Question

1. Explain the effect of counterfeit goods and black markets on international product strategies.

2. Explain the factors that determine whether the push or the pull strategy is appropriate in a given marketing environment.

Answer 1

PART 1-

A counterfeit good is one that closely resembles to another product in order to influence customers into buying. The business of counterfeit products is one of the largest underground industries in the world and it is continuously growing. They have cheap overheads and high profits which implies these global black-market industries are here to stay.

They create hurdle in between the international product strategies as they are identical to orignal goods but are available at a very cheap rate. These products adversely affect the International costing strategies of the company. Another strategy which is affected the most is Product differentiation strategy as these products are identical to the orignal goods of the company.

They cause businesses to experience an increase in costs, as well as loss of productivity. Most importantly, counterfeits can negatively impact a company's reputation and cost millions.

The best way to stop the manufacturing of imitated products is to inform consumers of the potential harm these products pose to the economy. If people refuse to purchase to these products, these industries will suffer economically and ultimately disappear.

PART 2-

Push and pull marketing strategy differ in the way they approach the customers.

Under Push marketing, specific product is promoted to an audience which the company finds relevant.

Pull marketing implies that the company implement a strategy that will draw consumers towards the company’s products. This strategy often creates loyal customers or followers. Social media is considered a “push” channel, whereas search engines and databases like Google, Bing, Youtube, etc. comes under “pull” category.

Companies use push marketing in the following scenarios-

• At the time of launch of new product
• When operating in a niche market

In both the above-mentioned cases, it is tough to reach the target audience without any “push” marketing efforts. Thus, companies resort to following push marketing strategies.

Pull strategy is used when customers know what they are looking for, and they often look for the benefits themselves. In this case, the customer engages much more with the product during pre-purchase and goes out and searches the relevant information actively. Companies will use pull marketing strategy in the following scenario –

• When the user knows what he or she is looking for
• When branding is of great importance

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