CHAPTER 1 – Marketing and PR as an effective mean of selling goods and services.

CONTENT

INTRODUCTION

 

CHAPTER 1 – Marketing and PR as an effective mean of selling goods and services.

1.1 Idea and essence.

1.2 Targets of PR and Marketing in international business.

1.3 The differences between PR and advertising

1.4 The concepts of international marketing

CHAPTER 2 – Competition and pricing policy

2.1 Product life cycle

2.2 Marketing researches and strategy development on international market.

CAPTER 3 - Examples

CONCLUSION

BIBLIOGRAPHY

APPENDIX

 

 

Introduction.

As technology creates leaps in communication, transportation, and financial flows, the world continues to feel smaller and smaller. It is possible for companies and consumers to conduct business in almost any country around the world thanks to advances in international trade. According to the World Trade Organization, the volume of international merchandise trade increased 33 times between 1951 and 2010.

Brands and products that originate in one country are enthusiastically accepted in others. For example, Louis Vuitton handbags, BMWs, and Columbian coffee, all foreign products, are symbols of status and quality in the United States – and many American brands, like Warner Brothers motion pictures, have similar footholds overseas.

However, globalization has created just as many challenges as opportunities for brands that venture overseas. Because consumers have so many more options for similar products, companies must ensure that their products are high in quality and affordability. Additionally, these products cannot be marketed identically across the globe. International marketing takes more into consideration than just language – it involves culture, market saturation, and customer behaviors. American and European companies especially have turned their international marketing efforts into something more than just exporting – they have adapted their branding to account for differences in consumers, demographics, and world markets.

 

Companies who have done this very well include Coca-Cola, who discovered that the word ‘Diet’ carries a negative connotation in Latin America and changed the name of their zero-calorie product to ‘Coke Lite’ for those countries. UPS, known in America for their brown trucks, issued a fleet of a different color after learning that their flagship brown trucks resembled Spanish hearses.

 

International marketing is the application of marketing principles in more than one country, by companies overseas or across national borders. International marketing is based on an extension of a company’s local marketing strategy, with special attention paid to marketing identification, targeting, and decisions internationally.

 

According to the American Marketing Association [1](AMA) "international marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives."

 

 

CHAPTER 1 – Marketing and PR as an effective mean of selling goods and services.

Idea and essence.

Targets of PR and Marketing in international business.

CHAPTER 2 – Competition and pricing policy

Product life cycle

Product life cycle

Every product has its life. Industrial goods may have a longer life than consumer goods. When a product idea is commercialised, the product enters into the market and competes with the rivals, for making sales and earning profits. Products, like human beings, have length of life. This has been described as life-cycle in human beings and when applied to products, it is product market life-cycle, because it is related to particular market. For instance, an old product in the market of Mumbai, may have a new life in a remote village. The product life-cycle may be short for some products and long for some other products. The period may differ from product to product. Every product passes through certain stages, collectively known as product life-cycle stages. These stages include:

Introduction

- Growth

- Maturity

- Decline

The concept of product life-cycle highlights that sooner or later all products die and that if management wishes to sustain its revenues, it must replace the declining products with the new ones. The product life-cycle concept indicates as to what can be expected in the market for a new product at various stages. i.e., introduction, growth, maturity and decline. Thus, the concept of product life-cycle can be used as a forecasting tool. It can alert management that its product will inevitably face saturation and decline, and the host of problems these stages pose. The product life-cycle is also a useful framework for describing the typical evolution of marketing strategy over the stages of product life-cycle. This will help in taking sound marketing decisions at different stages of the product life-cycle.

After a product has been developed, it is launched in the market with the help of various promotional devices such as advertising, sales promotion, publicity and paresonal selling. In other words, product development must be followed by the successful introduction of the product in the market. For this, planning for introduction of the product starts during the process of product development itself. Every firm makes sale projections during introduction, growth and maturity stage of the product life-cycle. To acheive the projected sales target, it formulates promotional, pricing and distribution policies. Thus, the concept of product life-cycle facilitates integrated marketing policies relating to product, price, place and promotion/distribution.

