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International Marketing

International Marketing

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Published by Kiran Virani
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Published by: Kiran Virani on Apr 13, 2011
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06/15/2013

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I
NTERNATIONAL
M
ARKETING
(IM)
EYUR
DV
ASAVA
.. Module 1. International Marketing: Nature Process and Benefits:
1.
I
NTERNATIONAL
M
ARKETING
 Definition:International marketing is the performance of business activities designed toplan, price, promote, and direct the flow of company’s goods & services toconsumers in more than one nation for profit.
2.
I
NTERNATIONALIZATION
P
ROCESS
 D
EFINATION
:Internationalization is the process of planning and implementing productsand services so that they can easily be adapted to specific local languagesand cultures, a process calledlocalization. The internationalization process issometimes called translation or localization
The process of Internationalization can be described as “the process of increasing involvement ininternational operations”. (Welch and Luostarinen, 1988). The process essentially involves the adaption of firm operations like strategy, structure, resources etc. to perfectly fit the international environments.Furthermore, the degree of internationalization can be measured as foreign sales relative to total sales.(Welch and Luostarinen, 1988).The goal of the Internationalization process is to have a pronounced global presence in an attempt tokeep abreast with their competitors, to generate improved profitability and be known as a multinational; a
 
sure sign of success and credibility. The process typically entails generalizing a product tocounterbalance and efficiently expedite the subsequent localization process. The result is an improvedquality product as well as reduced localization costs and time to market. The internationalization processmay involve the following tasks: 
Reduce surplus or repetitive text.
Modify and/or settle on a final text before the localization and translation process.
Application of standard language/nomenclature.
Creation of a glossary containing original, technical or perhaps unclear terms.
Implementation of a coherent writing style.
Adherence to grammar rules
Flexible layouts that fit right-to-left or top-to-bottom scripts
Application of programming tools that support foreign language character sets. (RFIDwizards,2007). Several theories have been postulated over the years to maintain and enhance the essence of theprocess of internationalization. According to the theories of the stage model; the process of internationalization may be successful if a specific prescribed path is followed. Strategic decisions that thefirms have to face play a vital role in validating the above assumption.The internationalization process is described as a gradual development taking place in distinct stages(Melin 1992). The process can be clearly identified under two major schools: (1) the models initiallydeveloped by Johanson and Wiedersheim-Paul (1975) and Johanson and Vahlne (1977), referred to asthe Uppsala models (U-models); and (2) the Innovation-Related Internationalization Models (I-models)conceptualized by Cavusgil (1980). Both the I-model as well as the U-model emphasizes on firm’sinvolvement in foreign market segments. The U-model describes the process as "a gradual acquisition,integration and use of knowledge about foreign markets and operations and a successively increasingcommitment to foreign markets” (All business, 2000). The strategic choices under the U-model areinfluenced by many factors which include certain aspects which either help in or suppress exports,information requirements and collecting informational data, foreign market selection and entry (includingthe effects of cultural distance), expansion, and marketing strategies (Leonidou and Katsikeas 1996).Due to the various factors involved, it is rather difficult to accurately assess this model. In Cavusgil's I-model, the involvement of exports is operationalized by the ratio of sales/export, which in turn indicates afirm’s reliance on foreign markets.
 
In the process of internationalization; market knowledge is gradually increased and the company gets aclear picture over time, reducing the involved uncertainties. Different companies gather a differentapproach but with a similar objective in mind. If the process of internationalization is relatively slow, it isprimarily because companies either want to avoid risks or are unable to gather relevant or enoughknowledge and information.
3.T
RADE
T
HEORIES
 
I
NTL
. T
RADE
T
HEORY 
1)
Mercantilism
countries should export more than they import - balance of trade
surplus – result in more gold & silver for governments trade
conducted by governments Led consolidation of power trade withcolonies
import less-valued raw materials export more-valued manufacturedgoods
views trade as zero-sum game
2)Absolute Advantage
proposed by Adam Smith
countries differed in their ability to produce different goods efficientlyand should specialize in the production of goods they can produce moreefficiently
views trade as a positive sum game countries will benefit from trade if they have an absolute advantage in one product
3)Comparative Advantage
even if a country has an absolute advantage in both products it shouldSpecialize in production of that good in which it has a comparativeadvantage
proposed by Ricardo

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