c
 
 



 
International marketing (IM) or global marketing refers to marketing carried out by
companies overseas or across national borderlines. This strategy uses an extension of the
techniques used in the home country of a firm. It refers to the firm-level marketing practices
across the border including market identification and targeting, entry mode selection, marketing
mix, and strategic decisions to compete in international markets. According to the American
Marketing Association (AMA) "Y
 
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Y Y YY    
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Y" In contrast to the
definition of marketing only the word  
Y 
Y  has been added. In simple words international
marketing is the application of marketing principles to across national boundaries. However,
there is a crossover between what is commonly expressed as international marketing and global
marketing, which is a similar term.

The intersection is the result of the process of internationalization. Many American and
European authors see international marketing as a simple extension of exporting, whereby the
marketing mix 4P's is simply adapted in some way to take into account differences in
consumers and segments. It then follows that global marketing takes a more standardized
approach to world markets and focuses upon sameness, in other words the similarities in
consumers and segments.

Cateora and Ghauri (1999) International Marketing is the performance of business

activities that direct the flow of a company's goods and services to consumers or users in more
than one nation for a profit.

International marketing is often not as simple as marketing your product to more than one
nation. Companies must consider language barriers, ideals, and customs in the market they are
approaching. Tailoring your marketing strategies to attract the specific group of people you are
attempting to sell to is highly important and can serve the number one cause of failure or
success.

As with other elements of marketing, there is no single definition of international

marketing. Furthermore some authors define international marketing and global marketing
differently. It can be distinguished between different levels of international marketing: "
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" Another definition sees international marketing as the international involvement of

business activities: "
 
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" It can be also defined as "
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 Some definition refer to the term global marketing: "
  
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A firm`s overseas involvement may fall into one of several categories:

1. Ñ
 Operate exclusively within a single country.

2.  
   Operate within a geographically defined region that crosses national
boundaries. Markets served are economically and culturally homogenous. If activity
occurs outside the home region, it is opportunistic.
3.   Run operations from a central office in the home region, exporting finished
goods to a variety of countries; some marketing, sales and distribution outside the home
region.
4. 


 Regional operations are somewhat autonomous, but key decisions are
made and coordinated from the central office in the home region. Manufacturing and
assembly, marketing and sales are decentralized beyond the home region. Both finished
goods and intermediate products are exported outside the home region.
5. 


    Run independent and mainly self-sufficient subsidiaries in a
range of countries. While some key functions (R&D, sourcing, financing) are
decentralized, the home region is still the primary base for many functions.
6.   Highly decentralized organization operating across a broad range of countries.
No geographic area (including the home region) is assumed a priori to be the primary
base for any functional area. Each function including R&D, sourcing, manufacturing,
marketing and sales is performed in the location(s) around the world most suitable for
that function.

Ñ 
 
 


  
 
 

 
There are various differences between domestic marketing and international marketing.
Due to a language barrier it is more difficult to obtain and interpret research data in international
marketing.] Promotional messages needs to consider numerous cultural differences between
different countries. This includes the differences in languages, expressions, habits, gestures,
ideologies and more. For example, in the United States the round O sign made with thumb and
first finger means  ! while in Mediterranean countries the same gesture means !! or
!

!. In Tunisia it is understood as ! Y ! meanwhile for a Japan consumer it implies
! ! Even among the 74 English-speaking nations a word with the same meaning can differ
greatly from the English which is spoken in the United States as the following example shows:

@ ½Y" bobby (Britain), garda (Ireland), Mountie (Canada), police wallah (South Africa)
@ ½" stoep (South Africa), gallery (Caribbean)
@ [" pub (Britain), hotel (Australia), boozer (Australia, Britain, New Zealand)
@ [
" loo (Britain), dunny (Australia)
@ 
 
" wendigo (Canada), duppy (Caribbean), taniwha (New Zealand)
@ [ " braai (South Africa), barbie (Australia)
@   " lorry (Britain and Australia)
@ G
Y" feis (Ireland)
@ u
" jumper (England)
@ G Y" chips (Britain)
@ u" football (the rest of the world)
 @ uY" pitch (England)

Three recent international examples of misinterpretation are:

@ è Y
Y [ 

" The lift is being fixed for the next day. During that
time, we regret that you will be unbearable.
@ G  #  Y 
Y   
 
 Y
  
 Y  Y
Y " Cooles and
Heates: If you want just condition of warming your room, please control yourself.
@    
" The manager has personally passed all the water served here.












 
 
  
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³The essential nature of the multinational enterprises lies in the fact that its managerial
headquarters are located in one country (home country) while the enterprise carries out
operations in a number of other countries as well (host countries).

³A Corporation that controls production facilities in more than one country, such facilities
having been acquired through the process of FDI.

A corporation that has its facilities and other assets in at least one country other than its
home country. Such companies have offices and/or factories in different countries and
usually have a centralized head office where they co-ordinate global management. Very
large multinationals have budgets that exceed those of many small countries.

Firms that participate in international business, however large they may be, solely by
exporting or by licensing technology are not MNCs.


  
 

Produce abroad and in the headquarters country

Operate in a certain minimum number of nations

Derive some minimum percentage of its income from foreign operations (eg. 25%)

Have a certain minimum ratio of foreign to total number of employees

Directly control foreign investments

    Y
 
Y  
Y 
  
Y  
Y   



Y 
    



 è 
  
Multinational Corporation: An MNC is a decentralized federation of assets and
responsibilities, a management process defined by simple financial control systems
overlaid on informal personal coordination and a dominant strategic mentality.

International Organization Model: In such an organization, the assets, resources,

responsibilities and decisions are decentralized but controlled from the headquarters.
The overseas operations are regarded as extensions. In this model, the headquarter
transfers knowledge and expertise to overseas environment that were less advanced in
technology or market development.

Global Organizational Model: This is based on centralization of assets, resources and

responsibilities, overseas operations are used to reach foreign market in order to build
scale. The role of the local subsidiary is to assemble and sell products and to implement
plans and policies at headquarters. They have much less freedom to create new
products or even to modify existing ones.

Transnational: This model attempts to eliminate the drawbacks of the other models. In
this model, the specialized resources and capabilities are dispersed among the various
operating units globally. These units are interdependent and integrated and have large
flow of product, people and information amongst them. It has a complex process of
coordination and cooperation in an environment of decision making.

   

Global liberalization has paved the way for fast expansion and growth of MNCs. With the
changes in Industrial Policy in 1991 and the opening up of the economy, the entrant of
MNCs into India largely increased.

As per the World Investment Report, 2007:

The production of goods and services by the TNCs outside their home countries, grew
more rapidly in 2006 than the previous year.

The sales, value added and exports of approx. 78,000 TNCs and their foreign affiliates
are estimated to have increased by 18%, 16% and 12% resp.

They accounted for 10% of the world GDP and one third of world exports.
 China continued to have the largest number of foreign affiliates in the world while the
growth rate of the number of TNCs from the developing countries and transition
economies over the past 15 years has exceeded that of TNCs from developed countries.

Employment in foreign affiliates of TNCs has increased nearly threefold since 1990.

US firms are by far the largest direct investors abroad, their foreign affiliates created the
largest number of jobs (9 million).

While the universe of TNCs is dominated by developed country firms, the picture is fast
changing.

The number of firms from the developing economies in the list of the world¶s 100 largest
TNCs has increased. Ranking in the list of the world¶ top 100 TNCs has been relatively
stable with General Electric, Vodafone and General Motors being the largest.


 
MNCs help the host countries in the following ways:

Transfer of technology, capital and entrepreneurship.

They increase the investment level and thus the income and employment in the host
country.

Greater availability of products for local consumers.

Greater access to high quality managerial talent which tends to be scarce in host
countries.

MNCs enable the host countries to increase exports and decrease import requirements,
thereby improving the host countries balance of payment.

They help in equalizing of cost of factors of production around the world.

They provide an efficient means of integrating economies.

The enormous resources enable the MNCs to have an efficient R&D.

MNCs stimulate domestic enterprise and give rise to competition in the host country and
better utilization of available resources.

Encouragement to world economic unity and through that, political and economic
integration
 Advantages to home countries:

Acquisition of raw materials from abroad, often a steadier supply and at lower prices
than can be found domestically.

Technology and management expertise acquired from competing in global markets.

Export of components and finished goods for assembly or distribution in foreign markets.

Inflow of income from overseas profits, royalties and management contracts.

Job and career opportunities at home and abroad in connection with overseas
opportunities


Ñ
 
Technology designed for MNCs is for world wide profit maximization and not for
development or social welfare of economies.

They may destroy competition and acquire monopoly powers.

Due to the tremendous power that they possess they may threaten the sovereignty of
the nations in which they operate as the host country is not able to control all that an
MNC does. It is said that a large MNC negotiates with a host government more than
what a resident business would have done.

They slow down the growth of employment in the home country.

They could cause fast depletion of some of the non renewable natural resources in the
host country.

They have been criticized for their business strategies and practices in the host
countries. They undermine local tradition and values.
 In order to allay the fears of host countries, MNCs need to:

w Provide employment

w Train managers

w Provide products and services that raise standard of living

w Introduce and develop new technical and managerial skills

w Increase productivity

w Mobilize capital for productive purposes from less productive uses.

 


Various international organizations have proposed codes of conduct for MNCs. Among
them are the United Nations, the International Chamber of Commerce and the
Organization for Economic Co-operation and Development (OECD). The proposed code
is as follows:

 
Confirm to the established policies and laws of the host country

Respond affirmatively to the social and economic plans of the host country

Progressively staff host country operations

Refrain from activities that would harm the functioning of the local capital markets

Supply appropriate information to local authorities about health, safety and

environmental effects.

Help the less developed countries that seek increasing technology transfer by
introducing well known technology or by helping local entrepreneurs to produce profits at
a profit.

Avoid degrading the physical environment wherever possible.

