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INTERNATIONAL MARKETING International marketing is defined as The performance of business activities designed to plan, price, promote and direct

the companys flow of goods and services to consumers or users in more than one nation for a profit. A company that wants to sell their product in other than domestic market should understand the environmental factors, consumer behavior, market forces and other characters relevant to the international market. After understanding the definition several questions may arise in your mind like why marketer should go the international market? And what is the difference between international marketing and domestic marketing. As we discussed in the introduction part companies enter into the international market to tap the potential, to support the customer requirements or to avoid the unprofitable domestic market. The difference between domestic marketing and international marketing are listed below.

THE INTERNATIONAL MARKETING CONCEPT The marketing concept is the idea that a f irm should seek to evaluate market opportunities before production, assess potential demand for goods, determine the product characteristics desired by the consumers, predict the prices consumers are willing to pay and then supply goods corresponding to the needs and wants of target markets. Adherence to marketing concept means the firm conceives and develops products to satisfy consumer wants. For international marketing this means the integration of the international side of the companys business with all aspects of its operations and the willingness to create new products and adapt existing products to satisfy the needs of world markets. Products may have to be adapted to suit the tastes, needs and other characteristics of consumers in specif ic regions, rather than it being assumed that an item which sells well in one country will be equally successful elsewhere. ADVANTAGES OF INTERNATIONAL MARKETING: 1. International marketing provides growth opportunities for the companies whose domestic market is maturing. For example, General motors focusing its strategies on the emerging markets like India 2. It brings the major portion of sales and profits to the company. For example, Unilevers major revenue comes f rom the Asian markets. 3. It generates employment: Indian textile sector which exports majority of the product produced is large employer after agriculture and retail. 4. International market also acts as survival place for the companies. If one market become unattractive either they establish their operation in another country or outsource the major functions to streamline the businesses.

5. It helps in improving the standard of living in the country.


INTERNATIONAL MARKET ENTRY STRATEGIES Organizations that plans to go for international marketing should answer some basic questions like a. In how many countries the company would like to operate? b. What are the types of countries it plans to enter? To answer the above questions companies evaluate each country against the market size, market growth, and cost of doing business, competitive advantage and risk level. Once the market is found to be attractive companies should decide how to enter

this market. Companies can enter international market from any one of the following strategies. They are a. Exporting b. Licensing c. Contract manufacturing d. Management contract e. Joint ownership f. Direct investment Exporting is the techniques of selling the goods produced in the domestic country in a foreign country with some modifications. For example, Gokaldas textiles export the cloths to different countries f om India. Exporting may be indirect or direct. In case of indirect exporting, company works with independent international marketing intermediaries. This is cost effective and less risky too. Direct exporting is the techniques in which organization exports the goods on its own by taking all the risks. Maruti udyog limited Indias leading car manufacturer exports its cars on its own. Company can also set up overseas branches to sell their products. Adani exports another leading exporter from India has international office in the Singapore. Licensing: According to Philip Kotler licensing is a method of entering a f oreign market in which the company enters into an agreement with a license in the foreign market, offering the right to use a manufacturing process, trademark, patent, or other item of value for a fee or royalty. For example, torrent pharmaceuticals has license to sell the cardiovascular drugs of Chinese manufacturer Tasly. Licensing may cause some problems to the parent company. Licensee may violate the agreement and can use the technology of the parent company. Contract manufacturing: company enters the international market with a tie up between manufacturer to produce the product or the service. For example, Gigabyte technology has contract manufacturing agreement with D- link India to produce and sell their mother boards. Another signif icant manufacturer is TVS electronics it produces key boards in its own name as well as for other companies too. Management contracting: In this type a company enters the international market by providing the know how of the product to the domestic manufacturer. The capital, marketing and other activities are carried out by the local manuf acturer hence it is less risky too. Joint ownership: A form of joint venture in which an international company invest equally with a domestic manufacturer. Therefore it also has equal right in the controlling operations. Direct Investment: In this method of international market entry Company invest in manufacturing or assembling. The company may enjoy the low cost advantages

