When marketers promote their products in foreign markets translation of advertisements is sufficient for effective communication with the consumers a true b false?

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Pricing U.S. Products for Export
Pricing Considerations
Key Elements of Pricing Analysis
Foreign Market Objectives 
Costs 
Market Demand 
Competition 
Pricing Summary
Learn More
Gender stereotyping
Slang and idioms
Graphic prints
Brand and printed packaging
Getting cultural sensitivity right

Pricing can be the most challenging due to different market forces and pricing structures around the world. What determines a successful export pricing strategy? The key elements include assessing your company’s foreign market objectives, product-related costs, market demand, and competition. Other factors to consider are transportation, taxes and duties, sales commissions, insurance, and financing.

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Pricing U.S. Products for Export

As in the domestic market, the price at which a product or service is sold directly determines your company’s revenues. Your firm’s market research should include an evaluation of all variables that may affect the price range for your product or service. If your company’s price is too high, the product or service will not sell. If the price is too low, export activities may not be sufficiently profitable or may actually create a net loss.   

Traditional components for determining proper pricing are costs, market demand, and competition. Each component must be compared with your company’s objective in entering the foreign market. An analysis of each component from an export perspective may result in export prices that are different from domestic prices. 
There are additional costs that are typically borne by the importer. These include tariffs, customs fees, currency fluctuation, transaction costs (including shipping), and value-added taxes (VATs). These costs can add substantially to the final price paid by the importer, sometimes resulting in a total that is more than double the price charged in the United States. U.S. products often compete better on quality, reputation, and service than they do on price—but buyers consider the whole package.

Pricing Considerations

As you develop your export pricing strategy, these considerations will help determine the best price for your product overseas:

What type of market positioning (i.e., customer perception) does your company want to convey from its pricing structure?
Does the export price reflect your product’s quality?
Is the price competitive?
What type of discount (e.g., trade, cash, quantity) and allowances (e.g., advertising, trade-offs) should your company offer its foreign customers?
Should prices differ by market segment?
What should your company do about product-line pricing?
What pricing options are available if your company’s costs increase or decrease?
Is the demand in the foreign market elastic or inelastic?
Is the foreign government going to view your prices as reasonable or exploitative?
Do the foreign country’s antidumping laws pose a problem?

Key Elements of Pricing Analysis

Foreign Market Objectives 

An important aspect of your company’s pricing analysis is the determination of market objectives. For example, is your company attempting to penetrate a new market, seeking long-term market growth, or looking for an outlet for surplus production or outmoded products? Marketing and pricing objectives may be generalized or tailored to particular foreign markets. For example, marketing objectives for sales to a developing nation, where per capita income may be one-tenth of that in the United States, necessarily differ from marketing objectives for sales to Europe or Japan.

Costs 

The actual cost of producing a product and bringing it to market is key to determining if exporting is financially viable. 

Cost-plus method is when the exporter starts with the domestic manufacturing cost and adds administration, research and development, overhead, freight forwarding, distributor margins, customs charges, and profit. However, the effect of this pricing approach may be that the export price escalates into an uncompetitive range once exporting costs have been included. 
Marginal cost pricing is a more competitive method of pricing a product for market entry. This method considers the direct out-of-pocket expenses of producing and selling products for export as a floor beneath which prices cannot be set without incurring a loss. For example, additional costs may occur because of product modification for the export market. Costs may decrease, however, if the export products are stripped-down versions or made without increasing the fixed costs of domestic production.
Other costs should be assessed for domestic and export products according to how much benefit each product receives from such expenditures, and may include: 
Fees for market research and credit checks 
Business travel expenses 
International postage and telephone rates 
Translation costs 
Commissions, training charges, and other costs associated with foreign representatives 
Consultant and freight forwarder fees 
Product modification and special packaging costs

After the actual cost of the export product has been calculated, you should formulate an approximate consumer price for the foreign market. 

Market Demand 

For most consumer goods, per capita income is a good gauge of a market’s ability to pay. Some products (for example, popular U.S. fashion labels) create such a strong demand that even low per capita income will not affect their selling price. Simplifying the product to reduce its selling price may be an answer for your company in markets with low per capita income. Your company must also keep in mind that currency fluctuations may alter the affordability of its goods.  

Competition 

In the domestic market, U.S. companies carefully evaluate their competitors’ pricing policies. You will also need to evaluate competitor’s prices in each potential export market. If there are many competitors within the foreign market, you may have to match the market price or even underprice the product or service for the sake of establishing a market share. If the product or service is new to a particular foreign market, however, it may actually be possible to set a higher price than is feasible in the domestic market.

