International marketing environment with details on foreign market entry modes. Forms of Exporting

1. Made By-
Lalit Chikker

2.  International marketing environment is a set of controllable
(internal) and uncontrollable (external) forces or factors that
affect international marketing.
 International marketing mix is prepared in light of this
environment.

4.  Factors related to the world economy.
 Broader picture of global phenomenon affects
every decisions of international marketing.

5.  Customer-related factors
 Political and legal factors
 Social factors
 Cultural factors
 Competition
 Global relations among nations and degree of the worldwide peace.
 Geographic/ecological/climate-related factors
 Functioning of international organisations like UNO, World Bank, WTO, etc.
 Availability of marketing facilities and functioning of international agencies,
etc.

6.  factors related to the economy of the nation.
 Overall economic, socio-cultural, demographic, political,
legal and other domestic aspects constitute domestic
environment for international marketing.

7.  Political climate/stability/philosophy
 Government approach and attitudes toward international trade
 Legal system and business ethics
 Availability and quality of infrastructural facilities
 Availability and quality of raw-materials
 Functioning of institutions and availability of facilities
 Technological factors
 Ecological factors, etc.

8.  These are internal and controllable factors.
 They are related to internal situation of the company dealing
with international trade.
 International marketer needs to use, adjust, and organize these
factors to satisfy needs and wants of the (international) target
markets.

9.  Objectives of company
 Managerial philosophy of company
 Personal factors related to management
 Managerial attitudes toward other nations, customers, social welfare, etc.
 Company’s policies and rules
 Resource ability of company and marketing mix
 Form of organisation and organizational structure.
 Nature and types of employees
 Internal relations with other departments
 Company’s relations with other stakeholders and service providers.

10.  EXPORTING
-indirect exporting
-direct exports
-intra-corporate
transfers
 LICENSING
 FRANCHISING
SPECIAL MODES
-Contract
manufacturing
-Management
Contracts
-Turnkey projects
 FDI without alliances
 FDI with alliances

11. Indirect
exporting
Direct
exporting
Intra-corporated
transfer

12. ◦ Indirect involvement means that the
firm participates in international
business through an intermediary
and does not deal with foreign
customers or markets directly.
◦ Direct involvement means that the
firm works directly with foreign
customers or markets with the
opportunity to develop a
relationship.
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13.  Exporting of goods and services
through various home-based
exporters
◦ Manufacturers’ export agents
◦ Export commission agents
◦ Export merchants
◦ International firms
16-
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16.  Licensing is when a firm, called the
licensor, leases the right to use its
intellectual property—technology, work
methods, patents, copyrights, brand
names, or trademarks—to another firm,
called the licensee, in return for a fee.
 The property licensed may include:
◦ Patents
◦ Trademarks
◦ Copyrights
◦ Technology
◦ Technical know-how
◦ Specific business skills

17.  Under franchising, an independent organisation
called the franchisee operates the business
under the name of another company called the
franchisor.
 In such an arrangement the franchisee pays a
fee to the franchisor.
 Franchising is a form of Licensing but the
Franchisor can exercise more control over the
Franchisee as compared to that in Licensing.
Franchising

18.  Franchisee has to pay a fixed amount and
royalty based on sales.
 Franchisee should agree to adhere to follow
the franchisor’s requirements
 Franchisor helps the franchisee in
establishing the manufacturing facilities
 Franchisor allows the franchisee some degree
of flexibility.
 Eg. McDonalds, Subway, KFC

20.  A management contract is an agreement
between two companies whereby one
company provides managerial assistance,
technical expertise and specialised
services to the second company for a
certain period of time in return for
monetary compensation.
 Eg. Schools, sports facilities, hospitals,
office buildings, malls and large
businesses have on-site cafeterias,
restaurants.

21.  A turnkey project is a contract under
which a firm agrees to fully design,
construct and equip a
manufacturing/business/service facility
and turn the project over to the
purchaser when its ready for operation,
for a remuneration.

22.  Contract manufacturing is outsourcing entire
or part of manufacturing operations.
 E.g.: pharmaceuticals, Personal Care products
etc
 The iPad and iPhone, which are products from
Apple Inc., are manufactured in China by
Foxconn. Hence, Foxconn is a contract
manufacturer and Apple benefits from a
lower cost of manufacturing devices

23. Companies enter the international market
through FDI , invest their money, establish
manufacturing and marketing facilities
through ownership and control.
Greenfield strategy- the term Greenfield refers
to starting of the operations of a company
from scratch in a foreign market.

24. Strategic alliance is a cooperative and
collaborative approach to achieve the larger
goals.
Modes of FDI through alliances are:
 Mergers and acquisitions
 Joint ventures

25. Merger : The combining of two or more
companies, generally by offering the
stockholders of one company securities in
the acquiring company in exchange for the
surrender of their stock.
Acquisition : When one company takes over
another and clearly established itself as the
new owner, the purchase is called an
acquisition.
HDFC Bank acquisition of Centurion Bank of
Punjab for $2.4 billion

26.  A joint venture is an entity formed between
two or more parties to undertake economic
activity together. The parties agree to create
a new entity by both contributing equity, and
then they share in the revenues, expenses,
and control of the enterprise.
 Sony-Ericsson is a joint venture by the
Japanese consumer electronics company Sony
Corporation and the Swedish
telecommunications company Ericsson to
make mobile phones

27. THANK YOU