International marketing full module 1.pptx

BBAE0203: INTERNATIONAL
MARKETING

MODULE I
 International Marketing – Introduction
 Definition and Concept
 Introduction to International Business – An Overview
 International Marketing Management Process
 Difference between Domestic Marketing and
International Marketing
 International Marketing Information System

 International Marketing Environment:
 Influence of physical, economic, socio-cultural,
political and legal environments on international
marketing decisions
 International Marketing Segmentation and
Positioning
 International Market Entry Strategies
 Exporting, Licensing, Contract Manufacturing, Joint
Venture, Setting-up of Wholly Owned Subsidiaries
Abroad

 International Product Planning and Pricing
Decisions
 Major Product Decisions – product design,
labeling, packaging, branding and product support
services
 Product Standardization vs Adaptation
 Managing Product Line
 International Trade Product Life Cycle
 New Product Development

MODULE II
 Pricing Decisions for International Markets:
 Factors affecting international price determination,
 International pricing process and policies
 Delivery terms and currency for export price
quotations
 Transfer pricing
 Counter trade as a pricing tool
 Types and problems of counter trading

 International Distribution Decisions
 Distribution channel
 From traditional to modern channel structures
 Intermediaries for international markets – their
roles and functions
 Factors affecting choice of channels
 International distribution logistics – issues and
planning

 International Promotion Strategies:
 Communications across countries – complexities and
issues
 Sales promotions in international markets
 International public relations
 International advertising decisions
 Personal selling and sales management
 Developing international promotion campaign
 Emerging trends in international Marketing
 International marketing through internet, ecological
concerns and international marketing ethics

 According to the American Marketing Association,
“marketing is the process of planning and executing
the conception, pricing, promotion and distribution
of ideas, goods and services to create exchanges
that satisfy individual and organisational
objectives.”
 Philip Kotler, defines marketing as "a human activity
directed at satisfying needs and wants through
exchange processes."

 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 organisational objectives."
 By placing individual objectives at one end of
the definition and organisational objectives at
the other, the definition stresses a relationship
between a consumer and an organization.

INTERNATIONALIZATION STAGES
 International companies are importers and exporters, they
have no investment outside of their home country.
 Multinational companies has locations or facilities in multiple
countries, but each location functions in its own way,
essentially as its own entity.
 Global companies also have locations in multiple countries,
but they’ve figured out to create one company culture with one
set of processes that facilitate a more efficient and effective
single global organization.

 Transnational companies are much more
complex organizations. Its
a commercial enterprise that operates substantial fa
cilities, does business in more than one country and
does not consider any particular country its national
home. One of the significant advantages of a
transnational company is that they
are able to maintain a greater degree of
responsiveness to the local markets where they
maintain facilities.

COCA COLA…
 By adapting sales promotion, distribution and
customer service to local needs, Coke captured
78% of soft drink market share in Japan.
 Apart from the flagship brand Coca Cola, the
company produces 200 other non- alcoholic
beverages to suit local beverages.

THE BEGINNING…
 With the establishment of GATT and WTO, as you
know, the reality of global markets and global
competition is pervasive
 Now the business enterprises can think that the
whole globe is a market for their products, and focus
resources on global marketing opportunities
 Companies that fail to pursue global
opportunities will eventually even lose their
domestic markets because they will be pushed
aside by stronger and more competitive global
enterprises. Example, micromax

 It makes clear that what is to be exchanged is not
restricted to tangible goods but can include
concepts, services, ideas, causes as well.
 Red cross working for international peace, UN
fighting against international terrorism are also
examples of international marketing apart from
regular products
 It is improper for a firm to create a product first and
then look for a place to sell it,

 For overseas markets, the process may call for a
modified product. In some cases, following this
approach may result in foreign needs being satisfied in a
new way i,e., a brand new product is created specifically
for overseas markets.
 The definition acknowledges place (distribution) is just a
part of the marketing mix, and that the distance between
markets makes it neither more nor less important than
the other parts of the mix.
 Thus, it is improper for any firm to regard their
international function as simply to export (i.e. move)
available products from one country to another

DEFINING INTERNATIONAL MARKETING
 It 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 for a profit in more than one nation
 It 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
objectives.

 It is marketing in an internationally competitive
environment, no matter whether the market is home
or foreign.
 e.g., Nirma competes with brands like surf, tide, ariel in
an internationally competitive market of India
 It is also defined as simply an attitude of mind, the
approach of a company with a truly global outlook,
seeking its profit impartially around the world,
“home” market included, in a planned and
systematic basis.

