Ladybel L.

Cañete BSBA 4A-MM

INTERNATIONAL MARKETING

ASSIGNMENT 1. Define the term

A. International marketing -

International marketing is the application of marketing principles by industries in one or

more than one country. It is possible for companies to conduct business in almost any country
around the world, thanks to the advances in international marketing. In simple words,
international marketing is trading of goods and services among different countries. The
procedure of planning and executing the rates, promotion and distribution of products and
services is the same worldwide.

B. Global Marketing

Global marketing is defined as “marketing on a worldwide scale reconciling or taking

global operational differences, similarities and opportunities in order to reach global
objectives". Global marketing is also a field of study in general business management that
markets products, solutions and services to customers locally, nationally, and internationally.

C. Globalization

Globalization is the word used to describe the growing interdependence of the world’s
economies, cultures, and populations, brought about by cross-border trade in goods and
services, technology, and flows of investment, people, and information. Countries have built
economic partnerships to facilitate these movements over many centuries.

D. Internationalization

Internationalization describes the process of designing products to meet the needs of

users in many countries or designing them so they can be easily modified, to achieve this goal.

E. Marketing

Marketing refers to activities a company undertakes to promote the buying or selling of a

product or service. Marketing includes advertising, selling, and delivering products to
consumers or other businesses. Some marketing is done by affiliates on behalf of a company.

F. Culture

Culture refers to the influence of religious, family, educational, and social systems on
people, how they live their lives, and the choices they make. Marketing always exists in an
environment shaped by culture. Organizations that intend to market products in different
countries must be sensitive to the cultural factors at work in their target markets

G. Standardization

Standardization is a framework of agreements to which all relevant parties in an industry

or organization must adhere to ensure that all processes associated with the creation of a good
or performance of a service are performed within set guideline.

H. Adaptation

Adaptation is the process of changing an existing product or service so that it is suitable for
different customers. This can often be seen as a less risky business option than launching a
brand-new product.

I. Glocalization

Is the simultaneous occurrence of both universalizing and particularizing tendencies in

contemporary social, political, and economic systems. The term, a linguistic hybrid of
globalization and localization, was popularized by the sociologist Roland Robertson and coined,
according to him, by Japanese economists to explain Japanese global marketing strategies.

J. V4 Countries

Visegrád Group, Visegrád Four, V4, or European Quartet, is a cultural and political alliance
of four countries of Central Europe (Czech Republic, Hungary, Poland and Slovakia), all of which
are members of the EU and of NATO, to advance co-operation in military, cultural, economic
and energy matters with one another and to further their integration to the EU.

K. Purchasing Power Purity

Purchasing power parity (PPP) is a popular metric used by macroeconomic analysts that
compares different countries' currencies through a "basket of goods" approach.

2. Describe the advantage and disadvantage of International Marketing.

ADVANTAGE

International marketing helps business in enhancing their sales by presenting them at

international level. It provides access to wider market globally through which business connects
with large number of customers. This boosts the sales volume and overall profitability of
organization.
DISADVANTAGE

International marketing faces many difficulties due to varying cultures and norms across
the globe. Different countries have their distinct norms, traditions, lifestyles, languages and
preferences. Companies may sometimes find it difficult to sell their products.

ACTIVITY 1.

Differentiate (a) domestic marketing to International marketing and (b) International

marketing to global marketing.

The activities of production, promotion, advertising, distribution, selling and customer

satisfaction within one’s own country is known as Domestic marketing. International marketing
is when the marketing activities are undertaken at the international level. Domestic marketing
caters a small area, whereas International marketing covers a large area. In domestic
marketing, there is less government influence as compared to the international marketing
because the company has to deal with rules and regulations of numerous countries. In domestic
marketing, business operations are done in one country only. On the other hand, in
international marketing, the business operations conducted in multiple countries while in
international marketing, there is an advantage that the business organization can have access
to the latest technology of several countries which is absent in case domestic countries. The risk
involved and challenges in case of international marketing are very high due to some factors
like socio-cultural differences, exchange rates, setting an international price for the product and
so on. The risk factor and challenges are comparatively less in the case of domestic marketing.
International marketing requires huge capital investment, but domestic marketing requires less
investment for acquiring resources. In domestic marketing, the executives face less problem
while dealing with the people because of similar nature. However, in the case of international
marketing, it is quite difficult to deal with customers of different tastes, habits, preferences,
segments, etc. International marketing seeks deep research on the foreign market due to lack
of familiarity, which is just opposite in the case of domestic marketing, where a small survey will
prove helpful to know the market conditions.

