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DRIVE WINTER 2014

SUBJECT CODE & NAME MK0018


International Marketing
QNO1 .The orientation of a companys top management,
its beliefs and assumptions significantly impact its
approach to international marketing. Discuss the concept
of EPRG framework.
A Management orientations

Effect on international marketing

ANSWER
Management Orientations
The form and substance of a companys response to global
business opportunities depend greatly on managements
assumptions or beliefs both conscious and unconscious about
the nature of the world. The worldview of a companys personnel
can be described as ethnocentric, polycentric, regiocentric, and
geocentric. Management at a company with a prevailing
ethnocentric orientation may consciously make a decision to
move in the direction of geocentricism. The orientationscollectively known as the EPRG framework are summarised in
the below figure -

Orientations of Management
and Companies

Ethnocentric
A person who assumes his or her home country is superior
compared to the rest of the world is said to have an ethnocentric
orientation. The ethnocentric orientation mans company
personnel see only similarities in markets and assume the
products and practices that succeed in the home country will, due
to their demonstrated superiority, be successful anywhere.
Polycentric The polycentric orientation is the opposite of
ethnocentrism. The term polycentric describes managements
often-unconscious belief or assumption that each country in which
a company does business is unique. This assumption lays the
groundwork for each subsidiary to develop its own unique
business and marketing strategies in order to succeed; the term
multinational company is often used to describe such a structure.
An ethnocentric orientation characterises domestic and
international companies that pursue marketing opportunities
outside the home market by extending various elements of the
marketing mix. A polycentric world view predominates at a
multinational company, where country managers operating
autonomously adapt the marketing mix.
Managers at international and transnational companies
are regiocentric or geocentric in their orientation and pursue both
extension and adaptation strategies in international markets.
International marketing importance today is shaped by the
dynamic interplay of several driving and restraining forces. The
former include market needs and wants, technology,
transportation improvements, costs, quality, international peace,
world economic growth, and recognition of opportunities to
develop leverage by operating internationally. Restraining forces
include market differences, management myopia, organisational
culture and national controls.

QNO2. How do international economic institutions affect


international marketing strategy of MNCs? Explain the role
of any two of them.
A Effect

Role of any two institutions

Answer The Organisation for European Economic Cooperation (OEEC) was


the parent organisation of Organisation for Economic Cooperation
and Development (OECD), which was created in 1947 under the
Marshall Plan to savage Europe post the World War II. In 1961, the
OECD overtook the OEEC. Currently, it has more than 30
members across the globe which include Australia, Austria,
Belgium, Canada, Czech Republic, Denmark, Finland, France,
Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea,
Luxembourg, Mexico, the Netherlands, New Zealand, Norway,
Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland,
Turkey, the United Kingdom and the United States. Now, it has
more than 70 developing and emerging market economies as its
members.
Major functions of OECD As OECD, a club of rich countries
wants to contribute to the growth in world trade and assist other
countries economic development so that economic growth can
be attained in the organisation. Following are some of the
measures undertaken by the OECD:
Competition The OECD has a competitions committee, which
provides policy analysis and advice to its members to enhance
their competency and global economic efficiency. The committee
works in the area of competition law, law enforcement,

competition-friendly regulation and growth and stability for all its


members. The OECD works as a global forum, that is, not only the
OECD members, but also different non-members and institutions
across the world are invited to participate in the mentioned areas.
Growth and Development The OECD provides support for the
growth and development projects of its members and nonmembers. Different clubs centres and directorates are established
for this purpose.
Industry The OECD helps member parties in forming policies
for their industrial development. Entrepreneurship, corporate
governance and industrial restructuring, and large and small firms
are the key focus areas.
Rural and Urban Development Rural and Urban Development
policy is one of the key expertise of the OECD under its Territorial
Development Policy Committee (TDPC). Infrastructure is the
building block of socio-economic development and this committee
of the OECD provides an international platform to work on the
urban and rural development through its programmes.
Trade The Trade Committee of the OECD provides a platform for
mutual progress and prosperity through facilitating multilateral
trade. Similar to the WTO, the OECD has an agenda dedicated to
trade liberalisation. This is perhaps the widest domain of the
OECDs portfolio which comprises of Civil Society Organisations,
businesses, union stakeholders, and member and non-member
governments to streamline the international trading system.

