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International marketing and materials management

Introduction

As this chapter deals with two related chapters of your textbook, we will once again discuss them in two parts. In Part A we look at two interdependent aspects of the production of goods for global markets - manufacturing and materials management. Here we focus on the manufacture of goods rather than the production of services.

The history of both domestic and international competition since World War II shows that competitive advantage was originally primarily gained by price. More recently, the quality of the goods produced became the means of gaining competitive advantage. However, because of the convergence phenomenon in manufacturing techniques and the ability of competitors to match each other on quality there is now a trend towards customer service: the better the service, the more competitive the firm becomes. One crucial aspect of customer service is time-based competition which relates not just to providing a product or service quickly but also to the ability to adapt quickly to changing consumer demand. Firms producing goods for global markets have to consider all of these factors.

Arising from consideration of these factors is the fundamental question of where the firm should manufacture its products to meet the sometimes conflicting demands of economy of scale and responsiveness to specific local demands. As manufacturing requires raw materials, the firm must be able to efficiently manage the sources, the transportation and the distribution of these materials.

In Part B, we focus on the management of the marketing mix and give attention to the four Ps (products, price, promotion and placement). The purpose of this is to set the stage for a discussion of the management of the international marketing mix which is all about managing the controllable variables that influence the effectiveness of international marketing strategy. Domestic and international marketing have much in common, but the task of international marketing is often far more difficult and riskier than many firms expect. The difference between domestic and international marketing occurs because of the differences in the external environment faced by international firms. These differences from one country to another lie in culture, tradition, religion, politics, geography, education and buying power. Taken individually or together, these differences influence what is acceptable and appropriate in terms of marketing activities.

To maintain consistency with Hill's (2005) Chapter 17, Part B also includes R&D (Research and Development). R&D is discussed primarily in the context of its relationship with marketing and production, thus integrating Parts A and B (Chapter 10).

Topics

The following is the outline of the topics covered in this chapter.

Learning outcomes

The objectives for this chapter have been carefully constructed to reflect the most significant concepts and ideas we are going to cover and to provide a focus for your work during the chapter. After completing the work you should be able to:

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