Q. What is international Marketing?

Ans: International marketing refers to the function of marketing values in more than one
country, by companies abroad or exceeding national borders. International marketing is
founded on an annex of a company’s local marketing policy, with special emphasis put on
marketing identification, aiming, and decisions globally.

Q. difference between controllable and uncontrollable investment

Ans:

CONTROLLABLE VARIABLES

Controllable variable refer to those variables that can be easily controlled by a business-man
or a company to suit the demand of the business. They include the following:
• Product:
A company or marketer is said to have control over a product because he or she can
undertake the following adjustments to suit prevailing demands of the business. The
business can increase the capacity of output to cope with increasing demand, modify the
product in terms of color, size, shape, fashion, design ,or change the package of the product
and so on.
• Price:
A business or a marketer is said to have control over price of his products because he or she
can undertake the following adjustments to suit the demand on business: it can offer
discounts, offer price reductions or use the money off e.g. he can use this slogan, “buy two
get one free”.
• Promotion:
A marketer is said to have control over promotional activities of his organization because of
the following factors: it is able to select appropriate promotional media to use depending on
different situations , is able to select appropriate slogans to use for different market
segments. It can to do this because different advertising slogans are perceived differently in
different market segments.
• Place or Distribution:
A company or a marketer is able to control distribution activities in his or her organization by
way of choosing appropriate marketing channels to use in the distribution of his goods and
services e.g. supermarkets, village shops, kiosks and multiple shops. This will enable
customers to get goods at the right time and place.
• Suppliers:
Companies can either increase the number of suppliers or decrease it.
UNCONTROLLABLE VARIABLES

these refer to those variables that a marketer has little or no control over them. But they can
affect a marketer’s activities either positively or negatively. As such, a marketer has to devise
ways of undertaking these activities under the umbrella of these variables. These variables
include:
• Demography:
This simply refers to the study of human population as well as its structure. This can affect
marketing activities in the following ways: A low rate of population growth implies small
potential market for goods and services, and vice versa. High mortality rate affects negatively
the demand for goods and services. Demand for goods and services always decrease.
• Technology:
Changes in technology affect marketing activities either positively or negatively. However,
the marketer has no control over them. As such, he needs to try and cope Political stability:
When a country is stable politically, a marketer’s activities are boosted. As such a marketer is
free to penetrate the market and serve all the customers. But during periods of political
instability in a country, marketers’ activities are jeopardized.
Legal Forces:
The government makes laws that govern a given country. These rules and regulations may
affect marketing activities either positively or negatively.
Social and Cultural Forces:
These include races, tribes, religion, class or status. Due to these differences, the marketer
has to produce what suits the market e.g. Muslims do not eat pork, while Christians do not
smoke and drink beer e.t.c.
Economic Forces:
When the economy of a country is booming, people’s purchasing power becomes high. Hence
they are able to purchase more goods and services. Thus, a marketer registers high sales’
volume. But during economic recession, coupled with inflation and devaluation of a country’s
currency, prices of essential commodities hike. Hence, people are not able to purchase all
that they require due to limited purchasing power.
• Competition:
A company has no control over the activities of competing firms. But to ensure a competitive
strategy is laid down, it has to compete fairly by offering better services and other strategic
techniques.
Adjusting To Uncontrollable Variables

Since the marketer has little or no control to the uncontrollable variables, he can adjust to
them. This can be done through the following strategies:

Competition. It is important for marketers to understand their competition’s marketing mix.

This involves looking at what they are doing and how they go about doing it. This allows you
to see what they could be doing better, and use that information within your marketing
strategy. And depending on your size, you may be able to influence your competition when
you make the most of your signature strengths.

Economy. The current economy must also be taken into consideration. Luxury items may not
do as well in a hurting economy. You can see the opportunities available to offer the most
affordable product. Your marketing strategy will need to be adjusted in order to maintain or
increase your market position in challenging circumstances.

Regulations. Changes in current laws and regulation are also key factors for companies to
keep into consideration. As laws and regulations change, what kinds of products are allowed,
how they are produced, exporting and importing regulations, and shipping can change
drastically

Technology. Having the latest technology can reduce costs, improve the quality of your
product, and make marketing more effective. This can allow you to better target your
customer, produce more efficiently, and create innovative products. As technology changes,
your product or service may become obsolete, like the many manufacturers of buggy whips
after the invention of the automobile. Social. Marketing can be improved by paying attention
to current social trends, such as concern for the environment and going “green”. Knowing
what is most important to your customers will allow you to fine tune your marketing strategy
to better target customers and create the kind of products and services.

