Unit 3 – Materials
A
In this unit, we are going to examine the implementation issues and determine the activities that will ensure that the strategies are competitive and sustainable, and the products and services are effective in meeting the needs of the customers. This unit specifically focuses on the product and communications elements of the international marketing mix
According to Doole, Lowe, and Kenyon (2016), product and service strategies in many industries are affected by the increased globalisation of consumer preferences, technological break-throughs, communication messages, and the business concentration. At the same time, however, customers expect that their individual needs will be met, considering the level of competition and abundancy of choice.
Product managers try to balance the standardisation benefits of economies of scale and scope (increased efficiency) with the need to meet the needs of local customers and regulators, and the accompanying cost of adapting products and services. Success in international marketing depends to a large extent upon the value proposition, satisfying the demands of the market, and, ultimately, on whether the product or service offered is suitable and acceptable for its purpose. More markets are reaching maturity and fewer products can be differentiated by their core benefits and so are becoming commodities. In defining the term ‘product’, therefore, we include additional elements such as packaging, warranties, aftersales service, and branding, that make up the total product and a complete package of tangible and intangible benefits for the customer.
Services are taking an increasing share of international trade, but managing services internationally poses particular challenges. This is because the delivery of services is so dependent on the context, which is usually influenced by the varying cultural perceptions of what is acceptable service. The growth of international services is a feature of international marketing and it is being driven by low labour costs and increasing demand in developing countries and the increased possibilities for transferring information through information technology and communications.
In both product and service markets, increasing customer expectations and competition mean that it is essential for firms to continually add better value through innovation and new product development (NPD). Much of this innovation is related to technological development. We focus upon some of the key aspects and recent trends of international product policy by considering the changes in the nature of the products and services offered individually and within the portfolio, their relationship with the market, and how innovation can create new products and services. Particularly important is the need to provide customers around the world with a satisfactory experience when using the product or service. Achieving this requires a clear understanding of when to meet the similar needs and wants of transnational customer segments, and when to adapt to local tastes and requirements.
In line with Doole, Lowe, and Kenyon (2016), this unit takes a broad view of communications, which not only includes the traditional promotional mix of advertising, sponsorship, public relations, personal selling, and sales, but also other more personalised methods of communications, such as online media. An aspect of communications that is often overlooked is the communication with other stakeholders than customers, such as the internal relationships between foreign entities and headquarters. Local subsidiaries often have a closer relationship with their customers and competition than they have with their own headquarters. Good communication between various stakeholders is especially important in the case of joint ventures and strategic alliances. The integration of marketing communications and distribution channels can help realise cost effectiveness and build successful value propositions for all stakeholders involved.
This unit covers material applicable to learning outcome 2:
LO2: Critically evaluate the key marketing practices employed by global organizations in various contexts.
Here are some keywords to use when you are conducting further research on this unit:
Product-service continuum, service characteristics, product liability, product strategy, Product Life Cycle, BCG matrix, branding, new product development, marketing communications, promotions mix, communications mix, internal communication, corporate communication, push and pull strategies, digital marketing communications, CRM.
Unit 3 Reading List
Doole, I., Lowe, R. and Kenyon, A. (2016) International marketing strategy. 7th Edition. Cengage Learning EMEA, chapter 8-9.
Barrett, M., Davidson, E., Prabhu, J. and Vargo, S.L. (2015) ‘Service innovation in the digital age: Key contributions and future directions’, MIS Quarterly, 39(1), 135–5.
Verma, R. (2014). ‘Why attend tradeshows? A comparison of exhibitor and attendee’s preferences’, Cornell Hospitality Quarterly, 55(3): 239–251.
