1. International Marketing
Dr. A. Kaul

2. Syllabus
1. Financial Transactions
Between exporter & importer, open account
D/P,D/A, letter of credit ,etc. – exchange
control regulations regarding export and
foreign exchange expenditure on export
promotion, pre-shipment and post-shipment
finance from banks – policies of ECGC
Dr. A. Take Notes
Kaul

3. Syllabus
Syllabus
2. Decision and Need to Enter into International
Market
International marketing organization problems –
international marketing environment –
institutions in world economy, GATT/UNCTAD –
trade groups in different countries – legal
environment of international marketing –
political environment – cultural environment –
economic environment – India’s trade relations
with other countries – government assistance
for export
Dr. A. Take Notes
Kaul

4. Syllabus
Syllabus
3. International Marketing Intelligence and Task
Appraising opportunities and risks – product
planning and development – managing channels
of distribution, foreign market channels & global
logistics – study of U.S.A., Canada, Latin
America, Middle East, Africa, South East Asia,
and Europe for export potential – marketing
research and export promotion – international
marketing operations and communications –
export pricing and costing – case studies
Dr. A. Take Notes
Kaul

5. Syllabus
Syllabus
4. Export Procedures and Documentation
Registration with various agencies – compulsory
quality control and pre-shipment with
inspection – processing export orders – export
production and packing – procedure for claim of
central excise duty on export goods – customs
and shipment procedure – duty drawback –
procedures to claim REP license and cash
assistance – export houses, etc.
Dr. A. Take Notes
Kaul

6. Reference Texts
1. International Marketing – Onkvisit and Shaw
2. International Marketing – Keegan
3. International Marketing – Cotera
4. International Marketing - Bhattacharya
Dr. A. Take Notes
Kaul

7. Financial Transactions 11
• The international market is generally very
competitive and sensitive, and the credit
facilities made available to the buyers are one
of the important determinants of export
business
Dr. A.
Kaul

8. 11
• The extent to which credit must be extended
to the importer depends on the sale terms
• If the exporter gets cash in advance, there is
no issue of financing;
but this is not common
Dr. A.
Kaul

9. 11
• It, therefore, becomes necessary to make
institutional credit available to the export
sector to
meet pre-shipment and post-shipment
financial requirements
• Such credit facilities will enable the exporter
to extend reasonable credit facilities to
foreign buyers
Dr. A.
Kaul

10. 11
Payment Terms
• Involves export financing methods and
process
1. Cash in Advance
2. Open Account
3. Consignment Sale
4. Document Against Payment – D/P
5. Document on Acceptance – D/A
6. Letter of Credit
Dr. A.
Kaul

11. 11
Payment
Payment
Terms
Terms
1. Cash in Advance
Most Advantages for Seller
With Order or Before Shipment
Draft, Check, Electronic Transfer
Seldom Acceptable to Buyer
Insisted when Customized Manufacture, to
order, and specifications of the buyers
Dr. A.
Kaul

12. 11
Payment
Payment
Terms
Terms
Necessary when Buyer is Unknown to
Seller
Buyer’s Creditworthiness is Doubtful
Seller’s Monopoly Exists
Sellers Market Condition Exists
• Fortunately, the International Market is
Inherently very Competitive
Dr. A.
Kaul

13. 11
Payment
Payment
Terms
Terms
2. Open Account
Exporter Ships Goods with no Financial
Documents
Only Commercial Invoice
Seller Carries Financial Risk
Restricted to Intra-Company Transactions
Seller and Buyer have Established
Relationship
Dr. A.
Kaul

14. 11
Payment
Payment
Terms
Terms
• Indian exporters are allowed to sell on the
Open Account basis only with special
permission from the Reserve Bank of India
• This permission is given only to foreign
companies operating in India
Dr. A.
Kaul

15. 11
Payment
Payment
Terms
Terms
3. Consignment Sale
Exporter consigns to Agent or Rep in the
foreign market
Agent of Rep arranges Sale and Pays the
Exporter
Exporter retains the Title until the Sale
Dr. A.
Kaul

16. 11
Payment
Payment
Terms
Terms
No Bill of Exchange is Involved
Seller Exposed to Default Risk
Exchange Risk exists if Consignee is
Inefficient or Dishonest
• An Indian exporter selling goods on
consignment basis must furnish a declaration
regarding the full export value of the goods
Dr. A.
Kaul

17. 11
Payment
Payment
Terms
Terms
4. Document Against Payment – D/P
Same as Cash Against Documents – C.A.D.
Exporter Ships Goods to Foreign Buyer
Documents giving Title handed over
through Bank only on Payment
Until Payment Ownership of Goods
remains with Seller
Dr. A.
Kaul
Dr. A.

