Professional Documents
Culture Documents
Cadawas-Magat-Wong
DOMESTVS INTERNATIONAL MARKETING
-consumer
-purchasing power
-product and packaging
-currency
-payment term
-physical distribution
-language
-communication
Phases of International Marketing
Subhash Jain's (1995) book International
Marketing Management
1. Domestic Exporter
2. Regional Exporter
3. Exporter
4. International Exporter
5. International to Global Exporter
6. Global Exporter
Cateora and Graham (2004)
1. No Direct Marketing
2. Infrequent Foreign Marketing
3. Regular Foreign Marketing
4. International Marketing
5. Global Marketing
Internal and External reasons why companies venture into
international marketing (Dalgic 1997):
1. Internal Reasons
To utilize the firm's excess capacity
To take advantage of higher purchasing power in overseas markets
To take advantage of the government's export promotion drive
To find other markets as the firm's product experiences a decline in
sales in the home market
To find other markets as stiff competition in the domestic or
home market has reduced the firm's soles
To diversify the firm's power base in different geographic locations
2. External Reasons
*2 by 2 by 2 rule*
>> 2 countries, 2 goods, 2 factors of
production
CLASSICAL THEORIES OF
TRADE
I. Theory of Mercantilism
I. Current account
II. Capital Account
III. Financial account
PROTECTIONISM
1.Tariff barriers
2.Non-tariff barriers
1.Tariff barriers
2.Non-tariff barriers
.
4. supports the needs of developing
countries
FACTS
open trade for the benefit if all.
run by its member governments
it could not function without its
Secretariat to coordinate the
activities.
FACTS
The WTO agreements cover
goods, services and intellectual
property.
The WTO resolves trade
quarrels under the Dispute
Settlement Understanding
What WTO stands for?
Non-discrimination
Opening Trade
Custom unions
Kinds of Trade Blocs
Common market
Economic unions
Custom unions
Examples
Association of Southeastern Asian Nations (ASEAN)
READY ?
ANSWER :
LOVE AT
FIRST SIGHT.
ANSWER :
SON OF A
GUN
ANSWER :
READ BETWEEN
THE LINES
ANSWER :
SPACE
INVADERS
ANSWER :
SPLIT
PERSONALITY
why countries form
TRADE BLOCS
1. Market Access
2. Economies of Scale
3. Reducing Trade Barriers
4. Enhancing Competitiveness
7. Counteracting
Pressures
External Economic
.
8. Cultural and Regional Affinities
9. Strategic Alliances
1. Surveillance
2. Financial Assistance
3. Technical Assistance
Capacity Development
and
4. Research and Data
5. Financial Stability
Start
ENTRY MODES IN
INTERNATIONAL
1. Franchising MARKETING
a continuing business in which the
franchisor provides a licensed
privilege to the franchisee to do
business.
ADVANTAGES: DISADVANTAGES:
Possibly easier to finance. Onerous reporting requirements
Access to quality training and Costs of supplies or materials may be
ongoing support. more expensive.
Established concept with reduced Possible exaggeration of advantages by
franchiser.
risk of failure.
Cost of franchise and other fees may
Access to extensive advertising.
reduce your profit margins.
Few start-up problems.
Inflexibility due to restrictions imposed
Use of well-known trade mark or
by franchiser.
trade name. Termination policies of franchiser may
allow little security.
ENTRY MODES IN
INTERNATIONAL
2. Licensing MARKETING
it is an agreement that you as the
licensor allows someone to sell
your product in exchange with
royalty fees.
ADVANTAGES: DISADVANTAGES:
It requires little capital.
It is the quickest and easiest way to The licensor may establish his her own
enter a foreign market. competitor.
I t enables the firm to gain knowledge of It provides limited returns.
and access to the local market. Problem of control on license may arise.
It provides a means of entry when
import restrictions forbid any other
ways or when a country is sensitive to
foreign ownership.
It offers savings on tariff, transport and
local production costs.
ENTRY MODES IN
3. Manufacturing INTERNATIONAL
the production of goods through
MARKETING
the use of labour, machinery, tools
and biological or chemical
processing or formulation.
ENTRY MODES IN
3. Manufacturing INTERNATIONAL
These local firms can assume any of
MARKETING
these forms:
1. Assembly Plant - The firm
produces domestically all or
most of the components of a
product, or the finished
product itself.
ENTRY MODES IN
3. Manufacturing INTERNATIONAL
These local firms can assume any of
MARKETING
these forms:
2. Contract Manufacturing - The
product is manufactured for the foreign
market by a local firm under contract
with the international company. It is
commonly known as Outsourcing.
ENTRY MODES IN
3. Manufacturing INTERNATIONAL
These local firms can assume any of
MARKETING
these forms:
3. Joint Venture - The firm has
enough equity position to have a
voice in management, but not
enough to completely dominate
or control the venture.
