INTERNATIONAL MARKETING AND EXPORTING

CHAPTER 1

The importance of international marketing

Lower barriers to trade Improvements in transportation

Entrepreneurial and technological innovation

Excess capacity Expansion of world trade

Factors leading to internationalization

HOME COUNTRY FACTORS Smallness Openness Location Domestic push HOST COUNTRY MARKET FACTORS Openness Largeness International pull

The nature of international marketing

Marketing of goods and services and information across national boundries PLANNING, PROMOTION, DISTRIBUTION, PRICING AND SUPPORT OF THE GOODS AND SERVICES AND INFORMATION TO BE PROVIDED TO INTERMEDIATE AND ULTIMATE CUSTOMERS

INTERNATIONALIZATION
International ~ marketing activity that is carried out across national boundries Multi-national ~ treat each foreign market separately, developing differentiated products and marketing strategies specifically for each of the markets (ethnocentric, polycentric, geocentric)

Global~ selling the same product in the same way all over the world E.g. automotive industry, internet

Complexities of Export Marketing

 The customer profile in the foreign market is often very different from that of the customer in the domestic market, particularly in the areas of language, religion, ideology, living standards and fashion Different and unfamiliar cultural, economic, legal, social and political systems may be encountered in foreign markets Foreign markets represent unfamiliar environments There are greater complexities associated with payment, distribution, transport and insurance

 The role of documentation assumes added importance to prevent misunderstanding and costly litigation
There are new parameters that the exporter will need to take into consideration, such as import duties as well as legal restrictions, different modes of transport, international trade documentation, foreign currencies, and different and additional marketing channels

 There is generally more extensive use made of the fax and e-mail than the telephone and when these are used, different time zones and different languages have to be considered Operating in foreign markets exposes the exporter to far wider and more intense competition than would be the case in the domestic market Exchange rates, and in some cases exchange control regulations, are applicable

 Goods are subject to customs control and the payment of import duty (where applicable) A number of technical and administrative regulations may apply to exports - legal requirements in certain foreign markets in respect of the technical specifications of a product, that call for changes to be made before the product may be imported

Degree of internationalization
Indicators that show the level of internationalization of a particular firm ~ based upon the relationship between its structure, evolution, organizational, product and attitudinal characteristics of international expansion

 There are a number of strategies through which a company can plan its entry into an international market ~ licensing, exporting, sales subsidiary, production subsidiary, joint venture. SMEs and large businesses differ in terms of international operations

International Marketing management

Major Dimesions of International marketing:~ Exporting Importing Management of international operations Three basic decisions with international marketing management:~ Whether to serve international markets Which markets to serve How to serve these markets ( 4 Ps)

 International marketing management involves the management of marketing not only to but also in foreign countries ~ what entry mode the company plans to choose
Market driven marketing approach creating a market rather than controlling it. Product / technology driven less concern among competitors about consumers or market share than product performance

Marketing program for international markets

Controllable factors:~ (FIRM SPECIFIC) Firms export marketing mix (price, promotion, product, product modification, export structure, credit, channel) Uncontrollable factors:~ Size, export competitiveness, export experience, export products, export volume

Domestic environments and foreign environments(UNCONTROLLABLE) political forces, cultural forces, geography and infrastructure, distribution structure, technology, competition, economic forces

Factors in domestic and foreign environment

LEGAL POLITICAL SYSTEM CURRENCY CLIMATE

Export marketing planning process

Export marketing strategy and Planning

1) Identifying and measuring oppurtunity:a) b) c) d) Preliminary screening Estimating market potentials Estimating sales Segmenting the market

2) Developing an export marketing strategy: a) Setting export objectives b) Planning the marketing mix( 4 Ps) 3) Marketing Export Strategy operational: a) Sales forecast b) Sales budget c) Sales quotas d) Production schedules e) Inventory control f) Labour requirements g) Promotional, financial and profit budgets

Demand Management
Marketing may need to be concerned with managing rather than just stimulating demand: environmental, legal, supply, and other concerns. States of demand: negative, none, latent, falling, irregular, full, overfull (excess demand for oil during the oil crisis), unwholesome (vice products).

Obstacles to exporting
Obstacles may be real or only perceived, but perceptions guide actions. Barriers affecting many companies, particularly smaller ones, include: higher operational efforts required for foreign market, lack of information, lack of knowledge and skills, trade barriers, risk, and others Coping with barriers for smaller companies

The Internet, WWB and E-Business

All aspects of domestic and international business operations have been impacted by the Internet, the World Wide Web and Ebusiness. Internet provides greatly increased speed and lowered costs in communications. World Wide Web, operating over the Internet, is an easily used system for providing constantly available displays of information

Impact of Technology
international markets, and lowered costs of doing business. Development and marketing of software to support e-business has become a major international industry. New products have resulted from major advances in communications technology, medical research and medicines, and traditional products and manufacturing processes. Improvements in shipping equipment and the applications of information technology in scheduling and control have reduced costs.

Entrepreneurial approaches to international marketing

E-business software allows companies to handle key functions in a coherent on-line system: supply chain and distribution chain management; ordering, billing, and inventory management; analyses of sales and trends; etc. Specific software is available to support Customer Relations Management (CRM) programs.

 Online marketplaces The virtual company

Business-government alliances

The growth of non-traditional exports

EXPORTING SERVICES OF KNOWLEDGE INDUSTRY WORKERS Greatly increased capabilities and lowered cost in communications have enabled crossborder export of information services Companies in lower-wage nations employ well educated people in providing services ranging from call centers and back office support to advanced technical support, software development, and design services.