INTERNATIONAL MARKETING

AN INTRODUCTION

Aditi Chakravarty

Nitesh Pandey

Puneet Dalakoti

Pawan Yadav

MARKETING

• Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

• International marketing is the extension of these activities across national boundaries.

THE CONTRASTS :

• Marketing– Process of planning

and executing the conception pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organization goals

• Int’l Marketing– Focuses resources on

Int’l market opportunities and threats; the main difference is the scope of activities because Int’l marketing occurs in markets outside the organization’s home country

DEFINITION

What is International Marketing?• At its simplest level, international marketing involves the

firm in making one or more marketing mix decisions across national boundaries. At its most complex level, it involves the firm in establishing manufacturing facilities overseas and coordinating marketing strategies across

the globe.

Doole and Lowe (2001)• The Difference

More than one nation, Competition, Legal constraints, Govt. Control, Ecological factors, Consumer traditions, or any uncontrollable elements.

INTERNATIONAL MARKETING MIX

International marketing managers must address four issues:

• how to develop the firm’s product's; • how to price those products;• how to sell those products; • and how to distribute those products to the firm’s

customers. The elements are collectively known as the

marketing mix (and are also referred to as the four Ps of marketing).

Complications for International Marketing vs Marketing in the

Home Nation• There will often be differences in laws across

nations. Such differences can affect any and all portions of the marketing mix

• National culture - Same idea as above• Geography - Same idea as above• Economic forces influence income level,

infrastructure, and the composition of goods and services demanded in a given nation

Standardization vs Customization

• Compared to their domestic counterparts, international marketing managers face a more complex set of issues and decisions related to the marketing mix. One overriding issue is whether a firm should standardize its offerings or customize for each market.

APPROACHES TO IM :

International marketing managers usually choose among the following approaches when deciding the extent to which to standardize their firm’s marketing mix:

• an ethnocentric approach (market products internationally the same way it does domestically),

• a polycentric approach (customize the marketing mix to meet the needs of each target market), or

• a geocentric approach (adopt a standardized marketing mix for all markets based on an analysis of customer needs).

ETHNOCENTRIC APPROACH

• Where goods are produced for one domestic market but the goods go “International” as a “by the way” due to surplus.

• The ethnocentric approach is easy to use, however, it may not be desirable because sales may be lost as a result of failing to consider the needs of foreign customers.

• For eg – Footwear Brand Jimmy Choo , Ferragamo & Dior

POLYCENTRIC APPROACH

• Where subsidiaries are located in different countries and each operates almost independently in that they set up their own marketing strategies etc

• The polycentric approach, while costly, may actually serve to increase a firm’s revenues because the needs of local customers are being met.

• For Eg- Mc Donalds , Papa John’s, Benetton

GEOCENTRIC APPROACH

• where marketing is on a global scale. • it involves standardization of the marketing mix,

allows a firm to sell essentially the same product using essentially the same approach in all of its markets.

• Most firms seek to fall in the middle of a continuum between standardization and customization, attempting to follow a policy of “think locally, act globally.”

• DRIVING FORCES

– Regional economic agreements

– Market needs and wants

– Technology– Transportation and

communication improvements

– Product development costs

– Quality– World economic

trends– Leverage

• RESTRAINING FORCES

– Management myopia– Organizational culture– National controls– Int’l World Order– Fight against Int’l terrorism

TOP 10 U.S PLAYERS IN THE GLOBAL GAME

Company

Wal-Mart

Ford Motor

General Electric

Citi Group

Hewlett-Packard

Boeing

Intel

Disney

Coca-Cola

Apple Computer

ForeignRevenues

($ Bil)

Foreign Revenues

(% of Total)

285.2

171.6

152.4

86.2

73.1

52.5

34.2

30.8

22.0

8.3

19.7

49.2

46.8

58.1

60.30

28.7

76.8

28.8

73.1

40.7.0

INDIA’S INTERNATIONAL MARKET:

• Currently in India, the national economy and marketplace are undergoing rapid changes and transformation.

• A large number of reasons could be attributed to these changes. One of the reasons -Globalization,resulting explosive growth of global trade and the international competition.

• Currently India has a share of total world trade of less than 1% - a measure of the vast opportunities that lie ahead as we move forward in the 21st century.

THE INDIA ADVANTAGE

• India’s vast pool of technical and scientific personnel- information technology and bio-technology

• India’s huge home market, with a large middle-class and its rapidly growing buying power, This allows International cos to reap economies of scale and reduce costs within the domestic market, position themselves to penetrate global market.

