1. International Marketing
Management
By Nagendra R
CIT, Gubbi

2. Global marketing
management-planning and
organization
By Nagendra R
CIT, Gubbi

3. Global perspective? When?
• Emergence of WTO
• Creation of Free Trade Areas
• Benefits of Foreign Trade
• Revolution in Global Communications
• Fast and Efficient Transportation
• Opening of Previously Closed Markets
• When domestic market is crowded with the competition
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4. Global perspective? When?
• Rushing to foreign market before local companies capture the market
• With the increase in competition for expanding markets, MNC's are
changing their marketing strategies & their org structure
• Acquiring the global perspective is easy, but planning, organizing, and
willingness try new approaches, redefining company operations is
difficult…
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5. Global perspective? What?
 Global perspective is far more than understanding of
worldwide business and international career opportunities.
 Enable people to understand the links between their own
lives and other part of the world.
 Incremental growth of economic, social, political which
shape life.
 Develop skills, attitudes and values to enable people
working together to bring change for good – Work for
sustained world where resources are shared.
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6. Global Gate Ways
1. Multinational Phase
2. Global Phase
3. Transnational Phase
1. Multinational Phase: After WW-II, MNC’s from US &
Europe expanded into Asia, Europe and Latin America.
• Parent company maintained nominal control over
subsidiaries.
• Manufacturing & marketing of products were localized to
meet local demands
• Foreign markets needs are subordinate to the home markets
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7. Global Gate Ways
2. Global Phase: Highlighted the merits of
standardization i.e Noted the convergence of world
markets
• Selling standardized products in standardized
methods all over the world Centralized core
competence activities
• R&D, Manufacturing, Management, etc
• E.g.: Semiconductors, Software, Boeing etc.
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8. Global Gate Ways
3. Transnational Phase: Sumantra Ghoshal, Christopher
Bartlett etc developed a Transnational business idea
• Decentralized but Coordinated operations
• Products are tailored to suit local needs
• Central marketing plan but Local execution
• Subsidiaries network with each other and share
knowledge.
• Head Quarters manages and coordinates activities
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9. An Old Debate and a New View
 Standardization v/s adaption (1970s)
 Globalization v/s Localization (1980s)
 Global integration
v/s Local responsiveness (1990s)
 Internet revolution
 Homogeneous Vs Heterogeneous (21
st
Century)
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10. Planning for global market
 Considerable factors are
 Company objectives and resources
 International commitment
 Planning process
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11. Planning for global market
• Why plan?
To manage external, uncontrollable factors on the firm’s
strengths, weakness, objetives, and goals to attain desired
end
Allows rapid growth of international function, changing
markets, increasing competition, and turbulent changes in
the market
Planning relates to goals and methods of achieving them
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12. International Planning Process
• What pdt to develop?
• In which market?
• What level of resource commitment?
• Where to allocate resources and efforts?
• How to allocate resources and efforts ?
For the
company
entering a
foreign
market for
the first time
For the
company
which has
already
committed
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13. Developing the International Marketing Plan
• Develop strategies for the target market

Product mix

Distribution

Promotion mix

Pricing
• Plan international marketing programs
• Manage the international marketing effort:

Organize

Implement

Control
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14. International Planning Process
Information derived from each phase, market research, and evaluation of
program performance
Phase 1
Preliminary analysis and
screening: Matching
company/country needs
Environmental uncontrollable,
company character, and
screening criteria
Phase 2
Adapting the
marketing mix to
target markets
Phase 3
Developing the
marketing
plan
Phase 4
Implementation and
control
Matching mix
requirements
Marketing plan
development
Implementation,
evaluation, and
control
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15. International Planning Process
Phase 1 Preliminary Analysis and Screening: Matching Company/Country Needs
Company Character
 Philosophy
 Objectives
 Resources
 Management style
 Organization
 Financial limitations
 Management and
marketing skills
 Products
 Other
Home Country Constraints
 Political
 Legal
 Economic
 Other
Host Country(s) Constraints
 Economic
 Political/legal
 Competitive
 Level of technology
 Culture
 Structures of distribution
 Geography
 Competition
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16. International Planning Process
Phase 2 Adapting The Marketing Mix To Target Markets
Product
Promotion
 Adaptation
 Advertising
 Brand name
 Personal selling
 Features
 Media
 Packaging
 Message
 Service
 Sales promotion
 Warranty
 Style
 Standard
Distribution
 Logistics
 Channels
Price
 Credit
 Discounts
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17. International Planning Process
Phase 3 Developing the Marketing Plan
 Situation analysis
 Objectives and goals
 Strategy and tactics
 Budgets
 Action programs
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18. International Planning Process
Phase 4 Implementation and Control
 Objectives
 Standards
 Assign responsibility
 Measure performance
 Correct for error
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19. International Planning Types
planning
corporate planning
strategic planning
Long
term,incorporating
generalized goals
for the enterprise
as whole
Conducted at the
highest levels of
mngt-deals with
product,capital,
and research and
long term and
short term goals
of the company
tactical planning
Used in specific
markets-made at
local level-address
adv and mktg
questions
19

