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‡ The fast changing environmental factors have
significantly influenced the global marketing
activities
‡ The major emerging issues in international
markets may be summarized in the following
manner.
 






  


 


 

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‡ The world output increased at an average rate

of 3.3% during 1986-95 while the world trade
grew at 6.2% during this period
‡ Moreover, the world output was expected to
grow at 3.8% during 1996-2005 compared to
growth in world trade by 6.1%
‡ Thus, international trade has become the
locomotive of growth of world economy and
has also increased the global economic
integration
‡ The advent of technology has greatly
facilitated a firm¶s ability to access
international markets
‡ The income of people across the world is
increasing rapidly opening up higher marketing
opportunities
‡ The World Bank estimates that the per capita
income is likely to increase in all regions of the
world except in Sub-Saharan Africa
‡ Markets world-wide are likely to grow at a much
higher rate than anticipated.
 


 


‡ The markets across the countries are becoming

global as the marketing boundaries are fast
disappearing
The major reasons for breaking down of marketing
boundaries are as follows:
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‡ Economic liberalization both in terms of

regulations and tariff structure has greatly
contributed to the breakdown of international
marketing boundaries
‡ The emergence of the multi-lateral trade
regime under the World Trade Organization
has facilitated the reduction of tariff and non-
tariff marketing barriers
‡ In the coming years, the tariffs are expected
to decline sharply
‡ Besides, there has also been a proliferation
in regional trade agreements that have
 facilitated the reduction of marketing barriers
among the member nations
‡ For instance, the European Union (EU) has
become a powerful economic union considerably
affecting a firm¶s marketing strategy for the
European market.
- 







‡ The marketing systems under planned

economies have collapsed world-wide
giving way to capitalist market-driven
systems
‡ The CIS countries and China have opened
up and are moving towards market-driven
economic systems at a fast pace
‡ However, the exceptions to free market
systems are only a few autocratic countries,
such as North Korea and Cuba.
. 




‡ Geographical proximity of markets had

traditionally been a significant criterion for
selecting target markets
‡ The advent of information and
communication technology and fast
developments in the means of transport have
considerably undermined the significance of
distance in market selection
‡ Besides, air travels has become both faster
and cheaper
‡ There has also been a considerable
reduction in the international tele-
communication tariff rates due to increased
competition and advent of new technology
 |






‡ The integration of national economies with the

WTO has restrained countries from increasing
tariffs and imposing explicit non-tariff marketing
barriers
‡ However, the countries are consistently
evolving innovative marketing barriers that are
WTO compatible
‡ Such barriers include quality and technical
specifications, environmental issues,
regulations related to human exploitation, such
as child labour, etc.
‡ Innovative technical jargons and justifications
are often evolved to impose such barriers by high-
income countries to restrict the import of goods
from low-income countries, which find it very hard
to defend such measures.
 |



   





‡ Customers around the world are exhibiting

convergence of tastes and preferences in terms of
their product likings and buying habits
‡ The automobiles , fast-food outlets, music
systems, and even fashion goods are becoming
amazingly similar across the countries
‡ The proliferation of transnational satellite
television and tele-communication has accelerated
the process of cultural convergence
‡ Traditionally, the cultural values were transmitted
through generations by parents, grand-parents, or
other members of family
‡ However, the emergence of nuclear families, with
both the parents working, has made television the
prominent source of acculturation not only in the
Western countries but also in the oriental countries
‡ Besides, the advances in the modes of transport
and increased international travel have greatly
contributed to the growing similarity in customer
preferences across the countries.
‡ Thus, the process of globalization has
encouraged firms to tap the global markets with
increased product standardization
‡ This has also given rise to a rapid increase in
global brands.
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‡ The technological advances have accelerated

the process of new product development
‡ Besides, the ever-growing demands of the
customers have necessitated firms to
customize their products
‡ This has triggered the competitive pressure to
develop new products and maintain a firm¶s
market share
‡ The proliferation of products has increased
the complexity of firms to sustain their market
share and maintain their unique marketing
proposition (UMP)
‡ Today, the breakthroughs in computer technology
have reduced the life span of computers and their
components and software to only a few months
rather than a year
‡ Since a firm cannot afford to lag behind its
competitors who are constantly coming out with
new products, it has no other option but to
innovate
‡ As new product development involves
considerable investment of resources, firms are
under intense pressure to recover their investment
as early as possible and often resort to adopting
market skimming strategies.
 







