INTRODUCTION OF

INTERNATIONAL MARKETING
INTRODUCTION TO INTERNATIONAL MARKETING

International Marketing is the performance of

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.

“ The process of planning and conducting transactions across

national borders to create exchanges that satisfy the
objectives of individuals and organizations”.
 INTERNATIONAL MARKETING AND
EXPORTING
International marketing is more than exporting,
because it involves:

• Marketing products that have been manufactured or

assembled in the target country
• Establishing a permanents presence in the foreign
country
• Licensing and franchising
• Sourcing components from foreign states.
 EXPORTING

Exporting means the sale in a foreign market of

an item produced, stored or processed in the
supplying firm’s home country.
Two kinds of exporting: passive and active
 EXPORTING (CONTINUED)
Sources of foreign demand (passive exporting):
• Non-availability of appropriate products from
domestic producers
• Price differentials between imported and locally
supplied items;
• Exotic images attaching to foreign products;
• Inefficiency of local distribution systems, political
disruption, industrial action, or other factors that
prevent local firms from supplying goods.
 EXPORTING (CONTINUED)
Reasons for active exporting:
• The product has reached the end of its life
cycle at home
• High competition
• Easy access to major customers
• Export increases turnover.
 IMPORTANCE OF INTERNATIONAL
MARKETING

+ International expansion helps

firm:
– Keep pace with competition
– Reach a larger market
– gather higher profits
– extend the lifecycle of their
products
 DIFFERENCES BETWEEN DOMESTIC AND
INTERNATIONAL MARKETING
Domestic International
Research data is available in a single Research data is generally in foreign
language and is usually easily languages and may be extremely difficult
accessed to obtain and interpret

Business is transacted in a single Many currencies are involved, with wide

currency exchange rate fluctuations

Head office employees will normally Head office employees might only
possess detailed knowledge of the possess and outline knowledge of the
home market characteristic foreign markets

Promotional messages need to Numerous cultural differences must be

consider just a single national culture taken into account

Market segmentation occurs within a Market segments might be defined across

single country the same type of consumer in many
different countries.
DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL
MARKETING (CONTINUED)
Domestic International

Communication and control are International communication and control

immediate and direct might be difficult

Business laws and regulations are Foreign laws and regulations might not
clearly understood be clear

Business is conducted in a single Multilingual communication is requires

language

Business risks can usually identified and Environments may be so unstable that it
assessed is extremely difficult to identify and
assess risks

Planning and organizational control The complexity of international trade

systems can be simple and direct often required the adoption of complex
and complicated planning, organization
and control systems
DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL
MARKETING (CONTINUED)
Domestic International
Distribution and credit control are Distribution and credit control may be extremely
straightforward complex

Selling and delivery documentation is Documentation is often diverse and complicated

routine and easy to understand due to meeting different border regulations

Distribution channels are easy to Distribution is often carried out by

monitor and control intermediaries, so is much harder to monitor

Competitors’ behavior is easily Competitors’ behavior is harder to observe,

predicted therefore less predictable

New product development can be New product development must take account of
geared to the needs of the home all the markets the product is sold in.
 OPPORTUNITIES
+ Integrate global
knowledge
+ Expand long-run
production
+ grow longer and
renew product life
cycles
+ Competitive supply
chains
Dr. Rosenbloom
 CHALLENGES

+ International logistics
+ Small business mindset
+ Political and economic instability
+ Increased competition

Dr. Rosenbloom
SMALL BUSINESS MINDSET
+ Many believe only
MNCs must carry out
international
marketing
– Smaller firms can also
be major players: 50%
of German exports
from firms with 19 or
fewer employees

Dr. Rosenbloom
 STAGES OF INTERNATIONALIZATION

+ Domestic Company: A purely domestic company operates domestically. A domestic company

may extend its products to foreign markets by exporting licensing and franchising. Most
international companies have their origin as domestic companies..

+ International Company: International company is normally the second stage in the

development of a company towards the multinational companies i.e, the marketing mix
‘developed’ for the home market is extended/cross national boundaries and entered in
neighboring countries.

+ Multinational Company:“when a company decides to respond to market differences, it evolves

into a stage-three company is multinational that pursues a multi-domestic strategy. The
focus of the stage-three company is multinational or, in strategic terms, multi-domestic (that
is, the company prepare a unique strategy for each country in which it conducts business).

+ Global:   According to Keegan, the global company will have either a global marketing
strategy or a global sourcing strategy but not both. It will either focus on global markets and
source from the home or a single country to supply these markets, or it will focus on
domestic market and source from the world to supply its domestic channel.
+  
 INTERNATIONALIZATION PROCESS

++ Motivations
Motivations to
to go
go abroad
abroad

Competitive pressures
Overproduction
Declining domestic sales
Excess capacity
Saturated domestic markets
Proximity to customers/ports

Reactive
Dr. Rosenbloom
 INTERNATIONALIZATION PROCESS

+
+ Motivations
Motivations to
to go
go abroad
abroad

Proactive

Profit advantage
Unique products
Technological advantage
Exclusive information
Tax benefit
Economies of scale

Dr. Rosenbloom
 INTERNATIONAL EXPANSION
+ 3 Ways to Approach International
Markets

Make no
special
provisions

Dr. Rosenbloom
 INTERNATIONAL EXPANSION
+ 3 Ways to Approach International
Markets

Adapt to local
Make no conditions in
special each target
provisions market (multi-
domestic
approach

Dr. Rosenbloom
 INTERNATIONAL EXPANSION
+ 3 Ways to Approach International
Markets

Adapt to local Incorporate

Make no conditions in differences into a
special each target regional/global
provisions market (multi- strategy to allow for
domestic local implementation
approach (globalization
approach)

