International Marketing

Presented by :Rahul Arjun Ina Swati

What is international business

- Wide range of activities involved in conducting business transactions

across national boundaries

- Described as being heterogeneous, universal and sequential
- Comprehensive approach to operations of both large and small firms

engaged in business abroad

- Concerns all activities of the firm (selling, procurement,

outsourcing)

- About seizing global opportunities (market expansion or

diversification)

Orientations: Export, Internationalization, Global

ization

What is international marketing?

The performance of business activities designed to plan, price, promote and direct the companys flow of goods and services to consumers or users in more than one nation for a profit. A company that wants to sell their product in other than domestic market should understand the environmental factors, consumer behavior, market forces and other characters relevant to the international market.
International marketing is defined as

After understanding the definition several questions may arise in your mind like why marketer should go the international market ? And what is the difference between international marketing and domestic marketing. The difference between domestic marketing and international marketing are listed below

Difference between
International
Domestic marketing

marketing

Culture :In that multi culture

Culture :Single culture and in some cases multi culture

 Data accessibility:-

Data accessibility:-

Very difficult
Data reliability :-

Easy
Data reliability :-

Very Low

High

Consumer preferences : Consumer preferences

Vary from country to country

Product mix :-

Vary in small extent

Product mix :-

Adaptability required Currency exposure :Required

Standardization required Currency exposure :Required only if it into the importing.

Advantages of international marketing:

1.International marketing provides growth opportunities for the companies whose domestic market is maturing. For example, General motors focusing its strategies on the emerging markets like India
2. It brings the major portion of sales and profits to the

company. For example, Unilevers major revenue comes from the Asian markets.
3. It generates employment: Indian textile sector

which exports majority of the product produced is large employer after agriculture and retail.

4. International market also acts as survival place for the companies. If one market become unattractive either they establish their operation in another country or outsource the major functions to streamline the businesses. 5. It helps in improving the standard of living in the country.

Approaches To International Marketing

The orientation towards the market varies with a

company to company. Each one adopts different approaches on the basis of their exper tise or strength of the company. Some companies ada pt same product for all the markets while others differentiate to each countries The three common approaches used in the international market are a. Domestic market extension approach. b. Multi domestic market orientation. c. Global market orientation.

 Domestic market extension :-

Companies that adopt this strategy thinks intern ational markets are secondary to its domestc markets .
Multi domestic market orientation:

In the international market each country has its uniqueness Their preference varies.The Consumer profile is different from domestic operation Companies develop different market plans for such markets.
For example, In France men use more cosmetics than the women where as in India women use more cosmetics than men. A cosmetics company should change the product positioning differently.

 Global market orientation:

in this approach company thinks that products needs are universal in nature irrespective of country they work. Here company tries to standardize their products or services. For example, Sony walkman is same across the world. The product information brochure contains explanation in different languages of different countries. The final product is same in all the countries.

EPRG Model
Ethnocentric: everything is centered on the domestic market. Polycentric: several important foreign markets exist.

Regiocentric: the market is composed of several large economic regions.

Geocentric: the world is one large global market.

EPRG Model - Characteristics

Ethnocentric Approach International operations are secondary Polycentric Each country is relatively independent Geocentric The world is one common market Global vision of the world Unifying differences in the world market World headquarters Matrix structure

Vision Priority

Centered on the Each market is domestic market unique Searching for identical segments in foreign markets National headquarters International division Taking into consideration differences in foreign markets Subsidiary in each country Division for each zone

Planning center Structure

EPRG Model - Characteristics

Ethnocentric Staff Citizens from the domestic market Extension Polycentric Citizens from each market Adaptation Geocentric Most qualified

Marketing strategy Management style

Extension, Adaptation, Creation Integrated and interactive

Centralized

Decentralized

Production

Domestic

Local

Low-cost sources of supply

Strategic alliances World market

Partnerships Performance

Agent, licensing Domestic

Joint-ventures Local market

Functions of International marketing

Planning

how to do business globally

monitor environments very closely plans fit the culture

Organizing Adapt to cultural and environmental differences. Open communication system

 Pre-international stage

Companies with a product or service that incorporates the latest

technology, is unique, or is superior may consider themselves ready for the international arena. The first strategy used to introduce a product to a foreign market is to find a way to export the product. At this phase, the firm adds an export manager as part of the marketing department and finds foreign partners.

International division stage

Pressure may mount through the enforcement of host

country laws, trade restrictions, and competition, placing a company at a cost disadvantage.

 Global structure stage

A company is ready to move away from an international division

phase when it meets the following criteria: The international market is as important to the company as the domestic market. Senior officials in the company possess both foreign and domestic experience. International sales represent 25 to 35 percent of total sales. The technology used in the domestic division has far outstripped that of the international division. As foreign operations become more important to the bottom line, decision making becomes more centralized at corporate headquarters. A functional product group, geographic approach, or a combination of these approaches should be adopted. The firm unifies international activities with worldwide decisions at world headquarters.

 Staffing

Success of any business

Familiar national labor laws

Directing]
Cultural differences Employee attitudes toward work and problem solving

differ by country The style of leadership

 E.g.
In countries like France and Germany, informal relations with employees are

discouraged. In Sweden and Japan, however, informal relations with employees are strongly encouraged, and a very participative leadership style is used. Incentive systems also vary tremendously. The type of incentives used in the U.S. may not work in Europe or Japan, where stable employment and benefits are more important than bonuses.

Controlling
Geographic dispersion and distance, language barriers,

and legal restrictions complicate the controlling function. Meetings, reporting, and inspections are typically part of the international control system.

 crucial function for multinational managers.

e.g.In many countries, bonuses, pensions,

holidays, and vacation days are legally mandated and considered by many employees as rights. Particularly powerful unions exist in many parts of the world, and their demands restrict managers' freedom to operate.

International Business Management Overview

Why companies opt for IB?

To increase sales and profit

Economy of scale Full capacity utilization may be difficult without foreign markets. Possibility of identifying niche foreign market ( hence a scope of premium pricing) Possibility of extending product life.

To acquire resources such as technologies, capital, manpower (skill/ talent) and information

Reasons for international trading between companies

Amongst individual companies there is an increasing need

for them to expand their markets into the international arena for a number of reasons, namely: To increase the overall level of total profits Because the home market might be saturated To take advantage of an innovative to the world product or service To satisfy the goals of corporate management who might wish as a general matter of policy that the company should be committed to international operations

 To enjoy the corporate tax advantages offered in overseas

countries To enjoy the funding benefits from setting up manufacturing and assembly bases in certain overseas countries which might also offer access to the trading block to which that country belongs To obtain economies of larger scale operations Freer trade in general as a result of GATT accords