This document discusses international marketing and business strategies. It outlines key considerations for developing a marketing plan, including deciding whether to standardize or adapt marketing approaches across different international markets. The document then discusses the 4 P's of marketing - product, price, promotion, and placement decisions. It provides details on how product strategies, pricing methods, promotional tools, and distribution choices may differ internationally. The document also covers financial requirements, working capital management, and organization strategies for international businesses.

1. INTERNATIONAL
TRADE AND BUSINESS
Presented by: Neshren L. Ebno

2. REPORT OUTLINE
Marketing Plan
Financial Requirements
Organization Strategy
Strategic Options

3. MARKETING PLAN
WHAT MUST BE DONE: THE INTERNATIONAL
WHAT MUST BE DONE: THE INTERNATIONAL
MARKETER’S DILEMMA
MARKETER’S DILEMMA
Marketing is one of the most important areas of operation for
multinational corporations. With the internationalization of
business, MNCs face increased competition at home from both
foreign and domestic competitors and internationally as they
seek to enter new markets. In developing a competitive
strategy, firms utilize the marketing process to identify, create,
and deliver products or services that are in demand at prices
that customers are willing to pay.
The basic marketing-mix decisions consist of four separate but
interconnected functions. These are the four Ps of marketing:
product, price, promotion, and placement.

4. MARKETING PLAN
international Marketing
While these marketing subfunctions are complex enough on the
domestic level, internationalization significantly increases their
complexity. Foreign markets not only are physically removed but
also differ culturally. Specific cost structures in the foreign
market may dictate special pricing, distribution channels found in
the domestic environment may be unavailable in the foreign
market, portions of the product may need to be modified to meet
local tastes, and promotional methods may need to be adjusted
to local media.
International marketing entails operating simultaneously in
different environments, coordinating these international
activities, and learning from the experiences gained in one
country to make marketing decisions in other countries.

5. MARKETING PLAN
international Marketing
The MNC must rely heavily on conducting appropriate and
accurate assessments to determine whether these potential
markets will prove profitable despite the added costs about its
prospective strategy in world markets.
TO CENTRALIZE OR DECENTRALIZE: THE FIRST KEY DECISIONS
In developing a successful international marketing program, a firm
must make several key decisions about its prospective strategy in
world markets. Two crucial questions an MNC must ask are: 1.
Whether or not the marketing program can or should be
standardized across all markets or adapted individually to each
separate market. 2. Whether marketing should be centralized in
company headquarters or decentralized to individual market
locations or foreign manufacturing subsidiaries.

6. It may be human nature that prompts management to attempt to
standardize the marketing function throughout the world, because
standardization greatly simplifies the complexity of marketing and
probably provides significant cost benefits to a firm.
However, the major drawback of standardization involves the risk
of market loss by not being attuned to individual differences in
consumer tastes or local behavior. This cost is difficult to assess,
and it is only through definitive, exhaustive market research that a
firm can determine whether its standardized marketing program is
losing customers.
The degree of standardization also relates to the degree of
comparative differences between the two environments in their
cultures, physical attributes, institutional infrastructure, and
political and economic composition. The greater the degree of
difference between a foreign market and the domestic marketers,
the more likely it is that the attributes or promotion of a product
are inappropriate.

7. Most multinationals have a combination of marketing
programs that are, to some degree, both centralized and
decentralized, which ensures that the company has
control over activities within the subsidiary and the
ability to formulate a global marketing program where
warranted. It can also pinpoint those areas where it is
possible to standardize portions of its marketing program
across markets.

9. ETHNOCENTRIC APPROACH
GEOCENTRIC APPROACH
POLYCENTRIC APPROACH
3 ALTERNATIVES IN DEVELOPING
MARKETING PLANS

10. PRODUCT DECISIONS
When most people think of products, they think of things or
services for sale by companies. The physical product as we
know it, however, is actually only part of the total product. The
total product is the entire package of the physical product and
includes its type and form, brand name, instructions for use,
accessories, and even the level of after-sales service. Desired
product attributes vary among users in different cultures or
countries.
There are two general classes of products marketed
domestically and internationally: industrial products and
consumer goods.

