International Marketing Management Kirsi Viskari spring 2009
Targets of the second part • Get acquainted in developing an international marketing plan – Utilizing the 4 P’s of marketing
• Organizing, Implementing and Controlling the Marketing Effort
Development of a Marketing or Export Plan
Hollensen, S.; Global Marketing, 4th ed
1
The 4Ps in Marketing Planning Communication Decisions (Promotion)
Product Decisions
International Marketing Plan Distribution Decisions (Place)
Pricing Decisions
Three Levels of a Product Support services
Product attributes
Delivery Installation Guarantee
After-sales service Spare parts
Brand name Design Price Size and color Quality Staff behavior Packaging Country of origin
Core product benefits
Functional features Performance
Possibilities of standardizing elements of product
Perceived value Image Technology
Characteristics of Services • Intangibility – Customers cannot claim ownership of anything tangible in traditional sense – Can also contain tangible parts like food in the restaurant service
• Perishability – Services cannot be stored for future use – Affects planning and promotion to match supply and demand
• Heterogeneity – Internactions between people create variations – Affects quality maintaining
2
Service Categories • People processing – Customers become part of the production process – Education, passenger transport, health care
• Possession processing – Tangible action to improve physical products – Car repair, laundry service
• Information-based services – Collecting, manipulating, transmitting data to create value – Telecom services, banking, news
Supplementary Services • • • • •
Information Consultation and advice Order taking Hospitality: taking care of the customer Safekeeping: looking after the customer’s possessions • Exceptions • Billing • Payment
Product Life Cycle • When sales start to decline: – Product improvements – Reposition product perception – Reach new users – Promote more frequent use – Promote new uses
3
Product Life Cycle • All products should not be in the same phase (age balancing of products) • PLCs for different countries have two approaches – International product life cycle (ILPC); age curves vary by country (US vs developing markets etc) – PLCs across countries – microeconomic approach; product in different stages in different markets at a certain moment in time
New Products for the International Market • PLCs and product development times shortening (4 2 years for R&D cost pay off) • Good quality prerequisite (as good as necessary for the customer) • Newness of the product for the market vs for the company • Product and promotion hand in hand (standard, adapt or invent product/communication mode)
Product/Communication Mode
Product Standard
Promotion
Straight Standard Extension (Coca-Cola) Adapt
Promotion Adaptation (LUX soap)
Adapt
Product Adaptation (Exxon) Dual Adaptation (Kellogg’s)
New
Product Invention (Handpowered washing machine)
4
Product Positioning • Begins with describing specific products with attributes generating benefits to buyers and users – Attributes bundled to match benefits with markets segment requirements
• Positioning involves basic product components, but also brand name, styling and similar features • Can vary from market to market • Positioning product ”away” from competing products creates competitive advantage • Country of origin has effects
Brand Equity • ~ Brand value beyond the physical assets associated with it • Brand loyalty • Brand awareness (familiarity) • Perceived quality (by the customer) • Brand associations (connecting values) • Other proprietary brand assets like trademarks, patents etc
Branding Decisions No brand
Branding decisions
Branded product
Private label Co-branding/ Ingredient branding
Single brand Single market
Multiple brands
Manufacturer’s own brand Local brands Multiple markets Global brands
5
Sensory Branding • Usually involves two senses; sight and hearing • Sight; colous, images, mental links • Sound; e.g. Nokia tune, Kellogg’s crunch • Smell; Rolls Royce smell, crayone colour pens smell • Touch • Taste • The more senses the brand appeals to the stronger the message will be perceived
Celebrity Branding • Appearing in advertisements, service or charity • Attending PR events • Creating their own line of products • Using their name as a brand
Collaboration with Customers • Usage of internet has provided new methods • Nike, Dell, Ducati motorcycles, airline special fares • Dynamic customization of products requires – Modularity – Intelligence (in websites) – Organization (customer-oriented and flexible)
• Can be extended to several areas; design, service&support, customer relations, logistics
6
Green Marketing • European consumers particularly green – Many retailers committed to green products Value creation approach Benefit enhancement for customers
Cost reduction
Proactive
Green product innovation (major modification)
Pollution prevention (beyond compliance)
Accommodative
Green product differentiation (minor modification)
Pollution prevention (compliance)
Change orientation
Environmental Management in the Value Chain Perspective • Every step of the value chain must be assessed of its overall environmental impact – Every step produces pollutants as byproducts
• Reverse logistics for packaging – Reduce, substitute, reuse, recycle
• Green marketing includes consumer education, credibility, competitor analysis and promoting direct benefits • Strategic alliances with environmental groups
Brand Piracy and Anti-counterfeiting Strategies • Piracy moved from copying of luxury items to large-scale industry – Even faking entire companies (NEC)
• Reduces revenues, might destroy the brand image, endanger customers etc • Can also produce positive outcomes – ”if the company’s products are copied, it is doing the right thing” – Forces lower-cost competitors to be stuck in the middle
7
