Marketing international of Topic 1.

An introduction to international Marketing concept

1. The role and the concept of international marketing
2. International marketing environment
3. Decisions in international marketing
1. The role and the concept of international marketing
International marketing – is the process of planning and conducting transactions across national borders in order to
create exchanges that satisfy the objectives of individuals and organizations
The main difference between international marketing and the domestic one conisits of the geographic area
which is much more larger for international activities and the environment.
Within which the marketing plans must be implemented.
International marketers assume that the world is one very large market consisting of a big number of segments that
may be satisfied by offering products and services that correspond to common needs and wants of consumers. In
this case,countries are no more than segments of a macromarket. So marketers are prepared to pass all the
differences and identify similarities in foreign consumers needs and behaviours.

A company has to analyze many issues before deciding to sell abroad. Domestic usually is more stable and easier to
implement than dealing with different countries environment,different foreign consumer behavior and
implementing different marketing plans.If tmarket is large enough,companies may prefer to remain in domestic
business.
Yet,there are several factors domestic that may influence a company to involve in international marketing.
1. The companie’s domestic market may be attached by global companies offering better products or lower prices
2. The company may discover some foreign markets that offer higher profit opportunities than the domestic
market
3. The company may meet an enlarged customer services in order to achieve economies of scale
4. The company may want to reduce its dependence on some market in order to reduce its risks
5. The companie’s customers may be going abroad and require international services
Before making a decision to go abroad a company must analyze several risks:
1. The company might not understand foreign customer preferences nd fail to offer a competitively attractive
product
2. The company might not understand the foreign countries business culture and know how to deal with
effectively with foreign governments
3. The company mught underestimate foreign regulations and deal with some unexpected costs
4. The company might realize that it lacks managers and marketers with international experience
5. The foreign country might change its commercial laws might depreciate its currency for expropriate foreign
property.
International marketing deals with the same knowledge techniques and theoretical framework as domestic
marketing but it implements all the activities in foreign markets
International marketing environments
The international marketing environment-has significant changes in last years creating new opportunities and new
problems for companies that are dealing on international arena.
The most significant changes are:
The growing economic power of EU
The globalization of the world economy reflected in the growth of world trade and investment
The growth of global brands in food clothing,electronics and car industries.
Rising trade barriers to protect domestic markets against foreign competition
The unequal opening of new markets such as China,Eastern Europe and the Arab contries
Serious debt problems of several countries influencing the international financial system
Increased forming of strategic alliances set between international companies from different countries
The speed up of international transportation ,communication

Each company going abroad and doing business on foreign markets deals with the following aspects of the
international marketing environment

The initial trade system

Doing business abroad we should understand the international trade system,because it will face various trade
restrictions. The most common is tarrif.
Tarrif- is a tax imposed by the foreign government against specific imported products. It may be deisgned to raise
revenue or to protect domestic companies.
Quota- sets limits on the amount of goods that the importing country will accept in certain product categories.
The pupose of the quota is to conservce foreign exchange and protect local industry and employment
Embargo-is the form of quota in which imports for certain categories of products are totally banned.
Exchange control- regulates the amount of available foreign currency and its echange note gainst other currencies
Non-tarrif barriers – standards inalte la produse:
Normele ecologice(industria de automobile)
-product standards (the most often used)
Economci environment
By considering the foreign markets, the international marketers must study each country’s economy, 3
characteristics reflect a foreign country attractiveness or an export market.
The size of the country’s population. Other attracted being equal,large countries are more attrached to expenses.
The county’s industrial structure

The following types of international market may be distinguished:

Substistance economies
In a substistance economy the majority of people are engaged in simple agriculture. The consumer most of their
output and barter the rest on simple R&D.the offer few opportunities foe exporters.
Raw material exporting countries
These economies are rich in one/ more natural resourcs but poor in other aspects. Much of their revenue comes
from exporting these resources. These countries tends and suppliers and trucks.
Industrializing economy
In an industrializing economy,manufacturing begins to aacount between 10-20% of the country’s gross national
product. As manufacturing increases,the country focuses more on imports of textile,raw materials,steel and
machinery on imports of finished textiles, paper products and automotors. The indistrualization creates a new reach
class and a small,but growing middle class and a small,but growing middle class,both demanding new types of
goods,that can be satisfied only by imports (Moldova)