Q. Stages of International Marketing Involvement

Ans:
1. No Direct Foreign Marketing – Reactive • Products “indirectly” reach foreign
markets • Trading companies • Foreign customers who contact firm • Domestic
wholesalers/distributors • Web orders • Foreign orders stimulate a company’s
interest to seek additional international sales
2. 18. 2. Infrequent Foreign Marketing – Reactive • Caused by temporary surpluses
– Sales to foreign markets are made as goods become available • Firm has little
or no intention of maintaining continuous market representation • Foreign sales
activity declines and is withdrawn when domestic demand increases
3. 19. 3. Regular Foreign Marketing – Proactive • Dedicated production capacity for
foreign markets • Strategy: – Firm employs domestic or foreign intermediaries –
Uses its own sales force or sales subsidiaries • Products are adapted for foreign
markets as domestic demand grows • Firms depend on profits from foreign
markets
4. 20. 4. International Marketing – Proactive • Fully committed and involved in
foreign markets and international activities • Production takes place on foreign
 soil earning firms the MNC (Multinational Corporation) title • Fedders being
“proactive:” – Looked to Asia for future growth after stymied U.S. sales –
Designed new types of air conditioner unit for the Chinese market – Plan to
introduce new product in the U.S!
5. 21. 5. Global Marketing – Proactive • The firm sees the world as one market! •
Market segmentation is now defined by income levels, usage patterns, or other
factors that span the globe • More than half of its revenues come from abroad •
The firm has a global perspective

Chapter 2

Q. Protectionism
Protectionism, policy of protecting domestic industries against foreign competition by means of
tariffs, subsidies, import quotas, or other restrictions or handicaps placed on the imports of
foreign competitors. Protectionist policies have been implemented by many countries despite
the fact that virtually all mainstream economists agree that the world economy generally
benefits from free trade.

Q. Arguments for Protectionism

Protect sunrise industries

Barriers to trade can be used to protect sunrise industries, also known as infant
industries, such as those involving new technologies. This gives new firms the chance
to develop, grow, and become globally competitive.

Protection of domestic industries may allow they to develop a comparative advantage.

For example, domestic firms may expand when protected from competition and benefit
from economies of scale. As firms grow they may invest in real and human capital and
develop new capabilities and skills. Once these skills and capabilities are developed
there is less need for trade protection, and barriers may be eventually removed.

Protect sunset industries

At the other end of scale are sunset industries, also known as declining industries, which
might need some support to enable them to decline slowly, and avoid some of the
negative effects of such decline. For the UK, each generation throws up its own
declining industries, such as ship building in the 1950s, car production in the 1970s, and
steel production in the 1990s.

Protect strategic industries

Barriers may also be erected to protect strategic industries, such as energy, water, steel,
armaments, and food. The implicit aim of the EUs Common Agricultural Policy is to
create food security for Europe by protecting its agricultural sector.

Protect non-renewable resources

Non-renewable resources, including oil, are regarded as a special case where the
normal rules of free trade are often abandoned. For countries aiming to rely on oil
exports lasting into the long term, such as the oil-rich Middle Eastern economies,
limiting output in the short term through production quotas is one method employed to
conserve resources.

Deter unfair competition

Barriers may be erected to deter unfair competition, such as dumping by foreign firms at
prices below cost.

Save jobs
Protecting an industry may, in the short run, protect jobs, though in the long run it is
unlikely that jobs can be protected indefinitely.

Help the environment

Some countries may protect themselves from trade to help limit damage to
their environment, such as that arising from CO2 emissions caused by increased
production and transportation.

Limit over-specialisation
Many economists point to the dangers of over-specialisation, which might occur as a
result of taking the theory of comparative advantage to its extreme. Retaining some self-
sufficiency is seen as a sensible economic strategy given the risks of global downturns,
and an over-reliance on international trade.

In addition to the economic arguments for protection, some protection may be for
political reasons.
Q. trade barriers

International trade is carried out by both businesses and governments—as long as no one puts
up trade barriers. In general, trade barriers keep firms from selling to one another in foreign
markets. The major obstacles to international trade are natural barriers, tariff barriers, and
nontariff barriers.