b.) International marketing involves the marketing tactics adopted by knowledgeable marketers
in different countries specific to the markets of those countries while global marketing is a
marketing concept which involves the marketing efforts put in for the unique worldwide
market.
QUIZ #1: ESSAY

1. Explain the following:

A) Can you specify the impact of globalization and Internationalization on global, regional
and intra-regional economy?

The impact of globalization and Internationalization on global, regional and intra-

regional economy is that they provide significant stimuli for economy growth in all
regions around the world. Trade has played the biggest role that enables individual
countries to produce and to consume more products that can be fully self-sufficient.

B) Is there any relationship between the global and European economy growth and
visegrad countries economy growth?

Yes, because they are connected to work together in a number of fields common
interest within the European integration. They also continue to attract a share of inward
investment to continue the economic growth of each countries.

ACTIVITY NO. 2
1. What are the key steps in Political Risk Assessment and explain each.
 Identify your risks
Through your risk manager, you gather pertinent information about the types of
political risk your company faces, or is likely to face, in the target country. The objective here is
to find out how political conditions may affect your goals in the market. Next, you identify the
political risks that most threaten these goals. Seizure of assets might be a low-ranked hazard if
you’re only exporting to the country from Canada, for example, but potentially a serious one if
you bring valuable assets into an emerging market to perform contract work on the ground.
 Measure your exposure
You rank the risks you've identified and measure your exposure to each one. This
involves attaching numbers to the risks to reflect their potential financial effects on your
company. These measurements will help determine whether the risk level of a market is within
your tolerance, thus helping you decide whether to enter it.
  Mitigate your risks
You take measures to lower the probability of a risk and to reduce its effects if it
becomes a reality. How you do this will be determined by the nature of your company. If
you’re making an investment, for example, you could work with local partners whose familiarity
with their market can help you avoid problems. To help protect you if trouble hits, you could
purchase insurance that covers political risks.
 Monitor your risks
Once you've established how your risk management process will work, you set up
routines for reporting, evaluation and review. There should be formal channels for regularly
reporting political risk issues, both upward to senior management and downward to the
personnel who manage your on-the-ground operations. These routines should become part of
your normal business activity, and your risk manager must make sure that they don't fall into
disuse as time passes. As you'll recognize by now, setting up a risk management process isn't a
trivial undertaking, and you may not have the internal resources to create the system you need.

2. What are the types of Political Risk and Explain.

1. CONFISCATION
Confiscation refers to a situation on under which a government forfeits a foreign
investment. It means that the government does not pay any compensation for taking over the
foreign investment.
2. EXPROPRIATION
Expropriation refers to a situation under which a government takes over a
foreign investment by paying some, compensation. This compensation may not be equal to
market value of foreign investment. It implies that a compensation is paid for taking over the
foreign investment.
3. NATIONALIZATION
Nationalization refers to a situation under which a government takes over the
ownership of the entire industry. It means that nationalization affects the entire industry rather
than a single company. Nationalization involves transfer of ownership of business to a
government agency. The process of nationalization may or may not have any compensation to
be paid to previous owners of the business. It means that a compensation may be paid or may
not be paid to the previous owners.
4. DOMESTICATION
Domestication refers to a situation under which a government restricts gradually
the freedom of operations of a foreign business firm. The purpose of domestication is to bring
the activities of a foreign business firm in line with national interest. It implies that
domestication is a mild form of intervention of a government. Domestication is a gradual
encroachment of the freedom of a business firm. Domestication can be either firm initiated,
government initiated or predetermined. The government-initiated domestication is quite risky
and is treated at par with expropriation.

