Biyani's Think Tank

Concept based notes

International Marketing
MBA Part-III

Miss Shashi Gurjar
Lecturer MBA Department Biyani institute of Science and Management Jaipur

Published by :

Think Tanks Biyani Group of Colleges

Concept & Copyright :

©Biyani Shikshan Samiti
Sector-3, Vidhyadhar Nagar, Jaipur-302 023 (Rajasthan) Ph : 0141-2338371, 2338591-95 • Fax : 0141-2338007 E-mail : acad@biyanicolleges.org Website :www.gurukpo.com; www.biyanicolleges.org

First Edition : 2011

While every effort is taken to avoid errors or omissions in this Publication, any mistake or omission that may have crept in is not intentional. It may be taken note of that neither the publisher nor the author will be responsible for any damage or loss of any kind arising to anyone in any manner on account of such errors and omissions.

Leaser Type Setted by : Biyani College Printing Department

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Preface

I

am glad to present this book, especially designed to serve the needs of

the students. The book has been written keeping in mind the general weakness in understanding the fundamental concepts of the topics. The book is selfexplanatory and adopts the “Teach Yourself” style. It is based on questionanswer pattern. The language of book is quite easy and understandable based on scientific approach. Any further improvement in the contents of the book by making corrections, omission and inclusion is keen to be achieved based on suggestions from the readers for which the author shall be obliged. I acknowledge special thanks to Mr. Rajeev Biyani, Chairman & Dr. Sanjay Biyani, Director (Acad.) Biyani Group of Colleges, who are the backbones and main concept provider and also have been constant source of motivation throughout this Endeavour. They played an active role in coordinating the various stages of this Endeavour and spearheaded the publishing work. I look forward to receiving valuable suggestions from professors of various educational institutions, other faculty members and students for improvement of the quality of the book. The reader may feel free to send in their comments and suggestions to the under mentioned address. Author

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Contents
S.No. Name of Topic Page No.
3-22

1. International Market Environment:-

  1.1) Meaning (International Marketing & International Environment)                                                        1.2) Characteristics    1.3) Importance    1.4) Identifying & Analyzing Opportunities    1.5) Changes in the world trading environment    1.6) IMF, WTO, World Bank    1.7) C‐factors (Countries, Currency, Competitors)    23‐32 

2. Understanding customer buying behavior:‐ 
2.1) what is customer Buying Behavior  2.2) Factors influencing buying behavior  2.3) Identify different stages of economic and political development   

3.  International Marketing Research   3.1) Meaning 
 3.2) Characteristics   3.3) Marketing Research   3.4) Selection of MR‐Agency   3.5) Comparative Analysis in international marketing appraisal   3.6) International Market strategy 

  33‐46 

3.7) International Marketing Planning

4. International Product Management
4.1) International Product Strategies
4.2) Product Portfolios  4.3)  Standardization & Adaptation  4.4)  Evaluation of stability with reference to marketing and financial implications.   

47-55

5. Marketing Communication
5.1) Meaning 5.2) Characteristics 5.3) Importance 5.4) Availability, Constraints, Suitability, Selection of agencies

56-60

6. Distribution & Logistics
6.1) Channel Management

61-74

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6.2) Characteristics and Importance 6.3) Foreign-Market Channel Management 6.4) Appropriateness for financial, distribution, marketing and international trade purposes, customer service levels-demand generation and costs.

7. Pricing Strategies
7.1) Meaning 7.2) Types of Pricing Strategies 7.3) Currency Considerations

75-79

8. Evaluating & Controlling
8.1) Evaluation and Control 8.2) Difficulties in evaluation &Control
 

80-82

 

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   Intense Competition    5. Explain the importance & Scope of International       Marketing.  Ans.   Broader Competence    4. Comprehensive risk  export & Import      Payments    Changes in fashion & Styles Sudden War Rules and Regulations Changes in Government For more detail: .           Nature of International Marketing    1.   According to Cateora: ‐ International Marketing is the performance of business    activities              That directs the flow of goods and services to consumers or users in more than one    nation.     and promote &direct the flow of a company’s goods & services to  consumers or users in more than one nation for a profit    According to Kotler: ‐ Global Marketing is concerned with integrating or  standardizing marketing           actions across a number of geographic markets.   Multinational Marketing Management    2.    3. price.Chapter ‐I    International Market Environment and International Marketing Q.   Controllable and uncontrollable factors:‐for international market uncertainty is    created by uncontrollable factors.    According to Cateora &Graham:‐It is the performance of business activities designed  to plan.http://www.com .gurukpo.         Credit Oriented      Political risk  6.1  Define International Marketing.

Q. Re-exporting (Importing semi-finished goods & Exporting final goods) 4. Marketing & Sales Facilities abroad 4. Exporting (Selling to foreign markets) 2. Political Nature Importance and Benefits of International Marketing 1) Survival 2) Growth of Overseas Markets 3) Sales & Profits 4) Diversification 5) Inflation & Price Moderation 6) Employment 7) Standard of Living 8) Understanding of Marketing Process Scope of International Marketing 1. Management of International Operations 4.3) Monitoring Operation of marketing practices of multinationals & other agencies. Characteristics of International Marketing:a) Large Scale Operations b) Dominance of Multinationals c) International Restrictions & Trading Blocks d) Need of Marketing Research e) Importance or Advanced Technology f) Keep and acute competition g) Need for long term Planning h) Develops cultural relations & maintains world peace For more detail: .2) Establishing Production or assembly facilities in foreign countries. What are the differences between Domestic Trade and International Trade? Ans.2 Define the Characteristics of International Marketing.com .1) Operating.7.http://www. 4.gurukpo. Importing (Buying from abroad) 3.

Maybe need to pay sales tax.etc International Trade: Restricted due to complicated custom procedures and trade barriers like tariff. Language And Cultural Barriers • • Domestic trade: speak same language and practice same culture International trade: Communication challenges due to language and cultural barriers For more detail: .http://www. labor. Broader markets • • Domestic trade: limited market due to limits in population. quotas or embargo • 3.Differences between Domestic Trade & International Trade The following are the major differences between domestic trade and international trade:- 1. Usage of different currencies • • Domestic trade: same type of currency used International trade: different countries used different currencies 4.gurukpo. Movement Of Goods • Domestic trade: easier to move goods without much restrictions.com . etc International trade: Broader markets 5. capital and labor capital and entrepreneurship from one state to another within the same country International Trade: Quite restricted • 2. Mobility in Factor Of Production • Domestic Trade: Free to move around factors of production like land.

Company considers marketing in India as foreign marketing.A U.Marketing methods used outside the home market.Marketing: . 3d) Foreign. Ans.S.It treats the whole world as a single market & standardizes the marketing mix of companies.3 Define the terms in international Marketing a) Domestic Marketing b) International Marketing c) Global Marketing d) Foreign Marketing And the difference between Domestic Marketing and International Marketing.3a) Domestic Marketing:-It is concerned with the marketing practices within the researchers or Marketers home country (domestic market). It has customized its menu offering according to local customers.Mc’ Donald have designed a restaurant anywhere in the world. It encompasses the domestic operations with a foreign country.http://www.Q.It focuses on the firm level marketing practices across the broader including market. Eg.gurukpo. For more detail: .com . identification &targeting. Entry mode selection & marketing mix & Strategic decisions. 3b) International Marketing: . Eg. 3c) Global Marketing: .

Very expensive and difficult . One set of uncontrollable variables. Product development & product planning varies from country to country. Deals with 2 or more culture. Single currency is used. Deals with many language. 3. Only local regulation. International and host country For more detail: . 5. Transactions are carried out in various currency. Deals with one culture. 6. Product development & product planning according to local environment. Easy to understand domestic competitive forces. 2.http://www.gurukpo. 4. Deals with one language. 8. Marketing practices within the marketer’s home country. 3. 5. 7. 2. Easy to conduct research. 9.Differences between Direct Marketing and International Marketing Domestic Marketing International Marketing 1. Difficult to understand. 8. Two or more set of uncontrollable variable. Marketing practices outside the marketer home country. 4. 1. 9. 7. 6.com .

gurukpo. Q.http://www. Process:Motivation for international Marketing Growth Profitability Risk Spread SWOT Analysis Decision to enter international markets Enter International markets For more detail: . Different countries have different legal framework. 11.4 Define the process of international marketing. International 10.Domestic 10.com . Domestic players are involved. What are the reasons for entering international markets? Ans. 11. Personal selling and other promotional methods not restricted through legal framework. International players are involved. Advertising.

gurukpo. Companies having small home market like-Singapore. Example . Firm enter international markets to explore opportunities their. Japan. Candilla Pharma entered into South America countries like Brazil and Argentania.Review Performance Consolidate Marketing efforts in global Marketing Reasons for entering International Markets:- Reasons for Entering International Markets Profitability Growth Achieving economies of scale Spreading R &D cost Why International Market Risk spread Marketing opportunities due to life cycle Uniqueness of product or services Reasons for Entering International markets1. Reddy. Growth When the domestic market potential saturates.com .Healthcare companies Cipla.http://www. For more detail: . Hongkong. Dr.

