Are the 4 P's of international marketing of equal importance to all firms? What factors might cause some to more or less important than others?

ingredients a company can use to achieve its objectives. (Lancaster and Massingham, 1995)

In order to answer the questions: “Are the 4 P´s of international marketing of equal importance to all firms? What factors might cause some to be more or less important than others?” the following explanations will be helpful.

The product is the basis or the foundation of the marketing mix because with no article there is nothing to promote, to price and to distribute. It means the totality of goods and services that the company offers to the target market and which are delivered to the consumer. “The actual product is that which gives satisfaction to the consumer, fulfilling the overall aim of marketing.” (Lancaster and Reynolds, 1995, p. 93) Without a product the marketing mix is a meaningless tool. All marketing planning is based on the product and must start from it. If the product is weak, it will not survive. Therefore companies must use new products as a mean towards market leadership, rather than market imitation. (Lancaster and Massingham, 1999) The aim of product policy is to offer a product or a service which has a Unique Selling Proposition (USP) in order to push out competitors.

Product policy is divided into product mix and product policy in the narrow sense. The product mix deals with number of the company’s product lines (width) and the different kinds and variations within these special lines (length). One good example for describing this fact is the company Melitta. The range exists of things which deal with coffee (Melitta), for example coffee machines, coffee filter, coffee beans, all things which deal with tea (Cilia), cleanliness (Swirl), freezer bags (Toppits) and better living conditions (Aclimat).

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Typical decisions concerning product mix are product innovation or product changes. These depend on turnover, profit and the present market position. (Lecture, Tourism Marketing, Merkur Academy, Bentele, Dr.B., 2004/2005).

Product policy in the narrow sense deals with product design, brand policy, service policy and packaging. Product design covers the quality, style and supplementary functions of the individual product, brand policy decides whether a product should be offered as a no-name or proprietary article. Within the framework of packaging, design decisions concerning wrapping are made. Through the years it became more and more important because of the rising environmental consciousness of the consumer.

Especially the packaging of exclusive goods like watches is important because it reflects prestige and image.

The last point is service policy which includes special services like delivery franco domicile, extended guarantees or vouchers.

Price is a particularly potent element of the marketing mix because of its direct impact on the consumer, the company and the economy. To the consumer, price is a major indication of quality and an important factor in the decision-making process. “For the company, the price at which a product or service is sold represents the sole means of recouping costs and making a profit.” (Lancaster and Reynolds, 1995, p. 46)) When introducing new products, the company has to develop pricing strategies. The two basic ones are the skimming and the penetration strategy.

The skimming strategy means that a company introduces a product at a high price to a small section of consumers (the early adopters). (Lancaster and Massingham, 1999) This strategy is recommendable for new technologies or innovations and if the product is unusually distinctive and demand is inelastic. The price will be lowered at successive stages when the product achieves larger sales.

The penetration strategy means that a product is introduced at a low price to attract the largest number of new buyers as soon as possible. The aim of the company is to gain a high market-share and to deter competitors.

In order to set a price the company has to inform itself about demand, costs, competitors and substitute products. After that, the company is able to choose the right strategy in order to determine the best price.

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Another important fact concerning price is the condition policy. It includes credit conditions, for example leasing, discounts such as price reductions, and terms of payment and delivery.

Pricing decisions are said to be simple. If the company knows the costs of producing and marketing a product, it is easy to calculate the selling price and to change it if market conditions vary. (Lancaster and Massingham, 1999, p. 239) However, buyer and seller have different attitudes concerning the price of a product or service. For many people price is often an indicator of quality but if there are two equal products, consumers tend to buy the cheaper ones.

“Place includes company activities that make the product available to target consumers.” (Kotler, Armstrong, Saunders, Wong, 1996, p. 96) The channel that a company uses to get its products to its customers is an important part of the marketing mix and can contribute to the customer’s perception of the quality and value that the product provides. (CIM Companion, 2002) Companies differentiate between direct distribution that means that they sell their goods directly to the final user, for example mail order catalogues or sales via internet and the selling through a series of intermediaries or middlemen, for example wholesaler or retailer who perform a variety of functions.

Producer →Consumer

Producer →Wholesaler →Customer Producer →Wholesaler →Retailer →Consumer (Lancaster and Massingham, 1999, p. 261)

The distribution chain has a number of advantages, for example costs of transport, storage and stock levels are reduced or the sheer number of transactions that must be made is dramatically reduced. (Lancaster and Reynolds, 1995) Companies within the distribution chain depend on each other in order to meet the objectives and to satisfy customer needs. What kind of distribution channel a company should use depends on different factors. There are always advantages and disadvantages. Using the direct route to the customer, the company does not have to pay any commission for salesmen and it can ensure a high qualified consultation. The disadvantage is that the company needs enough capital in order to sell the goods all over the country. Using distribution channels the company has to pay

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