What Are the Similarities and Differences Between Domestic and International Marketing?

1. What are the similarities and differences between domestic and international marketing? (Chapter 16, #1)

International marketing, like domestic marketing, is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. International marketing and domestic marketing both revolve around the four Ps of marketing – product, price, promotion, and place. Unlike domestic marketing, international marketing is not confined to a single market place, rather activities are extended across national boundaries, and as a result, the process of marketing becomes more complex as firms encounter different legal, cultural, political, and economic environments.

2. What are the pros and cons of trying to use a single brand name in different markets, as opposed to creating unique brand names for various markets? (Chapter 16, #4)

A brand name that is standardized offers a company several benefits. First, companies using a single brand name can reduce their packaging, design, and advertising production costs. Second, companies using a standardized brand name may be able to capture spillover benefits from their advertising messages in one country to another country. However, in some cases a standardized brand name may not be possible. For example, legal and/or cultural factors may force a company to alter brand names to better meet the local situation.

3. What are the advantages and disadvantages of each pricing policy? Why do most international firms use market pricing? (Chapter 16, #5)

The three types of pricing policy are standard pricing, two-tiered pricing, and market pricing. Standard pricing offers companies the convenience of charging the same price for its goods and services regardless of where they are sold. However, because it does not recognize differences between markets, it is generally used only for commodity products and for products or services that are highly visible and allow for price comparisons. Two-tiered pricing, because it involves a domestic price and a foreign price, allows companies to cater to differences between the domestic market and all foreign markets. However, because a company typically charges a higher price in the home market as compared to its foreign markets, it may be vulnerable to dumping charges. In addition, the system may not be effective in the long run because, since the company is only trying to cover the marginal costs of selling in foreign markets, it will never develop the international skills, expertise, and outlook necessary to be successful in the international marketplace. Finally, a market pricing policy, because it customizes prices on a market-by-market basis, allows a firm to maximize prices in each market. However, the system is a complex one, and the company must be able to avoid arbitrage situations and/or the development of gray markets for its goods.

4. How does international operations management relate to international marketing? (Chapter 17, #1)

International operations management refers to activities involved in transforming inputs into products that are finished, which includes acquiring the necessary resources to make the products. Not only include necessary resources, it includes decisions related to where production facilities should be located. International marketing involves the four Ps of the marketing mix: Product, Price, Promotion, and Place. The areas in international operations management is most related to international marketing are the distribution process, how the products will be shipped from point of production to the point of sale, and the packaging process.

5. How are a firm’s strategy and operations management interrelated? (Chapter 17, #2)

A company’s strategy should drive the company’s operations management