5. BLOCKING OF FUNDS
Blocking of funds refers to a situation under which a government does not allow
a foreign firm to remit the funds or earnings back to home country. Blocking of funds may be
temporary or permanent. In this case, there is no danger to ownership and property rights
orate funds, but a foreign firm is not allowed to repatriate its earnings and investment. Blocking
of funds was a common problem faced by Indians during Idi Amin’s rule in Uganda when it was
almost impossible for the Indian firms to repatriate their earnings in any form.

ASSIGNMENT 2
1. Differentiate the three (3) levels of political risk;
1. Firm related risk
2. Country related risk
3. Global related risk

1. FIRM RELATED RISK

A firm-specific risk is the unsystematic risk associated with a specific investment
in a firm that is completely diversifiable as per the theory of finance. Under this risk, the
investor can lower their risk by increasing the number of investments they have in their
portfolio. This is different from systematic risks that are market-linked and affect every
company and every industry. For example, an increase in the price of crude oil also affects the
costs associated with transporting goods, which, in turn, would affect consumer spending.
However, in the case of an unsystematic risk (specific risk), a newly launched food product that
does not sell only has a specific revenue impact related to that product and does not have an
industry-wide impact seeing as consumers buy alternative food products.
2. COUNTRY RELATED RISK
Country risk refers to the uncertainty associated with investing in a particular
country, and more specifically the degree to which that uncertainty could lead to losses for
investors. This uncertainty can come from any number of factors including political, economic,
exchange-rate, or technological influences. In particular, country risk denotes the risk that a
foreign government will default on its bonds or other financial commitments increasing transfer
risk. In a broader sense, country risk is the degree to which political and economic unrest affect
the securities of issuers doing business in a particular country.
3. GLOBAL RELATED RISK
The possibility that something bad may happen which will affect all countries.
The strongest measure of any company is its reputation. Over 90% of Global Risk customers
learn about our products by word-of-mouth from satisfied customers. This kind of track record
stems from an unmatched team of dedicated, highly technical and customer-focused people.
From our support team to our development team, we are committed to providing risk solutions
that exceed your expectations. Since the first release of the Option Trader software, Global Risk
has grown from a small technology startup to the leading provider and developer of risk
management software. From a modest beginning in 1991, our products and services, The
Global Risk Platform, is now used worldwide by more exchanges, banks, brokers, dealers,
clearing firms, regulators and professional traders than any other analysis tool.

QUIZ #2: (MODULE 2) CHAPTER 3&4

ESSAY:

1) Discuss the three (3) characteristics of culture.

Culture is learned

Let’s start with the first of the characteristics of culture–culture is learned. Culture is not
genetic—we are not born with culture. A baby can be raised in any culture, and he or she will
learn that culture, that religion, that language, and the skills that are important in that culture,
whether it’s spear-throwing or computer programming. We learn our culture as we grow up in
it, through a process called enculturation. It is also known as socialization.

Culture is shared

Let’s move on to the next of the characteristics of culture–culture is shared. Culture is

something that a group of people shares–it is shared practices and shared understandings. If
one person thinks something or behaves a certain way, which is not culture–it is a personal
habit. But if most of the people in a society do it, then it is culture. Culture is shared between
members of a group, meaning they all think and behave the same way because they grew up in
the same culture.

Culture is integrated

Now let’s move on to another of the characteristics of culture–culture is integrated.

Culture is a complex system, made up of many parts that are interconnected and related to
each other. Some examples of the parts of culture are education, technology, marriage,
medicine, economics, family, beliefs and religion, government, and language.

2) Explain the primary factors that influence business.

Geographical and Ecological or Natural Factors

Geographical conditions exert influence on the decisions as to the type of industries and
business to be carried on in a region. This is because the people of a particular geographical
region will have similar tastes, preferences and requirements.
Demographic Environment

Demographic environment includes a number of sub-factors viz., size, growth, age and
sex compositions of the population, educational levels, languages, caste, religion etc. The
impact of this demographic factor is more vital in India than any other country in the rest of the
world. Indian population is highly heterogeneous with varied religions, languages, castes and
creeds. Naturally their tastes, preferences, beliefs, temperaments are bound to differ. This
fundamental difference gives rise to different demand patterns and calls for different marketing
strategies.

