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Date Submitted: 01/11/2014 06:25 AM
Global Marketing and R&D
Learning objectives
• Explain why it makes sense to vary the attributes of a product from country to country.
• Articulate why and how a firm’s distribution strategy might vary among countries.
• Identify how and why advertising and promotion strategies might vary among countries.
• Explain how and why a firm’s pricing strategy might vary among countries.
• Discuss how the globalization of the world’s economy is affecting new product development within the international business firm.
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The focus of this chapter is on how marketing and R&D can be performed so they will reduce the costs of value creation and add value by better serving customer needs.
A global marketing strategy that views the world’s consumers as similar in their tastes and preferences is consistent with the mass production of a standardized output. By mass-producing a standardized output, the firm can realize substantial unit cost reductions from experience curve and other scale economies. But ignoring country differences in consumer tastes and preferences can lead to failure. Thus, an international business’s marketing function needs to determine when product standardization is appropriate and when it is not, and to adjust the marketing strategy accordingly. Similarly, the firm’s R&D function needs to develop globally standardized products when appropriate as well as products that are customized to local requirements.
Marketing and R&D are dealt with in the same chapter because of their close relationship. A critical aspect of the marketing function is identifying gaps in the market so that new products can be developed to fill those gaps. Developing new products requires R&D; thus, the linkage between marketing and R&D. Marketing dictates to R&D whether to produce globally standardized or locally customized products.
OUTLINE OF CHAPTER 17: GLOBAL MARKETING AND R&D
Opening Case: Levi Strauss Goes...