International Marketing Session 1
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Transcript of International Marketing Session 1
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Session 1
International Marketing
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What is International Marketing Marketing of goods and services across national
frontiers
It is an approach of a company with truly globaloutlook, seeking its profit impartially around theworld, on a planned and systematic basis.
It is the marketing function of multinationalcompanies
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Factors affecting InternationalMarketing
Trade
practicesFacilities Distance
Culture Economy Law
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Significance Profit Motive
Domestic Market constraint
Competition
Government Policies Monopoly Power
Spin off benefits
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Complexities Market differences
Management myopia
Trade barriers
Organization culture Social Structures and customs
Values and attitudes
Technological factors
Economic and competitive factors
Political legal factors
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International Marketing & DomesticMarketing - Similarities
1. Both in domestic marketing and internationalmarketing success depend upon satisfying the basicrequirements of consumers. This necessarilyinvolves finding out what the buyers want andmeeting their needs accordingly
2. It is necessary to build goodwill both in the domesticmarket and international market. If a firm is able todevelop goodwill of consumers or customers, its
tasks will be simpler than the one, which has notbeen able to do so.
3. Research and development for productdevelopment and modification is necessary both forinternational marketing and domestic marketing.
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International Mktg Vs Domestic Mktg
1. Sovereign Political Entities:Each country has a sovereign political entityand Goods andservices has to move acrossnational boundaries. As a result, they may
have to face a number of restrictions. This mayfall in any of the following categories;
Tariffs and customs duties
Quantitative restrictions
Exchange controls
Local Taxes.
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International v/s Domestic
2. Different Legal Systems:Each country has its own legal system and itdiffers fromcountry to country. The existenceof different legal systems makes the task of
businessmen more difficult as they are notsure as to which particular system will applyto their transactions. In the case of domesticmarketing the buyers are aware of the legal
systems in their country.
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International v/s Domestic
3. Cultural Differences: In domestic marketing thereis only one nation, common language and culture
where as at international marketing many
languages and different cultures.
4. Different Monetary Systems: Each country has its
own monetary system and the exchange value of
each country's currency is different from that of the
other. The exchange rates between currencies
fluctuate every day. In case of domestic marketing
there is only one currency prevailing in the country.
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International v/s Domestic
5. Differences in the Marketing infrastructure:
The availability of the marketing facilities
available in different countries may vary
widely.
For example, an advertisement medium very
effective in one market may not be available
or may be under developed in another market.
6. Trade Restrictions:Trade restrictions, particularly import controls
are a very important problem which an
international marketer faces.
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International v/s Domestic8. Procedures and Documentations:
Each country has its own procedures and documentaryrequirements and traders have to comply with these regulationsif they want to export or import goods from foreign countries.
9. Degree of Risk: There is a greater degree of risk involved in
international marketing than in domestic marketing due toLarge volume of transactions
Higher value of transaction
Longer time period
More time of transit
Longer credit periodComparatively less knowledge
Exchange fluctuations.
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International V/S Domestic
10. Stability in Business Environment: In domesticmarketing there is relatively stable businessenvironment. At international marketing multipleenvironments, many of which are likely instable.
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EPRG FRAMEWORK
Ethnocentric
- Homecountry
orientation
Polycentrism
- Host countryorientation
Regiocentrism
- A regionalorientation
Geocentrism
- A worldorientation
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EPRG FRAMEWORK
Ethnocentric
- Homecountry
orientation
Domestic techniques and
Personnel are considered
superior
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Ethnocentric Overseas operations are viewed as secondary to
domestic operations
Considered as a means to dispose of surplusdomestic production
Plans for overseas market are developed in thehome office, utilizing policies and proceduresidentical to those employed in the domesticmarket
Overseas marketing is looked after by homecountry nationals
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Ethnocentric continued No systematic research is conducted overseas
No major modifications are made to products soldin overseas markets
Prices are calculated on the same basis as in thehome market with the addition of overseasdistribution costs
Promotion and distribution strategies are similar
to that employed in the home country Strong reliance on export agents
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EPRG FRAMEWORK
Polycentrism
- Hostcountry
orientation
Local Personnel and
Techniques are best
suited to deal with
local marketconditions
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Polycentric orientation Subsidiaries are established in overseas market
Each subsidiary operates independently with itsown marketing objectives and plans
Marketing activities are organized on country bycountry basis
Marketing research is conducted independently ineach country
Separate product lines are developed in eachcountry
Home country products are modified to meet localneeds.
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Polycentric continued Each subsidiary will have its own pricing and
promotion policy
Sales personnel from those countries
Traditional channels of distribution of thosecountries
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EPRG FRAMEWORK
Regiocentrism
- A regional
orientation
Recognizesregional
commonaliti
es and leads
to the design
of regional
strategies
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EPRG FRAMEWORK
Geocentrism
- A worldorientation
Best manfor the job
irrespectiv
e of
nationalorigin
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Regiocentric and Geocentric Region or entire world as potential market
Firm develops policies and organises activities ona regional or worldwide basis
Marketing personnel from the region or from anycountry
Standardised product lines for regional orworldwide markets
Regional or Global channels of distribution arealso developed
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International Market Entry strategies
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Market Entry Once the target market has been identified, the
next step relates to the decisions regarding thealternative methods of entry. The variousmethods of market entry open to firm in a given
country are: Indirect exporting
Direct Exporting
Licensing Franchising
Joint Venture
Foreign subsidiaries
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International Marketing environment
Social factors
Political and government factors
Economic factors
Demographic factors
Competition
Logistics
Risk
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