INTERNATIONAL

MARKETING

What we will discuss in this presentation ?

Changing global
economy

Learn about foreign

customers

Options for global

expansion

PESTCL Framework

Developing new
products for a
market

Adapting existing
products

International Marketing
Having a solid plan based
upon a realistic assessment of
What your company wants
to accomplish
An
analysis
of
which
markets make the most
sense
A framework for how you
are going to get the work

Importance Of International Marketing

60 %
of
sale
outsid
e US

84 %
busin
ess
from
abroa
d

50 %
busin
ess
from
abroa
d

Why International Marketing ?

G
R
O
W
T
H

4.4 % of
world population

A non US based business

has to be part of the US
economy and expand
geographically

US is the largest economy

in the world. A US based
business
cannot
grow
within its borders. It has to
explore
international
markets

$ 17 Trillion
economy

Impact of Protectionism on International

Marketing
The trade commission of every country are determined to
place a tariff on an import of a product from another country
Tariff & Quotas are tools that govt. use to protect the
industries in home markets or make it difficult for non
domestic companies to succeed
Tariff A tax used by a government to raise the price of a
product being imported into their country

Cold Rolled Steel

Cost 150 USD more to produce in US
than in Asia
US govt. levy a tax on the cold rolled
steel coming from Asia because they
dont want US people working in steel
factory to loose their jobs

What does this have to do with

need to knowmarketing
that if the product
?

You
category you are going to take to another
market will be hit with a tariff

Its important to know because it will take

the price of your product higher

Exampl
e
CLOTHING

COMPANY

(Country A)

POTENTIAL
(Country B)

BUYER

Gross Profit Margin

25%
Manufacturing Cost Per Bolt
$4
Sales Price Per Bolt
$5

Currently Buying
$6
Manufacturing Cost Per Bolt
$5
Gross Profit Margin
20%

(Increase in production will

(Your plan will be to sell your cloth
increase efficiency
decrease
the
at $5 per bolt)
&Country
B imposes
a $1.25 per
operationalbolt
cost)tariff that takes your price

BU
T

to $6.25
It would have been better if you
knew this earlier

Global Marketspace
Competitors Entering
Home Market

Preparing For New Market

Quality website
Price match request
More negotiating behaviour

Translation
languages

Abandoned carts

Use of ecommerce sites

into

other

Company Culture
The values and behaviours that contribute to the
unique environment of an organisation
Write
Down
Values

Write
Mission
Statement

Publish
Principles

Issue
credo to
employee
s

Understanding Company Culture

Some countries can
be closely aligned

Some countries
may be in direct
conflict

Capture Guiding Principles

What we
value
Creativity
High Quality
Family
Atmosphere

Where we draw
Inappropriate use of intellectual
the line
property of others

Placing profits before customer

satisfaction
Authoritarianism

This will help in understanding how to export

your culture into a new geography

International Marketing Opportunity Matrix

Growth
rate of
industry

Trade Groups
Commercial
Services
Public Filling
Shareholder
Reports

20
%

Market Growth
Rate

Size of
industry

10
%

0
%

Small
est
Populatio
n Size

UK

China

Mexic
o

India
Mediu
m

Market
Size

Canad
a
Larges
t

Learning About Customer In Foreign Market

Conversation with an
expatriate
Community Organisation
Local Universities
Social Media

Number
4
is
unpopular in Japan
Its not advisable to
enter
this
market
with a product in
package of 4

HOW DO WE
LEARN THESE

Options For Global Expansion

High
er
PROFIT
POTENTI
AL
Lowe
r
Lea
st

Direct
Investme
Licensing
nt
Amount of firms financial commitment, risk &
marketing control
Exportin
g

