International Marketing

LBSIM, New Delhi

Friday, April 1
3, 2020
 Management Challenges of 21st
Century

• No institution whether a business , a university , or

hospital can hope to survive let alone to succeed unless it
measures up to the standards setup by leaders in its field
any place in the world.
---- Peter F Drucker

Friday, April 2
3, 2020
 International Trade
• It refers to performance of trade and investment
activities by firms across national borders .
• Most important thing is crossing the border.
• Firms involve in organizing , sourcing, manufacturing,
marketing, and other value addition in business on
international level.
• They seek foreign customers , engage in collaborative
relationship .
• Firms and nations exchange many physical and
intellectual assets .
Friday, April 3
3, 2020
 Globalisation of Markets

• On going economic integration and growing

interdependency.
• Internationalisation means tendency of firms to go for
systematically increase the international dimension.
• Globalisation means compression of time and space.
• It leads to substantial increase in volume and variety of goods
,services, capital flows.
• Also it leads to rapid diffusion of products , technology,
knowledge regardless of origin .

Friday, April 4
3, 2020
 Cos. , Global Rev(Billions),
% of business from outside US
Walmart $401 24.6%
Ford Motor $146.3 51.9 %
General Electric $182.5 53.7 %
CitiGroup $52.8 74.8 %
Hewlett-Packard $118.4 68.2 %
Boeing $60.9 38.9 %
Intel $37.6 85.4%
Coca-Cola $31.9 77.0%
Apple $36.5 46%
Starbucks $10.4 20.8%

Friday, April 5
3, 2020
 WORLD AT A GLANCE
WORLD 1980 1990 2000 2009 2010 2015-16 2018-19

GDP 10669 22137 32148 57843 61693 75210 84836

(current
prices) USD
Billions

GDP 1.96 2.94 4.34 -1.70 -1.79 2.62 3.6

Growth %

Inflation % 17.23 27.69 4.55 2.45 3.67 1.64 3,64

Exports 2295 4172 7892 15745 18333 20500 25200

USD Billions

Friday, April 6
3, 2020
 INDIA AT A GLANCE (March 2019)
INDIA USD

GDP USD Trillion 2.71 .

(projected 2.97 in 2019-20)
GDP USD Trillion ( PPP) Projected 11.468 (in 2019-20)
GDP Growth 6.5%

GDP Per Capita USD 2286 USD (2019-20)

8191 USD PPP (2019-20)

GDP % Contributors Service 57, Ind 28, Agri 15

Inflation 4-5% plus

Exports( USD Billion) 2018-19 330 Billion USD
Imports (USD Billion) 2018-19 514 Billion USD
FDI in India (USD Billion) 2018-19 44.37
Friday, April 7
FDI by India ( USD Billion) 3, 2020
 GDP
• Gross Domestic Product (GDP) is the broadest
quantitative measure of a nation's total economic
activity. More specifically, GDP represents the monetary
value of all goods and services produced within a
nation's geographic borders over a specified period of
time.
• GDP = Consumption + Government Expenditures +
Investment + Exports - Imports
• When GDP declines for two consecutive quarters or
more, by definition the economy is in a recession.
Meanwhile, when GDP grows too quickly and fears of
inflation arise, the Federal Reserve often attempts to
stimulate the economy by raising interest rates.
Friday, April 8
3, 2020
 International Trade & Its Impact
• Growth in world trade in benefitting consumers.
• It is mainstay of many emerging countries.
• Bolstered the GDP growth in such countries.
• For example, Indian Pharma companies led by Ranbaxy is a live
example of international trade.
• Apollo tyres and CEAT were primarily domestic co. till they set
up plants in Sri Lanka & Africa.

• World exports have grown by 100 times in last half

century.

