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1. INTERNATIONAL MARKETING
INTRODUCTORY LECTURE

2. Why firms go global
• Liberailsation, globalisation.
• Escape unfavorable domestic
factors.
• Avoid tariff and trade quotas.
• Business is a profit
maximizing enterprise; firms
go where profits are
maximized.

3. Why firms go global
• Higher rates of profits
• Expanding production capacity for reduced
production costs
• Limited growth opportunities in domestic market
• Availability of raw materials, cheap labor, high-
end technology, skilled workforce, managerial
competence and favorability of climate etc.

4. The New Global Environment
• Anti globalization and terrorism
• World Trade Organization
• Anti Americanism/ Anti West Opinion
• Fair Trade
• Global Warming and Green Trade
• The Dubai Phenomenon
• Regionalization

5. International Marketing
• It is the performance of business activities to
plan, price, promote and direct the flow of
goods and services to consumers and users in
more than one nation for a profit.

6. Global Perspective
Global Commerce Causes Peace
• International marketing promotes peace and
prosperity through the marketing of products
and services that meet the needs and wants of
customers in other lands

7. Why Global Marketing is Imperative
• Saturation of domestic markets: Domestic-market
saturation in the industrialized parts of the world
and marketing opportunities overseas are evident in
global marketing.
• Global competition: Competition around the world
and proliferation of the Internet are on the rise.
• Need for global cooperation: Global competition
brings global cooperation.

8. Why Global Marketing is Imperative (contd.)
• Internet revolution: Major structural changes to
the way companies operate worldwide.
• The term “global” epitomizes both the
competitive pressure and expanding market
opportunities.
• Companies operating both domestically and
internationally can no longer avoid competitive
pressures from around the world.

9. Events and Trends
Affecting Global Business
• The rapid growth of the World Trade Organization
(WTO) and NAFTA and EU
• Acceptance of the free market system among
developing countries in Latin America, Asia, and
Eastern Europe
• The burgeoning impact of the Internet, mobile
phones, and other global media on the dissolution
of national borders
• The mandate to properly manage the resources and
global environment for the generations to come

10. What do you see?

13. Globalization of Markets: Convergence and
Divergence

14. • The United States and Japan, the two largest
economies in the world are also the largest
importers of goods and services. However,
imports and exports put together have
comprised only 20 to 30% of the GNP in
recent past. Does this imply that the
corporation and media may be
overemphasizing globalization? Discuss why
you agree/disagree.

15. • Big Emerging Markets (BEMs): In the next ten to
twenty years, BEMs such as the Chinese Economic
Area (CEA: including China, Hong Kong Region,
and Taiwan), India, South Korea, Mexico, Brazil,
Argentina, South Africa, Poland, Turkey, and the
Association of Southeast Asian Nations (ASEAN:
including Indonesia, Brunei, Malaysia, Thailand,
the Philippines, and Vietnam) will be major
markets

17. Evolution of Global Marketing
• Five stages in the evolution of global marketing (see
Exhibit 1-2):
1. Domestic Marketing (domestic focus; home country
customers; ethnocentric orientation).
2. Export Marketing (indirect vs. direct exporting;
country choice, exports; ethnocentric orientation;
home country customers).
3. International Marketing (markets in many countries;
polycentric orientation; use of multidomestic
marketing when customer needs are different across
national markets).

18. Evolution of Global Marketing (contd.)
4. Multinational Marketing (many markets;
consolidation on regional basis; regiocentric
orientation; standardization within regions).
5. Global Marketing (international, multinational &
geocentric orientation; company’s willingness to
adopt a global perspective; global products with
local variations).

20. International Marketing Involvement -
Stages
No Direct
Foreign Marketing
Infrequent Foreign
Marketing
Regular Foreign
Marketing
International
Marketing
Global
Marketing

21. 1. No Direct Foreign Marketing –
Reactive
• Products “indirectly” reach foreign markets
• Trading companies
• Foreign customers who contact firm
• Domestic wholesalers/distributors
• Web orders
• Foreign orders stimulate a company’s interest
to seek additional international sales

22. 2. Infrequent Foreign Marketing –
Reactive
• Caused by temporary surpluses
– Sales to foreign markets are made as goods
become available
• Firm has little or no intention of maintaining
continuous market representation
• Foreign sales activity declines and is
withdrawn when domestic demand increases

23. 3. Regular Foreign
Marketing – Proactive
• Dedicated production capacity for foreign
markets
• Strategy:
– Firm employs domestic or foreign intermediaries
– Uses its own sales force or sales subsidiaries
• Products are adapted for foreign markets as
domestic demand grows
• Firms depend on profits from foreign markets

24. 4. International Marketing –
Proactive
• Fully committed and involved in foreign markets
and international activities
• Production takes place on foreign soil earning
firms the MNC (Multinational Corporation) title
• Fedders being “proactive:”
– Looked to Asia for future growth after stymied
U.S. sales
– Designed new types of air conditioner unit for the
Chinese market
– Plan to introduce new product in the U.S!

25. 5. Global Marketing – Proactive
• The firm sees the world as one market!
• Market segmentation is now defined by income
levels, usage patterns, or other factors that span
the globe
• More than half of its revenues come from abroad
• The firm has a global perspective

26. Global Market Orientation
• Approaches all country markets as a single
global market and standardizes the marketing
mix where culturally feasible and cost effective.

27. • Firms may pursue a global market strategy
for one product
Global Market Orientation

28. • And a multidomestic strategy for another
Global Market Orientation

29. Strategic Orientation

31. Uncertainty in Marketing
• Various factors affect business in the foreign
markets- Market Decision Factors
• Controllable elements. They are common to
domestic and international marketers.
• Uncontrollable elements .They exist at two
levels: Domestic and Foreign Marketing
Environment.

33. Self-Reference Criterion (SRC)
• Self-Reference Criterion (SRC) is an
unconscious reference to one’s own cultural
values, experiences, and knowledge as a basis
for decisions.
• Risk of SRC:
– Prevents from becoming aware of cultural
differences
– Influence evaluation of the appropriateness of a
domestically designed marketing mix for a
foreign market

34. Ethnocentrism
– Impedes the ability to assess a foreign market in
its true light

35. Overcoming Obstacles to success in
International Market
• Develop global awareness
– Developing world market potential.
– Tolerance of cultural differences.
– Knowledge of world market potential.
– Knowledge of history and its impact on national and
cultural differences.
– Develop understanding of key areas to target for
demand.
– Develop customized strategies for diverse markets.