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International Marketing

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International Marketing
International Marketing
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International Marketing

  1. 1. International Marketing by:- Siddhi Bhargava Divya Singh Rajput
  2. 2. Definition • International marketing (IM) or global marketing refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an extension of the techniques used in the home country of a firm. • It refers to the firm-level marketing practices across the border including market identification and targeting, entry mode selection, marketing mix, and strategic decisions to compete in international markets. • According to the American Marketing Association (AMA) "international marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” • In contrast to the definition of marketing only the word multinational has been added.
  3. 3. Contd… • In simple words International Marketing is the application of marketing principles to across national boundaries. • However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term. The intersection is the result of the process of internationalization. • Many American and European authors see international marketing as a simple extension of exporting, whereby the marketing mix 4P's is simply adapted in some way to take into account differences in consumers and segments. • It then follows that global marketing takes a more standardized approach to world markets and focuses upon sameness, in other words the similarities in consumers and segments.
  4. 4. Micro-Context of International Marketing Organizational and Consumer Behavior • Organizational buying behavior • International negotiations • Consumer behavior • Country of origin
  5. 5. Marketing Entry Decisions • Initial mode of entry • Specific modes of entry • Exporting • Joint Ventures
  6. 6. Local Market Expansion: Marketing Mix Decisions • Global Standardisation vs. Local Responsiveness Marketing Mix: • Product policy; • Advertising; • Pricing; • Distribution.
  7. 7. Global Strategy Competitive Strategy: • Conceptual development; • Competitive advantage vs. competitive positioning; • Sources of competitive advantage and performance implications. Strategic Alliances: • Learning and trust; • Recipes for alliance success; • Performance of different types of alliance. Global Sourcing: • Global sourcing in a service context; • Benefits of global sourcing; • Country of origin issues in global sourcing. Multinational Performance: • Determinants of performance; • A different interpretation of performance.
  8. 8. Analytical Techniques in Cross- national Research • Measurement Issues; • Reliability and Validity Issues.
  9. 9. Market Segmentation There are two main approaches to global segmentation: Macro Approach • Countries can be seen as segments. For example, there will only be a large market for expensive pharmaceuticals in countries with certain income levels, and entry opportunities into infant clothing will be significantly greater in countries with large and growing birthrates. • There are, however, significant differences within countries. For example, although it was thought that the Italian market would demand "no frills" inexpensive washing machines while German consumers would insist on high quality, very reliable ones, it was found that more units of the inexpensive kind were sold in Germany than in Italy—although many German consumers fit the predicted profile, there were large segment differences within that country.
  10. 10. Contd… Micro Approach: This approach caters to segments within countries. This can be approached in two ways : Intra-market Segmentation: This involves segmenting each country’s markets. Here the company entering a new market segments that market to attain greater understanding of it. • For example, an American firm going into the Indian market would research to segment Indian consumers without incorporating knowledge of U.S. buyers. • Here the idea is that every country's market is different from the others and that it hence demands to be approached differently. • This approach is a long term strategy and involves a lot of research and investment.
  11. 11. Contd… Inter-market Segmentation: This involves the detection of segments that exist across borders. It may be noted that that not all segments that exist in one country will exist in another and that the sizes of the segments may differ significantly. • For example, there is a huge small car segment in India, while it is considerably smaller in the U.S. Inter-market segmentation entails several benefits. • The fact that products and promotional campaigns may be used across markets; introduces economies of scale, and learning that has been acquired in one market may be used in another. • e.g., a firm that caters to a segment of premium quality cell phone buyers in one country can put its experience to use in another country that features that same segment. (Even though segments may be similar across the cultures, it should be noted that it is still necessary to learn about the local market. • For example, for a product, although a segment common across two countries may seek the same benefits, the cultures of each country may cause people to respond differently to it..
  12. 12. International Marketing Vs. Domestic Marketing • Marketing objectives are achieved in a way of molding the controllable elements of marketing decisions (product, price, promotion and distribution) within the framework of the uncontrollable elements of marketplace (competition, politics, laws, consumer behavior, level of technology, and distribution).
