
Should the firm try to sell
directly to the consumer or
should it go through retailers;
should it go through a
wholesaler; should it use an
import agent; or should it
invest in establishing its own
channel?
\
g
n
i
t
e Cultural Barriers
k Another critical element in
r the marketing mix is Cultural barriers can
\ communicating the attributes of make it difficult to
a\\ the product to prospective communicate messages across
\\ customers.
Mi\ \
A number of cultures. We discussed some
sources and consequences of
\\ communication channels are cultural differences between
available to a firm, including
direct selling, sales promotion, nations in Chapter 3 and in the
direct marketing, and previous section of this
advertising. A firm's chapter. Because of cultural
communication strategy is partly differences, a message that
defined by its choice of channel means one thing in one
country may mean something
quite different in
another.
 Noise Levels PUSH VERSUS PULL
STRATEGIES
Noise tends to reduce the The main decision
probability of effective with regard to
communication. Noise refers communications strategy
to the amount of other is the choice between a
messages competing for a push strategy and a pull
potential consumer's strategy.
attention, and this too
varies across countries
 The Push-Pull Mix
The optimal mix between push
A push strategy emphasizes and pull strategies depends on
personal selling rather than product type and consumer
sophistication, channel length, and
mass media advertising in the
media sophistication. Push strategies
promotional mix. Although tend to be emphasized .
effective as a promotional
tool, personal selling requires • For industrial products or
intensive use of a sales force complex new products
and is relatively costly. A pull
strategy depends more on • When distribution channels
mass media advertising to are short.
communicate the marketing • When few print or
message to potential electronic media are
consumers available.
Pull strategies tend to be
emphasized
• For consumer goods.
• When distribution channels
are long.
• When sufficient print and
electronic media are
available to carry the
marketing message.
Pricing Strategy
-International pricing strategy is an
important component of the overall
international marketing mix. This
section looks at three aspects of
international pricing strategy.
Predatory pricing

-is the use of price as a

competitive weapon to drive
weaker competitors out of a
national market
Multipoint pricing
-refers to the fact a firm's pricing
strategy in one market may have an
impact on its rivals' pricing strategy in
another market
Experience curve pricing
-strategy on an international scale will price low
worldwide in attempting to build global sales
volume as rapidly as possible, even if this means
taking large losses initially. Such a firm believes that
in several years, when it has moved down the
experience curve, it will be making substantial
profits and have a cost advantage over its less-
aggressive competitors.
Price Discrimination

-exist whenever consumers in

different countries are charged
different prices for the same
product.
THE LOCATION OF R&D
Ideas for new products are stimulated by the
interactions of scientific research, demand conditions,
and competitive conditions. Other things being equal,
the rate of new product development seems to be
greater in countries where

• More money is spent on basic and

applied research and development.
• Underlying demand is strong.
• Consumers are affluent.
• Competition is intense
END OF THE PRESENTATION

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