11. PRODUCT DECISIONS
The physical product as we know it, however, is actually only part of
the total product. The total product is the entire package of the
physical product and includes its type and form, brand name,
instructions for use, accessories, and even the level of after-sales
service. Desired product attributes vary among users in different
cultures or countries.
There are two general classes of products marketed domestically and
internationally: industrial products and consumer goods.
PRODUCT-POSITIONING DECISIONS
The decisions regarding the positioning or development of a product in
different markets depend on three crucial factors: the individual
characteristics of each market and the environment in which the product will
be sold; the functional need for the product (or the use to which it will be
put) in the market; and a company’s financial requirements and its
competitive position in that foreign market.

12. A multinational corporation has three different alternatives in targeting
the foreign market. It can either extend its product line, adapt the
product line, or create an entirely new line of products for the market.
PRODUCT-POSITIONING DECISIONS
Economic Forces
Cultural and Social Forces
PRODUCT STRATEGIES
Product Extension Product Adaptation Product Creation

13. PRODUCT STRATEGIES
Once a firm has made the crucial decisions regarding the appropriate
product mix, it needs to decide what message should be
communicated about that product and how it should be delivered in its
new markets. A firm has many alternatives regarding the content of its
promotion message. It can either extend its message from existing
markets or adapt its message to the target market.
As with product decisions, the development of appropriate promotional
efforts raises the question of standardization or adaptation. Promotion
involves reaching potential consumers and providing them with
information on the product’s existence and attributes and the needs it
satisfies.
Great care must be taken to ensure that the content of the message is
appropriate to different cultures.
PROMOTION DECISIONS

14. PROMOTIONAL TOOLS
Pricing is crucial to the success of any marketing program. An
overpriced product may fail to attract customers, and an underpriced
product may lower profitability. Pricing must therefore be carefully
balanced to achieve the optimum level of sales and revenue.
An international corporation must review and establish its pricing
policies in light of overall short-term and long-term strategic
objectives. Consequently, price setting is customarily carried out at
corporate headquarters.
PRICING DECISIONS
Advertising
Personal Selling
Sales Promotions
Publicity and public relations

15. An international marketer considers several crucial factors in
determining appropriate price structure. These factors fall into three
general categories: the strategic objectives of the firm, the costs
involved in the production of goods, and the competitive forces
interacting in the market in relation to consumer demand. The goal
of the multinational firm is to develop a competitive pricing structure
that will provide for both short-term and long-term profitability, as
well as for some flexibility to allow for differences between markets.
PRICING METHODS
Cost-based pricing Transfer pricing

16. The marketing function of distribution involves the critical process
of ensuring that a firm’s products reach the proper location for sale
at the proper time and in the proper quantity. Breaks in the
distribution flow can have critical ramifications, in the form of
disgruntled customers, spoiled or damaged goods, excessive costs,
and lost sales.
Distribution decisions are also of critical importance because they
are often long-term in nature, involving the signing of contracts
with transporters or equipment leasers or the development of
expensive capital equipment or infrastructures.
This process, difficult in domestic markets, grows more complicated
in international environments because it has two stages. First, the
international exporter must transport goods from the domestic
production site to the foreign market; then they must establish
methods of distribution for the goods within the foreign country.
PLACEMENT DECISIONS: DISTRIBUTION OF PRODUCTS

17. Distribution choices depend on several factors. One is the nature of
the product. Is it perishable or fragile, or is it a product that will
require after-sales service? Might it be better distributed by an
authorized company dealer? Another consideration is the degree of
control over distribution. Greater control over the distribution
process requires greater involvement by a firm in terms of time,
money, and energy.
A nation’s developmental level also affects its distribution
resources and networks. Distribution decisions can be even more
complex in less-developed countries where distribution channels
are dominated by specific ethnic groups within the country. This
control, called ethnodomination, means that a multinational firm
must be aware of and gain access to the members of the
distribution channel to get its goods to retail outlets.
PLACEMENT DECISIONS: DISTRIBUTION OF PRODUCTS

