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Globalization: world is becoming more homogeneous and

distinction between national markets are fading out and will
eventually disappear
Globalization drivers: take advantage of underlying market, cost,
environmental, and competitive factors
Global marketing evolution:
1. leverage of domestic capabilities: foreign market
entry(economies of scale)
2. expansion of foreign market presence(economies of scope)
3. coordination of global operation(exploit synergies
throughout network)
Globalisation drivers: Market factors
 Growth in world trade
 Firms made global investment, shifting locations of
 Impact of new technology and developed infrastructures
 Emergence of trading blocs
Convergence of consumer demand
 Channels of distribution become more global
Countries, institutions and individuals are all linked
Great pressures to quickly gather, manipulate, analyses and
disseminate information
Ongoing global technological innovation impact all business
activities, increasing the level of global competition
Changing roles of participants in international marketing
Globalisation drivers: Cost factors
 Avoiding cost inefficiencies and duplication of efforts
 A single-country approach maybe not be large enough to
achieve economies of scale and scope, and synergies
 Size as a major asset, with many mergers and acquisitions in
aerospace, pharmaceuticals, telecommunications
Globalisation drivers: Environmental
 Decrease in government barriers
 Rapid technological evolution
 Emergence of new-generational global players: mini-
nationals or ‘born global’ (newer companies with sales
between $200m and $1b)
Globalisation drivers: Competitive factors
 Leading companies drive globalisation process through their
global network
 Global marketers look for new markets and focus on best
product categories for growth
 Important to execute global strategies and prevent others
from having undue advantage in unchallenged markets

Strategic planning process:
Assessment and analysis
 Understanding and adjusting the core strategy:
-clear definition and participation of executives from
different functions
 Market and competitive analysis:
-simultaneous focus on a broad range of markets,
understanding of customers and structure of the global
 Internal analysis:
-assessing internationalization readiness
Objective setting
 Choice of competitive strategy:
-cost leadership, differentiation, or focus
 Country market choice:
-evaluating internal strengths against market attractiveness
 Segmentation:
-taking advantage of the benefits of standardisation for
segments that span markets
Base for international market segmentation
a) Environmental bases: geography, political, economic, culture
b) Marketing management bases: product, promotion, price,
distribution (4P)

Develop the global marketing program
 Degree of standardisation in the product offerings
 Marketing program beyond the product variable
 Location and extent of value-adding activities
 Competitive moves to be made
Implement global marketing
 Global marketing success is based on achieving the balance
between local and regional or global concerns
 Local differences matter

Challenges of global marketing
Local resistance: not-invented-here (NIH) syndrome
Balancing between country managers and global managers at
Ability to develop and implement global strategy trough
management process, organizational structure, and overall
corporate culture

Management process
Ensure local managers participate in the development of
marketing strategies and programs for global brands
Encourage local managers to generate ideas for regional and
global use
Maintain portfolio containing local, regional and global brands
Allow local managers to control their marketing budgets

Organizational structure
Matrix structure focuses on customers
Execute global account management to build relationships with
important customers

Corporate culture: global, Transparent
Competitive strategies for local companies

Dodger 躲避者 Contender 竞争者 Defender Extender
Difference between Domestic & International Marketing
Differences in national environments
Differences in the organization of companies
Extra management decision step – which geographic market[s]?

Benefits from International Marketing
Economies of scale
Spread risks of economic downturns and political, cultural or
social changes
Reduce vulnerability to increased competition
Increased technical and managerial skills
Firms active in overseas market quickly become aware of new
-New markets – New techniques
-New products – New applications

Motivations to Internationalise
-Profit advantage
-Unique products
-Technological advantage
-Exclusive information
-Managerial urge
-Tax Benefits
-Economies of Scale
-Competitive Pressures
-Overproduction/Excess Capacity
-Declining domestic sales
-Saturated (饱和) domestic market
-Proximity (亲近) to ports and customers

Change Agents
Internal:new management, Shareholders
External:-Demand -Other firms –Distributors -Export Agents -
Government activities

Acculturation -adjusting or adapting to a specific culture other
than one’s own
High context / Low context culture
cultural imperialism 文化帝国主义

Internal education programs include:
-culture-specific information
-cultural general information
-self-specific information.

The objective of training programs is to foster
Sources of cultural knowledge:
Factual (or objective) information: obtained through
communication, research and education
Experiential information: obtained by being involved in a culture
other than one’s own.

