International Trade and

Export Marketing

Course Code : MS60403

Department : Industrial Management
Faculty of Management Studies and Commerce

University of Vocational Technology

Ratmalana
 International Marketing Mix
The same marketing principles that lead to marketing success in domestic marketing can
also apply to global marketing.

With the rapidly growing force of globalization, the distinction between marketing
within an organization’s home country and marketing within external markets is
disappearing very quickly. With this in mind, organizations are modifying their marketing
strategies to meet the challenges of the global marketplace while trying to sustain their
competitiveness within home markets. These changes have also prompted brands to
customize their global marketing mix for different markets, based on local languages,
needs, wants, and values.

7/8/2024 2
 International Marketing Mix

• The international marketing mix strategy involves the use of different marketing
instruments to achieve positive financial results by a company operating on
international or global markets.

• The international marketing mix strategy should take into account legal and socio-
cultural circumstances in every country to which it is directed

7/8/2024 3
International Marketing Mix

.
The 4Ps of Marketing
1) PRODUCT
2) PRICE
3) PLACE
4) PROMOTION
International Marketing Mix
 International Marketing Mix
Product
General marketing concept describes how to sell more of a product with an aim to
meet the needs of our target market.
In international markets this includes considering various factors like customer's
cultural backgrounds, religion, buying habits and levels of personal disposable
income.
In some circumstances a firm adapts their product and marketing mix strategy to
satisfy the local requirements and demands that cannot be changed.
For example,
• McDonalds is a global player anyways, their burgers are accustomed to local needs. In
India, where a cow is worshipped and is believed to be a sacred animal, their burgers
include chicken or fish but not beef.
• In Mexico, McDonalds burgers is served with chili sauce.
• In some parts of the world, Coca-Cola tastes sweeter than in other places.

7/8/2024 6
 International Marketing Mix
Different product strategies used in international markets

Product policy on the international market includes three strategies:

• Product standardization – The company introduces an unchanged product on
the foreign market. Such action makes sense when the product due to its nature,
has similar utility for customers in various markets. The use of this strategy is
comfortable and not very expensive. An example of companies using
this strategy is IKEA.
• Product adaptation – involves the adjustment of the product and its properties
to the conditions prevailing on the particular market. This includes packaging,
size, symbols (depending on the culture prevailing in the country concerned),
color. Adaptation of the product requires a large amount of capital and
experience.

7/8/2024 7
 International Marketing Mix
Standardization – Pros
• Cost saving - One marketing strategy – production distribution and marketing
program
• Improved quality -
• Consistency - help build trust and loyalty among customers, which can lead to
increased sales and profits
• Efficiency - Standardization can help streamline processes and reduce waste,
resulting in increased efficiency and productivity.
• Global Customer - Large customer base
• Global Segments - Large market

7/8/2024 8
 International Marketing Mix
Standardization – Pros

• Lack of Flexibility - Standardization can limit the ability to customize products or

services to meet specific customer needs. This can lead to missed opportunities and
reduced customer satisfaction.

• Vulnerability to trade barriers - One marketing strategy – production distribution and

marketing program

• Strong local competition which offers customization to that specific market

7/8/2024 9
 International Marketing Mix
Pricing policies in the international marketing mix
Pricing is the process of determining what a company will receive in exchange for its
products. Many pricing considerations in global marketing are similar to domestic
marketing. As marketers develop pricing strategy, they should keep the following
goals in mind:
• Achieving the financial goals of the company and generating profits
• Matching the realities of the marketplace and consumer buying trends
• Supporting the designated positioning for a product, making it consistent with
other elements of the marketing mix, product, promotion and placement
.

7/8/2024 10
 International Marketing Mix
Pricing policies in the international marketing mix

Similar to domestic marketing, in the global marketing mix, factors

that affect pricing include manufacturing cost, distribution
channels, marketplace, competition, market conditions, and
quality of product.
For instance, if distribution is exclusive to one channel partner,
then prices are likely to be higher. High prices are required to cover
high costs of manufacturing, shipping, extensive advertising, and
promotional campaigns.
If manufacturing costs go up due to the rise in price of some raw
material, then prices will need to rise as well.

7/8/2024 11
 International Marketing Mix
Most common pricing strategies

• Cost-plus pricing . Calculate your costs and add a mark-up.

• Competitive pricing . Set a price based on what the competition charges.
• Price skimming . Set a high price and lower it as the market evolves.
• Penetration pricing . Set a low price to enter a competitive market and raise it
later.
• Value-based pricing . Base your product or service’s price on what the customer
believes it’s worth.
• Premium pricing . Setting a high price for high-quality goods.

