SHEETAL RAWATROLL NO. 1026

MMS - I

INTERNATIONAL MARKETING

Table of content

IntroductionWTOScanning the international eco environmentInternational marketing researchDecision making processEntering international marketProduct strategyBuilding brandsInternational distributionCommunication decisions

INTRODUCTION

International marketing involves recognizing that people all over the world have different needs.

Companies like Gillette, Coca-Cola and Cadbury Schweppes have brands that are recognized across the globe.

Theories of international marketing1. Absolute advantage theory2. Comparative advantage theory

Evolutionary process of global marketing

Domestic marketingExport marketingInternational marketingMultinational marketingTowards glocal marketing

International Marketing Decisions

Deciding whether to go abroad

Deciding which markets to enter

Deciding how to enter the market

Deciding on the marketing program

Deciding on the marketing organization

WTO

The WTO is the only organization dealing with global rules of trade between nations.

It came into existence on 1 Jan 1955 as a successor of general agreement on tariffs & trade(GATT).

WTO

The major implication of the WTO’s multilateral trade regime are as follows:

Security of access to international markets.Stability of access to international markets.Implications for importers of raw materials &

other inputs.

FROM GATT TO WTO

YEAR ROUND SUBJECT COVERED COUNTRIES

AVERAGE TARIFF CUT(%)

1947 GENEVA TARIFFS 23 35

1949 ANNECY TARIFFS 13 NA

1951 TORQUAY TARIFFS 38 25

1956 GENEVA TARIFFS 26 NA

1960-61 DILLON TARIFFS 26 NA

1964-67 KENNEDY TARIFFS & ANTI DUMPING MEASURES

62 35

1973-79 TOKYO TARIFFS,NON-TARIFF MEASURES,FRAMEWORK AGREEMENTS

102 33

1986-94 URUGUAY CREATION OF WTO 123 36

PRINCIPAL OF MULTILATERAL TRADING SYSTEM UNDER THE WTO

Trade without discrimination. Gradual move towards freer markets

through negotiations. Increased predictability of international

marketing environment. Promoting fair competition in international

markets.

SCANNING THE INTERNATIONAL ECONOMIC ENVIRONMENT

The international marketing decisions are influenced, to a large extent, by environmental factors in the target markets.

It major framework areas are INTERNATIONAL ECONOMIC INSTITUTIONS & TRADE GROUP.

The major international economic institution include the WORLD BANK GROUP (IBRD, IDA, IFC, MIGA, ICSTD), IMF, WIPO,ITC & UNCTAD.

INTERNATIONAL ECONOMIC INTEGRATION

The trade group or the form of economic integration, also known as regional trading agreement (RTAs).

The major RTAs include EU, GCC, ASEAN & NAFTA.

India is involved in economic integrations with RTAs such as ASEAN, GCC, SAARC, SAPTA & EAEC.

INTERNATIONAL ECONOMIC INTEGRATION

bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb(complete political & economic integration)

(((

Common Market

(free trade among members)

Preferential trading agreement

(tariff concessi0ns on import select items)

Free trade Area

(common external trade policy)

(Harmonization of economic policies)

Economic Union

(Complete political & economic integration)

Political Union

IncreasingIntegration

INTERNATIONAL MAKETING RESEARCH

International marketing research can be defined as research that crosses national borders & involves respondents & researchers from different countries & cultures.

The major objective of international marketing research are:i. To carry out country screening &

selection.ii. To evaluate a country’s market potential.iii. To identify aspects of country’s

environmentiv. To evaluate the components of

marketing mixv. To facilitate in developing a strategic

marketing plan.

