International Marketing Unit III igdtuw.pdf

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1. INTERNATIONAL
MARKETING
(BMS - 322)



INDIRA GANDHI DELHI TECHNICAL
UNIVERSITY FOR WOMEN

2. Course Structure
— Unit I : Framework of International
Marketing
— Unit II : Policy Framework
— Unit III : International Marketing
Decisions
— Unit IV : Institutional Infrastructure for
Export in India

3. Unit III
International Marketing
Decisions


INDIRA GANDHI DELHI TECHNICAL
UNIVERSITY FOR WOMEN

4. Learning Objectives
— Product Planning for Export Manufacturing firms &
Export Houses
— Identifying Foreign Markets. Market Research overseas
— Market Entry
— Export Pricing – International terms, Payment Terms
— Distribution logistics for Exports, foreign sales agent
selection and appointment
— Promotion of products/ services abroad – overview,
merchandising, Trade fairs/ exhibition

5. International Marketing
Decisions

6. International Marketing
Decisions

7. International Marketing
Decisions

8. International Marketing
Decisions
— Market Selection decision
— Entry and operating decisions
— Marketing decisions
— International organization decision

9. International Marketing
Decisions

10. Market Information Flow

11. Information Behaviour of
Firms

12. Market Research for Foreign
Markets

13. Market Research for Foreign
Markets

14. International Marketing Process

15. International Marketing
Strategies

16. International Marketing
Strategies

17. Identifying Foreign Markets

18. Factors Influencing Market
Selection

19. Market Identification

20. Market Segmentation

21. Market Segmentation
Standardization vs Customization Strategy:
— Ethnocentric – strategy centered on domestic
market
— Polycentric – separate & distinct strategy for each
foreign market
— Regiocentric - separate & distinct strategy for each
economic region (group of similar countries)
— Geocentric – one strategy for all countries
worldwide (global)

22. Market Segmentation
Criteria for Market Evaluation:
— Population
— Income
— Country competitiveness
— Macro Economic stability
— Labour market efficiency
— Financial Market
— Market size
— Infrastructure

23. Market Selection: Strategies &
Assessment

24. Market Entry Mode Decision

25. International Market Entry
Selection

26. Selecting the Foreign
Market

27. Mode of Entry for Exports
Firms can Export using two methods:
— Indirect involvement means that the firm participates in
international business through an intermediary and
does not deal with foreign customers or markets
Distributor / Export Merchants, Export agents, EMC
— Direct involvement means that the firm works with
foreign customers or markets with the opportunity to
develop a relationship
Export department, Export sales representatives, E -
business

28. Selecting the Country for
Foreign Manufacturing

29. Market Selection

30. Export Pricing – International
terms, payment terms
Factors affecting determination of Export Price:
— Cost of product and services
— Supply and demand
— Government Policies
— Incentives offered by Government
— Exchange Rate
— Tariff and Distribution Costs
— Market Share
— Product Differentiation and Brand Image

31. Export Pricing – International
terms, payment terms
Export Pricing Strategies:
— Skimming pricing
— Penetration pricing
— Transfer pricing
— Marginal cost pricing
— Market oriented pricing
— Competitors

32. Export Pricing – International
terms, payment terms
Export Pricing Quotations:
— Free on Board (FOB)
— Cost & Freight (C&F)
— Cost Insurance & Freight (CIF)
Conditions for Realization of Export Payment:
— Payment in permitted currencies
— Prevent immobilization of foreign exchange
— Submission of shipping documents
— Export full value of goods
— Authorized dealers

33. Export Pricing – International
terms, payment terms
Factors affecting Export Payment Terms:
— Nature of product
— Credit worthiness of buyer
— Exchange and import controls in importing country
— Competitors credit terms
— Economic situation in importer’s country
— Size of export order
— Financial position of the exporter
— Relation with the importer

34. Export Pricing – International
terms, payment terms

Method of Payment:
— Payment in advance
— Open account
— Consignment stock payment
— Documentary Bills of Exchange
— Letter of Credit

