International Marketing
elements that can have a direct
Q-1.What do you mean by
international marketing?
International marketing is the
performance of business activities
design to plan, price, promote and
direct the flow of a company’s
goods and services to consumers
or users in more than one nation
for a profit.
The only difference between the
domestic marketing and
international marketing is that the
latter case marketing activities
take place in more than one
country.
Describe the task of
international marketing Task
Ans. The international marketer’s
task is more complicated than
that of the domestic marketer
because the international
marketer must deal with lot of
uncontrollable uncertainty.
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
factors. So they have to consider
the following factors.
1.Marketing decision factor:
The most successful manager’s
construct a marketing program
designed for optimal adjustment
to the uncertainty of the business
climate. Assuming the necessary
overall corporate resources, the
marketing manager blends price,
product, promotion and channel
of distribution activities to
capitalize on anticipated demand.
The controllable elements can be
altered in the long and usually in
the short run to adjust to
changing market conditions.
Consumer tastes, or corporate
objectives.
2.Aspect of the Domestic
Environment:The aspects of the
domestic uncontrollable
environment that are often
beyond the control of companies.
These include home country
recognizing there impact.
effect on the success of a foreign
venture; political and legal forces,
economic climate and
competition.
The domestic economic climate is
another important home basted
uncontrollable variable with far
reaching effects on a country’s
competitive position in foreign
markets.
Competition within the home
country can also have a profound
effect on the international
marketer’s task.
3.Aspect of the Foreign
Environment:In addition to
uncontrollable domestic elements
a significant source of uncertainty
is the number of factors in the
foreign uncontrollable
environments. A business
operating in its home country
undoubtedly feels comfort table in
forecasting the business climate
and adjusting business decisions
to these elements. The process of
evaluating the uncontrollable
elements in an international
marketing program, however
often involves substantial doses
of culture, political and economic
shock.
Q. 2 Why need for
environmental adaption and
developing global awareness
are more important in
international marketing?
Need for Environmental
Adaptation:
To adjust and adopt a marketing
program to foreign markers,
markers must be able to
effectively interpret the influence
and impact of each of the
uncontrollable environmental
elements on the marketing plan
for each foreign market in which
they hope to do business. In a
board sense, the uncontrollable
elements constitute the culture
the difficulty facing the marketer
in adjusting the culture lies
The task of cultural adjustment;
however, is the most challenging
and important one confronting
international marketers; they
must adjust their marketing
efforts to cultures to which they
are not attuned.
Cultural conditioning is like an
iceberg- we are not aware of nine
tenths of it. In any study of the
market systems of different
peoples, their political and
economic structures, religions and
other elements for culture, foreign
marketers must constantly guard
against cultures.
Developing a Global
Awareness:The successful
businessperson in the twenty-first
century will have global
awareness and a frame of
reference that goes beyond a
region or even a country and
encompasses the world. To be
globally aware is to have (1)
tolerance of cultural differences,
and (2) knowledge of cultures,
history, world market potential
and global economic, social and
political trends.
To be globally aware is to have
tolerance for culture differences
and accepting and working with
others whose behavior may be
different difference from us. We
do not have to accept as our own
the cultural ways of another, but
we must allow others to be
different and equal.
A globally aware person is
knowledgeable about culture and
history. Knowledge of cultures is
important in understanding
behavior in the marketplace.
Knowledge of history is important
because the way people think and
act is influenced by their history.
Global awareness also involves
knowledge of the world market
potentials and global economic,
social and political trends.
Q.3 Describe the international
marketing involvement
stages.
Ans: when a company takes
decision to go international
market, it must decide the degree
of marketing involvement and
commitment it is prepared to
make.
1.No direct foreign Marketing:
A company in this stage does not
actively cultivate customers
outside the national boundaries;
however this company’s products
may reach foreign markets.
2.Infrequent Foreign
Marketing:Temporary surpluses
caused by variations in production
levels or demand may result in
infrequent marketing
internationally.
3.Regular Foreign
Marketing:At this level, the firm
has permanent productive
capacity devoted to the
production of goods to be
marketed in foreign markets.
Here firm first identify the needs
of individual foreign markets and
produce goods for the foreign
market regularly.
4.International
Marketing:Companies in this
stage are 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.
5.Global Marketing:At the
global marketing level, the most
profound change is the
orientation of the company
towards markets and associated
planning activities. At this stage,
companies treat the world,
including their home market, a
one market. Market segmentation
decisions are no longer focused
on national borders.
Q-4. What is balance of
payment? Which accounts are
involved in balance of
payment?