Pricing Summary

 It’s important to remember several key points when determining your product’s price:

Determine the objective in the foreign market.
Compute the actual cost of the export product.
Compute the final consumer price.
Evaluate market demand and competition.
Consider modifying the product to reduce the export price.
Include “non-market” costs, such as tariffs and customs fees.
Exclude cost elements that provide no benefit to the export function, such as domestic advertising.

Learn More

Find the latest country-specific pricing information in the Country Commercial Guides by viewing the ”Selling U.S. Products and Services” chapters.

While language is the carrier of culture, we also can’t forget the impact of the internet over the last 15 years. Not only does it reflect culture back at us, it also has the ability to change culture at a global level as we move into a digital future.

Ecommerce has vastly changed the way we purchased goods and services, and social media has a made significant impact in the way brands communicate with their customers. Misunderstand the cultural needs of a new market, and it can have a negative impact on how your product or service is received.

“Brands that are serious about engaging with consumers in foreign markets need to offer a more culturally relevant connection with their audience.”

That’s a statement found in a study commissioned by CMO Council, which looked at how successful global brands – including PepsiCo, Visa and Johnson & Johnson – use cultural sensitivity in order to stand out from the crowd, add value to their brand and remain relevant to their international customers.

Cultural sensitivity is the awareness of specific cultural factors that can influence research. For brands, it requires marketing teams to be aware of local cultural nuances and develop appropriate messaging that engages their target audience. If you’re embarking on a localisation project for the first time, cultural sensitivity will definitely need to be taken into consideration before you approach a language service provider.

But what are some of the key issues brands should take into account when adopting cultural sensitivity into international marketing campaigns or launching products into a new market?

Gender stereotyping

In Western markets, navigating away from gender stereotypes is probably one of the most common trends that brands are adopting when engaging with consumers. Marketers are beginning to realise that modern 21st-century consumers live more diverse, nuanced lives and aren’t necessarily governed by the traditional gender roles of the past.

In 2016, Unilever called for brands to consider the way they portray men, women and children in advertising. Based on multiple research studies in 25 markets over two years, the British-Dutch FMCG company revealed that 50% of ads showed a negative or “not progressive” stereotype of women and only 3% depicted them in managerial or professional roles.

Furthermore, it urged brands to do better when marketing products and services to consumers and a year later, brands including Facebook, Google and Alibaba joined Unilever by joining the Unstereotype Alliance.

But this isn’t the first time Unilever has attempted to tackle old-fashioned depictions of women when marketing its products to consumers.

In 2004, Dove launched its Campaign for Real Beauty to celebrate body positivity. The initial campaign was led by a striking image featuring a group of women with different body types and skin tones in their underwear – none of whom were professional models.

The Dove Campaign for Real Beauty is a worldwide marketing campaign launched by Unilever in 2004.

Although controversial at the time, the campaign followed up with headshot images of older women with captions such as “Will society ever accept ‘old’ as beautiful?”, promoting people to join an online debate on the brand’s website.

The campaign is still ongoing and has evolved into multiple, global TV and online campaigns, workshops, sleepover events, a book and even the production of a play. It’s considered one of modern marketing’s most talked-about success stories.

Brands in the fashion and beauty industry are also taking a leaf out of Unilever’s book by taking their marketing strategies into a new direction when engaging with younger audiences. A new athleisure campaign by ASOS titled, More Reasons to Move, featured women taking the lead in sports that are usually associated with men, including football and boxing.

There’s also been a keen focus on moving away from marketing toys directly to boys and girls as conversations around gender-related issues become common among younger generations, parents and the LGBTQ+ community.

As a result, a gender-neutral approach to marketing children’s toys is preferred in Western markets and is commonly seen on eCommerce sites such as Amazon. Countries including Sweden, Australia and the Netherlands have also all backed gender neutrality campaigns in recent years.

Slang and idioms

When localising your content, it’s always important to pay close attention to words and phrases that are solely associated with your own culture.

Idioms may work well in engaging a particular group in your own country, but localising colloquial phrases across languages and cultures may not elicit the same response. In some cases, you may even offend potential customers in the market you’re targeting.

Some linguists suggest that idioms are the most difficult items to translate in a localisation project. That’s not surprising when you consider that idioms tend not to have the same or equivalent translation in other languages. Some localised phrases also tend to convey imagery that simply doesn’t fit the culture of the target market.

If uncertain, keep idioms to a minimum or avoid using them altogether.

Slang can also be troublesome when localising your content. These words are difficult to interpret in other languages as they are unique to individual cultures.

