8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 1/12

I n t e r n a t i o n a l M a r k e t i n gI n t e r n a t i o n a l M a r k e t i n g

Unit 7

Pricing and

Promotion for International Markets

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 2/12

14-2 

Environmental Influences on PricingDecisions

Environmental Influences on PricingDecisions

� Currency Fluctuations

 ±  Are price adjustments appropriate?

 ± Distributors

 ± Weak Local currency� Exchange Rate Clauses

� Pricing in an Inflationary Environment

 ± FIFO, LIFO

� Government controls and Subsidies

 ± Deposits, profits, subsidies

� Competitive Behavior 

� Price and Quality Relationships

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 3/12

14-3

Grey Market GoodsGrey Market Goods

� Trademarked products that are exported from onecountry to another, where they are sold by unauthorizedpersons or organizations

� Parallel importing

 ± French Champagne in U.S.

 ± Pharmaceutical products in EU

 ± Caterpillar's U.S. dealers

� Quality and other services

� Laws

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 4/12

14-4

Transfer PricingTransfer Pricing

� Transactions between buyers and sellers that havesame corporate parent

� There are three major alternative approaches to transfer pricing which varies with the nature of the firm, products,markets and historical circumstances

 ± Cost-based transfer pricing

Cost plus pricing

 ± Market-based transfer pricing

Current or planned volume levels Market size

 ± Negotiated prices

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 5/12

14-5 

Global Pricing ± Policy AlternativesGlobal Pricing ± Policy Alternatives

� Extension/Ethnocentric

�  Adaptation/Polycentric

 ± Pharmaceutical products

� Invention/Geocentric ± Include local costs, income levels, competition and local marketing

strategy

Local cost-plus (short run and long run)

Product line pricing

Estimate market size

Consumer products (local income level)

Fit the marketing mix

 ± Push and pull strategy

 ± Head quarter's price coordination

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 6/12

14-6 

Global Advertising and BrandingGlobal Advertising and Branding

�  Advertising is a sponsored paid message placed in a massmedium

� First mover advantage

� Consumer and industrial products

� Global Market segmentation

� Benefits of Global Brands

Global Advertising Content

� Communication (wrong media, lack of cultural knowledge,understandability, noise )

 ± Global or localized

 ± Pepsi in Japan; McDonald¶s in Japan and Pakistan

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 7/12

14-7 

Selecting an Advertising AgencySelecting an Advertising Agency

�  Advertising agencies

 ± Inhouse Ad

Benetton, Disel

 ± Outside agency

Local or global

 ± Combine both

Cocacola

� Issues

 ± Company organization

 ± National Responsiveness

 ±  Area coverage

 ± Buyer perception

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 8/12

14-8 

Public Relations and PublicityPublic Relations and Publicity

� Non-paid form of communication

� Includes news releases, newsletters, press conferences,tours of plants and other company facilities, articles intrade or professional journals, company publications andbrochures, TV and Radio talk, special events andhomepages on internet

� Eg

 ± Death of Diana

� PR staffs or PR firms

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 9/12

14-9

Public Relations and PublicityPublic Relations and Publicity

� Growing role of PR in Global Marketing Communications

 ± Create trust and harmony, articulate and influence public opinion,

anticipate conflicts and resolve disputes

 ± Good relations between companies and government

 ± Language of the host country ± Sensitive to non-verbal communications

� PR practices differ around the world

 ± Industrialized countries

U.S.: news in small local newspaper 

Europe: the perspective has not been widely accepted

 ± Ghana: dance, songs, and story telling

 ± India: press releases won¶t be so effective

 ± Ethnocentric and polycentric approach

 ± Intel

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 10/12

14-10 

Personal SellingPersonal Selling

� Two-way personal communication

� Selling industrial products in Global Markets

 ± Selling Process

Prospecting, preapproaching, approaching, presenting,problem solving, handling objections, closing the sale and

following up

 ± Persistence

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 11/12

14-11

Sales PromotionSales Promotion

� Refers to consumer or trade program of limited durationthat adds tangible value to a product or brand

� Sales promotion and Trade promotion

� Sales promotion laws and usage vary around the world

� U.S., EU

8/6/2019 Unit 7-Pricing n Promotion 4 Intl Mkts

http://slidepdf.com/reader/full/unit-7-pricing-n-promotion-4-intl-mkts 12/12

14-12 

Sponsorship PromotionSponsorship Promotion

� Can be used to increase awareness and esteem, to buildthe brand identification to enhance brand¶s positioningand sales, and to circumvent advertising restrictions insome countries

� Olympics, world cup

� In U.S., Clairol professional Care Products supports AIDS research while Avon supports breast cancer research

