International Marketing

Session 1

What is International Marketing

Marketing of goods and services across national

frontiers It is an approach of a company with truly global outlook, seeking its profit impartially around the world, on a planned and systematic basis. It is the marketing function of multinational companies

Factors affecting International Marketing

Trade practices Culture

Facilities
Economy

Distance
Law

Significance
Profit Motive

Domestic Market constraint

Competition Government Policies Monopoly Power Spin off benefits

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

International Marketing & Domestic Marketing - Similarities

Both in domestic marketing and international marketing success depend upon satisfying the basic requirements of consumers. This necessarily involves finding out what the buyers want and meeting their needs accordingly 2. It is necessary to build goodwill both in the domestic market and international market. If a firm is able to develop goodwill of consumers or customers, its tasks will be simpler than the one, which has not been able to do so. 3. Research and development for product development and modification is necessary both for international marketing and domestic marketing.
1.

International Mktg Vs Domestic Mktg

1.

Sovereign Political Entities: Each country has a sovereign political entity and Goods and services has to move across
national boundaries. As a result, they may have to face a number of restrictions. This may fall in any of the following categories;

Tariffs and customs duties Quantitative restrictions Exchange controls Local Taxes.

International v/s Domestic

2. Different Legal Systems: Each country has its own legal system and it differs from country to country. The existence
of different legal systems makes the task of businessmen more difficult as they are not sure as to which particular system will apply to their transactions. In the case of domestic marketing the buyers are aware of the legal systems in their country.

International v/s Domestic

3. Cultural Differences: In domestic marketing there is 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.

International v/s Domestic

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.

International v/s Domestic

8. Procedures and Documentations: Each country has its own procedures and documentary requirements and traders have to comply with these regulations if 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 to Large volume of transactions Higher value of transaction Longer time period More time of transit Longer credit period Comparatively less knowledge Exchange fluctuations.

International V/S Domestic

10. Stability in Business Environment: In domestic marketing there is relatively stable business environment. At international marketing multiple environments, many of which are likely instable.

EPRG FRAMEWORK
Ethnocentric - Home country orientation

Polycentrism Regiocentrism - Host country - A regional orientation orientation

Geocentrism - A world orientation

EPRG FRAMEWORK
Ethnocentric - Home country orientation
Domestic techniques and Personnel are considered superior

Ethnocentric
Overseas operations are viewed as secondary to

domestic operations Considered as a means to dispose of surplus domestic production Plans for overseas market are developed in the home office, utilizing policies and procedures identical to those employed in the domestic market Overseas marketing is looked after by home country nationals

Ethnocentric continued
No systematic research is conducted overseas

No major modifications are made to products sold

in overseas markets Prices are calculated on the same basis as in the home market with the addition of overseas distribution costs Promotion and distribution strategies are similar to that employed in the home country Strong reliance on export agents

EPRG FRAMEWORK
Polycentrism - Host country orientation

Local Personnel and Techniques are best suited to deal with local market conditions

Polycentric orientation
Subsidiaries are established in overseas market

Each subsidiary operates independently with its

own marketing objectives and plans Marketing activities are organized on country by country basis Marketing research is conducted independently in each country Separate product lines are developed in each country Home country products are modified to meet local needs.

Polycentric continued
Each subsidiary will have its own pricing and

promotion policy Sales personnel from those countries Traditional channels of distribution of those countries

EPRG FRAMEWORK
Regiocentrism - A regional orientation
Recognizes regional commonaliti es and leads to the design of regional strategies

EPRG FRAMEWORK
Best man for the job irrespectiv e of national origin
Geocentrism - A world orientation

Regiocentric and Geocentric

Region or entire world as potential market

Firm develops policies and organises activities on

a regional or worldwide basis Marketing personnel from the region or from any country Standardised product lines for regional or worldwide markets Regional or Global channels of distribution are also developed

International Market Entry strategies

Market Entry
Once the target market has been identified, the

next step relates to the decisions regarding the alternative methods of entry. The various methods of market entry open to firm in a given country are: Indirect exporting Direct Exporting Licensing Franchising Joint Venture Foreign subsidiaries

International Marketing environment

Social factors Political and government factors Economic factors Demographic factors

Competition
Logistics Risk