International product and pricing policies: Product standardization & adaptation, international pricing strategies.
- 1. International Marketing – Marketing Mix, Branding, Pricing Strategies
- 2. Marketing Mix When introducing a product into foreign markets, companies can utilize a standard marketing strategy. This strategy should be chosen, according to what suits the nation the best.
- 3. 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.
- 4. Marketing Mix : Product 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.
- 5. Marketing Mix : Promotion Unlike international product decisions, an enterprise can either accustom or standardize their promotional strategy and message. Promotional messages in countries should be accustomed due to differences in language, political climate, cultural attitudes and religious practices in different region. A promotional strategy used in one country could be offensive when used in another. Every side of promotional brief needs to be analyzed followed by planning.
- 6. Marketing Mix : Promotion For example, people in China believe red to be a lucky color and this color is also worn by Indian brides. Similarly, white is worn by mourners in India whereas, brides in China and United Kingdom wear white. Some companies accustom organization promotion strategies to suit local markets as cultural backgrounds and activities affect what appeals to consumers.
- 7. Marketing Mix : Promotion The scale of media improvement and availability should also be analyzed and considered. Before framing promotional exercise for a foreign market, the company should complete a PEST analysis. This would help the entrepreneur have a complete understanding of the factors functioning in the foreign market before entering it.
- 8. Marketing Mix : Pricing Pricing on an international level is a very difficult task. It takes into account the traditional price i.e. the cost of the product in the local market including fixed and variable rates. It also determines the competition prevailing in the market between a particular company’s products and similar products of other companies.
- 9. Marketing Mix : Pricing Apart from these factors, an enterprise should consider additional factors like − 1. The cost of transport 2. Tariffs or import duties 3. Exchange rate fluctuations 4. Personal disposal incomes of the target market 5. The currency they want to be paid in and 6. The general economic situation of the country and how this will influence pricing
- 10. Marketing Mix : Pricing The internet has created more difficulties for the sellers as customers can now compare the prices of the products they are buying with similar products existing in the market. This has increased the level of competition.
- 11. Marketing Mix : Place This component of marketing mix is completely about product or service distribution to the consumer, at the right place and at the right time. Distribution of goods in a developed market like United States probably includes goods being shipped in a chain from the producer to wholesalers and onto retailers for consumers to buy from. In an international market, number of countries offering same products with different varieties is more as compared to national market.
- 12. Marketing Mix : Place For example, in Japan there are probably five different types of wholesalers engaged in the distribution chain. Businesses will be required to examine the distribution chains for each nation they would like to work with. They will also need to analyze and verify who they would like to sell their products and services to - businesses, retailers, wholesaler or directly to customers.
- 13. Marketing Mix : Conclusion Before designing an international marketing mix, an enterprise should conduct PEST analysis for every participating nation they would like to operate in. This assists them in identifying the major components of the marketing mix that can be standardized and which components will need adjustments to suit local needs.
- 14. Branding Branding is a process of designing a distinct name and picture for an item in the minds of the customers, mainly through advertising campaigns. A brand is a name, signature, mark, term, symbol, design or mixture of these components used to determine an item, a family of goods, or all products of a company. Branding is a vital aspect or element of product planning process and proves to be a very essential and powerful tool for marketing and selling products.
- 15. The merging of the following components form a company's corporate symbol or name −Branding Brand Name − It can be a single word, a combination of words, letters, or digits to highlight a product or service. For example, Pepsi, Lakme, Baggit, etc. Trade Name − It promotes and advertises an enterprise or a division or a specific corporation through a corporate brand name. For example, Dell, Nike, Google, and many more. Brand Mark − It is a distinct symbol, coloring, lettering, or other design component. Mostly, it is recognizable and need not be pronounced on spelled. For example, Apple's apple, or Coca-Cola’s
- 16. The merging of the following components form a company's corporate symbol or name −Branding Trade Mark − It is a word, name, letter, digit, symbol, or merging of these components. Trade mark is legally secured and owned by the government. For example,, NBC owns colorful peacock as its trade mark, or McDonald's golden arches. No other enterprise can use these symbols. Trade Characters − These characters include animals, people, animated characters, cartoons, objects that are used to promote a product or service, that is related with that product or service. For example, Godrej almirah and lockers.
- 17. Pricing Strategies With respect to marketing mix, price is the least attractive element to be considered. Marketing companies should really target on producing as high a margin as possible. The debate is that the merchant should change item, location or advertisement in some way before resorting to minimization of price. Anyhow, price is a flexible component element of the mix as we shall see.
- 18. 1. Penetration Pricing The rate issued for goods and services is set artificially low in order to earn market share. After achieving, the price is increased. This strategy was first used by France Telecom and Sky TV. Enterprises need to grab the opportunity to hold on to customers, so they offered free telephones or satellite dishes at minimal rates. And eventually, people signed up for their services. After getting large number of subscribers, rates gradually go up. For example, Tata Sky or any cable or satellite company, when there is a premium movie or sporting event rates are at their highest. Thus, they shift from penetration strategy to more of a skimming or
- 19. 1. Economy Pricing Here, the rates of marketing and advertising a product are kept as low as possible. Supermarkets often have economy brands for soups, spaghetti, biscuits, etc. Budget airlines are popular for keeping their overheads as low as possible and then providing the customer a comparative lower rate to fill an aircraft. The first few seats are sold at a very low rate almost an advertisement rate price and the middle majority are economy seats, with the highest rate being sold for the last few seats on a flight i.e. in the premium pricing strategy. During times of recession, economy pricing records
- 20. 1. Price Skimming Price skimming sees an enterprise charge a higher rate because it has a substantial competitive benefit. However, the benefit tends not to be sustainable and reasonable. The high cost tempts new competitors into the market, and the rate inevitably decreases due to increased supply. Producers of smart phones used a skimming strategy. Once other producers penetrated into the market and the smart phones were manufactured at a lower unit price, other marketing approaches and pricing approaches were executed. New products were launched and the market for smart phones earned a reputation for innovation.