1 international marketing intro

Evolution of International Marketing
Before the Industrial Revolution, small scale manufactured
influenced the economy and the product were locally marketed.
Post 1750, large scale manufacturers started dominating the
business scenario, and needed to expand the market place.
Products started crossing the borders.
Each country had its own currency, languages, trade tariffs,
business regulation, cultural requirements and political norms
and requirements.
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Domestic Marketing
Domestic marketing is the selling of a company’s
products within a local financial market. There are no
language barriers in domestic marketing and obtaining
and interpreting data on local marketing trends
and consumer demands is easier and faster to meet.
It helps the company make decisions and develop
marketing strategies, that are more effective and
efficient.
The risks are also lesser with domestic marketing and
it needs lesser financial resources.
Local markets are not as broad as the international
market.
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“International Marketing
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 in
more than one nation for
a profit.”
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International Marketing
International marketing is the promotion and sale of a
company’s products to consumers in different countries.
It is very complex and requires a huge amount of financial
resources. Every country has its own laws on business and
an enterprise that aims at entering business in another
country must first know about them. Consumer tastes and
preferences may also differ, so marketing strategies must be
formulated to cater to the needs of different consumers.
International marketing requires more time and effort, not to
mention its being very risky too. The international market is
very un-certain and a company must always be ready for
changes that may suddenly occur. It requires a higher level
of commitment to succeed in an international market.
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Domestic Marketing
•National Currency
• Local political
environment,
Governance
• Short distances
• Local taxation
• One nation, One language,
common culture
International Marketing
• Foreign currency
• Several political
environments
• Long distances
• Multiple taxes
• Mutliple nations, Various
languages, Different
culutures & Customs.
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Marketing Environment of International Marketing
•The Political Environment: These kinds of government comprise
the political & ethical base such as democracy, socialism,
dictatorship, monarchy, or consumerism.
•The Legal Environment: The ruling of goods and services by the
administration is very important to an international marketing
organization. If the market is driven by the law, then it supports
the price and circulation of products and services.
•Cultural Factor: The culture of any country is hugely significant
in international marketing, since it helps the organization to know
the international marketing features that they must keep in
purview. In the event of developing countries this is not the case,
as foreign goods are highly liked as compared with locally made
ones.
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International marketing involves the
marketing tactics adopted by
knowledgeable marketers in different
countries specific to the markets of those
countries.
Multinational / Global marketing, on the
other hand is a marketing concept which
involves the marketing efforts put in for
the unique worldwide market.
Global Marketing is like a bigger brother
to international marketing.
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1) International Companies
The operations of such companies lie in one single home country
as the base center.
These companies only export or import products from the home
country. The offices, hence, only exist in the home country and
there is no foreign direct investment in other countries.
The functioning and strategies are derived mostly from the
primary market which is the domestic home country market.
They have to continuously adjust to trading norms of the home
country.
Spencers is an example in the Indian context.
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2) Multinational Companies
As the name suggests, these
companies have direct operations
in more than a single country,
however, it is usually not a very
large number.
However, MNC’s have a
centralized structure, with the
head office in the home country
calling all the shots.
In this case, products are decided
and developed by the head office
and subsidiary offices do have
options to adapt to local markets,
if needed.
Some of the amazing examples
to explain multinational
companies.
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3) Transnational Companies
These companies are operating in multiple countries, having foreign
direct investment in all of them.
Such companies follow a flexible approach, understanding and
adapting to the local culture and demand of each country.
Hence, offices in each country work in a decentralized manner with
decision-making powers.
Infact, subsidiary offices can launch and make products which might
not be manufactured in the original home country, if there is a chance
of demand.
Examples in the Indian context.
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4) Global Companies.
These companies work to have a foothold in a large number of countries,
usually larger than a Multinational Corporation.
They, however, do not follow the system of having an official head office.
Various subsidiaries are set but standard products are sold, with flexibility
in terms of adapting to local consumers.
There is no change in branding or information about the global company,
even if the country of operations changes.
McDonald’s – a fast-food chain, is an exemplary example of this kind of
companies.
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Multinational companies
Multinational Marketing companies have
investment in other countries, but do not
have coordinated product offerings in
each country. More focused on adapting
their products and service to each
individual local market.
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Global Marketing
Global Marketing means a company
adopts the same promotional tactics
across the world – think of Wal-Mart or
Nike.
In global marketing, the business thinks
of the whole world as its operating
space and does not adapt its products
or services, communication and
distribution channels to domestic
requirements.
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Transnational Marketing
Transnational marketing is the geographical
and administrative span of the operations,
strategy and behavior.
Transnational is stateless, borderless, draws
upon multiple territories, cultures and multiple
reference points.
A transnational corporation, also known as a
multinational corporation, is a corporation that
has a home base, but is registered, operates and
has assets or other facilities in at least one other
country at one time.
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Global Marketing
Advantages
• Whenever a business turns
global, it is empirical that it
should take advantage of the
opportunities that economy
can bestow upon it.
