INTERNATIONAL MARKETING

Que1. The orientation of a companys top management, its beliefs and

assumptions significantly impact its approach to international
marketing. Discuss the concept of EPRG framework.

Ans. Management Orientation: EPRG Framework :

The orientation of a companys top management, its beliefs andassumptions
significantly impact its approach to international marketing.The concept
consisting of Ethnocentric, Polycentric, egiocentric andGeocentric is widely
known as EPRG framework, and it is discussed below.

1. Ethnocentric
A company with ethnocentric approach deals with the whole world, basedon the
home-country perspectives. Marketing strategies used in thedomestic market are
extended to the foreign markets. Thus, ethnocentrismis based on ones firm
belief in the superiority of ones own culture. Thus,are exported elsewhere in the
world with little adaptation. under the ethnocentric approach, products designed
for the home marketSuch ethnocentric approach often leads to ones failure in
the internationalmarkets as markets do differ significantly.

2. Polycentric
Contrary to the ethnocentric approach, a polycentric approach emphasiseson the
host-country orientation. It believes that local market tastes andpreferences are
most important and that market strategies need to beadapted accordingly for
different countries.

3. Regiocentric
Under this approach, the firm employs a single marketing strategy within
theregion but not across the regions. For instance, a firm may use a
singlemarketing approach within the Middle East or Far East.

4. Geocentric
Under the geocentric approach, a global approach to the market is followedand
the whole world is treated as a single market. Therefore, under thisapproach,
global marketing strategies are evolved and implemented.

The ethnocentric company is centralised in its marketing management,

thepolycentric company is decentralised, and the regiocentric and
geocentriccompanies are integrated on a regional and global scale, respectively.
Acrucial difference between the orientations is the underlying assumption
foreach. The ethnocentric orientation is based on a belief in the homecountrysuperiority. The underlying assumption of the polycentric approach is
thatthere are so many differences in cultural, economic and marketingconditions
in the world that it is an impossible and futile attempt to transferexperience
across national boundaries.

Que2. Hofstedes cultural classification helps in understanding the cultural

diversity. Discuss the 4 dimensions with examples.
Hofstedes dimensions

Ans.Hofstedes cultural dimensions :

Hofstedes cultural classification discussed below helps us to understandthe
cultural diversity. Let us look into these in detail.

Power distance :
The term power distance refers to the degree of inequality among peoplewho
are viewed equal. Power distance implies the ways through whichpeople develop
interpersonal relationship in a society. The hierarchy ofrelationships is of two
kinds, namely, vertical and horizontal. In verticalhierarchy, there is a
consideration given to the status, class and othermodes of power possessed by
people of a society. For example, in theUnited States the modes of vertical
hierarchy is race, in the United Kingdomit is class and in India it is the caste
system. The relationship based onequality, informality and egalitarianism are
counted under horizontal relationships. All these parameters affect the social and
cultural set-up of asociety and therefore, the firms operating in the international
marketingenvironment need to understand power distance carefully.

Uncertainty avoidance :
It means the manner in which the people of a society respond touncertainty, risk
and ambiguous situations. The behaviour, belief andapproaches of people differ
from culture to culture. Some culturesencourage an entrepreneurial spirit and
risk taking habits while others mayencourage risk-averse behaviour. People in

cultures with high-uncertaintyavoidance feel insecure about following new

products, services and othernpractices of modern culture. Such types of cultures
with high-uncertaintyavoidance are China, India, East European countries, etc.
People in lowuncertaintyavoidance cultures have enthusiasm towards new
changes,latest practices, products and services. People in such cultures are
eager totry all these. Examples of such cultures are Western Europe,
NorthAmerican countries, etc.

Masculinity / femininity :
Masculinity refers to the characteristic features of male characters,
namely,assertiveness, command, control and competitiveness. A culture with
moreof these attributes is considered masculine. Unlike this, femininity refers
tothe feminine attributes which include care, compassion, nurturing,
etc.Examples of countries with masculine culture include the United
States,United Kingdom, Australia, Canada, etc., whereas those with
feminineculture include Sweden, Norway, Denmark, etc.

Individualistic vs. collectivist culture :

The orientation in individualistic culture is towards self-interests. Peoplefrom such
cultures are driven by their own interests and of their immediaterelatives.
Collectivist cultures give a priority to the overall benefits to acommunity over
self-interest of any individual or a family. Examples ofnations that follow
individualistic culture include the American and Europeancountries while China,
Japan, Korea, Taiwan and other community regimebased cultures follow the latter
culture.The above discussed Hofstedes cultural dimensions are very important
tounderstand international communication, international
negotiation,international management and international marketing environment.
These cultural dimensions are analyzed widely in international marketing
andmanagement studies but sometimes they have limited practical
applicationsas these are primarily psychology based dimensions of an
individualpersonality.

