International Marketing Globalisation is defined as a process of economic integration of the entire world thru the removal of barriers to free

trade and capital mobility as well as thru the diffusion of knowledge and information Marketing is defined as the human activity directed at satisfying needs and wants thru exchange processes. International Marketing is defined as the performance of business activities designed to plan, prie, promote and direct the flow of companys goods and services to consumers or users in more than one nation for a profit. It takes place when marketing /trace is carried our across the border or between more than one nation. Global Marketing is the process of focussing the resources and objectives of an organisation on global marketing opportunities ad needs. Intl marketing involves.. 1. 2. 3. 4. Identifying the needs and wants of customers in international market Taking marketing mix decisions across different countries Penetration into international markets using various modes Taking decision in view of dynamic intl market environment

Reasons OR Objectives of entering International marketing 1. 2. 3. 4. 5. 6. 7. Growth saturation of domestic markets, smaller countries (SGP, HongKong etc. have limited markets) Profitability price differential amongst markets Achieving Economies of scale Risk spread economic upheavals in home market can balanced Access to imported Inputs Uniqueness of Product or Service herbal prods, handcrafts, software development etc India has an edge Marketting Opportunity due to Life cycles - a product saturated in a domestic market may have demand in other countries 8. Spreading R&D costs large market size help absorb R&D costs

International marketing challenges 1. 2. 3. 4. 5. 6. 7. 8. 9. Political and legal differences Cultural differences Economic differences Differences in currency unit Differences in Language Differences in Marketing infrastructure advertising medium Trade and investment restrictions High costs of distance Differences in business practices

International Marketting challenges

American companies have identified huge markets internationally for their products and services. The markets are huge in terms of population, in countries such as China and India. The purchasing power of consumers and businesses in many countries is also significant enough for American firms to want to compete in these markets. However, international marketing is not without pitfalls, and U.S. companies have made costly mistakes by not adequately researching international markets before they commit resources there.

Identifying a True Market Need

A key to success in business is offering products and services for which customers have a compelling need. The customer has a problem that needs to be solved, and the product or service provides the solution in such an effective way that its benefits are not difficult to communicate. Identifying the true needs of large numbers of people in a foreign country is not easy. Not having lived in their culture experiencing their day-to-day lives, American marketing executives can err by assuming that what people in other countries want or need exactly matches the wants and needs of American consumers.

Dilution of Brand-Name Power

Due to the Internet, movies and other forms of entertainment, American culture and the corporate symbols of that culture--brand names--are well known across the globe. This does not mean the American companies’ products will be popular when introduced in other countries. Being aware of a brand name isn’t the same as preferring it. It can be a long and expensive process to gain the trust of consumers who have used their own local companies’ products for years or even generations. The American companies can be perceived as attempting to take over the position long held by local companies, causing resentment.

Cultural Nuance
Consumers are influenced to purchase products by marketing messages delivered through the media, including print media such as magazines. Humor is often used in commercial messages to get the consumer to pay attention. But what is considered extremely funny in one culture can be perceived as confusing or insulting in another. To produce effective advertising requires more than accurate translation of the message from one language to another. It requires a deep understanding of the culture, customs, morals and even religious views that predominate in that country. What motivates consumers to buy products varies from country to country.

Communication Style
Business executives from different countries can encounter several barriers to effective communication besides obvious language differences. The traditional pace of business negotiations can be different. Americans sometimes want to hurry negotiations along, whereas in some other countries emphasis is placed on building relationships before a business deal is seriously considered. Executives from other countries may place a higher value on things such as facial expression instead of just the words that are being said.

Distance and Time

Even with technologies such as video conferencing, executives in other countries may prefer to establish relationships on a personal level. For a smaller American company, this can mean a significant investment in travel costs and having key executives out of the office for extended periods. Time zone differences can make it difficult to coordinate projects where collaboration is required. Executives on the West Coast of the U.S. are just getting to work in the morning when their European counterparts are winding down for the day.

Finding Reliable Partners

American firms often establish relationships with distributors located in the countries whose markets they are seeking to enter. They hire sales reps based in those countries. They may engage local marketing and public relations firms to assist them. Because the American firm might have no prior experience in that country, finding people who are trustworthy and competent can be a challenge.