18. 11
Payment
Payment
Terms
Terms
Exporter can obtain Finance from the
Bank against the D/P Bill
• If the bank is satisfied, it may finance the
exporter by purchasing the D/P Bill, usually on
a ‘with recourse’ basis
• In the event of non-payment by the buyer, the
bank has recourse to the drawer
Dr. A.
Kaul

19. 11
Payment
Payment
Terms
Terms
5. Documents on Acceptance
Buyer Accepts the Bill of Exchange by
Signing it
Documents and Title to the Goods are
handed over by the Bank
Exporter extends 30, 60, 90 days credit to
the Importer
Dr. A.
Kaul

20. 11
Payment
Payment
Terms
Terms
• Bank may extend finance to Exporter by
purchasing the D/A Bill ‘with recourse’
• The exporter relies on the honesty and
creditworthiness of the buyer, and the D/A is
extended only to parties with integrity,
financial stability, and reputation
Dr. A.
Kaul

21. 11
Payment
Payment
Terms
Terms
6. Letter of Credit
Letter of Credit is used most often Globally
Importer arranges L/C with a Bank
Document gives Bank Guarantee
Draft is Drawn on Importer’s Bank
Bank will Honor the Draft when
submitted by Exporter
Dr. A.
Kaul

22. 11
Payment
Payment
Terms
Terms
L/C Eliminates Risk for Exporter
Exporter must fulfill obligation of
Shipment
• Immediately after shipment of the goods the
exporter can present the Bill of Exchange
and other documents specified in the L/C to
obtain payment through exporters own Bank
Dr. A.
Kaul

23. 11
Payment
Payment
Terms
Terms
• There are different types of Letters of Credit
Clean L/C – no attached documents
Documentary L/C – additional documents
Assignable Credit – transferable
Non-Assignable Credit – non-transferable
Cash Credit – payment in cash
Acceptance Credit – bank merely ‘accepts’,
exporter then sells draft to bank
Dr. A.
Kaul

24. 11
Payment
Payment
Terms
Terms
Revocable Credit – can be cancelled
Irrevocable Credit – cannot be revoked
Confirmed Credit – a bank in exporter’s
country confirms the L/C
Back-to-Back Credit – original L/C used for
secondary credit
Revolving Credit – for similar transactions
Red Clause Credit – predetermined advance
Dr. A.
Kaul

25. 11
Irrevocable Letter of Credit Payment
Payment
Terms
Terms
• It is generally used in international
transactions
• It cannot be revoked, amended, or modified
by the issuing bank without express consent
of all the parties
• Is a definite undertaking provided shipment
terms and conditions are complied with
Dr. A.
Kaul

26. 11
Example –
Irrevocable Letter of Credit
• US Buyer, Indian Seller
• Indian Exporter requests US Importer to
arrange for an Irrevocable Letter of Credit
• US Importer applies to own bank in the US to
issue an L/C
• In the application the US Importer will indicate
the terms of the sale and the documents to
accompany
Dr. A.
Kaul

27. 11
Example
Example
-Irrevocable
-Irrevocable
Letter of Credit
Letter of Credit
• If the US Bank is prepared to issue the L/C, the
US Importer will sign the L/C Contract
agreeing to reimburse the bank
• The US Bank will now notify the Indian
Exporter’s bank in India, mentioned in the L/C,
and to confirm the L/C to the Indian Exporter
Dr. A.
Kaul

28. 11
Example
Example
-Irrevocable
-Irrevocable
Letter of Credit
Letter of Credit
• The notifying Indian Bank will now confirm to
the Indian Exporter that an irrecoverable L/C
has been arranged, and will describe the
terms under which the shipment must be
made before the Indian Exporter’s payment
draft will be honored
Dr. A.
Kaul

29. 11
Example
Example
-Irrevocable
-Irrevocable
Letter of Credit
Letter of Credit
• This makes the contract binding on both the
issuing US Bank and the confirming Indian
Bank
• The Indian Exporter will now ship the goods to
the US Buyer, and draw a time draft on the
issuing US Bank with documents, and present
it to the confirming Indian Bank
• The Indian Seller may sell the draft and
documents to the confirming Indian Bank
Dr. A.
Kaul