ENTRY MODES IN
3. Manufacturing INTERNATIONAL
These local firms can assume any of
MARKETING
these forms:
4. Wholly-Owned Subsidiary -
There is 100% local ownership of
the international firm.
ENTRY MODES IN
4. Management Contract INTERNATIONAL
Production is irrelevant to the mother MARKETING
companies. They merely supply
management know-how to a foreign
company that is willing to supply
capital to them. The local firm, on the
other, exports management services.
ENTRY MODES IN
5. Exporting INTERNATIONAL
refers to the marketing of
MARKETING
goods and services produced
in off country into another
country.
ADVANTAGES: DISADVANTAGES:
Enhances domestic competitiveness. Develops new promotional matorial.
Increases sales and profits. Subordinates short term profits to long-
Gains global market share. term gains.
Exploits corporate fechnology and know-how.
Incurs added administrotive costs.
Extends the sales potential of existing
Allocates personnel for travel.
products.
Stabilizes seasong market fluctuations.
Waits longer for payment.
Enhances potential for corporate expansion. Modities product or packaging.
Sells excess production capacity. Applies for additional financing.
Gains information about foreign competition. Obtains special export licenses.
INTERNATIONAL TRADE TERMS
Start
The International Rules for the
Interpretation of Trade Terms (INCOTERMS
or International Commercial Terms) came
into being in 1936 (Incoterms).
According to the U.S Export Governmental
Portal, there are 13 INCOTERMS categorized
in 4 groups:
Departure (E)
Main Carriage Unpaid by the Seller (F)
Main Carriage Paid by the Seller (C)
Arrival at Stated Destination (D)
These are the 13 INCOTERMS:
A. Departure (E)
1. EXW - Ex-Works Factory
Start
1. Ex-Works Factory (EXF) - the seller
fulfills his /her obligation when he/she
has made the goods available at his/her
premises. He/she is not responsible for
loading the goods on the vehice provided
by the buyer or for clearing the goods
for export, unless otherwise agreed
upon.
2. Free on Board (FOB) - means that the
seller fulfills his /her obligation to
deliver when the goods have passed the
ship's rail at the named port of shipment.
3. Cost and Freight (CFR) - means that the
seller must pay the costs and freight
necessary to bring the goods to the named
port of destination, but the risk of loss of
or damage to the goods, as well as any
additional costs due to any event occurring
after the time the goods have been delivered
on board the vessel, is transferred from the
seller to the buyer when the goods pass the
ship's rail in the port of shipment.
4. Cost, Insurance and Freight (CIF)
- means that the seller has the same
obligations at those under CFR Port of
Destination, but with the addition that
he/she has to procure marine insurance
against the buyer's risk insurance and
pays the insurance premium.
THAT WILL BE ALL.
HAVE A GOODNIGHT!
Entry Modes in International Marketing
I
II
III
IV
V
I
1. Franchising
2. Licensing
3. Manufacturing
4. Management Contracts
5. Exporting
II
III
IV
V
I II
Franchising
A form of business by which the
owner (franchisor) of a product,
service or method obtains
distribution through affiliated
delears (franchisees).
III
IV
V
I II III
Franchising (Pros)
IV
V
I II III
Franchising (Cons)
IV
V
I II
Licensing
Entails only a part of a
whole franchising
aspect.
III
IV
V
I II III
Licensing (Pros)
• It requires little capital
• It is the quickest way to enter a
foreign market
• It enables a firm to gain knowledge of
and access to the market
• It offers savings on tariff, transport
and local production cost
IV
V
I II
Manufacturing
Lumped into several categories,
certain local companies are
mostly concerned with the
manufacture products.
III
IV
V
I II
Manufacturing
(Local Firms)
• Assembly plant
• Contract Manufacturing
• Joint Venture
• Wholly-owned plant
III
IV
V
I II
Management Contracts
An arrangement or agreement
between two parties where one party,
known as the manager, agrees to
provide management services to the
other party, known as the client, for
an agreed duration.
III
IV
V
I II
Exporting
Marketing of goods
and services produced
in one country.
III
IV
V
I II
Exporting
(Modes of Entry)
• Producer Exporter
• Exporter Trader
• Selling Agent
• Buying Agent
• Subcontractor
III
IV
V
I II III
Exporting (Pros)
• Enhances domestic
competitiveness
• Increase sales and profit
• Gains global market share
• Sells excess production capacity
IV
V
I II III
Exporting (Cons)
IV
V
International Commerical Terms
I
II
III
IV
V
I II III IV
INCOTERMS
Standardized set of rules that all buyers
and sellers must follow when engaging in
international trade. This sets clear
guidelines of cost, insurance and
ownership for each party.