Stages of International Marketing

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No direct foreign Marketing o No activity in cultivating customers outside domestic market o Distributors / Dealers / Foreign Customers coming directly to the firm o Web Pages (Indication) Infrequent Foreign Marketing o Product surplus in domestic market o No intention of maintaining continuous market representation o Few companies fir this model as customers always look for long term commitment Regular Foreign Marketing o Marketing goods on a continuous basis to foreign markets o Overseas Middlemen / Own Sales force / Sales subsidiary o Adaptation of the product to the foreign market International Marketing / Multinational Marketing o Fully committed & involved in international marketing o Markets all over the world o Production & marketing activities outside the home market o The company formulates a unique strategy for every country with which it conducts business E.g. Balsara Mint / Cinamint Global Marketing o At this stage, companies treat the world, including their home market as one o Maximize returns through global standardization of its business activities o Efficiency of scale by developing a standardized product, of dependable quality, to be sold at a reasonable price to a global market o The company standardizes its logo, image, store, processes o Wherever necessary due to cultural differentiation adaptations are made (Multidomestic & Global Marketing can exist simultaneously) INTERNAL AND EXTERNAL INTERNATIONAL MKTG CONCEPT The key difference between domestic and international marketing is the multi-dimensionality and complexity of foreign country markets a country may operate in. Knowledge and awareness of these complexity and implications for international marketing is must. The important environmental analysis model SLEPT (Social, Legal, Economical, Political and Technological) 1. SOCIAL AND CULTURAL Influences a. SOCIAL: Difference in social conditions, religion and culture determines whether the customers are similar or dissimilar across the globe. McDonalds had to understand the same in India when they had to enter such huge market with its burger. In 1995 / 6 Indias vegetarian market was 40%. These vegetarians preferred that the burger should be made in a clean and separate kitchen. Also their love for spicy food was required to be considered. Among the non-veg. eaters, their disliking towards pork and beef among mean eater was very well known. McDonalds realize that they need to serve Indians more than just burger, a burger that satisfies Indians taste. b. CULTURE: Culture describes the kind of behaviour considered acceptable in society. The prescriptive characteristic of culture simplifies a consumers decision-making process by limiting product choices to those which are socially acceptable. The same feature creates problems for those products, which are not in time with culture. Coca Cola had to withdraw its 2 liters bottle from Spain market as Spaniards were not having refrigerator having larger compartments. Johnsons floor wax was doomed to failure in Japan as it made the wooden floors very slippery and Johnson failed to take into account the custom of not wearing shoes inside the home. Coca Cola when introduced in china the name sounded like KOOKE KOULA meant thirsty mouth, full of candle wax. So they had to change the name to KEE KOU KEELE which meant joyful taste and happiness. In Japan, White face is associated with death of mask.

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 The size of refrigerators in USA is very big compared to Indian refrigerators, as women there believe in storing vegetables and other eatable items, which can be consumed till longer period of time. Even the value and beliefs associated with colour vary significantly between different cultures. Blue considered as feminine and worm in Holland, is seen as masculine and cold in Sweden. Green is a favourite colour in Muslims, but in Malaysia, it is associated with illness. White is associated with death and mourning in China, Korea and in some traditions in India. Although, the same color expresses happiness and is color of wedding dress of the bride in English country. Such differences suggest that same marketing mix can not be used for all markets. 2. Legal Environment: Legal systems vary both in content and interpretations. A successful marketer will modify his marketing strategies in accordance with such variations. Laws affect the marketing mix in terms of products, price, distribution and promotional activities quite dramatically. For many firms such laws are burdensome regulations. For e.g. in Germany environmental laws mean a firm is responsible for the retrieval and disposal of packaging waste it creates and must produce packaging which is recyclable. In Canada, if the information does not appear in both French and English, the goods may be confiscated. An international Marketer should learn about the advertising, packaging, and labeling regulations in foreign markets. India has been seen by many firms to be an attractive emerging market having many legal difficulties, bureaucratic delays and lots of official procedures. Many MNCs have found it difficult to break such hard structure. Foreign companies are often viewed with suspicion. How ever, some firms have been innovative in overcoming difficulties. 3. ECONOMIC ENVIRONMENT: The economic situation varies from country to country. There are variations in the levels of income and living standards, interpersonal distribution of income, economic organization, occupational structure and so on. These factors affect market conditions. The level of development in a country and the nature of its economy will indicate the type of products that may be marketed in it and the marketing strategy that may be employed in it. In high income countries there is a good market for a large variety of consumer goods. But in low-income countries where a large segment does not have sufficient income even for their basic necessities, the situation is quite different. 4. POLITICAL ENVIRONMENT: The political environment of international marketing includes any national or international political factor that can affect the organizations operations or its decision-making. The tendencies of governments to change regulations can seriously affect an international strategy providing both opportunities and threat. (1992s liberalization policy by Narsimha Rao Govt.) An unstable political climate can expose firms to many commercial, economic and legal risks. Political risk is defined as being: A risk due to a sudden or gradual change in a local political environment that is disadvantageous to foreign firms and markets. 5. TECHNOLOGICAL ENVIRONMENT: The Technological Environment is perhaps the most dramatic force now shaping our destiny. An international marketer should very well keep in his mind the change taking place in technology and thereby affecting the product. New technologies create new markets and opportunities. However, every new technology replaces an old technology. Xerography hurt carbon-paper industry, computer hurt typewriter industry, and examples are so on. Any international marketer, when ignored or forgot new technologies, their business has declined. Thus, the marketer should watch the technological environment closely. Companies that do not keep up with technological changes, soon find their products outdated. The United States leads the world in research and development spending. Scientists today are researching a wide range of promising new products and services ranging from solar energy, electric car, and cancer cures. All these researches give a marketer an opportunity to set his products as per the current desired standard. The challenge in each case is not only technical but also commercial that means manufacture a product that can be afforded by mass crowd.