Training challenge
Training rigour low to high (factual, analytical, experiential)

The major elements of culture include:
-values and attitudes
-manners and customs
-material elements
-social institutions
Making culture work for marketing success
Embrace local culture.
-Be the best possible corporate citizen.
›Build relationships.
-Local ties are invaluable in expansion and countering political risk.
›Employ locals and gain cultural knowledge.
-The best way to understand a market is to grow with it.
Help employees understand you.
-Local employees need corporatisation to be effective.
›Adapt products and processes to local markets.
-Constant and consistent product redevelopment efforts are
›Coordinate by region.
-The transfer of best practice is critical.

Market characteristics: Population, Income, Consumption
patterns, Infrastructure
Population can be broken down by:
-Age distribution (Aging populations)
-Life expectancies (Low development = low life expectancy)
-Household size (Product features and size)
-Urbanisation (Different definitions of urban)
Income is useful for the initial screening of market potential
›Per capita GNP is the primary indicator of purchasing power
›Income Distribution
›Purchasing power parities (PPP):
–shows how many units of one currency are needed to buy
goods and services in the currency of another country

Consumption patterns: Income spent on necessities gives an
indication of market development levels
›Increase income/ Decrease % spent on necessities
›Not necessarily uniform across regions
›Inflation impacts buying habits
Infrastructure: -energy (electrical and fuel) consumption
-land, rail, waterway or air traffic networks for distribution
-communication systems for marketing (telephone, computers,
broadcast media, print media)
Effects decision to enter market
-Distance Physical > psychological > culture
-Pricing: expensive modes of transport to secure quality of
-Topography Barriers: land and water, pipelines, few access points
-Climate -Product/distribution -Modifications
-Natural Resources -Securing long term supply

Regional economic integration: economic union 经济联盟, common
market 共同体, customs union 关税联盟, free trade area 自由贸易区

Political Environment
›Structure of Government
›Political parties
›Ruling parties philosophy -Communism vs Socialism etc
›Government policy regarding international trade and investment

Sources of political risk
›Competing political philosophies (nationalism, socialism,
›Competing religious groups
›Social unrest and disorder
›Vested interests of local business groups
›Recent/impending political independence
›Armed conflicts
›Internal rebellions for political power
›New international alliances

Types of political risk
›Ownership risk: exposes property and life
›Operating risk: Involves interference with the ongoing
operations of a firm
›Transfer risk: Encountered when shifting funds between

Political Risk Effects
›Confiscation 没收充公: loss of assets without compensation
›Expropriation with compensation 有偿征用: loss of freedom to
›Operational restrictions: market share, product characteristics,
employment policies, locally shared ownership, etc.
Political Environment
›Loss of transfer freedom: financial, goods, personnel or
ownership rights
›Breaches or unilateral revisions in contracts and agreements
›Discrimination such as taxes, compulsory subcontracting
›Damage to property or personnel from riots, revolutions, wars
and terrorism
Reducing risk
›Accumulate information before making decisions
›demonstrate that it is an integral part of the host country
-Contribute to economic and political goals
-Increase exports to earn hard foreign currency
›Monitor political developments
›Joint Venture with Local partner
Reduce Political Risk
›Expand investment base -Involve other investors, banks etc
›Insurance -EFIC: Export Finance & Insurance Corporation
›Sell/license technology -Rather than capital investment
Approach to managing risk
1. Risk identification
2. Risk assessment and measurement: generate financial
model, integrate risk
3. Manage and monitor risk: respond: avoid, insure, mitigate
4. Communicate risk: reporting and decision making; the role
of senior management

Political Variables affecting International Business
›Export Controls -National security, foreign policy, retaining goods
in short supply
›Import Controls
-Tariffs, quota systems and prohibitions
-Protectionist 贸易保护主义 – higher domestic prices develops
uncompetitive industries
›Embargos 封港禁运, Sanctions 制裁处罚, Boycotts
›Exchange Controls
›Price Controls -Food, health care

Positive Political Variables
›Investment Incentives
›Low Taxes
›Adequate 充足 cheap labour
›Special economic zones

WTO, 1995, improve trade and investment flows around world
IMF, 1944, Offers funds to members for international currency
stabilization purposes, Works at the macro level
World Bank, 1944, Provides economic assistance to war-torn
countries and to developing nations, Works at the micro level

