Chapter 6
Global Marketing
and R&D
What Is The Marketing Mix?
The marketing mix is comprised of
1. Product attributes
2. Distribution strategy
3. Communication strategy
4. Pricing strategy
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Should The Marketing Mix Be
Changed For Each Market?
Question: Are markets and brands becoming global?
Theodore Levitt argued that world markets
were becoming increasingly similar making it
unnecessary to localize the marketing mix
Question: Is Levitt right? Probably not!
The current consensus is that while the world is
moving towards global markets, global
standardization is not possible because of
cultural and economic differences among
nations, trade barriers, and differences in
product and technical standards
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What Is Market Segmentation?
Market segmentation -
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How Do Product Attributes
Influence Marketing Strategy?
A product is like a bundle of attributes - products sell
well when their attributes match consumer needs
Consumer needs depend on
1. Culture - tradition, social structure, language, religion,
education
2. Level of economic development - consumers in highly
developed countries tend to demand a lot of extra
performance attributes, while consumers in less
developed nations tend to prefer more basic products
3. Product and technical standards - national differences
can force firms to customize the marketing mix
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How Does Distribution Influence
Marketing Strategy?
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How Do Distribution
Systems Differ?
There are four main differences in distribution systems
1. Retail concentration – concentrated or fragmented
2. Channel length - the number of intermediaries between
the producer and the consumer
3. Channel exclusivity – how difficult it is for outsiders to
access
4. Channel quality - the expertise, competencies, and
skills of established retailers in a nation, and their ability
to sell and support the products of international
businesses
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Which Distribution Strategy
Should A Firm Choose?
The optimal strategy depends on the relative
costs and benefits of each alternative
When price is important, a shorter channel is
better
each intermediary in a channel adds its own
markup to the product
When the retail sector is very fragmented, a long
channel can be beneficial
economizes on selling costs
can offer access to exclusive channels 18-8
Why Is Communication
Strategy Important?
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What Are The Barriers to
International Communication?
The effectiveness of a firm's international
communication can be jeopardized by
1. Cultural barriers - it can be difficult to communicate
messages across cultures
2. Source and country of origin effects
3. Noise levels - the amount of other messages
competing for a potential consumer’s attention
There are two types of communication strategies
1. A push strategy emphasizes personnel selling
2. A pull strategy emphasizes mass media advertising
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Which Is Better – Push Versus
Pull?
The choice between strategies depends on
1. Product type and consumer sophistication
2. Channel length
3. Media availability
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Should A Firm Use Standardized
Advertising?
Standardized advertising makes sense when
it has significant economic advantages
creative talent is scarce and one large effort to
develop a campaign will be more successful than
numerous smaller efforts
brand names are global
Standardized advertising does not make sense when
cultural differences among nations are significant
advertising regulations limit standardized
advertising
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What Pricing Strategy Should
Firms Use?
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How Should Firms Configure
The Marketing Mix?
Standardization versus customization
is not an all or nothing concept
most firms standardize some things
and customize others
Firms should consider the costs and
benefits of standardizing and
customizing each element of the
marketing mix
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Why Is New Product
Development Important?
Product innovation should be a strategic priority
today, competition is as much about technological
innovation as anything else
Technological change is shortening product life cycles
short
new innovations can make existing products
obsolete, but, open the door to new opportunities
The rate of new product development is greater in
countries where more money is spent on basic and
applied research and development, demand is strong,
consumers are affluent, competition is intense
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How Can R&D, Marketing, And
Production Be Integrated?
To adequately commercialize new technologies,
firms need to integrate R&D, marketing, and
production
Integration will ensure that
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The end!!!
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