30. 11
Example
Example
-Irrevocable
-Irrevocable
Letter of Credit
Letter of Credit
• The confirming Indian Bank will send the draft
and documents to its own corresponding bank in
the US, which will present it to the issuing or
drawer US Bank, of the US Buyer, for acceptance
• The accepting/issuing US Bank will deliver the
draft and documents to the US Importer/Buyer,
with a Trust Receipt, an instrument under which
the bank retains title to the merchandize
Dr. A.
Kaul

31. 11
Example
Example
-Irrevocable
-Irrevocable
Letter of Credit
Letter of Credit
• The US Importer/Buyer is expected to make
full payment when the draft matures
Dr. A.
Kaul

32. 11
Institutional Finance for
Exports
• Exporter’s Pre-Shipment Financing Requirements
Purchase of Raw Materials and
Components
Processing
Packaging
Packing
Marking
Transactions
Warehousing
Dr. A.
Kaul

33. 11
Institutional
Institutional
Finance for
Finance for
Exports
Exports
• Exporter’s Post-shipment Financing
Requirements
To cover period between the shipment of
the goods and the receipt of payment
Dr. A.
Kaul

34. 11
Pre-Shipment Credit
• Pre-shipment finance, also known as packing
credit, refers to the credit extended to the
exporter prior to the shipment of goods
• To met working-capital requirements
• Is short-term finance
• Also advanced against export incentives
Dr. A.
Kaul

35. 11
Pre-
Pre-
Shipment
Shipment
Credit
Credit
• Providers
Indian and foreign commercial banks
which are members of the Foreign Exchange
Dealers’ Association
Dr. A.
Kaul

36. 11
Pre-
Pre-
Shipment
Shipment
Credit
Credit
• Advances by Commercial Banks are governed
by the Packing Credit Scheme of the Reserve
Bank of India
• The Features are:
The loan is advanced only on receipt of an
export order
The exporter should deliver either a L/C or
a confirmed export order
Dr. A.
Kaul

37. 11
Features
Features
Advances must be repaid from the
proceeds of the relative export bill
Packing credits are eligible for interest
subsidy
Available against incentives
Concessional rates of interest
Sub-supplier must submit documents from
Dr. A. Export House/Merchant Exporter
Kaul

38. 11
Post-Shipment Finance
• Supplier’s Credit
Credit extended to Overseas Buyer to pay
for goods imported from Exporter
Generally, advanced for capital goods
• Line of Credit
Extended to a financial institution in the
buyer’s country when a number of buyers
Dr. A.
are involved
Kaul

39. 11
Post-
Post-
Shipment
Shipment
Credit
Credit
• Short-term Finance
Provided by commercial banks under L/C,
by purchasing D/P and D/A bills, against
export bills, export incentives, etc.
Medium and Long-Term Finance
By commercial banks
Industrial Development Bank of India
Dr. A.
(IDBI), but now Exim Bank
Kaul

40. 11
Finance
• The export-import (EXIM) bank, commercial
banks, and certain financial institutions like
specified cooperative banks provide
pre-shipment and
post-shipment finance
to exporters
Dr. A.
Kaul

41. 11
Finance
Finance
• Some of these institutions also provide
suppliers’ credit, including line of credit to
promote exports
• Export credits generally carry concessional
interest rates
Dr. A.
Kaul

42. 11
Exim Bank
• The Export-Import Bank of India was set-up in
1982, for the purpose of financing, facilitating
and promoting foreign trade in India, and
is the principal financial institution in the
country for
coordinating working of institutions engaged
in financing exports and imports
Dr. A.
Kaul

43. 11
Exim
Exim
Bank
Bank
• It is fully owned by the Government of India
• Managed by a Board of Directors – from
government, financial institutions, banks, and
business community
• Finance Operations – cover projects, trade,
and foreign investments
• It is supported by Planning and Co-ordination
Groups
Dr. A.
Kaul

44. 11
Objectives and Functions Exim
Exim
Bank
Bank
1. Grants loans and advances in India – solely or
jointly with commercial banks
2. Grants lines of credit in foreign countries – to
governments, financial institutions,
organizations
3. Handles transactions with mix – government
credit and commercial credit
Dr. A.
Kaul

45. 11
Exim
Exim
Bank
Bank
4. Purchases, discount, negotiate export bills
5. Sells or discounts export bills in international
markets
6. Provides refinance facilities
7. Issues guarantees for imports
8. Confirms/endorses L/Cs
Dr. A.
Kaul

