INTERNATIONAL MARKETING

INTRODUCTION:
MARKETING: A UNIVERSAL DISCIPLINE
 The foundation for a successful global marketing program is a sound understating of the
marketing discipline.
MARKETING is the process of focusing the resources and objectives of an organization on environmental
opportunities and needs.
 The first and most fundamental fact about marketing is that it is universal discipline.

THE THREE PRINCIPLES OF MARKETING

 The essence of marketing can be summarized in three great principles. The first identifies the
purpose and task of marketing, the second the completive reality of marketing, and the third the
principal for achieving the first two.
a. CUSTOMER VALUE AND THE VALUE EQUATION
 The task of marketing to create customer value that is greater than the value created by
competitors. Expanding or improving product and/or service benefits, by reducing the price, or
by a combination of these elements, can increase value for the customer.
b. COMPETITIVE OR DIFFERENTIAL ADVANTAGE
The second great principle of marketing is competitive advantage. A competitive advantage is a total
offer, vis-à-vis relevant competition that is more attractive to customers.
 The advantage can exist in any element of the company’s offer; the product, the where V= value
B= perceived benefits – perceived costs (for example, switching costs) P= price
c. FOCUS
The third marketing principle is focus, or the concentration of attention.
FOCUS is required to succeed in the task of creating customer value at a competitive advantage.
 All great enterprise, large and small, is successful because they have understood and applied
this great principle.
 IBM succeeded and became a great company because it was more clearly focused on
customer needs and wants than any other company in the emerging data processing
industry.

INTERNATIONAL MARKETING- is the performance of business activities that direct the flow of a
company’s good and services to consumers or users in more than one nation for a profit.
 International marketing is the multinational process of planning and executing the conception,
pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy
individual and organizational objectives (AMA (American Marketing Association)).
 The only difference in the definitions of domestic marketing and international marketing is that
the marketing activities take place in more than one country.

DOMESTIC MARKETING VS INTERNATIONAL MARKETING

 DOMESTIC MARKETING- is concerned with the marketing practices within a marketer’s home
country. From the perspective of domestic marketing, marketing methods used outside the
home market are foreign marketing.
  THE INTERNATIONAL MARKETER’S TASK- is more complicated than that of the domestic
marketer because the international marketer must deal with at least two levels of
uncontrollable uncertainty instead of one.
 MARKETING CONTROLLABLES
The successful manager constructs a marketing programmed designed for optimal adjustment
to the uncertainty of the business climate.
 The inner circle represents the area under the control of the marketing manager.
 The outer circles surrounding the market controllable represent the levels of uncertainty
that are created by the domestic and foreign environments. Although the marketer can
blend a marketing mix form the controllable elements.
 The uncontrollable are precisely that and there must be active adaptation. These are the
elements that are outside the control of the managers but need to be handled.
 DOMESTIC UNCONTROLLABLES
 The second circle, representing the domestic environment includes home country
elements that are outside the control of the manager and that can have a direct Cultural
effect on the success of a foreign venture: political forces, legal structure and economic
climate.
For example, most Western governments imposed restrictions on trade with South Africa to protest
about apartheid. In this case the international marketing programs of such companies as Shell, IBM and
British Petroleum (BP) were restricted by domestic uncontrollable.
 FOREIGN UNCONTROLLABLES
 A business operating in its home country undoubtedly feels comfortable in forecasting
the business climate and adjusting business decisions to these elements.
 The process of evaluating the uncontrollable elements in an international marketing
program, however, often involves substantial doses of cultural, political and economic
shock.

MANAGEMENT ORIENTATIONS
1. ETHNOCENTRIC- associated with attitude of arrogance or assumptions of national superiority.
 Ethnocentric companies who conduct business outside the country can be described as
international companies; they adhere to the notion that the product that succeed in the home
country are superior.
 This point of view leads to a standardization or extension approach to marketing based on the
premise that products can be sold everywhere without adaptation.
 STANDARDIZATION- the extent to which each marketing mix element can be executed the same
way in various market,
 ADAPTATION- the extent to which each marketing mix element can be executed in different
ways in various country market.
 EXAMPLE: NISSAN
2. POLYCENTRIC- the opposite of ethnocentrism.
 The term polycentric describes management’s belief or assumption that each country in which
company does business is unique.
 This point of view leads to localized or adaptation approach that assumes that products must
be adapted in response to different market conditions.
  EXAMPLE: WALMART, CITI
3. REGIOCENTRIC- the firm tries to balance its own interests with the interests of its subsidiaries on a
regional basis. A firm treats a region as a uniform market segment and adapts a similar marketing
strategy within the region but not across the region.
 Management orientation is geared to developing an integrated regional strategy. Example
European Union, NAFTA
 For example, McDonald’s strategy to not to serve pork and to slaughter animals through the
halal process is followed inly in the Middle East or Muslim-dominated countries and can be
termed as regiocentric.
4. GEOCENTRIC- views the world as a potential market and strives to develop integrated global
strategies.
 The company uses a global approach to decision making.
 Global product, with local variations
 Combines best features of geocentric and polycentric strategies.
 Headquarters redistributes profits among subsidiaries to meet capital investment and budget
needs.
 It is a “world view” that sees similarities and differences in markets and seeks to create a global
strategy that is fully responsive to local needs and wants.
 Entire world is a potential market
 Strives for integrated global strategies
 Also known as a global or transnational company
 Retains an association with the headquarters country
 Pursues serving world markets from a single country or sources globally to focus on select
country markets
 Leads to a combination of extension and adaptation elements
 The best managers are developed for key positions anywhere in the world.
 Coca-cola accept geocentric approach. It operate 195 countries & 2/3 of its 31000 work outside
USA and mostly managed by other than Americans.
 Gillete have managers from France, Egypt & Other Countries.
 Transnational companies serve both global markets and utilize global supply chains.

EPRG FRAMEWORK
 ETHNOCENTRIC
 Do not adapt their products to the needs and wants of other countries where they have
operations
 POLYCENTRIC
 Equal importance to every country’s domestic market. Believe in uniqueness of every
market.
 REGIOCENTRIC
 Economic, cultural or political similarities among regions.
 GEOCENTRIC
 The main idea is to target “global consumers” who have similar tastes.
 To borrow form every country what is best.
 ETHNOCENTRIC POLYCENTRIC/REGIOCENTRIC GEOCENTRIC
APPROACH International operation Each country/region is relatively The world is one
are secondary. independent. common market.
VISION Centered to the Each market is unique. Global vision of the
domestic market. world.
PRIORITY Searching for identical Taking into consideration Unifying differences in
segments in foreign differences in foreign markets. the world market.
markets.
PLANNING National headquarters Subsidiary in each country/region. World headquarters
CENTER
STRUCTURE International division Division for each zone. Matrix structure