INTERNATIONAL MARKETING

( MODULE 1 )
BY S.SURYANARAYANAN

DEFINITION

- International marketing is the process of planning and conducting

transactions across national borders to create exchanges that satisfy the objectives of individuals and organizations

- International marketing focuses its resources on global market opportunities and threats (Keegan and Green) Marketing in an internationally competitive environment, no matter whether the market is home or foreign.

similarities and differences between international marketing and domestic marketing

Similarities: basic concepts, practices and tools are almost identical, key success factors are the same Differences: more strategic, more variables, more complex, cultural differences, legal constraints, information sources, managing distances, entry mode choice

DRIVING FORCES

TECHNOLOGY---like telecom

REGIONAL ECNOMIC AGREEMENTS---WTO,NAFA,EU

MARKET NEEDS AND WANTSconverging of needs around the world. TRANSPORTATION AND COMMUNICATION IMPROVEMENTS time and cost barriers due to distance fallen. PRODUCT DEVELOPMENT COSTSnew drugs development

DRIVING FORCEScontd.

QUALITY competition and uniformity in quality

WORLD ECONOMIC TRENDS1.growth and opportunity 2.low resistance from domestic business 3.liberisation and privatization.
LEVERAGES1.experience transfers 2.scale of economies 3 resource utilisation 4. global strategy

RESTRAINING FORCES

MANAGEMNT MYOPIAignores market opportunities

ORGANISATION CULTUREvision,mission,direction
NATIONAL CONTROLS AND BARRIERSgovt.policies and controls

DIFFERENT STAGES OF INTERNATIONAL MARKETING

Domestic

Export stage
International marketing stage Multi national stage Global marketing stage

MANAGEMENT ORIENTATION

Ethnocentric: everything is centered on the domestic market.

Polycentric: several important foreign markets exist.

Regiocentric: the market is composed of several large economic regions. Geocentric: the world is one large global market.

INTERNATIONAL TRADE THEORIES

Mercantilism-----the trade theory that states that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports is called mercantilism. Absolute Advantage----A country that has an absolute advantage produces greater output of a good or service than other countries using the same amount of resources. Comparative Advantage----The principle of comparative
advantage states that a country should specialise in producing and exporting those products in which is has a comparative, or relative cost, advantage compared with other countries and should import those goods in which it has a comparative disadvantage.

INTERNATIONAL TRADE THEORIEScontd

Heckscher-Ohlin Theory (factor proportions theory)-----The Heckscher-Ohlin theory stresses that countries should produce and export goods that require resources (factors) that are abundant and import goods that require resources in short supply.

Product Life Cycle Theory------The international product life cycle theory stresses that a company will begin to export its product and later take on foreign direct investment as the product moves through its life cycle.

BALANCE OF PAYMENTS

A countrys balance of payments is commonly defined as the record of transactions between its residents and foreign residents over a specified period. CAPITAL ACCOUNT SURPLUS/DEFICIT CURRENT ACCOUNT SURPLUS/DEFICIT CURRENCY CONVERTIBILITY

References: 1.International Marketinganalysis and strategy by Sak Onkvisit and John Shaw 2.International Marketing by Francis Cherunilam 3.Global Marketing Management by Warren J Keegan and Naval K Bhargava