Que3. How are the international markets segmented on the basis of

development?

Ans. Classification of International markets on the basis ofDevelopment:

International markets have been classified into four categories on the basisof
development, namely:
a. Industrialised or developed market economies
b. Most rapidly developing economies
c. Developing economies
d. Subsistence economies or under/least developed economies

a. Industrialised/developed market economies :

Industrialised/developed market economies are those economies that
giveimportance to research and development and allocate their resources to
theproduction of more sophisticated products. They would therefore, like
toimport goods of simpler technology from simpler manufacturers.
Thesecountries also have an acute shortage of labour and would therefore,
tendto import labour-intensive products such as electronics and light
engineeringgoods. They also tend to import spares and components and raw
materialsto feed their industries, along with many decorative articles. They are
veryparticular about preventing further pollution and hence, they often import
notonly anti-pollution equipment but also articles whose production has
beenbanned for risks of pollution. They are willing to provide technology to set
upproduction and processing facilities in developing countries. They provide
alarge market as they have no import restrictions.

b. Most rapidly developing countries

This category includes countries like Brazil, Mexico, Hong Kong, India,China, etc.
These countries would like to update their technology for theircurrent range of
manufacturers. Also, they would be keen to importmachinery and equipment to
set up new manufacturing facilities. They arealso interested in setting up joint
ventures in other less-developed countries.

c. Developing economies
This category includes countries in the Gulf area and many countries inAfrica and
Latin America. They are generally faced with large changes inforeign exchange
earnings because of fluctuations in their export prices. Formexample, the Gulf
countries are presently benefiting because of thencreasein oil prices. They have
inadequate infrastructure and therefore, they needvarious types of goods such

as consumer durables, food products, transport equipment, service facilities, etc.

They are also offer opportunitiesfor setiing up turnkey projects. Changes in these
countries take place ratherslowly and therefore, the level of sophistication in
products required bythese countries is much lesser, compared to those required
by developedcountries.

d. Subsistence economies
Subsistence economies need equipment to exploit their untapped resourcesas
well as nfrastructural facilities like railways, roads, buildings,
transportequipment, power generation equipment, transmission line towers,
etc.They provide a lot of scope for turnkey projects like housing,
schools,hospitals, etc. Latest technology in production may not be offered
bycompetitors to these countries and therefore, the opportunities are
muchgreater for developing countries like India to export their products
tosubsistence economies.

Que4. Differentiate between national and international products,

global and standardised products with examples.

Ans. National and International Products

Many firms believe that for expanding existing businesses or for acquiring anew
business, the most obvious approach is to export domestic products.This is a
relatively low-cost approach. In the context of global productdevelopment,
national and international products are important.

National vs. international products

A national product is offered to a single market. Sometimes nationalproducts
appear when a global company caters to the needs andpreferences of particular
country markets. For example, Coca-Coladeveloped a non-carbonated, ginsengflavoured beverage for sale only inJapan and a yellow, carbonated flavoured
drink called Pasturina tocompete with Perus favourite soft drink, Inca Cola.
Such examples showthe reasons why national products, even those that are
quite profitable, mayrepresent a substantial opportunity cost to a company. First,
the existenceof a single national business does not provide an opportunity to
develop andutilise international leverage from headquarters in marketing, R&D
andproduction. Second, the local product does not allow for the transfer
andapplication of experience gained in one market to other markets. The
thirdshortcoming is that a single-country product lacks the feature
oftransferability of managerial expertise acquired in the single-product area.

International and global products

International products are those that are offered in multinational or inregional
markets. Global products are those which are designed to meet thestandards of
the global markets. There are different approaches that can betaken up to add
new products to the product mix in global markets. All depend on the firms
competitiveness in the context of global marketenvironment. Firms prefer to
introduce new products to stay in globalmarkets. MNEs (Multi national
enterprises) have different approaches todevelop global products. Though there
is a slight difference between theterms global and international products,
they are often usedinterchangeably.