Policies aim to maximize opportunities in export markets and
negotiate among conflicting domestic interests
Imports may compete with local production: may result in job
Exports may deprive 丧失the local market: may force up prices

International and domestic research
›New parameters: duties, foreign currencies and changes in their
value, different modes of transportation, international
documentation and port facilities
›New environments: -test and re-evaluate firms’ assumptions
-require firms’ to research the host country

Foreign-market opportunity analysis (cursoy): market data,
product data, trends, government regulations and restrictions
Researching foreign market potential
1. Screening for attractive country market
2. Assessment of industry market potential
3. Company sales potential analysis
Foreign firm evaluation: competitive standing, reliability, quality
of service/product consistency, length of delivery time
Domestic and foreign government rules and legislations must be

Macro-level information: tariff and non-tariff data, government
trade policy data
Micro-level information: local laws and regulations, local
standards and specifications, distribution systems, competitive
Degree of research centralisation: centralised approach,
coordinated approach, decentralised approach
Use of outside research services depends on: size of a firm,
environment familiarity, research capability of the outside
Research technique: In-depth interviews, Focus groups,
Observation, Surveys
Question format: structured or unstructured / direct or indirect /
cross-cultural equivalence
Element of product
Core product: core benefit or service
Tangible product (differentiate): packaging, brand name, quality,
Intangible product: positioning, country of origin
Augmented product (differentiation, positioning): installation,
after-sale service, warranty, delivery and credit

Standardisation versus adaptation -Extent of product modification
Encourage standardization:
Econmies of scale in production/ in product R&D/ in marketing
Shrinking of the corld marketplace/ econmic integration
Global competition
Encouraging adaptation:
Differing use coditions
Government and regulatory influences
Differing consumer behaviour patterns
Local competition
True to marketing concept

Factors affecting adaptation
›The market(s) that have been targeted
›The products and its characteristics
›Company characteristics
›Most products have to be modified
•Voluntary adaption–For example, ISO quality procedures
•Mandatory adaption
•The market environment
• Product characteristics
• Company consideration
›Decision-support systems
›Environmental conditions
›Assessment as a function of time
›Export learning leads to greater standardization

Market environment: Government regulations, Non-tariff barriers,
Economic development, Climate and geography
›Government regulations -political and social agendas
›Non-tariff barriers -product standards -testing or approval
procedures –subsidies -bureaucratic red tape
›Economic development -buyers buy and demand more versions
of more products -backward innovation -competitive offerings
-monitor competitors
›Climate and geography -can make products vulnerable to
damage -trade-off between shelf life and preservatives
Customer characteristics, expectations and preferences: Local
behaviours, Tastes, Attitudes, Traditions, May dictate product
adaptation, Consumption patterns, Psychosocial characteristics,
General cultural criteria, Positioning -consumer perception of a
brand relative to competitors brands, - differs across markets

Factors affecting product adaption:
1. Consumption pattern - pattern of purchase/ usage,
2. Psychosocial characteristic – attitude toward product/ brand
3. Cultural criteria
Product characteristics: Product constituents, Branding, Packaging,
Appearance, Method of operation or usage, Quality, Service,
Country-of-origin effects
Product characteristics: Product constituents 成分
›Ingredients must be sensitive to local market e.g. McD in India
Product characteristics: Branding
›Must not offend local customers ›Counterfeiting 伪造
Semantic variation 语义变化 ›Translation ›Transliteration 音译
Transparency 透明 ›Transcultural
Product characteristics: Packaging
›Protection ›Promotion ›User convenience ›Technological
Product characteristics: Appearance
›Styling, colour, size
›Consumer perception
-Brand identification -feature reinforcement
Product characteristics: Method of operation or usage
›Voltage, power plugs and sockets vary
›English and metric standards differ
›Local language
Product characteristics: Quality
›Cannot compete on price alone ›R&D investment
›Compliance with ISO standards may be required
Product characteristics: Service
›Repair arrangements ›Finding local staff ›Warranties
Product characteristics: Country-of-origin effects
›Influences perceptions of a product
›Promotional tool - product must match country’s image

Secure intellectual property rights through patents, trademarks
Enforce IP rights through: legislative action, bilateral and
multilateral negotiations, joint private sector action, individual
company measures
Global transformation of services
›Innovations in technology
›Deregulation –e.g. health care services must compete globally
›Labor-intensive & technology-intensive services are going global
Strategic implications of international services marketing
›Training ›Spirit, values and attitudes ›Service pricing
›Financing flexibility ›Distribution

