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Research Paper 3 International Marketing Management Abstract

ResearchPaper 3: International Marketing Management


Asthe spirit of globalization continues to evolve, it is becoming moreimportant for firms to increase their efforts in trying to respond tothe needs and expectations of their customers effectively. Thisnecessitates excellence in strategizing and implementation of thosestrategies in both multinational and global companies. To attainthis, companies must engage in a careful, customer-focused andincessant definition and clarifications of their future goals and themeasures they will take to accomplish them. Such firms have theopportunities to tap and exploit the world`s leading and establishedmarkets and expand their operations to new, or developing markets.Therefore, pricing issues are paramount. The firms also need todirect their attention towards channel structures, product promotion,and marketing strategies at the global arena. In light of theafore-mentioned points, this research paper starts by exploring themain factors that affect pricing decisions in a market. Secondly, itdiscusses key considerations that need to be made when making pricingdecisions. Moreover, it examines and evaluates the elements thataffect channel structures and the strategies at the disposal ofglobal marketers. Lastly, it investigates and comments on theapplication of the “standardized versus localized” debate toadvertising.

InternationalMarketing Management

Thisresearch paper examines four interconnected themes versus the conceptof international marketing. The first subject relates to theimportance of brand awareness, while the second issue relates tomarketing strategies at the global scale. The third subject relatesthe factors that affect pricing decisions of firms, while the fourththeme relates to the scope to which standardization and localizationshould be implemented in advertising. Product pricing is a vitalelement in the operations of any firm. It should be accompanied by acareful consideration of the factors that affect it so that the rightprices can be set in light of consumers’ purchasing power. In thesame way, channel structures that are available to global marketersare crucial elements because they help them assess the best plans fortheir firms.

Basicfactors that affect price in any market

Priceranks as one of the key elements of any consumer product. This isespecially the case for products launched in new markets because theyare directed to a new target group of customers. Product pricesconvey a significant magnitude of economic knowledge and insightregarding the products. Similarly, pricing has a proportionate impacton the profitability of a company. In his study, Levitt (2012)notedthat the most central marketing principle is to satisfy and go beyondconsumer expectations. Consumers expect to purchase products of highquality at competitive prices. This gives them value for theirhard-earned money. Therefore, companies must make efforts to offerproducts that meet the needs of consumers and price them in acompetitive manner given that there are substitutes in the samemarkets.

Haron(2016) comments that pricing remains a global challenge today.Pricing decisions at the global scope require input from a range offunctional divisions and regions to facilitate better decision-makingand avoid price wars in the market. The recommended simplest approachto pricing is to take into account a company’s production coststhen factor in its desired profit margin. Nonetheless, the process isbelieved to be cumbersome because it is associated with competition,a company’s market share and its survival in the market in thelong-term. Therefore, given the importance of pricing, marketers haveto consider a range of factors before establishing the marketingstrategy for a company.

Thesystematic review of marketing literature conducted in the precedingresearch paper grouped the factors affecting pricing decisions intointernal and external factors. Internal factors are those that fallunder the company`s control, and they include the production costs,marketing strategies, and the company`s objective. On the contrary,external factors are those that occur outside the company, over whichit has limited control. These include the elasticity of demand,competitors` pricing strategies and the nature of the market in whichthe company operates (Haron, 2016).

Ona similar note, market structures play a critical role in the pricingdecisions of a firm. The major types of market structures are themonopoly and perfect competition. Product prices in perfectcompetition are more receptive to the causes of pricing decisionsthan in monopolistic markets because the market is characterized byhighly differentiated products that depend on the forces of demandand supply. This implies that managers and marketers need to keepabreast with the dynamics of price determinants. To accomplish this,there needs to be constant market research and keeping in touch withcustomers to find out if, their needs are met satisfactorily.