Example.com . Example. 7. It reduces dependence on one market only.world market is 4 times larger than U.Apple earn 390 million U.P. marketing support schemes contribute to enhance the profitability of firms. International marketing strategies can generate greater revenue and greater operating margins. Exemption from indirect taxes and duties. B. Achieving Economics of Scale Large scale production capabilities in international markets.S dollar net profit from foreign land and 310 m U. 6. Example.O sell at competitive price provide Indian firms edge over other countries. Herbal products. Handicraft. 3. reduction in unit production cost. World Economic TrendsFast growth of developing economies has created new marketing opportunities and has provided a major incentive for companies to expand globally. Uniqueness of product or service The products with unique attributes in order to meet competition in the overseas markets and enjoy enormous opportunities in international markets. Large scale production. Risk spread Overseas markets provide an opportunity to reduce their dependence on one market and spread the market risks. Profitability Price differentials and enhanced profits in international markets. For more detail: .Nissan. 5.S dollar from domestic land. Matsushita etc. Quality Quality and cost are the two important determinants of demand & these can better achieved in global firm. Caterpillar.S market 4. several incentives by government for export oriented production. Software.http://www.2.gurukpo.

9. Management Orientations/ EPRG Concept 1.http://www. It has a belief that the same marketing strategy can work in domestic and international market. privatization and globalization movement is opening up closed markets and has provided opportunities and threats.Indian products sold outside as Sal war.Privatization of telephone system. ETHNOCENTRIC ORIENTATION It assumes home country superior to the rest of world.com . L. Example . Dosa mix.P.gurukpo. 2. Environmental differences between markets are ignored.Saris. product development strategies.kurta . pricing strategies are different for different countries. scale economics.G movement Liberalization. Each subsidiary develops its own unique business and marketing strategies to succeed. Example.Citicorp’s financial services For more detail: . Opportunities outside the home country are ignored. The marketing mix decisions. Idli mix. resource utilization. POLYCENTRIC ORIENTATION It is a strong orientation to the host country.8. Example. Example -Experience transfers. Leverage Leverage is an advantage that a company enjoys that conducts business in more than one country. It emphasizes differences between markets. global strategy. Sambhar mix etc.

Imports may face tariffs. analyzing them and encashing them for developing one’s own business. For more detail: . 1.5 Success in international markets depends upon identifying opportunities in global business environment. Especially those with labor intensive products. Please elaborate this by explaining what you understand by international Trading Environment and what strategies should be applied for success? A Step 1: -Identify Basic Appeal For a potential market this entails determining basic product demand. Labor is essential to production in any country. 2. quotas. Financing can send production abroad if it is not available at home or when interest rates are high at home. Raw materials for manufacturing must be local or imported.com .3. b. REGIOCENTRIC ORIENTATION Firm treats a region as a uniform market segment and adapts a similar marketing strategy within the region. It identifies similarities between various markets and formulates a uniform marketing strategy. d. and whether there are bans on a product (such as alcohol in Islamic nations). or other trade barriers.Mc Donald’s strategy to not to serve pork and to slaughter animals through the Halal process is followed in Middle East or Muslim dominated countries.gurukpo. GEOCENTRIC ORIENTATION It considers the whole world rather than any particular country as the target market. Markets and sites not meeting requirements are dropped. Determining Basic Demand Must explore the suitability of a nation’s climate.http://www. Q. 4. Determining Availability of Resources a. Example. For a Potential site this involves determining the availability of resources required. c. Many companies relocate to lowerwage countries.

b. Step 2: Assess the National Business Environment Managers must understand differences in cultures. iii. They create investment barriers to ensure domestic control of a company or industry by imposing investment rules on business ownership. and customs. Political risk can threaten activities of any international business activity. or the level of managerial skills of the local people affect site selection decisions. Government Bureaucracy Lean and smoothly operating bureaucracy can encourage investment while an inefficient. history. attitudes towards business. Cultural elements can influence what kinds of products are sold and how. Nations differ in their attitudes toward trade and investment based on culture . Restrict international companies from freely removing profits. Companies must monitor political events that threaten operations and future earnings. cumbersome. 1.com . ii. Key to political risk is unforeseen political change: if a company cannot estimate the future political Environment with accuracy. 2. Government Regulation i.http://www. Cultural Forces a. laws.gurukpo. b. politics. Can quickly eliminate a market or site from further consideration. c. political risk is increased. ii. For more detail: . and economies and incorporate that understanding into market and site selection decisions.B. Countries differ in language. or corrupt one can discourage it. Cultural elements such as work ethic. and current events. Political and Legal Forces a. religious beliefs. Political Stability i. traditions. educational attainment. forcing them to hold cash in the host country or to reinvest it in new projects there.

Economic and Financial Forces a. consumers might not be ready or able to buy a product and/or certain sites may be unable to supply the resources needed. Managers can obtain information about economic and financial conditions from international agencies. Affects product image because products are stamped with labels identifying country of origin or assembly. Poor fiscal and monetary policies can increase inflation and budget deficits. b. iii. Country image can be good for certain products but unfavorable for others. These reduce investor confidence and cause companies to scale back or cancel proposed investments. Country Image i. 1. how they are sold. Other Forces A country’s image and the cost of transporting materials and goods are important in assessing a nation’s business environment. and their features. ii.gurukpo. Currency and liquidity issues: a volatile currency complicates the prediction of future earnings in the home-country currency. a.3. Different levels of economic development Require varying approaches to researching market potential. and slow innovation. Cost of Transporting Materials and Goods I) can affect where manufacturing facilities are located. lower productivity levels. For more detail: . II) Logistics is managing the physical flow of products from point of origin as raw materials to end users as finished products. weaken a currency. c. Measuring Market Potential Level of economic development affects the products sold. 4.com . Embodies all facets of a nation’s business environment and affects the selection of sites for any activity. Logistics weds production to delivery b. Step 3: Measure Market or Site Potential Despite local demand for a product and/or availability of resources. C.http://www.

including political. Measuring Site Potential a) Managers must assess the quality of resources they will employ locally. • Structure of wholesale and retail distribution networks. Emerging Markets i. • Volume of exports and imports of the product. the most important resource will be labor and management. b.com .a. • Future market outlook and potential opportunities. social trends. b) Competitor Analysis Competitor analysis should address the following: • Number of competitors in each market (domestic and international). Data on market size or potential may be unavailable. • Total expenditure on product (and similar products). Information in a typical industry analysis: • Names. including roads. relatively less skilled (though perhaps welleducated). • Country risk: Estimate risk of doing business. production volumes. c) Managers should examine local infrastructure. • Retail sales volume and market prices of product. airports. or both. and marketing approaches used. ii.gurukpo. • Market background. • Market share of each competitor • Whether each competitor’s product appeals to a small market segment or has mass appeal • Whether each competitor focuses on high quality or low price For more detail: . Industrialized Markets i. Select the Market or Site Managers visit each location to confirm earlier expectations and perform a competitor analysis. • Commercial infrastructure: Assess channels of distribution and communication. Great deal of information on market potential is available about industrialized countries. training local managers requires a substantial investment of time and money. economic. seaports.http://www. and financial risks. Yet. and telecommunications 3. or make personal contact with potential new customers And distributors. 2. including population. For many companies. Managers evaluate each potential location’s Contribution to cash flows by undertaking a financial evaluation. a) Field Trips Trips to each remaining site let managers experience the culture. ii. b) Wages are lower if labor is abundant. and market shares of largest competitors. Companies often face a lack of information. • Market growth rate: Identify large (but shrinking) markets and small (but expanding) markets. Can rank locations using a market-potential indicator if company is considering exporting: • Market size: snapshot of market size at the moment. observe the workforce. bridges.

