Introduction to International MarketingIntroduction to International Marketing

Presentor - Neeraj BaliPresentor - Neeraj Bali

• The BasicsThe Basics– Basics of marketingBasics of marketing

•Segmentation, Targeting and PositioningSegmentation, Targeting and Positioning•Marketing Mix with reference to Marketing Mix with reference to

International marketing.International marketing.

– Definition of international marketingDefinition of international marketing– Difference between international Difference between international

trade and international marketing.trade and international marketing.– Difference between Marketing and Difference between Marketing and

SalesSales

MEANING OF INTERNATIONAL MEANING OF INTERNATIONAL MARKETINGMARKETING

““The marketing of goods and services The marketing of goods and services across national frontiers,could also across national frontiers,could also be Marketing in an internationally be Marketing in an internationally competitive environment , no matter competitive environment , no matter whether the market is home or whether the market is home or foreign”foreign”

Example-Nirma has competition with Example-Nirma has competition with P&G,unilever etc in India.P&G,unilever etc in India.

INTERNATIONAL INTERNATIONAL ORIENTATIONORIENTATION• Ethnocentrism(home country orientation)Ethnocentrism(home country orientation)Example- Surplus food grains are exported.Example- Surplus food grains are exported.• Polycentrism(host country orientation)Polycentrism(host country orientation)Example- Mc donald has launched burgers Example- Mc donald has launched burgers

with indian flavors.with indian flavors.• Regiocentrism(regional orientation)Regiocentrism(regional orientation)Example- sarees-kanchipuram silk saree.Example- sarees-kanchipuram silk saree.

• Geocentrism(world orientation)Geocentrism(world orientation)

Basic concepts-Basic concepts-

•Marketing is an organizational function and a set of processes for

creating, communicating and delivering value to customers and for managing customer relationships in

ways that benefit the organization and its stakeholders.

•Marketing is an organizational function and a set of processes for

creating, communicating and delivering value to customers and for managing customer relationships in

ways that benefit the organization and its stakeholders.

The Complete ProcessThe Complete Process

MarketSegmentation

Identify and describemarket segments

MarketTargeting

Evaluate segmentsand decide whichto go after

MarketPositioning

Design a product orservice to meet a segment’s needs and develop a marketing mix that will create a competitive advantage in the minds of the selected target market

Market SegmentationMarket Segmentation

• Identifying distinct groups of Identifying distinct groups of cconsumersonsumers whose purchasing behavior whose purchasing behavior differs from other differs from other in important ways. in important ways.

• Marketing mix adjusted to reflect Marketing mix adjusted to reflect differing purchasing patterns in differing purchasing patterns in segments.segments.– GeographyGeography– DemographicsDemographics– Socio-cultural factorsSocio-cultural factors– Psychological factorsPsychological factors

• Identifying distinct groups of Identifying distinct groups of cconsumersonsumers whose purchasing behavior whose purchasing behavior differs from other differs from other in important ways. in important ways.

• Marketing mix adjusted to reflect Marketing mix adjusted to reflect differing purchasing patterns in differing purchasing patterns in segments.segments.– GeographyGeography– DemographicsDemographics– Socio-cultural factorsSocio-cultural factors– Psychological factorsPsychological factors

Market Targeting and PositioningMarket Targeting and Positioning• Marketers TARGETS the attractiveness of each Marketers TARGETS the attractiveness of each

potential segment and decide which of these groups potential segment and decide which of these groups they will try to turn into customersthey will try to turn into customers– MassMass– DifferentiatedDifferentiated– ConcentratedConcentrated– CustomCustom

• Developing a marketing strategy aimed at influencing Developing a marketing strategy aimed at influencing how a particular market segment perceives a product how a particular market segment perceives a product or service in comparison to the competitionor service in comparison to the competition– 4 common positioning errors4 common positioning errors

• Underpositioning: lack of differentiationUnderpositioning: lack of differentiation

• Overpositioning: too narrowOverpositioning: too narrow

• Confused: too many things to too many peopleConfused: too many things to too many people

• Doubtful: consumer just doesn’t believe itDoubtful: consumer just doesn’t believe it

