International

Marketing
Management
A.S.M. Saifur Rahman

Meaning & Definition of

International marketing
Marketing activities carried on across
the nation boundaries.
According to AMA: International
Marketing
is
the
multinational
process of planning, executing,
conception, pricing, promotion and
distribution of ideas, goods and
services create exchanges that
satisfy individual and organizational
objectives.
A.S.M. Saifur Rahman

International Marketing
involves:
Identifying the needs and wants of the
customers in international markets.
To take market mix decisions keeping in
the view the diverse customers and
market behavior.
Penetrating into International Markets
using the various modes
Decisions in view of IBE ( International
Business Environment)
A.S.M. Saifur Rahman

Characteristics Of International
Marketing

Dominance of Multinationals
Large Scale Operations
Boundary Restrictions & Trade Blocks
Marketing Research
Importance of Advanced Technology
Precise competition
Want for Specialized institutions
Long term planning
Cultural relations

A.S.M. Saifur Rahman

Scope of International Marketing

Exporting

Establishing
JV & Collaborations
Licensing
Consultancy
Know-how(Technical & Managerial)

Importing
Managing of international operations
Re-exporting

A.S.M. Saifur Rahman

Objective of International Marketing

To develop skills, creating marketing
challenges & Opportunities.
To gain experience in developing
marketing strategies.
To gain verbal, written skills for
communication
To have decision making ability
To be ethical in practice and urge to learn
more on marketing management.
A.S.M. Saifur Rahman

Why Firms go international

Reasons for the firms going international

Profitability
Growth
Economies of Scale
Access to imported inputs/Resources
Marketing Opportunities
USP (Unique Selling Proposition) of product & services
R& D Costs.

A.S.M. Saifur Rahman

Orientation of management
The form and substance of a company's
response to global markets opportunities
depend greatly on managements assumption
and beliefs (both conscious and unconscious)
about the nature of the world. The worldview of
a companys personnel can be described as :
1.
2.
3.
4.

ETHNOCENTRIC
POLYCENTRIC
REGIOCENTRIC
GEOCENTRIC

A.S.M. Saifur Rahman

Ethnocentric

Management orientation Home

country orientation
Perception about market
Domestic market is superior
Focuses on similarities between home
and foreign market
Considers foreign market secondary to
an extension of domestic market
Marketing strategy Extension of
domestic strategy to foreign market
A.S.M. Saifur Rahman

Companies basic objective Profitability

Type of governance Top-down
Culture - Home country
Technology - Mass production
HRM practices Overseas operations are
managed by people from home country
Managerial predisposition(Apredispositionis a
tendency to do something. If you know you have a
predispositiontoward getting carsick, better to plan
ahead and avoid eating before a long drive. Things could
get ugly) - Manager/MNC rely on values &

interests of parent company in formulating and

implementing strategic plan.
A.S.M. Saifur Rahman

Characteristics
Overseas operations viewed as secondary & primary
means of disposing the surplus production
Domestic techniques &personnel superior to foreign
& most effective in overseas market
Domestic marketing mix is employed without major
modifications in overseas market
All foreign marketing operations are planned &
carried out from home base & overseas marketing
administered by export department
A.S.M. Saifur Rahman

Polycentric
Management orientation Host country orientation
Perception about market
Each national market is distinctive
Focuses on differences between home country &
foreign country
Marketing strategy Localization / adaptation
Companies basic objective Public acceptance

A.S.M. Saifur Rahman

Type of governance Each local unit sets objectives

(bottom up)
Culture-Host country
Technology - Batch production
HRM practices Local nationals are used in key
management positions
Managerial predisposition - MNC tailor strategic
plan to meet the need of local culture

A.S.M. Saifur Rahman

Characteristics

Recognize importance of inherent differences in

overseas markets
Subsidiaries are established in overseas market &
each is independent with own marketing objectives &
plans
Local techniques & personnel best suited to deal
with local market conditions
International marketing organized on country to
A.S.M. Saifur Rahman
country basis with separate
marketing strategy for all

Merits
Adaptation to market characteristics help in better
understanding of local needs which will lead to
better exploitation of market potentials
Demerits
High cost of national responsive marketing mix for
each country
Delay in localization
Examples : McD (no beef burgers in India)