Friday, April 9
3, 2020
 Why do firms pursue
internationalization strategies ?
• Seek opportunities for growth
• Earn higher margins & profits
• Gain new ideas about products & services
• Better serve key customers
• Capacity utilisation
• Gain access to lower cost or better value factors of production
• Grow in competition
• Risk mitigation
• Better relationship abroad
Friday, April 10
3, 2020
 Importance of international mktg
• Competitive edge
• Worldwide integration of economies & Continued lowering of barriers
• Technology edge and infrastructural development.
• Improvement in logistics
• Development of new goods/services
• Major advances in communication, e commerce
• Companies are highly linked, interdependent
• Capital markets are regulated but becoming global
• Excess capacity exists in wide no. of countries
• Demand is shifting in new economies
• Rapid growth in world trade
• Experience transfers and benchmarking.
Friday, April 11
3, 2020
 Global Perspective

• Global commerce thrives during peace time.

• In a way global trade enhances global peace.
• All the activities of development, production , marketing
requires millions of people & their coordinated efforts.
• All the interaction brings in the mutual gains , business
relationship, personal relationship & mutual
understanding.

Friday, April 12
3, 2020
 International Marketing

• IM is the performance of business activities

designed to plan , price , promote & direct the
flow of a company’s goods and services to
consumers or users in more than one nation for a
profit.

Friday, April 13
3, 2020
 International Marketing

• It is defined as process of focusing firm’s resources on

international marketing opportunities whether while
competing within the domestic market against
international companies or even when the firm goes
beyond national frontiers to market goods and services .

Friday, April 14
3, 2020
 International Marketing
• IM is the performance of business activities that direct
the flow of goods and services to consumers and user
in more than one countries.

• It offers an opportunity to a firm to prepare itself to

meet the challenges of catering to different needs ,
wants , behavioral patterns and perceptions of the
consumers and users in various countries , only when it
markets the products under its own brand umbrella.

Friday, April 15
3, 2020
 Nature of International Marketing
• Things never go in a planned way in IM
• Powerful economic ,technological , industrial, political ,
demographical factors affect IM
• Global terrorism, armed conflict do change the scenario.
• Recessionary trends change the face of IM drastically.

Friday, April 16
3, 2020
 International Marketing
• International firm not only has to satisfy its corporate
objectives but it also has to bring about customer
satisfaction through coordinated efforts.
• International marketing is simply an attitude of mind , the
approach of a company with a truly global outlook,
seeking its profits impartially around the world , home
market included , on a planned and systematic basis.

Friday, April 17
3, 2020
 International Marketing
• When a company decides to go international , it must
• Go beyond the comfort zone of known market
• GM, Mitsubishi , Microsoft, Exxon, Sony have done it.

• They should be ready to face the uncertain scenario .

Friday, April 18
3, 2020
 Factors affecting global business
• The rapid growth of WTO & regional trade organizations
like NAFTA & EU.
• Free market system acceptance in BRIC countries, Latin
America, East Asian countries, & Eastern Europe including
CIS countries.
• Impact of internet
• Mandate to properly manage the resources and global
environment.
• Protectionism

Friday, April 19
3, 2020
Stages of IM involvement
Domestic Company to a Global
Company
• No Direct Foreign Marketing
• Infrequent Foreign Marketing
• Regular Foreign Marketing
• International Marketing
• Global Marketing
Friday, April 20
3, 2020
 Stages of International Marketing
Involvement
In
In general,
general, firms
firms go
go through
through five
five different
different phases
phases in
in going
going
international:
international:

No
No Direct
Direct Foreign
Foreign Marketing
Marketing

Infrequent
Infrequent Foreign
Foreign Marketing
Marketing

Regular
Regular Foreign
Foreign Marketing
Marketing

International
International Marketing
Marketing

Global
Global Marketing
Marketing
Factors influencing Int. Marketer

Friday, April 22
3, 2020
 The International Marketing Task
Foreign Environment
(Uncontrollables)
7. Structure of 1. Competition
Distribution Domestic environment Environmental
(Uncontrollables) uncontrollables
country market A
(Controllables) 1. Competition
Price Product 2. Technology
5. Political- Target Environmental
7
6. Geography and Legal Market uncontrollables
Infrastructure Promotion Place or 2 .Technology country
Distribution market B
4.
Culture Environmental
3. Economy
uncontrollables
5. Political- 3. Economy country
Legal market C
4. Culture
IM Vs Domestic Marketing