• Marketers TARGETS the attractiveness of each Marketers TARGETS the attractiveness of each potential segment and decide which of these groups potential segment and decide which of these groups they will try to turn into customersthey will try to turn into customers– MassMass– DifferentiatedDifferentiated– ConcentratedConcentrated– CustomCustom

• Developing a marketing strategy aimed at influencing Developing a marketing strategy aimed at influencing how a particular market segment perceives a product how a particular market segment perceives a product or service in comparison to the competitionor service in comparison to the competition– 4 common positioning errors4 common positioning errors

• Underpositioning: lack of differentiationUnderpositioning: lack of differentiation

• Overpositioning: too narrowOverpositioning: too narrow

• Confused: too many things to too many peopleConfused: too many things to too many people

• Doubtful: consumer just doesn’t believe itDoubtful: consumer just doesn’t believe it

Marketing MixMarketing Mix

ProductPrice

Place

Promotion

Consumers

Marketing MixMarketing Mix

Marketing Mix:Product

Marketing Mix:Product

Product AttributesProduct Attributes

• A product is a bundle of attributes. If A product is a bundle of attributes. If consumer needs were the same all consumer needs were the same all over, a firm could simply sell the over, a firm could simply sell the same product worldwide. same product worldwide. Unfortunately, differences in the Unfortunately, differences in the three following areas often three following areas often necessitate adaptationsnecessitate adaptations– Cultural differencesCultural differences– Economic differencesEconomic differences– Product and technical standardsProduct and technical standards

• A product is a bundle of attributes. If A product is a bundle of attributes. If consumer needs were the same all consumer needs were the same all over, a firm could simply sell the over, a firm could simply sell the same product worldwide. same product worldwide. Unfortunately, differences in the Unfortunately, differences in the three following areas often three following areas often necessitate adaptationsnecessitate adaptations– Cultural differencesCultural differences– Economic differencesEconomic differences– Product and technical standardsProduct and technical standards

Cultural DifferencesCultural Differences

• Range of dimensions:Range of dimensions:– Social structureSocial structure– LanguageLanguage– ReligionReligion– EducationEducation

• Most important - the impact of Most important - the impact of traditiontradition

• Range of dimensions:Range of dimensions:– Social structureSocial structure– LanguageLanguage– ReligionReligion– EducationEducation

• Most important - the impact of Most important - the impact of traditiontradition

Economic DifferencesEconomic Differences

• Consumer behavior is influenced Consumer behavior is influenced by economic developmentby economic development– Consumers in highly developed Consumers in highly developed

countries tend to have extra countries tend to have extra performance attributes in their performance attributes in their productsproducts

– Consumers in less developed Consumers in less developed countries tend not to demand these countries tend not to demand these extra performance attributesextra performance attributes

• Consumer behavior is influenced Consumer behavior is influenced by economic developmentby economic development– Consumers in highly developed Consumers in highly developed

countries tend to have extra countries tend to have extra performance attributes in their performance attributes in their productsproducts

– Consumers in less developed Consumers in less developed countries tend not to demand these countries tend not to demand these extra performance attributesextra performance attributes

• Government standards can prevent Government standards can prevent the introduction of global productsthe introduction of global products

• Different technical standards Different technical standards impede global markets, as wellimpede global markets, as well– Come from idiosyncratic decisions Come from idiosyncratic decisions

made long made long agoago

• Government standards can prevent Government standards can prevent the introduction of global productsthe introduction of global products

• Different technical standards Different technical standards impede global markets, as wellimpede global markets, as well– Come from idiosyncratic decisions Come from idiosyncratic decisions

made long made long agoago

Product and Technical Product and Technical StandardsStandards

Marketing Mix:Place

Marketing Mix:Place

Distribution StrategyDistribution Strategy

• Three different distribution systems:Three different distribution systems:– Retail concentration: number of retailersRetail concentration: number of retailers

•Cost/benefit of each alternative Cost/benefit of each alternative vary from country to country vary from country to country

– Channel length: levels of channel Channel length: levels of channel membersmembers•Longer the channel in a country, the higher the Longer the channel in a country, the higher the

priceprice

•Shorter channel in a country, lower priceShorter channel in a country, lower price