International Marketing Challenges

1. Media Regulations o comparative advertising e.g., Germany prohibits use of superlatives. o time allocations e.g., In Italy 12% ads per hour., o special taxes e.g., Japan, o type of product, type of copy and illustration, etc. 2. Language limitations - translating ad slogans, literacy levels, use of different languages. 3. Cultural diversity - Symbols, colors, tastes, values and beliefs etc. - subcultures. 4. Production and cost limitations - Poor quality printing, lack of high grade paper, film editing and processing facilities, high comparative cost for quality. 5. Media - Availability, Audience data, international media.

Market Entry strategies

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Worldwide competition
One of the product categories in which global competition has been easy to track in U.S.is automotive sales. The increasing intensity of competition in global markets is a challenge facing companies at all stages of involvement in international markets. As markets open up, and become more integrated, the pace of change accelerates, technology shrinks distances between markets and reduces the scale advantages of large firms, new sources of competition emerge, and competitive pressures mount at all levels of the organization. Also, the threat of competition from companies in countries such as India, China, Malaysia, and Brazil is on the rise, as their own domestic markets are opening up to foreign competition, stimulating greater awareness of international market opportunities and of the need to be internationally competitive. Companies which previously focused on protected domestic markets are entering into markets in other countries, creating new sources of competition, often targeted to price-sensitive market segments. Not only is competition intensifying for all firms regardless of their degree of global market involvement, but the basis for competition is changing. Competition continues to be market-based and ultimately relies on delivering superior value to consumers. However, success in global markets depends on knowledge accumulation and deployment.[1] tiwana.

[edit] Evolution to global marketing

Global marketing is not a revolutionary shift, it is an evolutionary process. While the following does not apply to all companies, it does apply to most companies that begin as domestic-only companies.

[edit] Domestic marketing

A marketing restricted to the political boundaries of a country, is called "Domestic Marketing". A company marketing only within its national boundaries only has to consider domestic competition. Even if that competition includes companies from foreign markets, it still only has to focus on the competition that exists in its home market. Products and services are developed for customers in the home market without thought of how the product or service could be used in other markets. All marketing decisions are made at headquarters. The biggest obstacle these marketers face is being blindsided by emerging global marketers. Because domestic marketers do not generally focus on the changes in the global marketplace, they may not be aware of a potential competitor who is a market leader on three continents until they simultaneously open 20 stores in the Northeastern U.S. These marketers can be considered ethnocentric as they are most concerned with how they are perceived in their home country.
[edit] International marketing

If the exporting departments are becoming successful but the costs of doing business from headquarters plus time differences, language barriers, and cultural ignorance are hindering the companys competitiveness in the foreign market, then offices could be built in the foreign countries. Sometimes companies buy firms in the foreign countries to take advantage of relationships, storefronts, factories, and personnel already in place. These offices still report to headquarters in the home market but most of the marketing mix decisions are made in the individual countries since that staff is the most knowledgeable about the target markets. Local product development is based on the needs of local customers. These marketers are considered polycentric because they acknowledge that each market/country has different needs. these are negotiation variables.

Global marketing Mix

Global marketing is a field of study in MBA.[2] When it comes to global marketing strategies, the Internet plays a highly significant role as the most powerful business weapon in today's globalized business world.

Elements of the global marketing mix

The Four Ps of marketing: product, price, placement, and promotion are all affected as a company moves through the five evolutionary phases to become a global company. Ultimately, at the global marketing level, a company trying to speak with one voice is faced with many challenges when creating a worldwide marketing plan. Unless a company holds the same position against its competition in all markets (market leader, low cost, etc.) it is impossible to launch identical marketing plans worldwide. Nisant Chakram(Marketing Management)
Product

A global company is one that can create a single product and only have to tweak elements for different markets. For example, Coca-Cola uses two formulas (one with sugar, one with corn syrup) for all markets. The product packaging in every country incorporates the contour bottle design and the dynamic ribbon in some way, shape, or form. However, the bottle can also include the countrys native language and is the same size as other beverage bottles or cans in that same country.
Price

