International Marketing (Class-3


Arun Bhattacharyya
Faculty Member JIM, Noida

A Glimpse of the world in the new century
Source: “U. N. Human Development Report”, July 31, 1999

The Western Baby
•In Switzerland she will live to the age of 82, he will live to the age of 75. •In the Netherlands there is a 1% risk he will not see his fifth birthday & a 9 % risk of not seeing his 16th •In the US her family’s income will likely exceed $ 21,541 per anum •In Canada he will share 1 square mile with 8 other people •In Italy she will be living in a city, as 90% of the population does

The Baby of the Less-Developed world
•In Sierra Leone she will live to the age of 39, he will live to the age of 36. •In Niger he will run a 9% risk of not seeing his fifth birthday & a 36 % risk of not seeing his 40th •In Uganda her family’s income is likely to be about $ 602 per anum •In China he will share 1 square mile with 327 other people •In India she will be living in a rural area, as 72% of the population does

And politics also goes beyond national boundaries
Source: The Wall Street Journal”, July 28, 1995

On January 1, 1999, the European Union adopted euro as a common currency.
BUT, before the final names were chosen, political motivations came into play

•French President Jacques Chirac wanted to name it Ecu, name having a historical significance for France. •British PM, John Major, preferred names such as crown, shilling or florin- all of which had roots in England •The leaders than thought of putting euro as a prefix for all currencies (euro-mark or euro-pound). •German Chancellor Helmut Kohl wondered what the plural of euro would be •Euro was chosen probably because the name was the least offensive. •Still Greeks felt that the name was a little bit too close to the word ‘urine.’

Motivations for of International Marketing and the Drivers of Globalisation
•Going for gold (profit opportunities)
-Question is how long? -Economies of scale -Tax benefits

Globalisation Drivers
•Similarity of markets
Similar education, lifestyles, income, aspirations and use of leisure time (Benetton, Mc Donald, Starbucks)

•Approaching neighbours to control risk
-Distances (physical & psychological) of foreign markets

•Cost avoidance
Economics of scale & scope, (Unilever & P & G)

Falling government barriers, technological evolution, increasing consumer wealth & mobility

•Protecting turf
-Competitive threats at home -Declining sales & saturated markets

•Product life cycle - Product at end of domestic PLC

•Tackling competition
Introduce, upgrade & distribute new products faster than before

Development of marketing beyond borders
Domestic marketing Export marketing International marketing Multinational marketing Pan-regional marketing Global marketing
One market & one set of national customers A welcome & profitable byproduct of domestic strategy Developing entire marketing strategies for foreign markets Different strategies, each tailored to a particular local market Emphasising strategies for larger regions A single strategy for a product, service or co. for the entire global market

A global marketing strategy must reflect sound understanding of the cultural, economic and political environment of many countries

Which can be pictorially depicted as…
Product Foreign Country- 2 Promotion Place Price

Foreign country

Home country

Foreign Country- 1

Home Country

Unique mix

Similar mix

Multinational marketing Global marketing

The idea is to move from providing unique offerings to each country where the firm is in to similar offering to all markets including domestic markets.

The complexity of the international marketing task
Foreign Environment Political / legal forces Domestic Environment Economic forces Environmental Country Market - A

Environmental Country Market - B

Cultural forces

Political / legal forces

Firm characteristics Price Product

Competitive structure

Competitive forces

Promotion Channels Research

Environmental Country Market C

Economic climate Geography & infrastructure

Level of technology

Structure of distribution

Controllable Uncontrollable (Constitutes the culture, Need to realise the impact and how to adapt)

The local company in the global environment
Source: HBR 77, March-April, 1999

Competitive assets
Customised to home market High Dodger
Sells out to a global player or becomes part of an alliance

Transferable abroad Contender
Upgrades capabilities to match globals in niches

Pressures to globalise in the economy

Leverages local assets in segments where globals are weak

Expands into markets similar to home base


The new kid on the block….
Who are they:

The Mininational

Newer companies with sales between $ 200 m & $ 1b Able to serve the world from a handful of manufacturing bases Ability to move swiftly because of their size and seize new markets Characteristics: Focus on being number one or two in a technology niche Stay lean by having a small HQ to save costs & accelerated decision making Take idea and technology to and from wherever they can be found Welcome employee expertise regardless of nationality to globalise thinking. Examples: Cochlear, Australia: Production of implants for profoundly deaf Symbol Technologies, Bohemia, New York: Hand held laser scanners Cisco Systems, California: grew from a Mininational to an entity

So what questions need to be asked….
* What adjustments, if any, you need to make to the… * Product line (Which products have the best chances of
making it?) * Product's positioning and market mix (Optimising the firm’s sales message for best results) * Product's design (to better satisfy market requirements, but also to satisfy regulatory demands)

* What is the cost of ‘entry’ in the market… * The strengths and weaknesses of potential competitors, their
investment level, their marketing savvy.

* How soon will the firm be successful… * What ROI should the firm expect…
* Sales revenue generation

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