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Marketing Basics - Kotler Philip

The decision on the structure of the marketing mix

A company operating in one or several foreign markets must decide whether it will generally - and if so, to what extent - adapt its marketing mix to local conditions. On the one hand, there are companies that everywhere use a standardized marketing mix. The standardization of goods, advertising, distribution channels and other elements of the marketing mix offers the lowest costs, since no major changes are made to these elements. This principle lies at the basis of the Coca-Cola company’s idea that its drink should have the same taste anywhere in the world, and at the basis of Ford’s desire to create a “car for the world”, that is A car that meets the needs of most consumers in most countries of the world. On the other hand, there is the principle of an individualized marketing mix when the manufacturer specifically adapts the elements of the mix to the specifics of each individual target market, incurring additional costs, but hoping to gain a higher market share and get higher profits. For example, the Nestle company varies from country to country both its product range and its advertising. Between these two poles there are many different options. So, the Levi Strauss company can everywhere sell the same jeans and at the same time vary the main theme of its advertising in different countries.

Now we will consider possible options for the adaptation of goods, incentives, prices and distribution channels of the company when it enters foreign markets.

Product

Keegan outlines five strategies for stimulating a product and adapting it to a foreign market (see Figure 93) 11. We will focus on three product adaptation strategies and two incentive strategies.

Distribution unchanged means that when a product is released to foreign markets, no changes are made to it. In this case, the top management gives marketing specialists the following instruction: “Take the product as it is and look for customers for it”. However, first of all, it is necessary to find out whether foreign customers use this product at all. For example, the level of use of deodorants among men in the United States is 80%, in Sweden - 55, in Italy - 28, and in the Republic of the Philippines - only 8%. Many Spaniards do not consume such familiar foods as butter and cheese at all.

PRODUCT

STIMULATION

Keeping the product unchanged

Product Adaptation

New Product Development

Maintaining the same strategy

1. Unchanged distribution

3. Adaptation of goods

5. The invention of new items

Adapting Incentive Strategies

2. Adapting communication

4. Double adaptation

Fig. 93. Five strategies for product adaptation and stimulation to the external market

Propagation unchanged is successful in some cases and disastrous in others. When General Foods launched its Dzhello dessert in the usual powder form on the British market, it turned out that English consumers prefer to buy it in the form of briquettes or cakes. Distribution in an unchanged form is attractive because it does not require additional R&D costs, re-equipment of production, or changes to the practice of incentives. However, in the long run, it can be expensive.

Adaptation of a product involves making changes to the product in accordance with local conditions or preferences. Heinz varies its baby food products depending on the market. So, in Australia she sells lamb brain mashed potatoes, and in the Netherlands she sells colored bean mashed potatoes. General Foods prepares a variety of coffee blends for the British (who drink coffee with milk), the French (who drink coffee in black) and Latinos (who love the flavor of chicory).

The invention of the novelty is to create something completely new. This process can come in two varieties. A regressive invention is the resumption of the release of a product in its pre-existing forms, which are well adapted to meet the needs of a particular country. Thus, the National Cash Register (NKR) company resumed the production of cash registers with a drive pen, which could be sold half the price of modern devices, and began to sell them in large quantities in the countries of the East, Latin America and Spain. This example indicates the existence of an international product life cycle, since different countries are at different degrees of readiness to perceive specific goods12. A progressive invention is the creation of a completely new product to meet the needs existing in another country. Thus, less developed countries are in great need of cheap, high-protein foods. Firms such as Quaker Boots, Swift and Monsanto are studying the nutritional needs of these countries, developing new food products and new advertising campaigns designed to ensure trial use and perception of new products. The invention of new products seems overhead, but the game can be worth the candle.