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INTERNATIONAL MARKETING :-

Defn- 1.“ International Marketing is


multinational process of planning & executing
the conception, pricing, promotion, and
distribution of ideas, goods & services to
create exchange that satisfy individual &
organisational objectives’’
2. “Marketing carried on across national
boundaries”
3. “Performance of biz activities that directs
the flow of goods & services to consumers
/users in more than one nation”
4. “Exchanges across national boundaries for
satisfaction of human needs & wants”
The Scope and Challenge of
International Marketing

- Q: Why Study International Marketing?


- A: There is a trend toward a global
economy.

• No longer enough to look at domestic


market
• Markets across the world being sought
after by more competitors
• Explosion of international trade
• Global linkages become important
The Scope and Challenge of
International Marketing
International
Business Figure 1.2: International and
Global Marketing and Related
Fields of Study
International
Marketing International
Global Trade International
Marketing Management

International
Finance
Features :-
1.Economies of scale through volume transactions
2.Dominated by MNC’s from Developed / Industrialised countries
• Worldwide contacts
• Economic & efficient operations
• Global approach
1.Trade barriers
• Tariff barriers
• Forex regulations
• Trade blocs
1.Sensitive to changes
2.Need for research
• Policy changes, substitutes, restrictions
6. Importance of Advanced Technology
• Superior quality goods at competitive prices
• Promote exports , capture world mkts
7. Fierce competition
• Competiton betn developed & developing
countries
• Facilities, incentives for export promotion
• Competitive techniques
• Regular research
8. Support of Spl institutions
• Complicated procedures
• Requirement of professional experts
• Fund support from fin inst
STAGES OF INTERNATIONALISATION :
• It includes 5 stages :
1. DOMESTIC COMPANY-
• Limits its operations, mission, vision to national political
boundaries
• Cos focus its view on-
– domestic mkt opportunities,
– domestic suppliers,
– domestic financial cos,
– domestic customers
• Cos analyse natl environment
– Formulate strategies to exploit opportunities
– Motto is “ if its not happening in home country ,it is not happeneing”
• Never thinks of going global
• Selects diversification strategy if there’s growth beyond
capacity
2.INTERNATIONAL COMPANY.-
• Domestic cos having growth beyond
prodn & mkting capacities
• Decide to exploit opportunities outside
domestic country
• These cos remain ethnocentric
• Believe that domestic biz , people,
products are superior to others
• Focus is on domestic but extend to
foreign countries
• Select foreign mkt and extend same
domestic operations
• Most of the cos. Follow this strategy due
to-
– Ltd resources
– to learn the process of going global without
much risk
• It extends the domestic country mkting
mix & biz model & practices to foreign
countries
3. MULTINATIONAL COMPANY :
• Cos turn multinational when they start
responding to needs of different country’s
market
• Also termed as multidomestic
• Formulates different strategies for
different markets i.e ethnocentric to
polycentric
• The offeces/branches/subsidiaries work
like domestic co. in each country with
distinct policies suitable to that country
• Ex. Philips (Netherlands)
4. GLOBAL COMPANY :
• is the one having global marketing
strategy
• Either produces in home country/ single
country
• Focusses on marketing these products
globally/ produces the products globally &
mkt these products domestically
• Ex. Harley produces motor cycles in USA
& mkts globally. Dr.Reddy’s Labs
5. TRANSNATIONAL COMPANY:-
• Produces , markets, invests & operates
across the world
• Its an integrated global enterprise which
links global resources with global mkts at
profit
• There is no pure TNC
CHARACTERISTICS-
1.geocentric
2.Collect data & info worldwide regardless of
boundaries
3.Vision & aspiration are global, global mkts,
global customers
4. Analyse global opportunities regarding-
– Availability of resources
– Customers
– Mkts
– Technology
–R & D
5. Operating style-
– Globalise functions like-
• R&D
• Product development
• HRM
• Procured of high valued material
6.Adaptation : products, mkt & functional
strategies
7. Products do not require any
change,they’re an extn ex.
Calculators,lighters
8.HRM policy
9.purchasing
Drivers of International
Expansion
• Competition
• Regional Economic and
Political Integration
• Technology
• Improvements in Transportation and
Telecommunication
• Economic Growth
• Transition to Market Economy
• Converging Consumer Needs
Drivers of International
Expansion, continued
COMPETITION
• McCann Erickson, the
advertising agency,
follows longtime
client, Coke, to all
countries where
company is present
Drivers of International
Expansion, continued
REGIONAL, ECONOMIC and POLITICAL
INTEGRATION
• Regional agreements such
as NAFTA, and the European
Union lower and eliminate
barriers and promote trade
within common markets.
• Subsidiaries are established
in specific markets to take
advantage of free trade
within the region.
Drivers of International
Expansion, continued
TECHNOLOGY
• Consumers
worldwide are
exposed to similar
products, services,
and entertainment.
• The Web and the
Internet have
revolutionized the
way companies
conduct business.
Drivers of International
Expansion, continued