• The power of ideas, Innovation and outward oriented ambition among the business magnates of India to expand and Invest in new ventures.

WHY AND HOW ?

• The exciting aspect of India’s recent export performance is the dramatic growth in export of services.

• The share of services has risen from about 1/5th to 1/3rd of India’s total exports in the past 10 years, especially thanks to the IT revolution and the dramatic growth in exports of IT-enabled services.

•Indian companies are leveraging their low-cost advantage to create efficient global business models; they are seeking entry into fast-growing emerging markets and market share in profitable developed economies; they are looking to augment their knowledge, reach and capabilities through acquisitions of companies for their brands, technology, talent and product portfolios.

FDI IN INDIA

• Investment in India - Foreign Direct Investment - Introduction

Foreign Direct Investment (FDI) is permited as under the following forms of investments.

• Through financial collaborations. • Through joint ventures and technical collaborations. • Through capital markets via Euro issues. • Through private placements or preferential allotments

MARKET DYNAMICS

The other reason :• technological change. This is an important factor because

the technological competitiveness is making, not only the Indian market, but also the global marketplace cutthroat.

• survival of the fittest is the law .• In order to win, the companies are coming out with

various new and evolving strategies because the Indian market is also changing very fast. It is to capture the Indian market, that the Indian and the Multi National Companies are using all of their resources.

MARKET POTENTIAL • The Indian market is no longer a sellers market.

The winner is the one who provides value for money .

• Coca-Cola is the most valued brand name on the face of the earth, far surpassing its rival Pepsi. The world's number one soft-drink company,

• India and Mexico may well be the two most dramatic growth stories for America's most well-known multinational.

• US-based music magazine Rolling Stone and Condé Nast Publications’ magazine for women, Glamour, are among the dozen-odd global players planning to launch India editions.

PHARMA GOES GLOBAL • Indian biotechnology firms are steadily moving up the

value chain by offering research and development (R&D) services for global pharma companies to aid drug discovery and manufacture.

• Pharma companies across the world, see these India-based services as complementing their outsourcing model. They are, therefore, entering into partnerships, involving significant cost arbitrage and quick turnaround time.

• Biocon’s contract research subsidiary, Syngene International, has set up a dedicated centre for Bristol-Myers Squibb (BMS)

INTERNATIONAL MKT IN INDIA

• Global real estate majors - Dubai World, Trump Organisation of US, Smart City of Dubai, Kishimoto Gordon Dalaya, Khuyool Investments, Bonyan Holding, Plus Properties, ABG Group and Al Fara’s Properties are descending on the Indian real estate market with an investment of around $20-25 billion.

• number of global financial services players are gearing up for acquisitions and they have identified Asia-Pacific region as the ‘hot zone’ for private banking acquisitions.

• Based on a survey of 186 private banks and wealth management firms around the world, management consultants KPMG on Wednesday indicated that global financial giants are keenly looking at Indian banks for establishing their footprints.

INDIA EXPANDS

• Infrastructure sector dominated the deal street with transactions worth $12 billion, followed by power, oil and gas that saw M&As worth $5 billion.

• Major M&As clinched by Indian firms in the past nine months include acquisition of Citigroup’s captive business process outsourcing (BPO) arm Citigroup Global Services (CGSL) for $505 million by India’s leading IT services exporter Tata Consultancy Services.

Contd :• Tata Communications, Tata Steel ( Corus

deal) ,Bharti Airtel, Suzlon Energy have all set examples of how Indian players are going international by starting new businesses in varied parts of the globe.

• Indian telecommunications major Hutchison Essar Ltd was acquired by Vodafone Group Plc for $12.7 billion, and the deal is ranked 16 in terms of size(one of 25 largest cross-border M&A deals in infrastructure)

INDIA SHINING • The change in domestic mindset is one of the most significant trends

that is driving the tide of change in India • From a tentative mindset that questioned our entrepreneurial

capability to survive against global competition, Indian businesses and people are embracing globalization .

• Indian companies seeking to be listed on the New York Stock Exchange do not make headlines any longer. The hunger to be globally benchmarked has spread across sectors and regions.

• The intrinsic worth of India’s strong macro-economic fundamentals was being recognised by international investors. FDI equity inflows alone this fiscal (2006-7), were expected to touch US $ 12 billion, which was more than double the equity inflows of US $ 5.5 billion last year.

THANK YOU.