500 pages listing commitments by countries on specific categories of goods and services. World Bank. A set of Agreements The WTO agreements are at the core of the WTO. it also discussed more issues (e. there was a failed attempt to create an “International Trade Organisation”. From 1948 to 1994. IMF. GATT was a provisional agreement and organisation under whose umbrella ‘negotiation rounds’ were held. They are the result of negotiations by the different members inside the WTO.6 Define the terms.http://www. They are essentially contracts – or promises that governments have to respect. For more detail: .…). 123 countries took part in the discussions. The most comprehensive round was the Uruguay round (1986 . These agreements are negotiated.gurukpo. services.• Whether competitors tightly control channels of distribution • Customer loyalty commanded by competitors • Potential threat from substitute products Q. anti-dumping measures. there have been 8 trade rounds. It’s members resolve to abide by its rules by becoming a member (Regional trade agreements are exempted and fall outside the scope of the WTO) History Already in 1948. agreed by consensus. At first. (the bulk of the world’s countries) The agreements provide the legal ground-rules for international commerce. and signed by the members. Who’s there? The WTO members are the governments of 148 countries. One of the results was 22.The World trade Organisation (WTO) is an organisation that deals with the rules of trade between nations at a global level. problem solving. the GATT (General Agreement on Tariffs and Trade) provided the rules for world trade. From 1948 to 1995. Over ¾ are developing countries and countries in transition to market economies.g. As each round had more countries involved.com . WTO. specific sector agreements. the rounds focussed on lowering tariffs (customs duties) on imported goods.1994). Ans.

there are extra (sub-) agreements and annexes dealing with specific sectors or issues.com . as an organisation. Supachai. there is ‘main agreement’ (containing broad principles): Goods: the General agreement on tariffs and Trade (GATT) Services: the General Agreements on Trade in Services (GATS) Intellectual property: Trade Related Aspects of Intellectual property Rights (TRIPS) Under each of these broad agreements. the ministers (representing their governments) adopt the results of the negotiations. It largely consists of technical staff. In the end.http://www. For each of these. It is based in Geneva. Many different WTO Agreements The WTO agreements cover three broad areas: goods. USA. The ‘General Council’ (i. Negotiations are undertaken by ‘experts’. Start of the WTO The WTO. E. A ninth round.g. there are the detailed and lengthy schedules (or lists) of commitments made by individual countries allowing specific foreign products or serviceproviders access to their markets.gurukpo. Panitchpakdi. It has a staff of about 550 and is headed by a director-general. They were created as companion organisations to the United Nations. was established on 1 January 1995. the ambassadors of the different countries) is in charge of the day-to-day work at the WTO.e. For more detail: . This takes place at the ‘WTO ministerial’ which is the highest authority. The IFI’s (International Financial Institutions) IMF and World Bank The World Bank (WB) and International Monetary Fund (IMF) were founded in 1944 in Bretton Woods. Who does what? The WTO has a very limited staff at its headquarters. the ‘Doha Development agenda’ is currently ongoing. there are agreements on agriculture or textiles as part of the GATT agreement (goods). services and intellectual property. Finally.

http://www. providing water and electricity. fighting disease. World Bank “The World Bank promotes long-term economic development and poverty reduction” “It provides technical and financial support to help countries reform particular sectors or implement specific projects. For more detail: . the Poverty Reduction and Growth Facility (PRGF) and through the HIPC (Heavily Indebted Poor Countries) initiative. What do they do? IMF The IMF main responsibilities: international monetary co-operation. Exchange rate stability.com . and protecting the environment. and Making its resources available (under adequate safeguards) to members experiencing balance of payments difficulties. banking and financial system supervision and regulation and statistics Financial assistance “Available to give member countries the breathing room they need to correct balance of payments problems” Continued financial support is conditional on effective implementation of this programme. leading to a more stable and prosperous global economy.” For example. Reducing poverty The IMF provides financial support through its concessional lending facility. establishment of a multilateral system of payments. The main functions of the IMF Surveillance: Regular dialogue and policy advice “The IMF discusses with country’s authorities (usually annually) the policies that are most conducive to stable exchange rates and a growing and prosperous economy. building schools and health centres. growth of international trade. including fiscal policy monetary and exchange rate policies.” Technical assistance: Offered in several areas.gurukpo. The IFIs are meant to contribute to financial stability and economic growth.

Q. Joint initiatives The IMF and World Bank have jointly launched two major initiatives to help poor countries. In 1999.Five agencies IBRD (The International Bank For Reconstruction and Development): provides loans and development assistance to middle-income countries IDA (International Development Agency): Interest free loans and grants to poorest countries IFC (International Finance Corporation): Financing private sector investments and technical assistance to governments and business MIGA (Multilateral Investment Guarantee Agency): Provides guarantees to foreign investors – also technical assistance to help developing countries promote investment ICSID (International Centre for the Settlement of Investment Disputes) Co-operation and overlap IMF – World Bank There is a lot of co-operation between the IMF and the World Bank as there are many areas of overlapping responsibilities.com . (E. the IMF and the World Bank introduced the Heavily Indebted poor Countries (HIPC) initiative “Reduce the external debt burdens of the most heavily indebted poor countries”.7 What are the Changes in the world trading environment? Ans.gurukpo.http://www. donor support.g. and the development outcomes needed to reduce poverty in low-income countries”. the annual meeting of the boards of governors of the IMF and the World Bank) The membership of both organisations is the same. There are many joint-meetings and missions. In 1996. the IMF and the World Bank initiated the Poverty Reduction Strategy Paper (PRSP) approach “A country-led strategy for linking national policies.World Bank One group . New trends in international Trade:1) Trade in agricultural and manufactured goods 2) Developing Countries’ trade 3) Global Production Network 4) Intra-firm Trade (Trade within the same company) 5) E-commerce (Doing business electronically) For more detail: .

often abbreviated as COO. a) Organization for economic Corporation and development b) Organization of petroleum Exporting Countries c) Eastern Europe d) Developing countries e) Others iii) Pattern of exports or Composition of exports iv) Direction of exports 3) Export Promotion 4) Trading Policy Reforms 5) Export-Import Policy Q. 1. Country of Origin a) Country of Origin:-Country of origin. production or growth where an article or product comes from. Currency and Competition are the most vital factors which help the international marketers for deciding their marketing strategies at global level. c) The origin of design can be more important than the country of origin. Country of Origin. Ans. These important themes may be seen in the most admired international companies. b) It is believed that the country of origin has an impact on the willingness to buy a product. Change in the value of trade 2. The important themes may be seen in the most admired international companies. is the country of manufacture. and consumers may tend to have a relative preference for or aversion to certain products that originate from certain countries.com .http://www.gurukpo.8 Elaborate briefly the impact of three ‘C’ factors on the firm’s marketing decisions. a) General Electric(US) b) Microsoft(US) c) Toyota (Japan) d) IBM)( US) e) WalMart(US) f) Coca-Cola(US) g) Dell(US) For more detail: . Change in the composition and direction of trade By direction of trade-----i) Patterns of imports or composition of imports a) Consumer goods b) Raw-Materials and Intermediates goods c) Capital Goods ii) Sources of imports or direction of imports India’s trading partners can be classified into 5 broad categories.Changes in India’s Trading Environment 1. Country of origin feature may be changed according to the following themes: a) an identity system 2) added value 3) a legal instrument 4) a differentiate device 5) an image in the consumer’s mind 6) a relationship etc.

gurukpo. For more detail: . Foreign currency (FOREX) transactions increase the risks involved in cross-border marketing. Current Swap is an agreement in which currency is exchanged at a specified rate only to be reversed at a future date. Most currency transactions are channeled through the worldwide interbank m arket. Foreign exchange market is a market where one currency is traded for another is called foreign exchange market. Country of origin has an influence on the brand image. The purpose of the foreign exchange market is to permit transfers of purchasing power denominated in one currency to another that is to trade one currency for another currency. Forward.the wholesale market in which banks trade with one another. Currency Every country has its own currency. reflect traditional strength in their international market strategy 2.The country of origin forms an integral part of the brand culture. Balsara.Swap transactions. Zandu. The prices charged in different markets are influenced by the exchange rate of the currencies involved. Taj Mahal depicts Indian culture and has strong Indian brand image. Forward contracts require execution of the transaction on the date of contract maturity because they are generally used by large international banks and MNCs. for example. usually expressed in foreign currency bought or sold on foreign exchange markets. Foreign exchange transactions are derived from transactions in the market for commodities.com . Himalaya. The world currency environments worth billions annually. services and assets among the people of two nations Foreign Exchange facilitates business across national boundries.http://www. Indian firms such as Dabur. For example a Japanese Exporter sells automobiles to a US dealer for dollars and a US manufacture sells machine tools to a Japanese company for Yen. The three major transactions in the foreign exchange market are the Spot. European Union (EU) have created a common currency Euro as means of avoiding fluctuations The UK decided not to join the Euro although the strong pound is damaging some of its exports.

