SHORT NOTES OF IM – SHREYASH (SEM 4)

International marketing involves applying marketing principles across national borders to satisfy the needs of
different markets and achieve organizational objectives. It's crucial in today's globalized world where businesses
are expanding beyond domestic markets.

Domestic marketing focuses on a single country, while international marketing extends beyond borders to reach
customers in multiple countries. Multinational marketing involves operations in multiple countries, and global
marketing treats the entire world as a single market.

The benefits of international marketing include market diversification, brand recognition, increased sales and
profit, extended product lifecycle, innovation, and competitive advantage.

The EPRG framework categorizes approaches to international marketing as ethnocentric, polycentric,

regiocentric, and geocentric, based on attitudes towards global business operations.

Foreign market entry strategies include exporting, licensing, franchising, joint ventures, and wholly-owned
subsidiaries, each with its advantages and disadvantages.

The international marketing environment includes social, cultural, economic, political/legal, technological,
institutional, and competitive factors that influence marketing practices.

International product and service management involve adapting strategies to address the unique characteristics
of products and services in global markets, including customization, quality assurance, and cross-cultural
communication.

The international marketing of services requires understanding and addressing the intangible, inseparable,
variable, and perishable nature of services, as well as adapting marketing strategies to meet diverse cultural
preferences.

The international product offer comprises core, actual, and augmented product components, along with
branding, packaging, labelling, customization, localization, and product innovations to meet the needs of global
consumers.

International Product and Service Management:

Cultural Factors: Differences in culture affect how products and services are received and marketed
internationally.

Legal and Regulatory Environment: Varying laws and regulations in different countries impact product standards,
labeling, and safety.

Technological Advances: Rapid changes in technology influence innovation and distribution channels for
products and services.

Economic Conditions: Factors like GDP growth and inflation rates affect consumer purchasing power and
demand.
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Market Segmentation and Targeting: Understanding diverse market segments helps tailor products to specific
needs.

Competitive Landscape: Competition drives differentiation and pricing strategies for products and services.

Supply Chain Management: Coordination of production, sourcing, and distribution across borders affects
availability and cost.

Brand Image and Reputation: Building trust and loyalty through consistent branding enhances market presence.

Consumer Behavior and Preferences: Understanding buying habits and cultural influences guides product design
and marketing.

Technological Readiness and Infrastructure: Accessibility of technology influences product adoption and digital
marketing feasibility.

Managing Products Across Borders (IPLC):

Introduction Stage: Launching products in new markets involves adapting to local preferences and regulations.

Growth Stage: Expanding distribution channels and partnerships capitalize on increasing demand.

Maturity Stage: Competition intensifies, requiring differentiation and innovation to maintain market share.

Decline Stage: Sales decrease, prompting reevaluation of market presence or product strategy.

International Product Strategies:

Standardization: Offering uniform products globally for efficiency and brand consistency.

Adaptation: Modifying products to suit local regulations, preferences, or market conditions.

International Product and Communication Strategies:

Product & Communication Extension: Offering the same product and message globally.

Product Extension – Communication Adaptation: Standardizing products but adapting marketing to local
cultures.

Product Adaptation – Communication Extension: Customizing products while maintaining consistent messaging.

Product & Communication Adaptation: Adapting both products and communication to local markets.

Product Invention: Developing new products to meet global needs uniquely.

Approaches in International Product Design:

Modular Approach: Standardized parts for global use, common in industries like automotive.

Core-Product Approach: Designing a core product with customizable features for local markets.

Adoption, Diffusion, and Elimination of Products:

Adoption: Process of market acceptance influenced by innovation and consumer behavior.

Diffusion: Spread of product adoption over time, influenced by marketing and consumer trust.
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Elimination: Reasons include lack of adoption, changing preferences, or increased competition.

International Branding Strategies:

Global Branding: Consistent brand image globally for recognition and efficiency.

Local Branding: Adapting brand elements to suit cultural preferences.

Glocalization: Balancing global consistency with local adaptation.

Brand Architecture: Structuring brand portfolio for clarity and value proposition.

International Pricing:

Cost-Plus Pricing: Setting prices based on production costs plus profit margin.

Market-Based Pricing: Determining prices based on market demand and competition.

Skimming and Penetration Pricing: Strategies for entering markets with premium or low prices.

Value-Based Pricing: Pricing based on perceived value to customers.

Dynamic Pricing: Adjusting prices based on real-time market conditions.

Price Escalation:

Exporting Costs: Expenses associated with preparing products for international markets.

Taxes, Tariffs, and Duties: Additional costs imposed by destination countries.

Administrative Expenses: Costs related to customs clearance and compliance.

Currency Fluctuations: Impact of exchange rate changes on product costs.

Middlemen and Distribution Costs: Expenses added by intermediaries in the supply chain.

Inflationary Pressures: Rising production and input costs due to inflation.

Regulatory Compliance: Costs of meeting local regulations and standards.

Mitigating Price Escalation:

Government Intervention: Policies to regulate prices or address specific cost factors.

Consumer Awareness: Informed shopping to find better deals.

Business Strategies: Cost-cutting or efficiency improvements to offset rising costs.

Reducing Price Escalation:

Efficient Supply Chain Management: By optimizing processes like manufacturing, inventory management, and
distribution, companies can reduce costs associated with transportation and warehousing.

Negotiating Favorable Trade Terms: Engaging in discussions with suppliers and partners can lead to better pricing
terms, discounts, and stable long-term contracts.
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Local Sourcing and Production: Establishing local manufacturing facilities or sourcing components locally helps
minimize risks from currency fluctuations and trade barriers, while also potentially benefiting from lower labor
costs and tax incentives.

Tariff Engineering: Structuring products to minimize tariff liabilities through methods like product redesign,
reclassification, or leveraging preferential trade agreements for lower tariff rates.

