Starbucks succeeded in Asia specifically because it did not market the same way that it did in North America. Cultural differences made it difficult to market their primary product (coffee), so they shifted focus to their secondary product (the casual "third place"), something that is in high demand in Asia's densely populated cities and Asia's communal culture (Chang, 2010). Had Starbucks stuck with its focus on coffee, the message would have been lost on tea-drinking Asian consumers. The notion that products can be marketed the same all the world over is a fanciful one. Even the world's most ubiquitous companies tailor their products, their distribution and their promotional strategies to the local conditions. The brand may be the same, but the marketing behind the brand is often very different.

4. There are a number of costs beyond the domestic price that must be considered when marketing abroad, including product-related costs, transportation costs, marketing costs and financial costs. The first set of costs is product-related. These include modifications to the product to meet the needs or standards of the foreign country.

Once the product is ready to go, there are a range of transportation related costs. These include shipping to the international market, insurance, customs brokerage fees, duties and tariffs. Lastly, there are transportation and distribution costs within the foreign country to bring the goods to market.

A third set of costs includes marketing costs. This includes not only the basic costs associated with developing a marketing program, but other costs as well. Special packaging must be developed. The local market must be studied and segmented. Executives from the company will need to travel to the new market in order to build the infrastructure required to bring the product to market as well (UNZCO, 1999).

Lastly, there are costs related to currency exchange (unless the export takes place within a currency bloc). These include transaction risk costs, hedging costs and the financial impact of currency translation back to the home country financial statements. These can work in the company's favor, but management should assume that they will not, and therefore will be costs.

5. Building international distribution...

The structure of the distribution network in an international market will be dictated in part by decisions regarding the product and how it is to be marketed and in part by the local market conditions.
The company must first decide if it wishes to use an established local distribution provider or if it wishes to handle distribution itself. The latter is more costly, and has a much steeper learning curve, but gives the company more control. When Yum Brands (Pizza Hut, KFC) went into China, they handled their own distribution because they viewed it as a critical source of competitive advantage (Rong, 2004). Likewise, Wal-Mart implemented their in-house distribution system in Canada and Mexico. However, many firms find it easier to use established distribution networks for their products. Once this decision has been made, the remaining decisions are primarily operational in nature.

International marketing environmental elements will often have a strong influence on the distribution channel decisions. The competitiveness of the local market, for example, could mean that existing channels will ignore your product, necessitating going alone. The strength of local distribution channels may be insufficient, as was the case for Yum in China. Conversely, the learning curve for self-distribution might be too great, meaning that the best path to market is through an established distributor. The international marketing elements will be a major contributing factor in the decision-making process with respect to distribution channels in international markets.

Works Cited:

Johnson, J. & Arunthanes, W. (1995). Ideal and actual product adaptation in U.S. exporting firms: market-related determinants and impacts on performance. International Marketing Review. Vol. 12, 3, 31-46.

Chang, D (2010). In Asia, marketing 101 doesn't work. Harvard Business Review. Retrieved February 14, 2010 from http://blogs.hbr.org/cs/2010/02/in_asia_marketing-101-doesnt-work.html

No author. (1999). Pricing, quotations and terms. UNZCO. Retrieved February 14, 2010 from http://www.unzco.com/basicguide/c11.html

Rong, C. (2004). Feeding a behemoth. Far East Economic Review. ISSN: 0014-7591