Shell and B.http://www. in the oil etc.P. The nature of international competition is clear that:a) The new competition is between networks rather than single organizations. b) The development of world regional markets. Kodak and Sony. Microsoft and Apple in computer operating systems.3. Competitors face five forces including a) The threat of substitutes b)the threat of new entrants c) the bargaining power of buyers d) the bargaining power of suppliers e) intensity of rivalry Kotler describes following steps to assess competition: a) b) c) d) e) Identity competitors’ strategies Identity the organization’s competitors Determine competitor’s objectives Assess competitor’s strengths and weaknesses Estimate competitor’s reactions For more detail: .com . Competition The heightened impact of competition in world markets has influenced many aspects of international marketing strategy. The main areas are:a) The development of more integrated and coordinated international and global marketing approaches.g. b) The size of the foreign competitors is increasing and they have more resources to compete e.gurukpo. Good examples are Coca-Cola. Glaxo-SmithKline and Pfizer in drugs.

Draw a flow chart of consumer buying Behavior. use.Chapter-2 Understanding Customer Buying Behavior Q.gurukpo. Types of Buying Behavior: Routine Response Limited Decision Extension Decision Impulse Buying Consumer Buying Decision Process Problem Recognition Information Search Evaluation of Alternatives Purchase Decision Post-Purchase Evaluation For more detail: .http://www.1 Define the Consumer buying behavior. in satisfaction of their needs and wants. select. purchase. Learning Objectives: Understand the major factors influencing consumer behavior Know and recognize the types of buying decision behavior Understand the stages in the buying decision process Consumer Market: Consists of all the individuals and households who buy or acquire goods and services for personal consumption. and dispose of goods and services. Consumer Buying Behavior: The process by which individuals search for. See also consumer decision making.com .

Consumer Decision Making Process/Consumer Buying Process For more detail: .http://www.gurukpo.com .

Purchase Decision: . Post purchase Behavior Cognitive Dissonance: .http://www. 6.1.This is the final stage in the buying decision.com .Post Purchase Behavior of the consumer plays a significant role in the generation of favorable or unfavorable public opinion for the company’s product.This awareness may be on account of the search conducted by the consumer or due to promotional campaign of the marketing company about its product.Post-purchase cognitive dissonance is very important in this regard. Product Awareness: . Interest:-It may be viewed as a state of mind that exists when a consumer perceives a need and is aware of alternative products capable of satisfying that need. Post Purchase Decision: . out of several brands available in the market. 4. Evaluation of alternatives:-Once all the reasonable alternatives are identified. Consumer also uses the opinions of members of their families and other reference groups as guidelines in the selection of a particular brand.gurukpo. the consumer then evaluates each one to purchase decision. 5. For more detail: . 3. Need Recognition:-The buying process starts when an unsatisfied need creates tension. It is a state of anxiety in the mind of consumer due to the difficulty choosing a specific brand. 2. 7.

Q.gurukpo.http://www. Five Stage Model Of Consumer Buying Process Five Stage Model Of Consumer Buying Process Problem Recognition Information Search Evaluation Of Alternatives Purchase Decision Post Purchase Behavior For more detail: .com .2 Define the factors or determinants of the consumer buyer behavior.

and how the consumer behavior is measured in international marketing? The four types of consumer buying behavior are: 1. Reject those who are culturally dissimilar. Need very little search and decision effort. Personality Individual characteristics that make a person unique. Impulse buyingPurchase without planning or search effort. quality.Chinese consumers place greater emphasis on convenience of location. 3.http://www. For more detail: . comfort. pleasure. C. Consumer purchase on regular basis. durability etc. 1.Specialty goods Unfamiliar. Example. computers. High degree of economic risk. snack foods. Example. education.degree to which a culture fosters social inequality. Example-American style cocktails prove to be too much for Europeans who are accustomed to milder drinks. Routine Response/Programmed Behavior: Buyer low involvement frequently purchased low cost items.3 Define the types of consumer buying behavior.Q. National Characteristics – It states that people of each nation have a distinctive behavior and personality characteristics. expensive infrequently bought products. Koreans see themselves as being driven by 2 complementary passion-Han( bitterness) and Jang (devoted love). Examples include soft drinks. Consumer-Behavior in International Marketing Culture affects the psychological and social processes an thus affects consumer behavior. 4. Canadians sought fast decisions. Interpret others from the perspective of their own group. Non Rational Appeals-prestige. Learning Learning is a change in behavior that occur overtime. American are more concerned with Quality than the mannerism of the sales person. High power distance cultures emphasize prestige and wealth. Japanese prefer personal relationships. Motivation Rational Motives-price. Food and drink habits are learned. homes. A. 2.com . Limited Decision Making– Shopping goods Goods consume purchase on suitability. 4. milk etc 3. Extensive Decision Making/Complex high involvement. Consumer EthnocentrismDue to patriotic and nationalistic sentiments Consumer tends to buy domestic products. Power Distance.Furniture and clothing.gurukpo. price & style. Examples include cars. B.

Older Mexican consumers are less likely to buy U.S lifestyle create social pressure. Denmark. Adopters -18%. Prefer familiar products. opinion. BMW etc. Viewing them as status symbol. while Chinese prefer to cut the meet into small bite sized pieces before cooking. Canada.Mexican products are considered of inferior quality to those made in Japan and U. Example. New Zealand. Pressured. American prefer to cook big pieces of meat and to cut up on serving plate.22%. 3. 6. Attitude -Learned tendency to respond to an object favorably or unfavorably. Traditional-16%.13%. Consumers make their own preferences regarding product country match. 1. mostly Americans use sedatives as valium &Other pain relievers for headache Caused by stress.Australia. Psychographics Lifestyle or Activities. Achievers . Perception One’s culture greatly affects one’s perception. -Most people have favorable attitude towards automobiles as Mercedes Benz. Taiwan. USA.S. follow oldest values of their countries and culture and resist change.http://www. In Spain accepting credit is considered shameful situation. style leaders who makes statement about status and quality. Strivers. 5. Low power distance. 2. Germany or U. UK.S. 5. Thailand& Venezuela.S and Germany.gurukpo.U. For more detail: . Swedon. Japanese demand for drugs is small because these they take sound sleep after whole day work. Pakistan.26%. 2. Product Country match –Animosity Consumers may prefer automobiles from Japan.Example. It is an Analysis of consumer’s lifestyle and activities with purpose of relating these to buyer behavior. 4. older customers who respect new ideas without losing values.Greece.The Chinese perceive coke to look & taste like medicine. interest. Mexico. Chinese consumers have been found to hold animosity towards Japanese products in general. 4. Indians believe non-violence is a part of their culture.com . products than younger Mexicans. Lifestyle groups on worldwide basis are as follows1. Country of origin. -Attitude is influenced by culture. Example. Women who contend with economic & family pressures and have Little room for pleasure. Philippines. young people who work hard and seek convenience.

8. technological superiority. Philip Morris’s Galaxy brand was at one time perceived as diet cigarette & for the Reason Brazilians became ashamed to be seen with it because of social and personal pressures. It allows a reference group to operate.4 Explain consumer buying behavior. Reference Group It has direct or indirect influence on a person’s attitude or behavior. The more the product is visible & stands out more conspicuous it becomes. media selection.-Ford use Quality theme to affect consumer’s attitude. Family Family’s are Nuclear Extended Example. 7. attitude becomes more established. residence. source of income. Family background affects Purchase decision. freedom of business activity. . house type construct social group. For more detail: . product selection. advertising appeal selection and sales promotion selection. -As person grows older. Opinion Leader Individuals in a social group who influence attitudes of the members towards all the products.Many Asian and Middle East countries view status difference positively. education. In marketing products overseas MNC should appeal them. Individuals are motivated towards higher needs.http://www. business buyer behavior and government buyer behavior in different Economic and Political Systems? Consumer buying behavior in different Economies and Political System A) Consumer behavior in Democratic and Developed Nations (capitalistic economy):Nations have economic prosperity. 9. -In U.com . -Chinese social classes found that income occupation.American emphasizes individual freedom and children are taught to be independent. Japanese have a strong sense of responsibility and obligation to their families.Social class influences store selection.S occupation.gurukpo. Q. . Social Class -In U. 10. It is able to influence other members & affect their thinking and behavior in desired direction.S all are supposed to be equal.