Export intermediaries
Indirect exporting vs. Direct exporting vs. Distributors vs. Agents
Licensing: A firm permits another to use its intellectual property in
exchange for royalty payments
E.g. trademark, copyright, technical know-how
Licensing Advantages:
›No capital investment, knowledge, or marketing strength
›Huge profit potential
›Minimal risk of government intervention
›A stage in internationalization
›Preempt market entry before competition
›Increasing intellectual property rights protection
Licensing Disadvantages:
›International marketing experience
›The licensor may create its own competitor

Principal issues in negotiating licensing agreements:
›Product and/or patents rights
›Compensation needs to cover: transfer costs, R&D costs,
opportunity costs
›Licensee compliance: export control regulations, confidentiality,
record keeping
›Dispute resolution 调解纠纷
›The term, termination and survival of rights must be specified

Franchising advantages:
›Market potential
›Financial gain
›Saturated domestic markets
›Reduces the risk; proven concept
›Governmental perspective

Foreign direct investment (FDI)
›The greatest commitment
›Carried out by multinationals
›Depends on international sales
›Maintain a degree of control

Major determinants of FDI:
1. Marketing factors: size of market, market growth, desire to
maintain share of market, desire of advance exports of
parent company, need to maintain close customer contact,
dissatisfaction existing market arrangements, export base.
2. Trade restriction: barriers to trade, preference of local
customers for local product
3. Cost factor: desire to be near source of supply, availability of
labor/ raw materials/ capital/ technology, lower labor cost/
production costs/ transport costs, financial inducement by
government, more favorable cost levels
4. Investment climate: general attitude toward foreign
investment, political stability, limitation on ownership,
currency exchange regulation, stability of foreign exchange,
tax structure, familiarity with country
5. General: expected higher profits
Reasons for FDI: Marketing factors
›Desire for growth
›Political know-how and influence
›Operate abroad as a domestic firm
›Resource seekers look for natural or human resources.
›Market seekers look for better opportunities
›Efficiency seekers look for economic sources of production

Reasons for FDI: Derived demand
›As the demand for a firm’s products or services increases globally,
other firms (i.e. their suppliers) will also experience increased
›Suppliers often invest abroad
Reasons for FDI: Government incentives
›Governments need to provide jobs
›Fiscal incentives e.g. tax credits
›Non-financial incentives e.g. investment in infrastructure
The positive view on FDI investors:
-economic growth
-introduction of new capital
-transfer of technology and managerial skills
-new employment opportunities
The negative view on FDI investors:
-overdependence on multinationals
-brain drain 人才外流
-starvation 匮乏 of local capital markets
Types of ownership: Full ownership
›Ethnocentric 种族优越感considerations
›A matter of principle
›Host government’s view
›Market stability
Types of ownership: Joint ventures
-preferred by the governments of host countries
-overcome market access restrictions
-pooling 联营 of resources
-better relations with local firms
-governments’ FDI inexperience 缺乏经验
-relationship maintenance
-partner loyalty
-profit related disagreements
Types of ownership: Joint ventures – Strategic alliances
›Form of joint venture: help develop markets, spread risk, transfer
›Find the right partner
›Outline contingencies 意外事件
›Adapt to market conditions

After mid-term
Links producers and customers: -Directly sell -Use intermediaries
-Use outside distribution system
Relationships are crucial
›Configurations 配置 vary
›Manage multidirectional connections:
-physical movement of goods and services
-transactional title flows
-information communications flows

Length: number of levels or types on intermediaries;
Width: number of institutions of each type in the channel

Determinants of channel structure and relationships:
External: customer characteristics, culture (distribution culture),
Internal: company objective, character, cost, coverage, control,
continuity, communication
›Customer characteristics
-Demographics -psychographics -what do customers
need? -why, when & how?
›Distribution culture
-existing channel structures -relationships between channel
members -change is difficult
-the only distribution system is already taken -seek partners
who can develop markets
-may be blocked by government
›Company objectives
-market share -profitability -expansion through
›Character is the nature of the product -channel design must
match the product
›Capital is the financial requirements
›Maintenance costs
-intensive uses the largest number of intermediaries -selective
uses a few intermediaries
-exclusive uses only one intermediary
›Some control is lost when intermediaries are used -depend of
the type of product or service
›Continuity -market commitment -responsibility of the
›Perceived distances cause problems -social -cultural -
technological -time -geographical

