Dr. Mridula S. Mishra

International Marketing

Strategies

About the Course

• This course investigates various marketing

strategies in a global environment.

• It is an applied case oriented course with an

emphasis on logic, critical analysis and the

application of alternative theories

• The course builds on prior experiences of the

professionals in marketing, sociology and

economic principles

About the Course

• The course will provide students with an

awareness and understanding of a wide range

of strategies, and a comprehension of the ways

in which these strategies can be used in

international marketing

• Emphasis will be on the use of research

methods and case analysis in support of

international marketing and management

decisions.

Text Book

• Gerlad Albaum, Edwin Duerr, “International

Marketing and Export Management”, Pearson

Education, Seventh Edition.

Reference Material

• Articles and Research papers from various

academic Journals.

• Will be uploaded on Campus360

Pre Work-Post Work

• The List of cases to be discussed in the course

as part of Pre-Work & Post -work is

mentioned in the course outline- a schedule

mentioning the pre-work cases and post work

cases will be uploaded on campus 360.

• During the term if the faculty will find any

article or case more relevant for the course

then the same will be uploaded on campus 360

for reading.

Evaluation

30%Simulations Challenge

• Price Right Simulation – Session 6

30%QUIZ• There will be three quiz-of 15 marks each. Best two quiz will be considered fro grading.

• Quiz 1- After Session 3 [Questions will be from Chapter 1, 3,4, 5 of the text book]

• Quiz 2- After Session 5 [Questions will be from chapter 7,8,9, 10 of the text book]

• Quiz 3- After Session 8 [ Questions will be from chapter 11, 13, 14 of the text book]

40%End Term• The End Term Exam will be an open book exam. Application based questions will be asked.

Introduction

• Why is international marketing gaining

importance?

– Increased international interdependence

– Exports as one engine of growth

– Innovation and entrepreneurship as engines of

economic growth

Internationalization: Orientation Share Your Views...

Why should a firm enterinternational markets?

Reasons for Entering International Markets

Why should a firm enterinternational markets

Profitability Achieving Economies of

scale

Risk spread

Access toimported

inputsUniqueness of productor service

Marketing Opportunities

due to life cycle

Spreading R&D cost

Growth

Vodafone World Foot Print

Airtel World Footprint

Rank Company Name Subscribers

1 China Mobile 522 Mln

2 Vodafone Group 333 Mln

3 Telefonica 202 Mln

4 AmericaMovil 201 Mln

5 Telenor Group 172 Mln

6 Deutsche Telecom 151 Mln

7 China Unicom 148 Mln

8 TeliaSonera 148 Mln

9 France Telecom 133 Mln

10 Bharti Airtel 125 Mln

11 MTN Group 116 Mln

12 Mobile Telesystems 102 Mln

13 Reliance Communications 100 Mln

14 Orascom Telecom 93 Mln

15 AT&T 85 Mln

Th

ese

figu

res a

re b

ase

d a

s o

f en

d-

Fe

bru

ary

20

10

.

After the acquisition of Zain’s 42 Million subscribers in 15 African countries now

coming under Bharti’s Umbrella – The Total Subscriber base of Bharti Airtel

goes to 167 million Subscribers, which puts it firmly in 5th position

Factors Explaining

Internationalization

Company-specific

advantages Management

Interest

Changes driving

internationalization

Domestic

Push

Openness

Large Size

Niches

Location

Openness

Small Size

International

Pull

Firm Factors

Global Factors

Hom

e C

ountr

y m

ark

et

facto

rsH

ost C

ountry

mark

et fa

cto

rs

Globalization

• Is defined as a process of economic integration

of the entire world through the removal of

barriers to free trade and capital mobility as

well as through the diffusion of knowledge

and information.

Globalization Index

• Economic Integration- trade, portfolio, foreign direct investment, and investment income

• Personal Integration- telephone, travel, remittances, and personal transfers

• Technology integration-Internet users, Internet hosts, and secure Internet Services

• Political Integration- international organizations, UN peacekeeping, treaties and government transfers.