 

The advantages of PLC to a firm are as follows:[7]

When the product life-cycle is predictable, the management must be cautious in taking advance steps before the decline stage, by adopting product modification, pricing strategies, style, quality, change, etc.

The firm can prepare an effective product plan by knowing the product life-cycle of a product.

The management can find new uses of the product for the expansion of market during growth stage and for extending the maturity stage.

Management can adopt latest technological changes to improve the product quality, features and design.

 

Stages in product life cycle.

A new product passes through set of stages known as product life cycle. Product life cycle applies to both brand and category of products. Its time period vary from product to product. Modern product life cycles are becoming shorter and shorter as products in mature stages are being renewed by market segmentation and product differentiation.

Companies always attempt to maximize the profit and revenues over the entire life cycle of a product. In order to achieving the desired level of profit, the introduction of the new product at the proper time is crucial. If new product is appealing to consumer and no stiff competition is out there, company can charge high prices and earn high profits.

 

Product life cycle comprises four stages:

-Introduction stage

-Growth stage

-Maturity stage

- Decline stage

 

Introduction stage

Product is introduced in the market with intention to build a clear identity and heavy promotion is done for maximum awareness. Before actual offering of the product to customers, product passes through product development, involves prototype and market tests. Companies incur more costs in this phase and also bear additional cost for distribution. On the other hand, there are a few customers at this stage, means low sales volume. So, during introductory stage company's profits shows a negative figure because of huge cost but low sales volume.

At introduction stage, the company core focus is on establishing a market and arising demand for the product. So, the impact on marketing mix is as follows:

 

Product

Branding, Quality level and intellectual property and protections are obtained to stimulate consumers for the entire product category. Product is under more consideration, as first impression is the last impression.

 

Price

High(skim) pricing is used for making high profits with intention to cover initial cost in a short period and low pricing is used to penetrate and gain the market share. company choice of pricing strategy depends on their goals.

 

Place

Distribution at this stage is usually selective and scattered.

 

Promotion

At introductory stage, promotion is done with intention to build brand awareness. Samples/trials are provided that is fruitful in attracting early adopters and potential customers. Promotional programs are more essential in this phase. It is as much important as to produce the product because it positions the product.

 

Growth Stage

In this stage, company's sales and profits starts increasing and competition also begin to increase. The product becomes well recognized at this stage and some of the buyers repeat the purchase patterns. During this stage, firms focus on brand preference and gaining market share. It is market acceptance stage. But due to competition, company invest more in advertisement to convince customers so profits may decline near the end of growth stage.

 

Affect on 4 P's of marketing is as under:

 

Product

Along with maintaining the existing quality, new features and improvements in product quality may be done. All this is done to compete and maintain the market share.

 

Price

Price is maintained or may increase as company gets high demand at low competition or it may be reduced to grasp more customers.

 

Distribution

Distribution becomes more significant with the increase demand and acceptability of product. More channels are added for intensive distribution in order to meet increasing demand. On the other hand resellers start getting interested in the product, so trade discounts are also minimal.

 

Promotion

At growth stage, promotion is increased. When acceptability of product increases, more efforts are made for brand preference and loyalty.

 

Maturity stage

At maturity stage, brand awareness is strong so sale continues to grow but at a declining rate as compared to past. At this stage, there are more competitors with the same products. So, companies defend the market share and extending product life cycle, rather than making the profits, By offering sales promotions to encourage retailer to give more shelf space to the product than that of competitors. At this stage usually loyal customers make purchases.

 

Conclusion.

The market of a foreign country is attractive at growing demand population and organizations. Investments and perspective development of other branches that will require the goods and services of the market, interesting to the company, positively effect for a potential of the market. Al analysis of competitors it is worth to pay attention to the main shareholders and founders, areas of activity, market share, experience in branch, size of the capital.