Selection of intermediaries
›Distributor relationship -buys the product -complete
marketing service
›Agent relationship -does NOT physically handle the goods -
commission basis

Type of exporting function
›Indirect -sell goods to a domestic firm that in turn sells it
›Direct -marketer takes direct responsibility
›Integrated -investment into the foreign market

Sources for finding intermediaries
›Governmental agencies -e.g. Austrade
›Private sources -trade directories -websites

Screening intermediaries: Key criteria
›Performance -financial standing -sales figures -
product lines -physical facilities
-market coverage
›Professionalism -reputation -degree of help needed
-cooperation and commitment

The distributor agreement
›Contract duration
›Geographic boundaries

Termination of the channel agreement
›Reasons to terminate: -changes in distribution
approach -lack of performance
-violating terms of the agreement -breaking the law

Grey markets
›Legitimate goods bypass proper import channels
-price segmentation and exchange rate fluctuations allow
unauthorised importers to exist
Solutions to grey markets
›Stronger contractual relationships
›One-price policies
›Different product versions for markets

E-commerce ›Communications tool ›Interactive
relationships ›Hub sites
›Response and delivery challenges ›Governmental role
International logistics: The design and management of a system
that controls the flow of materials into, through and out of
international corporations
›Just-in-time (JIT) delivery ›Electronic data interchange (EDI)
›Early supplier involvement (ESI) ›Efficient customer response
(ECR) systems
International logistics: Phases in the movement of materials
›Materials management -through the firm ›Physical distribution
-from firm to customers
Total-cost concept
-minimises costs by implementing the systems concept
-maximises after-tax profits in the international arena
Trade-off concept
-e.g. locating warehouse near customer decreases delivery times
but increases storage costs
The impact of international logistics ›Fuel costs ›Growing
demand›10-30%of an order
›New dimensions -geographical distances -currency
-varying entry regulations -different transportation modes
›Transit time ›Predictability ›Cost ›Non-economic factors-e.g. gov
›Bill of lading: -acknowledges receipt of good -contract between
buyer and seller -evidence of title to good

›Shipper’s export declaration: -authorisation for export -
governmental data collection
›Shipper’s declaration for dangerous goods
›Consular invoice: -data collection
›Certificate of origin: -ensures correct tariffs
›Import licenses
›Foreign exchange licenses: -allows the importer to pay for the
Factors in deciding on the level of inventory to maintain:
›Order cycle time: -total time that passes between order
placement and receipt of the goods
-reduce order cycle time without increasing costs
›Customer service levels: -responsiveness of inventory policies
›Inventory as a strategic tool: -currency valuation changes -
hedge against inflation
International storage issues
›Trade-off between: -availability –adequacy -physical condition –
›Foreign trade zones -no duties -storage, packaging, inspections
etc. -‘made in’ status

The marketing communications process: sender (encodes
message based on objectives) – message – message channel –
receiver (decodes message) – communication outcome –
The promotional mix:
›Advertising n-non-personal mass communication
›Personal selling -person-to-person communication
›Publicity -non-paid, commercially significant news
›Sales promotion-extra product value
›Sponsorship -event or cause
Push strategies: Personal selling, Higher cost per contact,
Industrial goods
Pull strategies: Mass communication, Large target audiences,
Long distribution channels
Promotional mix coordination
›Target market and product characteristics
›Promotional budget size
›Type and length of international involvement
›Control considerations
Direct marketing: ›Immediate and measurable ›Mailing
lists ›Extensive planning
Trade shows: ›Display of products to: -perspective buyers, -
suppliers, -the press
Reasons to participate in trade shows: ›Product
examination ›Goodwill and contact cultivation
›Find intermediaries ›Meet decision makers ›Market research -
competitive intelligence
›Short time period ›Reasonable cost per contact
Reasons not to participate in trade shows: ›Cost ›Difficult to
choose the ‘right’ one ›Coordination
Trade Missions: ›Government-approved ›Organisedby trade or
industry ›Invitation only
›Solo exhibitions ›Video/catalogue exhibitions ›Virtual trade
Personal selling: ›High cost per contact ›Immediate customer
›Determined by exporter’s degree of internationalisation
Difficulties: ›Cultural› Economic ›Ethnic ›Regulatory ›Demographic
Planning promotional campaigns:
›Target audience: Multiple audiences, Cause-related marketing,
Corporate image-umbrella campaigns, Positioning
›Specific campaign objectives: Global, Regional, Local, Must be
measurable-awareness -market share
›Budget: Links marketing objectives with media, message and
control decisions, Set on a market-by-market basis, Control
›Media strategy: Target audience characteristics, Campaign
objectives, Budget, Media availability, Product or service offered,
Media habits of audience, Media availability, Ads must comply
with national regulations, Conflicting national regulations, Product
influences: -restrictions -consumer protection regulations -local
cultural values, Product placement, Audience characteristics: -
distribution -audience composition -advertising exposure, Global
media: -targetability -client-compatible editorial -editorial quality
›The promotional Message: What consumers buy and why?
Diffusion, Customers evaluate criteria, The product’s positioning
›Campaign approach: Outside services -offer better coverage-e.g.
advertising agencies-mega-agencies
›Campaign effectiveness: Pre-testing copy appeal and recognition,
Sales, Awareness, Intention to buy, Coupon return, The firm can
use the same techniques measuring effectiveness at home and
abroad, Audiences will differ, Interpretation can lack equivalence

