UNIT II

International marketing decision –

Marketing decision – Marketing selection
decision, Market entry decision – Market
mixed decision – International marketing
research methodology for marketing
research – Desk research and field research
 INTERNATIONAL MARKETING MIX
A business should focus on 4 aspects of the business:

1. Develop a product suitable for a foreign market

2. Price – competition & capacity of customers

3. Place – direct selling 0r appropriate intermediaries

4. Promotion – adequate strategy

 Product development
- Idea
- Screening & Analyzing
- Test marketing
- Commercial Production

Packaging Product Product life cycle

Branding
 PRODUCT DEVELOPMENT
⚫ Conceive, examine and thoroughly screen – suitability of the
product
⚫ Laboratory testing – test marketing – commercial production
⚫ Study & analysis – conception & idea generation – consult
experts – “Sweet & salt” biscuits
⚫ Business analysis – estimate cost, demand & profit – test
marketing – get feedback
⚫ Product positioning – Bisleri, Benz, Maruthi, Tata
⚫ Product –compatible with local customs and habits -
refrigerators
PRODUCT LIFE CYCLE

Decline Introduction

Extension Growth

Maturity
⚫ As product enters the standardized stage – technology

becomes widely diffused and available almost in all countries

⚫ Production shifts to low-cost locations

⚫ Comparative advantage to lower factor cost locations

⚫ Exporter – direct investor abroad

⚫ Declining stage: new technology brings out new product

⚫ Product life cycle – analysis – formulate suitable strategies

 BRANDING DECISIONS
⚫ Symbol – easily distinguishable

⚫ Generic products

⚫ Exporting companies go for dealer’s brand or private

brand

⚫ Global brand

⚫ https://www.daytranslations.com/blog/challenges-in-brand

-name-translation/
 PACKAGING DECISIONS
⚫ Packaging serves 2 important functions:

1. Protection - variations in climate & transport

2. Serve the needs of the people

⚫ Size – Economy size vs family size

⚫ Functional aspect vs beauty

⚫ Packaging for developed countries vs poorer countries

⚫ Legal restrictions
 Price
Decisions

Pricing
Counter Trade
Policies

Study
of
Dumping
Pricing Factors
affecting
international
pricing

Price
Quotations
 PRICING DECISIONS
⚫ Demand and Supply of factors of production

⚫ Cost of the commodity

⚫ Elasticity or cross-elasticity of demand

⚫ Exchange rate between the countries

⚫ The market share which can be knocked off by the company

concerned
⚫ Tariff and Distribution costs in the foreign countries

⚫ Purchasing power of the people in the foreign country and

their culture
 PRICING POLICIES
⚫ Standard Price Policy

⚫ Boeing / Crude Oil

⚫ Two – tiered Pricing

⚫ Domestic sales vs Foreign sales

⚫ Shipping costs, tariffs and foreign distribution costs

⚫ Market Pricing

⚫ Complex

⚫ Market by market basis – maximize profit

⚫ Car market – Ford & GM

 FACTORS AFFECTING
INTERNATIONAL PRICING
⚫ Cost factor

⚫ Competition factor

⚫ Product differentiation factor

⚫ Exchange rate factor

⚫ Economic conditions of the importing country

⚫ Governmental factors
 PRICE QUOTATIONS
⚫ Exworks (EXW)

⚫ Free Alongside ship (FAS)

⚫ Free on Rail/ Free on Truck (FOR/FOT)

⚫ Free on Board (FOB)

⚫ Cost and Freight (C&F)

⚫ Cost, Insurance & Freight (CIF)

⚫ Delivery Duty Paid

 DUMPING
⚫ According to Viner, “Dumping is price discrimination
between the two markets”
⚫ Two regions/Home Vs. Foreign/ Two Foreign Countries/
Reverse Dumping also possible
⚫ Kinds: Sporadic dumping; Predatory dumping; Persistent
dumping
⚫ Conditions: Monopolist; Transport cost – goods flowing
back to home market
⚫ Effects on Importing countries
⚫ Effects on exporting country – Producers vs. consumers
⚫ Anti dumping measures:
⚫ Tariff duty, Import Quota, Import Embargo, Voluntary export
restraint
⚫ Non tariff barriers – Quotas & Subsidies
 COUNTER TRADE
⚫ Goods for goods
⚫ International debt & liquidity problems; provision for
access to the markets of developing countries; bilateral
agreements
⚫ Drawbacks: bilateralism vs multilateralism; affects price
& competition
⚫ Types – Barter, Counter purchase (Books of accounts)
⚫ Brazil exports steel, vehicles and farm products to oil
exporting countries
⚫ Switch Trading – Triangle trade agreement:
US-India-UAE
 PLACE (Distribution)
⚫ Channels of distribution
⚫ Indirect selling
⚫ Direct selling
⚫ Indirect selling – Market Intermediaries
⚫ Foreign retailer/distributor/State controlled trading company
⚫ Web-pomerence association – export cartel
⚫ Export drop shipper – aka Desk Jobber or Cable merchant
⚫ Trading companies
⚫ Direct Selling
⚫ Distributor is a foreign firm that has exclusive rights to carry out
distribution
 Guidelines to MNCs in the selection of
Distributor
⚫ Who selects who?