Be concerned about human rights in decision making

Scrupulously adhere to guidelines in the company¶s code f ethics.

  !è! "c#cè#"
è!$è!#cè%

Current trends in the international marketplace favor the continued development of

multinational corporations. Countries worldwide are privatizing government-run industries, and
the development of regional trading partnerships such as the North American Free Trade
Agreement (a 1993 agreement between Canada, Mexico, and United States) and the European
Union have the overall effect of removing barriers to international trade. Privatization efforts
result in the availability of existing infrastructure for use by multinationals seeking to enter a new
market, while removal of international trade barriers is obviously a boon to multinational
operations.

Perhaps the greatest potential threat posed by multinational corporations would be their
continued success in a still underdeveloped world market. As the productive capacity of
multinationals increases, the buying power of people in much of the world remains relatively
unchanged, which could lead to the production of a worldwide glut of goods and services. Such
a glut, which has occurred periodically throughout the history of industrialized economies, can in
turn lead to wage and price deflation, contraction of corporate activities, and a rapid slowdown
in all phases of economic life. Such a possibility is purely hypothetical, however, and for the
foreseeable future the operations of multinational corporations worldwide are likely to continue
to expand.












&  c 

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India's market potential.

Labor competitiveness.

Macro-economic stability.

FDI attractiveness.

c 


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*
+

Irrational policies (tax structure and trade barriers).

Low invest in infrastructure - physical and information technology.

Slow reforms (political reforms to improve stability, privatization and deregulation, labor
reforms).

India is perceived to be at par with China in terms of FDI attractiveness by 'Multinational

Companies in India'.

In view of ' 
 
   ' community, it ranks India higher than China,
Malaysia, Thailand, and Philippines in terms of MNC performance.


 
    Operating in India cite India's highly educated workforce,
management talent, rule of law, transparency, cultural affinity, and regulatory
environment as more favorable than others.
$   
 
While globalization has several benefits, it has a number of problems. While developing
countries which, in the past, where against globalization, have wide opened their doors for
globalisation, many people in developed like USA are angry against globalisation. American
jobs and wage levels are severely affected by the influx of cheap imports and shifting of
production to low cost overseas locations. According to a business week/ Harries poll in early
2000, more than two-thirds of American believe that globalisation drags down U S wages. A
strong majority of the American feels that trade policies have not adequately addressed the
concerns of American workers, international labour standards, or the environment. The
important pros and cons of globalisation according to the above survey ate the following.
Productivity grows more quickly when countries produce goods and services in which they have
comparative advantage. Living standards can go up faster. Global competition and imports keep
a lid in prices, so inflation is less likely to derail economic growth. An open economy spurs
innovation with fresh ideas from abroad. Export jobs often pay more than other jobs. Unfettered
capital flows give the US access to foreign investment and jeep interest rated low.
The adverse effects of globalisation according to the survey are:

Millions of America have lost jobs due to imports or production shifts abroad. Most find
new jobs that pay less. Millions of others fear losing their jobs, especially at those companies
operating under competitive pressure. Workers face pay cut demands from employers, which
often threaten to export jobs. Service and white collar jobs are increasingly vulnerable to
operations moving offshore. U S employees can lose their comparative advantage when
companies build advanced factories in low-wage countries, making them as productive as those
at home.

True, globalisation can benefit the developing countries in several ways. It is, however,
apprehended that unregulated globalisation will cause serious problems for developing
countries. The almost universal acceptance of the market economy and the globalisation driven
by private enterprise tend to aggravate most of the harmful effects traditionally attributed to
neocolonialism. The global dominance of industries by MNCs is on the increase. Many countries
are indiscriminate in liberalizing foreign investment. Pepsi, Coke and ³junk foods´ are allowed
even in countries like China. A number of countries allow high foreign stake even in industries
where that is not really required. This could affect domestic enterprise of developing countries.
There have been a large number of cases of takeover of national firms by foreign firms. In some
of these cases, the domestic firms are driven to a situation of a situation of having to hand over
the majority or complete equity to the foreign partners of joint ventures because or the inability
of the Indian partners to bring in additional capital or some other incapability. Replacement of
traditional and indigenous products by modern product, resulting in the ruin of traditional crafts
and industries and the livelihood of people in these sectors has also been happening in several
countries. One common criticism has been that the technology that the MNCs bring in may not
be the one suited to the liberalized environment of today, another problem, viz., the dumping of
outmoded technology to the developing world is not as valid today as in the past and in future it
is likely to be even less valid. In the past, because of the entry restrictions and resultant
absence or lack of competition, developing countries could be used as a dumping ground for
obsolete products, including technology.
 The business environment today, however, is vastly different. Because of the competition
between MNCs (and national firms) made possible by the dismantling of entry barriers (and
freeing of technology imports by national firms and added thrust on R&D by them) technological
edge is an important determinant of success. The evolution of the motorcar market in India, for
example, gives come indication of this. In a competitive environment, a firm can survive only if it
is efficient. Companies all around world, including many large multinationals, have been cutting
down the size of their human resources as one of the means of achieving cost efficiency. The
problem of over-manning is very severe in the developing countries. Unless these firms get rid
of the surplus labour, they can hardly be competitive and successful. That means, the
liberalisation can succeed only if the economy grows very fast to absorb, the displaced labour
and the new addition to the -laoour force. The developing countries, in general, have been
disadvantaged by the international trading system. The adverse term of trade led to economic
loss for the developing countries, in general. The least developed countries have been the most
deprived. It may, however, be noted that one of the reason for the adverse terms of trade of the
developing countries is the demandsupply factor. It is also estimated that the least developed
countries stand to lose up to $600 million a year and sub- Saharan Africa $ 1.2 billion as a result
of the Uruguay Round Agreement, while the developed countries are expected to gain very
substantially.

Multilateral trade liberalisations were mostly in respect of goods traded between industrial
economies and those exported from developing to the developed nations did not benefit so
much. While developing countries as a group now face tariffs 10 per cent higher than the global
average, the least developed countries face tariffs 30 per cent higher, because tariffs remain
high on the goods with greatest potential for the poorest countries, such as textiles, leather and
agricultural commodities. It should, however, be noted that a number of developing countries
have improved their export performance substantially and several of them figure in the list of the
top 20 exporters. Despite the different problems and discriminations, there are chances of
developing countries benefiting from trade. Basic trade theory argues that poor people gain from
trade liberalization. Developing countries have a comparative advantage, in-abundant, low -
cost, unskilled labour. If they concentrate on goods whose production is simple and labour
intensive, greater integration into global markets should increase their exports and output,
raising the demand for unskilled labour and raising the income of the poor relative to those of
the non-poor. Moreover, countries move up the trade ladder, exporting more sophisticated
products, leaving space on the ladder below for later-industrializing countries. All this helps
reduce poverty. The countries on the higher rungs benefit most, but even those on the lower
rugs should see poverty fall. And free trade should also help poor consumers-without trade
protection, local prices should fall to world prices. There should also be benefits for employment
from a liberal financial regime.

Removing restrictions on capital flows should attract more FDI, creating more jobs for the
poor by integrating them into international systems of production. It is criticized that developed
nations receive most of the FDI. A vary small number of the developing countries, which are the
relatively developed or large or fast growing in the developing world account for the lion¶s share
of the FDI flows to this category. What the critics do not appreciate is that, as foreign investment
flows are based one economic rational, it is unrealistic to export the pattern of flow to be
different. Another criticism is that the liberalisation increases the economic inequality.
 Even in China, the liberalisation has created many island of affluence. If inequality
increases because of the worsening of the living conditions of the poor, it certainly is
unjustifiable. But, if the increase in inequality is the result of improving the economic conditions
of a section, while there is no economic deterioration of any section, or because of the
disproportionate benefits, the question is whether the economic progress of some sections
should be curbed so that there will not be a widening of the inequality. The liberalisation may
increase inequality. Further, several sectors and sections may not directly and immediately
benefit from mere liberalisation. There may also be shocks and other adverse effects on the
weaker sections. It is, therefore, necessary that there should be real socioeconomic reforms
rather than mere liberalisation.

Targeted poverty eradication programmes and social safety net are very important. The
fast growth and overall development resulting from liberalisation could have a major impact on
poverty. Naisbitt points out that there were an estimated 200 to 270 million Chinese living in
absolute poverty in 1978 (the year in which the liberalisation began) and their number came
down to 100 million by 1985. Foreign capital has significantly boosted investment and economic
growth in China. China has leaped forward on the export front too. Foreign funded enterprises
contribute a substantial chunk of the exports from China.

Other countries which, carry out proper reforms in real earnest should also be expected to
reap such gains in varying degrees. But, half-hearted and confused measures and
implementation problems may create more problems than they solve. Although the MNCs, by
the virtue of their size and resources, have certain advantages they may also have limitations or
disadvantages in certain spheres or aspects of business. Small and medium firms often have
some edge over the very large ones in respects of standardized products or technologies like
greater flexibility and adaptability, lower overheads, intimacy with the customers, etc. Low costs
is a great advantage which firms from developing countries enjoy. It may be noted that the
major component of growth of several India pharmaceutical firms is the foreign market. They are
relying mostly on bulk drugs and. generics. What is often ignored while discussing the impact of
the product patent is that patented drugs account for only about 15 per cent of the India drug
market. There are several more products, which would go off patent in the coming years which
can also be taken up the India firms.

The new patent regime should be expected help the Indian industry by prompting it to
give added thrust to R&D and thereby enabling Indian firms also to develop patented products.
Positive signs are already there on the horizon. There are also many evidences of the better
technology brought in by the MNCs inducing or provoking Indian firms to absorb similar
technology leading to their enhanced competitiveness and market expansion.
 

 
Global marketing offers a way for companies of all sizes to grow by expanding their
customer base beyond the domestic market. However, the complexities of global marketing
demand careful planning and proper implementation.

