International Marketing and Sales
International Marketing and Sales tests whether you can adapt the marketing mix to a foreign market without losing the brand's core proposition, and whether you can price a product through the full export chain. Expect questions on standardisation versus adaptation, price escalation, channel design, and agent versus distributor selling.
Product and promotion decisions
- Mandatory adaptation: regulation, technical standards, safety, voltage, labelling language, packaging and recycling rules.
- Voluntary adaptation: colour, taste, size, usage occasion, and cultural symbolism.
- Promotion issues: media availability, advertising regulation, literacy, language (use back-translation), imagery, and religious or political sensitivity. Trade fairs, trade missions, and digital marketplaces are common low-cost entry vehicles for sales.
Pricing across borders
Price escalation is the core calculation: ex-works price plus freight and insurance, plus duty, plus import taxes, plus distributor and retailer margins. Other concepts: cost-plus versus market-based pricing, transfer pricing at arm's length, grey-market and parallel imports, and dumping (selling below normal value in the importing market).
Worked example
Ex-works price USD 100; freight and insurance 15 → CIF 115. Duty 10% on CIF = 11.50 → 126.50. VAT 20% on 126.50 = 25.30 → 151.80. Importer margin 25% on landed cost = 37.95 → 189.75. The consumer pays nearly 90% above the ex-works price. Reasoning point: every 1% of freight or duty is amplified by every downstream margin, so reducing freight or securing preferential origin cuts retail price disproportionately. Note also that VAT is usually recoverable for a registered business, so it should not be treated as a permanent cost in margin analysis.
Channel and sales management
Channel length, exclusivity, and coverage (intensive, selective, exclusive) must match the buying behaviour and the firm's control needs. Sales management covers territory design, commission structures, sales targets, and channel conflict between online and offline partners.
Traps that cost marks
- Quoting an ex-works price as if it were the landed cost.
- Treating recoverable VAT as an absolute cost.
- Literal translation of slogans and brand names.
- Assuming a global brand requires identical marketing everywhere.
- Pricing below cost in the export market and triggering anti-dumping action.
- Giving an exclusive territory without performance clauses.