A.S.M. Saifur Rahman

Regiocentric
Management orientation Regional
orientation
Perception about market Markets can be
differentiated on the basis of common
regional characteristics
Marketing strategy Trade- off between
standardization & localization
Companies basic objective Both
profitability & public acceptance
A.S.M. Saifur Rahman

Type of governance Mutually negotiated

between region & its subsidiaries
Culture-Regional
Technology - Flexible manufacturing
HRM practices Regional people are
developed for key managerial positions
anywhere in region
Managerial predisposition - MNC use a
strategy that addresses both local &
A.S.M. Saifur Rahman
regional needs

Characteristics
Treat different regions as different market
Regions with similarity of marketing
characteristics treated as separate market
Merits - Advantages of both localization
&standardization
Demerits Lack of attention to inter
regional differences
Examples Punjab (paneer products more)
Gujarat (sugar more)
A.S.M. Saifur Rahman

Geocentric
Management orientation Global orientation
Perception about market Entire world is a
single market that can be effectively tapped by
standardized marketing strategy
Marketing strategy Global standardization
Companies basic objective Both profitability
& public acceptance
Type of governance Mutually negotiated at all
level of organization
A.S.M. Saifur Rahman

Culture- Global
Technology - Flexible manufacturing
HRM practices Best people anywhere in
the world are developed for key managerial
positions everywhere in the world
Managerial predisposition - MNC
constructs its strategic plan with a global
view of operations
A.S.M. Saifur Rahman

Characteristics
Entire world is treated as single market
Standardized marketing mix, to give
uniform image of product &company for
global market
Worldwide approach to marketing & its
operations
Merits
Economies of large scale production
Lower costs advantage of pace
A.S.M. Saifur Rahman

Demerits
Not successful in many cases
Uniform /standard marketing mix not
guarantees for sure success in every
situation
Examples Microsoft & Nokia standardized
products world wide

A.S.M. Saifur Rahman

Process of
Internationalization
FDI

Export
through
own
Export
sales
Via
represen
Agent/
Licens Distribut tative/
Sales
or
e
Subsidiar
y
A.S.M. Saifur Rahman

Local
Packagin
g/
Assembly

Transition from Domestic to

International Markets
Pre-Export Behavior

Company characteristics
Perceived Export
Perceived Import
Organizational commitment

Economic Reasons

Relative profitability
Insufficiency of domestic demand
Reduce Business risks
Legal restrictions
Obtaining Imported inputs
Social Responsibility
Increased Productivity
Technological Improvement
A.S.M. Saifur Rahman

Process of International
Marketing
Motivation
for
Internation
al
Marketing

Growth

Profitability

Risk Spread

Marketing
Opportunities

USP of
product/Servi
ces

Access to
imported
inputs

SWOT
Analysis

Decision to
Enter into
International
Markets

Spreading R
& D Costs

A.S.M. Saifur Rahman

Stages of International Marketing

Involvement
No Direct Foreign Marketing: Products reach foreign markets indirectly
Trading companies
Foreign customers who contact firm
Wholesalers
Distributors
Web sites

Foreign orders pick a companys interest to seek additional international sales.

Infrequent Foreign Marketing:

Caused by temporary surpluses

Variations in production levels

Increases in demand

Firm has little or no intention of maintaining continuous market representation

Foreign sales decline when demand or surplus decreases
May withdraw from international markets

Little or no change in company organization or product lines.

A.S.M. Saifur Rahman

Regular Foreign Marketing:

Firm has production capacity devoted to foreign markets

Firm employs domestic or foreign intermediaries
Uses its own sales force
Sales subsidiaries in important markets
Products allocated or adapted to foreign markets as demand
grows
Firm depends on profits from foreign markets.

International Marketing:

Fully committed and involved in international marketing

activities. Such companies seek markets all over the world
and sell products that are a result of planned production for
markets in various countries.

A.S.M. Saifur Rahman

Global Marketing:

Company treats world, including home market as

one market
Market segmentation decisions no longer focused
on national borders
Defined by income levels, usage patterns, or
other factors
More than half of revenues come from abroad
Organization takes on global perspective

A.S.M. Saifur Rahman

Challenges in International
Marketing
Self- reference(Self-reference criterion refers to the application of a

cultural viewpoint to values held in another culture when

designing strategies to use in a foreign market. Self-reference
criterion is another way of expressing ethnocentrism. Identifying
and addressing the cultural differences and measuring those
differences from a viewpoint based on a foreign country's life
experience and is essential to a successful business exchange .)

