Unit-2 International marketing

UNIT-2

1. What is meant by product? Explain new product development process and its key accepts in designing a product in context of International Market.

Ans:

Product:

” The word “product” stems from the verb “produce”, from the Latin prōdūce(re) “(to) lead or bring forth. ” Since 1575, the word “product” has referred to anything produced.

In marketing, a product is anything that can be offered to a market that might satisfy a want or need. In retail, products are called merchandise. In manufacturing, products are purchased as raw materials and sold as finished goods. Commodities are usually raw materials such as metals and agricultural products, but the term can also refer to anything widely available in the open market. In project management, products are the formal definition of the project deliverables that form the objectives of the project.

A product is composed of tangible/physical attributes like weight, dimensions and materials and intangible attributes such as fragrance, density and so on. Example: an automobile is composed of 3,000 pounds of metal or plastic measuring 190” Long, 75” wide and 59” high.

Definition:

A product is defined as the collection of physical, psychological, service, tangible, symbolic and intangible attributes which has created satisfaction as well as benefits to the buyer or the user.

A product is any good, service, or idea that can be offered to a market to satisfy a want or need.

Philip Kotler defines a product as anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need includes physical objects, services, persons, places, organizations and ideas.

New product development :

New Products are the products which are introduced for first time in the market. The marketer outlines the development process of new product fo0r successfully introducing the products in the competitive market.

Stages in new product development :

1. Idea generation

The first step in new-product development is idea generation.

New ideas can be generated by:

1. Conducting marketing research to find out the consumers’ needs and wants.
2. Inviting suggestions from consumers.
3. Inviting suggestions from employees.
4. Brainstorming suggestions for new-product ideas.
5. Searching in different markets viz., national and international markets for new-product ideas.
6. Getting feedback from agents or dealers about services offered by competitors.
7. Studying the new products of the competitors.

 

2. Idea screening

 

Most companies have a “Idea Committee.” This committee studies all the ideas very carefully. They select the good ideas and reject the bad ideas.

Before selecting or rejecting an idea, the following questions are considered or asked:

1. Is it necessary to introduce a new product?
2. Can the existing plant and machinery produce the new product?
3. Can the existing marketing network sell the new product?
4. When can the new product break even?

If the answers to these questions are positive, then the idea of a new-product development is selected else it is rejected. This step is necessary to avoid product failure.

 

3. Concept testing

 

Concept testing is done after idea screening. It is different from test marketing.

In this stage of concept testing, the company finds out:

1. Whether the consumers understand the product idea or not?
2. Whether the consumers need the new product or not?
3. Whether the consumers will accept the product or not?

Here, a small group of consumers is selected. They are given full information about the new product. Then they are asked what they feel about the new product. They are asked whether they like the new product or not. So, concept testing is done to find out the consumers’ reactions towards the new product. If most of the consumers like the product, then business analysis is done.

 

4. Business analysis

Business analysis is a very important step in new-product development. Here, a detailed business analysis is done. The company finds out whether the new product is commercially profitable or not.

Under business analysis, the company finds out…

1. Whether the new product is commercially profitable or not?
2. What will be the cost of the new product?
3. Is there any demand for the new product?
4. Whether this demand is regular or seasonal?
5. Are there any competitors of the new product?
6. How the total sales of the new product be?
7. What will be the expenses on advertising, sales promotion, etc.?
8. How much profit the new product will earn?

So, the company studies the new product from the business point of view. If the new product is profitable, it will be accepted else it will be rejected.

 

5. Product development

 

At this stage, the company has decided to introduce a new product in the market. It will take all the necessary steps to produce and distribute the new product. The production department will make plans to produce the product. The marketing department will make plans to distribute the product. The finance department will provide finance for introducing the new product. The advertising department will plan the advertisements for the new product. However, all this is done as a small scale for Test Marketing.