Value Engineering and Cost Reduction: Identifying opportunities to reduce costs without compromising quality
through optimizing product design, materials, and manufacturing processes.

Strategic Pricing and Market Positioning: Dynamically adjusting prices based on market conditions and customer
preferences, utilizing techniques like tiered pricing or value-based pricing to maximize revenue.

Risk Management and Hedging: Implementing strategies like forward contracts, currency hedging, or diversifying
sourcing locations to mitigate exposure to currency fluctuations and geopolitical risks.

Investment in Technology and Innovation: Embracing technological advancements and innovation to drive
efficiency gains, reduce production costs, and enhance competitiveness in the global market.

International Pricing Methods and Strategies:

Cost-Based Pricing: Setting prices based on production, distribution, and marketing costs, though it may not fully
consider market demand or competitor pricing.

Market-Based Pricing: Determining prices based on similar products in target markets to ensure competitiveness.

Value-Based Pricing: Pricing based on the perceived value of the product or service, considering factors like
customer needs and willingness to pay, potentially leading to premium pricing.

Transfer Pricing: Relevant for companies with international operations, setting prices for internal transactions
between subsidiaries to optimize profit allocation and tax strategies.

Administered Pricing:

Refers to pricing practices set or influenced by a third party, such as governments or industry associations, to
promote stability, ensure affordability, or limit competition in certain sectors.

Leasing and Countertrade:

Alternative methods of international trade financing:

Leasing: Involves financing the purchase of an asset and granting the right to use it for a specific period,
benefiting both exporters and importers.

Countertrade: Non-monetary trade where part or all of the payment is made with goods or services from the
importing country, providing opportunities but also complexities in transaction management.

Foreign Commercial Payments:

Various methods for receiving payments internationally, each with its own level of risk and complexity, including
cash in advance, letters of credit, documentary collections, and open account.

Dumping:
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Exporting goods at lower prices to foreign markets, potentially harming domestic industries through price
distortions, trade frictions, and market disruptions, leading to anti-dumping measures by importing countries.

International Channels of Distribution:

Direct vs. indirect selling channels:

Direct Selling Channels: Selling products directly to consumers without intermediaries, offering advantages like
control over marketing, cost efficiency, and flexibility.

Indirect Selling Channels: Using intermediaries like wholesalers, retailers, or agents to distribute products,
providing benefits like expanded market reach, access to expertise, risk mitigation, and cost sharing.

Factors Affecting Choice of Channels:

Nature of the Product: Product complexity, perishability, size, and value influence channel selection.

Target Market Characteristics: Understanding customer demographics and preferences guides channel choice.

Market Coverage: Intensive, selective, or exclusive distribution determines market reach.

Competitive Environment: Analyzing competitors helps identify unique channel opportunities.

Channel Intermediaries: Availability, reliability, and alignment with brand impact channel selection.

Cost Considerations: Balancing market reach and profitability influences channel decisions.

Legal and Regulatory Requirements: Compliance with laws and regulations affects international channel choices.

Technological Advancements: Leveraging technology enhances distribution efficiency and competitiveness.

Channel Management:

Channel Design: Structuring channel partners, responsibilities, and policies aligns with business goals.

Channel Recruitment and Selection: Choosing partners based on capabilities and alignment with brand.

Channel Training and Support: Educating partners ensures understanding of products and sales processes.

Channel Performance Evaluation: Monitoring partner performance against goals helps identify improvements.

Channel Conflict Resolution: Addressing conflicts fosters collaboration and trust among partners.

Channel Expansion and Optimization: Adapting channels to changing market conditions drives growth and
efficiency.

The Internet:

E-commerce: Direct online sales offer global reach and lower costs compared to physical stores.

Digital Marketing: Leveraging online tools enhances reach, engagement, and brand awareness.

Supply Chain Management: Internet-based technologies improve efficiency and transparency.

Direct-to-Consumer Models: Selling directly to consumers bypasses traditional intermediaries.

Marketplace Platforms: Online marketplaces provide access to vast global audiences.

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Logistics:

Inventory Management: Balancing demand and supply minimizes costs and stockouts.

Warehousing and Distribution Centers: Strategic hubs ensure efficient order fulfillment and visibility.

Transportation and Freight Management: Choosing optimal modes minimizes costs and ensures timely delivery.

Order Fulfillment and Delivery: Efficient processes ensure accurate and timely shipping.

Reverse Logistics: Managing returns and disposal processes effectively reduces waste and enhances customer
satisfaction.

Technology and Automation: Implementing technology solutions improves efficiency and control.

Collaboration and Integration: Seamless coordination among partners optimizes logistics performance.

International Communication:

Marketing Communications Role: Facilitating information exchange, brand building, and influencing purchase
decisions.

Challenges: Cultural differences, globalization vs. localization, media fragmentation, regulatory compliance,
technological disruption, measurement, and competitive landscape.

Strategy: Market research, brand positioning, channel selection, creative development, media planning, and
analytics drive effective international communication.

Tools: Localization, advertising, PR, content marketing, social media, email marketing, SEO, virtual events,
influencer collaborations, and trade shows enhance global reach.

Developing Profitable, Long-Term Marketing:

Market Segmentation and Targeting: Tailoring marketing efforts to specific customer segments.

Value Proposition and Brand Positioning: Communicating unique brand values and benefits consistently.

Customer Relationship Management: Building and nurturing customer relationships for loyalty and advocacy.

Continuous Innovation and Adaptation: Staying agile and responsive to changing market dynamics and trends.

Ethical and Sustainable Practices: Incorporating responsible business practices for trust and credibility.

Long-Term Brand Building: Investing in brand equity and loyalty for sustained growth and success.