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
In contrast to the definition of marketing only the word multinational has
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.
Organizational buying behavior
Country of origin
mode of entry
Specific modes of entry
Global Standardisation vs. Local Responsiveness
Competitive advantage vs. competitive positioning;
Sources of competitive advantage and performance implications.
Learning and trust;
Recipes for alliance success;
Performance of different types of alliance.
Global sourcing in a service context;
Benefits of global sourcing;
Country of origin issues in global sourcing.
Determinants of performance;
A different interpretation of performance.
Reliability and Validity Issues.
There are two main approaches to global segmentation:
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
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
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
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
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
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.
International marketing strategies are developed by various multinational companies on
a global level in order to set a common brand platform for their products and brands. It
is then passed on to each local or domestic market which makes adjustments for their
country and manages its implementation. Such a structure ensures a global brand
consistency, pricing and messaging. It also can have significant cost savings as major
advertising and marketing campaigns can be developed centrally
Globalization has created new marketing behaviors, opportunities and challenges
thereby making international marketing somewhat different from domestic marketing.
Due to deregulation and technological advances in transportation and communication,
companies can market in, and consumers can buy from almost any country in the world.
In this situation of heightened competition, it is important for companies to offer
products that would be of interest in the global marketplace and also adjust their product
and service features to each country’s different cultures and values. They must choose
what to produce, and how to price and communicate their products considering the
different legal and political differences, language, and currency fluctuations. To sum
up, when multinational companies segment their target markets and position their
products, cross-cultural literacy is necessary, which is a concept of glocalisation,
requiring a company to “think globally and act locally”. Without an understanding of
cultural and structural differences between countries, even leading global corporations
can fail in specific 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
Direct investment (split into assembly and manufacturing)
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.
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.
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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