KMB -302: Unit- 3 Lecture -1 (International Marketing: Nature and Significance)

1. Branch - MBA
International Business Management
DR. APJ ABDUL KALAM TECHNICAL UNIVERSITY
By
Dr. B. B.Tiwari
Professor
Department of Management
Shri Ramswaroop Memorial Group of Professional Colleges, Lucknow
Unit-3: Lecture – 1
International Marketing:
Nature & Significance

2. International Marketing: Introduction
• International marketing is the marketing across the national frontiers. It refers to the strategy,
process, and implementation of the marketing activities in the international arena.
• International marketing may be defined as an activity related to the sale of goods and services of
one country in the other, subject to the rules and regulations framed by the countries concerned.
• “Global marketing is concerned with integrating and standardizing marketing actions across a
number of geographic markets.” Kotler
• “International marketing is the performance of business activities that direct the flow of goods and
services to consumers and users in more than one nation.” Cateora
• “International marketing is the performance of business activities designed to plan, price, promote,
and direct the flow of a company’s goods and services to consumers or users in more than one
nation for a profit.” Cateora & Graham

3. Cont….
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4. Nature of International Marketing:
• Broader market is available: Unlike domestic marketing the market is not restricted to
national population. Population of other countries can also be targeted in international
marketing.
• Involves at least two set of uncontrollable variables : In domestic marketing the marketers
have to interact with only one set of uncontrollable variables. In international marketing at
least two set of uncontrollable variables are involved or more if the marketing organization
deals in more countries.
• Requires broader competence: Special management skills and broader competence is
required in international marketing/business.

5. • Competition is intense: An international marketing organization has to compete with both
the domestic competitors and the international competitors. Hence, the competition is
intense in international marketing.
• Involve high risk and challenges: International marketing is prove to various kinds of risk
and challenge like – political risk, cultural differences, changes in fashion and style of
foreign customers, sudden war, changes in government rules and regulations,
communication challenges due to language and cultural barriers, etc.
Cont….
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6. International Marketing – Scope
• Establishing a Branch: International marketing may be done by establishing a branch in foreign
country. Through branches, the exporter establishes sales organization in foreign markets, takes up all
marketing and promotional efforts, and provides after sales services and other facilities in the foreign
market.
• Licensing Arrangement: Licensing also comes under the scope of international marketing. Licensing
involves transfer of industrial property rights i.e., patents, trademarks, technical know-how etc., from a
licensor in one country to a licensee in other country. In other words, licensing is an agreement between
the company which is seeking to do business in foreign market and any party of the local market.
• Franchising: Franchising also comes under the scope of international marketing. Franchising is a
special form of licensing in which franchiser grants the franchisee, the right to do business in a
prescribed manner. In this arrangement, the franchiser makes a total marketing programme (including
the brand name, logo and the method of operation) available to the franchisee.

7. • For example, Coca Cola has franchise arrangement with their bottling units all over the world.
• International franchising has become a powerful mode of international marketing for companies that have
products and services that can be reproduced by independent franchiser. Few examples are Mc
Donald’s, KFC (Kentucky Fried Chicken), Pizza Hut.
• Joint Venture and Collaboration: Joint venture and collaboration with foreign firm is another method to
enter foreign markets. Joint venture is an enterprise formed by the international business company
sharing ownership and control with a local company in the foreign country. The main feature of joint
venture is that the ownership and management are shared between a foreign firm and a local firm.
• Foreign Agent and Distributor: For exporting to foreign market another method used is to appoint an
agent or distributor in foreign country. Under this system an agent is appointed to collect orders from
foreign country. The manufacturer exports the goods direct to customer in response to the orders
forwarded by the agent.
Cont….
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8. • Strategic Alliance: Strategic alliance is another form to enter foreign markets. In an alliance, two firms
pool their resources directly in a collaboration that goes beyond the limits of a joint venture.
• Consultancy Services: Offering consultancy services are also covered in international marketing scope.
The exporting company offers consultancy services by undertaking turnkey projects in foreign countries.
• Turnkey Contracts – In turnkey contracts projects are designed and made by foreign enterprises and
then handed over to the local enterprises. Personnel of local enterprise are trained for running the
project. Basically these kinds of contracts are common in construction industries.
• Technical and Managerial Knowledge: The scope of international marketing also includes the technical
and managerial know-how provided by the exporting company to the importing company.
Cont….
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9. Importance of International Marketing
• Important to expand target market : Target market of a marketing organization will be limited if it just concentrate on domestic
market. When an organization thinks globally, it looks for overseas opportunities to increase its market share and customer base.
• Important to boost brand reputation : International marketing may give boost to a brand’s reputation. Brand that sold
internationally is perceived to be better than the brand that sold locally. People like to purchase products that are widely available.
Hence, international marketing is important to boost brand reputation.
• Important to connect business with the world : Expanding business into an international market gives a business an advantage
to connect with new customers and new business partners. Apple – the tech giant designs its iPhone in California; outsources its
manufacturing jobs to different countries like – Mongolia, China, Korea, and Taiwan; and markets them across the world. Apple have
not restricted its business to a nation, rather expanded it to throughout the world. The opportunities for networking internationally are
limitless. The more “places” a business is, the more connections it can make with the world.
• Important to open door for future opportunities : International marketing can also open door for future business opportunities.
International marketing not only increases market share and customer base, it also helps the business to connect to new vendors, a
larger workforce and new technologies and ways of doing business. For example – American organizations investing in Japan have
found programs like – Six Sigma and Theory Z which are helpful in shaping their business strategies.

10. • Rapid Industrialization – Countries are economically dependent on one another. Every country has to import
certain goods and also to export so as to pay for imports. The third world countries are dependent on the western
countries for superior technology to achieve faster economic growth.
• Raised Standard of Living – There is consciousness all over the world and people desire to raise their standard
of living through the consumption of best quality goods procured from nook or corner of the world.
• International marketing also mobilizes foreign investments, superior technology and international understanding.
• Fulfils Economic Needs – The increase in the rate of population growth has brought pressure on the
Government to fulfill economic needs of growing number of its people. In order to provide basic amenities and
luxuries to the increasing population imports and exports become obligatory.
• Cultural Exchanges – Peaceful co-existence to a very great extent depends on economic, social and cultural
exchanges. International relations can improve when people move to different countries on goodwill visits. Cultural
differences separate the countries from one another.
Cont….
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11. THANK YOU