A short presentation on International Marketing

Notes on International Marketing

1. INTRODUCTION TO INTERNATIONAL MARKETING

2. Ag e n d a The I nternational M arketing concept Domestic Vs International Marketing Benefits of International Marketing Major obstacles in international marketing Process of Internationalisation Marketing Orientation of a Firm

3. International marketing It refers to marketing carried out by companies overseas or across national borderlines. The performance of the business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit . 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 American Marketing Association (AMA)

4. INTERNATIONAL MARKETING In simple words International Marketing is the application of marketing principles to across national boundaries. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term.

5. Global marketing It refers to marketing activities integrated across multiple country markets.

6. International Marketing Vs. Domestic Marketing The main difference between them is that the marketing activities take place in more than one country. International marketing more complicated, at least two levels of uncontrollable uncertainty instead of one.

7. International Marketing Vs. Domestic Marketing Uncertainty is created by the uncontrollable elements of all business environments, but each foreign country in which a company operates adds its own unique set of uncontrollable.

8. International Marketing Vs. Domestic Marketing Competition, legal restraints, government controls, weather, fickle consumers, and any number of other uncontrollable elements can, and frequently do, affect the profitable outcome of good, sound marketing plans.

9. International Marketing Vs. Domestic Marketing Marketer can not control or influence these uncontrollable elements, but instead must adjust or adapt to them in a manner consistent with a successful outcome.

10. International Marketing Vs. Domestic Marketing Marketing objectives are achieved in a way of molding the controllable elements of marketing decisions (product, price, promotion and distribution) within the framework of the uncontrollable elements of marketplace (competition, politics, laws, consumer behavior, level of technology, and distribution).

11. Difference Point Domestic Marketing International Marketing Operation Conditions One nation language & culture Many Nations, Languages & Culture Transportation cost Some Extent Major extent Currency One Multiple Political Same Differ Nature of market Relatively homogenous Diverse & Heterogeneous Change control & Tariffs No Problems Obstacles Data Availability Accurate Formidable, But doubted Government interferences Relative free Influences Environmental Effects Little effect Distortion by large companies Business Environment Stable Unstable Climate & Nature of Business Uniform & Understood Varies & Unclear 14 Difference B/w Domestic and International

12. Characteristics Of International Marketing Dominance of Multinationals Large Scale Operations Boundary Restrictions & Trade Blocks Marketing Research Importance of Advanced Technology Precise competition Sensitive character. Want for Specialized I nstitutions Long term planning Cultural relations

13. Market Entry Mode & Risk

14. International Orientation : Ethnocentrism (home country orientation) Polycentrism (host country orientation) Regiocentrism (regional orientation) Geocentrism (world orientation)

15. Ethnocentric Orientation Market Focus Overseas (Targeting & entering foreign markets) Marketing Mix Decisions Focussed mainly on domestic customers Overseas marketing Decision made at headquarter. 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 Merits – No cost & efforts needed for adaptation/localization It easy route to internationalization when foreign market exists with similar domestic characteristics Demerits – No full exploitation of IB 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

16. Polycentric Orientation Market Focus Differentiation in country markets by way of developing or acquiring new brands Marketing Mix Decisions Developing local products depending upon country needs Decisions by individual subsidiaries . Perception about market –  Each national market is distinctive  Focuses on differences between home country & foreign country Marketing strategy – Localization / adaptation 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)

17. Regiocentric Orientation Market Focus Consolidation of operations on regular basis Gains from economies of scale Marketing Mix Decisions Product standardisation within regions but not across them On regional basis Perception about market – Markets can be differentiated on the basis of common regional characteristics Marketing strategy – Trade- off between standardization & localization Merits - Advantages of both localization &standardization Demerits – Lack of attention to inter regional differences Examples Punjab (paneer products more) & Gujarat (sugar more)

18. Geocentric Orientation Market Focus Consolidating firm’s operation on global basis Marketing Mix Decisions Globalisation of marketing mix decisions within local variations Joint decision making across firm’s global operation Perception about market – Entire world is a single market that can be effectively tapped by standardized marketing strategy Marketing strategy – Global standardization 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

19. International Marketing involves: Identifying the needs and wants of the customers in international markets. To take market mix decisions keeping in the view the diverse customers and market behavior. Penetrating into International Markets using the various modes Decisions in view of IBE

20. International Marketing Environment (c o n t r o l l a b l es) Domestic environment (uncontrollable) E c ono mic climate structure Political / legal f o r c e s P o l i t i c a l / l e g al forces Foreign environment (uncontrollable) Economic forces C u l t u r al forces Competitive Competitive forces Geography and infrastructure Level of t e c hn o l og y Structure of distribution Environmental uncontrollables country market A Source: Philip R. Cateora. International Marketing. Ninth edition

21. International environmental forces Marketing controllables: The successful manager constructs a marketing program designed for optimal adjustment to the uncertainty of the business climate. Domestic uncontrollables: This includes home- country elements that can have a direct effect on the success of a foreign venture: political forces, legal structure, and economic climate. Foreign uncontrollable: The problem of uncertainty is further complicated by a frequently imposed “alien status” that increases the difficulty of properly assessing and forecasting the dynamic international business climate.

22. International environmental forces Thus a strategy successful in one country can be rendered ineffective in another by differences in political climate, staged of economic development, level of technology, or other cultural variation.

23. International marketing International marketing is often not as simple as marketing your product to more than one nation. Companies must consider ▫ language barriers, ▫ ideals, and ▫ customs in the market they are approaching.

24. Language barrier Due to a language barrier, it is more difficult to obtain and interpret research data in international marketing. Promotional messages needs to consider numerous cultural differences between different countries. This includes the differences in languages, expressions, habits, gestures, ideologies and more.

25. Language barrier

26. Language barrier United States - "okay" Mediterranean - "zero" or "the worst“ Tunisia - "I'll kill you" Japan - "money" .

27. Language barrier 74 English-speaking nations a word with the same meaning can differ greatly from each other Bar: pub (Britain), hotel (Australia), boozer (Australia, Britain, New Zealand) Bathroom: Loo (Britain), Dunny (Australia) Ghost or monster: Wendigo (Canada), Duppy (Caribbean), Taniwha (New Zealand) Truck: Lorry (Britain and Australia) Sweater: Jumper (England) French fries: Chips (Britain) Soccer: Football (the rest of the world)

28. Stages Of International Marketing Involvement ▫ ▫ ▫ No Direct Foreign Marketing: trading companies, foreign customers, domestic wholesalers, distributors Infrequent Foreign Marketing: Temporary surpluses caused by variations in production levels or demand, few companies today fit this model Regular Foreign Marketing: foreign or domestic overseas intermediaries, own sales force or sales subsidiaries

29. Stages Of International Marketing Involvement ▫ ▫ International Marketing: fully committed and involved in international marketing activities. Such companies seek markets all over the world and sell products that are a result of planned production for markets in various countries. Global Marketing: Market segmentation decisions are no longer focused on national borders. Instead, market segments are defined by income levels, usage patterns, or other factors.