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 ASSIGNMENT SOLUTION GUIDE (2020-2021)

IBO-02: INTERNATIONAL MARKETING

MANAGEMENT

Disclaimer/Special Note: These are just the sample of the Answers/Solutions to some of the Questions
given in the Assignments. These Sample Answers/Solutions are prepared by Private
Teacher/Tutors/Authors for the help and guidance of the student to get an idea of how he/she can
answer the Questions given the Assignments. We do not claim 100% accuracy of these sample
answers as these are based on the knowledge and capability of Private Teacher/Tutor. Sample
answers may be seen as the Guide/Help for the reference to prepare the answers of the Questions
given in the assignment. As these solutions and answers are prepared by the private teacher/tutor so
the chances of error or mistake cannot be denied. Any Omission or Error is highly regretted though
every care has been taken while preparing these Sample Answers/Solutions. Please consult your own
Teacher/Tutor before you prepare a Particular Answer and for up-to-date and exact information, data
and solution. Student should must read and refer the official study material provided by the
university.

Attemp all the question.

Q1. What is international market segmentation? What are the bases of international
market segmentation?
Ans.
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Q2. Discuss the emerging global competitive environment. Examine whether small
enterprise have scope in the emerging global business environment.
Ans.

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Q3. Distinguish between the following:
a. International and Multinational marketing.
Ans.

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b. High tech positioning and High touch positioning.
Ans.

c. Direct and Indirect exporting.

Ans.

d. Trade selling and Missionary selling.

Ans.

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Q4. Write short notes on the following:
a. EPRG Orientation
Ans.

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b. Franchising
Ans.

c. Test Marketing
Ans.

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d. Transfer Pricing
Ans.

Q5. Comment on the following:

a. There are several reasons for a business firm to go international.
Ans.
Firms Go International due to following reasons:
Domestic Market Constraints.
Domestic market constraints motivate many companies to go international. Following are the main
constraints in the domestic market:
Small Size of Domestic Market: In many cases companies go global because of the small size of
domestic market which does not allow them to have economies of scale.
Recession in the Domestic Market: Recession in the domestic market often provokes companies
to explore foreign markets. Recession in the domestic market does not allow the companies to utilize
full production capacity. For example Hindustan Machine Tools and automobile industry in the early
1990s explored foreign markets due to recession in Indian market.
Technology: The technological advances have increased the size of the optimum scale of operation
substantially in many industries making it necessary to have global market so that economies of scale
may be availed.
Growth in International Markets: Many Indian companies entered the international markets in
response to growth in international markets. The enormous growth potential of many foreign markets
has been a very strong attraction for Indian software companies to go international. Similarly, an
Indian pharmaceutical company CIPLA entered Africa with its HIV treatment drugs as there exists a
vast market.
Competition: Competition may become a driving force behind international marketing. Competitors
are an important factor which stimulates international marketing. Tata Motors became international
in response to other automobile companies becoming international. Many companies also take an
offensive international competitive strategy by way of counter competition.
Government Policies and Regulations.
Government policies and regulations attract the manufacturers to internationalize. The governments
of many countries including India give a number of incentives and other positive support to domestic

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firms to go international. For example Indian government provides a number of concessions to the
firms engaged in exports to and in manufacturing in foreign countries.
Growth of Overseas Markets.
The enormous growth potential of many overseas markets drive many companies to expand the
market globally. Economic growth of many developing countries has created market opportunities
that provide a major incentive for companies to expand globally. In a number of developing countries,
both the population and income are growing fast.
Increased Productivity.
Increased productivity is necessary for the ultimate survival of a firm. This itself may lead a company
to increase production. Increase in production facilitates a company to seek export markets. The
pressure for global markets is intense when new products require major investments and long periods
of development time. The cost of research and development must be recovered in the global market
place, as no single national market is likely to be large enough to support investments of this size.
Relative Profitability.
One of the most important objectives of internationalization of business is the profit advantage.
International business may be more profitable than the domestic because of export price being higher
than the domestic price. International business can increase the total profit even if it is less profitable
than the domestic. It could increase the total profit. In some cases, international business can help in
increase the profitability of the domestic business.
One of the important motivations for international business is to reduce costs. Many international
firms establish their production facilities in the countries where the manufacturing costs are cheaper.
Diversification to Reduce Business Risks.
A diversified export business may reduce sharp fluctuations in the overall activity of a firm. Decline of
sales in one market may be counter balanced by a rise in the sales in other markets. Foreign markets
even cut fluctuations by providing outlets for excess production capacity.
Control Inflation and Price Rise
On several occasions, governments permit imports to increase the supply and control prices, thus,
control the inflationary pressures on the economy. When imported products are available at lower
price, domestic producers have to reduce their prices. Thus, imports control inflation and price rise.
Counter Competition.
Counter competition is a strategy to penetrate the home market of the potential foreign competitor so
as to diminish its competitive strength and to protect the domestic market share from foreign
penetration.

b. Even after entering the markets a company must answer questions like, should it
build, divest or abandon the market it has entered; how many such market it should
hold and so on.
Ans.

section of the market to be captured or market segmentation and the final step involves the number of
market to be held.