Personal selling: ›Associated with high-priced items ›Most is done
by subsidiaries
›Training is crucial to success

Sales promotion: ›Not advertising, personal selling or publicity
›Local regulations may prevent or limit use
Public relations: ›Builds images-earn understanding and
acceptance ›Internal public relations-builds corporate
culture ›External public relations -builds global identify
Sponsorship marketing: ›Investment in an event or cause ›Rising
costs ›Decreasing ROI
›Ambush marketing-the unauthoriseduse of an event
›Cause-related -public relations -sales promotions -corporate
Social media and electronic word-of-mouth
›Social media: -use of communications technology to facilitate
interaction among individuals and organisations
›Electronic word-of-mouth: -information about a product or
service can be made available globally via the internet
Social media has grown in popularity because traditional
marketing communications are:
-‘one-way’ –expensive –inefficient -fragmenting
Forms of social media: blog, wiki, forum, podcasting
Why do social media work?
›Consumers’ natural social tendencies to seek, create, and share
content online
›Growth of information and communications technologies
›Ability to reach countless consumers in novel and engaging ways
›Ability to track and measure consumer behaviour and target
highly specific market segments

›Viral marketing: -technique that facilitates and encourages
people to pass along a marketing message to other users or sites
›Personalisation aspect of social media sites is powerful
›Consumer-generated media (CGM): -publicity and other
marketing communications that consumers create themselves
Marketing dimensions of social media:
›Generate exposure for the firm and its products
›Build brand equity
›Drive traffic to corporate websites
›Link with other sites across the internet
›Leverage social networks
›Generate buzz and spread specific messages virally
›Generate product sales
›Conduct market research
›Develop ideas for new products and marketing approaches:
-crowdsourcing is the act of mining a group of customers for new
product ideas, improvements in marketing methods, and other
useful outcomes
›Garner publicity from news media
›Improve search engine rankings
›Achieve cost effectiveness
Challenges of social media:
›Sends the wrong message: -viral spread of rumors, scandal, and
news stories portray the firm and its brands in a negative light
›Resource intensive:
-critical to designate a team of managers dedicated to constantly
monitoring and maintaining the firm’s social sites
-neglected corporate blogs convey the impression the firm cares
little about its customers and their needs
Results are difficult to measure: -measures used in traditional
media do not work
-difficult to measure the technology’s return on investment to the
›Lack of access: -‘digital divide’ occurs when people lack
knowledge on how to use computer technologies
Social media and international communications: Personal selling
›Useful for finding, connecting with, and engaging prospects
›Means to deliver the right message to the right audience at the
right time
›Consumers at the early stage of the buying cycle: -provide basic
information about their problems and the solutions
›Individuals in a later phase: -more detailed information about the
benefits of the firm’s offerings
Social media and international communications: Public relations
›Non-paid news or editorial commentary intended to generate
goodwill for the firm or its products
›‘Press room’ for quickly access company news
›Ordinary citizens also visit corporate websites for information in
posts at social sites about companies and their brands
Social media and international communications: Promotional
›Short-term inducements: -extra value and incentives to sales
personnel, intermediaries, and consumers
›Sample digital offerings prior to purchase
›Create interest, generate excitement, and entice users to visit a
retail website
Integrating social media with traditional marketing
›Increase desire purchase among consumers
›An additional dimension to integrated marketing
›Unified and consistent with the firm’s other marketing activities
Differences that drive social media:-culture -economic conditions
-technology diffusion
›Social media marketing may help democratise marketing
communications around the world
›Understand the difference between traditional approaches and
social media:
-focus on creating positive brand experiences
›Communicate your expertise:
-consumers seek solutions to their problems rather than the
product itself
-gain credibility and loyalty
Social media success strategies in international marketing
›Customise the message to the audience: -identify the target
market and customise communications accordingly -different
approach in problem-solving for each target market
›Target a specific market: -finding each audience -devising
social media that cater specifically
›Understand your markets: -promote products to targeted
audience at the appropriate sites
›Monitor online reputation: -invest efforts every day to monitor
news about the firm
-continuous scanning helps deal proactively with bad publicity
›Manage information about company and brands:
-explanations regarding emergent trends and events that interest
-speed and agility to adapt quickly to rapidly evolving events and
customer needs
Price dynamics
›Price - attracts potential buyers - competitive tool -
› Inelasticity 无弹性 is highly desirable
›Market pricing -reactive approach -similar products
already exist
›Skimming -low price -quick market share
›Penetration 渗透;突破;侵入pricing -high initial price -
lowered over time