D. Industrializied economies
Industrial eoconomiws are the biggest exporters of manufactured products and investment funds,they usually trade
manufactured goods themselves and also export them to other types of economies in exchange for raw materials
and semi-manufactured goods. The large and varied manufacturing activities of these industrial notions and the big
size of middle class make them attractive markets for all sources of G & S

The country’ s income distribution

Income distribution is created to a country’s industrial structure,but it’s alo affected by the political system. The
international marketor may face different income distribution structure:
Very law incomes (substistance economy)
Mostly law incomes ( raw material exp.countries)
Very law and very high incomes (india,moldova,no middle class)
Low,middle and high incomes
Mostly medium incomes (elvetia)

Political and legal environment

Companies differ in their political and legal environment. A company should consider. Factors in deciding to do
business in a particular country
Attitudes toward international business. Some notions are very receptive,managing foreign companies, other
companies may be more protective,and improve additional import quotas,blocked currencies and local management
requirements.
China,Mexic –open Bellorussia,Moldova- non-open

Political stability
The country’s future stability is a very important inside because they may change very rapidly and sometime quite
violently. Even without a change,the political party may decide that the foreign company’s political property might
be approximated,or import quotas or new duties might be imposed.
Where political instability is high,international marketers might still find it profitable to do business in the
country,but the situation will affect their way of entry. They will prefer export instead of direct investment.

Monitory regulations
Companies want to realize profits in a currency of value to them.
In the best situation,the import can pay in the seller’s currency or in foreign currency that is usually used on the local
market. In some countries,sellers might face currency restrictions,slacked currency or fluctuating exchange rate,that
may create some additional risks.

Government beauracracy
This factor shows how the host government runs an efficiency system for arising foreign companies. For, ex ; licesing
procedures,adequate market information, efficient customs

Cultural environment
Each country has its own values,customs and taboos. Foreign business people if they want to be effective must try to
understand the culture and business practices that may affect their future activit.

Business environment
Business norms behavior also differ from country to country. Business executives need to be informed before
negotiating ina foreign country.

Decisions in international marketing

In deciding to go abroad,a company needs to define its international marketing objectives and policies. Most
companies stat with small proportion of foreign to total sales.
In this case, they view foreign to total sales a small part of their business.
Other companies may decide to do foreign business pla on a greater scale and they may see foreign operations even
more important than their domestic business
So the est decision,the company must take is how many countries it want to enter.
International marketers recommend to operate in fewer countries with a deeper committmentnt in the following
situation:
the market entry and market control cost are high
Product and promotion adaptation cost are high (Barbie in Japan)
Population and income size and growth are high in the initial countries
Dominat foreign companies can establish high barriers to entry

The company may also decide on the types of countries toconsider. Companies should analyze the following aspects:
Market attractiveness that is influenced by geographical factor,population growth,GNP per capita,employment rate
and the structure of imports and exports of the particular country
Competitive advantage is influenced by the existence of local competition,low cost procedures,the availability or raw
materials,business dealing and type of management in that country.
Risk –level include political stability,development currency stability, repatriation rules,and the fluctuations of
exchange rate

So 5 types are involved in the financial analysis of these countries and the estimation of the probable rate of return
on investments.