of that country. Many manufacturing firms invested directly in the Chinese market to get its low cost advantage. Some governments provide incentives and tax benef its to the company which manufactures the product in their country. There is government restriction in some countries to opt only for direct investment as it produces the jobs to the local people. This mode also depends on the country attractiveness. It may become risky if the market matures or unstable government exists. APPROACHES TO INTERNATIONAL MARKETING The orientation towards the market varies with a company to company. Each one adopts different approaches on the basis of their expertise or strength of the company. Some companies adapt same product for all the markets while others differentiate to each countries. In this context we would like to know what are the common approaches adopted by the company in the international marketing. The three common approaches used in the international market are a. Domestic market extension approach. b. Multi domestic market orientation. c. Global market orientation. Domestic market extension approach: Companies that adopt this strategy thinks international markets are secondary to its domestic markets. Multi domestic market orientation: In the international market each country has its uniqueness. Their preference varies. The Consumer profile is different from domestic operation. Companies develop diff erent market plans for such markets. For example, In France men use more cosmetics than the women where as in India women use more cosmetics than men. A cosmetics company should change the product positioning differently. Global market orientation: In this approach company thinks that products needs are universal in nature irrespective of country they work. Here company tries to standardize their products or services. For example, Sony walkman is same across the world. The product information brochure contains explanation in different languages of different countries. The f inal product is same in all the countries.

MARKETING MIX ELEMENTS INTERNATIONAL PRODUCT STRATEGY Customer satisfaction towards company offerings will be positive if they able to meet their needs. Therefore product planning became integral part of international marketing plan. The distinctiveness in the different countries forces companies to think in different ways of product offerings and support promotion programs. These organizations adopt five different types of product strategies in the international markets. They are

1. Product extension 2. Communication adaptation 3. Product adaptation 4. Product and communication adaptation 5. Product invention. 1. Product extension is marketing a product in the international market without change in the product and promotion activities. Microsof t off ice 2007 and Microsof t servers are similar to USA market and communication is also unaltered. 2. Communication adaptation: Company does not change the product but adopt the different communication strategy in the foreign market. Colgate sells its toothpaste in a same way all over the world. Their communication strategy varies in different countries. In India and USA white teeth are preferred by the consumers while in Indonesia yellow teeth are preferred. Hence Colgate changed its communication strategies for these countries. 3. Product adaptation: Marketer understand the different needs of the consumer and adopts the product according to the local tastes but keeps the communication strategies same. Majority of the Indian consumers are vegetarians. KFC started selling vegetarian burgers in India though it is famous for chicken. The communication strategies of KFC remain same all over the worl d. 4. Product and communication adaptation: The product will be modified according to the needs of local market. Nokia worlds largest cell phone manufacturer increased the volume options in the India as most of the places are overcrowded. Consumers in India are not so familiar with English language. Hence Nokia changed its promotion to regional languages also. This is adoption of product and communication by the company. This strategy is also known as dual strate gy. 5. Product invention: Here, marketer develops entirely new product to suit the requirements of the local customers. Nokia manufactured 1100 cell phone only for the In dian market and promoted it as made for India. In this strategy company may adopt com munication strategy same as in the other country or change according to the local market.

INTERNATIONAL PROMOTIONS STRATEGY Communication in the international market is very challenging. There exist many languages and dialects and different perceptions about communication strategies. In some countries there are regulations on the advertisements and sales promotions. In India alcohol advertisements a re banned. In this section we are discussing what the communication strategies the company should adapt are and what are the barriers to it. The marketer may f ace the

language barrier, culture barrier, legal barriers in some countries. In Saudi Arabia using women in advertisements are prohibited. Vodafone has to change its promotion program to Tamil in Tamilnadu, a state in India. Organizations also face the problem of media and production and cost in different countri es. Global promotional program will have three set of objectives. First, setting the global objectives, Secondly, formulating the regional objectives and f inally setting the local objectives. The media decisions depend on the objectives of the promotion program. As we discussed in the promotion unit media budget in the international marketing is also determined by percentage sales method, competitive parity, resource allocation and objective and task method. Global promotion program may be standardized or adapted. Standardization will help the company to reduce cost and add the value to the product. The pitfall of standardization is local customers can not understand global messages. One of the famous companies in the world was showing its advertisements on supply chain management software in India in the same way as in the USA. The advertisement evaluation results were very strange. People can recall only the horse word in the advertisement. As we discussed in the earlier section of the unit company can adapt its communication strategy only to the local market or both product and communic ation can be adapted. Advertisements will have modif ications. If marketer wants to sell their products in Japan should not use white color as it is considered only f or mourning. Communication should not contain anything using cow in the Nepal as it is considered as sacred. The f ollowing examples of the united colors of Benetton and Microsof t depict the diff erent advertisements strategies adopted by them. Global marketer also uses sales promotion, Public relation and direct marketing techniques to communicate it to the consumer. Amway direct marketing company adapts same strategy in India, while Cadbury and Microsof t also use Public relation and sales promotion techniques to communicate the messages. Sales promotion covers the issue of coupons, the design of competitions, special offers, and distribution of f ree samples. International businesses wishing to employ sales promotions for cross border campaigns f ace a number of serious practical diff iculties, because in many nations the use of certain sales promotion techniques is regarded as unf air competition and as such is subject to stringent legal control. Indeed conflicting laws sometimes apply to these matters in various countries. Money off vouchers is legal in Spain but not in Germany Lower price for the next purchase are legal in Belgium but illegal in Denmark. In Germany and certain other countriesfree gifts are forbidden if they constitute a genuine incentive to buy. INTERNATIONAL BRANDING Brand names used in foreign markets need to be internationally acceptable distinct and easily recognizable, culture f ree, legally available and not subject to local restrictions. Brand name communicates its messages and appeals to consumers. They create the stimulus in the minds of consumer to purchase the

