International Marketing Strategies

Study Notes

Product and Market Adaptation

Tailor products to meet local preferences, legal requirements, cultural norms
Adapt product based on local market tastes, legal requirements, and cultural preferences.

Pricing Strategy

Consider local economic conditions, competition, cost of entry when setting prices.
Too high a price can lead to failure in developing markets while the same price might be acceptable in wealthier markets.

Promotion and Distribution

Adapt promotional strategies to local media consumption habits and cultural norms.
Distribution channels can vary between countries.

Incoterms

Incoterms define sellers and buyers responsibilities in international transactions.
Not all guidelines apply in every situation.
Incoterms specify when risks and costs transfer from seller to buyer.
EXW (Ex Works): Responsibility: Seller makes goods available at their location. Risk/Cost Transfer: Buyer assumes all risks and costs from pickup point.
FCA (Free Carrier): Responsibility: Seller delivers goods to a named carrier location. Risk/Cost Transfer: Transfers to the buyer once goods are handed over to the carrier.
CPT (Carriage Paid To): Responsibility: Seller pays for transport to a named destination. Risk/Cost Transfer: Transfers to the buyer at the named destination when goods are ready for unloading.
CIP (Carriage and Insurance Paid To): Responsibility: Seller pays for transport to the named destination. Risk/Cost Transfer: Transfers to the buyer at the named destination when goods are ready for unloading.
DAP (Delivered at Place): Responsibility: Seller pays for transport and makes goods available to the buyer at the named place. Risk/Cost Transfer: Transfers to the buyer at the named place.
DPU (Delivered at Place Unloaded): Responsibility: Seller pays for transport and makes goods available to the buyer at the named place, unloaded. Risk/Cost Transfer: Transfers to the buyer when goods are unloaded at the named destination.
DDP (Delivered Duty Paid): Responsibility: Seller pays for transport and delivers goods at named destination, cleared. Risk/Cost Transfer: Transfers to the buyer at the named destination.
FAS (Free Alongside Ship): Responsibility: Seller delivers goods alongside the vessel at the port. Risk/Cost Transfer: Transfers to the buyer once goods are alongside the vessel.
CFR (Cost and Freight): Responsibility: Seller pays for transport to the destination port. Risk/Cost Transfer: Transfers to the buyer once goods are on board at the origin port.
CIF (Cost, Insurance and Freight): Responsibility: Similar to CFR, but seller also pays for insurance. Risk/Cost Transfer: Transfers to the buyer once goods are on board at the origin port.

Pricing Strategies

Static Pricing: Charging the same price for all customers.
Flexible Pricing: Adjusting prices for specific customer segments.
Value Pricing: Setting prices based on the perceived value of the product or service.
Cost-Plus Pricing: Adding a markup to the cost of production and distribution.
Marginal Cost Pricing: Covering only variable costs of production and exporting, while fixed costs are covered by domestic sales.
Penetration Pricing: Keeping prices low to attract customers, discourage competitors, and gain market share quickly.
Price Skimming: Pricing the product high to maximize profit among high-end consumers while there is little competition.

Developing An Export Plan

Your export plan serves two main purposes:
- To identify the steps necessary to succeed in international markets.
- To track progress and make adjustments as needed.
Content:
- Market Research: Identify and analyze new market potential
- Marketing and Sales: Develop a marketing plan and sales strategy
- Export Operations: Outline production and logistics for exporting
- Export Budget and Pricing: Develop a cost-effective strategy
- Management and Monitoring: Set up processes for monitoring results and making adjustments.

Critical Export Challenges

Product Adaptation: Tailoring products to local markets.
Export Licensing: Securing necessary licenses.
Market Selection: Choosing target countries.
Customer Profiles: Understanding local customers and channels.
Market Challenges: Addressing competition and cultural differences.
Pricing Strategy: Setting competitive and cost-effective prices.
Operational Steps: Planning and timing each action.
Resource Allocation: Assigning personnel and resources.
Cost and Evaluation: Calculating costs and measuring success.

Cost Calculation

Direct Costs: Include manufacturing, shipping, insurance, tariffs, and local distribution costs.
Indirect Costs: Include marketing, administrative expenses, and after-sales support.
Market Adjustments: Consider local economic conditions, purchasing power, and competitive landscape to fine-tune your price.