Introduction International Marketing

1. International
Marketing
TYBMS

2. What is international
marketing?
 Buying and selling of goods and services
across national frontiers refers to International
Trade
 Selling of goods to other countries refers to
exports, while buying the goods from a
foreign country is imports
 Marketing of such goods and services across
between two or more nations, is International
Marketing

3. Features
 Large scale operations
 Domination of MNCs/developed countries in the
world trade
 Tariff and non tariff restrictions
 Acute competition
 International Research for marketing strategies
 Advanced technology
 Need for long term planning
 Lengthy and time consuming
 Vast scope in comparison with national trade
 Support from specialised institutions (banks, financial
institutions, marketing consultants) needed

4. Need for IM
 Unequal distribution of natural resources among
nations
 Earning foreign exchange
 To maintain favorable balance of payments
position
 Assistance to underdeveloped countries
 Optimum utilization of available resources

5. Why go international?
Broadly divided into push and pull factors- proactive and
reactive
1. Profit Advantage:
Cheap labour, low cost of production, better technology in
international markets, make international business more
motivating than domestic one.
2. Growth Opportunities:
Tremendous potential, population and income rising. Even
though no present demand for the product, a future
potential demand is predicted. Companies eager to
establish a strong foothold in such countries.

6. 3. Domestic market constraints:
Saturation of local demand, e.g. US of A has more stock of
consumer durables than number of households.
Economies of scale, e.g., feasible no of units that can be
produced, is less than the domestic demand.
A small domestic market- Nestle and Philips get only 2%
and 8% sales from home mkts-Switzerland and Holland
4. Competition:
Post liberalization (July 1991), a protected domestic market
disappeared. This made domestic players to plan
internationalization strategies.

7. 5. Govt. policies and regulations:
Incentives by local govt. to export or make foreign
investment
Policies of other governments may be more favorable in an
international market
6. Spin off benefits:
International business may aid in improving domestic
business
Image building exercise
Foreign exchange earnings aid in importing technology
etc.
Economic incentives are attached to exports

8. Problems in IM
 Political and legal differences
 Cultural/language difference
 Economic differences
 Differences in currency units
 Differences in marketing infrastructure
 Trade restrictions
 High costs of distance

9. Poor performance of India’s
Exports
 Volume of Indian exports is increasing, even though the
share of the exports in comparison with world exports is
insignificant
 Indian exports accounted for 0.8% of world exports in
2003-04, 1.3% in 2009 and 1.4% in 2010
 Export promotion measures by Indian government have
not contributed as expected
 India’s balance of payments position is also poor

11. Reasons for poor export figures
for India
 Limited capacity to compete in the global scenario
 Export of services not tapped to the fullest
 Less importance given to exports of agriculture and
allied activities
 Limited contribution of Special Economic Zones (SEZ
s) to promote exports
 Iraq war affected exports to the Middle East region

12.  Global terrorism affected the business environment
 Measures taken to globalise Indian economy not
tapped completely
 Infrastructure bottlenecks
 Complex procedures
 Inadequate information and its distribution
 Unfair trade practices by Indian businessmen