  13. 13. Contd… • Uncertainty is created by the uncontrollable elements of all business environments, but each foreign country in which a company operates adds its own unique set of uncontrollable. • Competition, legal restraints, government controls, weather, fickle consumers, and any number of other uncontrollable elements can, and frequently do, affect the profitable outcome of good, sound marketing plans. • Marketer can not control or influence these uncontrollable elements, but instead must adjust or adapt to them in a manner consistent with a successful outcome. • The main difference between them is that the marketing activities take place in more than one country. more complicated, at least two levels of uncontrollable uncertainty instead of one.
  14. 14. International Marketing Environment (controllables) Domestic environment (uncontrollable) Economic climate Competitive structure Political / legal forces Political/legal forces Foreign environment (uncontrollable) Economic forces Cultural forces Competitive forces Geography and infrastructure Structure of distribution Level of technology Environmental uncontrollables country market A
  15. 15. International environmental forces • Marketing controllables: The successful manager constructs a marketing program designed for optimal adjustment to the uncertainty of the business climate. • Domestic uncontrollables: This includes home-country elements that can have a direct effect on the success of a foreign venture: political forces, legal structure, and economic climate. • Foreign uncontrollable: The problem of uncertainty is further complicated by a frequently imposed “alien status” that increases the difficulty of properly assessing and forecasting the dynamic international business climate.
  16. 16. International environmental forces • Thus a strategy successful in one country can be rendered ineffective in another by differences in political climate, staged of economic development, level of technology, or other cultural variation.
  17. 17. Language barrier • Due to a language barrier, it is more difficult to obtain and interpret research data in international marketing. • Promotional messages needs to consider numerous cultural differences between different countries.This includes the differences in languages, expressions, habits, gestures, ideologies and more. • United States - "okay" • Mediterranean - "zero" or "the worst“ • Tunisia - "I'll kill you" • Japan - "money".
  18. 18. International marketing • International marketing is often not as simple as marketing your product to more than one nation. Companies must consider • language barriers, ideals, and customs in the market they are approaching.
  19. 19. Mode of Engagement in Foreign Markets After the decision to invest has been made, the exact mode of operation has to be determined. The risks concerning operating in foreign markets is often dependent on the level of control a firm has, coupled with the level of capital expenditure outlayed. The principal modes of engagement are listed below: • Exporting (which is further divided into direct and indirect exporting) • Joint ventures • Direct investment (split into assembly and manufacturing)
  20. 20. Exporting • Direct exporting involves a firm shipping goods directly to a foreign market. A firm employing indirect exporting would utilize a channel/intermediary, who in turn would disseminate the product in the foreign market. • From a company's standpoint, exporting consists of the least risk. This is so since no capital expenditure, or outlay of company finances on new non-current assets, has necessarily taken place. • Thus, the likelihood of sunk costs, or general barriers to exit, is slim. Conversely, a company may possess less control when exporting into a foreign market, due to not control the supply of the good within the foreign market.
  21. 21. Joint Ventures • A joint venture is a combined effort between two or more business entities, with the aim of mutual benefit from a given economic activity. • Some countries often mandate that all foreign investment within it should be via joint ventures (such as India and the People's Republic of China). • By comparison with exporting, more control is exerted, however the level of risk is also increased.
  22. 22. Direct Investment • In this mode of engagement, a company would directly construct a fixed/non-current asset within a foreign country, with the aim of manufacturing a product within the overseas market. • Assembly denotes the literal assembly of completed parts, to build a completed product. An example of this is the Dell Corporation. Dell possesses plants in countries external to the United States of America, however it assembles personal computers and does not manufacture them from scratch. • In other words, it obtains parts from other firms, and assembles a personal computer's constituent parts (such as a motherboard, monitor, CPU, RAM, wireless card, modem, sound card, etc.) within its factories. • Manufacturing concerns the actual forging of a product from scratch. Car manufacturers often construct all parts within their plants. • Direct investment has the most control and the most risk attached. As with any capital expenditure, the return on investment (defined by the payback period, Net Present Value, Internal Rate of Return, etc.) has to be ascertained, in addition to appreciating any related sunk costs with the capital expenditure.

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