20. Alternative Market-Entry Strategies
• An entry strategy into the international market should reflect
on analysis of market characteristics such as:
– Potential sales
– Strategic importance
– Strengths of local resources
– Cultural differences
– Country restrictions
• Companies most often begin with modest export
involvement.
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21. Alternative Market-Entry Strategies
• A company has four different modes of foreign market
entry from which to select:
– Exporting
– Contractual agreements
– Strategic alliances
– Direct foreign investments
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22. Alternative Market-Entry Strategies
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23. Exporting
• Exporting accounts for some 10% of global activity.
• Direct exporting - the company sells to a customer in
another country.
• Indirect exporting – the company sells to a buyer (importer
or distribution) in the home country, who in turn exports the
product.
• The Internet
- Initially, Internet marketing focused on domestic sales, however, a
surprisingly large number of companies started receiving orders
from customers in other countries, resulting in the concept of
international Internet marketing (IIM).
• Direct sales
- Particularly for high technology and big ticket industrial products.
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24. Contractual Agreements
• Contractual agreements are long-term, non equity association
between a company and another in a foreign market.
• Licensing
- A means of establishing a foothold in foreign markets without large
capital outlays.
- A favorite strategy for small and medium-sized companies.
- Legitimate means of capitalizing on intellectual property in a
foreign market.
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25. Contractual agreements
• Franchising
- Franchiser provides a standard package of products, systems, and
management services, and the franchisee provides market
knowledge, capital, and personal involvement in management.
- Two types of franchise agreements:
• Master franchise – gives the franchisee the rights to a specific
area with the authority to sell or establish sub franchises.
• Licensing
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26. A strategic international alliance (SIA)
• A strategic international alliance (SIA) is a business
relationship established by two or more companies to
cooperate out of mutual need and to share risk in achieving a
common objective
• Firms enter SIAs for several reasons:
-
Opportunities for rapid expansion into new markets
Access to new technology
More efficient production and innovation
Reduced marketing costs
Strategic competitive moves
Access to additional sources of products and capital
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27. A strategic international alliance (SIA)
consortium
• Consortia are similar to joint ventures and could be classified
as such except for two unique characteristics:
• They typically involve a large number of participants
• They frequently operate in a country or market in which none
of the participants is currently active.
• Consortia are developed to pool financial and managerial
resources and to lessen risks.
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28. Direct Foreign Investment
Many Factors that have been found to influence the
structure and performance of direct investments:
- Timing
- The growing complexity and contingencies of contracts
- Transaction cost structures
- Technology transfer
- Degree of product differentiation
- The previous experiences and cultural diversity of acquired
firms
- Advertising and reputation barriers
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29. Organization – organizing for global competition
• Organization is defined by the formal structure,
coordination and control systems, and the
organization culture.
• It’s the formal arrangement of roles, responsibilities
and relationships within an organization.
• It’s a powerful tool with which to implement
strategy.
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30. Organization – organizing for global competition
• The goal is to find a structure that:
 Enables the company to respond to relevant market
environment differences
 Ensures the diffusion of corporate knowledge and
experience throughout the entire system
• Organization’s must balance:
 The value of centralized knowledge and control
 The need for individualized response to local
markets
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31. Organization – organizing for global competition
Vertical Differentiation:
(Centralization V/S Decentralization.)
• Vertical Integration: The issue of determining where in the
hierarchy, the authority to make decisions stand.
• Centralization is the degree to which high level managers,
usually above the country level, make strategic decisions
and pass them over to lower levels for implementation.
• Decisions made at foreign subsidiary level are considered
decentralized, and those made at HQ are considered to be
centralized.
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32. Organization – organizing for global competition
Horizontal Differentiation:
(The Design of the Formal Structure)
•
Horizontal Differentiation: The way a company designs
its formal structure to perform the following functions;
1. Specify the set of organizational tasks.
2. Divide these tasks into jobs, departments, subsidiaries
and divisions to get the work done.
3. Assign authority relationships to get the work done in a
way that supports co. strategy.
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33. Organization – organizing for global competition
In global marketing there is not a single best structure
Leading-edge global competitors share one key
organizational design characteristic:
 Structure is flat and simple
In the 21st century corporations will have to find new,
more creative ways to organize
 Must be flexible, efficient, and responsive to meet the
demands of globalizing markets
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34. Organization – organizing for global competition
• The basic functions of an organization are to provide:
– A route and locus of decision making and coordination.
– A system for reporting and communication.
• The types of structures that companies use to manage foreign
activities are divided into three categories.
– Little or no formal organizational recognition
– International division
– Global organizations
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35. Organization – organizing for global competition
Factors affecting Organisation Structure
External Factors
•
•
•
•
•
Competitive Environment
Environmental Stability
Similarity with Home Country
Common Traits/Integration
Availability of Local Qualified Labor
Internal Factors
• Divisional Structure
• Centralized vs. Decentralized
• International Department 35