35. Distribution Logistics for
Exports
ELEMENTS OF LOGISTICS SYSTEM

36. Distribution Logistics for
Exports
FACTORS IMPACTING THE GLOBAL LOGISTICS
MARKET

37. Distribution Logistics for
Exports

38. Distribution Logistics for
Exports
Logistics and Freight Forwarders companies offer efficient
and cost effective solutions for the worldwide customer’s
freight needs by providing essential services like:
— Air Express Service, high priority (24Hrs)
— Value added service to any destination
— Economical & timely distribution
— Door to door & Airport to airport service with excellent
transit times
— Full Container Load (FCL) & Partial Container Load
(PCL) cargo service
— Worldwide Delivery

39. Product Planning for Export

Complete process of bringing a new product or
service to a new market involves –
— Idea generation, product design and detailed
engineering
— Market research and marketing analysis

40. Product Planning for Export

41. Criteria for Selection of
products for export
— Trends in Exports – analysing trends country wise, commodity
wise over a period of time
— Production capacity and product availability – adequate
production capacity in the country and the product can be
sourced for the desired quantity
— Product adaptability – product potential depends on physical
conditions, functional requirements, cultural factors, tastes,
levels of skill and levels of technical developments may be
different. Product must be capable of suitable changes in its
design, color, size, taste, packaging etc.
— Demand in the Potential Export Market – can be assessed by
considering the impact of: demographic and physical
environment, economic, social and cultural environment,
market access, product potential

42. Criteria for Selection of
products for export
— Trade Restrictions – there is a commitment by all the
WTO member countries to follow open and liberal all
— Incentives/ Facilities Offered for Exports – incentive of
duty drawbacks, facility of duty free import of raw
material & other inputs required for the manufacture of
export products, import of capital goods for the
promotion of exports at concessional rates of import
duties
— Shifting Spending Patterns – basic determinants of
consumer behaviour in terms of price, preference,
income
— Quality and Niche Marketing – emphasis on quality and
concentrating on creating a niche

43. Foreign Sales Agent
Selection
Points to be considered while appointing a Sales Agent:
— Size of an Agent’s company
—  Date of foundation of the agent’s company
—  Company’s ownership and control
— Company’s capital, funds available and liabilities
— Name, age & experience of the company’s senior
executives and salesmen
—  Other agencies that the company holds
— Length of company’s association with other principal

44. Foreign Sales Agent
Selection
Points to be considered while appointing a Sales
Agent:
— New agencies that the company acquired or lost during the last year
— Company’s total annual sales & the trends in its sales in recent years
— Company’s sales coverage, overall & by area
— Any major obstacles expected in the company’s sales growth
— Agent’s capability to provide sales promotion & advertising services
— Agent’s transport facilities and warehousing capabilities
— Agent’s rate of commission, payment terms required
— References on the Agents from banks, trade associations & major buyers

45. Foreign Sales Agent
Selection
Information on Agents can be sourced from:
— Government Departments Trade Association
— Chambers of commerce
— Banks
— Independent Consultants
— Export Promotion Councils
— Advertisement abroad

46. Foreign Sales Agent
Selection
Other options available:
— Foreign Distributor
— Export Broker
— Export Management Company
— Export Merchant
— Trading Company

47. Promotion of Products/
Services Abroad
Objectives of Export Promotion Measures:
— Compensate exporters for the high domestic cost
of production
— Provide necessary assistance to the new and small
exporters to develop the export business
— Increase the relative profitability of the export
business and domestic business

48. Promotion of Products/
Services Abroad
Benefits of Export Promotion (Trade Fairs,
Exhibitions)
— It provides opportunities to achieve economic
growth
— Supply of commodities increase the demand
— It enables countries to achieve export led growth
— It helps mitigate the effects of domestic recession
— It helps to boost exports to earn enough foreign
exchange

49. Promotion of Products/
Services Abroad
Ministry of Commerce, Government of India deals with
the promotion and regulation of the foreign trade of the country. Matters
related to foreign trade are dealt with by eight divisions in the Department of
Commerce, namely:
— Administrative and General Division
— Finance Division
— Economic Division
— Trade Policy Division
—  Foreign Trade Territorial Division
— Exports Products Division
— Services Division
— Industries Division