International Marketing

• Hess & Cateora define International Marketing as

the performance of business activities that directs
the flow of a company’s goods and services to
consumers in more than one countries.
• Foreign trade deals with trade between two
nations.
• International marketing has a managerial
perspective & deals with issues which concerns a
firm and not the nation as a whole.
 Reasons
• Product Life Cycle : A product may be at the end of its
life cycle in one market and not even be introduced in
another market.
• Excess Capacity: In an effort to minimize fixed cost per
unit, the firm may undertake foreign orders.
• Geographic Diversification: The strategy is to expand
the market without expanding its product line.
• Competition: To avoid competition
 Barriers
• Social factors: National legal regime, political
situation,financial system, culture, language
• Economic factors: Tariffs, quotas, currency
• Logistics: Availability of required type of
transport, cost of transportation.
• Risks: Political risks, commercial risks, acts of
goods
• Competition: Producers in the importing countries,
exporters from other countries, other exporters from home
country.
 Difference between IM & Domestic Marketing

Decision Variable DM IM
•Market Segment Single Mkt Multiple
& Sub Mkt Market
•Marketing control Easier More
difficult
•Market Research High Awareness Must
MR less important
•Product quality Any type Must be
high
Decision Variable DM IM
•Product Design Developed for Has to be
home market & adopted to every
question of market
adoption does not arise
•Product development Meet domestic May move to
requirements & another
withdrawn as needed Market

•Advertising Single message Multiple message

• Sales promotion Options known Options
Unknown,
Choice Varies
 Basic Modes of Entry
• Exporting: This is the most commonly used
method for entering foreign markets. This
method involves production of goods and
services in the home country followed by
distribution into foreign market. This
method is commonly adopted by countries
entering into foreign market for the first
time since it minimises the financial risks
involved.
• Joint Venture : When a company does not posses the
capacity to analyse and handle a particular market, it enters
into a J.V. The primary reason for sharing control of the
market is to protect itself against political and economic
risks. Others reasons:
*when the co doesn’t possess competent personnel to
handle foreign market or when it is short of capital.
* When a specific recourse is possessed by other partner.
* Wholly owned activities are not permitted by the foreign
government.
• Licensing : In order to protect its patents and
trademark rights the company simply licenses the
production of its product in the foreign country to
another company in return of fixed loyalty.

• Manufacturing: Here the Company invest in

foreign market and develop its own manufacturing
and marketing systems within that market.
• Management Contracts : A country may not
possess the required managerial or technical talent
and therefore may not be in a position to exploit
its assets. In such a situation a company may sign
a management contact with another country’s
government to manage the assets till such time
that it can develop its own resources necessary for
managing the assets. This method is mostly
practiced by technologically oriented firms.
 International Product Life Cycle
• The IPLC model developed by Prof. Raymond
Vernon of the Harvard Business School is based
on actual empirical patterns of trade.
• It helps us to understand what is actually
happening in real world of international
competition.
• It suggests that many products go through a cycle
during which high income, mass consumption
countries are initially exporters, then lose their
export markets and finally become importers.
• Other advanced countries shift from the
position of importers to exporters later in
time.
• Still later, less developed countries shift
from the position of being importers to
being exporters of a product.
 EPRG Framework
• It depicts the orientation of a firm towards
internationalization of its operation.
- Ethnocentric: Home market orientation
- Polycentric:Country by Country basis
- Regiocentric: Regional Marketing Policy
- Geocentric: Worldwide approach
 Transnational Corporation:
Evolution
• Domestic
• International
• Multinational
• Global
• Transnational
THANK YOU