Core Concepts of Marketing

THEINTERNATIONALMARKETINGPLAN 137

Asdiscussedearlier,DrOGUctpositioningisa keysuccessfactorandreflectsthecus-
tomer'sperceptionsoftheproductorservice.However,incountriesatdifferentstagesof
economicdevelopment,thecustomersegmentsthatarelikelytobeabletopurchasetheprod-
uctandtheoccasionsonwhichitisboughtmaybesignificantlydifferent.Forexample,while
KFCandMcDonald'srestaurantsaimateverydayeatingforthemassmarketinthedevel-
opedcountries.inless-developedcountriestheyareperceivedasplacesforspecial-occasion
eating,andarebeyondthereachofthepoorestsegmentsofthepopulation.Theproductposi-
tioning,therefore,mustvaryinsomedimensions.Inconfioningthepositioningofa prod-
uctorserviceina specificmarketorregion,itisthereforenecessarytoestablishil1the
consumer'sperceptionexactlywha:theproductstandsforandhowit differsfromexisting
andpotentialcompetitionbydesigninganidentitythatconfirmsthevalueoftheproduct.

Pricing
Pricingproductsinforeignnationsiscomplicatedbyexchangeratefluctuations,tariffs,gov-
ernmentalintervention,andshippingrequirements.A commonstrategyinvolvesamarketec
settinga lowerpricefortheirproductsinforeignmarkets. Thisstrategyis consistentwith
thelowincomelevelsofmanyforeigncountries,andthelowerpricehelps[0buildmar-
ketshare.Pricingstrategiesarealsostronglyinfluencedbythenatureandintensityofthe
competitioninthevariousmarkets.
Forthesereasons,it is importanttorecognizeat theoutsetthatthedevelopmentand
implementationofpricingstrategiesininternationalmarketsshouldfollowthefollowing
stages:

1. Analyzingthefactorsthatinfluenceinternationalpricing,sl;chasthecoststruc-
   tures,the valueoftheproduct, themarketstruc~ure,competitorpricinglevels,and
   a varietyofenvironmentalconstraints


2. Confioningtheimpactthecorporalestrategiesshouldhaveonpricingpolicy


3. Evaluatingthevariousstra~egicpricingoptionsandselectingthemostappropri-
   ateapproach


4. Implementingthestrategythroughtheuseofa varietyoftacticsandprocedures
   tosetprices


5. Managingpricesandfinanc~ng;nternationalu-ansactions

Perhapsthemostcriticalfactortobeconsideredwhendevelopinga pricingstrategyininter-
nationalmarkets,however, is howthecustomersandcompetitorswillrespond.N'agle' 2has
suggestedninefactorsthatinfluencethesensitivityofcustomerstoprices,andalihaveimpli-
cationsfortheinternationalmarketer.Pricescn:.itivityreduces:

• Themoredis;inctivetheproductis,


• thegreatertheperr:eivedquality,


• thelessawareconsun:ersareofsubstitutesinthemarket,


• ifit isdifficulttomakecomparisons,


• ifthepriceofa productrepresentsa smallproportionoftotalexpenditureofthe
  customer,


• astheperceivedbenefitincreases,


• iftheproductis usedinassociationwitha productboughtpreviously,


• i~costsaresharedwithotherparties,


• if theproductcannotbestored.