INTERNATIONAL MARKETING CONCEPTS
 Domestic Marketing: Marketing that is targeted exclusively
at the home-country market is called domestic marketing.
 Export Marketing: This is the first stage when the firm steps
out of the domestic market and explore market opportunities
outside the country
 International Marketing: You have studied that in export
marketing, the firm do not undertake marketing effort in the
foreign country. In international marketing, focus changes
from just exporting to marketing in foreign countries.
Company establishes subsidiaries in the foreign countries to
undertake marketing operations,

 Multinational Marketing: As you know, in international
marketing the firm extends the domestic marketing mix to all
countries which it finds insufficient after a point of time.
Therefore, it decides that marketing mix should be unique for
respective country in which the firm conducts its business.
This is multinational marketing approach.
 Global Marketing: At this stage the firm realises that although
the world is not a homogeneous market the possibilities to
identify the groups of consumers (segments) across the globe
with similar values, needs and behaviour patterns who can be
satisfied with a single standardised product and marketing mix.
This is global marketing strategy. Under this strategy, the world
as a whole is viewed as one market and the firm attempts to
standardise as much of the company effort as is practical on a
worldwide basis.

DIFFERENTIATING INTERNATIONAL MARKETING
& INTERNATIONAL TRADE
 The sale abroad of a good produced in India is
international trade but from a truly managerial point
it is international marketing if it is sold to the
ultimate buyer under the brand name of the
exporter
 e.g., Indian spice imported from India and repackaged
and sold as foreign brands

EXAMPLES OF INTERNATIONAL MARKETING
Global Marketing Strategy Company /Home Country
Brand Name Coca-Cola (U. S.), Philip Morris (U.S.)
DaimlerChrysler (Germany)
Product Design McDonalds (U.S.), Toyota (Japan)
Product Positioning Unilever (Britain), Gillette (U.S.)
Packaging Gillette (U.S.)
Distribution Benetton (Italy)
Customer Service Caterpillar (U.S.)
Sourcing Toyota, Honda (Japan), Gap (U.S.)

Customer
Needs &
Wants
R & D
Customer
Value
Engineering Manufacturing
Marketing
BOUNDARY-LESS MARKETING

AN OVERVIEW OF INTERNATIONAL BUSINESS
 The exchange of goods and services, resources,
knowledge and skills among individuals and businesses
in two or more countries.
 Transactions are carried out across national borders to
satisfy the objectives of individuals and organizations
 Various elements related to it
 Private and Government
 Sales
 Investments
 Logistics
 Transportation

 Its nature includes dissemination of accurate and
timely information
 The size of international business and proper
segmentation are equally crucial elements of it
 The scope of international business could be
understood in the terms of
 International Marketing
 International Finance and Investments
 Foreign Exchange
 Global HR

 International business involves not only the
international movement of goods and services but
also capital, personnel, technology and intellectual
property like trademarks or patents
 Features of IB
 Large scale operations
 Integration of economies
 Dominated by developed countries and MNCs
 Benefits to participating nations
 Keen competition
 Special role of science and technology (STEM)
 International restrictions

 Importance of IB
 Earn foreign exchange
 Optimum utilization of resources
 Achieve its objectives
 To spread/diversify business risks
 Improve organization’s efficiency
 Get benefits from Government (both home and host, as
applicable)
 Expand and diversify
 Increase competitive capacity

PROCESS OF INTERNATIONAL MARKETING
 The international marketing process is not a mere
repetition of using identical strategies abroad.
 The four Ps of marketing (product, place, promotion
and price) must be integrated and coordinated.
 International marketing is not a simple extension of
the domestic marketing mix to various countries.

 The answer lies not with different concepts of marketing but
with the environment within which marketing plans must be
implemented.
 Competition, legal restraints, government controls, weather,
fickle consumers, and any number of other uncontrollable
elements do affect the profitable outcome of sound marketing
plans
 What makes marketing interesting is the challenge of molding
the controllable elements of marketing decisions (product,
price, promotion, and place) within the framework of the
uncontrollable elements of the market place (competition,
politics, laws, consumer behaviour, level of technology, and so
forth) in such a way that marketing objectives are achieved

 Even though marketing principles and domestic
concepts are universally applicable, the
environment within which the marketer must
implement marketing plans can change
dramatically from country to country.
 The difficulties created by different environments
are the international marketer's primary concern

 International Marketing Process comprises of following five steps:-
 1. Motivation for International Marketing – For an organisation the
motivation for entering international market can be any or all of the
following:
 Growth
 Profitability
 Economies of Scale, or
 Risk Diversification
 2. Research and Analysis – Market research is done to Analyse the
organization’s strength and weakness, opportunities available in
international markets, and threats in international markets.



