Advance Marketing Management

By: YASIN VIKYANI

Topic: Decision area of International

Marketing & International Marketing
enviournment

Commerce and Management Department

Harivandana college Rajkot.

 1. International Markets Decision:
 2. Market Selection Decision:
 3. Market Entry Decision:
 4. Marketing Mix Decision:
 Whether to go for international market?
 Whether there is Excess production capacity
 Whether there is Foreign market is more profitable
than domestic market
 Whether company has enough capability to deal with
internationals market
 Whether domestic government insist to go for
international market
 Which markets to enter??

 When to enter these markets??

◦ Market segmentation
◦ Target market
 Non equity
Equity mode
mode

FDI or Wholly
Turnkey
Joint venture owned Licensing Franchising Exporting
Contract
subsidiary
• A JV entails
establishing a firm
that is jointly owned
by two or more
independent firms.
 Advantages Disadvantages
 Benefit from local  Risk giving control of
partner’s knowledge. technology to partner.
 Shared costs/risks  Shared ownership can
with partner. lead to conflict
 Reduced political risk.

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• The firm owns 100%
of the stock
• The firm can either
set up a
– Green-field venture
or
– It can acquire an
established firm in
the host nation
 A green-field (also "greenfield") investment is
a type of foreign direct investment (FDI) in
which a parent company creates a subsidiary
in a different country, building
its operations from the ground up.
 An acquisition is when one company
purchases most or all of another company's
shares to gain control of that company.
Purchasing more than 50% of a target
firm's stock and other assets allows the
acquirer to make decisions about the newly
acquired assets without the approval of the
company’s shareholders.
 Licensing is when a firm, called the licensor, leases the right
to use its intellectual property—technology, work methods,
patents, copyrights, brand names, or trademarks—to
another firm, called the licensee, in return for a fee.
 The property licensed may include:
 Patents
 Trademarks
 Copyrights
 Technology
 Technical know-how
 Specific business skills

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  Under franchising, an independent organization called
the franchisee operates the business under the name
of another company called the franchisor.
 In such an arrangement the franchisee pays a fee to
the franchisor.
 Franchising is a form of Licensing but the Franchisor
can exercise more control over the Franchisee as
compared to that in Licensing.

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  Exporting means shipping the goods and services
out of the port of a country.
Seller is referred to as an "exporter" .
Buyer is referred to as an "importer“.
 Indirect Exporting means that the firm participates
in international business through an intermediary
and does not deal with foreign customers or
markets.
 Direct exporting means that the firm works with
foreign customers or markets with the opportunity
to develop a relationship.

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 A turnkey, a turnkey project, or a turnkey
operation is a type of project that is constructed
so that it can be sold to any buyer as a
completed product.

 a contract in which a company is given full

responsibility to plan and build something that
the client must be able to use as soon as it is
finished without needing to do any further work
on it themselves
 A strategic international alliance (SIA) is a
business relationship established by two or
more companies to cooperate out of mutual
need and to share risk in achieving a
common objective
 Marketing mix decisions remain same as
domestic market except the target market.
Here, all marketing mix decisions are taken
with reference to foreign customers and
global marketing environment.
 International Marketing environment refers to
the controllable and uncontrollable forces that
influence upon the marketing decision making of
a firm globally.

 International Marketing environment is

comprised of those components which shape
policies, programmes and strategies of an
international marketer.
 An international firm must resort to systematic
study of international marketing environment to
collect the inputs of marketing decision making.
 1. Internal Environement

 2. External Environnent
 Internal environment refers to the firm related
factors. The firm related factors are referred to as
controllable variables because the firm has control
over them and can (relatively easily) change them
as may be thought appropriate as its personnel,
physical facilities, organisation and functional
means such as marketing mix, to suit the
environment
 Men

 Money

 Machinery

 Materials

 Markets.
 External environment refers to the factors outside
the firm. These factors are uncontrollable or we
can say that these are beyond the control of a
company.

 They are generally regarded as uncontrollable

factors.
 The political environment abroad is quite different
from that of India. Most nations desire to become
self-reliant and to raise their status in the eyes of
the rest of the world. This is the essence of
nationalism.

 The nationalistic spirit that exists in many nations

has led them to engage in practices that have been
very damaging to other countries’ marketing
organizations.
 Business activity tends to grow and thrive when a
nation is politically stable. When a nation is
politically unstable, multinational firms can still
conduct business profitably. Their strategies will
be affected however.

 Most firms probably prefer to engage in the export

business rather than invest considerable sums of
money in investments in foreign subsidiaries.
 A trade bloc is a type of intergovernmental
agreement, often part of a regional
intergovernmental organisation, where regional
barriers to trade, (tariffs and non-tariff barriers)
are reduced or eliminated among the participating
states.

 Regional trading blocs represent a group of

nations that join together and formally agree to
reduce trade barriers among themselves.
 Most nations encourage free trade by inviting
firms to invest and to conduct business there,
while encouraging domestic firms to engage in
overseas business.
 Businesses are affected by legal environments of
countries in many ways. Legal environments are
not just based on different laws and regulations
concerning businesses, these are also defined by
the factors like rule of law, access to legal systems
by foreigners, litigations systems etc.
 Laws concerning employment and labour affect managing
of workforce in international markets.
 Many countries also have different laws and regulations
that affect ownership of businesses by foreigners.
 Countries also differ on the accounting reporting
requirements from various categories of firms.
 Countries around the world have also actively implemented
environmental regulations that affect businesses
 The social/cultural environment consists of the
influence of religious, family, educational, and
social systems in the marketing system.

 Marketers who intend to market their products

overseas may be very sensitive to foreign cultures.

 Failure to consider cultural differences is one of

the primary reasons for marketing failures
overseas.
 The importance of language differences cannot be
overemphasized, as there are almost 3,000
languages in the world.

 Language differences cause many problems for

marketers in designing advertising campaigns and
product labels.
 Colours also have different meanings in different
cultures.

 For example, in Egypt, the country’s national

colour of green is considered unacceptable for
packaging, because religious leaders once wore it.

 In Japan, black and white are colours of mourning

and should not be used on a product’s package.
 An individual’s values arise from his/her moral or
religious beliefs and are learned through
experiences.

 in India, the Hindu religion forbids the

consumption of beef, and fast-food restaurants
such as McDonald’s and Burger King would
encounter tremendous difficulties without product
modification.
 Technological know-how impacts all spheres of an
international marketer’s operations including
production, information system, marketing etc.

 Research and Development (R&D) has a vital role

to play in increasing technological ability of a firm.

 New technologies create new markets and

opportunities.
 Xerography hurt carbon-paper industry,

 computer hurt typewriter industry

 Foreign workers must be trained to operate unfamiliar
equipment.
 Maintenance standards vary from one nation to the
next.
 Poor communication facilities hinder advertising
through the mass media.
 Poor transportation systems increase production and
physical distribution costs.
 The international marketer tries to understand
economic environmental variables of the global
markets for identifying the right marketing
opportunities for the enterprise.
 (a) National Income
 (b) Gross Domestic Product (GDP)
 (c) Industrial Structure
 (d) Rate of Economic Growth
 (e) State of Inflation
 (a) Industrialised,

 (b) Developing, and

 (c) Less-developed nations.

Thank you