 

6. Test marketing

 

Test marketing means to introduce the new product on a very small scale in a very small market. If the new product is successful in this market, then it is introduced on a large scale. However, if the product fails in the test market, then the company finds out the reasons for its failure. It makes necessary changes in the new product and introduces it again in a small market. If the new product fails again the company will reject it.

Test marketing reduces the risk of large-scale marketing. It is a safety device. It is very time-consuming. It must be done especially for costly products.

 

7. Commercialization

If the test marketing is successful, then the company introduces the new product on a large scale, say all over the country. The company makes a large investment in the new product. It produces and distributes the new product on a huge scale. It advertises the new product on the mass media like TV, Radio, Newspapers, and Magazines, etc.

 

8. Review of market performance

The company must review the marketing performance of the new product.

It must answer the following questions:

1. Is the new product accepted by the consumers?
2. Are the demand, sales and profits high?
3. Are the consumers satisfied with the after-sales-service?
4. Are the middlemen happy with their commission?
5. Are the marketing staffs happy with their income from the new product?
6. Is the Marketing manager changing the marketing mix according to the changes in the environment?
7. Are the competitors introducing a similar new product in the market?

The company must continuously monitor the performance of the new product. They must make necessary changes in their marketing plans and strategies else the product will fail.

 

 

2. Describe various steps of promotional program.

 

Marketing Communication or promotion plays a very important role in marketing, both domestic and international. Even if a product is very good, it may not achieve full success unless the promotion is appropriate and adequate.

 

promotion refers to how marketers combine a range of marketing communication methods

to execute their marketing activities. Different methods of marketing communication have distinct advantages and complexities, and it requires skill and experience to deploy them effectively.

 

Steps of promotional program:

             The different steps involved in the promotional programme are as follows:

1. Identifying the target market
2. Determining and setting objectives
3. Developing the message for right communication effects and
4. Selecting the communication mix

 

Step 1: Identifying the target market

            Target market is an important aspect based on which the communication mix is decided. The target market should be identified after through research. In this step, the consumers having the same characters are identified and accordingly the segmentation is done. For example, in a tourism industry, the visitors characteristics are examined, clear market segment is identified and then, buying decision factors are identified.

Step 2: Determining and Setting Objectives

            In the second step, the objectives are determined and set. It is very essential to clearly define the marketing objectives in order to design and use an effective form of promotion.

Step 3: Developing the Message for Right Communication Effects

            The message acts as an instrument/device to change or transform a suspect customer to prospect customer. Thus, an effective message is designed to attain the desired objectives of the promotional efforts.

The success of the promotional campaign relies on the promotional message. The promotional campaign must communicate a message which build-up the customer’s confidence and increases the possibility of purchase. The convincing words which are mostly used by the marketers while creating the message and are found very effective by the research conducted by the university of Yale are: save, health, love, proven, discover, you, easy, results, safety, guarantee, money etc. thus, the promotional campaign increases the awareness and creates a positive image of the service which in turn affects the demand of the service.

Step 4: Selecting the Communication Mix

            For selecting an appropriate communication mix, it is very essential to follow the criteria mentioned below:

• Overall marketing objectives
• Nature of the service
• Characteristics of target market
• Nature and attitude of intermediaries
• Action of competitors
• Cost efficiency
• Integration and feasibility with other marketing elements.
• Effective implementation
• Legal, managerial and ethical consideration.

Guidelines for Service Communication

• Tangible clues must be given for perceiving the service and for making it understandable. Example: ICICI makes use of an umbrella for symbolizing protection.
• Regular communication must be done with the target audience by using logos, signs, packaging, etc.
• The firm should make a promise which is possible to be delivered.
• The word-of-mouth communication must be used as a means to convey message as it is commonly used by the consumers in services.

In case of services, the employees are concouraged  to deliver the promise and attain zero percent defection of customers which needs high employee-customer interaction in a             user-friendly manner.

 

3.What is Marketing Research? Explain its features and process in detail.

