Sunteți pe pagina 1din 20


Mod 6
International Marketing
Units 19 - 22

Key Concepts of International



The US Scenario
1 out of every 3 U.S. farm acres is producing for export
1 of every 6 U.S. manufacturing jobs produces for export
$1 of every $7 of U.S. sales goes abroad
1 of every 3 cars, 9 out of 10 TVs, 2 out of 3 suits, and
every CD Player sold in the U.S. is imported.
Travel and tourism is the #1 source of U.S. foreign
$1 of every $4 of U.S. bonds & notes is issued to

International Marketing
Scope and Challenge
International Marketing - is concerned with planning
and conducting transactions across international
borders to satisfy the objectives of individuals and
Identifying and satisfying consumer needs abroad;
better than the national and international competitors,
under the constraints of the internationalization stage
of the firm and the global environment - Nathalie
Some Governments pursue economic policies aimed at
increasing export earnings on a national scale.


Rationale Behind International


There is a trend toward a global economy.

Excess Capacity
Competitive Pressures
Markets across the world being sought after by
more competitors
Explosion of international trade
Global linkages are becoming important
Economies of scale and scope
Saturated markets in the home country
New trade agreements

International Marketing
If we only distributed pictures in the U.S., wed
lose money. It takes the whole world now to
make the economics of movie-making work
- William Mechanic
President, 20th Century Fox
Half the people in the world have yet to take their first
picture. The opportunity is huge, and its nothing fancy.
We just have to sell yellow boxes of film.
- George M.C. Fisher
CEO, Eastman Kodak Company


International Marketing
Comparing Domestic and International Marketing

- Both carry out transactions that meet the needs of
individuals and organizations

- International markets have greater growth potential
- Some tasks associated with international marketing not
included (or less intense ) than in domestic marketing (e.g.,
cultural research, political factors, exchange rates, trade
laws, long distance distribution.)

IM and Exporting
International Marketing is more than exporting,
because it involves:
Marketing products that have been manufactured or
assembled in the target country
Establishing a permanents presence in the foreign
Licensing and franchising
Sourcing components from foreign states.


IM and Multinational Marketing

International marketing means marketing
across national frontiers.
Multinational Marketing means the integrated
coordination of the firms marketing activities
throughout the world.

IM Opportunities & Challenges


Integrate global knowledge

Expand long-run production
Lengthen and rejuvenate product life cycles
Competitive supply chains


International logistics
Small business mindset
Political and economic stability
Increased competition


IM Small Business Mindset

Many believe only
MNCs must carry out
Smaller firms can also
be major players: 50%
of German exports
from firms with 19 or
fewer employees

Roadmap When Going for Global Market

It is about the international trade system, economic,
political-legal, and cultural environments affect a
companys international marketing decisions.
Three key approaches to entering international
Companies adapt their marketing mixes for
international markets.
Three major forms of international marketing



Many U.S.
have made
the world
their market.

Major International Marketing



The Global Marketing Environment

The International Trade System:
Restrictionstariffs, quotas, embargos, exchange controls,
and non-tariff trade barriers.
The World Trade Organization and GATT:
Helps Tradereduces tariffs and other international trade
Regional Free Trade Zones:
Groups of nations organized to work toward common goals in
the regulation of international trade.

Political Legal Environment

Attitudes towards International Buying

Government Bureaucracy
Political Stability
Monetary Regulations


Cultural Environment
Sellers must examine the ways consumers in
different countries think about and use
products before planning a marketing
Business norms vary from country to country.
Companies that understand cultural nuances
can use them to advantage when positioning
products internationally.

Deciding Whether To 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


Deciding Which Markets to Enter

Before going abroad, the company should try to
define its international marketing objectives and
What Volume of Foreign Sales is Desired?
How Many Countries to Market In?
What Types of Countries to Enter?
Choose Possible Countries and Rank Based on
Market Size, Market Growth, Cost of Doing
Business, Competitive Advantage, and Risk Level

Colgate Goes to China

Using aggressive promotional and educational
programs, Colgate has expanded its market
share from 7% to 35% in less than a decade.



Market Entry Strategies

Market Entry Strategies

Indirect: working through independent international
marketing intermediaries.
Direct: company handles its own exports

Joint Venturing:
Joining with foreign companies to produce or market
products or services.


