Svend Hollensen

GLOBAL MARKETING4th Edition

International marketing mix decisions

Hollensen, Global Marketing 4e, © Pearson Education 2008 14-2

Figure 1 Environmental factors influencingthe balance between standardization

and adaptation

Hollensen, Global Marketing 4e, © Pearson Education 2008 14-3

Figure 2 Standardization and adaptationof the international marketing mix

Hollensen, Global Marketing 4e, © Pearson Education 2008 14-4

Figure 14.1 The three levels of a product

functional features, performance,perceived value, image,

technology

Delivery, installation, guarantees, after-sales service,

spare parts

brand, quality, design, packaging, price,country of origin, staff behaviour, size

Core productbenefits

Productattributes

Support services

Ability to standardize product elements

Low

High

Hollensen, Global Marketing 4e, © Pearson Education 2008 14-5

Figure 14.3 The product life cycle

Hollensen, Global Marketing 4e, © Pearson Education 2008 14-6

Figure 14.7 PLCs of different countries for a specific product

Hollensen, Global Marketing 4e, © Pearson Education 2008 14-7

Figure 14.11 Product/ communication mode

Promotion

Product

Standard

Adapt

NewAdaptStandard

Straight extension

Promotionadaptation

Productadaptation

Dualadaptation

Productinvention

Source: Source: adapted from Keegan, 1995.

Hollensen, Global Marketing 4e, © Pearson Education 2008 14-8

Kellogg’s dual adaption for Indian market

http://www.kelloggcompany.com

Hollensen, Global Marketing 4e, © Pearson Education 2008 14-9

Orgasmic Chocolates stimulate more than the

sense of taste

Hollensen, Global Marketing 4e, © Pearson Education 2008 14-10

Omega utilizes celebrity branding

www.omegawatches.com

Hollensen, Global Marketing 4e, © Pearson Education 2008 15-11

Figure 15.1 International pricing framework

Firm-level factorsEnvironmental

factors

Product factors Market factors

Firm performance

Other elements

Pricing strategies

Terms

Hollensen, Global Marketing 4e, © Pearson Education 2008 15-12

Internal factors affecting international pricing decisions

Firm-level factorsCorporate and

marketing objectivesCompetitive strategyFirm positioningProduct developmentProduction locationMarket entry modes

Product factorsStage in PLCPlace in product lineMost important

product featuresProduct positioningProduct cost structure

Hollensen, Global Marketing 4e, © Pearson Education 2008 15-13

External factors affecting international pricing decisions

Environmental factors Government influences

and constraints Inflation Currency fluctuations Business cycle stage

Market factorsCustomers’ perceptionsCustomers’ ability to payNature of competitionCompetitors’ objectives,

strategies, strengths and weaknesses

Grey market appeal

Hollensen, Global Marketing 4e, © Pearson Education 2008 15-14

Gillette relies on product line pricing

www.gillette.com/

Hollensen, Global Marketing 4e, © Pearson Education 2008 15-15

Basic approaches to pricing across countries

Price standardization

Price differentiation

Hollensen, Global Marketing 4e, © Pearson Education 2008 15-16

Figure 15.5 Structural factors of standardized

versus differentiated pricing

Source: Reprinted from European Management Journal, Vol. 12, No. 2, Diller. H. and Bukhari, I. (1994) ‘Pricing conditions in the European Common Market’, p. 168, Copyright 1994, with permission from Elsevier.

Hollensen, Global Marketing 4e, © Pearson Education 2008 16-17

Figure 16.2a Japanese car parts distribution channels

Sources: Cateora (1993); Onkvisit and Shaw (1993); Pirog and Lancioni (1997).

Hollensen, Global Marketing 4e, © Pearson Education 2008 16-18

Figure 16.2b US car parts distribution channels

Sources: Cateora (1993); Onkvisit and Shaw (1993); Pirog and Lancioni (1997).

Hollensen, Global Marketing 4e, © Pearson Education 2008 16-19

Figure 16.5 Factors influencing channel width

Source: adapted from Lewison, 1996, p. 279.

Hollensen, Global Marketing 4e, © Pearson Education 2008 16-20

Figure 16.7 Criteria for evaluating foreign distributors

Overall qualifications/ selection criteria

Financial and company

strengths

Productfactors

Marketingskills

Commitment

Facilitating factors

Source: Adapted from Cavusgil et al. (1995).

Hollensen, Global Marketing 4e, © Pearson Education 2008 17-21

Cathay Pacific chose standardized advertising

throughout its markets

http://www.cathaypacific.com

Hollensen, Global Marketing 4e, © Pearson Education 2008 17-22

Courvoisier cognac used a localization strategy

http://www.courvoisier.com/