Price will always vary from market to market. Price is affected by many variables: cost of product development (produced locally or imported), cost of ingredients, cost of delivery (transportation, tariffs,

etc.), and much more. Additionally, the products position in relation to the competition influences the ultimate profit margin. Whether this product is considered the high-end, expensive choice, the economical, low-cost choice, or something in-between helps determine the price point.
Placement

How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market. Using Coca-Cola as an example again, not all cultures use vending machines. In the United States, beverages are sold by the pallet via warehouse stores. In India, this is not an option. Placement decisions must also consider the products position in the market place. For example, a high-end product would not want to be distributed via a dollar store in the United States. Conversely, a product promoted as the low-cost option in France would find limited success in a pricey boutique.
Promotion

After product research, development and creation, promotion (specifically advertising) is generally the largest line item in a global companys marketing budget. At this stage of a companys development, integrated marketing is the goal. The global corporation seeks to reduce costs, minimize redundancies in personnel and work, maximize speed of implementation, and to speak with one voice. If the goal of a global company is to send the same message worldwide, then delivering that message in a relevant, engaging, and cost-effective way is the challenge. Effective global advertising techniques do exist. The key is testing advertising ideas using a marketing research system proven to provide results that can be compared across countries. The ability to identify which elements or moments of an ad are contributing to that success is how economies of scale are maximized. Market research measures such as Flow of Attention, Flow of Emotion and branding moments provide insights into what is working in an ad in any country because the measures are based on visual, not verbal, elements of the ad.

[Advantages and Disadvantages

Advantages

The advantages of global market we can introduce our product by using advertising:

Economies of scale in production and distribution Lower marketing costs Power and scope Consistency in brand image Ability to leverage good ideas quickly and efficiently Uniformity of marketing practices Helps to establish relationships outside of the "political arena" Helps to encourage ancillary industries to be set up to cater for the needs of the global player Benefits of eMarketing over traditional marketing

Reach

The nature of the internet means businesses now have a truly global reach. While traditional media costs limit this kind of reach to huge multinationals, eMarketing opens up new avenues for smaller businesses, on a much smaller budget, to access potential consumers from all over the world.
Scope

Internet marketing allows the marketer to reach consumers in a wide range of ways and enables them to offer a wide range of products and services. eMarketing includes, among other things, information

management, public relations, customer service and sales. With the range of new technologies becoming available all the time, this scope can only grow.
Interactivity

Whereas traditional marketing is largely about getting a brands message out there, eMarketing facilitates conversations between companies and consumers. With a two way communication channel, companies can feed off of the responses of their consumers, making them more dynamic and adaptive.
[edit] Immediacy

Internet marketing is able to, in ways never before imagined, provide an immediate impact. Imagine youre reading your favorite magazine. You see a double-page advert for some new product or service, maybe BMWs latest luxury sedan or Apples latest iPod offering. With this kind of traditional media, its not that easy for you, the consumer, to take the step from hearing about a product to actual acquisition. With eMarketing, its easy to make that step as simple as possible, meaning that within a few short clicks you could have booked a test drive or ordered the iPod. And all of this can happen regardless of normal office hours. Effectively, Internet marketing makes business hours 24 hours per day, 7 days per week for every week of the year. By closing the gap between providing information and eliciting a consumer reaction, the consumers buying cycle is speeded up and advertising spend can go much further in creating immediate leads.
[edit] Demographics and targeting

Generally speaking, the demographics of the Internet are a marketers dream. Internet users, considered as a group, have greater buying power and could perhaps be considered as a population group skewed towards the middle-classes. Buying power is not all though. The nature of the Internet is such that its users will tend to organize themselves into far more focused groupings. Savvy marketers who know where to look can quite easily find access to the niche markets they wish to target. Marketing messages are most effective when they are presented directly to the audience most likely to be interested. The Internet creates the perfect environment for niche marketing to targeted groups.
] Adaptivity and closed loop marketing

Closed Loop Marketing requires the constant measurement and analysis of the results of marketing initiatives. By continuously tracking the response and effectiveness of a campaign, the marketer can be far more dynamic in adapting to consumers wants and needs. With eMarketing, responses can be analyzed in real-time and campaigns can be tweaked continuously. Combined with the immediacy of the Internet as a medium, this means that theres minimal advertising spend wasted on less than effective campaigns. Maximum marketing efficiency from eMarketing creates new opportunities to seize strategic competitive advantages. The combination of all these factors results in an improved ROI and ultimately, more customers, happier customers and an improved bottom line.
Disadvantages

Differences in consumer needs, wants, and usage patterns for products Differences in consumer response to marketing mix elements Differences in brand and product development and the competitive environment Differences in the legal environment, some of which may conflict with those of the home market Differences in the institutions available, some of which may call for the creation of entirely new ones (e.g. infrastructure) Differences in administrative procedures Differences in product placement. Differences in the administrative procedures and product placement can occur