7/8/2024 12
 International Marketing Mix
Pricing policies in the international marketing mix

Pricing involves the problem of price management on an international

scale. There are two basic points of view:

• Usually, the company introduces separate pricing policies on foreign

markets (due to differences in wealth, competition, etc.),

• The development of modern communication technology makes distant

markets more similar to each other, which makes it harder to lead a
separate pricing policy at home and abroad. In this case, the company
carries out a global pricing strategy, when the processes
of internationalization blur the differences between the various
markets.

7/8/2024 13
 International Marketing Mix
Global Pricing Considerations
Pricing considerations become more complicated in the global context when it
comes to factors affecting global trade. Multinational companies must operate with
different currencies, exchange rates, and interest rates. Pricing needs to account for
risk associated with fluctuations in the relative value of different currencies in the
markets (Exchange gains / losses) where businesses operate.

When the dollar is strong against a foreign currency, for example, imported
American goods are more expensive relative to the local competition, so local sales
may decrease. When a weak dollar makes product imports more expensive, the
final good must carry a higher price tag to cover production costs.

7/8/2024 14
 International Marketing Mix
Global Pricing Considerations

Pricing can be affected by the cost of production (locally or internationally), Laws

and regulations, natural resources (product ingredients or components), and the
cost of delivery (e.g., the availability of fuel). For instance, if a country imposes a
minimum wage law that forces the company to pay more to its workers, the price of
the product is likely to rise to cover some of that cost. Natural resources, such as
oil, may also fluctuate in price, changing the price of the final good. Pricing may be
affected by government policy, such as trade tariffs and taxes, or costs associated
with regulatory compliance and adherence to administrative or legal criteria of
specific jurisdictions.

7/8/2024 15
 International Marketing Mix
Global Pricing Considerations

Global marketers must be also prepared to deal with other localized factors
affecting pricing. Cultural expectations may dictate what consumers are willing to
pay for some products and brands. A product’s positioning in relation to the local
competition influences the brand’s ultimate profit margin. Global marketers must
carefully consider how to position their products in global markets and decide
whether their products are considered high-end, economical, or something in
between according to cultural norms

7/8/2024 16
 International Marketing Mix
Distribution policy in international markets

Although other elements of the marketing mix are often more visible during the
marketing process, place, or distribution, is essential in getting the product
distributed to customers. Placement determines the channels used to distribute a
product across different countries, taking in factors such as competition and they
way similar brands are being offered to the target market. Regardless of its size or
visibility, a global brand must adjust its country strategies to take into account
placement and distribution in the marketing mix.

7/8/2024 17
 International Marketing Mix
Distribution policy in international markets
Global marketing presents more challenges around distribution,
compared to domestic or local marketing. Consequently, brands
competing in the global marketplace often conduct extensive research to
accurately define the market, as well as the environments where
consumers will find, buy, and use the product. A country’s transportation
and economic infrastructure, customs, marketplace conditions, and the
competitive landscape can all factor into strategic decisions around
distribution.
For example, not all cultures use or have access to vending machines to
distribute beverages. In the Canada, beverages are sold by the pallet via
warehouse stores. But warehouse stores do not exist in all markets.

7/8/2024 18
 International Marketing Mix
Distribution policy in international markets
Placement decisions must also consider the product’s positioning in the
marketplace.
A global luxury brand would not want to be distributed via a discount chains.
Buying a Gucci scarf at the Dollar Store is unlikely. Conversely, low-end shoemakers
would likely be ignored by shoppers browsing in an Italian boutique store.
Global marketers must also consider how their products will be distributed across
the different shopping venues unique to a particular country or market.
Customizing these placement strategies for national and local markets while
retaining a strong and consistent brand image can help companies gain significant
competitive advantages.

7/8/2024 19
 International Marketing Mix
Distribution policy in international markets

On the international market distribution activities are related to the offering on

the market of products in an appropriate form, place and time. The activities must,
however, be adapted to other instruments of the marketing mix and change along
with them. The main goal of distribution policy is to overcome spatial, temporary
and ownership barriers to distribution separating the manufacturer and the
final customer. International logistics plays a major role in international sales
and production activities.

7/8/2024 20
 International Marketing Mix
Promotion policy in international markets

For multinational corporations (MNCs), the interplay between product and promotion
is important because it can enable a company to make minor adjustments to a single
product and its promotion strategy rather than totally revamping the product and
promotion for different markets.
Coca-Cola is a strong example of this principle. The beverage brand uses two formulas
(one with sugar and one with corn syrup) for all markets. The product packaging in
every country incorporates Coca-Cola’s contour bottle design and signature ribbon in
some shape or form. However, the bottle can also include the country’s native language
and appear in identical sizes as other beverage bottles or cans in that country’s market.