institutions try to buy from their own nations. InstitutionsGovt. Elements of buying by govt. B) Consumer Behavior in Democratic and Developing NationsLess disposable income for consumers. Competition is high.C encourages export from their country and discourages imports.education and health care. and governmental institutions are important buyers in most national markets. Business buyer favor local supplier. Due to increasing growth potential of developing countries their buying behavior is changing. L. Businesses are trying to cut costs. Political Influence4. Buyer behavior in Democratic & Less Developed Countries Few business buyers Limited industrial development.power and communication . E) Consumer Behavior in Communist Nations Political power is in hands of people Who believe in equal distribution of goods . 2. National PreferenceGovt. purchase important product only. Consumers have limited choice of goods because of govt. Consumer has limited choice of goods because of government control and low disposable income.http://www. These are very attractive and more foreign retailers are investing their. Business Buyer Behavior in Democratic and Developed CountriesBusiness Buyers judge products on careful evaluation. Consumers have low income and little spending power and small market size.com . For more detail: . Business Buyer Behavior in Different Countries at different stages of Economic and Political Development 1. Consumers have high disposable income. Details of contract & criteria for selection are made available to interested parties. Government Buyer Behavior in different country at different stage of Economic and Political Development 1.Buying behavior must be matched to market.D. C) Consumer Behavior in Democratic and less Developed Nations These countries are poor and low level of economic and social infrastructure. They offer reliable high Quality products at lower price. 3. 2. control. Business Buyer Behavior in Democratic and Developing CountriesIncreased opportunities and demand for Infrastructure improvement . they engage in purchase of costly products. Tender systemPublic announcement of a contract for specific goods or services inviting to submitting a quotation for contract in tender. lower price. D) Consumer Behavior in Autocratic and Developed Nations Political power is in hands of people Who are concerned with rules & regulations. 3.gurukpo.

M. Classification of I.M. • To identify problems • To identify aspects of country’s environment that needs further study. recording and analyzing of data about problems relating to the marketing of goods and services.C influence of govt.5.D. collection. analysis.http://www. Buyer behavior in Democratic & less Developed countriesIn L. recording. Objectives of I. Buyer Behavior in Democratic and Developed CountriesDifficult to get contract 2. • To evaluate a country’s market potential. b) Multi country Research-Research conducted in more than one market.The marketer Based in country x wants to know Whether the marketing strategies that works well in domestic environment can be translated to country Y market. Govt. interpretation.Defense equipments 1.R • To carry out country screening and selection. c) Sequential Multi country researchIt is used for a geographical market one or two markets are researched and then it is applied to other countries. Govt. Marketing -Research Marketing research is systematic gathering. Chapter -3 International Marketing Research Q1.It is the systematic design. For more detail: . Govt. Type of business and govt. d) Simultaneous Multi country Research It involves conducting marketing research studies in multiple country market simultaneously. International marketing research: .R a) Single –Country Research. and reporting of information pertinent to a particular marketing decision facing a company operating internationally. is high. buyingExample. • To evaluate components of marketing mix. Buyer Behavior in Democratic & Developing Countries3.gurukpo. • To facilitate in developing a strategic marketing plan.What is International Marketing Research? Define the Classification and the process of International Marketing Research.com .

Information collected for a specific purpose.e) Independent Multi country ResearchWhen subsidiaries or branches of multinational companies independently conduct similar research on same products in a number of countries. Primary Data Research Approaches: Qualitative research has been particularly useful as a first step in studying international marketing phenomena. or causal research approaches.http://www. such as survey research. Example. International Marketing Research Process • STEP 1 Define the international research problem and agree on the research objectives Exploratory Research Descriptive Research Causal Research • STEP 2 Set specific objectives • STEP 3 Develop the International Research Plan • • STEP 4 Define Information Sources Primary Data: . involving either descriptive research approaches. Focus Groups Observation Quantitative researches are more structured. to address the problem at hand.com . Content Analysis Survey Research Experimental Research • • • • Secondary Data For more detail: .Awareness checks on international brands and test marketing of new products.gurukpo. such as experiments.

Regio centric both the similarities and differences are viewed of each country in relation to the world. and Validity Accuracy of secondary data can be questionable: Published statistics may be unreliable Sources of reliable data: World Bank United Nations Development Program Organization of Economic Cooperation and Development (OECD) • STEP 5 Design Data Collection Instrument Emic instruments measure phenomena specific to each culture. Ethnocentric Management of an organisation see the home market as superior.http://www.com . Geocentric Management have a worldwide view and can see the differences and similarities in home and host countries. but see similarities in other markets to their own. and Interpret Data • • Q. Reliability.2 What type of factors are needed while selecting the Foreign Market? Internal factors in Foreign market selection Personnel This section includes not only that of management but also employees. Analyze. Polycentric Management view each country as unique and outline the differences associated with each new country.• • • • • • • • • • • • • .gurukpo. Researchers must determine if the information is available. For more detail: . and. STEP 6 Decide on the Sampling Plan Sample Unit Sample Size Sampling Procedure STEP 7 Collect. how reliable it is Internal data is useful only if company has collected similar info from relevant respondents in a country with similar environment Secondary Data Constraints Conceptual Equivalence Concepts have different meanings in different cultural environments Functional Equivalence Products themselves may be used for different purposes in different country environments Availability. Etic instruments measure the same phenomenon in different cultures. if so.

“Social responsibility also incorporates the environment and the pollution restrictions imposed by each specific government. Corporate social responsibility “The social responsibility of business encompasses the economic.Management Management or the owner of the organisation will be an influencing factor in selecting a specific country for international trading. Customers Organisations customers’ may influence the market in which an organisation will select to compete in Capital requirements The organization will outline a cost-benefit analysis on each specific country and more importantly the capital requirements that Will be required for the initial outlay of a global orientation.” Time and research The decision on which country to select for international trading has an effect on the strategic development of an organisation.com . legal. Yet this decision will be affected by the element of time allotted for the decision. External factors in foreign market selection A) Market potential Aa) Market size           Ab) Market growth          Ac) Competitive intensity        Ad) Competitive entry      Ae) Entry barriers  B) Political environment Ba) Political issues for consideration in market selection  For more detail: .http://www. 2.gurukpo. into this country. ethical and discretionary expectations That society has of organisations at a given point in time”.

Research agencies have professional expertise. trade association. • Several consideration in agency selection decision1. 3. of research agencies are selected by preliminary screening. Agencies may be asked to submit written research proposal i.firms provide general information. E) Culture Global marketers who understand and recognize the meaning and substance of cultures other than their own and the associated behaviors In those cultures will have a significant global advantage? Q.. 3. Coordination- For more detail: . total cost. services.  Bc) Risk assessment  C) Legal environment A country’s legal environment can be identified as the rules and principles that nation states regard as binding upon themselves D) Economic environment Economic growth affects a countries attitude towards foreign business activity. the demand for goods and the distribution system found within the country. credibility and knowledge of marketing environment.http://www. 4. Advantages of research agenciesExpertise Knowledge Creditability Cost-effective • 1. Collection of information about research agencies sources of information include export promotion organization. Small no.e research methodology. time . 4. List should be pruned down to 2 or3 for detailed discussion. 2. Selection of Agency • The choice of Research agency to run a multi country research project may be made by headquarter or locally by regional headquarter.gurukpo. The economic environment is an important issue for international marketers to examine in choosing markets In which to expand their business. importers. expertise. 5. It helps client to select best agency. distributors in foreign market etc. list of references.3 what is Research Agency? How the selection of agency is taken place? Research Agency Selection • When a firm may not have the required knowledge of foreign marketing environment for conducting the research.com . advertising agencies. 2. 1.

customs etc. Company should examine willingness of agency to be flexible and coordination among members.com . Does it have good reputation in keeping matter confidential? Cost Letter of Agreement There is a written contract or letter of agreement which includesType of agreement Geographic coverage Remuneration Duration and termination Nature of report Q. 4. It includes norms.Consumption of wine acceptable in west but not in India.http://www. values. Communication 5.    Comparative Analysis in international marketing appraisal    1. E. Religion 3. Aesthetics 4. 3. • 1.g.4 Explain in detail the use of marketing research for comparative analysis in  international market appraisal. E. Culture can be learned.gurukpo. Track record of AgencyHow long the agency has been in business? What sort of problem has it dealt with? What clients it has served? Level of confidentiality requiredBack ground check-Does agency have any tie with potential competitor. Custom and Manner 6. Level of Expertise.Qualification of staff. Kind of behavior considered acceptable in society. Example.g. fieldwork. 2. 5. For more detail: . 5. 4. Value 2. Attitudes  A) Culture: Culture is a set of traditional beliefs and values that are transmitted and shared in society. –Westernization in India. 6. Culture is based on social interaction. 3.2. .Chinese parents preferred their children to have small feet.