V
I II III IV
PURPOSE OF INCOTERMS
• Clarifies rules
• Reduce Risk
• Helps with accounting
• Managing a shipment
• Avoid misunderstanding
V
I II III IV V
Groups
1. Departure (E)
2. Main Carriage Unpaid
by the Seller (F)
3. Main Carriage Paid
by the Seller (C)
4. Arrival at Stated
Destination (D)
I II III IV V
Departure (e)
MC Unpaid by S (F)
MC Unpaid by S (F)
MC Unpaid by S (F)
MC paid by S (C)
MC paid by S (C)
MC paid by S (C)
MC paid by S (C)
Arrival at SD (d)
Arrival at SD (d)
Arrival at SD (d)
REFERENCES
Jeong, L. S., & Garcia Jr., L. (n.d.). International Marketing (p. 252) [Review
of International Marketing]. C & E Publishing, Inc. (Original work published 2006)
V
MODES OF
VENTURING INTO
THE EXPORT
BUSINESS
MODES OF VENTURING INTO THE EXPORT BUSINESS
Philippine Trade Training Center's Handbook on the Basics of
Exporting (Philippines Trade Training Center, 2006)
ENTRY MODE 3:
SUBCONTRACTOR
ENTRY MODE 1:
PRODUCER-EXPORTER
A company produces
goods or services within
its domestic market and
then exports those
products to
international markets.
ENTRY MODE 2:
EXPORTER-TRADER
Allows companies to
leverage their
knowledge of domestic
products and
international markets to
create value in the global
supply chain.
ENTRY MODE 3:
SUBCONTRACTOR
Refers to a specific
method of entering a
foreign market or
engaging in international
business activities by
making use of the
resources of local
partners.
ENTRY MODE 4:
SELLING AGENT
The exporter
appoints a sales
representative or
middleman in the
target market to
represent their goods
or services.
ENTRY MODE 5:
BUYING AGENT
The exporters
employ an agent to
manage their global
business operations.
EXPORT
MERCHANDISER
EXPORT MERCHANDISER’S
FUNCTIONS AND ACTIVITIES
BUYER SOURCING,
HANDLING AND NEGOTIATION
ASSISTANCE
SUPPLIER SOURCING,
IDENTIFICATION AND ORDER FOLLOW-UP
EVALUATION
M A R K E T
RESEARCH
Week 8
OCTOBER 2023
Market Research
Refers to the gathering, analyzing, and
interpreting information about a particular
market, including its consumers,
competitors, and overall industry.
Importance of Market
Research
Product
Market Access
Competition
Is a tangible or intangible item or
service that is created, designed,
Refers to the ability of a company or manufactured for the purpose
or product to enter and compete Refers to the presence of other of satisfying a specific need or
in a specific market. businesses or organizations that offer want of a customer.
similar products or services within the
same market.
Market Size,
Price
Patterns and
Structure
Growth
Market Size- refers to the total sale, revenue, or volume of a
Refers to the way a company or
specific market at a particular point in time.
business sets and organizes the prices
Market Patterns- involve studying trends, consumer
for its product or services.
behavior, and other recurring characteristics within a
market.
Market Growth- is the rate at which a market is expanding.
Product Requirements
Packaging for Shipment Industrial Package Pack Consumer Pack
Export
Export requirements refer to the rules, regulations, and
and procedures that businesses
must adhere to when selling
Requirements
ocedures that businesses must adhere to when selling goods or
services to foreign markets. These requirements can vary
goods or services to foreign
gnificantly from one country to another and may encompass a
wide range of considerations. Here are some common export
markets.
requirements to be aware of:
EXPORT
REQUIREMENTS
SANITARY AND
PHYTOSANITARY (SPS)
MEASURES:
PRODUCT INTELLECTUAL TRANSPORT AND
are an essential aspect of
COMPLIANCE export requirements,
PROPERTY LOGISTICS
particularly for agricultural and RIGHTS
is a critical aspect of export are integral components
food products. SPS measures
requirements, ensuring that
are regulations and standards protection is a critical of export requirements,
the goods you are exporting
established by governments to aspect of export as they involve the
meet the regulatory
protect human, animal, and physical movement of
standards and safety
plant life and health from risks
requirements for
requirements of both your goods from the
that may arise from the businesses involved exporter's location to the
own country and the
importation of certain
destination country. in international trade. destination country.
products.
EXPORT
REQUIREMENTS
EXPORT COMPLIANCE
EXPORT FINANCING PROGRAMS
CULTURAL AND
LANGUAGE refers to the various are comprehensive
CONSIDERATIONS methods and financial strategies and sets of
are crucial aspects of instruments that procedures that businesses
export requirements businesses use to support establish to ensure that their
that can significantly their international trade export activities comply
impact the success of activities by obtaining with all relevant laws,
international trade funds for exporting goods regulations, and
efforts. or services. international trade
requirements.
Standard Marketing Practices