This study has been conducted to gain knowledge about the potential strength of
Stainless Steel exports of China. The supply demand scenario, domestic steel industry and the
present and possible role of India was analyzed in case of China.

To start with the Indian and the world Iron and steel Industry is studied and comparative
study of the performance of Exporting Countries and Indian industry is analyzed.

India¶s positioning in the global perspective will depend upon cost competitiveness of the
Indian. Besides the continuous emphasis is to given on new technology/process/products
developed, productivity improvement, quality improvement. The Chinese steel market is one of
the most active markets in the world. China is a country with a dynamic economy whose annual
growth rate has stayed at 7-8 percent in the last five years.

After this China Customer are segmented, and the most attractive segments for Indian
Exporters are selected as target markets. The company studied is Jindal Steel Ltd. Jindal
Stainless is among the top twelve stainless steel producers in the world along with Arcelor, KTS,
Acerinox, Avesta Polarit, and POSCO etc. The company itself has two offices in China and is a
well-known brand in the Chinese Stainless Steel Industry. It is a pioneer in the production of
Chrome Manganese Stainless Steel and last year 90% of Jindal Stainless' exports were to
China.

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m
m    m

Marketing planning helps us decide what products or services are required in our market, then
how to sell them and what price to put on them. So focus on the ³seven P¶s of marketing´ ²
people, planning, product, positioning, pricing, place and promotion.

$
The personal, cultural, social and psychological attitudes of our customers are important. If we
are going to meet their needs; do some basic market research.

$  
Our market research needs to be analyzed and evaluated. We can then start to predict the
requirements of our customers.

$
-) .
What makes our product different from that of our competitor? Can we develop any brand
values for our product? Decide what our unique selling point is and work out how the customer
will benefit from our product or service.

$
  
Differentiate our product from that of our competitors. Look for the gap in the market for our
product; work out why this gap exists. How big is this market? Does it have short and/or long
term growth potential? Decide who our competitors are and how they will react to our plans.
What makes our product special? How will we develop and exploit competitive advantage; work
out the best time to launch our product.

$  
What people feel about a product is reflected in what they are prepared to pay for it. Identify
what value our customers place on your product. Then decide which market segment we will
attack e.g. premium or budget. What discount structure (if any) will offer for volume. What will be
our pricing policy for agents, wholesalers and retailers?

$ 
We may need to work out how our goods will move from where they are produced to where they
are sold. We may want to use wholesalers, retailers or our own premises. Or will use direct
marketing, telemarketing, or e-commerce via the Internet?



$
 
This is the most visible aspect of marketing. It pulls together various communication elements-
Corporate identity; Branding; Advertising strategy; Public relations, internal and external; Direct
marketing; Sales promotion and merchandising; Sales and sales management; Exhibitions.

Ñ 
m  

a. Positioning and differentiating the market offerings through the product lifecycle
b. Developing new market offerings
c. Designing global market offerings

This study will also be conducted to gain knowledge about the potential strength of Stainless
Steel exports of China. The supply demand scenario, domestic steel industry and the present
and possible role of India was analyzed in case of China.

To start with the Indian and the world Iron and steel Industry is studied and comparative study of
the performance of Exporting Countries and Indian industry is analyzed.

In the next step, the environmental analysis of China is done. The environments selected
included macro-micro economic environment, legal environment, social environment, and
business environment, of China. India¶s positioning in the global perspective will depend upon
cost competitiveness of the Indian. Besides the continuous emphasis is to given on new
technology/process/products developed, productivity improvement, quality improvement. The
Chinese steel market is one of the most active markets in the world. China is a country with a
dynamic economy whose annual growth rate has stayed at 7-8 percent in the last five years.
The Iron and Steel Industry is one of the major foreign exchange earners, despite of important
role it plays in balancing India¶s international trade. Steel has pervaded our daily lives from the
kitchen to hospital and industry. Because of its ability to withstand corrosion, steel has found an
indispensable slot even in the medical world. Extensively used, steel is sudden in a wide
assortment of container industry, galvanizing units, engineering industry electrical industry, re-
rolling industry and heavy industry. Hence we can say that:

       

 

Iron containing less than 2% carbon and less than 1-% silicon and not more than a trace of
phosphorus is what is usually termed steel. Carbon is the principal hardening element in steel.
The increment of carbon % within steel increases the hardness of steel. The hardness becomes
correspondingly less in steel containing more than 85% carbon than low carbon ranges.











$!èÑ cè$!è%%
There are two primary methods of making steel, differing in terms of the process and raw
materials used : the blast furnace route (BF) and the electric arc furnace (EAF) route. In the BF
process, the iron is first reduced with coke in a blast furnace and then refined to produce molten
steel, while in the EAF process a mix of scrap and sponge iron is melted using electricity in an
electric are furnace to produce long and flat products. Stainless steel is gaining recognition and
it is considered as the friendly and sustainable material because of its corrosive resistance and
for its easy to clean / hygienic surfaces. Its versatility, durability and its supraliminal quality
makes stainless steel the exceptional material of a choice for the new millennium. Initially
stainless steel found its applicability in cutlery and gradually into textile, chemical and other
engineering industries. Today its application has created wonders in the Architecture, Building
and Construction (ABC) and Automobile, Railways and Transportation (ART). Stainless steel
usage in the building and construction sector would increase in the coming years. If the potential
of the market is fully realized in terms of the prospective end use sectors mentioned above
along with the continuing growth of the utensil market, the future growth rate of stainless steel
can even be higher than witnessed in the last decade.

cÑc#%"cÑ %!

Indian Steel Industry is now going through a speedy growth path. In the global scenario,
China remains the world¶s largest crude steel producer in 2008. China¶s steel sector has been
following an upward trend, with sale of steel product reaching their highest levels in recent
years. Increased imports and decreased export have combined to bring great pressure to bear
upon china¶s steel market. The Antidumping Measure taken by the United States against China
HR Plates has seriously helped up China¶s export.

In china the volatile Nickel price create uncertainty in the stainless steel market. China¶s
Metal Sector has been enjoying a period of astonishing growth. Trend of production and
consumption are further elaborated with respect to category of products like cold rolled flat,
bars, wire rods and pipes. Stainless steel world has a department specialized in research and
intelligence to help meet the market¶s increasing need for the resolution of complex
technological and informational problem.

Stainless steel production in India is speedily increasing since the last three decades.
Initially India had to depend on foreign markets to meet its requirement of stainless steel. Today
India is self sufficient enough to make stainless steel of all grades, shapes & sizes and is also a
major exporter of stainless steel of utensil grade. In the Public Sector, the special steel plants of
Steel Authority of India Limited (SAIL) at Durgapur and Salem have made significant
contribution for the growth of this industry. Mukand Limited, Panchmahal Steel Limited, Shah
Alloys Industries Ltd., Jindal Strips Limited have also contributed significantly in making India
self-sufficient in stainless steel production.
 Most (around 75%) of the Indian stainless steel market is still in the kitchen segment.
Indian Railways is switching over to manufacture their passenger coaches which will require 15
mt stainless steel per coach in coming 5 years. The Indian government is using Ferric cold
rolled stainless steel strips for making coins. The main focus of Indian stainless steel industry is
China which still imports 90% of stainless steel.

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Iron and steel exports from India started after 1964, the first time India¶s supply dominated
her domestic needs. Though the Indian exports are quite vulnerable to domestic demand
conditions, the export market has been doing reasonably well in the past few years, with FY03
seeing an increase of more than 100% over the previous year. The increase in exports to Asia
(approx. 227%) and America (105%) has contributed to this massive growth. The abundant
availability of raw materials like iron ore and cheap manpower in India provide tremendous
potential for the iron and steel sector to grow.

%# è$!è " 

The study is intended to find the export potential of Stainless steel to Chinese market, to
reveal present pattern and possible future developments of supply, demand and consumption in
relevant product specific markets. Jindal Strips Limited is the largest integrated producer of
stainless steel in India. It is Flagship Company of Jindal Group set up in 1970 under the
visionary of Mr. O.P.Jindal. Jindal Organization is ranked fourth amongst the top Indian
Business houses.

The company initiates developing new market for its stainless steel products around four
to five years back and has been able to achieve compounded average growth. Jindal is the
leader in domestic market of stainless steel and it is trying to become a major player in
international market. With a market share of 50% in India, it also exports to various countries
across the globe. Jindal stainless is the only company in India which has the composite
stainless steel plant for the manufacture of Slabs, Blooms, Hot rolled and Cold Rolled Coils.
This study is carried out keeping in the interests of Jindal Strips Limited and hence it becomes
important to have an insight of the domestic market and export potential in the Chinese market.
c 

A global industry is an industry in which the strategic positions of competitors in major
geographic or national markets are fundamentally affected by their overall global positions. A
global firm is a firm that operates in more than one country and captures R&D, production,
logistical, marketing, a financial advantages in its costs and reputation that are not available to
purely domestic competitors. Global firms plan, operate, and coordinate their activities on a
worldwide basis. Ford¶s ³world truck´ has a European-made cab and a North American- built
chassis, is assembled n Brazil, and is imported into the United States for sale. Otis Elevator
gets its door systems from France, small geared parts from Spain, electronics from Germany,
and special motor drivers from Japan; it uses the United States for systems integration. A
company need not be large to sell globally.

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An international marketing strategy involves developing and maintaining a strategic fit

between the international company's objectives, competencies, and resources and the
challenges presented by its international market or markets. As such, the international strategic
plan forges a link between the company's resources and its international goals and objectives in
a complex, continuously changing international environment. Given the changing nature of the
environment, the international company's strategic plan cannot afford a typical long-term focus
(a five- or ten-year plan); rather, the planning process must be systematic and continuous, and it
must re-evaluate objectives in light of new opportunities and potential threats. Another
dimension of international marketing strategy is linked to the company's commitment to its
international markets. Some companies use international marketing only to test the waters or to
unload overproduction. This approach to international marketing, although it might open
longterm opportunities to the company, does not indicate a substantial commitment to
internationalization and is not a premise for success in the long term in international markets. A
long-term international commitment that entails substantial investment in terms of resources and
personnel is likely to bring the company the greatest rewards in the long run. Such a strategy
will make the company a stronger competitor in the world market, as well as at home.
International strategic planning takes place at different levels:

 At the 
the strategic plan allocates resources and establishes objectives

for the whole enterprise, worldwide. The corporate plan has a long-term focus and
involves the highest levels of management. PepsiCo Beverages headquarters (including
its international headquarters) are located in Purchase, New York, USA. The company's
corporate plan is developed here.