Economic Environment

Economic environment consists of three important factors namely, economic systems,

economic policies and economic conditions. The impact of this environment is much more
direct and deliberate than other factors. These three elements of the economic environment
should be analysed individually as well as collectively as a whole.

Political and Legal Environment

Economic environment within a country is closely linked with the political and legal
environment there. Political and legal environment is the background of laws and regulation
within which the business firms should conduct their affairs.

Social and Cultural Environment

Social environment is concerned with the environment of society as a whole — of which

everyone involved. Cultural environment is an aggregate of all sub-cultures each with distinct
concepts, beliefs and faith. The society as we all know is not static. We have a dynamic i.e. ever-
changing society. New demands are created and old one lost in due course. The business
enterprises should constantly watch the developments taking place and make necessary
adjustments in their production and marketing plans and strategies to fulfill the new social
demands.
Physical and Technological Environment

Physical factors mean and include geographical factors like weather, climatic conditions
etc. These factors have a notable influence on business prospects. The availability of physical
facilities limits the scope and prospects of business.

Technology refers to the knowledge of how to do things. The dominant features of

technology have been made in the last three decades. Particularly for the last ten years,
technology has worked wonders. Prof. Kahn and Wiener have called the new development in
technology as “Innovation”, “Revolution” or “Break Through”. The technological development
can contribute to the economic development.

QUIZ #3: (MODULE 3) CHAPTER 5&6

Enumeration:

1) What are the attitudes that influence international business as well as international
marketing?

 Attitudes and beliefs

 Attitudes toward time
 Attitudes towards work and leisure
 Attitudes towards achievement
 Attitudes towards change
 Showing Emotion

2) What are the holidays practice by the Islam?

 Birth of Mohammed
 Islamic New Year
 Ramadan
 Festival of Breaking the Fast
 Festival of the Sacrifice
  Remembering Shiite Martyr Husayn

ACTIVITY #3:

1) Discuss why we should enter to foreign market, and why not?

In general, companies go international because they want to grow or expand

operations. The benefits of entering international markets include generating more revenue,
competing for new sales, investment opportunities, diversifying, reducing costs and recruiting
new talent.
WHY NOT?

Despite attractive opportunities, most businesses do not enter foreign markets. The
reasons given for not going international are numerous. The biggest barrier to entering foreign
markets is seen to be a fear by these companies that their products are not marketable
overseas, and a consequent preoccupation with the domestic market. The following points
were highlighted by the findings in the previously mentioned study by Barker and Kaynak, who
listed the most important barriers:

•too much red tape

•trade barriers

•transportation difficulties

•lack of trained personnel

•lack of incentives
•lack of coordinated assistance

•unfavorable conditions overseas

•slow payments by buyers

•lack of competitive products

•payment defaults

•language barriers

It is the combination of these factors that determines not only whether companies
become involved in international markets, but also the degree of involvement.

2) Identify some key factors which make international marketing research different from
domestic marketing research?

 The activities of production, promotion, advertising, distribution, selling and customer

satisfaction within one’s own country is known as Domestic marketing. International
marketing is when the marketing activities are undertaken at the international level.
 Domestic marketing caters a small area, whereas International marketing covers a large
area.
 In domestic marketing, the executives face less problem while dealing with the people
because of similar nature. However, in the case of international marketing, it is quite
difficult to deal with customers of different tastes, habits, preferences, segments, etc.
 International marketing seeks deep research on the foreign market due to lack of
familiarity, which is just opposite in the case of domestic marketing, where a small
survey will prove helpful to know the market conditions.
 In international marketing, there is an advantage that the business organisation can
have access to the latest technology of several countries which is absent in case
domestic countries.

ASSIGNMENT #3:

1) Search what kind of V4 products or services could be success or not to be success at

foreign markets?

Products or Services could be successful.