Globalization of Markets

• Companies must learn to operate as if the

world were one large market-ignoring

superficial regional and national

differences

- Theodore Levitt.

Concept of International Marketing

• Cateora defines international marketing as the

performance of business activities designed to plan,

price, promote and direct the flow of company’s goods

and services to consumers or users in more than one

nation for profit.

• International marketing can take place when

marketing/trade is carried out across the border or

between more than one nation.

International Marketing Process

• Identify the needs and wants of customers in International Markets.

• Taking Marketing MIX decisions keeping in mind the diverse environment.

• Penetrating into international markets using various modes of entry.

• Taking decisions in view of dynamic international marketing environment.

EPRG Framework

• Ethnocentric- Home country is superior & the needs of the home country are most relevant.

• Polycentric- each country is unique and therefore each country should be targeted in a different way.

• Regiocentric- the world consists of regions. The firm tries to standardize its marketing program within regions but not across them.

• Geocentric- the world is getting smaller and smaller. The firm may offer global product concepts with local adaptation (Glocal) or the firm may offer standardized products.

Domestic Marketing

Market Focus Domestic

Orientation Ethnocentric

Marketing Mix

Decisions

Focused on domestic customers

Organization Home country

Export Marketing

Marketing

Focus

Overseas (Targeting and entering

foreign markets)

Orientation Ethnocentric

Marketing

Mix

Decisions +

Strategic

Decision

Focused mainly on domestic

customers

Overseas marketing –generally an

extension of domestic marketing

Decisions Made at Home Country or

HQ

International Marketing

Marketing

Focus

Differentiation in country markets by

way of developing or acquiring new

brands

Orientation Polycentric

Marketing Mix

Decisions

Developing local products depending

upon country needs decisions by

individual subsidiaries (SBU)

Strategic

Decisions

Decision for overall organization is

centralized at HQ

Multinational Marketing

Marketing

Focus

Consolidation of operations on

regional basis

Gains from economies of scale

Orientation Regiocentric

Marketing Mix

Decisions

Product standardization within

regions but not across them

On Regional Basis

Strategic

Decisions

Both at HQ and SBU

Global Marketing

Market Focus Consolidating firms operations on

global basis

Orientation Geocentric

Marketing Mix

Decisions

Globalization of marketing mix

decisions with local variations

Joint decision making a cross firm’s

global operations

Strategic

Decisions

Highly decentralized at SBU level

Self-Reference Criterion

• The Self-Reference Criterion (SRC) is when

you as the marketer unconsciously expect that

everyone is like you.

• You expect that they have:

– The same cultural values

– Experiences

– Knowledge

Ethnocentrism

• This is the idea that things done in your culture

is the correct or best way of doing things.

• You tend not to look through the eyes of the

foreign consumer.

The Problem with SRC and

Ethnocentrism

• Letting these two issues cloud your judgment

can cause you to not understand the other

culture.

– This in turn will make it so you cannot provide the

product that the consumer wants.

Key international marketing

questions faced by a firm:

• How will my product or service fit into the

international market?

• What marketing adjustments are or will be

necessary?

• What global competitive threats should I

expect?

• How can I work with these threats and turn them

into opportunities?

• What are my strategic global alternatives?

The International Marketing Task

• The company that wishes to do international

marketing must operate on three different

planes simultaneously.

– Some of these planes are directly under the control

of the marketer, while other planes may only

partially controllable.

– These planes are related to the company

environment, the domestic environment, and the

foreign environment.