46. 11
Exim
Exim
Bank
Bank
9. Buys or sells foreign exchange
10. Undertakes and finances research, surveys,
market studies
11. Provides technical, administrative, and
financial assistance
12. Provides funded and non-funded assistance
for promotion of foreign trade
Dr. A.
Kaul

47. 11
Strategy Exim
Exim
Bank
Bank
• Three Aspects
Provides Funds for Exports
Information and Consulting
Research and Analysis – market, industry
Dr. A.
Kaul

48. 11
Exchange Control
Regulations
• The Export-Import Policy (Exim Policy) reflects
the foreign trade policy of India
• Implemented under the framework of the
Foreign Trade (Development and Regulation)
Act (FTDR), 1992
Dr. A.
Kaul

49. 11
Exchange
Exchange
Other Regulations Control
Control
Regulations
Regulations
• Indian Coffee Act, 1942
• Tea Act, 1953
• Antiques and Art Treasures Act, 1972
• Foreign Exchange Regulation Act (FERA), 1973
Dr. A.
Kaul

50. 11
Export Development
• Government of India promotes exports
• Export development is important to the Firm
and the Economy
Dr. A.
Kaul

51. 11
Export
Export
Development
Development
• Benefits
Economies-of-Scale
Surplus Supply of Commodities
Export-Led Growth
Counter Domestic Recession
Earn Foreign Exchange
Reduce Trade Deficits
Compete in the Global Market
Dr. A.
Kaul

52. 11
Government’s Role
• Establish and Sponsor Organizations
Ministry of Commerce
Autonomous Bodies:
1. Commodity Boards
2. Export Inspection Council
3. Indian Institute of Foreign Trade
4. Indian Institute of Packaging
Dr. A.
Kaul

53. 11
Government‘s
Government‘s
Role
Role
5. Export Promotion Councils
6. Federation of Indian Export Organizations
7. Indian Council of Arbitration
8. Marine Products Export Development
Authority
9. Agricultural and Processed Food Products
Export Development Authority
10. Indian Trade Promotion Organization
Dr. A.
Kaul

54. 11
India Trade Promotion
Organization (ITPO)
• Functions
1.Develop and promote exports, imports, and
upgrade technology through fairs in India and
abroad
2.Compile and disseminate trade related
information
3.Publicity
Dr. A.
Kaul

55. 11
India trade
India trade
Promotion
Promotion
Organization
Organization
4. Organize visits of foreign buyers and traders
5. Foreign delegations
6. Assist Indian companies in trade
development
Dr. A.
Kaul

56. 11
Incentives
• Export incentives are a widely employed
strategy of export promotion
• The objective is to increase the profitability of
export business by encouraging exports
Dr. A.
Kaul

57. 11
Incentives
Incentives
• Types:
Duty Exemption/Drawback
Income Tax Concession
Cash Compensatory Support
International Price Reimbursement
Scheme
Interest Subsidies
Freight Subsidies
Dr. A.
Kaul

58. 11
Marketing Assistance
• Assisting with Marketing Surveys and
Research
• Providing Marketing Information
• Organizing International Trade Fairs and
Exhibitions
• Credit and Insurance Facilities
Dr. A.
Kaul

59. 11
Marketing
Marketing
Assistance
Assistance
• Release of Foreign Exchange for Marketing
Activities
• Assistance in Export Procedures
• Quality Control and Pre-Shipment Inspection
• Identifying Markets and Products with Export
Potential
• Helping Buyer-Seller Interactions
Dr. A.
Kaul

60. 11
Foreign Exchange
• Foreign exchange is released for undertaking
approved market development activities such
as:
participation in trade fairs and exhibitions,
foreign travel for export promotion,
advertising abroad, market research,
procurement of samples and technical
information
Dr. A.
Kaul

61. 11
Export Risk Insurance
• International Business involves different types
of risks for which insurance coverage can be
obtained from
The Export Credit Guarantee Corporation
(ECGC)
Dr. A.
Kaul

62. 11
Export Credit Guarantee
Corporation (ECGC)
• The ECGC has policies objectives covering:
Different political and commercial risks
associated with export marketing
Certain types of risks associated with
foreign investments
Risks due to exchange rate fluctuations
Insurance coverage to banks against export
credit
Dr. A.
Kaul

63. 11
Extent of Cover
• ECGC normally pays 90% of the losses on
account of political or commercial risk
• No coverage if Payment is in Advance or by
Irrevocable Letter of Credit
Dr. A.
Kaul

