Advent of faster communication, transportation,

and financial flows

International trade
Global competition
Globalization.
 Definition
Multinational Firm
Focused on marketing to different countries with
local adaptation of products and promotions;
production localized and technology less advanced.
Ex- McDonalds

Global Firm
Involves more standardization of products and
integration across countries; driven by strong
foreign competition and growing homogenization
of world markets.
Ex- Coke, Microsoft
 Global vs. Multinational

GLOBAL MULTINATIONAL

R & D, DESIGN CENTRALIZED AND DECENTRALIZED AND

STANDARD CUSTOMIZED

MANUFACTURINGG LIMITED LOCATIONS MANY LOCATIONS

MANAGEMENT CENTRALIZED AND INDEPENDENT LOCAL
SALES & MKTG INTEGRATED COUNTRY MANAGERS
CUSTOMER GLOBAL SEGMENTS REGIONAL SEGMENTS
AFTER-SALES LOCAL-SUBCONTRACTED LOCAL-COMPANY
SERVICE HANDLED

INTERNATIONAL EXPORTING-LICENSING WHOLLY-OWNED OR J.V.

MARKET ENTRY LOCAL MANUFACTURING
Reasons to consider going global:
Foreign attacks on domestic markets
Foreign markets with higher profit opportunities
Stagnant or shrinking domestic markets
Need larger customer base to achieve economies of
scale
Reduce dependency on single market
Follow customers who are expanding
The International Trade System:
Restrictions—tariffs, quotas, embargos and non-tariff
trade barriers.

The World Trade Organization and GATT:

Helps Trade—reduces tariffs and other international
trade barriers.

Regional Free Trade Zones:

Groups of nations organized to work toward common
goals in the regulation of international trade.
 TO GO OR NOT TO GO INTERNATIONAL
THAT IS THE QUESTION
Should I Think of YES Do I Have a Chance of Success
Going International ? Internationally?

Evaluate & Revise INTERNAL AUDIT

Where Should I Go First? External
International Product, Environmental Analysis: Economics
Pricing, Distribution, Political, Legal, Cultural, Technology
Advertising and SEGMENT
Product Positioning &
Control Strategies Foreign Country-Region Choice

SELECT
DEVELOP
Choice of the Foreign Entry Method
Size Affordability
GDP, GNP, Trade Per Capita GDP or GNP
Population
Growth Rates

Corporate Capabilities & Need

Objectives Economic Need
◦ Develop The List Of Most Social Need
Economically Optimum Maslow’s Concept
Countries & Regions
Product Demand
New Exists & Is Satisfied
Differentiated Exists & Is Unsatisfied
Existing Is Expected To Emerge

Corporate Capabilities & Competition

Objectives Highly Competitive
◦ Determine The Actual & Niche Competition
Desired Product
Positioning In Foreign Non-Existent
Markets
Sellers must examine the ways consumers in
different countries think about and use products
before planning a marketing program.
Business norms vary from country to country.
Companies that understand cultural nuances can use
them to advantage when positioning products
internationally.
Language

Colors

Customs and taboos

Values
Aesthetics
Time
Business norms
Religious beliefs
Political Legal Environment
International Buying
Government Bureaucracy
Political instability
Monetary regulation
 Understand the environmental influences on firm’s international markets
Feedback and continually reassess

Segment international markets, identify & analyse opportunities

Develop appropriate international marketing

Strategies for small and medium sized firms and global players

Decide marketing entry strategies and determine product portfolio

Build added value through communication, distribution and pricing

Using enabling technologies

What Volume of Foreign Sales is Desired?
How Many Countries to Market In?
What Types of Countries to Enter?

Choose Possible Countries and Rank Based on Market

Size, Market Growth, Cost of Doing Business,
Competitive Advantage, and Risk Level
Marketing Mix (Standardized ):
Selling largely the same products and
using the same marketing approaches
worldwide.
Marketing Mix (Adapted):
Producer adjusts the marketing mix
elements to each target market,
bearing more costs but hoping for a
larger market share and return.
Straight Product Extension:
Marketing a product in a foreign market without
any change.
Product Adaptation:
Adapting a product to meet local conditions or
wants in foreign markets.
Product Invention:
Creating new products or services for foreign
markets.
Can use a standardized theme globally, but may
have to make adjustments for language or
cultural differences.
Communication Adaptation:
Fully adapting an advertising message for local
markets.
Changes may have to be made due to media
availability.
 Companies face many problems in setting their
international prices.

Price escalation eg. Gucci

Guilty of dumping
Transfer Price
Possible approaches to handle
Price
Charge a uniform price all around the world.
Charge what consumers in each country will pay.
Use a standard markup of costs everywhere.
Twelve European Union countries have adopted the euro as a
common currency, creating “pricing transparency” and forcing
companies to harmonize their prices throughout Europe.