18. The financing of international business operations is a far more
complex, tricky, and challenging task than managing the finances of
a domestic business. Several additional considerations and factors
that affect finances come into play when a business goes
international. Many of these factors are positive ones, for example,
newer, larger, and more flexible sources of financing and access to
a greater variety of financial instruments for more efficient use of
financial resources. On the other hand, financial operations become
subject to a variety of new constraints and risks. The task of
financial managers in international business, therefore, becomes a
twofold operation: minimizing the risks to the finances of a
company and maximizing the utilization of the new opportunities
presented by the international environment.
FINANCIAL PLAN

19. FINANCIAL REQUIREMENTS
Time and staffing dedicated to researching and scouting
overseas locations and markets
The costs of purchasing a new headquarters
Travel time between your current and new location
General staff recruitment, training and provisions
Machinery, tech and facilities for your new site(s)
A new fleet of vehicles for your logistics
Key Financial considerations before expanding to another country
(Zak Goldberg):
The Cost of your Expansion
The first place to look is at the possible expenses incurred from
your expansion. This might cover a variety of areas like:

20. Translation work on your company’s website, products, branding
Networking and understanding the cultural nuances of the country
International supply chains to support your company
Sourcing materials and goods for any manufacturing
The general work carried-out on and off-site
Potential Sales Revenue
When researching the location for your expansion, you will have
probably looked at aspects like how receptive the markets are to your
products or services. As well as this, you should use this information
to inform the potential revenue you could expect from successfully
working in this new country. Having a clearer idea of the possible ROI
at stake could also help you determine how quickly you could recover
financially from your expansion investment.
Extra Overseas Operational Costs

21. Additional Support
After you’ve done some initial planning, you may also want to
look into how you can source additional funds to support this.
The bigger your cash reserves the better placed you’ll be to
facilitate your growth and there are several different ways you
could go about this.
You might want to look at securing a business loan from a bank
or lender, or pitch your expansion ideas to your investors to see
if they put forward more capital for this. Anything you can gain
financially, whether large or small, can be incredibly valuable.

22. WORKING CAPITAL MANAGEMENT
In an international business, the management of working capital
has several imperatives in addition to the traditional requirements.
Maintaining an effective amount of working capital is essential for
companies of all sizes but may be even more important for small,
growing companies participating in the international arena.
The requirements of financing in different currencies to meet short-
term obligations can also be met by borrowing locally in the
different money and financial markets. These options generate the
consideration of whether the option of borrowing locally is better
than taking a covered position in the forward exchange market. In
other words, a choice has to be made between a money market
hedge and an exchange market hedge. The decision will depend on
several factors, primarily the expected rates of exchange
fluctuation and the interest-rate differentials and their expected
reliability.

23. A money market hedge is a technique for hedging foreign exchange risk using
the money market, the financial market in which highly liquid and short-term
instruments like Treasury bills, bankers’ acceptances, and commercial paper are
traded.
Simply, it is the use of borrowing and lending transactions in foreign currencies
to lock in the home currency value of a foreign currency transaction.
An exchange market hedge involves the purchase of hedging instruments to
offset the risk posed by specific foreign exchange positions. Hedging is
accomplished by purchasing an offsetting currency exposure.

24. The presence of exchange risk and the policy of the international corporation are
other crucial variables that impact the management of working capital across
national boundaries. Exchange risk will depend on the firm’s foreign currency
liabilities that are not matched by offsetting transactions. Several firms spend
considerable time, effort, and money to minimize their exposure to currency
fluctuations. Other firms prefer to take the risk exposure and hope to profit from
favorable currency movements.
Another challenge that confronts international managers is taxation. Taxation
laws vary among countries and are often fairly complex. Moreover, in several
countries there are frequent major changes in tax laws that could adversely affect
the management of working capital, which is run on a fairly tight basis and which
has little room for maneuvering. Moreover, different tax laws often require that
transactions be structured to minimize tax liability and achieve the lowest
possible posttax financing costs.