Estimate of current market potential. The first step is to estimation total insdustry’s sales in each market. This step
requires the use of published data and primary data collection
Forecasting of future market potenatila and risks. Forecasting industry sales is a different task,because it requires
predicting economic and politic development and their impact on industry sales.
Forecasti of sales potential.estimating the company’s sales requires forecasting its probable market share,based on
its competing advantage and the economic trends in the host country . If first 2 steps.
Forecasting the cost and profits lost will depend on the company’s entry strategyand the local labour
conditions,taxes estimates cost from estimated sales to obtain the company’s profit for each year.
Estimating the date of return an investment. The forecasted income should be related to the investment fund to
obtained the probable rate or retur. This should be high enough to cover the company’s normal target return its
investment and the risk of marketing in that country.
The next decision is related to how to enter the foreign market. Once a company decides to target a particular
country it has to determine . /the best way to entry.it has the following choices. After deciding what strategy of entry
on foreign markets is the best the company should analyze the marketing organization on foreign markets.
Company’s can manage their international market activities. In 3 ways.

Export department – a company normally gets inot international market. By simply sheeping out the goods. If its
international sales expand the company organizes an export department consisting of a sales manager and a few
assistants. As sales increase the export department is expanded to include various marketing services so that the
company moves into joint ventures or direct investment.,the export department will no longer be adequate to
manage intern operations
International division – many companies become involves in several international through different forms, sooner or
later it will create on international division to handle all its international activity. The international division is
conducted by an international division president,who sets goals and budgets an is responsible of the company’s
growth to the international marketing
Global organization
If the company has deeper and cement on foreign markets it may become a truly global organization. The top
corporate management plans worldwide manufacturing facilities,marketing policies,financial flows and logistical
systems. The global operating units report directly to the chief executive or executive comments,not to the head of
an international division. Executives and marketers aretrained in worldwide operations not just domestic or
international.
2 topic. The cultural environment in international marketing
Cultural dimensions Cultural values in international marketing
Geert Hafstede- was the first marketers that conducts a multicultural study of different cultural values in more than 120
countries. He had developed cultural dimensions.
Individualism versus collectivism. Individualistic shows the degree to which individuals are interpreted into groups: into
individualistic societies the,ties between individuals and groups and not strong and everyone is expected to look after
himself and his immediate family. In an individualistic society indentify is based oon the individual interest,children learn ti
think in terms. Everyone has a right to privacy and is expected to have a private opinion laws and rights are supposed to be
the same for all ( roght GNP by voters) on a collectivity societies people are strongly,interpretation in different groups and
usually are born in extended families. Identify is based on the social network is learning how to do and children learn to think
in te terens of we
Collectivistic society private life is influenced by the interests of groups,economy is based on collective interests dominant
roleo f state in the economic system,prices is controlled by state,laws and rights differ byer group.
Collect <45>individual
Moldova is considered to be a collectivistic society 30-40%
2.Value masculinity versus feminity index
In amasculine society prevail madsculine values such asa : power,material success,individual achievements.
In a masculine society money are important,so in the family there are different roles between amn and women. Fathers
deales with facts,mothers deals with feelings. So,stress on competitioned and performance.
In a feminine society the dominat values are:
Relationships Caring of others
eVerybody is supposed to be modest,people work in order to live, the society focuses on equality and quality of work life. In
the family,gathers and mothers deal with facts and feelings. Small and slow are beautiful and accepted by society. In a
feminine society,government spends relative small proportion of budget on armaments and resolves international conflicts
by negotiation and compromise. Feminine <45>masculine
Uncertainty avoidance index
Deals with societies tolerance for uncertainity and unbiguity (neclaritate). It indicates to what extend the society’s members
feel uncomfortable in unstructured situations. Unstructured situations are known,different from usual and new situation.
Uncertainity avoiding cultures try to minimize the possibility of such situations by strict laws and rules security measures and
safety regulations. If a society has weak uncertainity avoidance,the level of stress is low,everyone accepts easily the changes
people have positive attitudes towards institutions and political process.
In this society aggression and emotions shouldn’t be shown. There are few and general laws and rules/. What is different is
curious for the members of the society. Weak <45> strong
Power distanc index
Hofsteady’s power distance index measures the extend to which the less powerful memberws of organizations and
institutions accept and expect that power is distributed unequally. In a large power distance culture inequlities among people
are expected and desired. Less powerful people should be dependent on the more powerful. Parent teach children obidienc
and children treat parents with respect. In the management system subordinates expect to be told what to do and there si a
bottom of the organization