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THE CONCEPT OF
INTERNATIONAL MARKETING
Introduction:
International business existed in India in 3000 B.C.
During the latter half of the 20th
century large US,
European, and Japanese companies expanded their
markets as well as production facilities beyond
national borders.
Breakthroughs in Information and Communication
Technology.
Consumers, competitors developed global outlook.
Rise in consumers’ income.
Lower trade barriers.
The process of liberalization and the integration of
Indian trade policies with the WTO policies.

THE CONCEPT OF
Globalization:
“A process of economic integration of the entire world
through the removal of barriers to free trade and capital
mobility as well as through the diffusion of knowledge and
information.”
Global firms rely on technological innovation to enhance
their capabilities.
The economies in emerging Asia have grown at an extra
ordinary pace over the last 3 decades with emphasis on
outward – oriented growth strategies.
Growing importance of trade in world economy is an
indication of increasing global integration.
Prof. Kenichi Ohmae advocates the concept of borderless
world and need for universal products for global markets.
(Global brands – GE, Kodak, Sony etc.)

THE CONCEPT OF
The Concept of International Marketing:
In the mid-fifties, the orientation of markets shifted
from selling to marketing.
Selling focuses on the needs of the sellers, while
marketing focuses on the needs of the buyers.
Shift to Market orientation: Responsive Marketing
 Anticipative Marketing  Creative Marketing
e.g. VCR, CDs, ATMs.
The differences in marketing environment make
international marketing a distinct discipline.

THE CONCEPT OF
Terms in International Marketing:
1. Domestic Marketing.
2. Foreign Marketing.
3. Comparative Marketing.
4. International Trade (flow of goods, services, & capital across
national markets).
5. International Business (all commercial transactions between
2 countries e.g. sales, investment, transportation, etc.)
6. International Marketing – firm level marketing policies.
7. Global Marketing – The whole world is a single market.
Standardizing marketing mix for the whole world market.

THE CONCEPT OF
Domestic Marketing and International Marketing
Decisions:
Economic Environment:
1. The domestic tariff structure and the various import duty
exemption schemes.
2. The exchange rates and the foreign exchange regulations
of the country.
3. FDI policies and the entry mode for foreign firms.
4. Forex reserves and inflationary conditions.
Legal Environment:
1. Trade policies, fiscal policies, political priorities of
governments in power, etc.
2. Issues of national security, integrity, and preservation of
moral and cultural values.

THE CONCEPT OF
Overseas Environmental Challenges:
Political – The political stability and the government
policies greatly affect the international markets.
Economic – The economic stability in the target market
facilitates an international marketer’s task. Economic
uncertainties and hyper inflation create inflation problems.
Soundness of financial institutional system. Foreign
Exchange Risks etc.
Legal : Well developed sound legal systems in the target
market help to reduce the marketing risks and a firm can
expect a relatively unbiased and fair treatment.
Cultural and Social: Countries which have cultural
similarity in the target market segments can generally be
approached more easily as compared to countries with
cultural diversities.

THE CONCEPT OF
Why should
A firm enter
International
Markets?
Profitability
Growth
Spreading
R&D Costs
Marketing
Opportunities
Due to
Life cycle
Risk
Spread
Access to
Imported
inputs
Uniqueness
Of products
& Services
Achieving
Economies
Of Scale

THE CONCEPT OF
Evolutionary Process of Global Marketing:
Global marketing is a “gradual process occurring in stages,
rather than through large speculative investments.
Johanson & Wieldersheim.
Ethnocentrism:
Ethnocentrism is defined as the predisposition of a firm to
be predominantly concerned with its viability and legitimacy
only in its home country.
The marketing of most companies in the initial stages tend
to be ethnocentric, paying little attention to changes taking
place in the international marketing environment as a result
of arrival of new products and brands in the market, the
effect of tastes and preferences of international customers
on the domestic market and the emergence of new market
segments.

THE CONCEPT OF
Polycentric Orientation:
It refers to the predisposition of a firm to the existence of
significant cultural variations across the markets. It
recognizes the differences among the markets and the
need to respond to the market forces with market – specific
strategies.
The extreme form of international marketing is multi-
domestic marketing, where a company establishes an
independent foreign subsidiary in each and every foreign
market..
Global Marketing refers to the use of single marketing
method across the international markets with little
adaptation. Global marketing means a strategic approach
to have a global perspective to have economies of scale.

THE CONCEPT OF
Adaptation: The Critical Success factor in
International Markets.
The key to success to international markets
lies in a marketer’s ability to adapt the
company’s strategies to the requirements of
the overseas markets.
The impact of cultural factors in different
countries on the marketing practices to be
followed in different markets.

THE CONCEPT OF
A Self Reliance Criterion (SRC) is an unconscious
reference to one’s own cultural values, experiences, and
knowledge as a basis for decision making.
In order to arrive at an objective marketing decision, one
has to isolate the influences of SRC, while carrying out a
cross cultural analysis. E.g. McDonald’s problems with
Indian market.
Domestic market experience hardly works in the
international markets. Need to operate from a clear mind.
The consumers ‘behave’, but the way they behave vary
from country to country.
Two markets (viz. China and India) that appear to be similar
may actually be vary different in terms of their behavior and
marketing dynamics

THE CONCEPT OF
EPRG CONCEPT:
The orientation of a company’s personnel affects the ability
of a company to adapt to any foreign marketing
environment.
A key assumption underlying the EPRG framework is that
the degree of internationalization to which the management
is committed or willing to move affects the specific
international strategies and decision rules of the firm.
Ethnocentric Approach.
Polycentric Approach.
Regionocentric Approach and
Geocentric Approach.

THE CONCEPT OF
Ethnocentric Orientation:
1. It considers one’s own culture is superior to others.
2. The management believes marketing strategy which has
worked in domestic market will also work in international
markets. The environmental differences between markets
are ignored.
3. The ethnocentric firms opt for those markets which accept
indigenous products without any adaptation. E.g.
handicrafts.
4. Overseas operations are for disposing of surplus production.
5. Indian firm’s strategy to market products to Indians settled
abroad.

THE CONCEPT OF
Polycentric Approach:
1. Highly market oriented.
2. It believes that substantial differences exist among various
markets.
3. Highest decentralization of marketing activities.
4. Needs more corporate resources & little coordination
among various affiliates.
5. Difficult to achieve economies of scale.

THE CONCEPT OF
Regionocentric Orientation:
1. Treats a region as a uniform market segment.
2. Adapts a similar marketing strategy within the region but
not across the region.
Geocentric Orientation:
1. Considers the whole world as a single market.
2. Attempts to formulate integrated marketing strategies.
3. Identifies similarities between various markets and
formulates a uniform marketing strategies.

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