product. Brand name should be small, easy to pronounce and should have proper meaning. Such brand names can be used in several countries simultaneously for family branding and may be s8upported within the advertisements by a wide variety of pi ctorial illustrations. Brand positioning: As we discussed in the product standardization the debate exist for brand communication standardization or adaptability. We will discuss the various f actors that inf luence the opting the single or multiple positioning strategies. a. The inf luence of local substitutes on the foreign brand b. The coverage of the brand( mass versus niche) c. Acceptability for product uniqueness in all purchase points d. Brand name suitability in the particular market. Now we will discuss the advantages of brand standardization in the global markets. 1. Firms concentration on the positioning will be effective. 2. It helps in saving the costs. 3. A standardized product and standardized promotion helps to have same packaging. But all the companies will not go for standardizing the brand. Standardization of branding strategies has its own limitations. They are 1. Stereotype image of the national products (Germany for engineering, china f or low price product). If the customer thinks that any product coming out of the china is of low price and low quality whatever the effort the Chinese company does in other market will fail. 2. Patriotism of the people and their perception that their national brand s is superior to ot hers. Brand valuation in the international markets: Brand valuation in one country helps it to leverage the same brand in the other country. It also helps it to acquire different brands in the international markets. Brand valuation can be done on the following factors 1. Brand image in the market. 2. Consumer lif estyle and brand inf luence 3. Branded sales versus unbranded sales 4. Brands contribution to the corporate image. 5. Length of brand loyalty. 6. Market share of brand in each category it operates. 7. Adaptability and standardization of the brand in different countries. 8. Brands ability to be extended to other lines or category. PLACE Place refers to where and how the product gets to the customers, which geographic region, to which segment etc. Two basic issues involved in getting the products are: Channel management Logistic management How the product is distributed is also a country-by-country decision influenced by how the competition is being offered to the target market. Using Coca-Cola as an example again, not all cultures use vending machines. In the United States, beverages are sold by the pallet via warehouse stores. In India, this is not an option. Placement decisions must also consider the products position in the market place. For example, a high-end product

would not want to be distributed via a dollar store in the United States. Conversely, a product promoted as the low-cost option in France would find limited success in a pricey boutique. Country of origin is the country of manufacture, production, or growth where an article or product comes from. There are differing rules of origin under various national l aws and international treaties. Country of origin as a marketing strategy From a marketing perspective, "country of origin" gives a way to diff erentiate the product from the competitors. It is believed that the country of origin has an impact on the willingness to buy a product, and studies have shown that consumers may tend to have a relative pref erence to products f rom their own country or may tend to have a relative preference for or aversion to certain products that originate f rom certain countries. The effect of country of origin is however debated as studies have shown that the origin of design (f or instance Apple computers or Nike shoes) can be more important than the country of origin. When shipping products f rom one country to another, the products may have to be marked with country of origin, and the country of origin will generally be required to be indicated in the export/import documents and governmental submissions. Country of origin will affect its admissibility, the rate of duty, its entitlement to special duty or trade preference programs, antidumping, and government procurement.

INTERNATIONAL PRICING Determination of selling prices: The price of an organization may charge for its output depends on many factors. They are a. Customer perception towards the product. b. Total demand for the good c. The degree of competition in the market. d. Competitors price reactions e. Substitute products and its effect on the product. f. Products brand image g. Cost of production and distribution. h. Price elasticity of demand for the product Special problems apply to international pricing particularly in relation to lack of information, uncertain consumer response, and foreign exchange rate influences and the difficulty of estimating all the extra costs associated with foreign sales. These extra costs might include translatin g and interpreting fees, export packaging and documentation costs, insurance payments, c learing agents f ees, pre-shipment inspection and many other items. Credit period are very long in some countries. Government price controls apply in certain states. A company may adopt penetration pricing, skimming pricing, cost plus pricing and product lif e cycle pricing.