Q. The Impact of Tariff Barriers

• Trade barriers such as tariffs raise prices and reduce available quantities of goods
and services for U.S. businesses and consumers, which results in lower income,
reduced employment, and lower economic output.
• Measures of trade flows, such as the trade balance, are accounting identities and
should not be misunderstood to be indicators of economic health. Production and
exchange – regardless of the balance on the current account – generate wealth.
• Since the end of World War II, the world has largely moved away from
protectionist trade policies toward a rules-based, open trading system. Post-war
trade liberalization has led to widespread benefits, including higher income levels,
lower prices, and greater consumer choice.
• Openness to trade and investment has substantially contributed to U.S. growth,
but the U.S. still maintains duties against several categories of goods. The highest
tariffs are concentrated on agriculture, textiles, and footwear.
• The Trump administration has enacted tariffs on imported solar panels, washing
machines, steel, and aluminum, plans to impose tariffs on Chinese imports, and is
investigating further tariffs on Chinese imports and automobile imports.
• The effects of each tariff will be lower GDP, wages, and employment in the long
run. The tariffs will also make the U.S. tax code less progressive because the
increased tax burden would fall hardest on lower- and middle-income households.
• Rather than erect barriers to trade that will have negative economic consequences,
policymakers should promote free trade and the economic benefits it brings.
Q. Quotas and Import Licenses

The fundamental difference between quotas and import licenses as a means of

controlling imports is the greater flexibility of import licenses over quotas. Quotas
permit importing until the quota is filled; licensing limits quantities on a case by case
basis.

Standards

Like many non tariff barriers, standard have legitimacy. Health standards, safety
standards and product quality standards are necessary to protect the consuming public,
and imported goods are required to comply with local laws. Unfortunately standards
can also be used to slow down or restrict the procedures for importing to the point that
the additional time and cost required to comply become in effect trade restrictions.

Safety standards are a good example. Most countries have safety standards for
electrical appliances and require that imported electrical products meet local standards.
However, safety standards can be escalated to the level of an absolute trade barrier by
manipulating the procedures used to determine of products meet the standards. The
simplest process is for the importing to accept the safety standard verification used by
the exporting country, such as Underwriters Laboratories (UL) in the United States. If the
product is certified for sale in the United States and if US standards are the same as the
importing country’s then US standards and certification are accepted and no further
testing s necessary. Most countries not interested in using standards as a trade barrier
follow such a practice.

The extreme situation occurs when the importing nation does not accept the same
certification procedure required by the exporting nation and demands all testing be
done in the importing country. Even more restrictive is the requirement that each item
be tested instead of accepting batch testing. In this case the effect is the same as a
boycott. Until recently, Japan required all electrical consumer products to be tested in
Japan or tested in the United States by Japanese officials Japan now accepts the UL’s
safety tests except for medical supplies and agricultural products, which must be
tested in Japan.
Q. Voluntary Export Restraints
oluntary export restraints (VER) are arrangements between exporting and importing countries
in which the exporting country agrees to limit the quantity of specific exports below a certain
level in order to avoid imposition of mandatory restrictions by the importing country. The
arrangement may be concluded either at the industry or government level.

Q. Antidumping Penalties
An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign
imports that it believes are priced below fair market value. Dumping is a process wherein a
company exports a product at a price that is significantly lower than the price it normally
charges in its home (or its domestic) market.

Example of an Anti-Dumping Duty

In June 2015, American steel companies United States Steel Corp., Nucor Corp., Steel Dynamics
Inc., ArcelorMittal USA, AK Steel Corp., and California Steel Industries, Inc. filed a complaint
with the U.S. Department of Commerce and the ITC. Their complaint alleged that several
countries, including China, were dumping steel into the U.S. market and keeping prices unfairly
low.4

After conducting a review, one year later the U.S. announced that it would be imposing a total
of 522% combined anti-dumping and countervailing import duties on certain steel imported
from China.5 In 2018, China filed a complaint with the WTO challenging the tariffs imposed by
the Trump administration.6 Since then, the Trump administration has continued to use the
WTO to challenge what it claims are unfair trading practices by the Chinese government and
other trading partners.
Chapter 4
Q. Culture’s Pervasive Impact

Culture influences every part of our lives. It affects how we consume and how we spend
money. Culture is pervasive in all marketing activities. In pricing, promotion, channels of
distribution, packaging and styling
And, if successful, the marketer's efforts actually become part of the fabric of culture.
Culture influences every part of our lives
Cultures impact on birth rates in Taiwan, Japan, and Singapore
Birthrates have implications for sellers of diapers, toys, schools, and colleges
Q. Origins of Culture: Technology
Technology is a term that includes many other elements. It includes questions such as is there
energy to power our products? Is there a transport infrastructure to distribute our goods to
consumers? Does the local port have large enough cranes to offload containers from ships?
How quickly does innovation diffuse? Also of key importance, do consumers actually buy
material goods i.e. are they materialistic?

• Trevor Baylis launched the clockwork radio upon the African market. Since batteries
were expensive in Africa and power supplies in rural areas are non-existent. The
clockwork radio innovation was a huge success.
• China’s car market grew 25% in 2006 and it has overtaken Japan to be the second-
largest car market in the world with sales of 8 million vehicles. With just six car owners
per 100 people (6%), compared with 90% car ownership in the US and 80% in the UK,
the potential for growth in the Chinese market is immense.