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marketing policies. Finally the firm is assured of market access in that country in case the host country government starts insisting on locally produced content. The primary disadvantage of FDI is that if the government changes hands you may be stuck with a large investment with exposure to issues like blocked or devalued currencies, terrible markets or even expropriation. Of these risks the most likely to happen is currency fluctuations which can impact overall corporate profitability a great deal.
ADOPTING THE INTERNATIONAL MARKETING PROGRAMME
There is one simple diagram which captures a central issue in inter- national marketing (see Figure 10.1). This figure captures a key tension in international marketing, how much do we leave the product unchanged versus how much do we adapt for local tastes? If we change any part of the marketing mix it causes additional expense, this is captured on the X-axis. So we argue for a one product, one promotion, one price, etc., world. The advantages are manifold: economies of scale in production and distribution, and lower marketing costs because we use one ad for the world are just two. Consistency in brand image is critical because we live in a world that watches each other’s television and travels to each other’s countries. Another benefit is the ability to lever good ideas quickly and efficiently across lead markets.
However, the reality is that foreign cultures are often different from our own, so we must adjust the marketing mix in order to
figure 10.1 Communications adaptation model
Do not change communications
Adapt communications
Do not change product
Straight extension
Communication adaption
Product
Adapt product
Product adaption
Dual adaption
Develop new product
Product invention
Communications