DESIGNING AN INTERNATIONAL MARKETING PROGRAM

An international marketer goes through the same steps in designing a marketing program as domestic marketer. However, the international marketer must decide whether to use a global or customized approach. Careful marketing research must be done to help the international marketer decide whether to modify or maintain domestic product, price, place, and promotion strategies.

We start with the product. The following options can be considered here.

- Extension: Selling the same product in other countries is an extension strategy. It works well for products like Coca-Cola, Wrigley's gum, General Motors cars, and Levi's jeans.

- Adaptation: Changing a product in some way to make it more appropriate for a country's climate or preferences is an adaptation strategy. For example Exxon sells different gasoline blends based on each country’s climate.

- Invention: Designing a product to serve the unmet needs of a foreign nation is an invention strategy. This is probably the strategy with the most potential, since there are so many unmet needs, yet it is actually the least used.

Price. Most foreign countries use a cost-plus pricing strategy. For international firms this can mean their products are priced higher than the local goods. Why? International products must include not only the cost of production and selling, but also tariffs, transportation and storage costs, and higher payments to intermediaries.

Dumping is when a firm sells a product in a foreign country below its domestic price. This is most often done to build a share of the market by pricing at a competitive level. Another reason is that the products being sold may be surplus or cannot be sold domestically, and are therefore already a burden to the company. The firm may be glad to sell them at almost any price.

Some U.S. pharmaceutical firms have sold penicillin, for example, at a lower price in foreign countries than at home. They justify this by saying that R&D costs are not included in foreign prices. Japan has been accused of following a dumping strategy for some of its products in the United States. Its response is that the volume sold here allows economies of scale, the savings of which are passed on to U.S. consumers.

An unusual pricing dimension of international marketing is countertrade, using barter rather than money in making international sales. Although countertrade accounts for only about 10 percent of the world trade, it is growing in importance. An unpleasant aspect of pricing is bribery, the practice of giving or promising something of value in return for a corrupt act. This is a common practice in many countries to reduce red tape and make sales. Although in many countries bribery is an accepted business practice in some international sales, it is officially illegal in all countries.

Place. An international marketer must establish a channel of distribution to meet the goals it has set. The first step involves the seller; its headquarters is the starting point and is responsible for the successful distribution to the ultimate consumer.

The next step is the channel between the two nations, moving the product from the domestic market to the foreign market. Intermediaries that can handle this responsibility include resident buyers in the foreign country, independent merchant wholesalers who buy and sell the product or agents who bring buyers and sellers together. Once the product is in the foreign nation, that country's distribution channels take over. Foreign channels can be very long or surprisingly short, depending on the product line.

1. Give your own examples of product extension, adaptation, and invention.

2. Describe some international marketing price policies.

3. What steps does product placement involve?

4. Three Ps have been mentioned in the text. Using your knowledge from previous texts describe the way the fourth P works in International Marketing.

Ex. 8. Explain, in your own words, the following terms.

needs, wants, prospective customer, wholesaler, retailer, things of value, resale, buying decision, basic necessities, ultimate consumer, target market, controllable factors, tangible items, intangible items, inventory, idle production capacity.

Ex.9. Think of the verbs that are mostly used with following nouns.

exchange, needs, wants, services, goods, decision, product, benefit, commission, increase, price.

Ex.10. Think of the nouns that are commonly used with the following verbs.

satisfy, exchange, achieve, occur, create, shape, discover, concentrate, market, obtain, charge.

Ex. 11. Logically organize the following sentences to make up the text. The first sentence is given to you.

1. A basic decision in marketing products is branding.

2. Some brand names can be spoken, such as a Big Mac hamburger.

3. The Campbell Soup Company is the trade name of that firm.

4. In branding an organization uses a name, phrase, design, symbols, or combination of these.

5. A trademark identifies that a firm has legally registered its brand name or trade name

6. Other brand names cannot be spoken, such as the rainbow-coloured apple (the logotype or logo)that Apple Computer puts on its machines and in its ads.

7. A brand name is any word, “device” (design, sound, shape, or colour), or combinations of these used to distinguish a seller’s goods or services.

8. A trade name is a commercial, legal name under which a company does business.

9. It helps to identify its products and distinguish them from those of competitors.

10. So the firm has an exclusive use, thereby preventing others from using it.

What title would you give to the text?

Ex. 12. Fill in the gaps with the missing words.

Category, research, marketer, services, process, utility, exchange, profit, information, cycle, concept, marketing, advertising, goods, advertiser, extension, effectiveness

Marketing is the … companies use to make a … by satisfying their customers' needs for products. A more complicated … at the core of marketing is the perceived equal-value …, which implies three phases in the marketing-exchange … : finding out who customers are and what they want; interpreting this … for management in order to shape products; and devising strategies to inform customers about the product's … and to make it available to them. Advertising is concerned with the third step in the … process. It is one of several tools that … can use to inform, persuade, and remind groups of customers, or markets, about their … and … . Its … depends on the communication skill of the … person. It is also effective only to the extent that other marketing activities, such as market …, are correctly implemented.

There are three … of participants in the marketing process: customers, markets, and marketers. To reach customers and markets, … use the marketing communication process, which is an … of the human communication process.

Ex. 13. Join the halves.

A.