Assessment of pricing environments:
1. Market related factors:
-nature of demand/target audience characteristic
-Government regulations, e.g. duties
-Exchange rate stability
2. Industry related factors
-Competition intensity
-Nature of competition
1. Marketing mix
-product e.g. old/new; standardised/ differentiated
-distribution system e.g. length
2. Company characteristics
-extent of internationalisation
-countries export to
3. Management attitudes
-importance of exports
-overall price position to firm
Pricing strategy selection:
1. Objectives
2. Competitive posture
3. Decision control
4. Flexibility
Pricing strategy determination:
1. Standard worldwide price
2. Differentiation -cost based -market-based

Internal factors: ›Philosophy, goals and
objectives ›Costs ›Nature of product and industry
factors: ›Customers ›Regulations ›Competition ›Finances
Export-related costs:
›Modification costs
›Operational costs –e.g. insurance costs
›Market entry costs –e.g. tariffs and taxes
›Price escalation -export prices exceed domestic prices
›Shorten distribution channel
›Product adaptation
›Change tariff or tax classifications
›Assemble or produce overseas
Terms of sale
›Incoterms -internationally accepted -definitions for
terms of sale
-the International Chamber of Commerce (ICC) since 1936 -31
Incoterm categories:
›‘E’-terms: buyer gets goods from sellers premises
›‘F’-terms: seller delivers goods to a carrier appointed by the
›‘C’-terms: seller has to contract for carriage but assumes no risk,
loss or damage to the goods
›‘D’-terms: seller delivers goods to buyer and bears all the costs
and risks
Common Incoterms
›Ex-works (EXW)
›Free carrier (FCA)
›Free alongside ship (FAS)
›Free on board (FOB)
›Cost and freight (CFR)
›Cost, insurance and freight (CIF)
›Delivered duty paid (DDP)
›Delivered duty unpaid (DDU)

Types of payment
›Cash in advance-immediate use of the money
›Letter of credit -issued by a bank -bank’s promise to pay -
the most frequently used method
›Drafts -similar to a personal cheque
›Documentary collection -bank acts as collection agent
-a sight draft is payable to whom the draft is addressed
›Consignment selling -highly favoured by importers
-payment is deferred until the goods are sold -returning
unsold goods can be costly

