In this lesson, we will discuss how to adjust the marketing mix when pursuing an international market. Additionally, the Internet’s impact on the marketing mix will be discussed.

International Marketing Mix

The Ninja Corporation’s business has increased dramatically each year. They are under enormous pressure to keep their stockholders happy. The results of the company’s yearly board meeting showed that in order for them to keep growing at such a fast pace, they will need to expand to international markets. Ninja Corp.’s martial arts products are very popular (especially their bandanas), and the company believes Canada, Europe, and India should be considered for the expansion. The traditional marketing mix, consisting of product, place, price, and promotion, will have to be tweaked in many ways in order to reach international markets.

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The First Steps

In order to create an effective international marketing mix, the most important step is to have a thorough understanding of global markets. This can be accomplished through marketing research. The research studies must be designed with appropriate changes to handle how different cultures react to being surveyed. Companies must also research how cultures shop, eat, sleep, and socialize. Once information has been gathered about the market, the most important concern is whether the product and promotion strategies need to be changed.

Product & Promotion Changes

Ninja Corporation has to make a decision about the marketing strategy for their product. They have decided to try and sell their Ninja Martial Arts Bandanas overseas. Do they keep their product the same and follow the global marketing standardization? Sometimes products work well overseas, but sometimes unaltered products fail due to local cultural differences. For example, the word ‘diet’ does not do well on products in Europe as it is viewed as too feminine, so Coca-Cola had to change Diet Coke to Coca-Cola Light.

Sometimes the product itself has to change entirely as well, and this is called product invention. Ninja Corp. had to create really cheap knives for the overseas market due to much lower household incomes. Another change is called product adaptation, and this is when a marketer alters a product slightly to suit different cultures. For example, Ninja Corporation has to eliminate the American flag on their bandana in order for it to be accepted in other countries. They have decided to keep the bandanas the same, and then add each international country’s flag on the bandana.

The final type of change is called promotion adaptation, and this occurs when the marketer decides to keep the product exactly the same but alters the promotional strategy. Last year, when the Ninja Corp. decided to launch a new martial arts DVD in Canada, they found out that it needed a new promotion strategy. The DVD itself needed no adjustment, but the research study showed that most Canadians preferred buying their DVDs online. Ninja Corp. decided to promote their DVDs online and provided a low introductory price for the first series.

Place Changes

Even after the product and promotion have been tweaked for international sales, the distribution strategy also needs to be analyzed. Many countries do not have the same retail environments or the same distribution structure. Ninja Corp. really wants to sell their products in India but has been made aware of the very poor roads and ports. Most Indian roads are not paved and are in very poor shape. Products sit for days after being delivered in ports, and overall, the distribution system is extremely slow and expensive. Ninja Corp. found out that India has launched an initiative to spend millions on building highways. When the new road system is more established, it will lead to faster and easier transportation methods. For now, the company has decided to use smaller trucks to initially distribute their products in India. These smaller trucks will allow Ninja Corporation to navigate the small roads in towns and deliver their products with ease.

Price Changes

The final decision facing the Ninja Corp. marketers will be concerning their pricing strategy. The company must factor in extra transportation costs, tariffs, and taxes to come up with the end retail price. The exchange rate is a huge factor, because it depends on the demand for and supply of each currency. For example, the U.S. dollar has depreciated rapidly, and the cost of international goods has skyrocketed. This has resulted in fewer U.S. imports. Dumping is the sale of an exported product at a much lower price than it is sold in the original market. This is not a good practice for Ninja Corp. to consider using and can cause problems in international relations. An old method of pricing strategy is called countertrade, and the main idea is that all or part of the payment for goods or services is in the form of other goods or services. For example, Ninja Corp. could offer a straight barter for their products. They could trade their bandanas for local gourmet food products.

The Internet and International Marketing Mix

The increasing growth of Internet shopping has led to a drop in barriers to growth internationally. Most companies can now reach much larger target markets by using the Internet. Companies must still understand the local consumer shopping trends. For example, some international customers do not like using credit cards, so companies must have another way of getting their products to consumers.

Lesson Summary

When a company decides to expand its market overseas, it needs to analyze whether its marketing mix needs any adjustment. Companies must first start by analyzing the new global market to find out about the culture and customers. The product, place, price, and promotion all have to be examined to see if any changes need to be made based on local customer preferences. The Internet also has made going international even easier and erased many of the barriers that used to exist.

Lesson Objectives

After watching this lesson, you should be able to:

  • Identify the four marketing P’s
  • Discuss how a company should adjust their marketing mix to fit an international market
  • Describe how the Internet has made international marketing easier for companies