QNO3 Define the concept and scope of international


marketing research?
Answer - International marketing research deals with the
analysis of the market, information regarding the nature, size,
organisation, profitability of different markets, changes in the
market and various factors economic, social and political

affecting those changes. International markets are characterised


by rapid technology change and knowledge obsolescence. Due to
this, the processes of production and the products become
obsolete very quickly.
The international marketing concept requires customer
satisfaction rather than profit maximisation, which, is the goal of a
firm. International marketing research is a critical part of such a
marketing intelligence system. It helps to improve management
decision making by providing relevant, accurate and timely
information. Relevant strategies can be developed based on the
information gathered through marketing research.
Marketing research may include the following type of
research.
They are:
Qualitative research
Quantitative research
Scope of International Marketing Research
International marketing research has a broader scope than
domestic research as it deals with multi-country research.
Effective international marketing strategies are made with the
help of an in-depth understanding of the market environment of
the business. Managers will need additional information to
compensate for the lack of familiarity with the foreign
environment. This also contributes to heightened competitive
pressures as well as social change.
Export market research
Studies of industry, market characteristics and market trends
often in the form of acquisition, diversification and market-share
analyses, are conducted regularly by marketing research agencies
and shared with the subscribers.
Buyers behaviour research

Examining brand preferences and brand attitudes relate to the


buyer behaviour research. In most Asian countries, uncertainty is
strongly avoided, resulting in high brand consciousness, brand
loyalty, greater insistence on quality, and consumers active
reliance on reference groups and opinion leaders, whereas
consumers worldwide are concerned about monetary, functional,
physical, psychological and social risks. Asians tend to be more
sensitive to social risk than Westerners.
Product research
Concept development and testing studies are usually performed
in developed countries by the firms research and development
departments. Firms which decide to start on an international level
are those which already have a successful product to bring to the
marketplace; nevertheless, it is still important that they evaluate
the product/service they offer and related marketing mix in the
light of the different target markets, regionally and locally. Thus,
the need for research arises before the product launch and also
helps to ascertain the demand potential.
Distribution research
The distribution function is particularly important in international
marketing, where special attention should be given to
import/export regulations and practices, and where companies
are well advised to engage in comprehensive analyses.
Promotion research
Promotion research is crucial for companies doing business
internationally. By doing such research, the firm evaluates the
extent to which it effectively communicates with the market, it
ensures that certain promotional strategies are appropriate for
that particular market, and, finally, it evaluates the extent to
which the local media are appropriate for the intended message.

In terms of studies of premiums, coupons and deals, it is


important to identify the practices in each country where the
specific promotion will run. Advertising effectiveness research is
frequently conducted to examine the effectiveness and
appropriateness of advertisements aimed at individual markets.
Pricing research
Internationally, pricing research is much more problematic. In
addition to studies projecting demand such as international
market potential, sales potential, sales forecasts, cost analyses,
profit analyses, price elasticity studies and competitive pricing
analyses, which are typical of most pricing research studies
conducted by US firms in the United States, the firm must also
look at issues regarding counter trade and currency issues,
inflation rates, and a national tradition of bargaining for every
transaction all of which have implications for pricing decisions.
Price framing, or what the consumer compares price against, is
another area of research.
QNO4.Differentiate between national and international
products, global and standardised products with
examples.
A Difference
Examples
ANSWER National vs. international products
A national product is offered to a single market. Sometimes
national products appear when a global company caters to the
needs and preferences of particular country markets. For
example, Coca-Cola developed a non-carbonated, ginsengflavoured beverage for sale only in Japan and a yellow,
carbonated flavoured drink called Pasturina to compete with

Perus favourite soft drink, Inca Cola. Such examples show the
reasons why national products, even those that are quite
profitable, may represent a substantial opportunity cost to a
company. First, the existence of a single national business does
not provide an opportunity to develop and utilise international
leverage from headquarters in marketing, R&D and production.
Second, the local product does not allow for the transfer and
application of experience gained in one market to other markets.
The third shortcoming is that a single-country product lacks the
feature of transferability of managerial expertise acquired in the
single-product area.
International and global products
International products are those that are offered in multinational
or in regional markets. Global products are those which are
designed to meet the standards of the global markets. There are
different approaches that can be taken up to add new products
to the product mix in global markets. All
depend on the firms competitiveness in the context of global
market environment. Firms prefer to introduce new products to
stay in global markets. MNEs (Multi national enterprises) have
different approaches to develop global products. Though there is
a slight difference between the terms global and international
products, they are often used interchangeably.

