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Muhammad Aziz M (1606951903)

Putri Wulan (1606952124)

Raminda Adiati (1606952181)

Global Marketing and R&D

New Product Development

Closing Case

Kodak in Russia

Product Attributes

Question 1

Question 3

A product can be viewed as a bundle of attributes

Yes, they should slightly adjust their marketing mix. For most of the strategies the company took for the film cameras will be successful if implemented into the digital camera marketing.

However, some parts may need adjusting. One of them is the advertisement messages. Considering that the Russian PC market is in the top 5 in the world, they should focus on educating the customers on the simplicity of digital products and how much more convenient it is compared to traditional cameras.

Also the company should adjust its distribution channel so that it is better equipped with digital products.

  • Photographic industry was under developed
  • The market had potential
  • Consumers had little knowledge
  • They had to educate consumers and create the demands
  • Little or no infrastructure for distributing photographic equipment and films and for processing film
  • It kept the demands low
  • Consumers were poor
  • Low demands for expensive products
  • Firms today need to make product innovation priority, because innovation can open the door to a host of new opportunities
  • This requires close links between R&D, marketing, and manufacturing

Question 2

If consumer needs were the same the world over, a firm could simply sell the same product worldwide

What Kodak did:

  • Sent out clear and consistent marketing message for Russian people who were unfamiliar with cameras
  • Promoted itself as a clean company that stands against black market in Russia
  • Sold lower end cameras and films to Russian who had limited incomes
  • Encourage companies to give out cameras instead of traditional vodka
  • Set up franchising program

The Location of R&D

Integrating R&D, Marketing, and Production

Cross-Functional Teams

To reduce the failure of a new product development, the efforts should involve dose coordination between R&D, marketing, and production

With other things being equal, the rate of new-product development seems to be greater in countries where:

  • more money is spent on basic and applied r&d
  • underlying demand is strong
  • consumers are affluent
  • competition is intense

Effective cross functional teams should:

  • be led by a heavyweight project manager with status in the organization
  • include members from all the critical functional areas
  • have members located together
  • establish clear goals
  • develop an effective conflict resolution process

Tight cross-functional integration can ensure that:

  • Product development projects are driven by customer needs
  • New products are design for ease of manufacture
  • Development costs are kept in check
  • Time to market is minimized

YES, we do think this was the right thing to do

Distribution Strategy

Differences Between Countries

  • Retail Concentration
  • Channel length
  • Channel Exclusivity
  • Channel Quality

Cultural Differences

Economic Development

Product and Technical Standards

Distribution Strategy, the means it chooses for delivering the product to the consumer.

Countries differ along a whole range of dimensions, including:

  • social structure
  • language
  • religion
  • education
  • Consumers in highly developed countries tend to demand a lot of extra performance attributes
  • Consumers in less developed nations tend to prefer more basic products

Global Advertising

Makes sense when:

  • it has significant economic advantages
  • creative talent is scarce
  • brand names are global

The Globalization of Markets and Brands

Push and Pull Strategy

Doesn't make sense when:

  • cultural differences are significant
  • country differences in advertising regulations block the implementation

A pull strategy emphasizes mass media advertising

A push strategy emphasizes personal selling

The choice between the strategies depend on:

  • Product type and consumer sophistication
  • Channel length
  • Media availability
  • Theodore Levitt argued that world markets were becoming increasingly similar making it unnecessary to localize the marketing mix

Communication Strategy

Market Segmentation

While the world is moving towards global markets, cultural and economic differences among nations limit any trend toward global consumer tastes and preferences

A firm's communication strategy is partly defined by its choice of channel.

Identifying distinct groups of consumers whose purchasing behavior differs from others in important ways

Direct Selling

Sales Promotion

In addition, trade barriers and differences in product and technical standards also limit a firm's ability to sell a standardized product to a global market

Geography

Demography

Psychological Factors

Socio-Cultural Factors

Direct Marketing

Advertising

Barriers to International Communication

The effectiveness of a firm's international communication can be jeopardized by:

  • Cultural barriers, a message that means one thing in one country may mean something different in another.
  • Source and country of origin effects, when the receiver of the message evaluates the message on the basis of status or image of the sender.
  • noise level, the amount of other messages competing for a potential consumer's attention.

Pricing Strategy

3 issues to consider:

  • Price discrimination
  • Strategic pricing
  • Regulation that affect pricing dicision

Price Discrimination

Strategic Pricing

Regulatory Influences on Prices

The use of either price discrimination or strategic pricing may be limited by national or international regulation

Multi-point Pricing

A firm's pricing strategy in one market may have an impact on a rival's pricing strategy in another market

Experience Curve Pricing

Build global sales volume as rapidly as possible, even if this means taking large losses initially

Occurs when firms charge consumers in different countries different prices for the same product.

Can work if:

  • the firm is able to keep national markets separate
  • different price elasticities of demand must exist in different countries

Predatory Pricing

Using the profit gained in one market to support aggresive pricing designed to drive competitors out in another market

A firm's ability to set its own prices may be limited by antidumping regulations and competition policy.

Elastic and Inelastic Demand Curve

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