When you are in the process of selecting the target markets, the marketing mix decisions must be evaluated. Basically, the elements for market mix decisions are the same for domestic marketing and international marketing. But the scope of decisions under these elements are different.
- Product planning
- Price planning
- Distribution planning; and
- Promotion planning.
Elements of Marketing mix Decisions in International Markets
Product planning in marketing mix decision:
The international marketer should decide whether to sell the same product abroad as at home, or modify it for the new market or develop an entirely different product.
Marketing the same product around the world is practical when culture has no influence over the way the product is used. However, a product has to be redesigned entirely to meet the needs of the population.
Apart from the product and service component, branding and packaging are an integral part of the total product. Choice of brand name is a difficult problem. Companies like Coca-Cola establish a world wide image for the product by using the same name.
Packaging decisions must be taken in the light of the aesthetic preferences of customers, their income brackets and shopping habits.
Labeling decisions are influenced by familiarity of language law literary rate and local customs.
Internal marketers follow three basic product strategies namely, standardization, adaptation and innovation.
Standardization in marketing mix decisions:
Standardization is the strategy of selling identical products in all countries. This strategy is less costly as there is no need for special market research or product modification. Production and marketing costs are less. The success of standardization depends upon the product’s suitability to its different target markets.
Innovation in marketing mix decisions:
In certain markets, simple product modification is not sufficient. A complete new product may be required to suit the target customers.
Adaptation in marketing mix decisions:
Adaptation involves modifying the product to satisfy local tastes. Though adaptation is an expensive proposition, it yields profit by tapping the market opportunities. Adaptation strategy is appropriate when the product performs the same functions under varying conditions of use.
Price planning in marketing mix decisions:
Price planning is the basic consideration in international marketing. Price planning involves decisions as to whether prices should be standardized, the levels at which they are set, the currency in which prices are quoted and terms of sales.
When international marketers operate within an economic community, common market, standardization of prices is comparatively easy. Companies engaged in international minuting incur extra costs on account of taxes, tariffs, and currency exchanges.
Local economic conditions such as per capita income and GNP are the basic considerations in setting the price level. Some firms charge lower prices to expand the market or overcome excess supply in the home market and preserve the domestic price structure. Some companies indulge in dumping by selling a product in a foreign country at a lower price than the exporter’s own country.
The terms of sales should be determined by paying due consideration to discounts for middlemen, form of payment, credit period, refund policy, etc.
Distribution planning in marketing mix decisions:
International distribution planning involves the selection and use of channel members and the physical movement of products. Choice of channel members and physical distribution methods depend on customs, costs and other factors.
Firms make a number of arrangements to place their products in foreign markets. International marketers consider degree of control needed and the volume of exports while making channel decisions.
Firms marketing many products set up their own sales force abroad or buy out overseas distributors to have special control over servicing in foreign markets.
Special planning is required for physical distribution in international markets. Poor physical distribution facilities create problems. The problems of transportation exist in less developed countries. Warehousing is also a problem even in industrialized countries. Inadequacy of storage facilities, and absence of modern facilities increases the costs of marketing.
Promotion planning in marketing:
The purpose of promotion is the communication of goods and services marketed abroad. Communication takes place in the context of cultures. As cultures vary with countries, different approaches to promotion are adopted. Language, differing values and attitudes strongly influence the advertisement messages. The media used to carry the message may also have to be tailored locally.