36. Organization – organizing for global competition
Types Organisation Structure
• Worldwide regional divisions
• International division
• Product divisions
• Matrix structure
• Domestic division
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37. Organization – organizing for global competition
Worldwide Regional Division
• Subsidiaries report directly to single division
responsible for operations

Geographical region

Country
• Better equipped to respond to country-specific
information and conditions
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38. Organization – organizing for global competition
Worldwide Regional Division
Worldwide Regional Division Structure: Frito-Lay.
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39. Organization – organizing for global competition
International Division Organizational
• Organizations vary in:
 Size
 Potential of targeted global markets
 Local management competence
• Conflicting pressures may arise
 For product and technical knowledge
 Functional area expertise
 Area and country knowledge
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40. Organization – organizing for global competition
Four factors that lead to this structure
Top management’s commitment to global operations has
increased enough to justify the position
Complexity of international operations requires a single
organizational unity
The firm has recognized the need for internal specialists to
deal with the demands of global operations
Management recognizes the importance of proactively
scanning the global horizon for opportunities and threats
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41. Organization – organizing for global competition
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42. Organization – organizing for global competition
Product Division Structure
• Subsidiaries report to the product division (strategic
business unit) with responsibility for the particular
products.
• In the past, this structure was common for high-tech
companies or multinational companies with diversified
portfolios
• increasingly, this format is replaced by the matrix
structure.
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43. Organization – organizing for global competition
• Firms with an international division have two main
divisions:
• The domestic division
• The international division
• Export department structure: division has
responsibility for all international operations
• International division structure: all foreign
subsidiaries report directly to a single division
responsible for international operations.
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44. Organization – organizing for global competition
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45. Organization – organizing for global competition
The Matrix Design
• Takes into account the multiple dimensions involved in
doing business internationally—
• Functional areas,
• Product, and
• Region/country.
• In a matrix structure, two dimensions are integrated so
that each operational unit reports to both region/country
managers and product managers.
• E.g. Unilever with global and local brands
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46. Organization – organizing for global competition
• Functional competence – corporate staff with worldwide
responsibility contributes toward the development of functional
competence on a global basis.
• Product knowledge and know-how – Product managers that have a
worldwide responsibility can achieve new levels of product
competency.
• Region/country knowledge– understanding of economic, social,
political, and governmental market and competitive dimensions
• Knowledge of customer or industry and its needs – staff with
responsibility for serving industries on a global basis assist
organizations in their efforts to penetrate specific customer markets
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47. Organization – organizing for global competition
Europe
North
America
Asia Pacific
South America,
Africa, Middle East
Chemicals
Plastics
Performance
Products
Functional
Solutions
Agricultural
Solutions
Oil & Gas
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48. Organization – organizing for global competition
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