The document discusses the international marketing mix and whether companies should standardize or customize their approach across different markets. It covers the key elements of the marketing mix - product, place, price, and promotion. While standardization can reduce costs, customization may be necessary when consumer tastes and regulations vary significantly between countries. The document provides several examples of companies that have both standardized and customized their marketing mix internationally.

1. The International Marketing Mix
International Advertising.
Lecture 2.

2. The International Marketing Mix
• We have to bring in the concept of
international marketing mix as any advertising
whether local or international is dependent on
the marketing mix.
• Companies operating in foreign markets must
decide whether or not to adapt their
marketing mix to local conditions and to what
degree?

3. The International Marketing Mix
• Product: Design, development, branding and packaging.
• Place: channels used to move the product from
manufacturers to consumers.
• Price: product offer at certain level of profit.
• Promotion: advertising, personal selling, sales promotion,
direct marketing, publicity, sponsorships, trade fairs etc.
• 2001 was the turnaround year for Samsung. It earned US
$2.5 billion profit and became premium producer of cell
phones.
• But this was a relatively simple product with simple
deliverables.

4. Standardization of Marketing Mix
• With a global approach to the marketing mix,
a firm utilizes a common marketing plan for all
the markets.
• This means selling same product in the same
way every where in the world.
• Such standardization bring lower production,
management and promotion costs.

5. Samsung Example (Standardization)
o Consumers used to buy Samsung when they
could not afford Sony or Toshiba.
o Now it is the name which consumers specially
young ones seek out for most fun and style.
o Samsung was producing some cool products but
nobody was noticing mainly due to fuzzy image
from market to market.
o They had 55 advertising agencies.
o Single shop Foote, Cone and Belding.

6. Specialization of Marketing Mix
The other school of thought advocates
Specialization.
• Consumers and marketing environments in
different countries vary so greatly, it is necessary
to tailor the marketing mix elements.
• Although this results in higher cost, still
marketers believe that higher returns will offset
the additional cost elements.

7. KFC, MaC Donalds, PIZZA Hut
• They altered tastes and elements.
• Do you think PIZZA in its original Italian form
would have clicked. Today we are eating Chicken
Tikka in a PIZZA.
• They also had to move to Halal food elements.
• Walmart Example. “Locals Know Best Model”.
• Local managers have a say in what to stock. They
have the authority to buy and stock locally.
• Discussion Point – Which products should?

8. The International Marketing Mix
• Selling same product in different markets
eliminates duplication of cost related to
research and development, product design and
package design.
• Economies of scale.
• Coca Cola, Kellogs corn flakes, ponds cold cream,
Gillette razor blades are few examples who sell
same product worldwide.

9. The International Marketing Mix
• Durable and in durable goods.
• Customization is more seen in in durable segment of
goods mainly due to human tastes, habits and customs
involved where cultures are more relevant.
• Similarly industrial products are usually more
into standardization.
• Product standardization is also effective where
target markets are similar. Youth all over the world
are surprisingly similar. Marketers of jeans, hair
products and colas find that they can sell same product
world over.

10. The International Marketing Mix
• High tech / high touch products are essentially more
towards standardization.
• Electrical appliances have to customize in certain
markets.
• Government regulations also play an important role.
For example in US Cars manufacturers and importers
have to strictly follow emission standards. Germany
has strict guidelines for purity of beers sold in that
country.
• International food outlets seem to offer products
matching our tastes. Isn’t that the case?
• Country of origin effect.

11. The International Marketing Mix
Pricing Standardization or Specialization
• Corporate objectives.
• Competition.
• Consumer demand. Consumer satisfaction. Size of the market.
Market’s ability to purchase a product.
• Revenue equation P x Q.
• Government and regulatory considerations.
• Initially the prices may be low to penetrate the
market and later raised. Why?
• Skim the cream strategy. Initially the prices are kept high. This
happens when there is no competition or product is new in
that market as competition walks in prices are reduced.

12. The International Marketing Mix
• Prestige pricing strategy
• Competitive pricing.
Pricing is dependent on :
• Product modification in that market.
• Any additional operational cost such as
transportation and insurance.
• Costs incurred in entering that market. Like govt
duties and taxes etc. pharma example. PIA example.
• Export pricing. Freight and shipping, insurance, tariffs,
taxes, storage costs, doc cost, middlemen margins all add
up.
• Prices may be low due to movement of overproduction. May be no
storage capacity in the country of origin.
• Dumping. Goods sold at a price lesser than the production cost.????

13. The International Marketing Mix
• Goods produced abroad. Lower labor and material cost
may be. That gives flexibility.
Promotion.
• Saatchi & Saatchi and BBDO believe in
globalization whereas Grey believe in
customization.
• Cultural aspects at times compel to customize msg.
islamic values and pepsodent example.
• Language and creative driven by literacy rate.
• Research plays a vital role in deciding standardization
or localization of advertising message.

14. ENDS