International Business

Define International Business. According to Cateora: International Business is the performance of business activities That directs the flow of goods and services to consumers or users in more than one nation. According to Cateora &Graham:It is the performance of business activities designed to plan, price, and promote & direct the flow of a companys goods & services to consumers or users in more than one nation for a profit

According to Kotler: Global Marketing is concerned with integrating or standardizing marketing actions across a number of geographic markets.
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Nature of International Business 1. Multinational Business (Marketing) Management 2. Controllable and uncontrollable factors:for internat ional market uncertainty is created by uncontrollable factors. 3. Broader Competence 4. Intense Competition 5. Credit Oriented 6. Political risk 7. Comprehensive risk export & Import Payments 8.Changes in fashion & Styles 9. Sudden War 10. Rules and Regulations 11.Changes in Government 12. Political Nature
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Importance and Benefits of International Business

1) Survival 2) Growth of Overseas Markets 3) Sales & Profits 4) Diversification 5) Inflation & Price Moderation 6) Employment 7) Standard of Living 8) Understanding of Marketing Process

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MSCAS

Scope of International Business 1. Exporting (Selling to foreign markets) 2. Importing (Buying from abroad) 3. Re-exporting (Importing semi-finished goods & Exporting final goods) 4. Management of International Operations (1) Operating, Marketing & Sales Facilities abroad (2) Establishing Production or assembly facilities in foreign countries. (3) Monitoring Operation of marketing practices of multinationals & other agencies.

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Prof TMK

MSCAS

Characteristics of International Business:a) Large Scale Operations b) Dominance of Multinationals c) International Restrictions & Trading Blocks d) Need of Marketing Research e) Importance or Advanced Technology f) Keep and acute competition g) Need for long term Planning h) Develops cultural relations & maintains world peace

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Prof TMK

MSCAS

The terms in international Business:a) Domestic Marketing b) International Marketing c) Global Marketing d) Foreign Marketing

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Prof TMK

MSCAS

Domestic Marketing:-It is concerned with the marketing practices within the researchers or Marketers home country (domestic market).

International Marketing: - It focuses on the firm level marketing practices across the broader including market, identification &targeting, Entry mode selection & marketing mix & Strategic decisions.

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Prof TMK

MSCAS

Global Marketing: - It treats the whole world as a single market & standardizes the marketing mix of companies. Eg- Mc Donald have designed a restaurant anywhere in the world. It has customized its menu offering according to local customers.

Foreign- Marketing: - Marketing methods used outside the home market. It encompasses the domestic operations with a foreign country. Eg- A U.S. Company considers marketing in India as foreign marketing.

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Prof TMK

MSCAS

Reasons for Entering International markets1. GrowthWhen the domestic market potential saturates. Firm enter international markets to explore opportunities their. Companies having small home market like-Singapore, Hongkong, Japan. Example - Healthcare companies Cipla, Dr. Reddy, Candilla Pharma entered into South America countries like Brazil and Argentania.

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MSCAS

2. ProfitabilityPrice differentials and enhanced profits in international markets. Exemption from indirect taxes and duties, several incentives by government for export oriented production, marketing support schemes contribute to enhance the profitability of firms. Example- Apple earn 390 million U.S dollar net profit from foreign land and 310 m U.S dollar from domestic land.

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3. Achieving Economics of ScaleLarge scale production capabilities in international markets. Large scale production, reduction in unit production cost.
Example- world market is 4 times larger than U.S market 4. Risk spreadOverseas markets provide an opportunity to reduce their dependence on one market and spread the market risks. It reduces dependence on one market only.
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5. Uniqueness of product or serviceThe products with unique attributes in order to meet competition in the overseas markets and enjoy enormous opportunities in international markets. Herbal products, Handicraft, Software, B.P.O sell at competitive price provide Indian firms edge over other countries. 6. QualityQuality and cost are the two important determinants of demand & these can better achieved in global firm. International marketing strategies can generate greater revenue and greater operating margins. Example- Nissan, Caterpillar, Matsushita etc.

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7. World Economic TrendsFast growth of developing economies has created new marketing opportunities and has provided a major incentive for companies to expand globally.

8. L.P.G movementLiberalization, privatization and globalization movement is opening up closed markets and has provided opportunities and threats. Example- Privatization of telephone system.

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9. Leverage Leverage is an advantage that a company enjoys that conducts business in more than one country. Example -Experience transfers, scale economics, resource utilization, global strategy.

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Management Orientations/ EPRG Concept

1. ETHNOCENTRIC ORIENTATIONIt assumes home country superior to the rest of world. Opportunities outside the home country are ignored. It has a belief that the same marketing strategy can work in domestic and international market. Environmental differences between markets are ignored. Example- Indian products sold outside as Sal war-kurta ,Saris, Dosa mix, Idli mix, Sambhar mix etc.

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2. POLYCENTRIC ORIENTATIONIt is a strong orientation to the host country. It emphasizes differences between markets. Each subsidiary develops its own unique business and marketing strategies to succeed. The marketing mix decisions, product development strategies, pricing strategies are different for different countries. Example- Citicorps financial services

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3. REGIOCENTRIC ORIENTATIONFirm treats a region as a uniform market segment and adapts a similar marketing strategy within the region. Example- Mc Donalds strategy to not to serve pork and to slaughter animals through the Halal process is followed in Middle East or Muslim dominated countries.

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4. GEOCENTRIC ORIENTATIONIt considers the whole world rather than any particular country as the target market. It identifies similarities between various markets and formulates a uniform marketing strategy.

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