Even marketing products across countries that speak the same language could get you into trouble. Words such as ‘peckish’, ‘quid’ or ‘faff’, commonly spoken by English speakers in the UK, may be rendered meaningless by natives of the US, Canada or Australia. Localising words like these into an entirely different language could also spell disaster for your campaign in non-English speaking markets.

When tackling slang and idioms, try to work with native speakers of your target market or partner with a reputable language service provider with native, in-country linguists with Transcreation expertise who are best equipped to navigate the murky waters of cultural adaptation.

Graphic prints

Similarly, photos, images, icons and logos can convey meanings that you may not have intended. From high street brands including Topshop and River Island to established fashion houses such as House of Holland, graphic prints featured on apparel and accessories is back on trend.

It’s best to take a prudent approach when choosing imagery for your products to ensure you don’t cause offence to customers in international markets.

Keep clear of controversial images, religious symbols or iconography, and take the time to study your market ahead of designing products for international audiences.

American retailer, Gap, recently had to apologise after it released a T-shirt showing the incorrect map of China. The apology was announced after a comment surfaced on social media claiming that Chinese-claimed territories, including south Tibet, the island of Taiwan and the South China Sea were omitted from the print.

Gap opened its first store in China in 2010 now has more than 300 stores in Asia

While the US retailer had to pull the product from the Chinese market, what’s interesting about this case is that the comment came from a Chinese Weibo user commenting on a picture of the T-shirt in a Canadian store. It’s a clear example that brands can still get into trouble in territories close to home when using images that don’t necessarily relate to their own culture.

There have also been multiple cases of fashion designers travelling to countries in East Asia to photograph street art to include in their new designs. Unbeknown to them, the text translated in their designs contained racist or sexual content. If you aren’t able to translate symbols or text from other cultures it would be wise to have them checked by a native speaker of the target language.

Brand and printed packaging

Product packaging not only plays a vital role in how your product stands out from your competitors but also how your brand is perceived – especially when you launch new products internationally.

When Pampers first launched its nappy brand in Japan, the company continued to use an image of a stork carrying a used nappy in its beak in its packaging and campaign imagery.

Although the myth of storks delivering babies to new parents is quite common in the UK and the US, Japanese culture depicts the myth as a floating giant peach delivering newborn to its parents.

A depiction of Momotarō, a popular hero of Japanese folklore originating from Okayama Prefecture, in which came to Earth inside a giant peach. Image credit: Kamishibai.com

Although the campaign made its mark in the Japanese market, it wasn’t for the right reasons – consumers in Japan found the Pampers packaging extremely confusing.

In the beauty industry, packaging of products aimed at younger customers often have implicit references towards sexuality or sex appeal. It would be wise you err on the side of caution when launching the same products in countries that may deem such packaging inappropriate.

While research suggests that attitudes towards overt notions of sex appeal in advertisements in Asian markets are changing, its important that brands conduct the necessary cultural sensitivity checks to understand how different cultures respond to certain imagery, ideas and symbols. Even particular fonts and colours can trigger an unfavoured response to your brand in certain markets.

Getting cultural sensitivity right

If you want your product or service to be successful internationally, implementing a cultural sensitivity strategy within your wider marketing objectives – in each market – will allow your brand to stand out from the crowd and remain competitive.

When Gillette made the bold move to market its brand of 48-hour deodorant to the Orthodox Jewish community, who traditional don’t shave and were unaware of brand, it made the intuitive decision to work directly with the Jewish community in Israel.

During the 24-hour Sabbath, Orthodox Jews are prohibited from doing anything that’s considered work – even applying deodorant. This, of course, can make praying in packed synagogues during a 24-hour period quite uncomfortable.

In order to target this particular community with its 48-hour deodorant, the Proctor and Gamble-owned brand devised a dynamic and interactive ad campaign months before the 24-hour Sabbath.

This included partnering with synagogues and providing synagogue members with test products, running print ads in the most popular community publications and sponsoring the popular candle lighting schedules that appear on the front page of newspapers read by Gillette’s target audience.

Furthermore, the brand secured the last radio advertisement just minutes before the Sabbath began. As a result, Gillette increased its share of the Orthodox market in Israel alone from 3% to 15% in just two months.

If you intend to market your brand to different cultures, a copy-and-paste approach to your brand message or marketing campaign will pose significant challenges.

The devil is in the detail. Applying cultural sensitivity to your wider marketing strategy will ensure that you can effectively market your product in new territories, leverage your brand against foreign competitors and foster brand loyalty with local customers.