Contract manufacturing
Management contracting
Joint ownership



Joint Ownership

KFC entered Japan through a joint ownership

venture with Japanese conglomerate

Market Entry Strategies

Direct Investment:
The development of foreign-based assembly or
manufacturing facilities.
This approach has both advantages and



IM- Marketing Mix Strategies

Three approaches for marketing a product or service at
an international level:
Standardisation refers to the approach taken in which the
marketing mix is used in the same way in different
Selling largely the same products and using the same
marketing approaches worldwide
Adaptation relates to the approach in which the business
strategy is deliberately changed so that it relates to each
Producer adjusts the marketing mix elements to each
target market, bearing more costs but hoping for a larger
market share and return.
Globalisation looks like an extreme form of
standardisation but does not depend upon it.

Marketing Mix Adaptation

In India, McDonalds serves chicken, fish, and vegetable burgers, and the
Maharaja Mactwo all-mutton patties, special sauce, lettuce, cheese,
pickles, onions, on a sesame-seed bun.



Five Global Product & Marketing


Global Product Strategies

Straight Product Extension:
Marketing a product in a foreign market without
any change.

Product Adaptation:
Adapting a product to meet local conditions or
wants in foreign markets.

Product Invention:
Creating new products or services for foreign



Global Product Strategies

Product This is a part of the marketing mix that
many companies aim to standardise.
The augmented view of the product includes the
physical product plus the brand and company name
and trademarks.
It includes the packaging, warranties and guarantees.
It is possible, therefore, to standardise part of the
product and adapt other elements.
Some companies will keep the same physical product,
but may change the packaging and the labeling.
Language change is an obvious adaptation.

Global Pricing Strategies

Companies face many problems in setting their
international prices.
Possible approaches include:
Charge a uniform price all around the world.
Charge what consumers in each country will pay.
Use a standard markup of costs everywhere.

International prices tend to be higher than domestic

prices because of price escalation.
Companies may become guilty of dumping a foreign
subsidiary charges less than its costs or less than it
charges in its home market.



Global Pricing Strategies

Price - Very difficult to standardise price because
it is influenced by so many country factors.
Many differences in the tariff rates charged for
imports, value added tax rates, distribution channel
margins and the prices set by the main competitors.
There are considerable differences in the ability of
consumers to pay a particular price level.
Whilst a company can have a policy to charge good
value prices in the middle of the market and,
therefore, have a standardised process approach, the
practical implementation will give rise to many
detailed adaptations.

International Pricing

The European Union countries have adopted the euro as a common

currency, creating pricing transparency and forcing companies to
harmonize their prices throughout Europe.



Whole-Channel Concept for

International Marketing
Place (Distribution)This is a marketing mix element
that is strongly influenced by market and country
It is difficult to standardise the implementation of
distribution although the initiatives of organisations such
as Tesco and Wallmart the phenomenon of the
hypermarket is becoming global.

Global Promotion Strategies

Can use a standardized theme globally, but
may have to make adjustments for language
or cultural differences.
Communication Adaptation:
Fully adapting an advertising message for local

Changes may have to be made due to media




Global Promotion Strategies

PromotionThe selling part of promotion is
usually adapted.
The reason for this is the interface between the sales
force and the country distribution channel.
Because distribution channel members are strongly
influenced by the culture in the country, the sales
force, if it is to be successful, has to adapt to local

Public relations and sales promotions are also

often adapted to fit local requirements. It is the
advertising decision that stands the best chance
of standardisation.
Use of media that are less culturally specific

Global People Strategies

People One of the most difficult elements of
the services marketing mix to standardise.
By definition, people are individuals and in
addition people differ between different cultures.
Standardisation can be achieved to some extent
through careful and methodical training.



Global Process Strategies

Process The process element of the services
marketing mix relates to things such as how
the service is delivered, ordering systems and
so on.
Compared to the people element, process is
generally much easier to standardise
Eg, McDonalds processes for taking orders,
cooking these orders and treating customers in
their outlets are very highly standardised
throughout the world.

Global Physical Evidence Strategies

Physical Evidence Like process, this element
can be standardised to a high degree.
Eg at McDonalds where the layout and dcor is
more or less standardised throughout the world.
Standardising physical evidence is particularly
important in trying to develop a uniform company
image, and is often a key part of franchise services



Deciding on the Global Marketing

Organize an export department
Create international divisions
Geographical organizations
World product groups
International subsidiaries

Become a global organization