Chapter 3 - Pearson Learning Solutions

CHAPTER 3 • REGIONAL MARKET CHARACTERISTICS AND PREFERENTIAL TRADE AGREEMENTS 95TABLE 3-11 Marketing Strategies in the European UnionChanges Affecting StrategiesThreats to Marketers’PlanningManagement’sStrategic OptionsProductStrategiesPricingStrategiesPromotionStrategiesDistributionStrategiesHarmonization in productstandards, testing, andcertification processCommon patenting and brandingHarmonization in packaging,labeling, and processingrequirementsMore competitive environmentLifting of restrictions on foreignproductsAntimonopoly measuresOpening up of the publicprocurement marketCommon guidelines on TVbroadcastingDeregulation of nationalbroadcasting monopoliesUniform standards for TVcommercialsSimplification of transitdocuments and proceduresElimination of customsformalitiesIncorporating changesmandated by EC directivesComplying with rulesof originLocal content rulesDifferences in marketingresearchParallel importingDifferent taxationof goodsLess freedom in settingtransfer pricesRestrictions on alcoholand tobacco advertisingLimits on foreign TVproductionDifferences in permissiblepromotional techniquesIncrease in distributors’marginsLack of direct marketinginfrastructureRestrictions in the useof computer databasesConsolidate productionSeek marketing economiesShift from brand to benefit segmentationStandardize packaging and labelingwhere possibleExploit different excise and value-added taxesUnderstand price elasticity of consumer demandEmphasize high-margin productsIntroduce low-cost brandsCoordinate components of promotional mix viaintegrated marketing communications (IMC)Exploit advantage of pan-European mediaPosition products according to local marketpreferencesConsolidate manufacturing facilitiesCentralize distributionDevelop nontraditional channels(direct marketing, telemarketing)Source: Reprinted from Long Range Planning, Vol. 5, G. Guido, “Implementing a Pan-European Marketing Strategy,” p. 32, 1991,with permission from Elsevier.000200010270740623the Magnum MX, in one version. However, because different types of implements and trailers areused in different countries, the MX is available with different kinds of hitches. 16The advent of the euro on January 1, 1999, brought about more changes. Direct comparabilityof prices in the euro zone will force companies to review pricing policies. The marketingchallenge is to develop strategies to take advantage of opportunities in one of the largest,wealthiest, most stable markets in the world. Corporations must assess the extent to which theycan treat the region as one entity and how to change organizational policies and structures toadapt to and take advantage of a unified Europe.The music industry is a case in point; long before online music distribution and MP3 file swappinghad become issues, the major record companies faced a number of challenges. The single marketmeant that, for the first time, music retailers in Europe were allowed to buy CDs and tapes fromdistributors throughout the EU. This practice, known as transshipment, had not been permitted priorto the single market. Now, for example, a music retailer in Germany is no longer tied to a localsupplier in Germany if better prices are available elsewhere. The change means that EMI, Sony BMG,Universal Music Group, and Warner have been forced to adopt more uniform pricing policies acrossEurope. This, in turn, has required them to find ways to cut costs without compromising the need torespond quickly to consumer demand. One solution has been to realign distribution via joint venturesor other arrangements; previously, each company had maintained its own distribution system. In1998, however, Warner and Sony merged their distribution facilities in the United Kingdom. 1716 George Russel, “Marketing in the ‘Old Country’: The Diversity of Europe Presents Unique Challenges,” AgriMarketing 37, no. 1 (January 1999), p. 38.17 Jeff Clark-Meads, “The Year in Europe: Union Members Confront Parallel Imports and Universes,” Billboard 107(December 23, 1995), p. YE14; Alice Rawsthorn, “Music’s ‘Big Five’ Dip Toes in Common Distribution Pool,” FinancialTimes (August 14, 1998), p. 60.Global Marketing, Sixth Edition, by Warren J. Keegan and Mark C. Green. Copyright © 2011 by Warren J. Keegan. Published by Prentice Hall.