• Apart from the limitless
sales potential which the
business eventually enjoys
by keeping a worldwide
existence, a particular brand
must also invest on
resources which the
customers can readily relate.
• Higher profits, inflated sales,
fresh knowledge and skill-
development are also some
marked advantages of global
marketing.
Disadvantages
• The competitive
dissimilarities amongst the
various brands and
manufacturers.
• The differences in customer
likings such as needs and
desires impacted by their
own regions.
• The differences in
authorized concerns which
may create clashes with that
of the native market.
• There may be language
barriers, changed mindset of
consumers and/or additional
costs incurred in
production.
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EPRG Methodology.
Variant/Different attitudes towards company’s
involvement in international marketing process
are called international marketing orientations.
EPRG framework was introduced by Wind,
Douglas and Perlmutter.
This framework addresses the way strategic
decisions are made and how the relationship
between headquarters and its subsidiaries is
shaped.
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INTERNATIONAL MARKETING MANAGEMENT
ORIENTATIONS
The form and substance of a company's
response to global markets opportunities
depend greatly on management’s assumption
and beliefs (both conscious and
subconscious) about the nature of the world.
The worldview of a company’s personnel can
be described as
ETHNOCENTRIC
POLYCENTRIC
REGIOCENTRIC
GEOCENTRIC
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Ethnocentric Management Orientation.
Home country orientation.
Perception about market. Domestic market is
superior.
Focuses on similarities between home and
foreign market.
Considers foreign market secondary, to an
extension of domestic market.
Marketing strategy. Extension of domestic
strategy to foreign market
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Ethnocentric Characteristics
Overseas operations viewed as secondary &
primary means of disposing the surplus
production.
Domestic techniques & personnel superior to
foreign & most effective in overseas market
Domestic marketing mix is employed without
major modifications in overseas market.
All foreign marketing operations are planned
& carried out from home base & overseas
marketing administered by export department.
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Companies basic objective.
Profitability.
Type of governance. Top-down Culture
Home country Technology
Mass production & HRM practices
Overseas operations are managed by people
from home country. Managerial predisposition
Manager/MNC rely on values & interests of
parent company in formulating and
implementing strategic plan
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Merits
No cost & efforts needed for
adaptation/localization.
It is easy route to internationalization when
foreign market exists with similar domestic
characteristics.
Demerits
No full exploitation opportunities worldwide.
Main focus on domestic market.
Examples Nissan in 1st years exported cars
in US markets, sold cars without change, then
sold car in Japan
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Type of governance.
Each local unit sets objectives (bottom up).
Culture.
Host country Technology.
Batch production HRM practices.
Local nationals are used in key management
positions Managerial predisposition.
MNC tailor strategic plan to meet the need of
local culture.
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Polycentric Management orientation.
Host country orientation.
Perception about market.
Each national market is distinctive.
Focuses on differences between home
country & foreign country.
Marketing strategy Localization /
adaptation. Companies basic objective.
Public acceptance.
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Polycentric Characteristics.
Recognize importance of inherent
differences in overseas markets.
Subsidiaries are established in overseas
market & each is independent with own
marketing objectives & plans. Local
techniques & personnel best suited to deal
with local market conditions.
International marketing organized on
country to country basis with separate
marketing strategy for all
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Merits
Adaptation to market characteristics help
in better understanding of local needs
which will lead to better exploitation of
market potentials.
Demerits
High cost of national responsive
marketing mix for each country.
Delay in localization Examples McD (no
beef burgers in India).
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Type of governance.
Mutually negotiated between region & its
subsidiaries.
Culture-Regional Technology.
Flexible manufacturing HRM practices.
Regional people are developed for key
managerial positions anywhere in region
Managerial predisposition.
MNC use a strategy that addresses both local
& regional needs
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Characteristics.
Treat different regions as different market
Regions with similarity of marketing
characteristics treated as separate market
Merits
Advantages of both localization &
standardization
Demerits
Lack of attention to inter regional
differences. Examples Punjab (paneer
products more) Gujarat (sugar more)
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Geocentric Management orientation.
Global orientation.
Perception about market.
Entire world is a single market that can be
effectively tapped by standardized marketing
strategy.
Marketing strategy
Global standardization Companies basic
objective.
Both profitability & public acceptance.
Type of governance. Mutually negotiated at all
level of organization.
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Culture- Global Technology.
Flexible manufacturing HRM practices.
Best people anywhere in the world are
developed for key managerial positions
everywhere in the world Managerial
predisposition.
MNC constructs its strategic plan with a
global view of operations
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Characteristics.
Entire world is treated as single market.
Standardized marketing mix, to give uniform
image of product &company for global
market.
Worldwide approach to marketing & its
operations.
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Merits
Economies of large scale production
Lower costs advantage of pace
Demerits.
Not successful in many cases
Uniform /standard marketing mix not
guarantees for sure success in every
situation Examples Microsoft & Nokia
standardized products world wide.
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1 international marketing intro

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