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International Marketing

International marketing is the multinational process of planning and

executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organization objectives.

Benefits of International marketing1. Reduce marketing cost. 2. A much bigger area of marketing. 3. Facilitates centralized control of marketing. 4. Promote efficiency in R&D. 5. Results in economies of scale in production. 6. If international marketing is properly handled, the payment is Guaranteed and quick. 7. International marketing help in developing domestic market. 8. Marketer is much less likely to be affected by business cycle & political of a particular country.

Problems in International Marketing1. Unstable government. 2. Exchange Instability 3. Huge Foreign Indebtedness. 4. Foreign government entry requirements. 5. Tariffs and other treacle barriers. 6. Corruption. 7. Technological pirating. 8. High cost of product & communication.

Difference between Domestic and International MarketingDomestic marketing1. One nation, same language and culture. 2. Transport cost is a major marketing expenses. 3. One currency. 4. Political environment and factors are the same. 5. Market is relatively homogeneous. 6. No problems of exchange control and tariffs.

International marketing1. Many nations, many languages & culture. 2. Transport cost influences only to same extent. 3. Different currencies in different countries. 4. Different political environments and factors in different countries. 5. Markets are diverse and highly heterogeneous. 6. There are problems of exchange controls and tariffs and they act as obstacles.

Continued .7.Data available usually accurate and relatively easily collected at less cost. 7. Data collection a formidable take, requiring signification higher budgets and personnel allocation. 8. Relative freedom from govt. interference. 9. Individual company has little effect on environment. 10. Relatively stable business environment. 10. 9. Gravitational distortion by large companies. Multiple environments many of which are highly unstable. 8. Govt. influences business decisions.

11. Uniform financial climate.


Variety of financial climates ranging from over conservatives to widely inflationary.

Why should go to International Market

1. 2.

To achieve the higher rate of profit. Expensing the production capacities beyond the demand

of the domestic country. 3. 4. 5. 6. Severe completion in the home country. Limited home market. Political stability vs. political Instability. Availability of Technology & managerial competence.

Continued .7. 8. 9. 10. High court of transportation court. Neared to Raw materials. Availability of Quality human rescores at Len court. Liberalization & globalization.

11. To increase market share. 12. To avail tariffs and import Quotas.

Stages of Internationalization

Stages - I:

Domestic Company

Stages- II: International Company Stage -III: Stage -IV: Multinational Company Global Company

Stage - V: Transnational Company

Stages-I: Domestic Company

Domestic companies limits in operations, mission & vision to the national political boundaries.

Stages-II: International companyThese companies believe that the practices adopted in domestic market, the people and products of domestic market are superior to those of other countries. These companies extend the domestic product, domestic price, promotion & other marketing practices to the foreign market. These companies adopt ethnocentric approach.

Stage-III: Multinational Company

The international companies turn into multinational companies when they start responding to the specific needs of different country markets regarding product, price & promotion, multinational company formulate different

strategies for different markets, the orientation shift from ethnocentric to polycentric.

Stage-IV: Global Company

Global company is the one which either global marketing strategy or a global


Stage-V: Transnational Company

Transnational company produces, markets, invests and operates alum the world of is an integrated global enterprise which links global resources with global markets at profit. There is no pure transnational corporation.

International marketing approach

1. 2. 3. 4.

Ethnocentric approach. Polycentric approach. Regiocentric approach. Geocentric approach.

1. Ethnocentric approachThe domestic company normally formulates their strategies, their product design and their operations to words the national markets, Customers and competitions. But, the excessive production more than demand for the product, either due to competition or due to change in customer preferences push the company to export the excessive production to foreign countries.

2. Polycentric approachThe company establishes a foreign subsidiary company and decentralizes all the operations and delegate decision-marking and policy making authority to it executives. Company appoints the key personnel from the home country and all other vacancies are filled by the people of the host country.

3. Regiocentric approach

The company after operating successfully in a foreign country thinks of exporting to the neighboring countries of the host country, At this stage, the foreign subsidiary considers the regional environment (ex. Asia) for formulating policies & strategies.

4. Geocentric approachThe entire world is just like a single country for the company. The select the employees from the entire globe and operate with a number of subsidiaries. The hard quarter coordinates the activities of the subsidiaries. Each subsidiary functions like an independent and autonomous company in for making policies, strategies, product design, human resource policies, operations etc.

Difference between International Trade, International Mktg. &

International Business

International trade

The producers used to export their products to the nearby countries and gradually extended the exports to for off countries. India used to export raw cotton; raw jute and iron are during the early 1900s.

International Marketing

India, during 1980 could great markets for its products, in addition to mere exporting. The export marketing efforts include creation of demand for Indian products like textiles, electronics, leather products, tea, coffee, etc. arranging for appropriate distribution channels, attractive package, product development, pricing etc.

International Business The multinational companies which were producing the products in their home countries and marketing them in various foreign countries before 1980 started locating their plants and other

manufacturing facilities in foreign/host countries. Later, they started producing in one foreign country & marketing in other foreign countries exhale.

Economic EnvironmentInternational marketing is mostly and directly influenced by the economic environment of various countries. The economics environment change is revolutionary after 1990. The results of these are emergence of global markets, establishment of world trade organization, emergence of global business houses and global competitors rather than local competitors.

The major changes include


Capital flour rather than trade or product flour

across the global. 2. countries. 3. Technological revolution delinked the relation bet`n Establishment of production facilities in various

the size of production & level of employment.

Continued .4. Primary products are delinked from the industrial

economies. 5. The macro economics factors of individual nation independently do not significantly control the global economic out comes. 6. The contest between capitalism & communism is over. Capitalism succeeded over communism/ socialism.

Before going to international marketing we should understand several economic factors such as.

A. B. C.

Economy System Size of the Economy Pattern of Personal Consumption

D. Growth and Stability Pattern E. F. G. Inflationary Trends External Financial Position Exchange Rate Trends

A. Economy SystemEconomic system is on organization of institutions established to satisfy human needs/wants. There are three types of economics system: 1. Capitalism, 2. Communism & 3. Mixed.

1. Capitalistic Economic System Under this system, customers choice for product/ services decides what will be produced by whom. This economic system provides for economic democracy. Ex. USA, UK etc.

2. Mixed Economic SystemUnder this system, major factors of production and distribution are owned, managed & controlled by the state. The purpose is to provide the benefits to the public more or less on equity basis. The other factors of mixed economic system are development of strong public sector, agrarian reforms, control over private wealth, regulation of private investment & national self reliance. Ex. India.

3. Communistic Economic SystemUnder this system, private property and property rights to income are abolished. The stat owns all the factors of production & distribution. The resource allocation decisions are made by the government planner. The no. of automobiles, shoes, shirts, television sets- heir size, color, quality, features etc. are determined by government planners. Under this system consumers are free to spend their income on what is available. Ex. China, Russia etc.

B. Size of the Economy Countries are segments based on GNP per capita. World countries are divi