Political & Legal Difference

Cultural Difference
Economic Difference
Difference in the currency unit
Differences in the language.
Difference in Marketing Infrastructure
Trade restrictions
High cost of distance
Difference in trade practices
A.S.M. Saifur Rahman

Difference between Domestic and

International
Difference Point
Domestic
International
Marketing

Marketing

Operation Conditions

One nation language

& culture

Many Nations,
Languages & Culture

Transportation cost

Major extent

Some Extent

Currency

One

Multiple

Political

Same

Differ

Nature of market

Relatively
homogenous

Diverse &
Heterogeneous

Change control &

Tariffs

No Problems

Obstacles

Data Availability

Accurate

Formidable, But
doubted

Government
interferences

Relative free

Influences

Environmental Effects

Little effect

Distortion by large
companies

Business Environment

A.S.M. Saifur Rahman

Stable

Unstable

Trade in International
Marketing
International Trade is exchange of
capital, goods and services across
international borders or territories.

TRADE
DOMESTIC TRADE
INTERNATIONAL
TRADE
A.S.M. Saifur Rahman

Need for international trade

Large scale production

Degree of self- sufficiency
Geographic Factors
Occupational Distribution
Means of Transportation
Compensating the production

A.S.M. Saifur Rahman

Dynamic Environment of
International Trade
Comparative Advantages
Impact of National Policies
Impact of Countries

A.S.M. Saifur Rahman

Balance of Payment(BOP)
It refers to the net results that are drawn
recording all the visible and invisible items
that are exported and imported from the
country.
Balance of Payments is comprehensive
record of economic transactions between
residents of home country & residents of
the other countries.
It includes
Current Account
Capital Account
A.S.M. Saifur Rahman
Reserves Account

Characteristics of Balance of
Payment
It is statement of systematic record
of all economic transactions between
one country & rest of the world.
It is a annual statement & pertaining
to time.
Listing receipts & payments in
international transactions of a
country.
Double entry book keeping system.
A.S.M. Saifur Rahman

Fundamental of BOP
Identifying an International Economic
Transactions.
Understanding the flow of goods,
services, money & assets.
Real assets
Financial assets

Book keeping procedures for

accounting.
A.S.M. Saifur Rahman

Factors Affecting BOP

Cost of production
Demand of the supply
Cost & availability
Exchange rate movements
Domestic business
Trade agreements
External pressures
Price
A.S.M. Saifur Rahman

Protectionism
It is the economic policy of
restraining trade between states
through methods such as tariffs on
imported goods, restrictive quotas
and a variety of government
regulations designed to discourage
imports and prevent foreign take
over of domestic markets and
companies.
A.S.M. Saifur Rahman

Reasons for trade barriers

To protect domestic companies.

BOP position favorable.
To curb prominent consumption.
To mobilize revenue for the
government.
To discriminate against certain
countries.

A.S.M. Saifur Rahman

Types of international
barriers
Tariff barrier
Non- tariff barrier
Intended constraint

A.S.M. Saifur Rahman

Global e-Marketing

Search of convenience
Internet into purchase process.
Shift loyalties.
Future buying plans.

A.S.M. Saifur Rahman

Death of distance
Potential of e-commerce

Lower transactions costs

Reduce inventory costs
Competitive business advantage
Expands market
Reduce the supply chain management.

A.S.M. Saifur Rahman

Major benefits of eMarketing

Global reach
Easy marketing
Economics
Updates
More attractive presentation

A.S.M. Saifur Rahman

Communications

Building relationships,
Individual attention
Instant , cheap
Easy transactions

A.S.M. Saifur Rahman

Targeting an Individual
customers

Customer access
Insight
Dialogue
Emotions
Customers transactions

A.S.M. Saifur Rahman

Relationship marketing
It is the process of building the long
term, trusting, win-win relationships
with customers, distributors, retailers
and suppliers.
Key elements are
Interactions between suppliers and customers
Customers
segments
to
customers
satisfaction
Working
,
developing
and
enhancing
relationship in internal markets and building
strong external markets
A.S.M. Saifur Rahman