Friday, April 24
3, 2020
International Mktg & Global Mktg
• Internationalization may be thought as 1) Process 2)
An end result 3) A way of Thinking
• A company becomes more involved and committed to
serve markets outside home country.
• A multinational company treats each foreign market as
separate and distinct ,developing differentiated
products and marketing specifically for each of the
markets.
• The global companies operate as if entire world , or a
major region of the world , were a single entity .Such
companies would sell the same product(s) in the same
way everywhere.
Friday, April 25
3, 2020
Is a company ready to enter foreign mkt?

• Competitive capabilities in the domestic markets

• Motivation for going international
• Commitment for owners & top management
• Skills, knowledge and resources
• Experience and training

Friday, April 26
3, 2020
 Major Obstacles

• SRC : Self reference criterion : It is

unconscious reference to one’s own cultural
values, experiences, knowledge as the basis
for decisions.
• Ethnocentrism is the notion that one’s own
culture or company knows best how to do
things.
Friday, April 27
3, 2020
 Steps to check SRC &
Ethnocentricism

• Define the business problem or a goal in home country cultural

traits , habits or norms
• Define the business problem or goal in foreign country cultural
traits , habits or norms thru consultation with natives of target
country . Make no value judgments.
• Isolate SRC influence in the problem & examine it carefully to
see how it complicates the problems.
• Redefine the problem without the SRC influence and solve for
the optimum business goal situation.
Friday, April 28
3, 2020
 Developing Global Awareness

• Tolerance towards cultural difference

• Knowledge of culture, history, world market potential,
• Knowledge of global economic, social and political trends

Friday, April 29
3, 2020
Friday, April 30
3, 2020
 Strategic Orientation: EPRG Framework

Domestic Marketing (Ethnocentric)

Extension

Multi-Domestic (Polycentric)
Marketing

Global Marketing (Regio/Geocentric)

 Strategic Orientation: EPRG Framework
Generally, four distinctive approaches dominate strategic thinking in
international marketing:
1. Ethnocentric or Domestic Marketing Extension Concept:
Home country marketing practices will succeed elsewhere
without adaptation; however, international marketing is
viewed as secondary to domestic operations

2. Polycentric or Multi-Domestic Marketing Concept:

Opposite of ethnocentrism
Management of these multinational firms place importance
on international operations as a source for profits
Management believes that each country is unique and
allows each to develop own marketing strategies locally
 Strategic Orientation: EPRG Framework
Generally, four distinctive approaches dominate strategic thinking in
international marketing:
3. Regiocentric:
Sees the world as one market and develops a standardized
marketing strategy for the entire world

4. Geocentric:
Regiocentric and Geocentric are synonymous with a Global
Marketing Orientation where a uniform, standardized
marketing strategy is used for several countries, countries in
a region, or the entire world
International Mktg & Global Mktg

• Internationalization may thought as 1) Process 2) An end

result 3) A way of Thinking
• A company becomes more involved and committed to
serve markets outside home country.
• A multinational company treats each foreign market as
separate and distinct ,developing differentiated products
and marketing specifically for each of the markets.
• The global companies operate as if entire world , or a
major region of the world , were a single entity .Such
companies would sell the same product(s) in the same
way everywhere.
Friday, April 34
3, 2020
 Limitations

• Three factors limit to general applicability of this

approach.
• Very significant differences in consumer demands
and in marketing requirements exist country to
country.
• As income rise , many consumers tend to become
less price sensitive and willing to pay more to get
products and services.
• Thirdly , a move toward more flexible production
systems in some industries has lowered (though
failed to eliminate) the cost advantage of very
large scale production.
Friday, April 35
3, 2020
John Deere ( US) Vs. Hyundai(S Korea)

Friday, April 36
3, 2020
Top 10 Countries’ trade with US($ Billion)

Country Total trade Exports Imports Balance

Canada 429 204 225 -19
Mexico 305 129 176 -47
Japan 148 51 97 -46
China 366 69 297 -228
Germany 114 43 71 -28
UK 93 45 48 -3
South Korea 68 29 39 -10
Taiwan 46 18 28 -10
Dutch 48 32 16 +16
Italy 34 10 24 -14

Friday, April 37
3, 2020
• In addition to U.S. economic assistance, a move toward
international cooperation among trading nations was
manifest in the negotiation (1986–1994) of the General
Agreement on Tariffs and Trade (GATT).