 3. Decision to Enter International Markets – After
identification of potential opportunities in international
market decisions are taken to enter international market.
Such decisions include – identification of potential
buyers in international markets, demand measurement
and forecasting, market segmentation, market targeting
and market positioning.
 4. International Marketing Mix – At this step
international marketing mix is developed. Marketing mix
identifies four key areas – Product, Price, Place, and
Promotion for developing a well coordinated marketing
strategy.

 5. Consolidate Marketing Efforts - Developing a
good marketing program is not enough a marketing
organisation need to manage the international
marketing effort properly. Marketing organisations
also need proper analysis, planning,
implementation and control of their marketing
efforts.

DOMESTIC V/S INTERNATIONAL MARKETING
 Marketing can be thought of in terms of two
processes
 Technical
 Domestic and international marketing are similar
in this regard
 Includes non-human factors such as product,
price, cost, brand ,etc.
 The basic principles regarding these variables are
of universal applicability

 Social
 It is unique in every stratum as it involves
human elements
 Hence, intn’l marketing is different from
domestic marketing due to the differences in
behaviour, society, attitudes, customs, values,
etc

 Domestic marketing involves one set of
uncontrollables derived from the domestic market
 International marketing is much more complex as
marketer faces two or more sets of uncontrollable
variables from various countries.
 It is important in international marketing to
recognize the extent to which marketing plans and
programmes can be extended to the world and the
extent to which marketing plans must be adapted

 ‘Glocalisation’
 Think global and act local is the meaning of
Glocalisation
 to be successful in international marketing, companies
must have the ability to think global and act local.
 International marketing requires managers to
behave both globally and locally simultaneously by
responding to similarities and dissimilarities in
international markets.

 Similarities
 In both cases success depends upon satisfying the
basic requirements of the consumers
 It is necessary to build goodwill in both
 Research & Development for product impr0vement and
adaptation is necessary in both

 Differences
 Sovereign Political Entities
 Due to this, restrictions such as tariffs, quantitative,
exchange and local taxes affect marketing
 Different Legal Systems
 Due to differences in the laws, rules and
regulations, marketing is altered to suit the
changes
 Different Monetary Systems
 Due to different exchange rates marketing policies
need to be changed accordingly

 Differences
 Lower Mobility of Factors of Production
 Factors of production are less mobile between nations
than in the country itself thus affecting marketing
function too
 Differences in Market Characteristics
 Each country is a separate market having its own
demand pattern, channels of distribution, method of
promotion, etc.

 Differences in Procedures and Documentation
 Greater Degree of Risk
 The risk is always higher in international marketing as
compared to domestic marketing due to
 Larger volumes, longer time durations, lesser knowledge
about the party, longer credit period involved

INTERNATIONAL MARKETING ENVIRONMENT
 Environment consists of various forces.
 Environment is made of such controllable and
uncontrollable forces.
 It is the environment that determines favourable or
unfavourable conditions, and hence, provides either
opportunities or threats & challenges.
 Degree of one’s success, to a large extent,
depends on effect of marketing environment and
ability of the firm to respond effectively.

 International marketing environment covers all the
relevant global forces influencing international
marketing decisions.
 These forces may be internal (such as resource
ability and management attitudes), may be
domestic (such as government policy toward
international business and facilities), and global
(such as overall international business
environment of relevant part of the world).

DEFINING INTERNATIONAL MARKETING
ENVIRONMENT
 International marketing environment is a set of
controllable (internal) and uncontrollable (external)
forces of factors affecting it.
 It also consists of global forces, such as economic,
social, cultural, political, legal, and geographical
and ecological forces
 International marketing environment for any
marketer consists of internal, domestic, and global
marketing forces affecting international marketing
mix

FACTORS OF INTERNATIONAL MARKETING
ENVIRONMENT
 Factors or forces involved in the international marketing
environment can be classified into three categories as
stated in the figure.
 Manager dealing with international marketing has to
design his marketing mix and marketing (mix) strategies
in accordance with these forces.
 The environment determines the degree of
favourableness for any marketer for international
marketing; determines level of opportunities and threats.



