This document discusses international marketing and various strategies for entering foreign markets. It begins with quotes highlighting the global nature of business today. It then covers topics like the growth in international trade, differences between domestic and international marketing, factors driving firms to go global, objectives of international marketing, and common market entry strategies like exporting, licensing, joint ventures, and direct investment. Key strategies discussed in more depth include exporting, alliances, and different modes of foreign market entry.

1. Shilpa Tandon
Introduction to International
Marketing

2. “If we distributed pictures only in the
United States, we’d lose money. It
takes the whole world now to make
the economics of movie-making
work.”
- William Mechanic
President, 20th Century Fox

3. “Half the people in the world have
yet to take their first picture. The
opportunity is huge, and it’s
nothing fancy. We just have to
sell yellow boxes of film.”
- George M.C. Fisher
CEO, Eastman Kodak Co.

4. International Marketing
 Today we live in a world of Global
outsourcing. Global Trade is at its potential
high and the trend is going to grow in future.
 Peter Drucker says, “No Institution, whether a
business, a university or a hospital, can hope
to survive, let alone to succeed, unless it
measures up to the standards set by the
leaders in its field any place in the world.”
 So also, the Indian business environment has
seen a sea change in the level of competition
since the opening up of the domestic markets
for participation of MNC’s.

5.  In 1950, the International Trade was worth $55
billion. From here, it has raised to $10120 billion
in 2005.
 Germany ranks the first in exports and exported
goods worth $912.3 billion with a global share of
10% in 2004. USA ranked second with $818.8
billion and 8.9% share. India was 30th with
exports of $75.6 and a share of 0.8%.

6.  In imports, the USA has imported goods worth
$1525.5 billion with a global share of 16.1%. India
ranks 23rd with imports of $97.3 billion and 1% of
the global share.
 This data shows that India has to go a long way
in international Trade and the scope is
tremendous.

7. International Marketing
 ...is the marketing of goods and services across
national frontiers.
 … is the marketing operations of any company that
sells and / or produces within a given country when :
 The organization is a part of, or associated with an
enterprise which also operates in other countries, and
 There is some degree of influence or control on its
activities from outside the country in which it sells and
/ or produces
 The process of planning and conducting transactions
across national borders to create exchanges that
satisfy the objectives of individuals and organizations.

8. Difference between Domestic and
International Marketing
 What is the difference between marketing domestically
and internationally
 Marketing concepts are universal (goal is to make a profit by
satisfying customers)
 Difference is that in international marketing ALL environments
have to be taken into consideration when the marketing plan
is developed and executed
 Must consider the legal environment, governmental
controls, climate & weather, cultural beliefs, buyer
behavior… (uncontrollable elements)

9. Global Marketing Environment
Global
Regional
Local
Marketing Mix
Environment

10. Major International Marketing
Decisions

11. Special Problems of IM
 Political & Legal differences.
 Cultural differences.
 Economic differences.
 Differences in the currency units & their fluctuations.
 Differences in language.
 Differences in marketing infrastructure. ( In terms of
promotion channels, distribution channels etc )
 Trade restrictions.( Import controls )
 High cost if distance coverage.( Has an impact on
time, mode of transport, obsolesce and goods
perishing costs)
 Differences in Trade Practices.

12. Why Go Global
 Firms are motivated to expand their markets
internationally for two reasons :
 Push factors : Refer to the compulsion of
domestic markets like saturation of markets,
international competition etc that amount to
reactive reasons for going global.
 Pull factors : Refer to proactive reasons, that
attract firms to global markets. This talks
about the potential in the global markets to be
more profitable and high growth prospects.

13. Why Go Global
 Reasons to consider going global:
 Foreign attacks on domestic markets
 Foreign markets with higher profit opportunities
 Stagnant or shrinking domestic markets
 Need larger customer base to achieve economies
of scale
 Reduce dependency on single market
 Follow customers who are expanding

14. Driving Forces
 Liberalization
 MNC’s
 Technology
 Transportation and communication revolution
 Product development costs and efforts.
 Rising aspirations and wants
 Competition
 World economic trends
 Regional integration
 Leverages

15.  Private Firms.
 MNC’s
 Other large firms
 SME’s
 Public sector undertakings
 Trading companies
 Individuals.

16. Objectives Of International
Marketing
 Identifying the needs and wants of
International Customer : Undertaking IMR &
analyzing market segments, seeking to
understand similarities & differences in
customer groups across different countries.
 Achieving Global customer satisfaction :
Adapting products and services & other
elements of the MM to satisfy different
customer needs across countries

17. Objectives Of International
Marketing
 Staying ahead of the competitors by providing
better products / services : Assessing, monitoring
& responding to global competition by offering
better value, developing superior Brand Image &
product positioning , broader product range,
competitive price, high quality, good performance,
better distribution & after sales service.