International Marketing Research

 

Introduction

 

Today the environment in modern business arena is highly uncertain and rapidly changing. Advances in communications and information systems technology are further accelerating the pace of change. Expansion of business operations from home country toward other countries is making the uncertainty more prominent and stronger. This may be due to cultural, political, and legal differences. This makes it increasingly critical for management to keep abreast of changes and to collect timely and pertinent information to adapt strategy and market tactics in expanding local markets. As a consequence, international marketing research becomes essential for effective decision making when organizations start to internationalize toward foreign markets.

 

Definition of Marketing Research

 

According to American Marketing Association – “Marketing Research is the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services”.

 

According to Philip Kotler – “Marketing research is a systematic problem analysis, model building and fact finding for the purpose of improved decision-making and control in the marketing of goods and services”.

 

According to Paul Green and Donald Tull – “Marketing research is the systematic and objective search for, and analysis of, information relevant to the identification and solution of any problem in the field of marketing”.

 

According to David Luck, Donald Taylor, and Hugh Wales – “Marketing Research is the application of scientific methods in the solution of marketing problems”.

 

Definition of International Marketing Research

 

International marketing research is the systematic design, collection, recording, analysis, interpretation, and reporting of information pertinent to a particular marketing decision facing a company operating internationally.

 

International Market Research is a particular discipline of Market Research, focusing on certain geographical areas.

 

International Market Research is concerned with consumer goods, but also with any resource or service within a value chain which will be commercially utilized or further processed – which is the area of industrial goods and B2B-Marketing.

International Marketing Research Process

Conduct preliminary research – Do some preliminary research on your topic of interest. For this you can go online and search existing survey reports related to your topic of interest. the searched reports may not be too specific to your requirement, but it might give you some ideas on how to go about your primary research.

 

Features of Marketing Research:

(1) Intensive Study- It involves systematic and intensive study of a marketing problem.

(a) Planned Process- We have planned procedure of investigation and analysis.

(b) Orderly Investigation- The procedure of marketing research has clearly-defined steps in proper sequence or order.

(c) Intensive Investigation- All the relevant factors involved in a marketing problem are observed closely.

(2) Scientific Approach- Marketing research adopts scientific method and objectivity in the solution of a marketing problem.

(a) Rational Outlook- Researcher or analyst has an objective attitude — rational outlook based on reason and logic.

(b) Defined Purpose- The purpose of inquiry and the problem under investigation are clearly defined.

(c) Accuracy- Accuracy (exactness) in calculation, in observation and in reporting is strictly ensured.

(d) Standardised Process- Marketing research process is standardised and can be repeated exactly in solving all problems.

(e) Scientific Attitude- The researcher has an open mind, critical attitude, creativity, absolute honesty and integrity — the hallmarks of scientific attitude and approach.

(3) Decision Tool- Marketing research is a tool for decision-making and control in the marketing of goods.

 

 Marketing Research Process:

Marketing research helps in arriving at the decision or solutions for various marketing problems.

The research process involves different stages which are:

1. Problem Formulation:

Formulation of the problem is the first step in the marketing research process. Unless and until the problem is well defined, there is no use of the research work. Well defined and formulated problems can be solved very easily and appropriately. The problem should be defined neither too broadly nor too narrowly. Problems may be of different type i.e. operating (recurring) problem or non-operating (non­recurring) problem.

Recurring problems includes problems relating to sales expenses, sales forecasting, sales volume, product quality, product line, price policy etc. Non-recurring or non-operating problems relate to problems such as change in consumption pattern, price changes, product innovation, changes in competitive forces etc.

2. Research Design:

A research design is the framework or blue print for conducting the market research project. Once the specific research objective has been defined, it is essential to arrive at the correct hypothesis, data collection method, sampling plan and research design instrument.

Formulating a research design involves following steps:

1. Define the information which is required.
2. Analysis of the secondary data.

iii. Qualitative research.