INTERNATIONAL MAKETING RESEARCH

CROSS-CULTURE MARKETING BEHAVIOUR & RESEARCHi. Religionii. Value systemiii. Normsiv. Aesthetics

INTERNATIONAL MAKETING RESEARCH

Comparison of cross-cultural behavior Power distance

Mal

aysia

Mex

ico

Arab

coun

trie

sIn

dia

Brazil

Thai

land U

.S

Great

Brit

ain

Swed

en

Austria

020406080

100120

Cou

ntry

sco

re

Country

Comparison of cross-cultural behavior

Individualism vs. collectivism

U.S

Great

Brit

ain

Franc

e

Sout

h Afr

ica

Indi

a

Japa

n

Argen

tina

Arab

coun

ties

Mal

aysia

Sing

apor

e

Paki

stan

0102030405060708090

100

Cou

ntry

sco

re

Country

Comparison of cross-cultural behavior

Masculinity vs. femininity

Cultural Context

Culture Homogeneity

GermanSwiss

ScandinavianNorth

AmericaEnglishItalian

SpanishGreekArab

VietnameseJapaneseKoreanChinese

Low Context

High Context

PROCESS OF INTERNATIONAL MARKETING

Problem identificatio

n

Decide Research

methodology

Workout information requirement

Identifying sources of

information

Prepare research design

Collect primary

data

Analyses information

Evaluation &

Interpretation

DECISION MAKING PROCESS

The decision making process consist ofi. Identificationii. Segmentationiii. Selectioniv. Targeting A firm has to overcome various distancesi. Geographicalii. Psychiciii. Economiciv. Political

DECISION MAKING PROCESS

A firm can make use of information & services from

i. export promotion agenciesii. The world bankiii. WTO The international market segmentationi. Geographicii. Demographiciii. Psychographiciv. Segmentation

DECISION MAKING PROCESS

Selection of international marketsi. Preliminary screening of international

marketsii. Accessibility to international marketsiii. Tariff Barriersiv. Profitabilityv. Estimate market potential

ENTERING INTERNATIONAL MARKET

In order to succeed in international markets, the decision to select an appropriate entry mode is crucial & integral part of a firm’s international marketing strategy.

The modes of entry in international market varies from low-commitment to high commitment.

INTERNATIONAL MARKET ENTRY MODES

International market entry modes

Exports

Production in Home country Production in Foreign country

Providing offshoreservices

Investment mode

direct

indirect

Complementary(piggybacking)

Contractual mode

Joint Venture

Mixing

Wholly owned foreign subsidiaries

Greenfield operations

Acquisition

PRODUCT STRATEGY

EPRG Model Ethnocentric: everything is centered on the

domestic market.Polycentric: several important foreign

markets exist.Regiocentric: the market is composed of

several large economic regions.Geocentric: the world is one large global

PRODUCT LIFE CYCLE

INTRODUCTION GROWTH MATURITY DECLINE

BUILDING BRANDS

THE AMERICAN MARKETING ASSOCIATION (AMA) defines a brand -

“as a name, term, sign, symbol or design, or a

combination of these, intended to identify the goods or services of one seller or a group of seller & to differentiate them from those of competitors.

STRATEGIES FOR BUILDING BRANDS

Brand based on tangible product componentBrand based on intangible product componentBalance brand based on tangible-intangible

product componentLIFE CYCLE CONCEPT

EmbryonicGrowthMaturityDecline

INTERNATIONAL DISTRIBUTION

The procurement of inputs & marketing of the products beyond country boundaries is referred to as international.

Distribution channel are:1. Direct channels2. Indirect channels

INTERNATIONAL DISTRIBUTION CHANNELS

International border

FIRM

END USER / CUSTOMER

e-channelAgent Merchant intermediary

Agent Merchant intermediary

Three-tier system

Winery, Supplier

Distributor / Wholesaler

Supermarkets, wine shops, HORECA,

bars, transportation, etc…

Consumers

Winery, Supplier

Control States

State controlled

retail stores

HORECA, clubs,

etc…

Consumers

Open States Control States

Tier I

Tier II

Tier III

COMMUNICATION DECISION

CUSTOMER

ADVERTISING

PUBLIC RELATIONS

DIRECT & INTERACTIVE MARKETING

PERSONAL SELLING

SALES PROMOTIO

N

INTERNATIONAL MARKETING COMMUNICATIONN MIX

PROCESS OF INTERNATIONAL MARKETING COMMUNICATION

HOME COUNTRYCONTEXT

ENCODING

FOREIGN COUNTRYCONTEXT

DECODING

SENDER(FIRM)

MEDIUM

MESSAGERECEIVER(CUSTOMER)

FEEDBACK

NOISE