Balance of payment:
When countries trade, financial
transactions among businesses or
consumers are occur in different
nationals. Products and services
are exported and imported,
monetary gifts are exchanged,
investments are made, cash
payments are made and cash
receipts are received and
vacation and foreign travel
occurs. In short, over a period of
time there is a constant flow of
money into and out of a country.
The system of accounts that
records a nation’s international
financial transaction is called its
balance of payments.
A nation’s balance of payments
statement records all financial
transactions between its residents
and those of the rest of the world
during a given period of time –
usually one year. Because the
balance of payments record is
maintained on a double entry
book keeping system, it must
always be in balance.
A nation’s balance of payments
represents a overall view of its
international economic position
and is an important economic
measure used by treasuries,
central banks and other
government agencies whose
responsibility is to maintain
external and internal economic
stability.
A balance of payments
statement includes three
accounts:
1.The Current Account: A
record of all merchandise exports,
imports and services plus
unilateral transfers of funds.
2.The Capital Account: A record
of direct investment, portfolio
investment and short term capital
movements to and from
countries.
3.The reserve Account: A
record of exports and imports of
gold, increases or decreases in
foreign exchange and increases
or decreases of liabilities of
foreign central banks.
Q-5. How do tariff, quotas,
voluntary export registrants
and boycott embargo works in
favor of protection?
To encourage development of
domestic industry and protect
existing industry government may
establish such barriers to trade a
tariff, quotas, boycotts, monetary
barriers, non-tariff barriers and
market barriers. Barriers are
imposed against imports and
against foreign businesses. While
the inspiration for such barriers
may be economic or political, they
are encouraged by local industry.
1.Tariffs: A tariff, simply defined,
is a tax imposed by government
on foods entering at its borders.
Tariffs may be used as a revenue
generating tax or to discourage
the importation of goods, or for
both reasons, in addition, tariffs
are arbitrary, discriminatory and
require constant administration
and supervision.
2.Quotas: A quota is a specific
units or dollar limit applied to a
particular type of good. Quotas
put an absolute restriction on the
quantity of a specific item that
can be imported.
3.Voluntary Export Restraints:
Similar to quotas is to the
voluntary export restrictions
(VERs) or orderly market
agreements (OMAs). Common in
textiles, clothing, steel,
agriculture and automobiles, the
VER is an agreement between the
importing country and exporting
country for a restriction on the
volume of exports. A VER is called
voluntary because the exporting
country sets the limits; however,
it is generally imposed under the
threat of stiffer quotas and tariffs
being set by the importing
country if a VER is not
established.
4.Boycotts and Embargoes: A
government boycott is an
absolute restriction against the
purchase and importation of
certain goods from other
countries. An embargo is a refusal
to sell to a specific country. A
public boycott can be either
formal or informal and may be
government sponsored or
sponsored by an industry.
Q-6. How do monetary
barriers, standards and
antidumping penalties works
in favor of protection?
1.Monetary barriers: A
government can effectively
regulate its international trade
position by various forms of
exchange – control restriction. A
government may enact such
restrictions to preserve its
balance of payment position or
specifically for the advantage or
encouragement of particular
industries. There are three
barriers to consider.
2.Standards: Non-tariff barriers
of this category include standards
to protect health, safety and
product quality. The standards
are sometimes used in an unduly
stringent or discriminating way to
restrict trade but the sheer
volume of regulations in this
category is a problem itself. A
fruit content regulation for jam
various so much from country to
country and different standards
are one of the major
disagreements between two
countries.
3.Antidumping Penalties: Now
there is a new nontariff barrier,
antidumping laws that have
emerged as a way of keeping
foreign goods out of market.
Antidumping laws designed to
prevent foreign producers from
using predatory pricing, a practice
whereby a foreign producer would
intentionally sell their products in
a specific country for less than
the cost of production to
undermine the competition and
take control of the market. It was
intended as a kind of antitrust law
for international trade. Violators
are assessed antidumping duties
for selling below costs or are
assessed countervailing duties to
prevent the use of foreign
government subsidies to
undermine a specific country’s
industry.
Q-7. What is mean by culture?
Why the origins of culture are
important to a marketer?
Culture: Culture affects every
part of our lives, every day from
birth to death and everything in
between. It even affects how we
sleep. We can that Spaniards
sleep less than other European’s.
Culture deals with a group’s
design for living. It is pertinent to
the study of marketing, especially
for international marketing.
