International Marketing (Essay Sample)


International Marketing
Prepared By: MD Hasan Sheikh
Student ID: 11908
Submission Date: 10-11-2014


Table of Contents
 TOC \o "1-3" \h \z \u  HYPERLINK \l "_Toc406973207"
Introduction  PAGEREF _Toc406973207 \h
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Part 1: Analysis of marketing mix.  PAGEREF _Toc406973208 \h
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a. Price  PAGEREF _Toc406973209 \h
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b. Place  PAGEREF _Toc406973210 \h
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c. Product  PAGEREF _Toc406973211 \h
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d. Promotion  PAGEREF _Toc406973212 \h
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e. Justification for standardization  PAGEREF _Toc406973213 \h
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Part 2: Internationalization Process Theory (IPT)  PAGEREF _Toc406973215 \h
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Conclusion  PAGEREF _Toc406973216 \h
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Bibliography  PAGEREF _Toc406973217 \h
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Introduction
Adoption of the best marketing mix enhances competitive advantage in the market. Saturation of local market leads to expansion into international through a process called international. The paper articulates various marketing strategies employed by Apple Inc. to thrive in the international markets (Albaum, Albaum & Duerr 2008). The paper will cover various challenges facing organizations in the international markets. The international marketing mix will be discussed and explained how it applied to Apple Inc. The international marketing mix will involve examining international prices, distribution/place, promotions, and products. The paper will also discuss market entry strategies in the international markets whereby various market entry strategies such as standardization and adaptation as they apply to Apple brand. Standardization involves developing production criteria that are specific, standard or tolerant in definitions, formulas, measurement and drawings to improve quality while limiting deception. Adaptation on the other hand entails the act of tailor-making products to suit target customers and markets in terms of market development, conformity to governing laws and regulations, cultural beliefs and competition strategy. The paper will discuss factors behind Apple Inc. marketing strategy. The company either adapted or standardized its marketing techniques and tools to suit each market social, economic and cultural environment to gain competitive advantage.
Part 1: Analysis of marketing mix in relation to standardization and adaptation across international markets
Marketing Mix encompasses four key tools termed 4Ps (Price, Products, Place and Promotion). The four tools are applied in different rationale depending on prevailing market conditions to gain competitive advantage in the market. Marketing mix means combining the tools in a technical manner to realize an effective blend that creates maximum positive impact in the target market. The tools’ main target is a target customer deemed vital in enhancing the organizational or market growth through increased consumption of provided products or services. Apple in an effort to attract and sustain huge customer base in local and international market streamlined pricing strategies. However, to be cost-effective, it embraced production of standard products with multiple applications to suit most of the consumer needs. Its promotion and distribution channels were also standardized (Huang, Hu & Zhang 2013).
Price
Apple Inc. used adaptation approach in adopting its pricing mix including competition, cost, geographical area and discounts. All factors being perfect, fixing standard price would make customers from disadvantaged economies shy away. Apple Inc. is based in U.S. market whose individual and market economy is stable compared to developing economies in Asia and Sub-Sahara Africa. It would be competitively disadvantaged in such countries where local competitors price similar products at low prices due to low cost of production. Therefore, Apple Inc., fixed prices based on cost of production in the market, prevailing competition, geographical location, individual and market economic situation. At the beginning, Apple Inc. sold products at $599 (8GB) in the U.S. market. It gradually dropped the price to $499 (4GB) to gain competitive advantage from competitors like Microsoft. The company further reduced the price to $399 to attract mainstream users who were affected by economic fluctuations. The company, hoping to increase growth did not reply on earlier adopters including young techno savvy and professionals. Using versioning and tried skimming approach Apple Inc. saw price of the products displayed varied on the internet due to availability of substitute products. Apple charged prices depending on market and customers’ economic conditions embodied in 2008 global recession that saw the price of iPhone drop to $399 in U.S. market (Doole & Lowe 2012).
Place
Apple Inc. adopted standardized distribution channels as opposed to adaptation due to logistics. The company was limited in knowledge and expertise to serve every market segment in international markets. In collaboration with telecommunications services, Apple Inc. distributed products through connected systems of distribution and stores. The strategy led to an increase in customers who accessed its products evident in 2008 whereby out of 58 million U.S. populations, 18 million people accessed ipod products through established touch point networks (Huang, Hu & Zhang 2013). In 2007, iPhone consumers in the U.S. market purchased the devise from wireless carrier, AT&T. However, Apple expanded its distribution channels after introducing iPhone 4G in 2010 (Froud et. al., 2012). The company established more carriers within and outside U.S. markets including Spain, U.K., Ireland and Germany markets. Consumers in markets with iPhone 3G, had alternative carriers of cellular network (Huang, Hu & Zhang 2013).
Product
Apple Inc. produced standardized devices with multiple features to offer application variety to consumers. Adaptation of the devices required extra investment in personnel and research activities that would lead to an increase in production cost. The extra expenses would translate to fixing uncompetitive prices. To meet differences in cultural needs, Apple leveraged adoption of iPhone using iPod ecosystem (Huang, Hu & Zhang 2013). By so doing, it made online music system stronger. Introduction of PC websites display made the iPhone unique to products offered by competitors in the market. Apple exploited market opportunities by providing consumers’ technological needs solutions through innovative offers before entry of competitors. The company made products that were compatible with customers’ needs and expectations particularly internet usage habits. Apple’s iPhone has more than 225,000 applications. The application features are beyond what smartphone competitors provide to consumers (Froud et. al 2012). Amongst Apple’s applications, the following resonate well with consumers: social networking, Lifestyle, Entertainment and News. They are designed in line with consumer value of ‘Internet community’ and ‘Hedonism and Aesthetics.
Promotion
Apple Inc. aggressively used standardized marketing strategies to alert consumers on new offers in the market. It used multiple distribution channels to inform target markets about “right” products to purchase. Before launching iPhone, in 2010, Apple Inc. introduced 4TV to provide potential customers wanting to share information and entertainment (Doole & Lowe 2012). According to Steve, the Chief Executive Officer of Apple Inc., the company’s main objective was to create a robust relationship with local media firms to improve promotion of its products. Adaptation of promotion techniques and tools would increase the company’s cost of marketing due to recruitment and training of extra personnel to serve in every region in repackaging the message and appearance of the adverts.
Justification for standardization
Standardization of products, distribution and promotion activities enhanced Apple’s competitiveness through cost-effective production. However, the company was skeptical in using standardized price for fear of losing business to competitors. Since the company was operating in markets characterized by different economic stability, arriving at standard price would not be practical. Adaptation would need modification of product designs, promotion messages and distribution channels to suit each location and consumer segment. Modification would therefore need more investment in Research and Development, personnel and production facilities. Other than pricing, Apple Inc. employed standardized marketing strategies to reduce the cost of production. The company continuously enhanced its distribution capacity by opening retail stores in strategic cities internationally using quality shopping venues (Huang, Hu & Zhang 2013). The company trained and distributed retail floor employees in specific retailing stores like Australian department store. Using strategic alliances with multinationals like HP, the company branded and distributed iPod and pre-loading iTunes on customer laptops and PCs (Huang, Hu & Zhang 2013). The company using sellers not operating systems at the moment further increased iPod accessibility thereby increasing online stores. The success story of Apple stores relates to direct experience on how customers access its brands at retail stores by being offered good care, an enabling environment and direction on where to acquire the company’s products. Apple Inc. customers are given an opportunity to test the products and are hel...