 At the YYY   the strategic plan allocates funds to each business unit based on
division goals and objectives. In the PepsiCo example, its division for Eastern Europe is
located in Vienna, Austria. From there, the company coordinates all local (country-level)
operations. At this point, Pepsi may use various portfolio analysis tools to decide which
brands to harvest, to invest in, or to divest, and plan its resources accordingly.
  At the  Y  Y
  within each country, decisions are made regarding which
consumer segments to target. At this level, Pepsi develops a strategic plan.

 At the  
(line, brand), a marketing plan is developed for achieving objectives.
PepsiCo's marketing plan for Poland, for example, might include increasing the
consumption of Pepsi and Pepsi Light and launching Pepsi Max beyond the cities of
Warsaw, Krakow, Wroclaw, and Poznan.

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At this stage of the planning process, the international company develops a marketing
plan. Assuming that the company has already analyzed its marketing
opportunities and researched and selected the target market, it must now:

 Develop marketing strategies for the target market, deciding on the product mix for the
local target market, as well as on the other components of the marketing mix²
distribution, promotion, and pricing.

 Plan the international marketing programs.

 Manage (organize, implement, and control) the marketing effort.

The decision on which elements of the marketing mix to use in a particular target market
is closely linked to the product's life cycle and to the market entry strategy selected: A product in
the early stages of its life cycle, such as the Palm Pilot, will most likely be sold to consumers in
highly industrialized countries for a high price, accompanied by heavy promotion. A product will
most likely be manufactured in a developed country and exported to the rest of the world.
Alternatively, a product in the later stages of its life cycle, such as a videocassette recorder, will
be sold to consumers worldwide, regardless of country development level. The company selling
the product will heavily compete on price and, thus, most likely manufacture the product in a
developing country where labor is inexpensive, to sell all over the world. Most likely, the
company will have at least one subsidiary located in the country of product manufacture.
Insights into the marketing strategies that companies use to target international markets reveal
that marketing mix decisions are complex and based on extensive research. Kraft Foods
(www.kraftfoods.com), for example, has made interesting product mix decisions: It sells coffee
products and confectionery products that cover the spectrum of target consumers²and the
brands often cannibalize.

Among the many brands of coffee Kraft Foods offers are:

    : This product sells mainly in Central and Eastern Europe. Jacobs coffee
is popularly known as a quality German brand. Because con summers in Central and
Eastern Europe have traditionally had frequent interaction with German consumers and
have acquired a taste and prefer hence for German brands, marketing the Jacobs brand
in this region was appropriate. Had Kraft brought the product to the United States, it
would have had to challenge quality perceptions of bulk coffee associated with
developing countries in Latin America (Colombia and Guatemala, in particular) and
Africa (Kenya, especially) and value perceptions held by store brands and other low-
priced national brands such as Folgers and Kraft's own Maxwell House.
     This brand is aimed at the Scandinavian market and imported into the
United States as a gourmet product sold exclusively by mail order. Among the numerous
confectionery products Kraft offers are the following:

 m: Kraft Foods is now importing its European Milka brand of choco late into the
United States, selling it primarily through chain stores such as Target. Mass-market
consumers in the United States are increasingly replacing favorite local candy bars with
products that are perceived as more sophisticated and that are available at competitive
prices. Competitors such as Ferrero Rocher and Dove have had great success with the
premium chocolates they sell in the U.S. market, and they are increasingly placing their
products in the impulse-purchase section, by the cash register. Kraft's Milka is using a
similar strategy, selling its basic milk Chocolate with the picture of a Swiss cow in the
Alps on the packaging at Target stores. Milka also is available in a wider selection at
shops that specialize in foreign gourmet foods.

Kraft also has numerous brands that are restricted to a few markets. Among them are
Daim, aimed at Scandinavian consumers, and Bis, aimed at Argentina and Brazil. Kraft Foods,
a company based in the United States, has different mix strategies for each market. And it sells
to the U.S. consumer only a fraction of its international offerings, some of which are positioned
as premium European imports. It should be mentioned that companies with more limited
resources will very likely be more restricted in their worldwide market coverage. Companies
entering more and more countries in search of new markets are likely to face increasing
difficulty in continuously monitoring and controlling their international operations. These firms
must monitor not only the constantly changing marketing environment, but also changes in
competitive intensity, in competitor product/service quality strategies, in supply chains, and in
consumer expectations.
Ñ   c
 
 

 
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The company control over operations and overall risk increase from the export mode to
the wholly owned subsidiary entry mode. In general, companies tend to use the export mode in
their first attempt to expand internationally and in environments that present substantial risk, and
companies tend to approach markets that offer promise and lower risk by engaging in some
form of foreign direct investment. There are, however, many exceptions to these statements:
Companies that have been present for decades in attractive international markets, such as
Airbus Industries and Caterpillar, continue to export to those markets, rather than manufacture
abroad. Similarly, many new small businesses find that they can manufacture products cheaply
abroad and distribute them in those markets without making a penny in their home country; this
is increasingly becoming a possibility for companies selling on the World Wide Web.

c 
&
 

Indirect exporting means that the company sells its products to intermediaries in the
company's home country who, in turn, sell the product overseas. A company engaging in
indirect exporting can use middlemen such as export management companies, trading
companies, or agents/brokers to distribute its products overseas. Alternatively, the company can
use cooperative exporting, also referred to as "piggybacking" or "mother henning." With
cooperative exporting, companies use the distribution system of exporters with established
systems of selling abroad who agree to handle the export function of a no competing (but not
necessarily unrelated) company on a contractual basis. Such companies are paid on
commission or are charged a discount price for the product; they are larger companies with
extensive experience in and knowledge of the target international market.

Using indirect exporting does not require market expertise, nor a long-term commitment
to the international market. The company's risk also is minimal; at most, it can lose a product
shipment. Among disadvantages are lack of control over the marketing of its products - which
could ultimately lead to lost sales and a loss of-good will that might ultimately affect the
perception of the company and its brands in other markets where it has a greater commitment.
Some companies use indirect exporting as a first step toward a greater degree of involvement.
After a sufficient consumer franchise is secured and the market is tested with the initial
shipment, a company might commit resources for additional investment in the market. It should
be mentioned, however, that indirect exporting in the long term does not necessarily mean that
the company is not committed to the market; it simply means either that the company does not
have the resources for greater involvement or that other markets are performing better and
need more company resources. One of Europe's leading car makers, Germany's Volkswagen,
operates through independent importers and distributors in Belgium, the Netherlands,
Switzerland, and Austria, while in France, Germany, Italy, and Spain, which together account for
83 percent of European sales, it controls its wholesale operations directly.







Ñ
&
 

Companies engaging in 
 &
  have their own in-house exporting expertise,
usually in the form of an exporting department. Such companies have more control over the
marketing mix in the target market: They can make sure that wholesalers and retailers observe
the company's marketing policies, charging the suggested sale price, offering the appropriate
promotions, and handling customer requests promptly and satisfactorily.

More control, however, is expensive. Companies carry the cost of their export department
staff, and the costs involved in selecting and monitoring the different middlemen involved in the
distribution process²freight forwarders, shipping lines, insurers, merchant middlemen, and
retailers²as well as other marketing service providers, such as consultants, marketing
researchers, and advertising companies.

One venue that opens new opportunities for direct exporting is the Internet. With a well-
developed web site, companies now can reach directly to customers overseas and process
sales online. And many companies do: Catalog retailers and dot-corn companies, such as
Lands' End and Amazon, respectively, long ago made their first international incursions by
exporting their products to consumers abroad and are rapidly expanding their international
operations. The challenges for companies using the Internet to export their products involve
securing the appropriate credit in environments where credit cards and personal checks are
uncommon and, finally, having sufficient sales to warrant staff expenditures needed to process
and handle the international sale.

"   

A popular international entry mode, licensing presents more risks to the company but also
offers it more control than exporting. Licensing involves a licensor and a licensee. The licensor
offers know-how, shares technology, and often shares a brand name with the licensee. The
licensee, in turn, pays royalties. The two approaches to licensing are licensing without the name
and licensing with the name.



   !


A licensor is very selective when choosing a licensee, ensuring that products

manufactured under license are of the highest quality. When quality cannot be guaranteed,
either because the licensee does not allow the licensor sufficient control and scrutiny, or
because the licensee cannot guarantee quality, it is preferable for the products produced under
license not to carry the licensor's brand name. In the early 1970s, Italy's Fiat granted a license
to Avto VAZ, Russia's largest automobile manufacturer, to manufacture Lada, Russia's most
popular automobile, and an important export to neighboring and other developing countries.
Under a similar arrangement, France's Renault granted a license to build Dacia brand
automobiles in Romania in the 1960s. Today, the automobile, which continues to sell under the
Dacia name, is as popular as ever, and, in 1999, Renault acquired a 51 percent stake in the
company.
 

  !


Licensors can decide to adapt the names of their products when they have a greater
confidence in the capability of the licensee's workforce. One example is Poland's Polski Fiat.
Fiat was confident of the reliability of Polish manufacturing and did not require the use of a
different name for the product. Today, Fiat no longer licenses the Fiat name to Polish
manufacturers; it has set up a subsidiary with multiple operations, Fiat SpA, which manufactures
many of the Fiats sold in Eastern Europe under the Fiat brand name (primarily lower-priced
models, such as Fiat Punto and Seicento J.