Que5.Write short notes on:

a) Containerization
b) 4 PL operators

ANS : Containerization- Containerisation has revolutionised maritime business

throughout the orld.Cargo-carrying containers are an integral part of the
transport industry.Containers facilitate both the unitisation and carriage of cargo
throughdifferent modes of transportation. Containerisation has ultimately
provided an ideal unit load, which meets allthe logistical requirements. It not only
eliminates conventional timeconsumingmethods of cargo handling, but also
benefits ship owners,shippers and port authorities. The added advantage is that
containerisationsimplifies the procedures and documentation related to
transportation ofcargo.
Containerisation is an increasingly popular method of shipment. A containeris a
large box made of durable material such as steel, aluminium, plywoodand glassreinforced plastics. A container varies in size, material andconstruction. Its
dimensions are typically 8 ft. high and 8 ft. wide, withlengths usually varying in
multiples of 10 ft. up to a maximum of 40 ft. Acontainer can accommodate most
cargo but is most suitable for packages ofstandard size and shape. Containers
can take care of most of the four mainpacking problems. Because of the
containers construction, a product does not have to have heavy packing. The
container by itself provides goodprotection for the product against breakage,
moisture and temperature.
Fourth Party Logistics operators

Third Party Logistics (3PL) operators had limited success so far, and this
isnattributed to their priority to manage only the logistics rather than the
supplychains for their clients (this is mostly with regard to shipping
companies).3PL companies co-ordinate with various components of the logistics
chainsuch as transport operators, shipping lines, warehouse operators,
freightforwarders and so on, but in the process they tend to ignore the real need
ofthe customer, that is, to manage the customer's supply chains in the world.
4PL operators provide a complete business process outsourcing solution to their
clients. Information technology plays animportant role in 4PL operations,
comprising elements of people, processand technology. In 3PL operations, clients
themselves kept a track ofincoming inventories by continuously following up with
all the supplies aswell as following up with the 3PL operator. Communication
andtransportation of documents through conventional e-mails and faxmessages
were also proving to be tedious and time

Que6. Choose a product and explain how you will prepare seven steps
in a global e-marketing plan?

Ans : e-Marketing
e-marketing deals with issues ofonline advertising, marketing strategies, and
customer behaviour. So, wecan define e-marketing as the use of internet and
related digital informationand communication technologies to achieve marketing
objectives. (Instituteof direct marketing) Similar to traditional marketing, online
marketing (another term for emarketing)also starts with the process of
identifying the needs and wants ofcustomers. Here, you should know at what
price to sell the product, how tosell (i.e. instruments to sell), and how to
distribute your product. This toorequires extensive marketing research and
marketing plan.
Product
A product is the main offering of a company to its customers. It defines the
customer segments and competitors for the company.Let us look at five aspects
of the product namely features, quality look andpacking, branding and customer
support.

Features What does the product do and what it does not do? Colour,taste,
size, and style are all features of a product. The product should offerthose
benefits, which satisfy the needs of customers. If the benefits satisfythe needs of
customers then the customers are likely to buy the productagain.

Quality The quality of the product should match the message that
thecompany is trying to communicate. This quality should at least match
thepromise the company makes to the customers. The overall service
i.e.,ordering, follow-up, and even delivery should give the customer
theconfidence about the quality of the product.
Look and packaging The product should look appealing and thepackaging
should complement the look. The packaging should be functionaltoo.

Branding It is one of the crucial decisions in the e-marketing arena. Whenthe

company decides to go the e-marketing way it should take a decisionwhether an
existing brand (if the company is doing business offline too)must be used or a
new brand is needed. The company will want thecustomers to recognise its
brand when they see it online. Also, when thecompany is looking for domain
names there might be a probability that thename already exists. In such a
scenario, it is difficult for the company to getthat domain name which represents
its brand.
Customer support In case of e-marketing, the support services
representservices during and after the purchase. Sometimes, online transactions
orshopping experience can cause frustrations. Successful companiesrecognise
this fact and give due importance to support services during thepurchase
process.
Price
Importance of price There are some websites designed to search theInternet
and return the best prices available for the product. Therefore, acompany has to
compete in such price-centric online market where pricingdecisions hold more
importance. Companies have to set the price such thatit is not very high. They
should be able to cover their costs and make someprofit. Another factor in case
of e-marketing is that the customer can easilyaccess competitors website.
Hence, the company has to be responsive toany price change in the market or
else it will lose sales. If a firm is not ableto reduce costs, then it has to position
itself in the market by offering some mother services associated with the
product.

Macro environment If a company has an offline store it needs to

decidewhether to use the same price or different price for its online store.
Theconsistency in pricing always pays but we need to look at other cost
likeshipping (which is a very important factor during online
purchase).Sometimes, government regulations also have an impact on the prices
likesales tax. in the host or home country (if it is an international

transaction).Different states of a country can also have different tax structures.

Themarket structure may also change the pricing of the product.