 1. Global Factors:
i. Customer-related factors
ii. Political and legal factors
iii. Social factors
iv. Cultural factors
v. Competition
vi. Global relations among nations and degree of the worldwide
peace.
vii. Geographic/ecological/climate-related factors
viii. Functioning of international organisations like UNO, World
Bank, WTO, etc.
ix. Availability of marketing facilities and functioning of
international agencies, etc.


 2. Domestic Factors:
 Overall economic, social and cultural, demographic,
political and legal, and other domestic aspects
constitute domestic environment for international
marketing.
 This environment affects international marketing
mix in several ways.

 Important domestic factors include:
i. Political climate/stability/philosophy
ii. Government approach and attitudes toward international
trade
iii. Legal system and business ethics
iv. Availability and quality of infrastructural facilities
v. Availability and quality of raw-materials
vi. Functioning of institutions and availability of facilities
vii. Technological factors
viii. Ecological factors, etc.


 Physical Factor
 A country's territorial size, geographical location, natural
resources, climate, rivers, lakes and forests constitute
its physical environment.
 The physical environment influences political and
economic activities, shapes cultural characteristics such
as language and religion, and determines land usage,
transportation, and commercial flows.
 Economic Factors:
 A nation’s economic situation represents its current and
potential capacity to produce goods and services. The
key to understanding market opportunities lies in the
evaluation of the stage of a nation’s economic growth.

 Political and Legal Factors:
 The organization should take into consideration the political and
legal development relating to market and organization during
decision-making process.
 Social and Cultural Factors:
 The impact of organization’s services and products on the society
must be taken into consideration. If there is any element used in
production process or product that is harmful to society, it should
be avoided since it is a social responsibility of an organization
 The technological environment
 The level of technological development of a nation affects the
attractiveness of doing business there, as well as the type of
operations that are possible. Marketers in developed nations
cannot take many technological advances for granted. They may
not be available in lesser developed nations.

 Components of political environment
 Government type and stability
 Freedom of press, rule of law and levels of bureaucracy
and
corruption
 Regulation and de-regulation trends
 Social and employment legislation
 Tax policy, and trade and tariff controls
 Environmental and consumer-protection legislation
 Likely changes in the political environment

 Components of economic environment
 Stage of business cycle
 Current and projected economic growth, inflation and
interest rates
 Unemployment and labour supply
 Labour costs
 Levels of disposable income and income distribution
 Impact of globalisation
 Likely impact of technological or other change on the
economy
 Likely changes in the economic environment

 Components of socio-cultural environment
 Population growth rate and age profile
 Population health, education and social mobility, and
attitudes to
these
 Population employment patterns, job market freedom
and attitudes
to work
 Press attitudes, public opinion, social attitudes and
social
taboos
 Lifestyle choices and attitudes to these
 Socio-Cultural changes

 Components of technological environment
 Impact of emerging technologies
 Impact of Internet, reduction in communications costs
and
increased remote working
 Research and Development activity
 Impact of technology transfer

 3. Internal or Organisational Factors:
i. Objectives of company
ii. Managerial philosophy of company
iii. Personal factors related to management
iv. Managerial attitudes toward other nations, customers,
social welfare, etc.
v. Company’s policies and rules
vi. Resource ability of company and marketing mix
vii. Form of organisation and organisational structure.
viii. Nature and types of employees
ix. Internal relations with other departments
x. Company’s relations with other stakeholders and
service providers.

INTERNATIONAL MARKETING SEGMENTATION
AND POSITIONING
 Variation in customer needs is the primary
motive for market segmentation.
 Most companies will identify and target the most
attractive market segments that they can effectively
serve.
 In global marketing, market segmentation becomes
especially critical because of wide divergence in
cross-border consumer needs and lifestyles.

 Once the management has chosen its target
segments, management needs to determine a
competitive positioning strategy for its products.
 How can we do it?
 Intuition (experience and judgment)
 Imitating ( Act as followers)
 Structured analysis
 Identify current and potential needs
 Identify differentiating characteristics
 Determine whose need is it!

