International Marketing Lect1

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International Marketing Lect1

  1. 1. International Marketing - Swapnil Deshmukh [email_address]
  2. 2. Impact of Globalization <ul><li>Indian businessman </li></ul><ul><li>Wearing an Armani suit </li></ul><ul><li>Meeting a Japanese friend </li></ul><ul><li>At a French restaurant </li></ul><ul><li>Returns home to drink Russian Vodka </li></ul><ul><li>Watch an American soap on TV </li></ul>
  3. 3. What is International Marketing? <ul><li>At its simplest level, international marketing involves the firm in making one or more marketing mix decisions across national boundaries. At its most complex level, it involves the firm in establishing manufacturing facilities overseas and coordinating marketing strategies across the globe </li></ul><ul><li>http://www.marketingteacher.com/Lessons/lesson_international_marketing.htm </li></ul>
  4. 4. What is Global Marketing? <ul><li>Global marketing refers to marketing activities coordinated and integrated across multiple country markets </li></ul><ul><li>More of an extension to International Marketing </li></ul><ul><li>http://www.marketingteacher.com/Lessons/lesson_international_marketing.htm </li></ul>
  5. 5. Major Decisions in International Marketing Deciding whether to go abroad Deciding which markets to enter Deciding how to enter the market Deciding on the mktg program Deciding on the mktg organization
  6. 6. Deciding Whether to go abroad <ul><li>Higher profit opportunities in foreign markets </li></ul><ul><li>Need for larger customer base to achieve economies of scale </li></ul><ul><li>Reduce dependency on any one market </li></ul><ul><li>Competition from global firms in domestic markets </li></ul><ul><li>Customers going abroad and need for international servicing </li></ul><ul><li>Excess production which can be sold in international markets </li></ul>
  7. 7. Risks involved <ul><li>Failure to understand foreign customer preferences </li></ul><ul><li>Failure to offer completely attractive product </li></ul><ul><li>Failure in understanding foreign country’s business culture </li></ul><ul><li>Underestimating foreign regulations and incur unexpected costs </li></ul><ul><li>Lack of relevant human resources </li></ul><ul><li>Change in international factors viz. laws, currency, political issues, etc </li></ul><ul><li>Egs. KFC in Japan, WaltDisney park in France, etc </li></ul>
  8. 8. International Trade Theories <ul><li>Mercantilism </li></ul><ul><ul><li>Oldest theory </li></ul></ul><ul><ul><li>Colonial era </li></ul></ul><ul><ul><li>Trade surplus in the form of gold </li></ul></ul><ul><ul><li>Ruled by states </li></ul></ul><ul><ul><ul><li>Ban/Restrictions on imports </li></ul></ul></ul><ul><ul><ul><li>Incentives for exports </li></ul></ul></ul>
  9. 9. International Trade Theories <ul><li>Natural Advantage Theory </li></ul><ul><ul><li>Eg. Saudi Arabia oil reserves, Scotland vineyards grape farms </li></ul></ul><ul><ul><li>More egs…………. </li></ul></ul>
  10. 10. International Trade Theories <ul><li>Acquired Advantage Theory </li></ul><ul><ul><li>Technology provides more advantages in production of goods than do available resources </li></ul></ul><ul><ul><li>Eg. Japanese auto market </li></ul></ul><ul><ul><li>More egs……… </li></ul></ul>
  11. 11. International Trade Theories <ul><li>Absolute Advantage </li></ul><ul><ul><li>Adam Smith </li></ul></ul><ul><ul><li>A country has an absolute advantage over another in producing a good, if it can produce that good using fewer resources than another country </li></ul></ul><ul><ul><li>Eg. </li></ul></ul>50 80 Wool 75 20 Wine Spain Scotland 1 unit of labour
  12. 12. International Trade Theories <ul><li>Comparative Advantage Theory </li></ul><ul><ul><li>David Ricardo </li></ul></ul><ul><ul><li>Opportunity Cost </li></ul></ul><ul><ul><li>Food </li></ul></ul><ul><ul><ul><li>England – 100 tonnes </li></ul></ul></ul><ul><ul><ul><li>Portugal – 200 tonnes </li></ul></ul></ul><ul><ul><li>Clothes </li></ul></ul><ul><ul><ul><li>England – 100 tonnes </li></ul></ul></ul><ul><ul><ul><li>Portugal – 100 tonnes </li></ul></ul></ul>
  13. 13. International Trade Theory <ul><li>Factor Proportions Theory </li></ul><ul><ul><li>HOS ( H ecksher- O hlin- S amuelson) theory </li></ul></ul><ul><ul><li>2 factors of production viz. labour and capital </li></ul></ul><ul><ul><li>Labour abundant e.g. India/Vietnam.. IT services </li></ul></ul><ul><ul><li>Capital abundant e.g. Australia/US.. Agriculture </li></ul></ul><ul><ul><li>Leontief’s Paradox </li></ul></ul>
  14. 14. International Trade Theory <ul><li>Product Life Cycle Theory </li></ul><ul><ul><li>New Product Stage – PCs produced and sold in US </li></ul></ul><ul><ul><li>Maturity Stage – US exports PCs to other markets </li></ul></ul><ul><ul><li>Standardized/Decline Stage – Production moves to countries with comparative advantage in production of PCs.. PCs imported in US from developing/others markets </li></ul></ul>

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