7/8/2024 21
 International Marketing Mix
Promotion policy in international markets
Before launching promotional programs, global companies must first define their target
markets and determine the products that will resonate most with those consumers and
businesses.
This research can help inform marketing leaders about what course to take—localization
versus standardization strategy, as they learn more about the target market’s receptivity to
their goods and services..
Promotional tactics for global audiences can range from television commercials to social-
media marketing on Facebook or YouTube. It is the job of global marketers to create and
place promotional efforts in settings where local consumers will be most receptive to
receiving and acting on those messages. Consumers in each target market have different
media habits and preferences, and understanding these behaviours is important for
selecting the right promotional mix.

7/8/2024 22
International Marketing Mix
Promotion policy in international markets

After product research, development, and creation, promotion is generally the largest line
item in a global company’s marketing budget. Using integrated marketing communications
can significantly increase efficiency and reduce promotional costs, as messages across
multiple channels reinforce and amplify one another. For organizations that pursue a
standardized approach to promoting products and building brands, promotion is the crucial
component of the mix that enables a global company to send the same message worldwide
using relevant, engaging, and cost-effective techniques

7/8/2024 23
International Marketing Mix
Promotion policy in international markets
Global marketers must balance four potentially competing business objectives when
developing worldwide advertising:
• Building a brand while speaking with one voice
• Developing economies of scale in the creative process
• Maximizing local effectiveness of advertisements
• Increasing the company’s speed of implementation
Global marketers can use several approaches when executing global promotional programs:
exporting executions, producing local executions, and importing ideas that travel.
To successfully implement these approaches, marketers must ensure that their promotional
campaigns take into account how consumer behaviour is shaped by internal conditions (e.g.,
demographics, knowledge, attitude, beliefs) and external influences (e.g., culture, ethnicity,
family, lifestyle) in local markets. Areas for attention include

7/8/2024 24
International Marketing Mix
Promotion policy in international markets

When launching global advertising, public relations, or sales campaigns, global companies
test promotional ideas using marketing research systems that provide results comparable
across countries. These systems help marketers achieve economies of scale in marketing
communications, since they reveal which messaging or creative elements contribute to a
product’s market success. Marketing-research measures of nonverbal factors such as flow
of attention, flow of emotion, and branding moments can provide insight into what is
working in an advertisement or other marketing communication piece across multiple
countries and languages.

7/8/2024 25
International Marketing Mix
Promotion policy in international markets

he same recommendations about how to research and understand a target market in

domestic settings apply to global settings. Marketing research is essential for marketers to
build their understanding of which promotional tactics will be successful in any country or
region. Informed experimentation and trial and error are also good teachers. Once
marketers and brand managers discover what works (and what doesn’t) in the promotional
mix, they can import this knowledge to infuse creative ideas into other markets. Likewise,
companies can use this intelligence to modify various elements in their promotional mix
that are receiving minimal or unfavourable response from global audiences.

7/8/2024 26
 International Marketing Mix
Promotion policy as a marketing mix instrument
Promotion policy involves transferring information to new potential buyers about the
company, its products to make them buy these products. Selection and use of the
instruments needed to achieve these objectives depend on factors such as:
 The objective of promotion on the international market,
 Financial resources and experience in foreign markets,
 Provisions of the law which regulate promotional activities in each country,
 Cultural factors – e.g. language, habits, religion, symbols, associations related to the
color
 Attitude to foreign products,
 Competition on the foreign market,

7/8/2024 27
 International Marketing Mix
Promotion policy as a marketing mix instrument

• the company may take similar actions as experienced competitors or, if it is

lacking in resources, cooperate with the participants in the distribution channel
and jointly carry out promotion,
• the nature and quality of the product,
• type of customer.

7/8/2024 28
 International Marketing Mix
Promotion policy as a marketing mix instrument

7/8/2024 29
 Product Strategy
Segmentation Strategy
Product Strategy
Hybrid Marketing Ideal Global
Global
Strategy Marketing Strategy

National Ideal National Marketing Hybrid Marketing

Strategy Strategy

Toyne & Walters

National Market Segment Global Market Segment
1993

7/8/2024 30
 Ideal Global Marketing Strategy

Global marketing mix strategy – is based on the assumption that

on the international market there is the so-called global
consumer with similar needs and preferences. Using this
approach, on foreign markets companies apply identical marketing
instruments and their combinations, there are no different
instruments adapted for a social and cultural environment in those
countries

7/8/2024 31
Ideal National Marketing Strategy

National marketing mix strategy or multinational

strategy –
For each country company applies a separate
marketing strategy adapted to specific needs and
preferences of customers, their customs and
traditions,
Hybrid Marketing Strategy

Hybrid marketing mix strategy –

Involves standardization of one or more marketing
instruments and at the same time adjusting others to the
characteristics and conditions prevailing on the particular
national market (customs, traditions, regulations, etc.,).
Hybrid Marketing Strategy

Hybrid marketing mix strategy –

involves standardization of one or more marketing
instruments and at the same time adjusting others to
the characteristics and conditions prevailing on the
particular national market (customs, traditions,
regulations, etc.,).