Dr. Rosenbloom
 INTERNATIONAL EXPANSION

+ 3 Factors to Market Approach

Market Characteristics

Government regulations

Customer characteristics,
expectations, and
preferences

Purchase patterns
State of economic
development

Competitive offerings

Climate and geography

Dr. Rosenbloom
 INTERNATIONAL EXPANSION

+ 3 Factors to Market Approach

Market Characteristics Product Characteristics

Government regulations Product ingredient

Customer characteristics,
expectations, and Brand
preferences
Purchase patterns
State of economic
Positioning
development
Competitive offerings Packaging
Climate and geography
Country of origin

Dr. Rosenbloom
 INTERNATIONAL EXPANSION
+ 3 Factors to Market Approach

Market Characteristics Product Characteristics Company

Considerations
Government regulations Product constituents Profitability
Customer characteristics, Brand
expectations, and Positioning Market opportunity
preferences Packaging
Purchase patterns Country of origin
State of economic
Policies
development
Competitive offerings
Climate and geography

Dr. Rosenbloom
 THE ACTIVITIES IN INTERNATIONAL
MARKETING INCLUDE:
1. Detailed analysis of current markets and
potential markets;
2. Planning and development of products that the
consumers want, clearly defined in suitable
package;
3. Distribution of products through channels which
provide the services or conveniences demanded
by purchases;
 THE ACTIVITIES IN INTERNATIONAL
MARKETING INCLUDE:

4. Promotion of products to inform and educate

consumers about products or services;
5. Setting of prices which reflect both a
reasonable value (or utility ) of product to
consumers; and
6. Technical and non-technical services given to
the consumers-both before and after a sale is
made.
STAGES OF INTERNATIONAL MARKETING INVOLVEMENT
+ 1. No Direct Foreign Marketing
– Company does not actively pursue customers in foreign
markets, but receives them thru unintentional channels
 Products are bought abroad through domestic
wholesalers/distributors, website on the internet

+ 2. Infrequent Foreign Marketing

– Company sells to foreign markets only when a temporary
surplus of product exists
 Once surplus is gone, foreign activity is gone
 Few companies fit this model because of the need to develop long
term relationships in foreign countries
 STAGES OF INTERNATIONAL MARKETING INVOLVEMENT

+ 3. Regular Foreign Marketing

– Companies produce their products and services to primarily
sell domestically, but also internationally
 Through domestic/foreign middlemen, sales force in foreign countries

+ 4. International Marketing
– Companies are fully engaged in international marketing
strategies
 Companies are now international or multi-national
STRATEGIC APPROACHES TO MARKETING INTERNATIONALLY

+ 1. Domestic Market Extension Orientation

– International markets are secondary to its domestic
markets

+ 2. Multidomestic Market Orientation

– Each country has a specific and separate marketing plan to
adjust to differences

+ 3. Global Marketing Orientation

– Marketing activities are global
– do your best for efficiencies of scale through
standardization
 ETHNOCENTRIC ORIENTATION

 Guided by domestic market extension concept:

 Domestic strategies, techniques, and personnel
are perceived as superior
 International customers are considered as
secondary
 International markets are regarded primarily as
outlets for surplus domestic production
 International marketing plans are developed in-
house by the international division
 POLYCENTRIC ORIENTATION

 Guided by the multidomestic market concept:

 Establishes a foreign subsidiary company and
decentralizes all the operations
 Focuses on the importance and uniqueness of each
international market
 Likely to establish businesses in each target country
 Fully decentralized, minimal coordination with
headquarters
 Marketing strategies are specific to each country
 REGIOCENTRIC ORIENTATION
 Guided by the global marketing concept:

 The company after operating successfully in a foreign country,

thinks of exporting to the neighboring countries of the host
country.

 World regions that share economic, political, or cultural traits

are believed as distinct markets
 Divisions are organized based on location
 Regional offices coordinate marketing activities
 GEOCENTRIC ORIENTATION
 Guided by the global marketing concept:
 The entire world is just like a single country for the
company.
 The world is visible as a total market with particular,
homogenous segments
 Targeted marketing strategies aimed at market segments,
rather than geographic locations
 Achieve position as low-cost manufacturer and marketer of
product line
 Provides standardized product or service throughout the
world
DRIVERS OF INTERNATIONAL MARKETING EXPANSION

+ Competition
+ Regional Economic and
Political combination
+ Technology
+ Improvements in
Transportation and
Telecommunication
+ Economic Growth
+ flock Consumer Needs
 DRIVERS OF INTERNATIONAL
EXPANSION, CONTINUED
REGIONAL, ECONOMIC and POLITICAL INTEGRATION

• Regional agreements such as

NAFTA, and the European
Union and reduce barriers and
promote trade within common
markets.
• Subsidiaries are established in
specific markets to take
advantage of free trade within
the region.
DRIVERS OF INTERNATIONAL
EXPANSION, CONTINUED
TECHNOLOGY
• Consumers worldwide
are understanding to
similar products,
services, and
entertainment.
• The Web and the
Internet have change
the way companies
conduct business.
Drivers of International
Expansion, continued

TRANSPORTATION and TELECOMMUNICATIONS

• Lower cost and higher
quality communication
due to satellite technology,
teleconferencing, and
e-mail
• Efficient transportation due
to containerization and
just-in-time technology
DRIVERS OF INTERNATIONAL
EXPANSION, CONTINUED
ECONOMIC GROWTH

• Emerging middle class

with increasing buying
power in big emerging
markets such as Brazil and
India
• Opening of new markets
previously closed, such as
the markets of China and
Vietnam
• Rising economies are
becoming practical trade
partners