BY Naresh Bangeja Swapnil Chaskar Khushboo Dhedia Prachanti Bisne

International Marketing

IntroductionInternational marketing is the process of planning and

conducting transactions across national borders to create exchanges that satisfy the objectives of individuals and organizations

In contrast to the definition of marketing only the word multinational has been added. In simple words international marketing is the application of marketing principles to across national boundaries. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term.

Reasons for Global MarketingGrowth

Access to new markets and access to resources

SurvivalAgainst competitors with lower costs (due to increased

access to resources) – e.g. India and China

Or push and pull factors

International Marketing DecisionsDeciding whether to go abroad

Deciding which markets to enter

Deciding how to enter the market

Deciding on the market program

Deciding on the market organization

Deciding whether to go abroad?

Reasons to consider going global:Foreign attacks on domestic marketsForeign markets with higher profit opportunitiesStagnant or shrinking domestic marketsNeed larger customer base to achieve economies of scaleReduce dependency on single marketFollow customers who are expanding

Deciding which markets to enter?

Before going abroad, the company should try to define its international marketing objectives and policies.

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

Deciding how to enter the market?

Deciding how to enter the market?Joint Venturing:

Joining with foreign companies to produce or market products or services.

Approaches:LicensingContract manufacturingManagement contractingJoint ownership

Direct Investment:The development of foreign-based assembly or

manufacturing facilities.This approach has both advantages and disadvantages.

Deciding on the market program

Standardized Marketing Mix:Selling largely the same products and using the same

marketing approaches worldwide.

Adapted Marketing Mix:Producer adjusts the marketing mix elements to each

target market, bearing more costs but hoping for a larger market share and return.

Deciding on the market organizationOrganize an export department

Create international divisionsGeographical organizationsWorld product groupsInternational subsidiaries

Become a global organization

Strategies

Global strategy

Companies such as Sony and Panasonic pursue a global strategy which involves:

Competing everywhereAppreciating that success demands a presence in almost every

part of the world in order to compete effectivelyMaking the product the same for each marketCentralized controlTaking advantage of customer needs and wants across

international bordersLocating their value adding activities where they can achieve

the greatest competitive advantageIntegrating and co-ordinating activities across borders

Global Strategies Continued…A global strategy is effective when differences between

countries are small and competition is global. It has advantages in terms ofEconomies of scaleLower costsCo-ordination of activitiesFaster product developmentHowever, many regret the growing standardization across

the world.

Domestic Strategies

A multi-domestic strategy involves products tailored to individual countries

Innovation comes from local R&DThere is decentralization of decision making within the

organizationOne result of decentralization is local sourcingResponding to local needs is desirable but there are

disadvantages: for example high costs due to tailored products and duplication across countries

Management Orientation

The ERPG Concept E---- Ethnocentric P---- Polycentric R---- Regiocentric G--- Geocentric

The Ethnocentric Orientation

-- It is a belief which considers- one’s own country/ culture, products as superior

-- It views similarities in all markets/ foreign country market.

-- Product’s/ services/ management practices/ methods that is being offered/ followed in one’s own country/ successful in one’s own country will be acceptable in other world markets, anywhere.

-- Adaptation of the product is not required.-- Shades of egoism encircled herewith

The Polycentric Orientation

-- Opposite of Ethnocentrism .-- It views each country as unique.-- Each subsidiary is to develop its own unique business.-- Each subsidiary to develop its own marketing

strategies to succeed in its own right.

The Regiocentric Orientation:

Management views regions as unique.-- Management seeks to develop an integrated regional

strategy, to market product/services- in the particular identified region.

-- Regions are considered to be one- i.e. consumers having one taste, choices, preferences, one regional identity etc.

-- NAFTA, EU, SAARC etc are examples.

The Geocentric Orientation:

-- The Company views the entire world as a potential market.

-- Company strives to develop integrated world market strategies.

-- It views similarities and differences in markets and countries.

-- It seeks to create a global strategy- responsive to local needs and wants.

The Importance of Global Marketing

For US-based companies, 75% of sales potential is outside the US.

About 90% of Coca-Cola’s operating income is generated outside the US.

For Japanese companies, 85% of potential is outside Japan.

For German and EU companies, 94% of potential is outside Germany.

Marketing Mix Adaptation

In India, McDonald’s serves chicken, fish, and vegetable burgers, and the Maharaja Mac—two all-mutton patties, special sauce, lettuce, cheese, pickles, onions, on a sesame-seed bun.

U.S. Globalization

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

Cultural Difference

When Nike learned that this stylized “Air” logo resembled “Allah” in Arabic script, it apologized and pulled the shoes from distribution.

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.

Joint Ownership

KFC entered Japan through a joint ownership venture with Japanese conglomerate Mitsubishi.

International Pricing

Twelve European Union countries have adopted the euro as a common currency, creating “pricing transparency” and forcing companies to harmonize their prices throughout Europe.

Any

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