25. Management of working capital in different countries also implies the
necessity of ensuring a relatively smooth transfer of funds, both within
and outside the corporation. There are distinct possibilities that
unexpected hurdles may arise because of government restrictions,
exchange controls, or other political risk–related factors that may
prevent funds from reaching their destination on time.
The citizenship-based taxation
The residential taxation
The territorial taxation
The non-dom-system
Different tax systems in the world:

26. Intracompany pooling is a financing technique that seeks to optimize the total
availability of resources on a worldwide or area-group basis. A multinational
corporation is likely to have several offices, each of which generates income
and incurs expenditures and, therefore, has either operational surpluses or
shortages of financial resources at any given time.
The advantages of this technique are obvious. The surplus funds held with one
office or subsidiary of a company would essentially be idle, because they are
not utilized products. If intracompany pooling is effective, the corporate
financial headquarters or regional control centers will know the exact
locations of surpluses and shortages. With this knowledge available at a
centralized point, instructions can be sent to move funds from the surplus to
the deficit locations, which evens out the imbalances.
Intracompany Pooling

27. Dealing with inflation in different countries calls for active working capital
management policies. High inflation tends to erode the value of
receivables but also lessens the burden of payables in real terms. When
inflation is expected to rise, plans are made for local receivables to be
delivered at the earliest possible date. Leading is the technical term for
the early receipt of goods. Conversely, an MNC would tend to delay its
payables. The policy of creating deliberate delays with respect to
outflows or inflows is called lagging. Centralized cash management
systems also help in corporate efforts to minimize the inflationary erosion
of liquid assets by permitting their transfer to locations where there are
lower inflation rates and expectations.
Financial Plan
HEDGING AGAINST INFLATION

28. OPERATIONS, TECHNOLOGY, AND INTERNATIONAL COMPETITION
With increasing worldwide competition, the strategic implications of
decisions concerning an MNC’s choices for operations and technology
become even more important than they normally are. These two elements
influence where and how a company operates. Decisions regarding what
an MNC will produce and in what location and to maintain a competitive
edge are closely related to its technological and operational resources.
Although some international business experts have chosen to treat
technology and production in the international arena as separate factors,
the two are interrelated issues because of the impact that technology has
on international production decisions.
Organization Strategy

29. Organization Strategy
International management of operations and production may be very
similar to the management of operations and production in a home
country. Common to both are considerations regarding the efficient use of
all the factors of production, productivity improvements, R & D, and the
extent of horizontal or vertical integration, or both. The international
environment, however, includes other considerations. Before making
production decisions, an MNC must consider such additional factors as
different wage rates, industrial relations, sources of financing, foreign
exchange risk, international tax laws, control, the appropriate mix of
capital and labor, access to suppliers, and the production-experience
curve in each country.

30. Organization Strategy
WORLDWIDE STANDARDIZATION
SUPPLY
CONTROL
STRATEGIC CONTROL (Areas to Control )
The control process involves continuous monitoring of the
strategic plan to measure its effectiveness and to make
corrections where necessary, either in the plan itself or in
compliance. Three major areas of importance to an MNC with
regard to controlling international operations include control of
foreign exchange risk, adjustments needed in routine control
systems because of differences in various branch operating
environments, and control of risks arising out of foreign
operations, including relations with host governments.

31. Organization Strategy
The local operational system will be somewhat
reflective of the parent organization. For example, a
foreign subsidiary is usually a smaller version of the
parent company and has a similar organizational
structure. If a parent company is structured according to
functional divisions, for example, the foreign subsidiary
will also be organized by functional departments.
Furthermore, because the local operational system is
most likely to be smaller than that of the parent
company, it will not be integrated vertically or
horizontally.
DESIGNING THE LOCAL OPERATIONS SYSTEM

32. Organization Strategy
Materials handling includes obtaining necessary inputs
and maintaining appropriate inventories. If materials
handling is inefficient, management may find surplus
parts inventories at some sites, while other sites are
shut down because of a lack of parts. The logistics of
the production system, or coordination of the
movements and storage of inputs and outputs, are an
intricate part of the materials-handling function. The
objectives of an MNC’s logistics system are to minimize
costs, secure supplies, and satisfy demand
MATERIALS HANDLING

33. Organization Strategy
There are two categories of activities inherent to production: productive
activities and supportive activities. In terms of productive activities, given
a period of introduction and orientation, managers of the productive
activities expect the system to operate at a sufficient and prescribed level
of output to meet demand. If the system fails to produce at such levels,
managers, including the line personnel, must determine where and what
the impediment is and how to correct it. Potential obstacles management
must address are low output, inferior product quality, and excessive
manufacturing costs.
Productive Activities
Supportive Activities