‡ The global retail sales were estimated at US

$ 8 trillion in 2002, whereas the retail sales of
top 200 retailers of the world accounted for
29% of the world-wide market
‡ This has encouraged the large retailers to put
their private labels on the merchandise
‡ The retailers buy products directly from the
manufacturers and put their own labels, which
results in higher margins for the retailers
‡ Besides, the private labels offer tough
competition to the manufacturers of branded
products
‡ The private labels have witnessed a rapid increase
over the years
‡ The share of private labels increased between
March 2002 and 2003 from a meagre 0.2% to 15%
according to a survey of private labels conducted
by AC Neilsen in 36 countries for 80 different
categories
‡ The growing power of retailers has given rise to
the adoption of push strategies by the firms where
the retailers wield their muscles to get more and
more margins and squeeze the promotional
budgets of the companies for creating pull in the
markets
‡ It is anticipated that retailers¶ power is likely to
grow in future.
 |





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‡ Knowledge or information is gaining

significance in achieving competitiveness in a
firm
‡ In the 19th century, some of the world¶s
wealthiest people, from John Rockefeller to
the Sultan of Brunei, were associated with oil
‡ Today, Bill Gates is the richest person on the
earth due to his hold on the information
technology segment
‡ The industries with the highest level of growth
today, such as biotechnology, electronics,
information and communication technology,
designing, etc., are primarily knowledge-
based
‡ Firms increasingly derive their competitive
advantage based on their intellectual property
‡ The Agreement on Trade Related Intellectual
Property Rights (TRIPS) under the WTO has
generated considerable debate among the high-
income and low-income countries about the
legislations related to the protection of intellectual
property.
_ 

 

 




‡ Although the emphasis on launching global

products has gained popularity among the
global trans-national corporations, the market
response hardly supports this uniform
approach
‡ Consequent to the liberalization of the Indian
economy, most multi-nationals entered India
with the belief that anything with a foreign
label could be sold to the Indian consumers
like hot cakes
‡ They failed to understand the extent to which
the preferences between India and the West
converge
‡ Indian customers are making a distinct market
segment as they want to enjoy the latest
technology/products but, at the same time, they
prefer some degree of customization that suits
local conditions and tastes.
 




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‡ Consequent to economic liberalization in

India, most multi-nationals targeted the urban
middle class with an estimated size of 300-
400 million
‡ It is estimated that 74% of India¶s total
population of one billon resides in rural areas
and has 58% of India¶s disposable income
‡ With the growth in agricultural output from
176 million tonnes in 1990-91 to 215 million
tonnes in 2004, the affluence in rural India is
growing rapidly
‡ Rural India accounts for 70% of toilet soap users
and 38% of two-wheeler purchases
‡ Therefore, it is difficult for any firm to overlook the
huge buying potential of growing rural consumer
class
‡ However, tapping rural Indian market means
reaching out to 6,27,000 villages spread over
32,87,263 sq. km
‡ Innovative thinking and strategy is required to
break into these markets
‡ Coca-Cola company spotted the potential of
India¶s rural market and perfected a unique supply
chain to cater to India¶s vast hinterland
‡ The supply chain network in rural India requires its
 distributors to travel 200 km to reach about five
shops in a day with drop sizes of less than a case
‡ Besides, a typical village retail structure consists of
4-5 2
 shops (small grocery shops).
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‡ Charity for charity¶s sake is passe in today¶s

business environment
‡ Corporate business responsibility makes
sound business sense
‡ A growing number of business organizations
the world over link their growth and survival
schemes with a firm¶s overall corporate
objectives
‡ For instance, Pfizer¶s Indian subsidy has
sponsored diagnostic centres and x-ray clinics
for the poor
‡ These centres would eventually act as referral
centres for Pfizer products
‡ Similarly, Hindustan Lever Limited promoted its
health care programmes in the villages of Kerala
as a part of its plan to expand its market for
personal care products in rural India
‡ Lafarge, the global building materials
manufacturer, plans to build low-cost concrete
houses at a cost of less than US $ 1,000.
  

 

 

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‡ The Internet is becoming increasingly

integrated with day-to-day activities both in
the developed and the developing economies
‡ In markets where there are many more mobile
phones in hands than PCs on desks ±
including most of the developing world ±
wireless devices are becoming delivery
mechanisms for IT-enabled services
‡ It is not surprising that mobile banking
services are more developed in the
Philippines and China than in the US
‡ Earlier, the information flow between the
companies and the customers was generally a
one-way process
‡ The information was market-controlled, customers
were ill-informed, and the exchanges were
market-initiated
‡ The industrial era was known as the era of
information asymmetry
‡ With the breakthroughs in information and
communication technology, information has
become affordable and universal
‡ The ease of access and availability of information
about a firm¶s products and those of its
competitors to the customers have greatly
increased around the world
‡ This has resulted in a shift of power from the
manufacturers to the customers
‡ This has led to not only customer-oriented
marketing but also customer-initiated marketing
‡ The use of Internet has empowered buyers
significantly
Today, the buyers can:
‡ Get information about the manufactures of
the products and brands around the world
‡ Carry out comparison of product features,
quality, prices, etc. from a variety of sources
‡ Initiate requests for advertising and
information from the manufacturers
‡ Design the market offerings
‡ Hire buying agents and invite market offers from
multiple sellers; and
‡ Buy ancillary products and services from a
specialized third party.
   