1. Method of collecting data.
2. Measurement and scaling procedure.
3. Questionnaire design.

vii. Sampling process and sample size.

viii. Plan of data analysis.

3. Data Collection:

Data can be collected from both primary and secondary sources. Primary data is the data which is collected for the first time with research purpose in mind. It is the first hand information. Secondary data is the data already collected by some other person for some other research problem. Primary data can be collected through different method – observation method or communication method. Interviews may be conducted either personal or through telephone or any other method to collect the required information.

4. Data Analysis:

Analysis of the raw data is very essential to arrive at the conclusion.

This analysis involves three phases, they are:

1. Classifying the data
2. Data summarization

iii. Advanced data analysis tools and techniques to highlight inter­relationship and quantitative significance.

1. Classifying the Data:

Classification of data includes editing, coding, transcription and verification of data. The most commonly used techniques here are quantitative, qualitative, geographical and chronological.

Quantitative classification are for quantitative data like number of units, number of respondents. Qualitative classification is for qualitative data like occupation, types of family etc. Geographical classification is the one where geographical location is used to classify the data. Chronological classification is on the basis of the time period when event took place.

1. Data Summarization:

For summarization of data various techniques are there like mean, median, mode, range, variance, standard deviation, mean deviation.

iii. Advanced Data Analysis Tools and Techniques:

This includes advanced method for analysing the data like factor analysis, discriminate analysis, correlation, regression, multiple regression.

5. Report Presentation and Recommendations:

A normal report includes the following:

(1) Title of the report

(2) Summary of conclusion

(3) Sample and characteristics

(4) Findings and observations

(5) Questionnaire

(6) Appendices

(7) Recommendation made may be accepted or rejected.

 

4.Define Advertisement? Explain in detail Advertisement with its objectives, types, importance and advantages?

Advertising is the action of calling public attention to an idea, good, or service through paid announcements by an identified sponsor.

Definition: 

According to Kotler –

Advertising is any paid form of non-personal presentation & promotion of ideas, goods, or services by an identified sponsor.

According to the Advertising Association of the UK –

Advertising is any communication, usually paid-for, specifically intended to inform and/or influence one or more people.

A simpler (and modern) definition of advertising can be – A paid communication message intended to inform people about something or to influence them to buy or try something.

Advertising is a means of communication with the users of a product or service. Advertisements are messages paid for by those who send them and are intended to inform or influence people who receive them, as defined by the Advertising Association of the UK.

An advertorial is a form of advertisement in a newspaper, magazine or a website which involves giving information about the product in the form of an article. Usually, a brand pays the publisher for such an article.

Definition of International Advertising
International advertising entails dissemination of a commercial message to target audiences in more than one country. Target audiences differ from country to country in terms of how they perceive or interpret symbols or stimuli, respond to humor or emotional appeals, as well as in levels of literacy and languages spoken. How the advertising function is organized also varies. In some cases, multinational firms centralize advertising decisions and budgets and use the same or a limited number of agencies worldwide. In other cases, budgets are decentralized and placed in the hands of local subsidiaries, resulting in greater use of local advertising agencies.
International advertising can, therefore, be viewed as a communication process that takes place in multiple cultures that differ in terms of values, communication styles, and consumption patterns. International advertising is also a business activity involving advertisers and the advertising agencies that create ads and buy media in different countries. The sum total of these activities constitutes a worldwide industry that is growing in importance. International advertising is also a major force that both reflects social values, and propagates certain values worldwide.

Characteristics Of Advertising

• Paid Form: Advertising requires the advertiser (also called sponsor) to pay to create an advertising message, to buy advertising media slot, and to monitor advertising efforts.
• Tool For Promotion: Advertising is an element of the promotion mixof an organization.
• One Way Communication: Advertising is a one-way communication where brands communicate to the customers through different mediums.
• Personal Or Non-Personal: Advertising can be non-personal as in the case of TV, radio, or newspaper advertisements, or highly personal as in the case of social media and other cookie-based advertisements.

