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International Marketing

“There will be two kinds of CEO’s who will exist in the next five
years: those who think globally and those who are unemployed”
Drucker

Suppliers and Competitors International marketing . • Customers.International Marketing: Definition • International Marketing is the performance of the business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.

Domestic-Environment Controllables • Price • Promotion • Product • Channels of Distribution International marketing .

Uncontrollable International Environment Factors • Political/Legal forces • Economic Forces • Competitive Forces • Level of Technology • Structure of Distribution • Geography and Infrastructure • Cultural Forces International marketing .

Pierre Cardin suits. Monte Blanc pens. transportation. • Products developed in one country – Gucci purses. and financial flows. German BMW’s – are finding enthusiastic acceptance in other countries International marketing . Japanese Sushi.The importance of international marketing • Times and distance are rapidly shrinking with the advent of faster communication. McDonalds burgers.

The importance of international marketing • Nestle. motorcycles. on Nestlé gains in coffee and candy markets and the loss of textile and shoe markets to Third World imports International marketing . copying machines. Shell. cameras. producers in consumer electronics.S. Bayer. Toshiba and other multinationals have been doing this for decades • Newspaper headlines report daily on Japanese victories over U. and watches • The French firm Bic’s successful attacks on Gillette.

The importance of international marketing • Is generally undertaken by large businesses which had grown too big for domestic markets • Today basically due to globalization e.g. it is necessary for survival International marketing . its not an option. international transport and telecommunications • Due to which businesses need to consider the threat from foreign competition and the opportunities which might be gained • For many businesses.

Why go International? • Profits – overseas markets more lucrative. British American Tobacco industries • Legal differences e.g. manufacturing and distribution costs may be lower abroad. pharmaceutical co. International marketing .g. The product might also sell for a higher price than home market • Spreading the risk • Unfavorable trading conditions e.

import tariffs and barriers. demographics. role of women.Why the overseas market is different? • Political differences – Political stability. Unrest.g. • • • • change in government etc. Differences in business practice – adapting vs. Advertising Economic and social differences – levels of income. Environmental impact. Cultural differences – Language e. product name. Differences in Legislation – Product labeling. levels of sales and corporate taxes. religious attitudes. colours. bribe etc. Product safety. how income is distributed. English. original International marketing . Social factors such as literacy rates. readiness to accept new ideas etc.

Also a means of testing out ground. Example: No direct Foreign Marketing Infrequent Foreign Marketing Regular Foreign Marketing International marketing . No Control.Methods of entering overseas markets • Exporting: It involves manufacturing products at • • • home but selling them abroad. It minimizes the risk of operating abroad.

• International Marketing • Global Marketing International marketing .

product or service in return for an initial payment and further commission on royalties. Use in service industries. KFC etc. Allows franchiser a high degree of control over the marketing of the product.Methods of entering overseas markets • Franchising: The license allows one firm to use another’s name. A share of the profit does go to the franchisee. Quick and relatively easy way. such as Budget rent-a-car. Pizza Hut. International marketing .

Success and failure is in the hands of the licensee • Joint ventures: Two companies from separate countries combining their resources. patents and expertise under license. International marketing . Goods do not have to be physically moved abroad instead produced abroad by the foreign licensee. Businesses can draw on each others strength. designs. Many broken due to conflict.Methods of entering overseas markets • Licensing: Involves one firm producing another’s product and using its brand name. Risks are shared.

g. advantage of government incentives. Toyota and Honda. E. advantages of relatively low costs and relatively cheap labour. Can be obtained by merger or takeover or built for specific purpose. lower distribution costs. advantage of local knowledge International marketing .Methods of entering overseas markets • Direct Investment: Requires the setting up of production and distribution facilities abroad. Import duties can be avoided.

Methods of entering overseas markets • Mergers and takeovers: Buying a business in another country. Often used by multinationals. International marketing .

International Marketing Concept • Domestic market extension concept • Multidomestic market concept • Global marketing concept International marketing .