CHAPTER 5

Export Marketing

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Factors Affecting Globalization
• Globalization
• Deregulation of economies
• Customer empowerment
• Increased competition
• Emergence of big retail players
• Convergence of various industries

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 The Marketing Mix
Four Ps of marketing Marketing mix: customer’s
viewpoint
• Product • Customer solution
• Price • Customer cost
• Place • Convenience
• Promotion • Communication

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Different stages in any firm’s international
transition are:
• No direct foreign marketing
• Infrequent export marketing
• Regular foreign marketing
• International marketing
• Global management

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Export Marketing—Going Global
Why firms enter international markets?
• Profitability
• Growth
• Achieving economies of scale
• Risk spread
• Access to imported inputs
• Uniqueness of products and services
• Marketing opportunities due to life cycle
• Spreading R&D costs

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 GATT
The salient objectives of GATT were:
• Non-discriminatory trade between countries
• Protection through custom tariffs, not through
commercial measures like quotas
• Consultation to solve trade issues

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Different Levels of International
Integration
Regional Cooperation Groups
• Exhibit the most basic level of integration
• Governments participate jointly in RCGs to develop
mutually beneficial projects
Free Trade Areas
• Involve more cooperation than do the RCGs
• Custom duties and non-tariff trade barriers are different
among partners while maintaining standard rules for
others.

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Contd
Customs Unions
• Involve reduced or non trade barriers like a FTA and common
tariff for other external countries.
• Do not allow free movement of labour between member
countries, but allow free movement of capital.

Common Markets
• Involve elimination of all tariffs and restrictions on internal
trade.
• Allow free movement of all factors of production (capital,
labour).
• Provide common marketplace for all goods and services
produced elsewhere in the marketplace.

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Contd
Political Unions
• Signify the final step of integration in regional cooperation.
• Provide a common marketplace and common central bank.
• Involve common fiscal and monetary policies.

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Different Forms of International
Trade
• Export-Import of Goods: It involves search for
marketplaces in foreign countries (export) and search for
raw materials in foreign countries (import).
• Subsidiaries The subsidiary is a registered company of
the parent company in foreign land.
• Joint Ventures Partnership with local partner in a foreign
country.
• Franchises Local Franchises implement policies, and
produce and sell goods of the a foreign company.

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 Factors Affecting International
Marketing Decisions
• Political environment
• Legal environment
• Consumer behaviour determined by cultural factors
• Level of infrastructure and technology affecting
distribution and manufacturing
• The geography and climate of the country

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 Understanding Customer
Behaviour
The behaviour of consumers in any country can be
understood largely by its culture, which is influenced by:
• History of the region
• Social institutions like family, schools etc
• Regional, political, and economic stability
• Effect of Peers (Peer Pressure)

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Hofstede’s Dimensions of Cultural
Difference
Hofstede’s Dimensions:

1. Individual/Collectivism Index (IDV) refers to the

preference to promote one’s own self interest or that of
the group.
2. Power Distance Index (PDI) refers to the tolerance of
power inequality between superior and subordinates.
3. Uncertainty Avoidance Index (UDI) measures the
comfort level with ambiguity and uncertainty among
members.
4. Masculinity/Femininity Index (MAS) determines
whether assertiveness and achievement are taken as
focus areas for success.
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 Selecting Channels of
Distribution
The following channels of distribution are generally utilized
while exporting to overseas markets :
• Exports through consortia
• Export through canalizing agencies
• Export through other established merchant exporters or
export houses, or trading houses
• Direct Exports
• Export through overseas sales agencies

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Selecting Prospective Buyers
• Enquiries from friends and relatives or other
acquaintances residing in foreign countries.
• Visiting/participating in International Trade Fairs and
exhibitions in India and abroad.
• Contacting the Export Promotion Councils, Commodity
Boards and other government agencies.
• Consulting the International Yellow Pages (a publication
from New York by Dun & Bradstreet, USA) or other
Yellow Pages of different countries, such as Japan, UAE,
etc.

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 Selecting Prospective Buyers
(Contd)
• Collecting addresses from various Indian directories
• Collecting information from international trade
directories/ journals/periodicals available in the libraries
of the Directorate General of Commercial Intelligence
and Statistics, IIFT, Export Promotion Councils, ITPO, etc.
• Making contacts with trade representatives of overseas
governments in India and Indian trade and other
representatives/international trade development
authorities abroad.

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