Joint
Venture

Mos
t

PESTCL Framework
P

Political

Economi
c
Social

S
T
C
L

Technologi
cal
Competit
ive
Legal

Researching Political Structure

Country

CANADA
MEXICO
CUBA

Rating
Notes
s
Low import barriers &

high ratings on
transparency

Some corruption in
our industry

Trade restrictions in
our industry

Performing An Economic Analysis

Countr
y

Currenc
y Name

Historical
Exchang Exchange
e Rate
Rate
Trend

Forecasted
Change in
Exchange
Rate

Econom
y
Growth
Rate

Industry
Growth
Rate

Tariffs,
Duties or
Quotas

A
B
C
Currency strong in home market = More Expensive
when exported

Social Analysis
Values
Values

Aspec
t Of
Cultur
e

Custom
s

Symbols

Langua
ge

Country A
Country B
Country C

Custo
ms

Symbo Langua
ls
ge

Technology Analysis

Around the globe there are differences in infrastructure &

technology that can have a significant impact on your ability
to take your product in new markets
If you deal in heavy equipment which is
transported through truck or train its
important to know whether :
Your equipment will fit under the
bridges
Fit in railways as railways in different
countries have different width between
Technology
Analysis Table
the rails

Transport
A
B
C

Storage

Trial

Disposal

Compleme
nts

Competitive Analysis
Winning in the
Marketplace
Best Price
Best Features
Perfect Distribution

Company
1
Company
2
Company
3

To gain advantage we need to

understand
With whom we will be
competing
What are they offering to the
market
Competitive
Analysis
Table
How
realistic
are our chances of
Promoti
Weakne
winning
Product
Price
Place
Strength
on

ss

Legal Analysis
Types of
law
Comm
on

Code

Islamic

Marxist
/
Socialis
t

Legal Analysis Table

Registratio
n?
A
B
C

Local
Address

Transportat Disposal &

IP
Othe
ion Laws
Recycling Issues
r

Product Adaptation & Development

CHINA

In China the
spices in KFC
vary from
region to
region

In Kentucky
the menu is
totally
different
from China

KENTUCK
Y

Heinz the maker of the most

popular ketchup in the world
also adapt their flavouring &
spices to local taste in
different global regions

Product
Brand A
Brand B
Brand C

Price

Place

Market Development Questions

New
Difference
Market
form Home
Differenc
Market
e
Where do they learn about the product ?
How do they gather information or make comparison to
competitors ?
Where do they buy the product ?
How do they pay for it ?
Where do they use it ?
What complements do they need or want ?
What does the average usage frequency look like ?
How do they tell other about the product ?
How often do they repurchase ?

Exporting
Exporting
Model
Lowest Burden

Distributors
Concern
Lower price

Least amount of
cash

Regulation &
tax

Customer
complaints

Choosing an Export Partner

Talk with trade groups
Network with other companies
Connect with commercial services

Fastest to market

Competitors

Franchising or Licensing
Franchisingis the practice
of the right to use a
firm'sbusiness modeland
brand for a prescribed
period of time.
Choosing a franchisee or
licensee
Do significant due
diligence
Look for a brand
ambassador

License means to give

permission. Licence refers
to that permission as well
as
to
the
document
recording that permission.
Distributor Agreement
Importer buys products
Importer then take
control going forward

Joint Ventures
A business structure in which two or more
contractually agree to develop a business together
They have shared ownership
Brand owner typically owns majority
Contract Can Specify Requirements To:
Invest a certain amount
Perform duties
Hit milestones
Deliver results

partners

Direct Investment
The direct investment path gives you total control over
Location
Hiring
Training
Management style
Marketing
Going The Direct Investment Route
1. Establish business entity in new country
2. Recruit and hire staff
3. Consider technical needs

The 4Ps Of Marketing

Product

Price

Place

Promoti
on

Product Modifications
Product Adaptation
Adapting or changing a product to reflect the local needs in a
new market
In India

Adaptation Considerations:
Values, Symbols, Customs
Product size
Colour, labels
Branding

In USA

Pricing Considerations
Calculating The
Real Price
Transportation Cost
Switching Cost
Transaction Cost
Taxes
Exchange Rate

Wireless Headset
Sold for $90
Shipping Cost $10
Needs CE mark to sell in
Europe
Competitors Price 100
EUROPE

UNITED
STATES

Switching
Cost

$15

$10

Adapter

$5

$0

Transaction
Cost

Distribution Issues
Distribution
Considerations
Delivery Services
Supply Chain
Importing
Transit Time
Local Transportation
Retail Site

Promotional Methods
Promotional
Considerations
Literacy Rates
Training
Communication
Personal Selling
Website/Ecommerce
Telemarketing
Deal promotion

GROW
INTERNATIONALLY