›Minimisethe risk of not being paid -commercial risk -non-
commercial or political risk
›Assess buyers -credit reports -audited reports -
financial report
Managingforeign exchange risk:
›Currency fluctuations
›Protect against currency-related risk -forward exchange
market -option -futures
›Market refocus
›Streamline operations 精简运作
›Shift in production
›Pass-through 转嫁到消费者
›Absorption 吸收
›Pass-through only a portion of the increase
Sources of export financing:
›Commercial banks
›Forfeiting 福费廷业务是指包买商(商业 银行或 银行附属机构)
从出口商那里以无追索权的方式购买经进口商所在 银行担保
›Factoring 应收账款保理是企业将赊销形成的未到期应收账款
›Official trade finance
Price negotiations: ›Package ›Concessions ›Importer’s
›Negotiate substantive 实质的 issues before price
Dumping 倾销:
›Selling for less than in home market; and/or
›Selling below the cost of production
›Predatory 掠夺性的
›Unintentional 无意识的
Remedies 救济方法 for dumping:
›Anti-dumping duties -levy 征税on imported goods sold at less
than fair market value
›Countervailing 补偿 duties -duties on imports that are
subsidised in the exporter’s home country
Transfer pricing:
›The pricing of sales to members of the corporate
family ›Requires central management
Objectives of transfer pricing:
›Competitiveness in the international marketplace ›Reduction
of taxes and tariffs
›Management of cash flows ›Minimisation of foreign
exchange risks
›Avoidance of conflicts ›Internal concerns
Influences on transfer pricing decisions:
Market conditions in target countries
Competition in target countries
Corporate taxes at home and in target countries
Economic conditions in target countries
Import restrictions
Customs duties
Price controls
Exchange controls
Reasonable profit for foreign affiliates 关联公司
Use of transfer prices to achieve corporate objectives:
›Cost-based ›Market-based ›Arm’s-length price 正当交
Transfer pricing challenges:
INTERNAL: ›Performance measurement -apparent 表面
profit -actual profit
EXTERNAL: ›Taxation -what’s reasonable in the home
country/host country?
Pricing within individual markets:
Costs: ›Procurement ›Manufacturing ›Logistics
›Marketing costs
›Overheads 企业的日常管理费用;杂项开支 ›Inflation rates
Demand and market factors: ›Price elasticity of consumer
-inelastic products can be sold at a premium -tied to
customer perceptions
Market structure and competition: ›Competition helps set the
-bundled prices -loyalty programs -selective price cuts -new
products to counter price challenges
Countertrade 对应贸易;易货贸易;对销贸易;反向贸易;往返贸
›A type of barter 易货贸易 arrangement
›Historically, no money involved -e.g. General Motors exchanges
a car for a trainload of strawberries
Reason countertrade:
›Better than financial exchange alone
›Circumvent 避免 controls
›Entry into new markets
›Long-term sales stability
›Uncompetitive goods may be marketed
›Online global barter economy
Types of countertrade:
›Counter-purchase -two separate contracts -may
include cash
›Buyback -one party supplies technology or equipment to
another to produce goods
-those goods are sold to pay for supplies or finished goods bought
›Clearing arrangements 清算协定 -use of clearing accounts
清算帐户 -switch-trading
›Offset -government-mandated 强制执行 compensation
-defence-related goods and services
Preparing for countertrade:
›Match to firms’ strengths ›Assess risks ›Evaluate
countertrade relationship

The emerging economies: Potential threats
›Uncertainty ›Social change ›Political change ›Infrastructural
inadequacies 不足
Population patterns:
›The discrepancy 矛盾 will continue to increase
›Population stabilisation
›Pace of urbanisation
›Gender balance
›Manpower shortages
›Living standards -the expectation-reality gap
›Ageing consumers -new marketing mixes are required
The technological environment
›4.6 billion people have access to the Internet -72% in both
Australia and New Zealand
›Digital divide ›Easier to reach niche markets
The future of international marketing management
›Increased international risk
›Source of high profits
›Cushion 缓冲 slack 松弛 in domestic sales
›Compensate for foreign product and service inflows
International planning and research:
›Niche markets
›Social responsibility
›Reputation management -encourages corporations to be good
corporate citizens
Product, product development and production policy
›Environmental concerns
›Shortening international product life cycles -advantages for
nations with low production costs
›More mass customisation 大规模按需生产
International communications:
›Location is becoming less significant
›Faster and more concentrated sharing -data -information
Distribution and logistics strategies:
›New globally networked channels
›Slowing due to security measures
›Movement away from just-in-time
›The constant risk of disease
A cautious look into the future
›Will globalisationbring about the standardisationof consumer
›New industry-specific maps of global markets are needed
›BRIC economies ›Africa ›Middle East
›Liberalisation VS. protectionism
›Intellectual property rights -fought in markets rather than courts
›Technological advances -communications -transportation
-Production -storage
›Environmental concerns
›Changes in society -lifestyle -the ageing population -
›Companies will have to constantly re-examine markets
›Anticipate and react to change