– Channel exclusivity: accessChannel exclusivity: access•Match to positioning of product in countryMatch to positioning of product in country

• Three different distribution systems:Three different distribution systems:– Retail concentration: number of retailersRetail concentration: number of retailers

•Cost/benefit of each alternative Cost/benefit of each alternative vary from country to country vary from country to country

– Channel length: levels of channel Channel length: levels of channel membersmembers•Longer the channel in a country, the higher the Longer the channel in a country, the higher the

priceprice

•Shorter channel in a country, lower priceShorter channel in a country, lower price

– Channel exclusivity: accessChannel exclusivity: access•Match to positioning of product in countryMatch to positioning of product in country

A Typical Distribution SystemA Typical Distribution System

Manufacturer Inside the Country

Manufacturer Inside the Country

Manufacturer Outside the

Country

Manufacturer Outside the

Country Import Agent

Import Agent

Wholesale DistributorWholesale Distributor

Retail Distributor

Retail Distributor

Final Customer

Final Customer

Marketing Mix:Price

Marketing Mix:Price

Pricing StrategyPricing Strategy

• Price discriminationPrice discrimination

• Strategic pricingStrategic pricing

• Regulatory factorsRegulatory factors

• Price discriminationPrice discrimination

• Strategic pricingStrategic pricing

• Regulatory factorsRegulatory factors

Pricing StrategyPricing Strategy• Price discrimination: Different prices, Price discrimination: Different prices,

different countries, same productdifferent countries, same product– Charging what the market will bearCharging what the market will bear– Two factors:Two factors:

• Must keep national markets separateMust keep national markets separate• Different price elasticitiesDifferent price elasticities

• Arbitrage:Arbitrage:Charging different prices in different Charging different prices in different countries for same productcountries for same product– Doesn’t always workDoesn’t always work– Sometimes it doesSometimes it does

• Income level and competitive conditions Income level and competitive conditions determine elasticitydetermine elasticity– Elasticity (price) tends to be be greater in countries Elasticity (price) tends to be be greater in countries

with low income levelswith low income levels– Elasticity (demand) tends to be greater in countries Elasticity (demand) tends to be greater in countries

where there are many competitorswhere there are many competitors

• Price discrimination: Different prices, Price discrimination: Different prices, different countries, same productdifferent countries, same product– Charging what the market will bearCharging what the market will bear– Two factors:Two factors:

• Must keep national markets separateMust keep national markets separate• Different price elasticitiesDifferent price elasticities

• Arbitrage:Arbitrage:Charging different prices in different Charging different prices in different countries for same productcountries for same product– Doesn’t always workDoesn’t always work– Sometimes it doesSometimes it does

• Income level and competitive conditions Income level and competitive conditions determine elasticitydetermine elasticity– Elasticity (price) tends to be be greater in countries Elasticity (price) tends to be be greater in countries

with low income levelswith low income levels– Elasticity (demand) tends to be greater in countries Elasticity (demand) tends to be greater in countries

where there are many competitorswhere there are many competitors

Strategic PricingStrategic Pricing

• Predatory pricing:Predatory pricing:– Using price as a competitive weaponUsing price as a competitive weapon

• Multipoint pricing strategy:Multipoint pricing strategy:– When two or more international firms When two or more international firms

compete against each other in two or compete against each other in two or more national marketsmore national markets

– A firm’s pricing strategy in one market A firm’s pricing strategy in one market may impact a rival in another marketmay impact a rival in another market

• Predatory pricing:Predatory pricing:– Using price as a competitive weaponUsing price as a competitive weapon

• Multipoint pricing strategy:Multipoint pricing strategy:– When two or more international firms When two or more international firms

compete against each other in two or compete against each other in two or more national marketsmore national markets

– A firm’s pricing strategy in one market A firm’s pricing strategy in one market may impact a rival in another marketmay impact a rival in another market

Regulatory Influences on Regulatory Influences on PricesPrices

• Antidumping regulations:Antidumping regulations:– Selling a product for a price that is less than the cost Selling a product for a price that is less than the cost

of producing itof producing it• Predatory pricing pricing may violate regulationsPredatory pricing pricing may violate regulations