Middle east.gurukpo.A.Japan. sarees. wearing burke by Middle C) Aesthetics It relates the artistic taste of culture. 3. But associated with sickness across much Asia.In U. Muslims don’t use alcoholic drink So a non alcoholic beer from Switzerland “Moussy” was manufactured.g. Southern Europe countries. E.North Africa. china. Chinese and majority of Indian not.http://www. 4.S. E. Eating habits. Indonesia. Hinduism 2. Korea. –To be honest and straightforward are considered right in U.g. Catholicism – Latin America. Cultural pride can make many nations reject foreign ideas and products. People in different culture have different ideas about the same subject. In many countries color black is associating with mourning. Islam.E. American preferred fried chicken.S B) Attitudes: Consumption pattern. White with joy and purity.Dowry Culture is shared and passed from generation to generation . In many Asian countries white is color for mourning. Christianity Protestantism.Asian consumer prefer boiled chicken.dressing habits like-Indians prefer East women.American Europeans and Arabians consume beef Whereas Thais.com . Buddhism. –Respect towards elders. Lifestyle. D) Religion1. What is right and wrong is based on culture. Aesthetically related area is color. Canada and Australia. Malaysia. For more detail: . Green is favorable in Islam.g.

For more detail: .alcohol good. Folk way. But In U.30 to 8.America. Indonesians avoid use of left hand while offering food and other objects.wisdom comes from age. U.K. A) Individualism. truth and justice. In Argentina 7 means it’s far too early. social & cultural characteristics  of foreign   consumers    Variation in Cultural values 1. Japan and India. Ii MoresAmerica. Australia. Chinese-20% English-6% Hindi-5% Russian-4% Spanish-3% Others-62% b) Non Verbal communication It means differently in different nature. In Arab countries it is considered bad manners to attempt to shake hands with person of higher authority. Hong. Mexico. Other oriented values – Relationship between individual and groups within society. Cross cultural analysis. Korea. B) AgeAmerican-youth oriented Asian. right of women. NormsI. In Great Britain 7 means 7.Kong. Collective.S it is reverse G) Value Marriage. • Cross Cultural Analysis is effort to determine to what extent the consumer of 2 or more nations are similar or different.E) Communication a) Verbal communication (Language)More than 5000 spoken language in world.com . Canada.  It Provides marketer understanding of psychological.gurukpo. honesty and loyalty. Saudi Arabia alcohol is punishable. New-Zealand etc. American feel avoidance of eye contact impolite F) Manners Indians meet their business partners with folded hands.time conscious In America 7 means 7.Taiwan. Japanese view eye contact as rude.http://www.

S encourages. Example-Perfect Rouge Shiseido brand lipstick targeted working woman. b).Nature• Most Northern European countries place high value on environment. New-zealand. • Example-Packaging and other environmental regulations are stronger in countries than in America. Religious/SecularIslamic countries and Catholic countries are religiously oriented. Hong-kong. Active/PassiveAmerican show quick response to problem. Denmark. India. In poor countries It is not valued. Australia. U. b.S high value is placed on Cleanliness. Japan are high in acceptance in power. ChangeIn comparison to Americans. E) Competitive/ Cooperative• Germany and Spain ban competitive ads and U. Environment Oriented Values Society relationship to its economic & technical as well physical environment. Hard work/LeisureIn Latin America work is viewed as necessary evil c). • China doesn’t have strong environmental orientation. c).) CleanlinessIn U. Self Oriented Values Approaches to life that the individual members of society find desirable. Koreans and Chinese feel less comfortable dealing with new situations. Example-Mc Donald has introduced more hygienic food preparation and toilets in east Asian markets and china. Brazil. status. 3. authority. D) Masculine/ Feminine• Are rank.S are low. Take action oriented approach. a.http://www. wealth in society. India.) Power DistanceDegree to which people accept inequality in power. d) .C) Extended /limited familyU. France.S. 2. prestige & important social roles assigned primarily to men or woman? • Due to increasing % of working woman in Japan Led to increased demand for time saving products.gurukpo.Extended families In Mexico-Adolescents seek parental advice. a).Narrowly defined In Japan.com . For more detail: .

SpaceAmerica and Northern Europe bigger space is better.com . • In Latin America.It plays small role in Chinese culture. cruel. Australians tends to view time as inseparable. Use of timePromptness is considered v. Canadians. important in America and Japan. Time Perspective• Monochromic PerspectiveAmericans. Europeans. Popular ford car Camet has limited sales in Maxico Where Caliente is slang for streetwalker.gurukpo. Middle east prices are negotiated prior to sale.S Golf ball manufacturer failed to penetrate Japanese market because it packaged balls in set of 4. ugly in Spain. • Pepsi lost its market share in Southern Asia when it changed color of vending equipment from deep regal blue to ice blue. Negotiation• Americans assume prices are uniform. Asia. 4. • Polychromic PerspectiveMost Latin Americans. Things• Clock is similar to word for funeral in China. FriendshipChinese relationships are complex. Fiera (A low cost truck designed for developing countries) faced sales problems because Fiera means terrible. • • Americans rely on legal system for business obligations. b). In China character of trading partner is important. For more detail: . Ice blue is associated with death in South Asia. g). In Latin America space is shorter. Indians view time as discrete and less important. Asians. Cultural Variation in Non-Verbal Communication • Ford Motors face problems. f). e). a).http://www. d). Symbol• A leading U. c). • • Whirlpool faced problems in Spain where its name is unpronounceable in Spain. fixed in nature.4 is symbol of death in Japan. • In most Asians and Latin American good personal relationships matters.

The setting of objectives (market share. market segment size and requirements. products and territories. product market and target segments.• • In China gifts should be presented privately. expected sales. profit). 3.com . b) Choice of target customers and market segments facilitates adequate allocation of resources within the supplier present and future market. h). Planning For more detail: .http://www. • The market decision process for each target customer at S. EtiquetteWay of behaving in social situation.   Q.U (strategic Business level) would involve. The Analysis of competition offerings (differentiation Analysis).B. The Development of International Marketing Strategy Marketing strategy decisions will be based on based on information about market potential. 4. • Japanese find American tendency to look into eyes to be rude. industry and market trends. sales and profit performance for customers. c) Market opportunities and risks associated with operating in different countries influence market choice at country level. • Japanese executives will seldom say no directly during negotiation as it is considered impolite. The analysis of demand (customer Requirement). 1. In Arab countries they are given in front of others. a) Selection of target customers & market is one of the basic strategies in international marketer. d) Global strategies are formulated at the corporate level and determination of overall allocation of company resources across countries. present and future competitive behavior. 2.gurukpo.5 What are the international Marketing Strategies that a Marketer has to adopt while  entering in the Foreign Market?    Ans. The definition of a strategy. 5. e) At the customer level actual and potential customers in each market of operation should be evaluated. customer requirement.

   Develop and implement a marketing action plan. weaknesses.6 How the International Marketing Planning is taken place in International Market? Ans. uncontrollable factors on the firm's strengths. and goals to attain a desired end. In other words.http://www.                                                                     PHASE I                                           A)   Preliminary Analysis and Screening          THE RESULTS OF PHASE (1) PROVIDE THE MARKETER WITH THE BASIC INFORMATION NECESSARY TO:       Evaluate the potential of a proposed country market.com .              THE ANSWERS TO THREE MAJOR QUESTIONS ARE GENERATED            IN PHASE 2:           Which elements of the marketing mix can be standardized and where is standardization not          Culturally possible?        Which cultural/environmental adaptations are necessary for successful acceptance of the  marketing mix?        Will adaptation costs allow profitable market?                                                                                 PHASE 3                                                Developing the marketing plan                                                                                                                                                            PHASE 4                                               Implementation and control                   For more detail: . International Marketing Planning:Planning is a systematized way of relating to the future. It is an attempt to manage the  effects of external.6. planning is the job of making  things happens that may not otherwise occur.   Identify environmental elements which need further analysis. 7. Further.  objectives.   Identify problems that would eliminate the country from further consideration.gurukpo.                                                                   PHASE 2                                   B)  Adapting the marketing mix to target markets. Implementation Control and evaluation Q. it is a commitment of resources to  a country market to achieve specific goals.