Licensing is a lower-risk entry mode that allows a company to manufacture a

product all over the world for global distribution. Beverly Hills Polo Club, for example, conducts
business in approximately 85 countries around the globe, producing apparel licensed under its
own name, all licensed apparel for Harvard University, as well as Hype, Karl Kani, and Blanc
Bleu²a line that sells in upscale European retailers.

Licensing permits the company access to markets that may be closed or that may have
high entry barriers. In the examples in the "Licensing without the Name" section, Lada, Dacia,
and Polski Fiat were sold in the countries of manufacture at low prices, with few taxes, while
automobile imports were charged tariffs at rates ranging from 50 to 100 percent.

Companies that engage in licensing agreements also limit their exposure to economic,
financial, and political instability. In the event of a national disaster or a government takeover,
the licensor licensing without the name incurs only theloss of royalties. The licensor that permits
the use of the name may suffer a loss of reputation in the short term if the products are
manufactured without licensor supervision and/or if they do not uphold the licensor's standard.
In the latter case, the licensor has some control, at least in international markets. For example, it
can bring to the attention of international trade bodies the sale of products that are illegally using
its brand name, assuming the company has international trademark protection; in most markets,
it also can sue the former licensee. A downside of licensing is that it can produce a viable
competitor in the licensee, who is well equipped to competently compete with the licenser.
Simply training locals in company operations, particularly technology, can lead to the
development of skills for future competitors.

  

Franchising is a means of marketing goods and services in which the franchiser grants
the legal right to use branding, trade marks and products, and the method of operation is
transferred to a third party ± the franchisee ± in return for a franchise fee. The franchiser
provides assistance, training and help with sourcing components, and exercises significant
control over the franchisee¶s method of operation. It is considered to be a relatively less risky
business start up for the franchisee but still harnesses the motivation, time and energy of the
people who are investing their own capital in the business. For a franchiser it has a large
number of advantages including the opportunity to build greater market coverage and obtain a
steady, predictable stream of income without requiring excessive investment.
 Franchising (or business format franchising, to be accurate) is µthe permission given by
one person, the franchisor, to another person, the franchisee, to use the franchisor¶s trade
name, trade marks and business system, in return for an initial payment and further regular
payments¶ Having satisfied himself that franchisee would be suited to running his own business
and that he will accept the restrictions laid down by the franchiser, franchisee will choose the
type of business in which he would like to work and be happy that it is in a market with good
potential.

Franchisee now need to choose the franchiser. If he has picked a category in which there
are only one or two franchisers, it would be wise to select a second category to avoid having too
small a choice. This will also give him a wider selection of territories.

Obtain a list of the franchises, which are available in the business category franchisee
has chosen. Which is best for him? Although this is the last stage of your assessment process,
it is, of course, the most important. He may be right for franchising and the market he has
chosen may be full of promise, but this will not make up for an ineffective franchiser.

There are many questions that can be asked to assess the quality of a franchiser, but
most falls into the following fields. Has the franchise been sufficiently tested and are its
franchisees successful? Do the initial fee and continuing fees (or product mark up) represent
good value for money? Do the on-going fees (or product mark up) still leave the product or
service competitive in the market place and provide sufficient profit for the franchiser and
franchisee to make the business worthwhile? Have the franchiser sufficient financial and
management resources to do what they say they will do to make our business succeed? Are
they fair and ethical in their business conduct? Are they a member of the British Franchise
Association, whose members are required to abide by a code of business practice? In the event
of the franchiser¶s failure are there alternative suppliers?



,


Joint ventures involve a foreign company joining with a local company, sharing capital,
equity, and labor, among others, to set up a new corporate entity. Joint ventures are a preferred
international entry mode for emerging markets. In developing countries, joint ventures typically
take place between an international firm and a state-owned enterprise; in this case, the
company's partner is the local government. As such, the company is assured instant local
access and preferential treatment. Many developing countries welcome this type of investment
as a way to encourage the development of local expertise, of the local market, and of the
country's balance of trade²assuming the resultant production will be exported abroad. In most
developing countries, the international firm will typically provide expertise, know-how, most of
the capital, the brand name reputation, and a trademark that is internationally protected, among
others. The local partner will provide the labor, the physical infrastructure (such as the factory
and access to the factory), local market expertise and relationships, as well as connections to
government decision-making bodies. It is typical for the local government of the developing
country to limit the joint venture ownership of international firms to less than 50 percent. It is
also typical for the local government to encourage the reinvestment of profits into the firm, rather
than the repatriation of profits by the international firm. As such, the government, in effect, leads
the international firm to engage in transfer pricing, a method whereby the parent company of the
international joint-venture partner charges the joint venture for equipment and expertise, for
instance, above cost.
 Joint ventures could constitute a successful approach to a greater involvement in the
market, which is likely to result in higher control, better performance, and higher profits for the
company. Successful joint ventures abound. In one example, British Petroleum PLC
established a joint venture in Russia, under the name Petrol Complex, with ST, a powerful local
partner with close ties to the Moscow city government. The company owns 30 BP gas stations,
each of which sells an average of 3.5 million gallons of gasoline a year, four times the average
of a gas station in Europe. BP offers Russian drivers good service (a rare commodity in this
market), as well as minimarkets with espresso bars and a wide selection of wines; this is in stark
contrast to the Russian gasoline stations where customers pay for gasoline by stuffing cash
through a tinted window and where they communicate with the salesperson through a
microphone. The joint-venture entry mode is not limited to developing countries. Numerous joint
ventures are operating throughout Europe, and they are increasingly coming under the scrutiny
of the European Commission, which assesses their impact on competition. Typically, the
Commission appoints a taskforce to investigate the impact of the joint venture on competition
and then issues a statement of objections within six to eight weeks, giving the companies
involved a chance to respond and request a hearing before the Commission makes its final
decision with regard to the joint venture; whenever no such statement is issued, the deal is
assumed to be on its way for approval, One joint venture that the European Commission has
examined involves the diamond giant De Beers Centenary AG (the world's largest diamond-
mining company) and the French luxury goods company LVMH Moet Hennessy Louis Vuitton
SA (which owns, among others, Christian Dior, Moe't & Chandon, Louis Vuitton, and Donna
Karan); the company wants to produce De Beers-branded jewelry and open a network of
exclusive shops all over the world.

Overall, 70 percent of all joint ventures break up within 3.5 years, and international joint
ventures have an even slimmer chance for success. Companies can, to a certain extent, control
their chances for success by carefully selecting the joint-venture partner; a poor choice can be
very costly to the company. Other factors that will increase the success of the international joint
venture are the firm's previous experience with international investment and the proximity
between the culture of the international firm and that of the host country; a greater distance
erodes the applicability of the parent's competencies.

Reasons for the failure of joint ventures are numerous. The failure of a partner can lead to
the failure of the joint venture²for example, the joint venture between a mid-size company, Bird
Corp. of Dedham, Massachusetts, and conglomerate Sulzer Escher Wyss Inc., a subsidiary of
Sulzer Brothers Ltd. of Switzerland. Although the joint venture performed well, Bird Corp.
experienced serious problems, with unsteady revenues and slim profits, leading to the failure of
the joint venture. Even a natural disaster or the weather could lead to failure: Zap-ata, a $93
million Houston, Texas, company involved in natural gas exploration, took a 49 percent share in
a joint venture with Mexican investors with the goal of fishing on Mexico's Pacific coast for
anchovies, processing them, and selling them as cattle and poultry feed The weather system El
Nino caused the anchovies to vanish, leading to the failure of the joint venture.
 Like licensing and franchising, joint-venture partners can turn into viable competitors that
know the firm's operations and competitive strategies. In this case, the local partner will
undoubtedly become a formidable competitor locally, where the firm will be protected by the
government. Internationally, however, the international firm has some capability to combat the
new competitors through controls and agreements with the supply chain and distributors that will
prevent access to equipment or to markets, for example.

%

  

In analyzing the results of joint ventures in China, I observes that joint ventures are hard
to sustain in stable environments and concludes that more direct investment will be wholly
owned offering Johnson and Johnson¶s oral-care, baby and feminine hygiene products business
as a success story. Whilst all market entry methods essentially involve alliances of some kind,
during the1980s the term strategic alliance started to be used without being precisely defined to
cover a variety of contra contractual arrangements which are intended to be strategically
beneficial to both parties and which cannot be defined as clearly as licensing or joint ventures.
Defined strategic alliances in terms of at least two companies combining value chain activities
for the purpose of competitive advantage. Perhaps one of the most significant aspects of
strategic alliances has been that it has frequently involved cooperation between partners who
might in other circumstances be competitors. Some examples of the bases of alliances are:

 Technology swaps
 R&D exchanges
 Distribution relationships
 Marketing relationships
 Manufacturer supplier relationships
 Cross-licensing

There are a number of driving forces for the formation and operation of strategic
alliances. Insufficient resources: the central argument is that no organization alone has sufficient
resources to realize the full global potential of its existing and particularly its new products,
competitors will exploit the opportunities which arise and become stronger. In order to remain
competitive, powerful and independent companies need to cooperate. Pace of innovation and
market diffusion: the rate of change of technology and consequent shorter product life cycles
mean that new products must be exploited quickly by effective diffusion out into the market. This
requires not only effective promotion and efficient physical distribution but also needs good
channel manager, especially when other members of the channel are powerful, and so, for
example the strength of alliances within the recorded music industry including artists, recording
labels and retailers has a powerful effect on the success of individual new hardwire products
such as the Sony compact disc and Philips digital compact cassette. High research and
development costs: as technology becomes more complex and genuinely new products become
rarer, so the costs of R&D become higher. For example, Olivetti and Canon set up an alliance to
develop copiers and image. In order to recover these costs and still remain competitive,
companies need to achieve higher sales levels of the product.
 The pharmaceutical company Glaxo¶s success in marketing Zantac, its nulcer drug, was
achieved by using a network of alliances the most effective of which was including Roche in the
US. Concentration of firms in mature industries: many industries have used alliances to manage
the problem of excess production capacity in mature markets. There have been a number of
alliances in the car and airline business, some of which have lead ultimately to full joint ventures
or take\over. Government cooperation: as the trend towards rationalization continues, so
governments are more prepared to cooperate on high cost projects rather than try to go it alone.
There have been a number of alliances in Europe- for example, the European airbus has been
developed to challenge Boeing, and the Euro fighter aircraft project has been developed by
Britain, Germany, Italy and Spain. Self-protection: a number of alliances have been formed in
the belief that they might afford protection against competition in the form of individual
companies or newly formed alliances. This is particularly the case in the emerging global high
technology sectors such as information technology, telecommunications, media and
entertainment.