64. Dr. A.
Kaul

65. Decision and Need to Enter 22
International Market
Dr. A.
Kaul

66. Decision and Need to Enter 22
International Market
• International marketing is not the same thing
as international trade
• Only a part of international trade flows
represent international marketing
• There is an aspect of international marketing
that is not captured by the international trade
statistics
Dr. A.
Kaul

67. 22
Definition –
International Marketing
• The marketing of goods and services across
national frontiers, and
the marketing operations of an organization
that sells and/or produces within a given
country when:
1. the organization is part of, or associated
with, an enterprise which also operates
in other countries; and
Dr. A.
Kaul

68. 22
Definition ––
Definition
International
International
Marketing
Marketing
2. there is some degree of influence on or
control of the organization’s marketing
activities from outside the country in
which it sells and/or produces
Dr. A.
Kaul

69. 22
Definition ––
Definition
Definition International
International
Marketing
Marketing
• International marketing is simply an attitude
of mind,
the approach of a company with a truly global
outlook,
seeking its profit impartially around the world,
‘home’ market included,
on a planned and systematic basis
Dr. A.
Kaul

70. 22
Definition
• International marketing is the marketing
function of multinational companies
Dr. A.
Kaul

71. 22
Need to Enter Definition ––
Definition
International
International
International Markets Marketing
Marketing
• The Decision and Need to Enter may be due
to:
Pull Factor – attractiveness of the
foreign market, profitability and
growth
Push Factor – lack of growth in domestic
markets, mature PLC of major
products, international competition
Dr. A.
Kaul

72. 22
Reasons for Going
International
• Profit
• Growth Opportunities
• Domestic Market Constraints
• Competition
• Government Policies and Regulations
Dr. A.
Kaul

73. 22
Reasons for
Reasons for
Going
Going
International
International
• Monopoly Power
• Spin-Off Benefits
• Strategic Vision
• Globalization
Dr. A.
Kaul

74. 22
Reasons for
Reasons for
Going
Going
International
International
• Profit
Increase Sales
Reduce Costs – cheap labor, free trade
agreements
Increase Profit Margins
• Growth Opportunities
Short-Term Growth – developed markets
Base in Foreign Market – US, Singapore
Future Growth Potential – emerging markets
Dr. A.
Kaul

75. 22
Reasons for
Reasons for
Going
Going
International
International
• Domestic Market Constraints
Matured PLC Portfolio – for major
products
Insufficient Economies of Scale – stable
market share in domestic market
Recession in Domestic Market – reduce
economic risk, HMT
Dr. A.
Kaul

76. 22
Reasons for
Reasons for
Going
Going
International
International
• Competition
Economic Liberalization – reduction in
domestic protection and trade
barriers
Counter International Competition –
change in business strategy, IBM
against Fujitsu, Hitachi
Dr. A.
Kaul

77. 22
Reasons for
Reasons for
Going
Going
International
International
• Government Policies and Regulations
Export Promotion Policies - incentives
Foreign Direct Investment Policies –
restrictions eliminated
Environmental Regulations – may be less
stringent
Trade Agreements – EU, NAFTA, SAARC
Dr. A.
Kaul

78. 22
Reasons for
Reasons for
Going
Going
International
International
• Monopoly Power
Patents – pharmaceuticals
Technology Advantage – VCR, Panasonic
High Market Share – few competitors
Product Differentiation – color TV, Sony
Raw Material Resources - tea
Dr. A.
Kaul

79. 22
Reasons for
Reasons for
Going
Going
International
International
• Spin-Off Benefits
Branding – build identity and image
Foreign Exchange – easier imports
Government Incentives – export incentives
Product Development – product
improvements
New Products/Technologies – foreign R&D
Dr. A.
Kaul

80. 22
Reasons for
Reasons for
Going
Going
International
International
• Strategic Vision
Future Grow – long-range plan
Retain Competitive Edge – survival
To Diversify – acquire new businesses
Reduce Economic Risk – build a business
portfolio
Dr. A.
Kaul

81. 22
Reasons for
Reasons for
Going
Going
International
International
• Globalization
Global Corporation – become one
Resource Globally – materials,
components, manufacturing,
advertising, financing, management
Changing Business Environment – stay
ahead
Dr. A.
Kaul

82. 22
International Marketing
Decisions
• International Business Decision
• Market Selection Decision
• Entry and Operating Decisions
• Marketing-Mix Decisions
• International Organization Decision
Dr. A.
Kaul

83. 22
International
International
Marketing
Marketing
Decisions
Decisions
• International Business Decision
Current and Future Opportunities
Current Domestic Opportunities
Firm Resources
Skill Base, Experience,
Production, Marketing,
Finances
Dr. A.
Kaul