REASONS FOR INTERNATIONAL MARKET
SEGMENTATION
 Segments ideally should possess the following set
of properties:
 Identifiable
 Sizable
 Accessible
 Stable
 Responsive
 Actionable

WHAT LEADS TO EFFECTIVE SEGMENTATION?
 Country Screening
 Global Market Research
 Entry Decisions
 Positioning Strategy
 Resource Allocation
 Marketing Mix Policy
 Balance between standardization and customization

INTERNATIONAL MARKET SEGMENTATION
APPROACHES
 International segmentation procedures:
 Country-ad-segments or aggregate
segmentation
 Disaggregate international consumer
segmentation
 Two-stage international segmentation
 The standard country segmentation
procedure classifies prospect countries on a
single dimension

(e.g., per capita GNP) or on a set of multiple
socioeconomic, political, and cultural criteria
available from secondary data sources.
 When there are numerous country traits, use
smaller set of dimensions using data reduction
techniques such as factor analysis.

SEGMENTATION SCENARIOS
 Universal or global segments
 iPhone
 Regional segments
 McDonalds
 Unique/ niche (diverse) segments
 Mercedes Benz

BASES FOR COUNTRY SEGMENTATION
 Demographics
 Demographics variables are among the most popular
criteria.
 Socioeconomic Variables
 Caveats in using per capita income as an
economic development indicator:
 Monetization of transactions within a country

Gray and Black Market sections of the
economy
Income disparities
 Purchasing Power Parity (PPP) criteria
 Socioeconomic Strata (SES) Analysis
 Human development index (HDI) classification
 Behavior-Based Segmentation
 Occasion and frequency of usage
 Benefits sought
 Willingness to buy
 Attitude towards a product

 Lifestyles
 Global Values Segments; the survey investigated
1000 consumers in 35 countries (source: Robert
Starch Worldwide):
Strivers (23 percent)
Devouts (22 percent)
Altruists (18 percent)
Intimates (15 percent)
Fun Seekers (12 percent)
Creatives (10 percent)
Psychographic which includes social life,
life style and personality types

INTERNATIONAL POSITIONING STRATEGIES
 The formulation of a positioning strategy (local or
global) includes the following steps:
1. Identify the relevant set of competing products or
brands.
2. Determine current perceptions held by consumers
about your product/brand and the competition.
3. Develop possible positioning themes.
4. Screen the positioning alternatives and select the most
appealing one.
5. Develop a marketing mix strategy.
6. Over time, monitor the effectiveness of your
positioning strategy and if needed, conduct an audit

.
 Uniform vs. Localized Positioning Strategies
 Universal Positioning Appeals
 Positioning themes:
Specific product features/attributes
Product benefit, solutions for problems
User application
Lifestyles

INTERNATIONAL MARKETING INFORMATION
SYSTEM (IMIS)
 Marketing Information System (MIS) is an
interacting, continuing future-oriented structure of
people, equipment and procedures.
 It is designed to generate and process an
information flow to aid decision-making in a
company’s marketing programme
 The MIS is much broader than marketing research
(MR). MR is part of MIS

 System is a collection of elements, such as people,
resources, concepts an d procedures, intended to
perform and identifiable function or serve a goal.

 IMIS refers to the system designed for regular
collection of required data related to international
markets and analysis
 IMIS is used in performing following tasks:
 Scanning the global environment to monitor trends
 Assessing how to reallocate resources and efforts
across different countries
 Monitoring performance in different countries and
product markets across the world
 Transferring ideas and experience from different
countries and areas.

 The information flow in IMIS is continuous. Hence
importance of feedback becomes crucial.
 Based on the information collected and created
through the IMIS, the company affects its
environment which creates a new situation
 The success of IMIS lies in constantly creating new,
more favourable business conditions for the
company

INTERNATIONAL MARKET ENTRY STRATEGIES
 It is a strategy in which a company, without any
marketing or production organization overseas,
exports a product from its home base.
 Its main advantage is the ease in implementing the
strategy
 The product is often the same as the one marketed
in the home market
 The risk is minimal. Very likely the most common
overseas entry approach for small firms

 DIRECT EXPORTING
 Direct exporting is selling the products in foreign country
directly through its distribution arrangements or through a
host country’s company
 INDIRECT EXPORTING
 Exporting the products either in their original form or in the
modified form to a foreign country through another
domestic country.
 INTRA-CORPORATE TRANSFERS
 selling of products by a company to its affiliated company in
host country (another country).e.g., Selling of products by
HUL in India to Unilever in the USA. This transaction is
treated as exports in India and imports in the USA.