Market access: strategic alliances have been used by companies to gain access to
difficult markets, for instance, Caterpillar used an alliance with Mitsubishi to enter the Japanese
market. In light of the fact that two thirds of alliances experience severe leadership and
financing problems during the first two years, emphasize the need to consider carefully the
approach adopted for the development of alliances. They have stressed the need to analyze the
situation, identify the opportunities for cooperation and evaluate shareholder contributions have
identified some guidelines for success in forming alliances. There needs to be a clear
understanding of whether the alliance has been formed as a short-term stop gap or as a long
term strategy. It is, therefore, important that each understands the other partner¶s motivations
and objectives, as the alliance might expose a weakness in one partner which the other might
later exploit. It is apparent that many strategic alliances are a step towards a more permanent
relationship, but the consequences of a potential breakup must always be borne in mind when
setting up the alliance. Glaxo appears to have changed its strategy resulting in the take-over of
Welcome. More recently it announced a proposed, merger with Smith Kline Beecham but at the
first attempt it failed, apparently because of a clash of personalities of the top executives. As
with all entry strategies, success with strategic alliances depends on: effective management,
good planning, adequate research, accountability and monitoring. It is also important to
recognize the limitations of this as an entry method. Companies need to be aware of the
dangers of becoming drawn into activities for which it is not designed.

The magnitude of the advantages and disadvantages associated with each entry mode is
determined by number of factors, including transportation costs, trade barriers, political risks,
economic risks, costs and firm strategy. The optimal entry mode varies by situation, depending
on these factors. Thus, whereas some firms may best serve a given market by exporting, other
firm may better serve the market by setting up a new wholly owned subsidiary or by acquiring
an established enterprise. In the opening case Tesco has primarily entered foreign markets
through acquisition of established players in those markets. Strategic alliance are cooperative
agreements between actual or potential competitors. The term strategic alliances is often used
to embrace a variety of arrangements between actual or potential competitors including cross
shareholding deals, licensing arrangements, formal joint ventures, and informal cooperative
arrangements. Strategic alliances have advantages and disadvantages, and Tesco must weigh
these carefully before deciding danger is that the firm will give away more to its ally than it
receives.



Ñ   





In deciding to go abroad, the company needs to define its marketing objectives and
policies. What proportion of foreign to total sales will it seek? Most companies start small when
they venture abroad. Some plan to stay small; others have bigger plans. ³Going abroad´ on the
internet poses special challenges.

$


Straight extension means introducing the product in the foreign market without any
change. Straight extension has been successful with cameras, consumer electronics, and many
machine tools. In other cases it has been a disaster. General foods introduced its standard
powered jell-O in the British market only to find that British consumers prefer the solid wafer or
cake form. Campbell Soup Company lost an estimated $30 million in introducing its condensed
soups in England; consumers saw expensive small-sized cans and did not realize that water
needed to be added. Straight extension is tempting because it involves no additional R&D
expense, manufacturing retooling, or promotional modification; but it can be costly in the long
run.

$
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Product development is a critical activity for all TNCs. A globally standardised product
can be made efficiently and priced low but may end up pleasing few customers. On the other
hand, excessive customisation for different markets across the world may be too expensive.
The trick, as in the case of other value chain activities, is to identify those elements of the
product which can be standardised across markets and those which need to be customised.
Thus, a standard core can be developed, around which customised features can be built to suit
the requirements of different segments.

Japanese companies such as Sony and Matsushita have been quite successful in
marketing standardised versions of their consumer electronics products. These companies, had
limited resources during their early days of globalisation, and cleverly identified features, which
were universally popular among customers across the world. Global economies of scale helped
them to price their products competitively. At the same time, they laid great emphasis on quality.
Consequently, their products, even without frills, began to appeal to customers. Many of Sony¶s
consumer electronics products are highly standardised except for components that have to be
designed according to national electrical standards. This is also the case with Matsushita.

Canon offers an interesting example of a Japanese company that took into account
global considerations at the cost of domestic requirements while developing a new product. In
its domestic market, customer requirements were quite different, photocopiers being expected
to copy all sizes of paper. Canon felt that to emerge as a global player, the design had to be
built around the requirements of the US, the largest market for photocopiers in the world. In the
process, the company deliberately overlooked some of the features required by Japanese
customers, to keep its development costs under control.
 #  1
Honda¶s approach to the development of its well known car model, Accord is a classic
example of how transnational companies attempt to strike the optimum balance between
standardisation and customisation. The trigger point in Honda's product development efforts
came during President Nobunhiko Kawamoto¶s visit to the US in 1994. When US customers
complained that the Accord was too small, Honda responded by making efforts to µlengthen its
nose and bulk up its rear end.¶ Though Honda incurred substantial expenditure, the move paid
off and the Accord almost overtook Ford¶s popular model, Taurus. Unfortunately, the new model
did not find acceptance among Japanese customers. Honda realised that a truly global car had
to gain popularity not only in the US but also in Japan and Europe. At the same time, designing
separate models for each market would be prohibitively expensive. 
Soon, Honda began coordinated efforts to develop a platform which could be shrunk,
stretched or bent to offer different shapes of the overlying car for different markets. The
development efforts were closely monitored by Kawamoto, who wanted different models for
different markets but within a tight budget. Chief Engineer Takefumi Hirematsu, who was made
in charge of the project, realised the need for a fresh approach. His solution was to develop
radically different vehicles based on a single frame. Hiramatsu decided to move the car¶s gas
tank back between the rear tires, so that he could design a series of special brackets that would
allow him to hook the wheels to the car¶s more flexible inner subframe. These brackets allowed
Honda to push the wheels together or pull them apart, easily and cheaply.
Honda¶s flexible global platform resulted in three Accords which cost 20% less to
develop compared to the single Accord model it had developed four years back. Honda saved
approximately $1200 per car enabling it to take on competing models, Camry (Toyota) and
Taurus (Ford). For the US market, the Accord was 189 inches long and 70 inches wide with a
higher roof, and a roomy interior consistent with its positioning as a family car. For the Japanese
market, the model not only had a lower roof compared to the US model, but was also six inches
shorter and four inches thinner and incorporated high tech accessories in line with the tastes of
Japanese customers. For the European market, the model had a short narrow body for easy
navigation on narrower roads and aimed to provide a µstiffer, sportier ride.¶

In the case of industrial products, standardization may become unavoidable if

customers coordinate globally their purchases. This seems to be true in the PC industry.
Companies such as Dell are taking full advantage of this trend, which is likely to strengthen
further, as companies increasingly feel the need to integrate corporate information systems
across their global network. MNCs often choose to replicate the computer system in their
headquarters across their worldwide network to minimize training and software development
costs.
 In industries characterized by high product development costs (as in the
pharmaceuticals industry) and great risk of obsolescence(as in the case of fashion goods),
there is a great motivation for developing globally standardized products and services. By
serving large markets, costs can be quickly recovered. Even in the food industry, where tastes
are largely local, companies are looking for opportunities to standardize as developing different
products for individual markets can be prohibitively expensive. Though identical offerings
cannot be made in different markets, companies are developing a core product with minor
customization, (like a different blend of coffee), to appeal to local tastes.
 In their enthusiasm to reduce costs by offering standard products, MNCs need to avoid
some pitfalls. Customer preferences vary across countries. A product developed on the basis of
some µaverage¶ preference may well end up pleasing no one. As Kenichi Ohmae has
remarked*: ³When it comes to product strategy, managing in a borderless economy doesn¶t
mean managing by averages. It doesn¶t mean that all tastes run together into one amorphous
mass of universal appeal. And it doesn¶t mean that the appeal of operating globally removes the
obligation to localize products. The lure of a universal product is a false allure.´
Some products tend to be more global than the others. These include cameras,
watches, pocket calculators, premium fashion goods and luxury automobiles. In the case of
many industrial products, since purchase decisions are normally taken on the basis of
performance characteristics, considerable scope exists for global standardization. However,
even here, local customization may be required in engineering, installation, sales, service and
financing schemes. In the same industry, different segments may have different characteristics.
Institutional financial services, tend to be more global than retail ones. Ethical (prescription)
medicines tend to be more global than OTC drugs.
Within a given product, some features lend themselves to global standardisation.
Consider a product like cars. Traditionally, car manufacturers have developed hundreds of
models to meet the needs of different markets without exploring the scope for standardisation.
This has resulted in unused capacities and inefficiencies. Faced with excess capacity, car
manufacturers have been looking for ways to cut costs. One approach has been to build models
of different shapes for different markets around standardised platforms. The idea here is that the
basic functionality of a car can be extended globally while features and shape are customised to
appeal to varying consumer tastes in different parts of the world. Ford, Honda (See Box

$

  

International positioning is far more complicated than positioning in the domestic

market. The degree and nature of segmentation can vary across countries. Brands may not be
perceived the same way in different regions. The importance of product attributes may vary from
market to market. A TNC¶s ability to convey an identical positioning across countries may also
be constrained by the different degrees of sophistication in the local marketing infrastructure.
Well-entrenched local brands can also cause problems by creating competitive pressures that
demand a different positioning. Having said that, opportunities for global positioning are
expanding due to the convergence of tastes. Global communication media and frequent travel
between countries are creating a degree of homogeneity in consumer tastes. In the case of
industrial products, organizational linkages created by professional organizations are
accentuating this trend.