Most traditional definitions of
culture center around the notion
that culture is the sum of the
values, rituals, symbols, beliefs
and thought processes that are
learned, shared by a group of
people and transmitted from
generation to generation. So,
culture resides in the individual’s
mind. But the expression “a
culture” recognizes that large
collectives of people can be like
minded to a great degree.
Culture is the human made part
of human environment – the sum
total of knowledge beliefs, art,
morals, laws, customs and any
other capabilities and habits
acquired by humans is members
of society.
Origins of culture are
important to a marketer:
The best international marketers
not only appreciate the culture
differences pertinent to their
businesses, they also understand
the origins of these differences.
Indeed, geography has influenced
history, technology, economics
our social institution and our ways
of thinking.
1.Geography: Geography has
immediate effects on consumer
choice. But geography exercises a
more profound influence than just
affecting the buying decision of
consumers. Indeed, geography
has influenced history,
technology, economics our social
institution and our ways of
thinking.
2.History: The impact of specific
events in history can be seen
reflected in technology social
institution. Culture values and
even consumer behavior.
3.The Political Economy: For
most of the twentieth century
three approaches to governance
competed for world dominance,
fascism, communism and
democracy/ free enterprise.
4.Technology: Technology has
tremendous power to change our
human lifestyle. It can change our
habit, system, behavior,
consumption and thinking pattern
also. Technology has the power
to change our culture though new
innovations, such as television,
computer, internet, jet aircraft
and birth control pill and so on.
5.Social Institutions: Social
institutions, including family,
religion, school, media,
government and corporations all
affect the ways in which people
relate to one another, organize
their activities to live in peace
with one another, teach
acceptable behavior to
succeeding generations and
govern themselves.
The positions of men and
women in the society, the
family, social classes, group
behavior, age groups and how
societies define decency and
civility are interpreted
differently within every
culture:
a.Family: Families lifestyles are
different societies. These
differences lead directly that how
does children think and behave.
b.Religion: Religion clearly does
affects people’s habits, their out
look on life the products they buy
and way they buy them.
c.School: Education, one of the
most important social institutions.
Affects all aspects of the culture
from economic development to
consumer behavior.
d.The media: The media has the
power to make or bring some
changes easily in culture and
society, which is difficult by other
forms.
e.Government: Most often
government tries to influence the
thinking and behaviors of adult
citizens for the citizens “own well”
of course, in some countries the
government owns media and
regularly uses propaganda to
from “favorable” public opinions.
f.Corporations: Of course,
corporations influence us early via
the media. But more important is
that most innovations are
introduced to societies by
companies, many times
multinational companies,
multinational firms have access to
from ideas around the world.
Q-8. What are the elements of
culture? Describe the impacts
of elements of culture on our
daily life.
Elements of culture:
1.Culture values;
2.Rituals;
3.Symbols;
4.Beliefs;
5.Thought Process.
The impact of elements of
culture on our daily life:
Culture has a significant impact
on our daily life. So international
marketers in must design
products distribution systems and picture is worth a thousand
promotional programs with due words” Obviously, a dance or a
consideration of each of the all song can be equally meaningful.
elements. These elements are
discussed below: 4.Beliefs: Believes comes form
religious training and it I not
1.Culture values: the most possible to adequately consider
useful information in the case of matters of true faith and
international marketing is that spirituality. Moreover, the
how cultural values influence relationship between superstition
various types of business and and religion is not at all clear.
market behavior.
5.Thought Process: Culture has
a.Individualism/ Collectivism much more power on our thinking
Index: The individualism/ process. We also observe that
collectivism index refers to the thinking of Asian and Western
preference for behavior that people has huge differences.
promotes one’s self interest.
********
b.Power distance index: The
power distance index measures
the tolerance of social inequality
that is power inequality between
superiors and subordinates within
a social system.
c.Uncertainty Avoidance
index: The uncertainty avoidance
index measure the tolerance of
uncertainty and ambiguity among
members of a society.
d.Cultural values and
Consumer Behavior: Cultural
values might help us to predict
the speed of diffusion of such new
consumer services as equity
investment.
2.Rituals: Life is filled with
rituals, or patterns of behavior
and interaction that are learned
and repeated.
3.Symbols: Anthropologist says
that culture is communication.
Learning to correctly interpret the
symbols that surround us is a key
part of socialization
a.Language: The importance of
understanding the language of a
country cannot be overestimated
particularly if we are selling our
product in France. The Successful
international marketer must
achieve expert communication.
b.Aesthetics as Symbols: Art
communicates; Indeed, Confucius
is reputed to have opined. “A