International Marketing - Assignment Example

Table of Contents Question 1- Brand can be differentiated on the basis of many variables, however four differentiation strategies are emphasised in the text. List and discuss the characteristics of these four differentiation strategies 2 Question 2- Importance of Marketing Channel System to a firm 4 Question 3- Interactive Marketing offers many unique benefits to the direct marketer. Explanation of the benefits accorded to marketers using interactive marketing 6 Question 4- Most companies prefer to remain domestic if their domestic markets were large enough. Yet, more and more companies are drawn into the international arena, List and Description of these factors 8 References 11 Question 1- Brand can be differentiated on the basis of many variables, however four differentiation strategies are emphasised in the text. List and discuss the characteristics of these four differentiation strategies Brand differentiation can be analysed in a number of ways. There are about eight ways in which differentiation strategies can be implemented as part of strategies of brand positioning. Four of the strategies reflect the company’s perspective and the remaining four reflect the customer’s perspective (Franzen & Moriarty, 2008, p.178). Brand differentiation strategies are conducted by the suppliers as it helps them to assess the customer’s perspective towards their brand as compared to other competing brands. The insights are required by the suppliers to differentiate themselves against their competitors for the purpose of analysis of the critical factors which builds customer loyalty and to know the exact characteristics most preferred by customers (Research and Markets, n.d., p.1). Perspective of the Company on differentiation Intrinsic Product Differentiation This strategy refers to the provision of some unique characteristic in the product. It needs to be ensured that the characteristics gives the product a competitive edge in the market and is advantageous for the segment of users it targets. Following are some examples of such characteristics which are required for the positioning of different car brands. Figure 1: Characteristics central for the positioning of various car brands (Source: Franzen & Moriarty, 2008, p.178) Design/Style Differentiation Certain brands chose designing as a major positioning strategy. There are numerous possibilities of brand differentiation through designing and styling. Styling is done to give an added dimension to the other strategies of differentiation (Franzen & Moriarty, 2008, p.178). A good design helps in the development of the branding relationship by way of exposing deep emotions through colours and shapes. It is possible to differentiate a brand through different designs, displays, audios and lighting. Other measures would be the in-store activities required to stir customer emotions during the point of sale. One example of a company which has successfully implemented brand differentiation strategies and built up a strong relationship with its customers based on those strategies is Starbucks. New brands are said to succeed because they have high differentiations. There is a substantial amount of logic which goes behind the implementation of brand differentiation strategies. The objective is to make the product look different from other products to the customer. If a product brand is not differentiated all brands begin to look alike. Some of the major brands fade away because they are not differentiated properly. A differentiated and distinct brand is essential for a company’s business. Following is an example of a product differentiated on both product and brand specific characteristics. For example, Ford and General Motors both of which sells automobiles which includes both the economic compacts as well as the luxury sedans. The product characteristics offered for both the companies are somewhat similar. The consumer segments are also considered to be the same for both. It is seen that vertical product differentiation provides an incentive to the firm to increase profits. Products are offered based on the types of consumers they are targeted at. Similar companies implementing both product and brand differentiation strategies generally lead to great competition. Such a situation gives an impression to the customer that the products are close substitutes. This enhances the occurrences of competition between the firms. Thus the decision to select a particular product would depend on the extent of brand specific differentiation as compared to the product specific differentiation for the product (Gilbert& Matutes, 1993). Question 2- Importance of Marketing Channel System to a firm Marketing channels play the most significant role in terms of distribution of the product of the firm. The biggest challenge in front of the managers is to choose the channel most suitable for the company, its product and the marketplace. Traditionally the different sales route gives many advantages for the manufacturers of the product. The channels help in the transportation of the products to different places. Marketing channels makes it possible to evaluate what needs to be sold, how much is to be charged and what should be the mode of selling (Rolnicky, 1998, p.2). It would not be possible to have access to all kinds of goods and commodities in the absence of marketing channels. It is impossible to imagine a person calling up a manufacturer at the specific time of requirement for a commodity. Retail outlets allow the customers to meet all of their requirements at the right time and at the right cost. Additionally marketing channels also allows the customer to choose from a wide variety of products, subsequently saving on money and time. Indirect marketing channels prove to be especially beneficial in the case of small companies. It might not be able to rely completely on its sales force. Indirect marketing channels sell a number of manufacturer’s products to the same group of customers. “By doing so, the channels spread the cost of sales to several product lines” (Rolnicky, 1998, p.2). This method is significantly important in growing the company’s revenue. Most companies also agree with the fact that with the increase in the revenue and profitability of the company the respective marketing channels also draw benefits. It can be concluded that all companies are required to use proper marketing channels to survive, grow and prosper (Rolnicky, 1998, p.2). Using marketing channels prove to be primarily advantageous to the manufacturers. Distribution is considered to be a ‘process of cost transfer’. By using the channels, manufacturers are able to transfer a substantial amount of the cost of doing business to the resellers and the distributors. The distribution channel may even sell to lower level counterparts on establishing itself as a successful marketing channel. By doing this it can use sophisticated and advanced marketing expertise, strategic and technical planning. This gives a national presence for the company. An example can be sited in this regard. Procter and Gamble sells its products to those distributors which purchase the company’s product in lots consisting of more than 500 units (Rolnicky, 1998, p.11). Marketing channels also provide a “one-step shop” to