• Workforce and talent management

 • Real estate brokers / Viewing coordinator

• Legal compliance

• Marketing management

• Online advertising / Photography

Products or Services not be successful in foreign market.

• The Zune

Modern first introduced this portable media player in 2006, with several new generations
of the device to follow. The Zune faced several major challenges: namely, inevitable
comparisons to the iPod, which rules the portable media marketplace, and the fact that its
software is only available for Windows (so far). In a financial report covering the fiscal quarter
ending in December 2008, Microsoft said Zune revenues had decreased by 54%, or $100
million.

• McDonald's

The Golden Arches are a staple fast food establishment around the globe, but Ronald and
Co. haven’t quite caught on in the Caribbean. The company made a good effort during its 10-
year run in Jamaica, initially opening 11 stores on the island. A writer for Moneymax101 noted
a number of other issues, including high barriers to running a McDonald’s franchise and a slow
economy. In Barbados, the company was there less than a year before closing due to lack of
sales.

McDonald’s also saw less-than-stellar performance in Trinidad and Tobago, pulling out of
the country in 2003 due to low sales. But Mickey D’s is nothing if not determined, and Arcos
Dorados, a major McDonald’s franchiser in Latin America and the Caribbean, announced in
2011 that the chain would reopen there.

• Best Buy

This big box store chain may appeal to Americans, but the electronics and entertainment
retailer has struggled to make headway in foreign markets. Business Insider reported in 2011
that Best Buy bungled its European efforts through poor marketing strategy and for failing to
notice that Europeans prefer smaller shops to large box stores, among other factors. Best Buy
also closed its branches in China and Turkey. CNBC contributor and China Market Research
Group founder Shaun Rein attributed Best Buy’s lackluster performance in China to “failing to
differentiate its product lines” from local retailers and for not adapting to local consumers’
shopping preferences, such as preferring smaller, more conveniently located retailers.

• Taco Bell

This gastronomically dubious fast food chain has seen mixed reactions in Asia. Despite the
success of parent company Yum Foods’ other brands, such as KFC, in China, Taco Bell never
garnered rave reviews in the Middle Kingdom, according to Agenda Beijing. The magazine
noted that Mexican food is “notoriously hard to market in China,” and the Taco Bell shops in
Shanghai and Shenzhen were shut down in 2008.

Taco Bell made a valiant return to South Korea in 2010, after a poor performance there
in the 1980s. The fast food chain was opened in Itaewon and Hongdae — a strategic move, as
these are two popular nightlife areas frequented by foreigners who are likely familiar with the
brand.

QUIZ # 4

1.) TRUE

2.) FALSE

3.) TRUE
4.) FALSE

5.) TRUE

6.) FALSE

7.) FALSE

8.) TRUE

9.) TRUE

10.) TRUE

ASSIGNMENT 4:

1. Differentiate a Joint venture Subsidiary to a Wholly Owned Subsidiary.

A joint venture is a firm that is set up, owned and operated by two or more companies.
A joint venture may be an equal partnership, or one of the partners may have a greater share of
the business. A wholly owned subsidiary is a owned by a single company that maintains control
over it.

2. What are the differences between particular investment modes? Which of them are used in
what situation?

The term "investment" has become confusing as a result of its overuse. An investment is
something like a stock or a bond. People are now urged to invest in their educations,
automobiles, and even flat-screen televisions. All of these items may make good financial sense,
but they aren't investments in the strictest sense.

There are (3) particular investment modes which composed of: 1) branch 2) joint venture
subsidiary 3) wholly owned subsidiary and their differences are:

 Branch is the establishment on a foreign market of an organizational unit of the parent

firm that is both an organizational and legal part of that company.
 Joint Venture subsidiary is the formation of a foreign subsidiary that is jointly managed
by the parent firm and a foreign partner (minority and majority shares).
 Wholly owned subsidiary is the formation of a wholly owned (100%) foreign subsidiary
by a parent firm. When a business is considered low risk, wholly owned subsidiaries are
commonly utilized. It is usually employed when a company has all of the necessary
expertise and a thorough understanding of the market
ACTIVITY 4:

1. Explain each of the three (3) entry modes of Foreign Markets.

a. Exporting
Exporting is a cross border sale of domestically grown or produced goods. There
are three types of exporting: indirect exporting, direct exporting and cooperative exporting.
Indirect exporting is the lowest risk entry mode as there is effectively no exposure to the
foreign market and its associated risks. The organization is merely selling their product to an
agent in the foreign market who then sells the product on to an intermediary. Exporting is a
common method used by organizations when they first enter a new market.

b. Licensing
International licensing is a cross border agreement that permits organisations in
the target country the rights to use the property of the licensor. This property is generally
intangible and includes: trademarks, patents, and production techniques. The licensee is
required to pay a fee in exchange for the rights specified in the contract between the parties.
Licensing is commonly chosen because its low risk, has low exposure to economic and political
conditions, has high return on investment and is preferred by local governments.

c. Franchising
Franchising is a foreign market entry strategy where a semi-independent
business owner (the franchisee) pays fees and royalties to the franchiser to use a company’s
trademark and sell its products and/or services. The terms and conditions of a franchise
package vary depending on the contract, however it generally includes: equipment, operations
and management manual, staff training, and location approval. Franchising is commonly used
and a largely successful method of cross border market entry, however organizations pursuing
this entry mode need to consider both the positive and negative aspects of franchising.

2. Differentiate indirect export to direct export.

Indirect exporting is the process of selling products to an intermediary, who will then
sell your products directly to customers or importing wholesalers. When looking for an
intermediary to help you with indirect exporting, the easiest way is to find one in your own
country while direct exporting refers to the sale in the foreign market by the manufacturer
himself. A manufacturer does not use any middlemen in the channel between the home
country and overseas market. Following figure shows direct exporting channels.
ACTIVITY 5: IDENTIFICATION

1. Innovative leaders’ strategy This strategy relies on systematic launching new products on the
international market.

2. Flexible Specializations Policy The strategy that relies on modification of features and
properties of products previously offered by an innovator and adjusting them to the needs of
specific market segments.

3. Price Policy A policy that play as an essential part of marketing mix.

4. Tariff This is a special form of tax or fee changed when goods are brought into a country from
another country, with the aim of protecting a market or for increasing government revenue.

5. Ad valorem The type of fee as a percentage of the value of the imported goods.

6. Price escalation This difference in price between the exporting country and the importing
country due to added costs incurred as a results of moving goods from one country to another.

7. Marginal-cost pricing A type of price cannot be set below the floor price without incurring a
loss.

8. Cost-plus (full cost) method This method used in pricing a product for the overseas market
strategy.

9. Low-price strategy The price strategy that used when a company wishes to dispose of excess
or obsolete inventory.

10. Pricing Strategies This is considered as an essential part of company factors influencing
price settings.

ASSIGNMENTS 5: Define the following terms:

1. Market Penetration

Market penetration is a measure of how much a product or service is being used

by customers compared to the total estimated market for that product or service.
Market penetration can also be used in developing strategies employed to increase the
market share of a particular product or service
2. Market Skimming

Market skimming a pricing approach in which the producer sets a high introductory
price to attract buyers with a strong desire for the product and the resources to buy it,
and then gradually reduces the price to attract the next and subsequent layers of the
market.

3. Gray market of Parallel Imports

Parallel imports (or gray market goods) refer to branded goods that are imported into
a market and sold there without the trademark owner’s consent in that market. The
goods have been manufactured by or under license of the brand owner and therefore
are not counterfeit, but they may have been formulated or packaged for a particular
jurisdiction and are imported into a different jurisdiction in contradiction to the brand
owner’s intention.

4. Dumpings

Dumping is when foreign firms dump products at artificially low prices in the
European market. This could be because countries unfairly subsidise products or
companies have overproduced and are now selling the products at reduced prices in
other markets.

5. Switch Trading

A form of countertrade in which a buyer in one country of exports from a

second pays for it with an obligation due from a third party. Practice in which one
company sells to another its obligation to make a purchase in a given country.

MIDTERM EXAM
FINAL EXAM