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c. GATS Eliminates various legal barriers to international marketing in services.
Ans. The GATS lays down that increasing participation of developing countries in world trade shall be
facilitated through negotiated commitments on access to technology, improvements in access to
distribution channels and information network and the liberalization of market access in sectors and
models of supply of export interest to them. With reference to domestic regulations, the Agreement
lays down that all measures of general application affecting trade in services are administrated in a
reasonable objective and impartial manner. There would be a requirement that parties establish ways
and means for prompt reviews of administrative decisions relating to the supply of services. It is
recognized that particular pressures on the balance of payments of a member in the process of
economic development or economic transition may necessitate the use of restrictions to ensure, inter
alia, the maintenance of a level of financial reserves adequate for the implementation of its program of
economic development or economic transition. A member country may, therefore, apply restrictions
on international transfers and payments for current transactions under certain circumstances
envisaged under the GATS. In the event of serious balance of payments and external financial
difficulties of threat thereof, a member may adopt or maintain restrictions on trade in services on
which it has undertaken specific commitments including on payments or transfer for transactions
related to such commitments. The commitments of member countries under the GATS also include
national treatment (that is, to treat foreign suppliers or services like domestic suppliers and provision
of market access. Hence, it may be concluded that GATS has eliminated various legal barriers to
international marketing in services.

d. International marketing research is full of complexities.

Ans. International marketing research is more complicated as compared to domestic marketing
research due to differences in the environment. Marketing research is systematic and objective
collection of data, its analysis and evaluation and decision-making in respect of specific aspects of
marketing problem. Collection of accurate and reliable data is a complicated job even in domestic
markets.
Following are the special problems associated with international marketing:
1. Differences in perceptions.
2. Conceptual differences.
3. Language.
4. Sampling errors.
5. Lack of standardized approach.
6. Difficulty in analysis and interpretation.
Difference in Perceptions.
Perceptions differ across countries. Cycles are perceived as basic means of transportation in some
countries, while in few other countries they have recreational value and in some other they are used as
a good means of physical exercise. In these circumstance, the perceptions about cycles cannot be
compared on same scale and the scales have to be adjusted for accommodating the differences in
situations.
Conceptual Differences.
Conceptual differences also need to be tackled carefully in international marketing research, as the
same terms do not carry the same meanings in different markets. For example, the terms such as
middle class, upper middle class, upper class do not imply same income groups across countries.
What one may mean by middle class in India may entirely be different from the meaning of middle
class in USA. Living standards and economic conditions in India and the USA need to be analyzed on
different scales.
The following concepts of economics and marketing need to be analyzed with utmost
care, while analyzing the data and information generated out of international
marketing research:
● Premium segment of a market.
● Prosperous markets.
● Desirable level of living.

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● Economic openness.
● Social openness.
● High and low levels of saving.
● High and low levels of growth.
● Consumer awareness.
● Political liberty.
● Consumerism.
● Aggressive marketing.
Translation from one Language to other Languages.
Translation from one language to other languages poses many problems since every language is
associated with the history and culture of the country. It is a very difficult task to convey exactly the
spirit of the original in the the translated version. To overcome many of these problems, a process
called back translation is used. In this process, the questionnaire is first translated into the other
language by one translator and then this translation is translated back into the original language by a
different translator.
This process minimizes the problems arising out of discrepancies between the original and the
translated version. Another way to overcome translation problems is to incorporate the relevant items
from each country included in the research study. This process is called de-centering.
Sampling Errors.
In any research confined to either national boundaries or covering many countries, the issue of sample
selection occupies the center-stage. The desired sample may not always be available and, hence,
attempts should be made to make the sample as representative as possible. Further, the extent of
comparability should always be reported so that an appropriate analysis may follow. The following
types of errors may creep in sampling in international Marketing research:
● Frame error.
● Non-response error.
● Selection error.
● Definitional error.
● Instrument error.
In international marketing research, sampling frame errors arise because of the diversity of the
sources. Often it will be noticed that more than one source needs to be used, some to collect the
required information. There is a serious problem of lack of timely response from respondents due to a
number of reasons. Similarly there are chances of selection errors due to lack of sufficient and reliable
information. Since the same definitions are not suitable for various countries, definitional errors arise.
Lack of Standardized Approach.
A standardized approach towards international marketing research is neither feasible nor advisable
since countries differ in a number of respects. For example, problems crop up when languages,
cultures, economic levels, are etc. different. International marketing research becomes a more difficult
task particularly in those countries, where more than one language is spoken, as is the case with India.
Even if the same language is spoken in more than one country, terminologies may differ. For example,
though English is spoken both in USA and India, terms such as lorry, lift, chilies, petrol, brinjal, etc.,
are not used in USA instead truck, elevator pepper, gasoline and egg plant are the corresponding
terms in use in the USA.
Difficulty in Analysis and Interpretation.
Analysis and interpretation of data collected in international marketing research poses a number of
problems because such data are subjected to adjustment/ vetting.

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