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‡ Conduct of marketing transactions, such as

buying, selling, distributing, or delivering of
goods or services using electronic methods,
is termed as e-marketing/e-commerce
‡ It includes the use of electronic data and its
applications for conceptualization, planning,
pricing, distribution, and promotion of goods
and services to create exchanges to satisfy
customer needs
‡ Global e-marketing involves the marketing
transactions through electronic methods
across the world.
 
 

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‡ The concept of e-marketing has transformed

the marketing process from µphysical market-
place¶ to µvirtual market-space¶ that has
considerably changed the process of
consumer purchasing decisions
The basic changes in the consumer purchasing
decision process are as follows:
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‡ It was conventional marketing

communications that stimulated market
demand via conventional media, i.e.,
advertisements in print media, radio, or
television
‡ The communication strategy on the Internet
should be user-specific rather than the mass
communication approach used in traditional
media
‡ Thus, the communication strategy has
undergone a fundamental change
‡ The focus now is on following a customized
communication approach for individual
consumers.
-  




‡ In a traditional marketing system, customers

gather information through either internal or
external sources, including peer group
discussions, company brochures, etc.
‡ The availability of market information varies
widely between the firms and the customers
‡ However, in the virtual market-space,
customers can scan information on the
Internet and make comparisons to suit their
individual requirements
‡ The intermediary function performed by the
Internet sites is mainly related to providing
information and exchange
‡ For instance, airlines, railways, tour operators, etc.
provide online booking that bypasses traditional
market intermediaries, such as travel agents
‡ Internet websites also provide links with other
websites that help customers gather more
information.
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‡ In a traditional market-place, the evaluation

of alternatives is greatly influenced by the
peer groups, members of the family, friends,
and publicity through word of mouth,
whereas in a market-space, the virtual
community has taken up the role of
traditional reference groups
‡ Various discussion groups and consumer
forums share with each other their
experiences over the net.
/  





‡ The decision to select a seller for a purchase

is traditionally based on the previous
experience of the buyer with the seller, its
proximity, range of products offered, and the
price charged
‡ However, in the electronic market-space,
sellers often attract the buyers by way of
creating interesting websites, competitive
prices, and superior purchasing experience to
induce the purchase decisions
‡ In Internet transactions, the payment is
usually through credit cards but the delivery
mechanism differs depending upon the
product type
‡ It may be in the form of either online delivery or
physical delivery
‡ Software, music, design, etc. may be delivered
online whereas physical goods have to be
delivered physically.
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‡ In traditional markets, a firm should respond

to customer complaints and enquiries through
the marketing channels
‡ However, in an electronic market-space, the
emphasis is on information and
communication technologies, such as
continuous updating of websites, and on
satisfying customer needs
‡ A firm should endeavour to offer value to its
customers through its websites by promptly
responding to their queries and providing
latest information to encourage new
purchases.
 
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‡ Earlier, the marketers used to initiate the

marketing activities, but today the information
and communication technology has
completely changed the marketing system,
enabling customers to initiate the marketing
activities
‡ The phenomenon is termed as



2 
where the customers initiate the
exchanges and gather the required
information.
The customers can now initiate and carry out the
following activities:
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‡ A Customer may search for product

information and solicit promotion from the
marketers or through the intermediaries
‡ These intermediaries relay customer requests
to the marketers without divulging personal
information and block unwanted offers.
- 
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‡ Traditionally, the firms used to push the

advertisements to the customers generally as
a mass communication tool
‡ The introduction of information and
communication technology has now enabled
customers to request for more information
from manufacturers and click on the
advertisements they are interested in
‡ Thus, advertising has become customer-
initiated as it can be pulled by the customers.
. 
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‡ Buyers can place their offers for bidding and

set the prices
‡ A number of e-marketing firms, such as
indiatimes.com allow the customers to set
their own prices
‡ Buyers can specify the price and model
options.
/ 
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‡ Traditionally, the marketing firms used

customer purchase history to create
customized offers
‡ However, under e-marketing, customers self-
select and co-customize offers with
marketers.
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‡ The e-marketing activities can basically be

categorized under four heads, as depicted in
Figure 1
‡ The electronic exchanges between the
customers and the business firms with the
government, such as government to business
(G2B), government to consumer (G2C), and
consumer to government (C2G) are
discussed as follows:
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 Business
firm
C2B B2C

