MODULE – I

Introduction to International
Marketing:
Definition – scope and challenges,
Difference between international
marketing and domestic marketing,
the dynamic environment of
international trade, transition from
domestic to International markets,
orientation of management and
companies.
Meaning & Definition of International
marketing
• Marketing activity carried on across
the nation boundaries.
• According to AMA: “International
Marketing is the multinational process
of planning, executing, conception,
pricing, promotion and distribution of
ideas, goods and services create
exchanges that satisfy individual and
organizational objectives.
INTERNATIONAL MARKETING
INVOLVES:
• Identifying the needs and wants of the
customers in international markets.
• To take market mix decisions keeping in the
view the diverse customers and market
behavior.
• Penetrating into International Markets using the
various modes.
⦿ Decisions in view of IBE.
CHARACTERISTICS OF INTERNATIONAL
MARKETING
⦿ Dominance of Multinationals
⦿ Large Scale Operations
⦿ Boundary Restrictions & Trade Blocks
⦿ Marketing Research
⦿ Importance of Advanced Technology
⦿ Precise competition
⦿ Sensitive character.
⦿ Want for Specialized institutions
⦿ Long term planning
⦿ Cultural relations
SCOPE OF INTERNATIONAL
MARKETING
⦿ Exporting – Establishing – JV & Collaborations
– Licensing – Consultancy – Know how
(Technical & Managerial)
⦿ Importing
⦿ Managing of international operations
⦿ Re-exporting
 OBJECTIVE OF INTERNATIONAL
MARKETING
⦿ To develop skills, creating marketing challenges
& Opportunities.
⦿ To gain experience in developing marketing
strategies.
⦿ To gain verbal, written skills for
communication.
⦿ To have decision making ability.
⦿ To be ethical in practice and urge to learn more
on marketing management.
WHY FIRMS GO INTERNATIONAL
• Reasons for the firms going international
• Profitability
• Growth
• Economies of Scale
• Access to imported inputs/Resources
• Marketing Opportunities
• USP of product & services
• R& D Costs.
ORIENTATION OF MANAGEMENT
⦿ ETHNOCENTRIC
⦿ POLYCENTRIC
⦿ REGIOCENTRIC
⦿ GEOCENTRIC
⦿ Process of Internationalization FDI Local
Packaging/ Export Assembly through Export
Via own sales Agent/ representative
Distributor / Sales License Subsidiary
PROCESS OF INTERNATIONAL
MARKETING
⦿ Process of International Marketing Growth
Profitability Risk Spread Motivation for
International Marketing Marketing USP of
Access to Opportunities product/Services
imported inputs Decision to Enter Spreading
R & D SWOT Analysis into International Costs
Markets
Stages of International Marketing Involvement
⦿ No Direct Foreign Marketing
⦿ Infrequent Foreign Marketing
⦿ Regular Foreign Marketing
⦿ International Marketing
⦿ Global Marketing
CHALLENGES IN INTERNATIONAL
MARKETING
⦿ Self- reference
⦿ Political & Legal Difference
⦿ Cultural Difference
⦿ Economic Difference
⦿ Difference in the currency unit
⦿ Differences in the language.
⦿ Difference in Marketing Infrastructure
⦿ Trade restrictions
⦿ High cost of distance
⦿ Difference in trade practices
 DIFFERENCE B/W DOMESTIC AND
INTERNATIONAL DIFFERENCE POINT
DOMESTIC MARKETING INTERNATIONAL
MARKETING
Difference Pointy Domestic Market International Market
Operation Conditions One nation language Many Nations,
& Culture Languages culture &
Culture
Transportation cost Major extent Some Extent
Currency One Multiple
Political Same Differ
Nature of market Relatively Diverse &
homogenous Heterogeneous
Change control & No Problems Obstacles
Tariffs
Data Availability Accurate Formidable But
doubted

Government Relative free Influences

interferences
Environmental Effects Little effect Distortion by large
companies
Business Environment Stable Unstable
TRADE IN INTERNATIONAL
MARKETING
International Trade is exchange of capital,
goods and services across international
borders or territories.