Example. 3. Geographical expansion is used to grab opportunities and respond to competitors. Firms sustain in domestic market or limited overseas market due to regulations. Outsourcing. KingsStrong product portfolio and wide geographic coverage.com . 1. Crusaders Firms having high geographical coverage and low product strength. Mc Donald.Tata motors with high product strength in motor vehicles acquired Daewoo Company. Pepsi. Barons High product strength and low geographic coverage.1 What are the International product strategies? Define the terms of Product Portfolio and Product Positioning in International Market. International product strategy International Competitive Posture Matrix-Given by Google and Larreche BARONS KINGS COMMONERS CRUSADERS Product Strengthening is used to create and maintain product competitive position in market.gurukpo. Strategic Alliance is used by firms to enter in foreign market. 2. Sony etc.http://www.Coke. acquisition or international product development is required by firms 4. Commoners Firms with low product strength and limited geographical coverage.Chapter‐4  International Product Management Q. Firms need to strengthen their portfolio For more detail: . Example.

Asia. Global ProductsThese products are offered in global Markets. Example. Africa. 3. It offers global view of international competitive structure. information and ideas. America. Product portfolio Analysis gives a correct picture of competitive situation.It is offered in a single national market. Local Products. Example-Renault was a European product.Toyota launches its lexus range as very luxurious cars. 1.http://www. It classifies a firm’s international performance on the basis of relative market share & growth rate. Decision relating to international product planning is based on marketing potential in host market and careful analysis. It’s portable. services.Coca-Cola develops a non-carbonated ginseng flavored beverage for sale in Japan. places.These products are offered in multinational regional markets.gurukpo. Example. 4. Product -Positioning • Kotler “ Positioning is act of designing the company image & value offer so that segment customer understand and appreciate what the company stands for in relation to its competitors”. Middle East. National Product.Products available in a portion of a national market. Product positioning can be achieved by emphasizing the attributes of products or benefits that consumers seek. It acts as guide for formulation of global international marketing strategy. • • • • • • • • • Types of Products 1. then Renault entered the Brazilian market and became multiregional company.Sony is a Global brand. experiences. events.C. It may include physical goods. Correnche (1980) notes that product portfolio approach is useful in formulating international marketing strategies. Difference between countries in terms of market growth and structure lead to the consideration of multiple market entries for given product.com . • For more detail: . 2.Product Portfolio • A product is anything that can be offered to a market to satisfy want or need.L. Example. It is set of company’s product mix and brands at different levels of P. Product portfolio approach is used for product planning. organisations. International Products . Renault acquire Nissan and capture the Europe. Latin America. Example-Cape Cod potato chips was a local product in England market. persons. Its portable personal sound system or personal stereos are global products.

Products remain same but their promotional Strategy is customized. Example-Gillette Razor:Consumer needs satisfied-disposable. needs satisfied and conditions of product use is same. difference in operating system require product modification 4. easy to use product 2. Example.S. Straight Extension Where the product function. Product Adaptation-Promotion extensionIn markets where conditions of product use are different but the product performs the Same function or satisfies the same needs.http://www. For more detail: . Indian housewives use Lukewarm water. Example. • • • •   Q.Rolex watches are positioned as exclusive products for wealthy.Coke and Lux brand of soaps etc. Product –Extension-Promotion Adaptation It is used in market where the product function and the needs satisfied are different but The conditions of product use are same.• • • 2. 3. Example-Bicycles are cost effective and affordable means of transport in low income countries. Example-Unilever launched Radion in U. In International market each market is unique in character & present different set of market opportunities and problems. A firm has to customize both product and promotion strategies. 3.k as a detergent that removes stale odour in washed clothes. Positioning by use/user. Example-In India chewing gum is viewed as children products Whereas it is used as a substitute to smoking in U. A single product is positioned differently in each market. Example.Washing habits of people vary in various markets. French use scalding hot water and Australian use cold water. This strategy is used. Positioning by product categoryPitching a product against similar product with difference in quality or price.according to user characteristics and life style. Dual AdaptationIn countries where the functions of the product and need satisfied are different and the conditions of product use are also different.gurukpo. It is used as means of recreation and health care in high income countries. Difference in electrical voltage.2 What types of product promotion strategies are adopted by International Market? INTERNATIONAL PRODUCT PROMOTION STRATEGIES 1.com .

Developing New Product• It is used in the market where product function.Philips introduced a hand wound radio in 2003.com . 5. need satisfied remain same but conditions of product use differ and consumers don’t possess ability to pay for the product. Maturity Production at multiple location Emphasis on creating product differentiation. innovating company establishes production in other developed countries to face local competition. Export grows to other developed countries and developing countries. IntroductionA majority of new product interventions are made in highly developed countries. Production in other developed countries. 4.k which has been largest manufacturer and exporter of bicycle . New products are made in highly industrialized and developed countries 2. Emphasizes on customer feedback and frequent modifications. 3. Example-In low income countries clothing serves the basic purpose of physical protection whereas in high income countries it symbolizes the personality and status.gurukpo. Growth Firm gets better opportunities for exports Price competition Standardization of products. U.http://www. Price of product is high. Decline Technical know-how and skills become widely available. Bicycles are at declining stage in developed countries and maturity stage in developing countries. Example. Product Life Cycle in International Markets: 1. Define the different stages of product life cycle in international market. Marketed in home country and export to other developed countries.to suit the needs of rural India where electricity supply is erratic and use of batteries makes the radio expensive Q3. Product attributes are offered by several competitors Price and cost competitiveness. Chemical and hazardous industries are shifting from high income countries to low income countries.import them. A firm establish its operations in middle and low income countries . Emphasis on cost effective locations. For more detail: . Competition determines prices.

Benefits Enable firm to tap market.Example-Perrier has adopted differentiated positioning strategy.K it is positioned as substitute for soft drinks with snob appeal. 3. Example. user characters & culture & benefit from product to determine ideal positioning strategy.Eg Revlon.Computer servers. Food. So marketer has to strike a balance between product features. translation of words and other cosmetic changes). Support services and payment to suit target market. Diamond.http://www. Firm customize the features.4 Define the concept of Product Standardization and Product Adaptation in International Marketing. Product -Adaptation Making changes in a product in response to needs of target market. Formidable Adaptation cost Production and distribution of product and services through standardization is simple and cost effective. Mc Donald. labeling. product uniformity is required. micro & macro processors and VAN (Value Added Networks). packaging. fashion and style are highly sensitive and customer preference varies.com .Levi’s jeans. Fulfill the need and expectation of customers For more detail: . Amway etc.gurukpo. Q. Factors that favor product standardization 1. 2. Watches. MTV. Example. Convergence of customer needs worldwide- When a consistent company or product image is needed. When customers from different countries share similar needs and want identical products. High level of technology Intensity To reduce confusion and promote compatibility. In France its sparkling water is positioned as ordinary bottled water and in U. Product –Standardization & Adaptation in International Marketing Product Standardization:-Process of marketing a product in overseas market with little changes (modified packaging and labeling.

Product Quality Decisions Quality plays an important role in maintaining goodwill and image in the market. Efficiency in use 6. Product Information 5.5 What are the trade off strategies are adopted between Product Standardization and Product Adaptation? Trade-Off Strategy between Product Standardization and Adaptation STANDARDIZATI ON ADAPTATION A firm has to carry out cost benefit analysis of its decisions. Helps in gaining market share Increases sales Product Adaptation by Mc Donald Mc Donald Hum burger in U. Firm needs to carry out product customization. Packaging and Labeling for International Market Packaging and labeling should meet importer’s specification and the regulations of the importing countries. Convenience in use 7. Quality Protection 3. The purpose of business organization is not to save the cost but to maximize market share and profitability.com . Q. Maharaja Mac in India Chicken Tatsuta and Teriyaki Chicken in Japan Kiwi burger in New Zealand Mc Palta-Hong kong Japanese firms have always adapted their automobile to American customers. Product Promotion 4. The lime taste of sprite was taken out because Japanese prefer a purer lemon flavor. Du pont has customized its manufacturing and marketing for Japanese market and design parts to their specification. 1.gurukpo. If a firm sells standardized products it leads to decline in market share and generate profitability to company. Recyclability For more detail: .http://www.S. Transport 9. Storage 8. A firm has to not any adapt mandatory quality requirement of target market but also attempt to achieve quality excellence. Physical Protection2.