the customers. One example is a computer shop which sells all the parts of a computer individually. They also do the set up and install the complete system for the business (Rolnicky, 1998, p.12). Figure 2: Basic Marketing Channel Structure (Source: Rolnicky, 1998, p.2) Question 3- Interactive Marketing offers many unique benefits to the direct marketer. Explanation of the benefits accorded to marketers using interactive marketing At times the consumers are responsible for receiving and monitoring the information coming from the marketer. This is done through the communication process between the customer and the seller. The process is known as interactive marketing. Some examples are CD-ROMs, virtual reality kiosks and toll free phone numbers. This mechanism is especially advantageous to the marketer as it helps in building a long term relationship with the suppliers. The marketer gets to know the requirement of each individual customer as it is a one to one marketing process. This allows him to know and understand the exact requirements of the customers. Apart from this the technique also allows customer to access key information about the product when he needs it (Kurtz, MacKenzie & Snow, 2009, p.35). Interactive marketing also allows consumers and marketers customise communication between them. Consumers may even visit the companies when they require certain information. This creates an opportunity for the marketer to enter into a one to one relationship with the consumer. Many companies create their own websites which allows them to know the needs of its stakeholders and employees. This is one process in which marketers and consumers remain on the same platform. The process also ensures absolute transparency and helps in building the confidence and trust of consumers (Kurtz, MacKenzie & Snow, 2009, p.35). Interactive marketing also enhances possibilities of making exchanges in large amounts. Under the system consumers are able to communicate with each other using “e-mail and electronic bulletin boards” (Kurtz, MacKenzie & Snow, 2009, p.35). Electronic conversations also help to establish a relationship between the marketers and the users of the technologies. The marketer is able to provide information which remain customised and are based on the level of interest and understanding of the user. Interactive marketing accounts for a rapid way of expanding the customer base. Information exchange not only helps customers but also the marketers to know customer requirements. It accounts for a smart way of increasing and improving sales leads. Since information technology has been growing at a fast pace and the process is greatly dependent on technology, it is hoped to have great prospects for the future. The process even allows the marketer to increase brand awareness of their products. Brand awareness helps to construct and enhance the corporate image of the company (Beamish, 2006, p.45). Apart from directly adding to the sales revenue of the company, interactive marketing ensures to establish the position and image of the company in front of the public. It also allows for the transfer and communication of the company’s philosophy, corporate values and ethics to the general public. It is a smart measure of limiting and overcoming the damages done by conducting poor public relations. Most importantly it helps to uplift the organisation profile and enhance stronger relationships (Beamish, 2006, p.44). Question 4- Most companies prefer to remain domestic if their domestic markets were large enough. Yet, more and more companies are drawn into the international arena, List and Description of these factors A number of factors are responsible for the domestic companies to venture into the international market. Global marketing has gained popularity over the years. It is true that some nations are internationally advanced in comparison to other nations. These nations are characterised for having great production capacities and surplus goods. The domestic markets are considered to be inadequate for them. These countries have to rely on the international market for the sale of their products. Thus they export their products to sell them in foreign countries (Kumar, n.d., p.14). Besides, international marketing has gained universal acceptance for being beneficial for all countries. International marketing has found a special place during the time when globalization has linked the entire world together. Nations have become economically interdependent on each other. The underdeveloped and third world countries depend on the developed countries for the import of superior technology in order to attain rapid economic growth. Rapid industrialisation and international interdependence has increased the prominence of international marketing. Certain countries are able to produce goods and commodities at low production costs. This gives certain countries a comparative edge over other nations. These companies tend to gain more from selling its products internationally than their domestic markets. In this way the companies also enjoys cost benefit and are further drawn towards the international market (Kumar, n.d., p.14). The countries are also drawn towards the international arena as it helps them to mobilise the country’s foreign investments and superior technologies. Some of the nations significantly enjoy benefits from the international market on the following grounds. Varying prices does not remain long in the international market. Different countries market goods at different competitive rates in the market. This allows benefits of comparative costs of one country to be shared and distributed with other nations (Kumar, n.d., p.15). Most importantly the marketer is able to make the country’s goods available in the foreign market where it is of high demand. International marketing ensures the most rational and best resource allocation in the global level. The surplus production in the domestic market is effectively utilised in the global market. Nations are also drawn towards the global market to bring about political, cultural and economic cooperation. With the improvement of technology and its acceptance across the globe, marketing of domestic products in a foreign country does not seem to be a costly affair. Nations have been increasingly resorting to web marketing which has reduced the cost of international marketing even further and enhanced efficiency and effectiveness of the process (Kumar, n.d., p.15). References Beamish, K. 2006. CIM Revision Cards Marketing Planning. Butterworth-Heinemann. Gilbert, R. J. & Matutes, C. September 1993. Product Line Rivalry and Brand Differentiation. [Online]. Available at: http://www.jstor.org/pss/2950460. [Accessed on November 1, 2010]. Franzen, G. & Moriarty, S. 2008. The Science and Art of Branding. M.E. Sharpe. Kurtz, D. L., MacKenzie H. F. & K. Snow. 2009. Contemporary Marketing. Cengage Learning. Kumar, N. No Date. International Marketing. Anmol Publications PVT. LTD. Research and Markets. No Date. Maximing Market Share Through Brand Differentiation. [Pdf]. Available at: http://www.researchandmarkets.com/reports/342460/maximing_market_share_through_brand.pdf. [Accessed on October 29, 2010]. Rolnicky, K. 1998. Managing channels of distribution. AMACOM Div American Mgmt Assn. Read More