LICENSING
 It is a reasonable compromise when export is ineffective
but the company is hesitant to invest abroad directly
 It is an agreement that permits a foreign company to use
industrial property, technical know-hows and skills,
designs, or any combination of these
 Essentially, a licensor allows a foreign company to
manufacture a product for sale in the licensee’s country
and in other markets.
 A prudent licensor doesn’t ‘assign’ a trademark to a
licensee

 Licensing is not only restricted to tangible products
 It is considered when capital is scarce, restrictions are
there, and ownership issues are there
 By granting a license to a foreign firm, a manufacturer
may be nurturing a competitor in the future
 Nestle (the licensee) agreed to pay $7.15 billion in
cash to Starbucks (the licensor) for exclusive rights to
sell Starbucks' products (single-serve coffee, teas,
bagged beans, etc.) around the world through Nestle's
global distribution network.

JOINT VENTURES
 It is simply a partnership at corporate level
 It is an enterprise formed for a specific purpose by two
or more investors
 Often, it is the only way, apart from licensing, by which a
firm can enter a foreign market
 Partners’ commitment to a JV is a function of the
perceived benefits
 It substantially reduces the amount of resources to be
contributed
e.g., Hero Honda, TVS Suzuki, Maruti Suzuki

CONTRACT MANUFACTURING
 Contract manufacturing in international markets is used
in situations when one company arranges for another
company in a different country to manufacture its
products
 This is also known as international subcontracting or
international outsourcing.
 The company provides the manufacturer with all the
specifications, and, if applicable, also with the materials
required for the production process
 An example of a reputed contract manufacturing
company is Foxconn Technology Group that supplies
products to high-profile companies like Microsoft,
Amazon, and Apple.

WHOLLY OWNED SUBSIDIARY ABROAD
 It means a foreign concern formed, registered or
incorporated in accordance with the laws and
regulations of the host country whose entire equity
share capital is owned by home nation.
 A company can become a wholly owned
subsidiary through an acquisition by the parent
company or having been spun off from the parent
company, a regular subsidiary is 51% to 99% owned by
the parent company.
 It is the ultimate form of international business.
Samsung India is a wholly owned subsidiary of
Samsung South Korea.

INTERNATIONAL PRODUCT PLANNING
DECISIONS
 Product Planning is the ongoing process of identifying
and articulating market requirements that define a
product's feature set.
 A firm operating in international markets should not
only identify the products for various markets but
should also evolve suitable marketing strategies for
developing such products.
 Whether a single standardized product can be offered
world wide or a customized product needs to be
developed for each market is the most significant
product decision that a firm, has to make while
operating in international markets.

PRODUCT DESIGN
 Product design is a key factor in determining success in
global marketing
 In some instances, making a design change may
increase sales. However, the benefits must be weighed
against the cost of changing the design and testing
costs
 Global marketers need to consider four factors when
marking product design decisions
 Preferences
 Costs
 Laws and Regulations, and
 Compatibility

INTERNATIONAL LABELING
 Many countries require a label that details the registration
information for the product in their native language.
 These labels must be updated whenever the product is
renewed, as they must display registration information
including the product certification number.
 In order to have one international finished good for all of these
countries, products now need to have many different
specialized labels.
 Indonesia, Korea and Australia have recently added labeling
requirements

INTERNATIONAL PACKAGING
 Packaging serves two purposes, namely functional
and promotional
 It is an integral part of a product
 Functional means able to protect the product at min
cost
 If not local, extra protection is needed due to
additional time and distance involved
 A package change may be either mandatory (like
bilingual) or at the discretion of the marketer.
 Packing and labeling are highly related

INTERNATIONAL BRANDING
 International branding refers to the management of a
brand in different regions of the world, intending to
increase its strength and recognition in the markets in
which it operates.
 The functions of a brand are
 To create identification and brand awareness
 Guarantee a certain level of quality, quantity and
satisfaction
 Help with promotion
 A brand has brand equity when there is value
attached to that brand

 International Branding Decisions
 No brand vs brand
 Private brand (Tasty Treat of Big Bazar) vs
manufacturer’s brand (Apple)
 Single brand (Starbucks) vs multiple brands (L'Oreal,
with brands like Garnier, Maybelline, NYX, and La
Roche-Posay)
 Local brands (Local Famous Accountant) vs worldwide
brand (Deloitte)

PRODUCT SUPPORT SERVICES
 Product support can be as simple as a set of
instructions and a throwaway wrench that comes
with an assemble-it-yourself child’s bicycle or as
complicated as warranty programs, service
contracts, parts depots, and equipment on loan to
replace a defective machine while it is being
repaired.
 Caterpillar Tractor and John Deere, two companies
whose marketing strategies are based on providing
superior product support.