Accordingto Davis, Crip &amp Kutner (2016), pricing at the global stagerequires a smart market strategy, and companies need to specify theirpricing strategies, understand their products and understand thefactors the affect market structures in the host country. Thisrequires a remarkable level of wisdom for the management to ensure asmooth running of the operations. Keegan &amp Green (2011) suggestthat the ideal pricing policy can be attained by seeking a balancebetween cost and production on one end, and the value derived bycustomers on the other end. Therefore, it is affirmative to recognizethe value that customers generates from products offered.

Furtherconsiderations entering into pricing decision

Thereis a range of firm-specific and industry-specific factors that can beused as inputs into the pricing decision-making process. Thesefactors include technology innovation at the firm level and decliningcosts of materials at the industry-level. Similarly, there arecertain external factors such as fluctuations in the businessenvironment and the global economy that should be deemed important inthe relevant strategic planning practices. Firms can utilize one ofthe two primary growth-oriented strategies to spearhead theirstrategic planning processes. These are cost leadership and productdifferentiation. Firms can either use one strategy of combine two ormore depending on its desired outcomes.

Anotherfactor relating to concerns about pricing decisions is the locationof the unit of production. Setting up the production overseas canenhance a firm’s competitiveness in the domestic market (Davis,Crip &amp Kutner, 2016). Nevertheless, a firm may own a productionfacility overseas but still succumb to forced price cuts. Eventually,it can be forced to take a lower amount of revenue in the foreignmarket to maintain its competitiveness.

Afirm`s distribution systems also play a vital role in its pricingdecisions. This is because additional expenses that occur throughoutthe system can be factored in and reflect in the form of higherprices. This necessitates a careful assessment of the effect of thelocation and characteristics of the foreign market. Moreover, it isbest to keep a close check on the exchange rate differentials whendesigning pricing options for foreign markets. As noted by Levitt(2012)firmsneed to take a considerable degree of caution when planning andimplementing global pricing. This means that firms must be keen toset up systems that facilitate the development and maintenance ofcompetitive prices globally.

Additionalpricing concerns relate to perceptions of uncertainty, issues relatedto branding and the flexibility of a firm’s operations to adapt tothe intended outcomes. According to Musonere &amp Ndagijimana(2011), cost and supply rank among the leading concerns when pricingproducts. Demand is another factor because the more consumers want aparticular product, the more they will be willing to pay for it.

Furthermore,other related pricing strategies include timing of price changes andbundling among others. Therefore, companies can influence theirpricing strategies using creativity through numerous ways. Inaddition, regular enticements such as discounts and generous terms ofcredit can be used to attract potential customers. Musonere &ampNdagijimana (2011) note that brand asset measurement demonstrates theextent to which a firm is successful in developing a product,offering market support, customer retention, and building its valueamong others. Notably, these factors offer a vital supplementarybasis for price determination.

Inthe same way, Keegan &amp Green (2011) contend that brand pricing isa crucial decision for a firm’s top marketing management. This isthe reason why many exporters base their pricing techniques on costs,which denies them competitiveness due to lack of information aboutmarket trends. As such, if such information is of such a highquality, it can be exploited by competitors in the market to gain anedge thus, building the brand value.

Therefore,pricing ranks as one of the most challenging, yet a significantdecision in the field of marketing. When deciding the best way toprice a product, marketers take into account the cost of productionand distribution, and their desired profit margin. Nevertheless, manymore factors such as consumer expectations and competitors come intoplay and affect the price of a product. For that reason, properpricing carefully examines each factor based on the nature of themarket in question. In monopoly market structures, firms set priceswithout considering competitors because there are few or none. On thecontrary, pricing in perfectly competitive markets is subject to arange of elements including the forces of demand and supply. Somefirms opt to set up production facilities overseas to enhance theircompetitiveness in the domestic markets. However, this expectation issometimes frustrated by additional costs that arise from distributionexpenses and exchange rate fluctuations among others thus callingfor a critical evaluation of every potential factor before deciding apricing strategy.

