international marketing session 1

8/3/2019 International Marketing Session 1

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Session 1

International Marketing


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What is International Marketing Marketing of goods and services across national

frontiers

It is an approach of a company with truly globaloutlook, seeking its profit impartially around theworld, on a planned and systematic basis.

It is the marketing function of multinationalcompanies


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Factors affecting InternationalMarketing

Trade

practicesFacilities Distance

Culture Economy Law


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Significance Profit Motive

Domestic Market constraint

Competition

Government Policies Monopoly Power

Spin off benefits


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Complexities Market differences

Management myopia

Trade barriers

Organization culture Social Structures and customs

Values and attitudes

Technological factors

Economic and competitive factors

Political legal factors


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International Marketing & DomesticMarketing - Similarities

1. Both in domestic marketing and internationalmarketing success depend upon satisfying the basicrequirements of consumers. This necessarilyinvolves finding out what the buyers want andmeeting their needs accordingly

2. It is necessary to build goodwill both in the domesticmarket and international market. If a firm is able todevelop goodwill of consumers or customers, its

tasks will be simpler than the one, which has notbeen able to do so.

3. Research and development for productdevelopment and modification is necessary both forinternational marketing and domestic marketing.


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International Mktg Vs Domestic Mktg

1. Sovereign Political Entities:Each country has a sovereign political entityand Goods andservices has to move acrossnational boundaries. As a result, they may

have to face a number of restrictions. This mayfall in any of the following categories;

Tariffs and customs duties

Quantitative restrictions

Exchange controls

Local Taxes.


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International v/s Domestic

2. Different Legal Systems:Each country has its own legal system and itdiffers fromcountry to country. The existenceof different legal systems makes the task of

businessmen more difficult as they are notsure as to which particular system will applyto their transactions. In the case of domesticmarketing the buyers are aware of the legal

systems in their country.


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3. Cultural Differences: In domestic marketing thereis only one nation, common language and culture

where as at international marketing many

languages and different cultures.

4. Different Monetary Systems: Each country has its

own monetary system and the exchange value of

each country's currency is different from that of the

other. The exchange rates between currencies

fluctuate every day. In case of domestic marketing

there is only one currency prevailing in the country.


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5. Differences in the Marketing infrastructure:

The availability of the marketing facilities

available in different countries may vary

widely.

For example, an advertisement medium very

effective in one market may not be available

or may be under developed in another market.

6. Trade Restrictions:Trade restrictions, particularly import controls

are a very important problem which an

international marketer faces.


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International v/s Domestic8. Procedures and Documentations:

Each country has its own procedures and documentaryrequirements and traders have to comply with these regulationsif they want to export or import goods from foreign countries.

9. Degree of Risk: There is a greater degree of risk involved in

international marketing than in domestic marketing due toLarge volume of transactions

Higher value of transaction

Longer time period

More time of transit

Longer credit periodComparatively less knowledge

Exchange fluctuations.


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International V/S Domestic

10. Stability in Business Environment: In domesticmarketing there is relatively stable businessenvironment. At international marketing multipleenvironments, many of which are likely instable.


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EPRG FRAMEWORK

Ethnocentric

- Homecountry

orientation

Polycentrism

- Host countryorientation

Regiocentrism

- A regionalorientation

Geocentrism

- A worldorientation


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EPRG FRAMEWORK

Ethnocentric

- Homecountry

orientation

Domestic techniques and

Personnel are considered

superior


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Ethnocentric Overseas operations are viewed as secondary to

domestic operations

Considered as a means to dispose of surplusdomestic production

Plans for overseas market are developed in thehome office, utilizing policies and proceduresidentical to those employed in the domesticmarket

Overseas marketing is looked after by homecountry nationals


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Ethnocentric continued No systematic research is conducted overseas

No major modifications are made to products soldin overseas markets

Prices are calculated on the same basis as in thehome market with the addition of overseasdistribution costs

Promotion and distribution strategies are similar

to that employed in the home country Strong reliance on export agents


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EPRG FRAMEWORK

Polycentrism

- Hostcountry

orientation

Local Personnel and

Techniques are best

suited to deal with

local marketconditions


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Polycentric orientation Subsidiaries are established in overseas market

Each subsidiary operates independently with itsown marketing objectives and plans

Marketing activities are organized on country bycountry basis

Marketing research is conducted independently ineach country

Separate product lines are developed in eachcountry

Home country products are modified to meet localneeds.


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Polycentric continued Each subsidiary will have its own pricing and

promotion policy

Sales personnel from those countries

Traditional channels of distribution of thosecountries


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EPRG FRAMEWORK

Regiocentrism

- A regional

orientation

Recognizesregional

commonaliti

es and leads

to the design

of regional

strategies


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EPRG FRAMEWORK

Geocentrism

- A worldorientation

Best manfor the job

irrespectiv

e of

nationalorigin


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Regiocentric and Geocentric Region or entire world as potential market

Firm develops policies and organises activities ona regional or worldwide basis

Marketing personnel from the region or from anycountry

Standardised product lines for regional orworldwide markets

Regional or Global channels of distribution arealso developed


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International Market Entry strategies


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Market Entry Once the target market has been identified, the

next step relates to the decisions regarding thealternative methods of entry. The variousmethods of market entry open to firm in a given

country are: Indirect exporting

Direct Exporting

Licensing Franchising

Joint Venture

Foreign subsidiaries


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International Marketing environment

Social factors

Political and government factors

Economic factors

Demographic factors

Competition

Logistics

Risk


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international marketing session 1

Documents