TRADE

DOMESTIC TRADE

INTERNATIONAL TRADE
NEED FOR INTERNATIONAL TRADE
⦿ Large scale production
⦿ Degree of self- sufficiency
⦿ Geographic Factors
⦿ Occupational Distribution
⦿ Means of Transportation
⦿ Compensating the production
DYNAMIC ENVIRONMENT OF
INTERNATIONAL TRADE
⦿ Comparative Advantages
⦿ Impact of National Policies
⦿ Impact of Countries
BALANCE OF PAYMENT
⦿ It refers to the net results that are drawn
recording all the visible and invisible items
that are exported and imported from the
country.
⦿ Balance of Payments is comprehensive record
of economic transactions between residents
of home country & residents of the other
countries.
⦿ It includes
• Current Account
• Capital Account
• Reserves Account
CHARACTERISTICS OF BALANCE OF
PAYMENT
⦿ It is statement of systematic record of all
economic transactions between one country
& rest of the world.
⦿ It is a annual statement & pertaining to time.
⦿ Listing receipts & payments in international
transactions of a country.
⦿ Double entry book keeping system.
FUNDAMENTAL OF BOP
⦿ Identifying an International Economic
Transactions.
⦿ Understanding the flow of goods, services,
money & assets.
• Real assets
• Financial assets
• Book keeping procedures for accounting.
FACTORS AFFECTING BOP
• Cost of production
• Demand of the supply
• Cost & availability
• Exchange rate movements
• Domestic business
• Trade agreements
• External pressures
• Price
PROTECTIONISM
It is the economic policy of restraining trade
between states through methods such as
tariffs on imported goods, restrictive quotas
and a variety of government regulations
designed to discourage imports and prevent
foreign take over of domestic markets and
companies.
REASONS FOR TRADE BARRIERS
• To protect domestic companies.
• BOP position favorable.
• To curb prominent consumption.
• To mobilize revenue for the government.
• To discriminate against certain countries.
TYPES OF INTERNATIONAL
BARRIERS
• Tariff barrier
• Non- tariff barrier
• Intended constraint
RELATIONSHIP MARKETING
• It is the process of building the long term,
trusting, win-win relationships with
customers, distributors, retailers and
suppliers.
- Key elements are
» Interactions between suppliers and customers
» Customers segments to customers satisfaction
» Working , developing and enhancing
relationship in internal markets and building
strong external markets
THANK YOU
INTERNATIONAL TRADE AND PEACE

A rail has been built to link North and South Korea for the first
time in nearly 60 years to transport materials. This shows a step
toward peace and international trade.

©Han Myung-gu
THE INTERNATIONALIZATION OF U.S. BUSINESS
Globalization of markets increasing
• More foreign customers, competitors, suppliers
• Competition comes from domestic and foreign firms

Many foreign-controlled companies in U.S.

• Foreign direct investment in U.S. is above $3 trillion
• Foreign-owned companies in almost all industries:
• Automobiles (Honda, BMW, Mercedes)
• Appliances (LG Electronics, Frigidaire)
• Convenience stores and restaurants (7-Eleven, Ben & Jerry’s)
• News and entertainment (The Wall Street Journal, Pearle Vision,
Universal Studios, RCA)
• Hotels (Holiday Inn, Waldorf Astoria)
MEXICAN BRANDS IN THE U.S.

© John Graham
Along with NAFTA have come two of Mexico’s most prominent brand names.
Gigante, one of Mexico’s largest supermarket chains, now has several stores
in Southern California, including this one in Anaheim. Grupo Bimbo, a
growing Mexican multinational, has recently purchased American
brand-named firms such as Oroweat, Webers, Sara Lee, and Mrs. Baird’s
Bread.
EXHIBIT 1.3 THE INTERNATIONAL
MARKETING TASK

Jump to long image description.

CITIBANK IN BRAZIL

© John Graham
A Citibank branch in the heart of Brazil. One of the world’s great
multinational corporations barely survived the financial debacle of October
2008. Indeed, during the past few years, its international operations have
performed much better than its domestic ones with the exception of those in
Brazil. In particular, emerging markets such as China, India, and the
Philippines proved relatively resilient since the financial crisis that began in
2008.
ENVIRONMENTAL ADAPTATION NEEDED
Cultural adjustment: the most challenging and
important task
Duties of international marketers
• Interpret influence of each uncontrollable element
on market
• Adjust marketing efforts to cultures in which they
are not attuned
• Be aware of own frame of reference when evaluating
markets
• Often based off acculturation in home country