Factorsinfluencing channel structures and strategies

Globalmarketing involves the integration of marketing efforts acrossinternational boundaries in a coordinated manner. The customers inthese markets are targeted based on the opportunities available fordoing business (Mallen,2013).Less attention is given to the national affiliation and the regionaleconomic standards, hence, market availability influences thetargeting decisions. Marketing decisions made by businesses are amongthe most important strategic decisions that determine the survival ofan organization (Rosenbloom,2012).

Itis important to keep in mind the changing global economic environmentas market dimensions shift in favor of certain markets such as theemerging markets. Therefore, global economic shifts determine the waybusinesses align their channels and strategies to make sure theymaximize the benefits of robust economies and reduce the risksassociated with an economic slowdown (Rosenbloom,2012). The strategies, as well as channels, should also be aligned with thebusiness cycle. This ensures that the inventory/stock levels arelight amidst recessions and heavy during economic booms. Businesseswill, therefore, avoid losses during recessions and optimize theirprofits during economic booms.

Distributionchannels may also respond to changes in customer tastes andrequirements as well as the introduction of new products. Changes incustomer requirements require businesses to determine better channelsand strategies of meeting the new requirements. These requirementsmay take the shape of new price requirements, the frequency ofpurchases and general changes in customer tastes (Mallen,2013).Again, when companies introduce new products, old channels may notserve the needs of the new products especially when the productdiffers from traditional product categories of a particular country.In such scenarios, marketers focus more attention on productpromotion and marketing activities to ensure business survival. Theintroduction of a new product is usually a major decision forcompanies and it has the potential for enhancing success orinitiating a disaster. Similarly, organizational strategies such asmarketing strategies may need to change in light of the changes inthe company’s product mix (Wilkinson,2013).

Localand international distribution channels both consist of various setsof flows that provide linkages between producers and the final usersof products and services. These channel flows take time to establishand do not automatically establish themselves. The flows aresustained by organizational strategies that enable the integration ofthe distribution tasks needed for buyers to get products from sellers(Mallen,2013).Therefore, global marketers must ensure that they constantlydetermine better ways of not only exploiting the existingdistribution channels but also strengthening current channels formore efficiency in the future. In this regard, channel structuresmight change in response to the need to respond to be adaptive to thechanges in the economic environment.

Businesschannels rely on the power of effective communication. Frequentchanges in communication technology force businesses to align theirchannels to reflect the changes in communication technology. Themajority of the channel and strategic alignments are aimed atreducing the costs of doing business by increasing efficiency.Therefore, businesses seek to enhance utility through retailerdifferentiation pegged on the alteration of business channels andstrategies (Mallen,2013).The result of such alteration is the cultivation of betterrelationships with mass retailers. Therefore, the need to improverelationships with suppliers and retailers might also influence thechannel and strategy chosen by businesses. Efficient channels, aswell as reliable distribution processes, are fundamental componentsof marketing.

Tomeet customer expectations, businesses need to put in place efficientdistribution channels and the facilitating processes (Wilkinson,2013).This requires a wide variety of procedures and players to ensure thesafe transmission of products down to the buyer. In this regard,organizations may want to expand to international markets using fourmarket entry strategies. These strategies include franchising,organic growth, joint ventures/licensing and acquisition (Mallen,2013).Businesses select the appropriate expansion strategies depending ontheir objectives such as cost reduction. For example, advancements intelecommunications technology and the Internet have prompted manybusinesses to opt for franchising because of the cost-reducingbenefits.

Brandperceptions among consumers also influence the strategies thatorganizations may adopt in marketing. The promotional activateschosen by a company will be influenced by the reputation of a companyas either local, regional or international (Wilkinson,2013).International companies will be keen to adopt international marketingstrategies such as the utilization of mainstream media. On thecontrary, local organizations will be ready to use direct sellingchannels such as the use of sales representatives to sell and markettheir products. In this regard, companies are keen to align theirmarketing strategies and supply channels to reflect their global,regional or local status (Rosenbloom,2012).Again, international companies will want to be consistent with theirbusiness strategies to be in line with the strategies employed inmarkets with similar characteristics. Consistency in marketingstrategies and supply channels enhances efficient management becauseof the familiarity of the models used.