• Competition Policy:Competition Policy:– Promote competitionPromote competition– Restrict monopoly practicesRestrict monopoly practices– Can limit the prices a company can charge in a given Can limit the prices a company can charge in a given

countrycountry

• Antidumping regulations:Antidumping regulations:– Selling a product for a price that is less than the cost Selling a product for a price that is less than the cost

of producing itof producing it• Predatory pricing pricing may violate regulationsPredatory pricing pricing may violate regulations

• Competition Policy:Competition Policy:– Promote competitionPromote competition– Restrict monopoly practicesRestrict monopoly practices– Can limit the prices a company can charge in a given Can limit the prices a company can charge in a given

countrycountry

Marketing Mix:Promotion

Marketing Mix:Promotion

Communications StrategyCommunications Strategy

• Effectiveness of international communications Effectiveness of international communications can be impacted by:can be impacted by:– Cultural barriersCultural barriers

• Need to develop cross-cultural literacyNeed to develop cross-cultural literacy

• Effectiveness of international communications Effectiveness of international communications can be impacted by:can be impacted by:– Cultural barriersCultural barriers

• Need to develop cross-cultural literacyNeed to develop cross-cultural literacy

Communications StrategyCommunications Strategy

• Effectiveness of international communications Effectiveness of international communications can be impacted by:can be impacted by:

• Self reference criterionSelf reference criterionExample-P&G in Japan.Example-P&G in Japan.

– Cultural barriersCultural barriers• Need to develop cross-cultural literacyNeed to develop cross-cultural literacy

– Source and country of origin effectsSource and country of origin effects• Receiver of the message evaluates it based upon the status Receiver of the message evaluates it based upon the status

of the senderof the sender

– Country of origin effects:Country of origin effects:• Emphasize/de-emphasize foreign originEmphasize/de-emphasize foreign origin

• Effectiveness of international communications Effectiveness of international communications can be impacted by:can be impacted by:

• Self reference criterionSelf reference criterionExample-P&G in Japan.Example-P&G in Japan.

– Cultural barriersCultural barriers• Need to develop cross-cultural literacyNeed to develop cross-cultural literacy

– Source and country of origin effectsSource and country of origin effects• Receiver of the message evaluates it based upon the status Receiver of the message evaluates it based upon the status

of the senderof the sender

– Country of origin effects:Country of origin effects:• Emphasize/de-emphasize foreign originEmphasize/de-emphasize foreign origin

Communications StrategyCommunications Strategy

• Effectiveness of international communications Effectiveness of international communications can be impacted by:can be impacted by:– Cultural barriers.Cultural barriers.

• Need to develop cross-cultural literacyNeed to develop cross-cultural literacy– Source and country of origin effectsSource and country of origin effects

• Receiver of the message evaluates it based upon the status Receiver of the message evaluates it based upon the status of the senderof the sender

– Country of origin effects:Country of origin effects:• Emphasize/de-emphasize foreign originEmphasize/de-emphasize foreign origin

– Noise levelsNoise levels• Tends to reduce the effectiveness of a messageTends to reduce the effectiveness of a message• Developed countries - highDeveloped countries - high• Less developed countries - lowLess developed countries - low

– Push versus Pull:Push versus Pull:• Push emphasizes personal sellingPush emphasizes personal selling• Pull depends on mass media advertisingPull depends on mass media advertising

• Effectiveness of international communications Effectiveness of international communications can be impacted by:can be impacted by:– Cultural barriers.Cultural barriers.

• Need to develop cross-cultural literacyNeed to develop cross-cultural literacy– Source and country of origin effectsSource and country of origin effects

• Receiver of the message evaluates it based upon the status Receiver of the message evaluates it based upon the status of the senderof the sender

– Country of origin effects:Country of origin effects:• Emphasize/de-emphasize foreign originEmphasize/de-emphasize foreign origin

– Noise levelsNoise levels• Tends to reduce the effectiveness of a messageTends to reduce the effectiveness of a message• Developed countries - highDeveloped countries - high• Less developed countries - lowLess developed countries - low

– Push versus Pull:Push versus Pull:• Push emphasizes personal sellingPush emphasizes personal selling• Pull depends on mass media advertisingPull depends on mass media advertising

ANY QUESTIONS?ANY QUESTIONS?