TRANSPORTATION and TELECOMMUNICATIONS


• Lower cost and higher
quality communication
due to satellite technology,
teleconferencing, and
e-mail
• Efficient transportation due
to containerization and just-
in-time technology
Drivers of International
Expansion, continued
ECONOMIC GROWTH

• Emerging middle class


with increasing buying
power in big emerging
markets such as Brazil
and India
• Opening of new markets
previously closed, such
as the markets of China
and Vietnam
• Emerging economies are
becoming viable trade
partners
Drivers of International
Expansion, continued
TRANSITION to a MARKET ECONOMY
• Transition of the Eastern
Bloc to a market
economy created
important new markets
• Created opportunities to
transform inefficient
government-owned local
companies into
successful enterprises
Drivers of International
Expansion, continued
CONVERGING CONSUMER NEEDS
• Uniform consumer
segments emerging
worldwide: global
teenagers, global elite
Foreign environment
(uncontrollable)

Political/legal 1 Economic
forces forces

Domestic environment
(uncontrollable)
2
7
Political/ Competitive Competitive
Cultural
legal (controllable) structure Forces
forces
forces
Price Product

3
Channels of
Promotion
distribution
6

Level of
Geography
Technology
and Economic climate
Infrastructure

4
5
Structure of
distribution
The activities in international
marketing include:
1. Detailed analysis of current markets and
potential markets;
2. Planning and development of products
that the consumers want, clearly defined in
suitable package;
3. Distribution of products through channels
which provide the services or conveniences
demanded by purchases;
The activities in international
marketing include:
4. Promotion of products to inform
and educate consumers about
products or services;
5. Setting of prices which reflect both
a reasonable value (or utility ) of
product to consumers; and
6. Technical and non-technical
services given to the consumers-both
before and after a sale is made.
What is International
Marketing
• Made up of many facets, that is levels
of involvement

– Domestic Marketing (Domestic co.)


– Export Marketing
– International Marketing
• Multi National Marketing
• Global Marketing
Domestic Marketing
• One set of Competitors
• One Economy
• One set of market pressures
• One set of Customers
Domestic Market
• Manipulate a series of variables
– Controllable by business
• Price
• Advertising
• Distribution
• Product
– Uncontrollable by business
• Economic structure
• Competitors
• Cultural
• Legal
Export Marketing
• Where the company markets its
goods or services across national or
political boundaries
• Usually a reactive situation
• Emphasis on product modification, if
required.
• Most traditional and least
complicated form of international
marketing.
International Marketing
• Entire marketing strategy will need to
be adapted.
• Understanding of different
environments becomes essential.
• Several markets
• Differing controllable variables across
markets
• Differing uncontrollable variables across
markets
International Marketing
• Giving
– Differing infrastructures
– Differing advertising/promotions
– Differing complexity of market
Why is international marketing
different
• Culture Diverse, Multi-cultured
• Markets Widespread, Fragmented,different
• Data Difficult to get, expensive
• Politics Varying stability and attitudes
• Governments Attitudes towards foreign trade
• Competitiors Varying levels
• Economies Varying levels & Systems
What makes international
marketing different