QNO5 Write short notes on:


a) Containerization
b) 4 PL operators
A a) Role and benefits of containerization
b) meaning and role of 4PL operators
ANSWER -

a) Containerization
Containerisation has ultimately provided an ideal unit load,
which meets all the logistical requirements. It not only eliminates
conventional timeconsuming methods of cargo handling, but also
benefits ship owners, shippers and port authorities. The added
advantage is that containerisation simplifies the procedures and
documentation related to transportation of cargo.
Containerisation is an increasingly popular method of
shipment. A container is a large box made of durable material
such as steel, aluminium, plywood and glass-reinforced plastics. A
container varies in size, material and construction. Its dimensions
are typically 8 ft. high and 8 ft. wide, with lengths usually varying
in multiples of 10 ft. up to a maximum of 40 ft. A container can
accommodate most cargo but is most suitable for packages of
standard size and shape. Containers can take care of most of the
four main packing problems. Because of the containers
construction, a product does not have to have heavy packing. The
container by itself provides good protection for the product
against breakage, moisture and temperature. Because breaking
into a container is difficult, this method of shipment discourages
pilferage and theft as well.
It is important to select the right container because
containers come in varying sizes and types. The two basic types
of containers are: (1) dry cargo containers and (2) special purpose
containers. Some of the various types of dry cargo containers are
end loading, fully enclosed; side loading, fully enclosed; and open
top, ventilated insulated. Special purpose containers come in
different types for refrigerated, liquid bulk, dry bulk, flat rack,
auto, livestock, and sea shed cargoes.
b) 4 PL operators
Product
Customers today are aware of several ethical issues relating to
the products they purchase. Many customers will not buy
products that have been tested on animals, products that have

been made using child or forced labour and those containing


harmful chemicals. In such a case, companies selling such
products globally need to decide whether it is ethical to sell such
products. For example, Mattel, in 2007, recalled toys that
contained lead in its paint.
Price
You have already learnt that prices for the same product vary in
different countries due to government regulations, duties/taxes,
shipping costs, etc. Though you learnt the ethical problems
related to price in sub section 14.3, this section will attempt to
provide you with a greater understanding on price-related moral
issues.
Promotion
Is it honest and legal to advertise products or services that may
not be beneficial to health or those that give false promises? For
example, in India, though it is against the law to advertise liquor
and tobacco directly on TV, is it ethical to promote a soda by the
same name instead of liquor? Or, for that matter, is it ethical to
promote skin fairness creams that promise a positive change in
social status?
Place
When selling across boundaries, is it ethical to distribute/sell
inferior products to certain countries perceived as
underdeveloped by the company? For example, Coca Cola is
accused of selling inferior Coke made from corn sugar
(isoglucose) in eastern European countries while it sells Coke
made from cane sugar (sucrose) in other European countries.
QNO6 Choose a product and explain how you will prepare
seven steps in a global e-marketing plan?
Choosing the product

Global e marketing plan


Answer Today, customers are aware of most of the products in the
market as the Internet allows the customer to access a vast
amount of information. The customer can easily shift from one
supplier to another. This has made the customers more powerful
than the company.
Before taking the decision on selling the products online, the
marketer needs to know the following:
Why and how the customer buys the product or service.
What profile of the customer is available online?
The steps to create of a global e-marketing plan are as follows:
1. SWOT analysis - A company must do a SWOT analysis to
determine the
opportunities and threats. This is also called
situation analysis. In case of global e-marketing, the company
undertakes an external environment analysis of the host and
home country. The culture, government regulations, economic
environments, and technological environment differences
between countries are compared. They can affect the business if
not taken into consideration when the differences are huge.

2. Market segmentation / selection - The company should


select and rank the countries it is targeting in its global business.
The company needs to profile each target country/group and
understand its requirements and expectations. Accordingly, the
company can change the marketing mix if required.

3. Setting objectives - The Company now wants to enter the


market for raising awareness about the product/brand or to
increase the sales or for internal efficiency (i.e. reducing the
marketing and operational costs). The company sets objective/s
by seeing its vision and mission statements. Then the company
makes strategies to achieve these goals.
4. E-marketing strategies -The following decisions are taken
regarding the 4 Ps in accordance with the set objectives.
5. Implementation - The Company looks into the 4 Ps and plans
objectives and devises a detailed plan for implementation.
6. Budget - The company identifies the returns it expects from
the investment in e-marketing activities.
7. Evaluation - The company builds a feedback and review
mechanisms to assess the success.