In general, a global positioning is recommended when similar customer segments exist

across countries, similar means of reaching such segments are available, the product is
evaluated in a similar way by different segments, and competitive forces are comparable. On
the other hand, differing usage patterns, buying motives and competitive pressures across
countries result in the need for positioning products uniquely to suit the needs of individual
markets.

Global positioning ensures that money is spent efficiently on building the same set of
attributes and features into products. Global positioning can also reduce advertising costs.
However, as mentioned earlier, uniform positioning without taking into account the sensitivities
of local markets can result in product failures.
 For a long time, Citibank has been serving the premium segment in India. To open a
savings bank account, the minimum deposit required is Rs. 3 lakhs. While this may sound
reasonable in dollar terms ($7000) it is obviously beyond the reach of the Indian middle class.
Citibank has probably realized that targeting the mass market is a Herculean task in a vast,
predominantly rural country like India where there are also several restrictions on the expansion
of foreign banks. Hence its decision to limit itself to India¶s major cities and target wealthy
individuals and blue chip corporate. Citibank¶s up market positioning as a consumer finance
company, rather than a commercial bank, needs to be appreciated in this context. Now Citibank
seems to have realized the need for offering products and services for the mass market. Its new
Suvidha scheme is in line with the changed philosophy.

Global positioning of products often evolves over time. Ford offers some useful insights in
this context. The automobile giant¶s Escort model was launched individually in different
countries. Each country not only came up with its own positioning but also developed its own
advertising messages using local agencies. In some countries, the product was positioned as a
limousine and in others as a sports car. Compared to the Escort, Ford¶s new compact, Focus is
a classic example of global positioning. The Focus is being launched across different markets
as a car with a lot of design flair, plenty of space, great fuel efficiency and special engineering
features to enhance safety. Ford has employed only one advertising agency for the launch of
the Focus.
Nestle uses positioning documents for its global, as well as, important regional brands.
These documents are prepared by the respective strategic business units in consultation with
marketing personnel from different parts of the world and are approved by the general
management. In the late 1990s, roughly 40% of Nestle¶s total sales was generated by products
covered by the Nestle corporate brand. For some products such as pet foods and mineral water,
Nestle has chosen to keep the brands as distant as possible from the corporate brand. Nestle
CEO Peter Letmathe* explains: ³We felt that people buying water are looking for the purity of
the source whereas our seal is that of a manufacturer. So we set up a special institute, Perrier ±
Vittel, which puts its own guarantee on mineral water.´

The choice of brand name is an important issue in global marketing. Companies such
as Coca-Cola have used the same brand name around the world for their flagship products.
Others have used different names to convey the same meaning in different languages across
the world. Volkswagen has chosen the same brand name across various countries for many
models but there have been some exceptions. It has a series of model names denoting Wind -
Golf (gulf wind), Sirocco (hot wind in North Africa) and Passaat (trade wind). Golf is one of
Europe's most popular cars. For the US market, however, Volkswagen renamed the Golf as
Rabbit to project a youthful image. Japanese car maker Nissan's experience offers useful
lessons. When Nissan started exporting cars to the US, it chose the name Datsun. After
establishing the brand over a period of time, it decided to revert back to Nissan. Sales however
plummeted, with the name change possibly playing a major role in the decline.
#)
 

In general, advertising is more difficult to standardise, than product development. Due

to language differences, chances of being misunderstood are great, especially in the case of
idiomatic expressions. Besides, cultural differences can result in different interpretations of the
same advertisement in different countries. Differences in media infrastructure also play an
important role. In many emerging markets, due to a low penetration of TV sets in rural areas,
film based advertising is ruled out. Differences in government regulations also stand in the way
of developing a standardised approach to advertising. In Germany, comparative advertising is
not permitted. Commercials showing children eating snacks are not allowed in Italy. Many
countries impose restrictions on the advertising of alcohol and cigarettes. Due to all these
factors, advertising copy content may have to be modified suitably. Yet, some advertising
activities can be rationalised, to do away with inefficiencies resulting from excessive
customisation.
Consider the choice of advertising agency. A totally decentralised approach would mean
selection of different agencies for different countries. While local agencies are often in the best
position to understand the needs of the local markets, no global company can afford a totally
uncoordinated approach towards advertising. Nestle once employed over a hundred different
agencies. As the company looked for global branding opportunities, coordinating the activities of
multiple agencies became a major problem. Nestle decided to retain only a few agencies ± Mc
Cann Ericsson, Lintas, Ogilvy & Mather, JWT, Publicis / FCB and Dentsu.

$    




 
 

Pricing very often has to take into account local factors, especially in the case of consumer
goods. Indians are among the world¶s most price sensitive customers. Yet, many MNCs
operating in India have ignored the mass market and launched products for the upper end of the
market. Consequently, their ability to build volumes has been threatened. Consider the
following.
@ When §Y u
  entered India in June 1995, it was expected to do well, as it had the
advantage of owning one of the leading brands in the world. By mid 1998, Levi had realised
that it was going nowhere. Teenagers perceived Levi's products, priced over Rs 2,000, to
be too expensive, forcing the company to tone down its premium image.
@ ÎY 1 started marketing its brands in India in 1995. Till April 1999, however, Nike did not
offer any product priced below Rs 2500. Needless to say, volumes did not pick up. In July,
1999, Nike was forced to introduce sneakers priced at Rs 999 to meet the general purpose
needs of entry level sports enthusiasts.
@ xY  recently launched a ketchup in India and claimed2: "We're bringing real ketchup to
India." A 500 gm bottle was priced at Rs 65, 20% more than market leader, Maggi. Heinz
feels that Indian customers will be willing to pay a premium as Indian taste buds are
sophisticated enough to distinguish the superior taste.
@ Y

 has decided to focus on the premium segment in the urban areas of India. Zubair
Ahmed, Gillette's country manager explained recently3: "While most of the blade sales are in
the rural markets, these constitute low cost blades. That's not a game that Gillette would
like to get involved in since our game plan is to increase value." Even Gillette's new
launches in the flat blades segment are priced four to five times higher than those of
competitors.
@ Ñ4 is a relatively small player in the global automobile industry and is known for its
aggressive pricing strategies. Yet, when it launched its small car, Matiz in India in
 November, 1998, Daewoo announced a price of Rs. 3.55 lakhs, substantially higher than the
country's best selling car, Maruti 800. Daewoo's price was also higher compared to
competitors like Hyundai (Santro) and the Tatas (Indica). Subsequently, Daewoo cut prices
to boost sales.

Nestle CEO Peter Letmathe has explained the role of an advertising agency in the
company¶s globalisation efforts5: ³ To us, the most important thing is to have dedicated teams.
Mc Cann for instance has 10 people working only with Nestle. I see them as an extended arm of
my communications team. They visit every six weeks to tell us what they are doing around the
world.´ Nestle subsidiaries have encouraged their local agencies to tie up with the company¶s
global agencies. The rationalisation of worldwide communications efforts has helped Nestle cut
advertising in the case of products such as coffee, ice creams and chocolates.

Nestle has also made attempts to transfer advertising content across countries, but there
are obvious limits, as Letmathe explains through an example1: ³Some time ago, Chile produced
an outstanding Nescafe commercial. In a little house by a lake, a man gets up early and tries to
wake his son (who prefers to stay in bed) to go fishing. We see the disappointed father sitting in
the morning mist at the lake. Then the son reconsiders the decision, gets up and makes a cup
of coffee and brings it to his father for a moment of spontaneous renewal. Their whole
relationship is built up through coffee. Now, the same commercial, projected in a different
market can bring completely different connotations. In Paris, you might even provoke ecological
feelings that look almost like an environmental statement. The same images are perceived
totally differently.´

$  

When it comes to pricing, both global and local approaches can be used, depending on
the specific situations. Consider the virtual bookstore Amazon.com, which sells books -
essentially branded products. Customers typically have a distinct preference for a particular
book. For Amazon. com, global pricing makes sense except in cases where cheaper reprints
are available for developing countries. On the other hand, in the car industry, pricing has to take
into account local factors. Companies such as Ford2 and General Motors are realising that their
Indian customers are unwilling to pay Rs. 8-9 lakhs (based on an exchange rate of Rs. 45/$) for
the same models which cost $15 ± 18,000 in the US and Western Europe. This is putting
pressure on them to look for ways to cut costs, indigenise and offer cheaper models. Fiat¶s
success in Brazil has been largely due to its ability to design and offer value for money cars.
Sometimes, global pricing becomes difficult because of different levels of competition in different
markets. A company like GE which follows global pricing for its jet engines, makes suitable
adjustments to take into account local competitive factors. Using a uniform price relative to
competitors appears to make sense in many cases as it protects market share while maintaining
a consistent positioning. A point which MNCs should appreciate is that multiplying the home
country price by exchange rate to arrive at the price in the overseas market may not always be
appropriate. Very often, there is a significant difference between the market exchange rate and
the exchange rate calculated on the basis of the relative purchasing power of the two
currencies.