• Finance Varying systems &


regulatory bodies
• Currencies Varying & Fluctuating
• Businesses Cross Cultural Influences
• Control Remote & Difficult
SLEPT Factors
(Framework to analyse macro environment)

• S ocial & cultural values


• L egislation affecting trade
• E conomic conditions
• P olitical systems & attitudes
• T echnological level & infrastructure,
& Competition within the market
Problems of international
trade
• Debt
• Unstable countries
• Protection of intellectual rights
• Tariff regulations
• Instability in Foreign exchange
markets
• Non tariff barriers, eg specifications
international
marketing
marketing
1. Buying & selling activities
within one country
1. At global level
2. Its simple due to one
currency, ltd trade
restrictions, uniform trade 2. Difficult due to
practices, short distances multiple currencies,
3. Absence of trading blocs & trade restrictions,
trade barriers long distances etc
4. Free from lengthy
procedures & licensing & 3. Trade blocs restrict
formalities free trade
5. PEST changes impact is less 4. Involves licensing,
permissions,
lengthy procedures
5. PEST has larger
impact on intl
marketing
6. Risk is ltd due to ltd area 6. Heavy risk due to vast
of operations, political operation, sensitive nature
stability, uniform rules & of mkts, political factors
laws
7. Not highly competitive 7. Highly competitive as
different countries are in
different phases
8.Max Govt interference
8. Least Govt interference
9.Divided into foreign &
9. No division, as it is one multinatl mkting
integrated marketing
activitiy
10. Conducted in large qty
10. Conducted in small qty with high profit potentials
with ltd profit potentials
11. exporters, merchant
11. wholesalers, retailers exporters, export houses,
&trading orgn are trading houses
involved
Barriers to International
Marketing
• Control
• Language
• Red tape
• Cash flow
• Logistics
• Lack of trained staff
Levels of International
Domestic Export Marketing
Marketing International Global
Marketing Marketing Marketing

• Least • Limited • Substantial • Extensive


international international international international
commitment commitment commitment commitment
• Domestic focus • Involves direct or • Focus on • Focus on
indirect export individual countries segments, rather
or regions than countries or
• Ethnocentric regions
• Polycentric or
Regiocentric • Geocentric
Ethnocentric Orientation
• Guided by domestic market extension concept:
• Domestic strategies, techniques, and personnel
are perceived as superior
• International customers are considered as
secondary
• International markets are regarded primarily as
outlets for surplus domestic production
• International marketing plans are developed in-
house by the international division
Polycentric Orientation
• Guided by the multidomestic market concept:
• Focuses on the importance and uniqueness of each
international market
• Likely to establish businesses in each target country
• Fully decentralized, minimal coordination with
headquarters
• Marketing strategies are specific to each country
• Result: No economies of scale, duplicated functions,
higher final product costs
Regiocentric Orientation
• Guided by the global marketing concept:
• World regions that share economic,
political, and/or cultural traits are
perceived as distinct markets
• Divisions are organized based on
location
• Regional offices coordinate marketing
activities
Geocentric Orientation
• Guided by the global marketing concept:
• The world is perceived as a total market
with identifiable, homogenous segments
• Targeted marketing strategies aimed at
market segments, rather than
geographic locations
• Achieve position as low-cost
manufacturer and marketer of product
line
• Provides standardized product or service
throughout the world
Five International Product
and Promotion Strategies

Product
Do not change Adapt Develop new
product product product
Do not change
Promotion

promotion
Straight Product
extension adaptation

Product
invention

Communi- Dual
Adapt cation adaptation
promotion adaptation

03/09/98
Market Entry Strategies
• Exporting • Joint venture
– Low investment – Considerable investment
– Low control of – More control
promotion – Able to benefit from
• Licensing partner’s experience
– Must work with partner
– Low investment
– Low control of • Direct investment
promotion, positioning, – Large investment
and quality – Risky
– Able to benefit from – Greater control
existing distribution and – May lack knowledge of
market knowledge market

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