⚫ Capabilities of developing markets

⚫ Treat them as long term partners in the business

⚫ Should maintain control over marketing strategy and be familiar

with different kinds of distributors and their marketing efficiency
⚫ Get detailed market and financial performance data from the
dealer
⚫ Understand host country’s culture and build links with national
distributors
 ADVERTISIN
G

PUBLIC
PROMOTION SELLING
RELATIONS

SALES
PROMOTION
ADVERTISING
⚫ Message (Two wheelers; Soft drinks; Insurance;

Pain-killers; France/Italy/USA/Japan/India

⚫ Medium (Owl, White Elephant, Language sequence and

Picture sequence (Right to left)

⚫ Extent or coverage
 SELLING THE PRODUCT
⚫ What does selling refer to here?

⚫ Personal selling

⚫ Industrial products

⚫ Consumer durables & consumption articles

 SALES PROMOTION
⚫ Vital part of ‘marketing’ the product

⚫ Special efforts – trade fairs, sampling, dispatches,

direct mail campaigns, shows & exhibitions cum sales

– lucky dips, prize coupons, discounted prizes

 PUBLIC RELATIONS
⚫ Reputation & image – ‘Good corporate citizen’
 INTERNATIONAL BUSINESS
INTELLIGENCE
⚫ Sufficient and reliable information is a prerequisite for
proper business decision

⚫ In a broad sense, “the general subject of international

marketing intelligence includes the collection, processing,

analysis and interpretation of all types of information,
from all available sources, to aid business management in
making international marketing decision”
 INFORMATION REQUIREMENTS
⚫ INTERNATIONAL BUSINESS DECISION
⚫ Prospects, competition

⚫ MARKET SELECTION
⚫ Political & economic stability, currency stability, Govt policy and regulation

⚫ PRODUCT
⚫ Size/quantity, shape, colour, product form, packaging
⚫ PRICE
⚫ Price ranges, trends, margins, pricing practices, govt policies &
regulations, price elasticity of demand
⚫ PROMOTION
⚫ Media availability & effectiveness, government regulations,
customs/practices
⚫ DISTRIBUTION
⚫ Channel alternatives & characteristics, relative effectiveness of different
channels, customs & practices
 SOURCES OF INFORMATION
⚫ INTERNAL SOURCES
⚫ Sales and cost records
⚫ Accumulated knowledge of the company personnel
⚫ Other data available in the records
⚫ EXTERNAL SOURCES
⚫ Primary data
⚫ Secondary Data
⚫ Organizations within India
⚫ Export promotion organizations – ITPO, State Trading
Corporations, Chambers of commerce, CII, Export promotion
councils/commodity boards, EXIM Bank
⚫ Consulates, embassies
⚫ Educational and research organisations
⚫ Organizations outside India
 INTERNATIONAL MARKETING
INFORMATION SYSTEM AND
MARKETING RESEARCH
⚫ Marketing research is one of the sources of information

input for the marketing information system

⚫ Marketing research is essential:

⚫ Increasing competition

⚫ Fast technological developments

⚫ Changing consumer attitudes

⚫ Changing tastes and requirements

INTERNATIONAL MARKETING INFORMATION
SYSTEM AND MARKETING RESEARCH
⚫ Marketing research helps to:
1. Identify the deficiencies
2. Identify existing and emerging marketing opportunities
3. Analyze the competitive environment
4. Identify the relative weaknesses and strengths of the company
5. Monitor the environmental changes
⚫ Limitations
⚫ Not always dependable
⚫ Involves costs
⚫ Underdeveloped countries – non availability of adequate and
reliable data
⚫ Time consuming process
 INTERNATIONAL MARKETING
INFORMATION SYSTEM AND
MARKETING RESEARCH
⚫ Scope of Marketing research:

1. Product research
2. Pricing research
3. Distribution research
4. Promotion research
5. Consumer research
6. Marketing environment research
7. Market trend research
 Phases of a research project
1. Definition of the problem

2. Situational analysis

3. Informal investigations

4. Research design

5. Collection of data

6. Processing, analysis and interpretation of data

7. Presentation of research findings

 Methods of Data Collection
⚫ Observational Research

⚫ Survey Research

1. Personal interviewing
1. Individual interviewing
2. Group interviewing

2. Telephone interviewing

3. Mail questionnaires
 SAMPLING
⚫ What Is a Sample?

A sample refers to a smaller, manageable version of a

larger group. It is a subset containing the characteristics of
a larger population. Samples are used in statistical testing
when population sizes are too large for the test to include all
possible members or observations.
 REASONS FOR SAMPLING
1.To bring the population to a manageable number

2. To reduce cost

3. To help in minimizing error from the despondence due to

large number in the population

4. Sampling helps the researcher to meet up with the

challenge of time.

5. sometimes it is the only justifiable method

Characteristics of a good sample:
⚫ Goal oriented

⚫ Accurate representative of the universe

⚫ Proportional

⚫ Random selection

⚫ Economical

⚫ Practical

⚫ Actual information provider

 Limitations of sampling
⚫ Sampling error – error in selecting the sample

⚫ Reliability of the sample depends on the appropriateness

of the sampling method used

Methods of sampling
 RESEARCH AGENCIES
⚫ A good research agency has the experience, expertise and

resources to conduct marketing research efficiently

⚫ Advantages:

⚫ Expertise

⚫ Objectivity

⚫ Knowledge and familiarity

⚫ Cost effectiveness
Selection of the right agency
⚫ Collection of information

⚫ Preliminary screening (interest & references)

⚫ Methodology, time, budget, nature of report

⚫ Terms & conditions

Problems in International research
1. Cultural differences

2. Very expensive

3. Different research methodology to be adopted for

different markets
 MARKET SELECTION
⚫ Market selection is necessitated by the large number of

markets and wide differences in their attractiveness

⚫ Market Selection Process:

Determine Determine Detailed

international parameters Preliminary investigation Evaluation
marketing for market Screening and short and Selection
objectives selection listing
 MARKET SELECTION DECISION
⚫ FIRM RELATED FACTORS:
⚫ Objectives, resources, product mix, international orientation
⚫ MARKET RELATED FACTORS:
⚫ General Factors:
⚫ Economic factors
⚫ Economic policy
⚫ Business regulation
⚫ Currency stability
⚫ Political factors
⚫ Ethnic factors
⚫ Infrastructure
⚫ Bureaucracy and procedures
⚫ Market hub
Specific factors
⚫ Trends in domestic production, consumption, estimates
⚫ Trends in exports & imports
⚫ Nature of competition
⚫ Govt policy & regulations
⚫ Infrastructure relevant to industry
⚫ Supply conditions of raw materials and other inputs
⚫ Trade practices and customs
⚫ Cultural factors and consumer characteristics
⚫ Market characteristics including the number and nature of
market segments, price trends, etc
Evaluation matrix
 Market Profile
A market profile is a description of the relevant
characteristics of the market

MARKET SEGMENT SELECTION

Objectives and capabilities of the firm are the important
determinants of market segment selection.
 MARKET ENTRY STRATEGIES
⚫ Exporting

⚫ Licensing/franchising

⚫ Contract manufacturing

⚫ Management Contracting

⚫ Turnkey contracts

⚫ Fully owned manufacturing facilities

⚫ Assembly operations

⚫ Joint venturing
 MARKET COVERAGE
STRATEGIES
⚫ Concentrated marketing strategy

⚫ Differentiated marketing strategy

⚫ Undifferentiated marketing strategy

Market segment shall be:
⚫ Measurable

⚫ Substantial

⚫ Differentiable

⚫ Accessible and Actionable

 MARKET EXPANSION
STRATEGIES
⚫ Enter new markets in existing countries

⚫ Enter new country markets for already identified and served market
segments
⚫ These 2 dimensions produce 4 strategies:

1. Concentrate on few segments in a few countries

2. Country concentration and segment diversification
3. Country diversification and market segment concentration
4. Country and segment diversification