• International trade had ground to a halt following World

War I when nations followed the example set by the U.S.
passage of the Smoot-Hawley Act (1930), which raised
average U.S. tariffs on more than 20,000 imported goods
to levels in excess of 60 percent. In retaliation, 60 countries
erected high tariff walls, and international trade stalled,
along with most economies. A major worldwide recession
catapulted the world’s economies into the Great
Depression when trade all but dried up

Friday, April 38
3, 2020
Foreign Acquisitions of US
companies

Friday, April 39
3, 2020
Indian companies Acquiring Foreign firms
Buyer Target Sector Amount ($ Stake %
mn)
Videocon Daewoo elec Con Durable 696 NA

Tata Tea Energy beverages 670 30

Dr Reddy Betapharm Pharma 572 100
Suzlon Hunsen Energy 565 100
VSNL Teleglobe Telecom 239 100
Tata Coffee Eight O Clock Beverages 220 100
Tata Chem Brunner Mond Chemicals 113 36.5

Apeejay Premier foods Bevereges 138 NA

Tata Steel Millenium Steel 131 100
Appollo Dunlop Tyres 66 100
Friday, April 40
3, 2020
 Developing Global Awareness
• Opportunities in global business abound for those who
are prepared to confront myriad obstacles with optimism
and a willingness to continue learning new ways.
• The successful businessperson in the 21st century will
have global awareness and a frame of reference that goes
beyond a region or even a country and encompasses the
world.
• To be globally aware is to have (1) tolerance of cultural
differences and (2) knowledge of cultures, history, world
market potential, and global economic, social, and
political trends
Friday, April 41
3, 2020
 Global Marketing

• At global marketing , the profound change is seen in the

orientation of the company towards the markets and its
planning.
• Company treats entire globe as its one market.
• Market segmentation is no longer restricted to its own
country’s boundary
• Entire operation –orgn structure, source of finance,
production, marketing takes global perspective.
Friday, April 42
3, 2020
Major Concerns of Marketing Managers

• Developing new products

• Developing relationship with suppliers, distributors, even
customers
• Fewer but stronger global competitors
• Enhanced price competition
• Greater regional integration and government regulations
• Developing a marketing culture.

Friday, April 43
3, 2020
 Degree of Adaptation
• Business customs can be grouped into imperatives ,
customs that must be recognized and accommodated;
electives , customs to which adaptation is helpful but not
necessary; and exclusives , customs in which an outsider
must not participate.
• An international marketer must appreciate the nuances
of cultural imperatives, cultural electives, and cultural
exclusives

Friday, April 44
3, 2020
Imperatives
• BEIJING, CHINA: GermanChancellor
Angela Merkel and Chinese Prime
Minister Wen Jiabao toast after the
EU–China Business Summit at the
Great Hall of the People in Beijing.
• The summit was boosted by the
settlement of a trade row that had left
80 million Chinese-made garments
piled up in European seaports, unable
to be delivered to shops under a quota
pact agreed to at the time.
• Drinking half a bottle is a cultural
elective, but taking a sip is more of an
imperative in this case.
Friday, April 45
3, 2020
Friday, April 46
3, 2020
The Four Risks of International
Business

Copyright © 2014 Pearson Education Inc.

Copyright © 2014 Pearson Education Inc.
• Chinese Government is keeping a very keen eye on the
Gujarat Vidhan Sabha election Result…………….. News of
17th Dec 2017

Friday, April 49
3, 2020