StandardizedVersus Local Debate in Advertising

Standardizedinternational advertising is the process of using a similaradvertising model for advertising a similar product everywhere in theworld. The localization school, on the other hand, holds thatadvertisements must take into account country differences. However,other marketing theorists think that it might not be easy todetermine which advertisement strategy between localized andstandardized might be the most effective (DeMooij, 2013).Multinationals, as well as global brands, are localizing theirmessages, thus suggesting the belief that one size is not a fit forall. It is understandable that promotional messages need to speak tothe people targeted and not appear to be a general message (Mueller&amp Taylor, 2013).

Otherrelevant literature on the debate also gives emphasis on thecentrality of “localized versus standardized” advertising favorslocalized strategies. It is important to bear in mind that theadvantages of localization do not stand as a ratification for thecase of the standardized school of advertising (Mueller&amp Taylor, 2013).Moreover, if standardized advertisements can focus on the commoncharacteristics and attributes, which global customers share, theycan be effective in delivering the marketing message.

Standardizedadvertisements are therefore most appropriate when markets exhibitstrong similarities in the customer requirements. Countries thatshare languages, as well as cultures, can have effective standardizedmarketing messages. However, many marketing theorists believe thatto kind of product information transmitted down to the customersshould involve the inclusion of localized advertisement practices andstrategies especially where the cultural variation is significant. Therefore, in principle, fundamentally distinguishing features suchas brand logo and brand name can be made to appeal to customersglobally (DeMooij, 2013).


Globalizationcontinues to be an everyday reality, especially with the constantadvancements in technology. It is, therefore, a driving influence onthe business decisions regarding the relevant channels and strategiesto be adopted. More specifically, the elimination of detrimentaltrade barriers between countries and has created tremendousopportunities for the facilitation of capitalist forces to exploitthe global market. In this regard, organizations have been offered agreat opportunity to make profits through trade, while at the sametime, exposing them to the risks of international businesses.Therefore, the success or failure of businesses depends on thebusiness strategies and supply channels chosen by businessorganizations.

Advertisingis one of the challenging yet important activities in organizations.When choosing a means for advertising a product, marketers oftenconsider the cost of advertising and the effectiveness of the chosenchannel in promoting product awareness. However, the actualpopularity of the product is influenced by many other factorsincluding the objectives of a firm, competitors, and customerexpectations. On the other hand, proper pricing takes into accounteach factor depending on the market within which the firm operates.In highly monopolistic markets, few firms set prices withoutconsidering competitors. However, in perfectly competitive markets,competitions, as well as the forces of demand and supply, play keyroles.

Itis important for organizations/marketers to base their marketingdecisions and strategies on the options that ensure optimum profits.Whether localized, globalized or standardized, the bottom line forevery firm should be profitability. Companies should invest enoughresources in gathering important market information to enable them intheir strategic decision-making. Based on authoritative marketresearch, companies can make decisions regarding the strategies ofentering different markets, either through an intermediary or solely.The primary goal, however, should be to achieve cost reductions.

However,many multinationals are likely to favor entering new markets throughintermediaries. This option enables organizations to make sounddecisions on issues to do with advertising and product promotions.Companies need partners who are well informed regarding the localmarket, thus will provide them with relevant information on thestrategic engagements with suppliers, government authorities andcustomers. Communications strategies should always be localized,especially where local competitors are dominant in the market.


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Haron,J. (2016). Factors Influencing Pricing Decisions. InternationalJournal of Economics and Management Science5 (1): 1-4

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Levitt,T. (2012), “The globalization of markets”, HarvardBusiness Review,May-June, No. 61, pp. 92-102.

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