C2C
Customer Customer

B2B
B2C
Business C2B
firm

Figure 1, Types of e-marketing Models

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‡ It involves intra-firm transactions using an

electronic network
‡ B2B transactions are estimated to account for
about 90% of total electronic business
transactions
‡ Although the internet-based e-marketing
networks are highly cost-effective, the
transactions are less secure as these are
open networks
‡ The B2B e-marketing adds to the efficiency of
marketing transactions
‡ It facilitates greater access to information by
the buyers about the sellers world-wide
‡ As the prices have become more transparent
through the Internet, it has increased price
pressures on un-differentiated commodities
‡ At the same time, it provides greater information
on highly differentiated brands
‡ Launched in 1999, auctionindia.com claims to be
India¶s first business to business (B2B) auction
site
‡ It provides superior customer value by using
dynamic price-based solutions, i.e., µauctions¶ to
create an online market-space for industrial assets
‡ Besides, the auction sites also bring together
buyers and sellers through a comprehensive
listing and asset-matching facility.
*-  


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‡ It includes electronic retailers generally

operating on a global basis
‡ The Internet has greatly facilitated the
proliferation of B2C e-marketing during the
recent years
‡ Global e-retailers, such as amazon.com, Dell
Computers, etc., have been highly popular in
most parts of the world
‡ However, e-marketing transactions are less
popular in product categories that need to be
physically touched and examined by the
buyers, such as clothes, furniture, etc
‡ The consumers buying online tend to be
relatively younger, better educated, and
generally affluent
‡ The B2C e-marketing leads to exchange
processes initiated and controlled by the
customers
‡ Until customers invite marketers to participate in
their exchange processes, marketers will have to
wait
‡ Moreover, the rules of marketing engagement
are also determined by the end customers.
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‡ It involves µreverse auction¶ where the

customers rather than the sellers initiate the
market transactions
‡ It includes the tendering by the buyer inviting
suppliers to put forward their bids.
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‡ It involves horizontal interaction between

consumers, who generally share their
experiences of the product by way of chat
rooms
‡ Communication among customers by e-mail
is the most important channel
‡ Person-to-person trading offered by eBay in
the web-based community is the world¶s
largest and the most popular virtual market-
space
‡ It pioneered online person-to-person trading
by developing a web-based community where
the buyers and sellers transact personal items
‡ The site permits sellers to list items for sale and
buyers to bid on the items of their interest
‡ All eBay users browse through listed items on an
easy-to-use online service
‡ Items generally transacted under eBay or its
Indian subsidy baazee.com include apparel and
accessories, books and magazines, computers
and peripherals, fitness and sports, jewellery and
watches, music and instruments, stamps, coins,
consumer electronics, mobiles and accessories,
movies and videos, etc.
 



 


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‡ In case of traditional marketing, the focus was on

single sales transactions between a firm and its
customer, also known as transaction marketing
‡ In case of customer relationship marketing, on
the other hand, greater emphasis is laid on
retaining existing customers than on acquiring
new ones
‡ It is well known that it is much easier for a firm to
retain its existing customers than acquiring new
ones
‡ Such relationships were also an integral part of
high cultural context of oriental markets
‡ However, with the advent of the Internet, the
concept of relationship marketing has become
highly popular in the Western markets
‡ Customer relationship marketing (CRM) is defined
as the process of creating and maintaining
business relationship by a firm with its customers
‡ In the oriental countries, marketing activity was
traditionally carried out through exchange
processes based on mutual trust and relationship
between the buyers and sellers
The typical process of CRM is as follows:
‡ Identify key customers in terms of long-term
potential profits
‡ Analyze the expectations of the customers
and the sellers
‡ Find out strategies to work more closely with
the customers
‡ Identify the changes required in the operating
procedures
‡ Customize the marketing mix
‡ Establish an institutional mechanism for
regular interactions with the customers
The information and communication technology
facilitates customer relationship marketing (CRM) in
the following manner:
‡ It facilitates mass customization of marketing
messages and also the product
‡ It helps in initiating two-way dialogues with
the customers, allowing the firm to customize
its market offerings to meet the customers¶
needs
‡ It makes it possible to receive online
feedbacks
‡ It provides incentives to the customers to
engage in dialogues.