%2Ñ

 

Approaches to personal selling can vary from country to country. In some markets,
door to door selling is very popular while in others, people prefer to shop at retail stores.
Telemarketing is quite popular in the US but not so in many Third World countries. Yet
opportunities to standardise should not be ignored. Dell Computer has replicated its direct
selling practices across the world. To be closer to overseas customers in Europe and Asia, Dell
has a plant in Limerick, Ireland and another in Penang, Malaysia. In Ireland, Dell¶s facilities are
very close to the plants of its suppliers such as Intel (microprocessors), Maxtor (hard drive) and
Selectron (motherboard). Such arrangements facilitate the smooth execution of Dell¶s direct
selling, build to order, just in time model. Dell¶s sales persons directly target large institutional
accounts. Retail customers can dial toll free one of its call centres in Europe and Asia. If a
customer in Portugal makes a local call, it is automatically forwarded to the call center in France
where a Portuguese speaking sales representative answers the customer¶s questions.
International distribution has to take into account local factors. Strategies can vary from
country to country owing to different buying habits. In some societies, µmom and pop¶ stores
proliferate, while in others large departmental stores carrying several items under one roof are
popular. In some countries, intermediaries handle credit sales, while in others, cash transactions
are the norm. Even within developed countries, significant differences exist in the channels of
distribution. (See Note: Distribution in Japan at the end of the chapter). The rapid emergence of
the Internet is however changing the old paradigm. Many companies are seriously looking at
the potential of the Net as a global distribution vehicle, an excellent example being
Amazon.com.



%
c 

All types of steel products will be required to support the ongoing industrial growth in the
country. Because there is Y

Y

Y $Y starting from pin to construction,
automobile, railways and engineering. In short, promotion of steel usage today has gained so
much of importance both at national and international levels. But one needs to be very selective
well in advance today in deciding the product mix that should be able to meet users demand in
domestic international market.

Successful operation of highly sophisticated iron and steel industry depends to a great
extent or technical and commercial information, particularly, the information in respect of various
options of plants and equipments, their availability, range of investment, selection of sites, use
or users of the product, availability and demand for the product in market (present and future)
prospective competitors, various tariff and non tariff barriers, price trends in domestic and
international markets are some of the essential information which an entrepreneur must know at
least broadly before entering into steel industry.

However, India¶s positioning in the global perspective will depend upon cost
competitiveness of the Indian. Besides the continuous emphasis is to given on new
technology/process/products developed, productivity improvement, quality improvement.
However, India¶s positioning in the global perspective will depend upon cost competitiveness of
the Indian. Besides the continuous emphasis is to given on new technology/process/products
developed, productivity improvement, quality improvement.

#
è!Ñ #ÑÑ!c,!%è!%"cÑ %!ccÑc#

Higher infrastructure spending - It is an unquestionable fact that the infrastructure

situation in India is poor. If the Indian economy has to maintain its growth rates, the
infrastructure situation has definitely got to improve. Spending on infrastructure will definitely
lead to a higher demand for steel.

Higher standard of living ± The standard of living is expected to go up in the coming

decade. This will in turn push up the demand for consumer durable and automobiles.
Percentage of the demand for flat products comes from these industries. Hence, any pickup in
these sectors should lead to a higher demand for flat products.

Steel Products can be categorized as:


%( : These are intermediate products cast from liquid steel for further rolling into
finished products. These are often sold by Integrated Blast Furnace Producers (IBFPs) to small
mini mills and rolling mills to be rolled into finished steel. They include billets, blooms, rods,
which are rolled into long products or slabs which are rolled into flat products. While some
countries export semis (e.g. Russia), India uses them in the domestic industry as inputs for
higher value added long and flat products.





"  
: These include bars, rounds, angles and structural and are mainly used in
construction, infrastructure and heavy engineering. These products require lesser capacities.
Long products are the largest steel category produced in India accounting for around 50% of
total production.



: These include sheets, coils and plates and are mainly used in automobiles and
consumer durable. The technology for the manufacture of flats is critical and it requires larger
capacities for manufacturing. These are high value products and enjoy higher margins. These
can be hot rolled, cold rolled, galvanized or coated. This category, usually the largest product
category in developed countries is small in India accounting for about 44%.

$"These include seamless pipes and welded pipes. Stainless steel is the generic name for
a number of different steels used primarily for their resistance to corrosion. The one key element
they all share is a certain minimum percentage (by mass) of chromium: 10.5%. Although other
elements, particularly nickel and molybdenum, are added to improve corrosion resistance,
chromium is always the deciding factor. The vast majority of steel produced in the world is
carbon and alloy steel, with the more expensive stainless steels representing a small, but
valuable niche market.

c
 
 



$   Ñ

 

· Price regulation of Iron and steel was abolished on 16.1.1992.

· The government removed the distribution controls on iron & steel except five priority sectors
i.e. Railways, Defense, Small Scale Industries Corporations,
Engineering Goods Exporters and North Eastern Region.
· Government has no restriction over prices of iron and steel products
· Price increases have taken place mainly in long products than flat products.

c
c  %


Least potential items are ERW and seamless pipes and tubes, since their imports are
controlled. India has been importing around 1.5 Million Tones of steel yearly.

c  %
&

· Advance Licensing Scheme allows duty free import of raw materials for exports.
· Duty Exemption Pass Book Scheme also facilitates exports.
· Indian steel exports have been subject to anti-dumping/anti-subsidy duties actions by the
stronger economies over the last few years.

China has imposed safeguard measures on import of various items of steel products by fixing
tariff quotas. However, these measures do not apply to India. The rising trend in Indian steel
exports that was being witnessed in the last couple of years was halted due to these anti
dumping actions initiated by the advanced, developed nations of the world, which led to the loss
of major markets for the Indian steel exporters. Despite the initial setbacks Indian exports have
recovered - largely due to the ability to find out alternative export markets where selling steel
has been profitable. (www.steel.gov.in/annual.htm)

  !$!è%$%+cÑc#%#c"%%%"cÑ %!

The Indian steel industry has a bright future with 75% of market of stainless steel is in
kitchen segment. 95% of the gas stove market uses only stainless steel. India has emerged as
the largest manufacturer of 200 series low nickel stainless steel in the world. Railways will used
to manufacture of passenger coaches requiring 15 mt stainless steel per coach in next 5 years.
The Delhi Metro Rail Corporation tendered for 200 all stainless steel coaches. The government
of India is using ferric cold rolled stainless steel strips for making coins.
(www.steel.gov.in/annual.htm) The usage in industrial and other segments is still very low which
will be expected increase in future.


  

 c  




The transport and automotive sector accounts for nearly 14% and the construction sector
takes around 12% stainless steel. In India at present consumption in these two segments put
together is just l%. This gives clear picture of future prospects in both building and transport
sectors in India. The automobile companies also will be demanding the use of stainless steel in
increasing amounts for the production of fume exhaust and catalytic converter applications. The
major international fast food joints are investing in India for the consumption of stainless steel.
Fast food joints using good quantity of stainless steel for making kitchen equipments, service
area and furniture. The major steel exporting companies aimed on China because it still imports
70% of its total demand of 1.5 million tons. The large potential exists in value added products
like pipes, tubes and kitchen utensils. Also India also good production environment for stainless
steel long products like bar, rod and wires which has good markets in Europe, South East Asian
region and USA.
%
Having done all the preparatory planning work (no mean task in itself!), the prospective
global marketer has then to decide on a market entry strategy and a marketing mix. These are
two main ways of foreign market entry either by entering from a home market base, via direct or
indirect exporting, or by foreign based production. Within these two possibilities, marketers can
adopt an "aggressive" or "passive" export path.

Entry from the home base (direct) includes the use of agents, distributors, Government
and overseas subsidiaries and (indirect) includes the use of trading companies, export
management companies, piggybacking or countertrade. Entry from a foreign base includes
licensing, joint ventures, contract manufacture, ownership and export processing zones. Each
method has its peculiar advantages and disadvantages which the marketer must carefully
consider before making a choice.

Global marketing strategies have to respond to the twin needs of global standardisation
and local customisation. In their quest to maximise local responsiveness, companies should not
overlook opportunities to standardise and cut costs. On the other hand, an excessive emphasis
on generating efficiencies through a standard marketing mix may result in the loss of flexibility.
The challenge for global marketers is to identify the features which can be standardised and
build a core product. Then customised offerings can be designed around the core product for
different markets. In real life, striking the right balance between standardisation and
customisation can be extremely challenging.

A classic example is Volkswagen, which faced major problems while trying to market its
best selling model, Golf in the US. CEO, Carl Hahn, who had been leading the company's
globalisation efforts admitted* "Our basic mistake was to trust the design adaptation of the Golf
to American thinking: too much attention to outward appearances, too little to engineering detail.
We were not true to our heritage. We gave American customers a car that had all the handling
characteristics - one might say the smell - of a US car. We should have restricted ourselves to
our traditional appeal, aiming at customers, who were looking not for American style but for a
European feel. Instead, we gave them plush, colour coordinated carpeting on the door and
took away the utility pocket. We gave them seats that matched the door but were not very
comfortable."
! 

1. Cunningham, M.T. "Strategies for International Industrial Marketing". In D.W. Turnbull and
J.P. Valla (eds.) Croom Helm 1986, p 9.

2. Pavord and Bogart. "Quoted in The Export Marketing Decision" S.A. Hara in S. Carter (Ed)
"Export Procedures", Network and Centre for Agricultural Marketing Training in Eastern and
Southern Africa 1991.

3. Piercy, N. "Company Internationalisation: Active and Reactive Exporting".   #  
% 
Y
 Vol. 15, No. 3, 1982, pp 26-40.

4. Collett, W.E. "International Transport and Handling of Horticultural Produce" in S. Carter (ed.)
"Horticultural Marketing". Network and Centre for Agricultural Marketing Training in Eastern and
Southern Africa, 1991.

5. Korey, G. "Multilateral Perspectives in International Marketing Dynamics".   #  

% 
Y
 Vol. 20, No. 7, 1986, pp 34-42.

6. Khoury, S.J "Countertrade: Forms, Motives, Pitfalls and Negotiation Requisites". #   
[ Y & Vol. 12, 1984, pp 257-270.

7. Shipley, D.D. and Neale, C.W. "Successful Countertrading. Management Decision", Vol. 26,
No. 1, pp 49-52.

8. Anderson, E. and Coughlan, A.T. "International Market Entry and Expansion via Independent
or Integrated Channels of Distribution". #  % 
Y
 Vol. 51. January 1987, pp 71-82.