On the basis of the analytical data and conducted research can come to a conclusion about the outlooks and capabilities in the foreign market, demonstrate the strengths and threats, which can tiff a firm at an entrance to the market.

Thus, the international marketing researches arc a major element at implementation of foreign trade activities of firms. Depending on current needs of the corporation in analytical estimation of the foreign markets, researches are carried out in several phases. The applying of external marketing researches helps to promote successful operations and effective development of commercial organizations.

 

 

BIBLIOGRAPHY

1) Global Marketing Management, 6th Edition by Kristiaan Helsen, Masaaki Kotabe.

2) Годин А.М. Маркетинг: Учебник. 4-е изд., перераб. и доп. - М.: Издательско-торговая корпорация «Дашков и Ко», 2006.

3) Schindler, Robert M. Pricing Strategies: A Marketing Approach. Thousand Oaks, California: SAGE.2012. pp.

4) Акулич, И. Л. Маркетинг: учебник для студентов высших учебных заведений по экономическим специальностям / И. Л.

5) M Spann; M Fischer; GJ Tellis. Skimming or Penetration? Strategic Dynamic Pricing for New Products. Marketing Science 2015

6) International Business: Competing in the Global Marketplace, Feb 10, 2014 by Charles W. L. Hill

7) Hall, Jeffrey Stamp – Rules of Marketing in Procter & Gamble, 2004

8) International Business: Opportunities and Challenges in a Flattening World by Mason Carpenter, Sanjyot P. Dunung - Flat World Knowledge, 2011

9) International Trade Theory and Policy by Steven M. Suranovic - internationalecon.com, 2007

 

[1] The American Marketing Association (AMA) is a professional association for marketing professionals with 30,000 members as of 2012. It has 76 professional chapters and 250 collegiate chapters across the United States.

The AMA was formed in 1937 from the merger of two predecessor organizations, the National Association of Marketing Teachers and the American Marketing Society. It also publishes a number of handbooks and research monographs. The AMA publishes the Journal of Marketing, Journal of Marketing Research, Journal of Public Policy & Marketing, Journal of International Marketing, and Marketing News.

[2] Economic and social affairs -Achieving Sustainable Development and Promoting Development Cooperation

[3] The European Economic Community (EEC) was a regional organization which aimed to bring about economic integration among its member states. It was created by the Treaty of Rome of 1957. Upon the formation of the European Union (EU) in 1993, the EEC was incorporated and renamed as the European Community (EC). In 2009 the EC's institutions were absorbed into the EU's wider framework and the community ceased to exist.

[4] Differences Between Advertising and Public Relations by Apryl Duncan

[5] Method adopted by a firm to set its selling price. It usually depends on the firm's average costs, and on the customer's perceived value of the product in comparison to his or her perceived value of the competing products. Different pricing methods place varying degree of emphasis on selection, estimation, and evaluation of costs, comparative analysis, and market situation. See also pricing strategy.

[6] Price skimming is a product pricing strategy by which a firm charges the highest initial price that customers will pay. As the demand of the first customers is satisfied, the firm lowers the price to attract another, more price-sensitive segment.

 

[7] Internationalization of the firm: stage approach vs. global approach, Gianpaolo Baronchelli, PH.d. in Marketing for Business Strategy, University of Bergamo

 

[8] Market research is the process of assessing the viability of a new good or service through research conducted directly with the consumer which allows a company to discover the target market and record opinions and other input from consumers regarding interest in the product. Market research may be conducted by the company itself or by a third-party company that specializes in the market research field. Test subjects are usually compensated with product samples and/or paid a small stipend for their time.

 

CONTENT

INTRODUCTION

 

CHAPTER 1 – Marketing and PR as an effective mean of selling goods and services.

1.1 Idea and essence.

1.2 Targets of PR and Marketing in international business.

1.3 The differences between PR and advertising

1.4 The concepts of international marketing