34. The appropriate transfer and analysis of information regarding markets,
operations, customers, and enterprise activities can be a crucial factor in
the success or failure of a firm and its international activities. In the best
of circumstances, the use of relevant information can provide a
multinational concern with competitive advantages over its competitors
by allowing it to develop a strategic position of strength. On a more
routine level, an MNC must manage its information flows from
subsidiaries about operations, markets, and potential just to maintain its
existing operating strengths in current markets across the globe.
Information must be comparable and standardized if it is to be
aggregated for analysis by an MNC.
MANAGEMENT INFORMATION SYSTEMS

35. Globalization continues to influence world economies, as reduced
tariffs, enhanced communications, and increased capital mobility
have allowed companies to connect to global financial markets
and expand their businesses internationally. However, successful
expansion into new foreign markets demands that companies
adopt international business strategies that best fit their needs
and capabilities. International business involves dealing with
foreign stakeholders, employees, consumers, and governments,
and therefore, business managers need to consider many factors
when conducting business in global markets, such as competition,
supply chain management and pricing strategy. In order to
successfully expand their consumer base and increase profitability
through internationalization, companies need to spend the
necessary time and resources to understand global market
opportunities and choose the proper international business
strategies.
STRATEGIC OPTIONS

36. International-Expansion Entry Modes
Market entry strategies allow companies to offer their products in
international markets. Since there are many methods companies
can use to sell their goods globally, they can choose a suitable
approach based on their goals and target market.
Market entry strategies are methods companies use to plan,
distribute and deliver goods to international markets. The cost and
level of a company's control over distribution can vary depending
on the strategy it chooses. Companies usually choose a strategy
based on the type of product they sell, the value of the product and
whether shipping it requires special handling procedures.
Companies may also consider their current competition and
consumer needs.
STRATEGIC OPTIONS

37. INTERNATIONAL-EXPANSION ENTRY MODES

38. International Strategy
Multi-Domestic Strategy
Using an international strategy means focusing on exporting
products and services to foreign markets, or conversely,
importing goods and resources from other countries for
domestic use.
In order for a business to adopt a multi-domestic business
strategy, it must invest in establishing its presence in a foreign
market and tailor its products or services to the local customer
base. As opposed to marketing foreign products to customers
who may not initially recognize or understand them, companies
modify their offerings and reposition their marketing strategies
to engage with foreign customs, cultural traits, and traditions.
STRATEGIC OPTIONS

39. Global Strategy
Transnational Strategy
In an effort to expand their customer base and sell products in
more foreign markets, companies following a global strategy
leverage economies of scale as much as possible to boost their
reach and revenue. Global companies attempt to homogenize their
products and services in order to minimize costs and reach as broad
an international audience as possible. These companies tend to
maintain a central office or headquarters, usually in their country of
origin, while also establishing dozens of operations in countries all
over the world.
The transnational business strategy is one of the most intricate
methods that businesses can employ when expanding
internationally, and can be seen as a combination of the global and
multi-domestic strategies.
STRATEGIC OPTIONS

40. References:
Links:
https://online.norwich.edu/academic-programs/resources/international-business-strategies-globalizing-
world
https://opentextbc.ca/principlesofmanagementopenstax/chapter/strategies-for-expanding-globally/
https://opentextbc.ca/strategicmanagement/chapter/types-of-international-strategies/
https://courses.lumenlearning.com/clinton-marketing/chapter/reading-entry-strategies-in-global-markets/
https://globalisationguide.org/tax/world-taxation-systems/
https://opentext.wsu.edu/cpim/chapter/7-1-international-entry-modes/?
fbclid=IwAR16P0kw68CfD_kNuj4BWAC7eEo2khmOR5GZDqpEGKdivw8W1o-gmwd-fog
Book:
Ajami, R, Cool, K., Goddard, J., & Khambata, D. (2006). INTERNATIONAL BUSINESS
THEORY AND PRACTICE 2ND EDITION. M.E. Sharpe, Inc.
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harpe)%20-%20libgen.lc.pdf