1.In the past, each of the countries of the European Union

2.These differences made it difficult and expensive

3.Now, these countries are abandoning old political

4.It helps to reduce taxes and other barriers

5.This unification has eliminated over 300

6.Trucks loaded with products spill

7. The increased efficiency is reducing costs and

8.These changes make Europe that largest unified market

9.By the year 2010 the EU may expand to include at

10.These changes have dramatically altered opportunities available to marketing

11.The international competition fostered by the unification of Europe has also provided

B

1.across the European continent and Britain.

2.creating millions of new jobs.

3. impetus for the US, Mexico, and Canada to develop more cooperative trade agreements.

4. managers both in Europe and in other parts of the world.

5. had its own trade rules and regulations.

6. to move products from one country to the others.

7..squabbles and nationalistic prejudices in favour of cooperative efforts.

8. separate barriers to inter- European trade.

9.commonly applied at national boundaries.

10. least 25 countries and 450 million people.

11.in the world, and more changes are coming.

Read the sentences once again. Do you see that you have written the text? What is it about? What title would you offer?

Ex.14. Make up the sentences. Put them down into your notebook. The beginning of each sentence is given to you.

Marketing,practices, inappropriate, sometimes, actions, that, produce consumers, find.If,become, upset, actions, enough, specific, with, consumers, sufficiently, they, action, demand, will, regulatory, local, at, or, level, federal, the, state. A social, sellers, movement, with, of, the, that, purpose, to, of, relative, enhancing, buyers, the, of, power, consumerism, termed, is.

Such,products, movements, or, generally, boycotts, produce, firms, some, of. A common,activities, objective, marketing, of, the, is, consumerism, regulation, of. The current, 1960s, began, consumerism, early, the, in. The consumenrism, group, is, a, movemrnt, political,well-organized, not. Rather, consumers, refers, state-of-mind, more, many, a, to, in.

Ex. 15. Give Russian equivalents to the following.

Encounter difficulties; to do international marketing; exploit a better business opportunity; with little room for growth; demand may shift t a newer product; to return to other markets; the dimensions being evaluated; offer investment incentives; to compete fairly in the domestic markets; protect themselves against; duties are imposed; quotas are revised; a means of entry; the option chosen; domestically produced goods; do not require intermediaries; contract for a large volume of purchases; under licensing; the right to a trademark; in return for a loyalty or a fee; capital-free entry; the product manufactured locally; the advantages are twofold; dumping prices; bribery; reduce red tape.

Ex.16. Render the following into English.

1.Marketing – процесс выяснения и удовлетворения потребностей.

2.Buyer’s behaviour – процесс принятия покупателем решения о том, какой продукт покупать и у кого. Процесс состоит из пяти последовательных этапов: осознание проблемы, поиск информации, оценка информации, решение о покупке, оценка после покупки.

3.Market segmentation – процесс разделения рынка на субрынки, каждый из которых образован группой потребителей в чем-то похожих друг на друга, например, уровнем образования, возрастом.

4.Marketing mix – маркетинговый комплекс, состоящий из продукта, системы его распространения, рекламы и цены, который фирма использует для обслуживания потребителей на его целевом рынке.

5.Target market – особая группа потребителей, чьи потребности собирается удовлетворять предприятие.

6.Branding – использование дизайна, символа, имени или их комплекса для идентификации продукта, что дает производителю ряд преимуществ.

7.Consumer goods – товары, покупаемые для непосредственного удовлетворения потребностей покупателя.

8.Distribution channel – цепь фирм, которые участвуют в покупке и продаже товаров по мере их продвижения от производителя к пользователю.

9.Durable goods – товары, срок потребления которых превышает один год.

10.Positioning – процесс подгонки имиджа товара потребностям его целевого рынка.

11.Product life cycle – период, в течение которого продукт последовательно проходит через стадии зарождения, роста, зрелости и упадка.

12.Publicity – общественное мнение о компании или ее продукте.

13.Trademark – символ или наименование сорта, которые защищены законодательно.

Ex. 17. Give the English equivalents to the following.

Нет необходимости в маркетинге; больше, чем он потребляет; ссылки на такие темы, как деньги, кредит, богатство; эра производства; эра продаж; эра маркетинга; излишки обмениваются на; удовлетворять потребности; конечный потребитель; покупать для собственного пользования; нечто, имеющее ценность; незанятые производственные мощности; возросшие продажи и прибыли; из-за высоких налогов; отношение правительства к зарубежным рынкам; прямой экспорт; принимающая страна.

Ex.18. Translate into English.

1.Маркетинг тесно связан с такими социальными науками, как экономика, социология, психология. 2. Маркетинг изучает людей в социальном контексте. 3. Маркетинг – это система научных и практических взглядов, направленных на изучение и управление рыночными отношениями. 4. Цель маркетинга – определить нужды т потребности своих будущих потребителей. 5. Четыре основных управляемых фактора маркетинга – это товары, цена, размещение и продвижение. 6. Потребитель не может отделить услугу от ее поставщика. 7. Внешние рынки могут предоставить больше возможностей для роста компании. 8. Одна из сложностей – это оценка политических и правовых условий в стране. 9. Каждая страна Европейского Союза имела свои торговые правила и положения. 10. Объединение устранило свыше 300 отдельных торговых барьеров. 11. Международный маркетинг – это маркетинг товаров и услуг за пределами страны, где находится организация. 12. Специалисты по международному маркетингу должны учитывать культурную среду каждого рынка.