84. 22
International
International
Marketing
Marketing
Decisions
Decisions
• Market Selection Decision
Analysis of International Markets
Analysis of Marketing Environments
• Entry and Operating Decisions
Export, Licensing, Franchising,
Distribution, Contract, Manufacturing,
Joint Venture, Acquisition, Merger
Dr. A.
Kaul

85. 22
International
International
Marketing
Marketing
Decisions
Decisions
• Marketing-Mix Decisions
Uncontrollable Factors
Controllable Factors
Product, Price, Promotion, Place
• International Organization Decision
Export Department, Foreign Marketing
Division, Manufacturing Subsidiary,
International Division, Global Organization
Dr. A.
Kaul

86. 22
International Marketing
Decisions
Company Objectives
Company Objectives Company Resources
Company Resources
International Marketing
International Marketing
Market Potential Decision
Decision Environmental Factors
Market Potential Environmental Factors
Market Selection
Market Selection
Decision
Decision
Entry and Operating
Entry and Operating
Decisions
Decisions
Product
Product Marketing-Mix
Marketing-Mix Price
Price
Decisions
Decisions
Place
Place Promotion
Promotion
International Organization
International Organization
Decision
Decision
Dr. A.
Kaul

87. 22
Problems in International
Marketing
• Special Problems due to Differences
1.Political and Legal – complex, regional within
2.Cultural – significant compared to domestic
3.Economic – free or freer market economy
4.Currency – exchange rate fluctuations,
monetary policy
5.Language – can be managed easily
Dr. A.
Kaul

88. 22
Problems in
Problems in
International
International
marketing
marketing
6. Infrastructure – developed, developing
7. Marketing – advertising media
8. Trade Policies – restrictions, import controls
9. Logistics – transportation, insurance
10.Trade Practices – customs clearance, duty
Dr. A.
Kaul

89. 22
Changed Company
Orientation
• Reflect company goals and philosophy
• Lead to different management strategies and
planning procedures for international operations
• Orientation
Ethnocentric – domestic
Polycentric – foreign
Regiocentric – regional
Geocentric - world
Dr. A.
Kaul

90. 22
Internationalization Stages
Domestic Company
Domestic Company
Exporting, Licensing, Franchising
Exporting, Licensing, Franchising Ethnocentric
Ethnocentric
International Company
International Company
Extending marketing-mix to
Extending marketing-mix to
foreign markets
foreign markets Polycentric
Polycentric
Creating international division
Creating international division
Multinational Company
Multinational Company
Unique strategy in each country
Unique strategy in each country Regiocentric
Regiocentric
Creating regional subsidiaries
Creating regional subsidiaries
Global/Transnational
Global/Transnational
Company
Company
Global sourcing, development,
Global sourcing, development, Geocentric
Geocentric
Dr. A. production, marketing
production, marketing
Kaul

91. 22
Driving Forces
• Liberalization and Privatization
Under National Policy
Under WTO Agreements
Global Mergers and Acquisitions
Foreign Direct Investments (FDIs)
• Multinational Corporations (MNCs)
Growing Number and Networks
Dr. A.
Kaul

92. 22
Driving
Driving
Forces
Forces
• Technology
Advances – new products
Economies of Scale –better
Break-Even – lower
• Transportation
Faster
Lower Costs
Safer
Dr. A.
Kaul

93. 22
Driving
Driving
Forces
Forces
• Communications
Wireless
Satellite
Internet
• IT
Applications – commercial packages
Control and Display – processes
Processing – seed, accuracy,
Dr. A.
Kaul

94. 22
Driving
Driving
Forces
Forces
• Product Development Costs
Quick Payback
• Product and Process Quality
Driving Demand and Supply
• Consumer Aspirations
Improved Standard of Living
• Competition
Increasing Rapidly
Dr. A.
Kaul

95. 22
Driving
Driving
Forces
Forces
• Economic Trends
Free markets
Emerging Markets – China, India, Brazil
• Regional Integration
European Union (EU)
North Atlantic Free Trade Agreement (NAFTA)
South Asian Association for regional
Cooperation (SAARC)
Dr. A.
Kaul

96. 22
International Marketing
Environment
• Economic – stage of development
• Socio-Cultural – customs, tastes, preferences
• Demographic – size, age, households, income
• Political – parties, platforms, control
• Government – nature, policies
• Technological – breakthroughs, diffusion
Dr. A.
Kaul

97. Dr. A.
Kaul