The International Marketing Task

(Controllable)

Firm Characteristics

Price

ProductPromotion

Research

Channel of Distribution

Domestic Environment(Uncontrollable

Competitive Structure

Economic Climate

Political/Legal Forces

Political/Legal Forces

Cultural Forces

GeographyAnd Infrastructure

Structure of Distribution

Level of Technology

CompetitiveForces

EconomicForces

Foreign Environment(Uncontrollable

AB C

A B C

Environmental uncontrollable elements

Country Markets

Potential Benefits from International

Marketing

• The effects of Imports

Low price, better technology, increase in supply, variety of goods

• The effect of exports

Country must export to see that import does not adversely affect its balance of payments and cause drain on its international monetary reserves.

• Increasing Productivity and efficiency

International Trade Theories

• The classical theory of international trade

• The factor proportion theory

• The Product Life Cycle theory of International

Trade

The Classical Theory of

International Trade• What a country exports and imports is determined

not by its character in isolation but in relation to those of its trading partners.

• It relies on the concept of economic advantage which states that the countries tend to specialize in those products in which they have an advantage, namely lower cost of production.

• Country exports only those items that it can make cheaply than other countries

• And imports only those items that comes cheap if procured from other countries

Considerations in Classical

theory• Absolute Advantage?

• Comparative Advantage?

• Equal Advantage?

• The decisions should be taken keeping the

above in mind.

Factor Proportion Theory

• International differences in supply conditions, e.g., factor productivities and factor endowments, explain much of international trade.

• Factor proportion theory offers an explanation for the difference in comparative costs among trading partners.

• According to this theory international difference in supply conditions e.g., factor productivities and factor endowments, explain much of international trade.

• It is assumed that trading partners have the same tastes and preferences (demand conditions), use factors of production that are uniform quality, and use the same the technology. The productivity or efficiency of a given resource unit is thus identical for both trading nations.

Factor Proportion Theory

• The factor proportion theory argues that relative price level differs among countries because:– They have different relative endowments of factors of

production (capital and labor inputs)

– Different commodities require that the factor inputs be used with differing intensities in their production (factor intensities- capital/labor relationships)

• A nation will export that product for which a large amount of the relatively abundant (cheap) input is used and it will import that product in the production of which the relatively scarce (expensive) input is used.

The PLC theory of International Trade

Export Behavior Theories and

MotivesInternal External

Proactive Managerial Urge Foreign Market Opportunity

Marketing Advantages

Economies of Scale Change agents

Unique Product/Technology

competence

Reactive Risk Diversification Unsolicited orders

Extend sales of a seasonal

product

Small home market

Excess Capacity of resources Stagnant or declining home market

Marketing Decision Factors

• These factors are found within the company

environment where the marketer has control

over them.

• These factors are:

– Price

– Promotion

– Product

– Place (Channels of Distribution)

Domestic Environment Factors

• These factors are related to how the domestic

environment affects your marketing decisions.

• These tend to be more uncertain to the

marketer, but on some level may still be

controllable.

Domestic Environment Factors

Cont.

• These factors are:

– Political/Legal Forces

– Economic Climate

– Competitive Structure

Foreign Environment Factors

• These factors are related to how the foreign

environment affects your marketing decisions.

• These tend to be the most uncertain to the

marketer, and is very difficult to be controlled.

Foreign Environment Factors

• These factors are:

– Political/Legal Forces

– Cultural Forces

– Geography and Infrastructure

– Structure of Distribution

– Level of Technology

– Competitive Forces

– Economic Forces

Opportunities And Challenges In International

Marketing

• International environment is dynamic and each of the changes require active response.

• International activity may be crucial to a firm’s survival and growth.

• Firms and individuals must be capable of adapting to the environment.

• Countries are interdependent and isolation is impossible today

• Interdependence and the global economy.

Nine Strategic Windows

The principle of Transferring Knowledge

and learning across borders

The Value Chain

Simplified Version of the Value Chain

Centralizing Upstream activities and Decentralizing

downstream activities (Global + International

Orientation)

Virtual Value Chain as Supplement

to Physical Value Chain

mridula@iift.ac.in

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