Trade Appeal Q.6 What types of approaches are there while entering foreign market? Timing of Foreign Entry New Product Launch Waterfall Approach Products are launched in international market in a sequential manner. It is suitable in High competition Short life cycle High potential markets Large resources Example. For more detail: . Coca-cola took 20 yrs etc. Firms having low growth potential and resources. I.T software products etc. Example-Mc Donald‘s took 22 yrs to market outside the U.luxury consumer goods. Longer time is available to customize a product in Foreign market.http://www.S.10. Sprinkler Approach Product is launched simultaneously in various countries.gurukpo.com .

margins required by the trade to market the new product. For more detail: . Q. adoption (repeat purchase) frequency and the volume bought each time. therefore need to be prepared. 4) Based on the cost and anticipated sales revenue. warehousing. together with the associated balance sheet and cash flow analysis.http://www. An income and expenditure statement. promotion. promotion expenses and sales force cost. first purchase. Most of the reasons for failure of new products can be eliminated by the firm itself by properly evaluating the stability if products in terms of marketing and financial implications. An evaluation of stability is therefore an important task of the product manager. a) b) c) d) 1) 2) 3) External business environment analysis External competitive survey Internal capability audit Feasibility Analysis:-This study involves the following the following:Estimation of demand in target market at different price levels. Ans. f) Financial Analysis: .gurukpo. budgets and action plans relating to marketing and financing the product planning and its development. calculation of break even price and the sales.Microsoft Windows 95 . taking into account cost of transportation.A financial analysis needs to take place in order to assess whether the product concept can be made into a profitable proposition.Evaluation of Stability with reference to Marketing and Financial Implications Risk is inherent in all strategic decisions.com .7 Write a detailed note on Evaluation of stability with reference to marketing and financial implications. Forecasting sales based on demand estimation and competitive analysis Estimate the cost of serving the market segment.Global roll out: 4-6 million customers worldwide bought the operating system in the first three weeks after the launch.volume e) Test Marketing Analysis The new product is tested on 4 parameters: trial.

Marketing -Communication Market communication is the means by which firm’s attempts to inform. goods and services by sponsor. 5.v & other mass media. 4. company magazine. samples. place.1 What is Marketing Communication? Define the functions and the process of International marketing communication. t. coupons and gifts. brochures.com . magazines. motivations. attitudes. Communication mix 1. Personal sellingDirect selling by firm’s sales force & it is considered to be 2 way method of communication. Advertising-Any paid form of non personal presentation & promotion of ideas. catalogues. cultural events. Functions of Marketing Communication • Consumers can be told how & why a product is used. 3.http://www. internet etc. Public relation and publicity-Programmes designed to promote or protect a company image or its products.gurukpo. by which and when. International Promotional Mix: Understanding the norms. fax. email.Chapter-5 Marketing Communication Q. persuade and remind consumers directly or indirectly about the products and brands that they sell. 2. Direct MarketingFirm has direct interaction with customers. experience. For more detail: . -It is carried out through newspapers. seminars etc. radio. It includes sponsorship of sports. • It allows company to link their brands to other people. events. Sales Promotion-Short term incentive to encourage trial or purchase of product or service. telephone. -It includes rebates and price discounts. annual report. feelings etc. • Consumers can learn about who makes the product and what the company and brand stands for. and opinions of the target market is crucial to company success in marketing to and communicating with different cultures around the globe. interests. Use of mail.

samples.gurukpo. sales meetings.Sales presentation. Non personal communication Media • • • • • Broadcast media Interactive media Salespeople Telemarketers Trade show and exhibits Communication Process Source's environmental factors Receivers Environmental factors Source's field of experience Receivers Field of Source Encoding Information Decoding Receiver Noise Feedback Process of International Marketing For more detail: . fair and trade shows.http://www.com .

hearing or seeing. Message• It can be non-verbal. • Marketing message has an object is product (Marlboro cigarettes).face to face. 2. • Non-Personal-Mass communication channels. • Personal. ReceiverCustomer who receive message by reading. One cannot use a single language for an international campaign.com . word of mouth.2 What are the cultural issues that a marketer has to face while entering the foreign market? International Marketing Communication • SALES PROMOTION • PUBLIC RELATION • DIRECT MARKETING Cultural Issues and International Marketing Communications Cultural issues that international marketers need to consider when communicating with target audiences in different cultures. 1. • Language and cultural issues are considered. 3. Q. religion. • It takes longer time in advertisement. individualistic American).http://www. written or symbolic. Medium• The channel used to convey the encoded message. 6. The similarity or diversity of beliefs. The family and the roles of those within it are factors to take into account. 5. • Immediate response is obtained by personal selling. Sender• Marketing firm conveying the message. • • • • • • For more detail: .Communication • It aims at conveying a firm’s message effectively and accurately. DecodingProcess of transforming the sender message into thoughts. oral. The work ethic of employees and customers to be targeted by media. Feedback• Feedback is used to assess the effectiveness of communication process. Language will always be a challenge. 7. a sign or symbol (Marlboro cowboy) and interpret ant (rugged.gurukpo. Encoding• Putting ideas. morality and values in the target nation. Levels of literacy and the availability of education for the national population. 4. thoughts or information into a symbolic form.

Finland. Spain. 1. samples. Italy. Chile. gifts. • In France it is illegal to sell the product less than cost. Japan. Japan. marketer must consult local lawyers and authorities before launching a promotional compaign. Brazil. • In Japan legal. registration is required.S its legal but some restriction apply. Italy. contest. drugs and some agricultural products. Venezuela. France. Brazil. hungry. U.except pharmaceutical . • In Poland. New Zealand. France. govt. 3. 4. Columbia. • In Germany marketer must notify authorities in advance. tobacco. Sweden it is legal. . coupons. Australia. Belgium.Demonstration. Australia.It is short term efforts directed to the consumers or retailers to achieve specific goals. • In Spain. Premium and Gifts• In Argentina . Mexico.5% 2. Israel. • Germany restricts door to door sampling. Singapore etc premium and gift vouchers are legal. Price Reduction & Discounts• Austria has a discount law prohibiting cash reduction.1. Hungry it is legal . Italy. • In Belgium. Mexico. • P & G introduction of Ariel detergent in Egypt through road show and puppet show in rural areas. • In U. • In Austria and Germany special sales may be made only during specified period of time. Games and Contests • In Argentina. Brazil. • Singapore-legal but requires permission from authorities. point of purchase etc.http://www. Chille. For more detail: . tobacco.10% Belgium. New Zealand etc it is legal.com . • International marketer should know the specific law of each country. Mexico. U. Samples In Argentina. medicines and some food.K. Spain. Holland.gurukpo. notification required. Consumer Promotion 2. 1. • When product concept is new & has small market share. New Zealand.20% tax on prize value.S product sampling is legal with restrictions on alcohol. • Some countries have set limit to premium. Japan. Columbia.Australia. Discount for payment on delivery may not exceed 3%. Malaysia. . Trade promotion • It is effective in low developed countries. except medicine. SALES PROMOTION -S. • In UK legal but some restrictions on alcohol.P is marketing activities that stimulate consumer purchases & improve retailer or middle Man effectiveness and cooperation. Poland. Ireland. Sweden.alcoholic beverages. Govt.

• • Italy.R practices in countries can be affected by cultural traditions. social and political contexts. • Eliminate intermediaries.http://www. faxes and other directly to consumer.S with effective publicity & sales promotion compaign. In high income countries.K Tyres sponsor sports events in Europe. brochures. • Personalized service. 2) Door to Door Marketing. e-mails. Technological advances as proliferation of telecommunication and I. economic environment. • Example. release of news about company. Avon and Tupperware rely on door to door marketing worldwide. Nike was able to overtake Adidas in U. • • • • • • • • 2. notification required. It includes sponsorship of sports. Example-Amway. as public relation activity.org For more detail: . cultural events. Mary kay cosmetics etc. 3) Multi-level MarketingA core group of distributor is recruited who pay registration fee to company and works as sponsor. 1) Direct Marketing.com .legal 45% tax on prize value & govt. P.Amway. contribution to sports and other events. professional firms offer specialized public relation services. Indian firm J. Avon. PUBLIC RELATIONS Public relations aim at building corporate image and influencing media and other target groups to have a favorable publicity. • Send your requisition at info@biyanicolleges. 3.In Japan motorcars are sold door to door.sending letters. DIRECT MARKETING Selling products and services to customers without using any market intermediary is termed as direct marketing.gurukpo. A public relation effort should foster goodwill and understanding both inside and outside the company.T has facilitated direct marketing. In low income countries the word of mouth mode of publicity is used. • Helps in building customer relationships. • Provide direct contact with the customers. The rapid growth in credit card usage has increased payment over Internet. UK subject to compliance with lotteries & Amusements Act.

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