PRODUCT AND TECHNICAL STANDARDS
Even with the forces that are creating some convergence of consumer tastes and preferences among advanced, industrialized nations, Levitt’s vision of global markets may still be a long way off because of national differences in product and technological standards.
Differing government-mandated product standards can rule out mass production and marketing of a standardized product. Differences in technical standards also constrain the globalization of markets. Some of these differences result from idiosyncratic decisions made long ago, rather than from government actions, but their long-term effects are profound. For example, DVD equipment manufactured for sale in the United States will not play DVDs recorded on equipment manufactured for sale in Great Britain, Germany, and France (and vice versa). Different technical standards for television signal frequency emerged in the 1950s that require television and video equipment to be customized to prevailing standards. RCA stumbled in the 1970s when it failed to account for these differences in marketing TVs in Asia. Although several Asian countries adopted the U.S. standard, Singapore, Hong Kong, and Malaysia adopted the British standard. People who bought RCA TVs in those countries could receive a picture but no sound!
14.
Distribution Strategy
A critical element of a firm’s marketing mix is its distribution strategy: the means it chooses fordelivering the product to the consumer. The way the product is delivered is determined by the firm’s entry strategy, discussed in Chapter 14. In this section, we examine a typical distribution system, discuss how its structure varies between countries, and look at how appropriate distribution strategies vary from country to country.
Figure 17.1 illustrates a typical distribution system consisting of a channel that includes a wholesale distributor and a retailer. If the firm manufactures its product in the particular country, it can sell directly to the consumer, to the retailer, or to the wholesaler. The same options are available to a firm that manufactures outside the country. In addition, this firm may decide to sell to an import agent, which thendeals with the wholesale distributor, the retailer, or the consumer. Later in the chapter we will consider the factors that determine the firm’s choice of channel
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