 

Advertising activities can also be categorized into 5 types based on the advertisement medium used. These types of advertisements are:

• Print Advertising:Newspaper, magazines, & brochure advertisements, etc.
• Broadcast Advertising:Television and radio advertisements.
• Outdoor Advertising:Hoardings, banners, flags, wraps, etc.
• Digital Advertising:Advertisements displayed over the internet and digital devices.
• Product/Brand Integration:Product placements in entertainment media like TV show, YouTube video, etc.

Objectives Of Advertising

There are 3 main objectives of advertising. These are:

To Inform

Advertisements are used to increase brand awareness and brand exposure in the target market. Informing potential customers about the brand and its products is the first step towards attaining business goals.

To Persuade

Persuading customers to perform a particular task is a prominent objective of advertising. The tasks may involve buying or trying the products and services offered, to form a brand image, develop a favourable attitude towards the brand etc.

To Remind

Another objective of advertising is to reinforce the brand message and to reassure the existing and potential customers about the brand vision. Advertising helps the brand to maintain top of mind awareness and to avoid competitors stealing the customers. This also helps in the word of mouth marketing.

Other objectives of advertising are subsets of these three objectives. These subsets are:

• Brand Building
• Increasing Sales
• Creating Demand
• Engagement
• Expanding Customer Base
• Changing Customers’ attitudes, etc.

 

Importance Of Advertising

To The Customers

• Convenience: Targeted informative advertisements make the customer’s decision making process easier as they get to know what suits their requirements and budget.
• Awareness: Advertising educates the customers about different products available in the market and their features. This knowledge helps customers compare different products and choose the best product for them.
• Better Quality: Only brands advertise themselves and their products. There are no advertisements for unbranded products. This ensures better quality to the customers as no brand wants to waste money on false advertising.

 

To The Business

• Awareness:Advertising increases the brand and product awareness among the people belonging to the target market.
• Brand Image: Clever advertising helps the business to form the desired brand imageand brand personality in the minds of the customers.
• Product Differentiation: Advertising helps the business to differentiate its product from those of competitors’ and communicate its features and advantages to the target audience.
• Increases Goodwill: Advertising reiterates brand vision and increases the goodwill of the brand among its customers.
• Value For Money: Advertising delivers the message to a wide audience and tends to be value for money when compared to other elements of the promotion mix.

Advantages Of Advertising

• Reduces Per-Unit Cost: The wide appeal of advertisements increases the demand for the product which benefits the organization as it capitalizes on the economies of scale.
• Helps In Brand Building: Advertisements work effectively in brand building. Brands who advertise are preferred over those which doesn’t.
• Helps In Launching New Product:Launching a new product is easy when it is backed by an advertisement.
• Boosts Up Existing Customers’ Confidence In The Brand:Advertisements boosts up existing customers’ confidence in the brand as they get a feeling of pride when they see an advertisement of the product or the brand they use.
• Helps In Reducing Customer Turnover:Strategic advertisements for new offers and better service helps reduce customer turnover.
• Attracts New Customers:Attractive advertisements help the brand in gaining new customers and expanding the business.
• Educates The Customers:Advertisements inform the customers about different products existing in the market and also educates them in what they should look for in an apt product.

Disadvantages Of Advertising

• Increases The Costs:Advertising is an expense to the business and is added to the cost of the product. This cost is eventually borne by the end consumer.
• Confuses The Buyer:Too many advertisements with similar claims often confuses the buyer in what to buy and should he buy the product or not.
• Is Sometimes Misleading:Some advertisements use smart strategies to mislead the customers.
• Only For Big Businesses:Advertising is a costly affair and only big businesses can afford it. This makes small businesses out of competition with big businesses who get to enjoy a monopoly in the market.
• Encourages The Sale Of Inferior Products:Effective advertisements even lead to the sale of inferior products which aren’t good for the consumers.