Product Standardization
 Standardisation involves using “the same range of
products, the same pricing, promotional and location
strategies
 Rationale behind standardisation practices relate to
homogenisation of consumer wants and needs due to
intensifying forces of globalisation
 Standardisation can focus on core competitive
advantage of the brand and it “allows for a consistent
and strong brand to be developed across all markets
 Some products like music or art works cant be easily
modified. Global brands like Nike, Adidas, Coca Cola in
terms of their standard products.

PRODUCT ADAPTATION
 Making changes in a product response to the needs of
the target market. Ex McDonald’s
 Adaptation of product may vary form major modifications
in the product, packaging, logo or brand name.
 The major factors that favour product adaptation for
international markets include-
 Government regulations
 Operating system
 Measurement system
 Environmental changes
 Packing & labeling regulations
 Price sensitivity

MANAGING AN INTERNATIONAL PRODUCT LINE
 Product lines in even the most global companies are
rarely identical across countries
 There are varied reasons why product lines differ
 History
 M & A
 Preferences
 Capacity
 Channels
 As with all product line management, well-managed
global lines also need to offer a certain rate of new
product introductions.
 To be successful in globally competitive markets, a
significant percentage of sales and profits should come
from new products

International Trade Product Life Cycle
 International markets follow a cyclical pattern over a period of
time due to a variety of factors.
 Factors like level of innovations and technology, resources, size
of market and competitive structure influence the market
patterns.
 In addition, the ability of the customers in international markets
also determines the stage of international product life cycle.
 The PLC for international markets has the following four
identifiable stages
 Introduction
 A majority of new product inventions are made in highly
industrialized and developed countries and hence found there.
 In the initial stages, the price of a new product is relatively high.

 Growth
 The demand in the international markets exhibits an
increasing trend and an innovating firms gets better
opportunities for exports.
 Markets begin to mature in the developed countries, an
innovating firm faces increased international
competition in the target market.
 Maturity
 As the technical know-how of an innovative process
becomes widely known, a firm begins to establish its
operations in middle and low-in-come countries in
order to take advantage of resources available at
competitive prices.

 Decline
 The major thrust of the marketing strategy at this stage
shifts to price and cost competitiveness, as technical
know-how and skills become widely available
 Therefore, the emphasis of a firm is most on the cost –
effective locations.
 Besides developing countries, production also
intensifies in least developed countries.
 As a result, it has been observed that the innovating
country begins to import such goods from other
developing countries rather than manufacturing them.

New Product Development
 Idea Generation
 The new product development process begins with
generation of ideas. The more novel they are, the more
valuable they are.
 Idea Screening
 Develop system to estimate: market size, product price,
development time and costs, manufacturing costs, and rate
of return
 Concept Development and Testing
 Product Idea: idea for a possible product that the company
can see itself offering.
 Product Concept : detailed version of the idea stated in
meaningful consumer terms.
 Product Image: the way consumers perceive an actual or
potential product

 Marketing Strategy Development
 Part One Describes:
 The Target Market Planned Product Positioning Sales,
Market Share, & Profit Goals
 Part Two Outlines the First-Year’s:
 Product’s Planned Price Distribution Marketing Budget
 Part Three Describes Long-Run:
 Sales & Profit Goals Marketing Mix Strategy

 Business Analysis
 Involves a review of the sales, costs, Competition,
investment and profit projections to assess fit with
company objectives.
 If yes, move to the product development phase.
 Product Development
 Develop concept into physical product
 Calls for large jump in investment
 Prototypes are made
 Prototype must have correct physical features and convey
psychological characteristics

 Test Marketing
 Product and program introduced in more realistic
market setting.
 Not needed for all products.
 Can be expensive and time consuming, but better than
making major marketing mistake.
 Commercialization
 Must decide on timing (i.e., when to introduce the
product).
 Must decide on where to introduce the product (e.g.,
single location, state, region, nationally, internationally).
 Must develop a market rollout plan.

International marketing full module 1.pptx

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