It is important, too, to evaluate the capacity of the
to be flexible, adaptable, and proac-
tive, as these are the attributes
for success in a highly competitive and rapidly
changing world.
Undoubtedly,
factors have received the most attention from marketers
considering international markets .
The Functional Level
Having set the objectives for the company, both
the corporate level and the business level,
the company can now develop a detai led program of functional activities to achieve the objec-
tives. Following the integrated approach employed throughout this text, each of the func-
tional elements (e.g., finance, human resources, research) must be considered jointly. The
international marketing strategy is doomed to failure if human resources can ' t find and
train the appropriate employees, or research can't modify the product so that it is accept-
able to consumers in another country. Ultimately, this coordination between bu siness func-
tions is contingent on the market entry strategy employed as well as the degree of
or customization deemed .
Having integrated at the
level, we next
integration of the
keting mix elements.
Product/Promotion
Keegan II has highlighted the key
of marketing strategy as a combination of stan-
dardization or adaptation of product and promotion elements of the mix and offers five
alternative and more specific approaches to product policy:
1. One product, one message, worldwide. While a number of writers have argued
that this will be the strategy adopted for many products in the future, in practice
only a
of products might claim to have achieved this already.
2. Product extension, promotion adaptation. While the product stays the same this strategy allows for the adaptation of
promotional effort either to target new
customer segments or to appeal to the particular tastes of individual countries.
3. Product adaptation, promotion extension. This strategy
used if a promotional
campaign has achieved international appeal, but the product
to be adapted
because of local needs.
4. Dual adaptation. By adapting both products and promotion for each
the
firm is adopting a totally differentiated approach .
5. Product invention.
usually from advanced nations, that are supplying
ucts to less well-developed countries adopt product invention.
Another critical element that is closely aligned with the product and promotion is the
brand. Anthony O ' Reilly, Chairman of H .J. Heinz, believes that
communications rev-
olution and the convergence of cultures have now set the stage for truly global marketing.
The age of the global brand is at hand. For example, Heinz was looking to expand its 9
Lives cat food bran::! and Morris the Cat logo into Moscow. Although it's a stable and suc-
cessful brand in the U. S., testing and research done by Dimitri Epimov, a local marketing
manager in Moscow, led Heinz executives to make marketing
to ensure the prod-
uct's success in Russia. Namely, a fatter-looki ng Morris was created for packaging. Another
discovery : While Americans tend to treat their kitties with tuna, Russian
prefer
to serve beef-flavored food.
THE INTERNATIONAL MARKETING PLAN
137
As discussed earlier, DrOGUct positioning is a key success factor and reflects the cus-
tomer's perceptions of the product or service. However, in countries at different stages of
economic development,
customer segments that are
to be able to purchase the prod-
uct and the occasions on which it is bought may be significantly different. For example, while
KFC and McDonald's restaurants aim at everyday eating for the mass market in the devel-
oped countries. in less-developed countries they are perceived as places for special-occasion
eating, and are beyond the reach of the poorest segments of the population. The product posi-
tioning, therefore, must vary in some dimensions. In confioning the positioning of a prod-
uct or service in a specific market or region, it is therefore necessary to establish il1 the
perception exactly
the product stands for and how it differs from existing
and potential competition by designing an identity that confirms the value of the product.
Pricing
Pricing products in foreign nations is complicated by exchange rate fluctuations, tariffs, gov-
ernmental intervention, and shipping requirements. A common strategy involves a
setting a lower price for their products in foreign markets . This strategy is consistent with
the low income levels of many foreign countries, and the lower price helps
build mar-
ket share. Pricing strategies are also strongly influenced by the nature and intensity of the
competition in the various markets.
For these reasons, it is important to recognize at the outset that the development and
implementation of pricing strategies in international markets should follow the following
stages:
1. Analyzing the factors that influence international pricing,
as the cost struc-
tures, the value of the product, the market
competitor pricing levels, and
a variety of environmental constraints
Confioning the impact the corporale strategies should have on pricing policy
Evaluating the various
pricing options and selecting the most appropri-
ate approach
4. Implementing the strategy through the use of a variety of tactics and procedures
to set prices
5. Managing prices and
;nternational
Perhaps the most critical factor to be considered when developing a pricing strategy in inter-
national markets, however, is how the customers and competitors will respond. N'agle ' 2 has
suggested nine factors that influence the sensitivity of
to prices, and ali have impli-
cations for the international marketer. Price
reduces:
• The more
the product is,
• the greater the
quality,
• the less aware consun:ers are of substitutes in the market,
• if it is difficult to make comparisons,
• if the price of a product represents a small proportion of total expenditure of the
customer,
• as the perceived benefit increases,
• if the product is used in association with a product bought previously,
•
costs are shared with other parties,
• if the product cannot be stored.
138