138 CHAPTER 6 MARKETINGINGLOBALMARKETS
Finally, thereare severalinherentproblemsas sociatedwithpricingin international
markets.Oftencompaniesfindit difficulttocoordinate andcontrolpricesacrosstheir activ-
itiesinordertoenablethemtoachieveeffectivefinancial performance andtheirde:,ired
pricepositioning.Simply,howcanprices becoordinatedby thecompany acrossthevari-
ousmarketsandstillmakethenecessaryprofit?Difficultyanswering thisquestionhasled
totwoseriousproblems.Dumping(whena firmsells a pro duct ina foreign countrybelow
itsdomesticpriceorbelowitsactual costs)isoften done to builda company'sshareofthe
marketbypr:cingat a competitivelevel.Another reasonisthat theproductsbe ingsoldmay
besurplusorcannotbesolddomestically andarethereforealreadya burdentothecom-
pany.Whencompaniespricetheir productsveryhighinsome countri esbutcompetitively
inothers, theyengageina graymarketstrategy.Agray market,alsocalledpa rallelimport-
ing,isa situationW;1ereproducts aresoldthroughunauthorized channelsof distributi on.
Agraymarket comesaboutwhenindividuals buyproductsin a lower-priced country from
a manufacturer'sauthorizedretailer, shipthemtohigher-priced countries, and thensellthem
belowthemanufacturer'ssuggestedprice throughunauthori zed retailers.
Considerableproblemsaris einforeigntran sactions becauseoftheneedtobuyan d
sellproductsindifferentcurrencies. Questionstoconsider are: What currency shoulda com-
panypriceits products?Howshoulda co mpany deal withfluctuatingexchange rates?
Finally,obtainingpaymentpromptlyand ina suitablecurrency fromlessdeveloped
countriescancauseexpense andadditionaldifficulties.Howshoulda companydealwith
sellingtocountrieswherethereisa riskofnonpayment?Howshould acompanyappro ach
sellingtocountriesth at havea shortageofhard currency?DistributionandLogistics
Distributionchannelsarethemeansbywhichgoods aredistributedfromthemanufacturer
totheenduser.Logistics,orphysicaldi stributionmanagement , is concernedwith theplan-
ning,implementing,and controlofphysical flows of materials and final goods frompoints
oforigintopoint s of usetomeetcustomerneeds ata profit.
Essentiallythereare threechannellinks between theseller and buyer. The first link
is theseller'sheadquarter~organization, whichisresponsibleforsupervising thechannel,
andactsaspartofthechannelitself.Channels betweencountr ies represen t thesecondlink.
Theyareresponsible forgettingproductstooverseas marketsand paymentinreturn.Finally,
thethirdlinkis the channelstructure (logistics)withincountries, whichdistributestheprod-
vctsfromtheirpointof entrytothefinalconsumer.
Distri butionst:ategieswithin overseas marketsareaffected byvariousuncontrollable
factors.First, wholesalingandretailingstructurediffers widely fromonenationto thenext.
So,100,doesthequalityofserviceprovided.Differencesinthesizeandnatureofretail-MARKETING CAPSULE •
:i..Theinternationalmarketingplanincludesconcernfor
a. Corporate level conSiderations-determining the
resourcestobeallocated
b. Businesslevelconsiderations,including:- assessmentofstakeholders
< thesituationanalysis
c. Functionallevelconsiderationsthat delineatethevar-
iousactivitiesthatwillachieveobjectives
2.The in ternational marketing environment includes
concernfor:
a. thesocial!culturulenvironment
b. thepolitical/legalenvironment
c. thetechnological environment
d.the economicenvironment
e. thecompetitiveenvironment