18. Objectives Of International
Marketing
 Co-coordinating marketing activities :
Coordinating and integrating marketing strategies
across countries, regions and global markets,
which involve centralization, delegation,
standardization & local responsiveness.

19. Market Entry Strategies
 Exporting
 Low investment
 Low control of promotion
 Licensing
 Low investment
 Low control of promotion,
positioning, and quality
 Able to benefit from existing
distribution and market
knowledge
 Joint venture
 Considerable investment
 More control
 Able to benefit from partner’s
experience
 Must work with partner
 Direct investment
 Large investment
 Risky
 Greater control
 May lack knowledge of
market

20. Modes of Entry
 Exporting is a relatively low risk strategy in which few
investments are made in the new country. A
drawback is that, because the firm makes few if any
marketing investments in the new country, market
share may be below potential. Further, the firm, by
not operating in the country, learns less about the
market (What do consumers really want? Which
kinds of advertising campaigns are most
successful? What are the most effective methods of
distribution?) If an importer is willing to do a good job
of marketing, this arrangement may represent a “win-
win” situation, but it may be more difficult for the firm
to enter on its own later if it decides that larger profits
can be made within the country

21. Exporting
 Need for limited finance
 Less Risk
 Proactive and reactive motivations.
 Forms of Exporting :
 Indirect Exporting
 Direct exporting
 Intracorporate transfers.

22. Types of Export Intermediaries
 Export Management companies
 International Trading Companies
 Manufacturer/s agents
 Manufacturers export agents
 Export and import brokers
 Freight forwarders.

23. Modes of Entry
 Licensing and franchising are also low exposure
methods of entry—you allow someone else to use
your trademarks and accumulated expertise. Your
partner puts up the money and assumes the
risk. Problems here involve the fact that you are
training a potential competitor and that you have little
control over how the business is operated. For
example, American fast food restaurants have found
that foreign franchisers often fail to maintain American
standards of cleanliness. Similarly, a foreign
manufacturer may use lower quality ingredients in
manufacturing a brand based on premium contents in
the home country.

24. Modes of Entry
 Contract manufacturing involves having someone
else manufacture products while you take on
some of the marketing efforts yourself. This
saves investment, but again you may be training
a competitor.

25. Direct entry
 Direct entry strategies, where the firm either
acquires a firm or builds operations “from
scratch” involve the highest exposure, but
also the greatest opportunities for profits. The
firm gains more knowledge about the local
market and maintains greater control, but now
has a huge investment. In some countries,
the government may expropriate assets
without compensation, so direct investment
entails an additional risk. A variation involves
a joint venture, where a local firm puts up
some of the money and knowledge about the
local market.

26. Alliances
 Advantages:
 Ease of market entry. It may be useful for a
firm to partner with another that already has a
presence in and knowledge of a market. For
example, Kentucky Fried Chicken (KFC)
partnered with the Mitsubishi Keirishi in
entering Japan. By doing so, KFC was
assured of managerial talent to deal with
local regulations and handling logistics (e.g.,
labor and construction) while Mitsubishi in turn
got the use of an authentic American brand
name.

27. Alliances
 Shared risk. Some projects are just too big for
any one company to approach alone. Boeing can
partner with Rolls Royce, with the latter making
the engines for the aircraft, while Boeing makes
the frame. Many times, deep sea oil exploration
is too big a commitment for any one oil company,
so two or more may together.

28. Alliances
 Shared knowledge and expertise. Intel, known
for its cutting edge innovations in computer chips,
can partner with a Japanese firm do to its
manufacturing.
 Synergy and competitive advantage. “Synergy”
refers to the idea that the resources held by two
firms, when combined, add up to more than the
sum of their parts.

29. Alliances
 Legal obstacles. Since both firms have their own
interests, complicated legal agreements may have to
be made up. Also, there may be limitations on market
concentration, and there may be some concern about
the legality of technology transfer. In some countries,
as previously mentioned, it may be difficult to enforce
agreements.
 Complacency: If two firms join forces where they
previously competed, they may become complacent
in developing new products, improving quality, and
lowering costs and prices. When competition is
place, firms tend to maintain greater discipline, which
is needed for competitive ability in the long run.

30. Alliances
 Costs of coordination. When two firms have different cultures
(e.g., individualistic vs. collective or authoritarian vs. more
participative), more effort may be needed in circulating
information and reaching decisions. For example, Oracle, an
aggressive computer firm in the Silicon Valley with a strong
emphasis on meritocracy might have difficulty working with a
collectivistic Japanese firm.
 Blurred lines between areas of competition and
cooperation. Suppose Sony and Compaq, which both make
computers, want to collaborate on making memory chips. To do
so, they may have to share information about other computer
technology in areas where they may compete. There is now a
question of what to share and what to hold back. Not only is
time spent deciding whether to share or withhold, but essential
information may end up not being available to those who need
it.