home Marketing Basics of Marketing - Kotler Philip

Basics of Marketing - Kotler Philip

Price

Often manufacturers ask for a lower price for their goods in foreign markets. The profit is likely to be low, but a low price is needed to organize the sale of the goods. The manufacturer can set a low price to win a market share. And maybe he wants to sell at bargain prices goods for which there is no market in their own country. Practice, when on the foreign market the producer takes less for the goods than at the domestic one, is called dumping. The firm "Zenith" has put forward against the Japanese manufacturers the charge of dumping their TV sets in the US. If there are any cases of dumping, the US Customs Bureau may impose an anti-dumping duty on the goods.

Distribution channels

A firm that acts on the international market must necessarily consider comprehensively the problems of bringing its goods to final consumers13. In Fig. 94 there are three main links between the seller and the final buyer. The first link is the headquarters of the seller's organization, which controls the distribution channels and at the same time is itself a part of these channels. The second link - interstate channels - ensures the delivery of goods to the borders of foreign countries. The third link - domestic channels - ensures the delivery of goods from the points of crossing the border of a foreign country to the final consumers. Too many American manufacturers consider their mission to be complete once the goods come out of their hands. And they should more closely monitor what happens to this product in the process of its movement within a foreign country.

Fig. 94. General structure of the distribution channel for international marketing

Domestic distribution channels of different countries differ in many respects from each other. There are large differences in the number and type of intermediaries serving each individual foreign market. To deliver soap to the Japanese market, Procter & Gamble Corporation has to deal, perhaps, with the world's most complex distribution system. The corporation must sell the goods to a wholesaler with a wide assortment that sells it to a wholesaler specializing in this assortment of goods who sells it to a wholesaler who sells it to a regional wholesaler who sells it to a local wholesaler who finally sells it to retailers. The presence of all these levels in the commodity circulation system can lead to the fact that the selling price of the goods for the consumer will be 2 to 3 times higher than its price for the initial importer. When trading in the same soap in tropical countries, the corporation sells it to an importing wholesaler that sells it to a large trader who sells it to small traders who sell it peddling.

Another difference is the size and nature of retail enterprises abroad. While the United States is dominated by large-scale retail chains, most of the retail trade in other countries falls to the share of many small independent traders. In India, there are millions of retailers who sell goods in tiny shops or in bazaars right under the open sky. They produce high margins, but the requested price of the goods can be significantly reduced by bargaining. Undoubtedly, prices could be reduced by supermarkets, but because of the many economic and cultural obstacles, it is very difficult to open them.

Box 41. The Americans are going - with popcorn!

The US government wants the British to eat as much popcorn as possible (popcorn). This is what the Chicago "Popcorn Institute" wants, whose members produce more than 85% of the world's total air corn. Americans annually spend more than $ 1 billion on purchasing popcorn products, while the British spend just $ 4.7 million. Turning the British into air-corn eaters will mean an increase in the incomes of American farmers and exporters. To convince the British skeptics of the charms of popcorn, the Agricultural Trade Bureau of the American Embassy joined forces with the Popcorn Institute to launch a three-year campaign to popularize popcorn. The main emphasis was made on the low price of popcorn, its nutritional value and new ways of cooking. Among such novelties - sausages from grated peanuts with popcorn, popcorn, soaked in cognac, and sauce for steak with flavored popcorn. More traditional, but completely unfamiliar to the British dish - popcorn with salt and butter.

So far, the English are accustomed to eating only candied popcorn, which is sold in entertainment passages and cinemas. "The Popcorn Institute" is looking into what other habitual situations for the English people could introduce popcorn. One of the new potential groups of popcorn eaters is the regulars of English pubs. Since in England beer houses are the focus of public life, the "Popcorn Institute" is trying to persuade their owners to try to offer popcorn as a free light snack for beer and other beverages. And although beer owners are not set to spread at least $ 475 to buy industrial machines for making popcorn, the head of the agricultural trade bureau Wilson Lynn Abbott proves to them that it will be, the costs of return for sure. He says: "Research shows that when feeding popcorn, beer consumption per visitor may increase by 30-40%." In addition, Abbott points out, air corn itself is cheaper than potato chips and peanuts, usually offered by beer owners as a free snack.

Americans basically eat popcorn at home - and most likely when watching TV. With this in mind, the "Popcorn Institute" has chosen an extensive audience of English viewers as its second and probably the largest potential market. And in this case, the advertising campaign focuses on the cheapness of air corn in comparison with other light snacks.

Since today the diet is widely taken care of, the campaign to popularize popcorn also accentuates its nutritional value: when consumed without seasonings and flavoring, it does not contribute to completeness; It provides the body with fiber; It even has proteins, vitamins, and minerals. In a number of English schools, popcorn is served instead of sweetened snacks. Ann Attfield, chef of the Roman Catholic school of St. Angela in Stevenage, pours popcorn with melted cheese, sprinkles with herbs and serves as a vegetable dish.

Inspired by the preliminary survey of the market, the American firm West Bend will soon begin selling household electrical devices for cooking popcorn. And while it is still unlikely that popcorn will replace vegetables on the plates of many Englishmen, the advertising campaign instills in the British an increasing taste for this American snack.