All images in this presentation are used for educational purposes. Fair dealing.

INTERNATIONAL MARKETING
MGT 382
Dr Nasreen Gul

Lecture 1: Introduction to IM
 Lecture Content

• Introduction to the module

• Introduction to International Marketing
• The International Marketing Environment I
• Assignment Briefing
• Assignment Group Formation
 MGT 382

• Module leader: Dr Nasreen Gul

• Teaching team:
Dr. Nasreen Gul (lectures & tutorials)
• Dr. Zahra Shah (lectures)
• Kathy Xu (tutorials)
• 10 weekly lectures
• 5 tutorials (held on a fortnightly basis)
• Content outline, plan of work and tutorial tasks –
Blackboard
 Teaching team contact details:
• Dr Nasreen Gul
Email: n.gul@Sheffield.ac.uk
Consultation & Feedback hours: To be confirmed

• Dr Zahra Shah
Email: Zahra.shah@Sheffield.ac.uk

• Kathy Xu
Email: kxu18@Sheffield.ac.uk
WEEK
Content outline and plan of work
DATE OF LECTURE w/c LECTURE

1 27/09/2021 Introduction to International Marketing; Assignment briefing

The International Marketing Environment – I

2 4/10/2021 The International Marketing Environment - II

3 11/10/2021 Meso/micro marketing environment in international context; International

Marketing Research
4 18/10/2021 International consumers and cultural differences
5 25/10/2021 Reading Week
6 01/11/2021 Market entry strategies

7 08/11/2021 International market segmentation strategies

  Group video presentation assignment submission deadline 11th November (TBC)

8 15/11/2021 Consumer brand evaluations & brand positioning decisions in international
market settings; international product decisions
9 22/11/2021 International promotion decisions
10 29/11/2021 International pricing and distribution decisions

11 06/12/2021 Place marketing and other contemporary international marketing

applications; Revision
12 13/12/21 Individual report assignment submission deadline 16th December (TBC)
Tutorial Plan of work on Blackboard
 How will you learn?
Module handbook, lecture slides, tutorials plan of work, as well as assignment
briefs will be available on Blackboard.

Lecture slides will be made available one day before the lecture takes place

10 weekly lectures (2 hours each)

5 tutorials (held on a fortnightly basis)
Week 5 is a reading week

Content will be updated as we progress, check Blackboard regularly

Note block ‘Additional materials’ – module FAQs available, also pieces that may be
of interest will be added. It is also expected that you act as independent learners
and utilise wider resources and information through your own research and
readings
 A few house rules
 Must come prepared having completed the readings/tasks
 If you have a query relating to the module assessment or other module matters,
please either post it on the Discussion Board (Q&A) or book a meeting during
consultation & feedback hours
 Apply what we learn to examples in real life – read marketing blogs and
databases, such as Marketing Weekly, Campaign, Utalkmarketing.
 For tutorials: students are ONLY allowed to change groups if there is a timetable
clash. There will be a register.
 Please arrive on time for all classes and put your mobile phones on silent
All images in this presentation are used for educational purposes. Fair dealing.

An introduction to
International Marketing
 Agenda
• Why
• International trade
• Theories of internationalization
• IM and IM challenges
• IM development
• A firm’s readiness to internationalize
 Why international trade?
• International Trade Theory – explains why it is
beneficial for countries to engage in international
trade.
• Trade between countries take place because one
country is able to produce a product at lower price
than elsewhere
• Produce and export the product they have
comparative advantage and import other goods
 Reasons for international expansion
• Incidentally • Risk spread
• Customer - Supplier • Making use of intl
relationship production & sourcing
• • Higher margin
Excess production
o Economy of scale
• Market proximity
o Economy of scope
• Unsolicited orders • Increase reputation & brand
• Policies incentives awareness
• Small/ decline/ saturated • Competitiveness
domestic market • Management ambition
 Benefits?

When accumulated volume in production results

in lower cost price per unit, economies of scale
occur.

When resources can be reused from one

business/country in additional business/countries,
economies of scope
occur.
 All images in this presentation are used for educational purposes. Fair dealing.
Step 1: The
company has
successfully sold
Learning from Country A product within
Experience country A (no
regular exports)

Similar
Similar Step 2: The language
culture company sends and
and sales political
currency representatives to system
country B to try
Country C and sell and Country B
promote the
products

Step 3: The product is Step 4: Now that

selling well, so the the organisation is
company sets up a established, they
sales subsidiary in would move
the country B manufacturing to
country B
Born global:
Refers to a firm that from its ‘birth’ globalizes
rapidly without any preceding long-term
internationalization period
Two extreme pathways of internationalization: the organic versus born global
Source: Hollensen 2014, adapted from Âijö et al. (2005, p. 6) Fair dealing.
 What is IM?
• Marketing across the national boundary
• Marketing involves:
– Focusing on customers’ needs and wants
– Identify the best method of satisfying these
– Orient the company towards the process of providing that
satisfaction
– Meet organizational objectives
• Create, communicate and deliver values
 IM vs. Global Marketing

• Global Marketing refers to the company’s

commitment to coordinate its marketing activities
and efforts across international boundaries in
order to find and satisfy global consumer needs
better than its competitors.
– Globalisation trend

– Worldwide perspective
 All images in this presentation are used for educational purposes. Fair dealing.

IM Development

International National
Comparative Product Competitive
Advantage Life cycle Advantage
Mercantilism Till early 19th Till mid 20th From late 20th
1500-1550 century century century

Domestic
Domestic Export
Export International
International Global
Global
Marketing
Marketing Marketing
Marketing Marketing
Marketing Marketing
Marketing 21st
century

David Michael
Ricardo Porter
 Challenges of IM/GM

“The task of global marketing management is

complex enough when the company operates
in one foreign national market. It is much
more complex when the company starts
operations in several countries”
(Hollensen 2012)
 A taster of issues:
nation-specific market differences

 Coca-Cola: 2 Litre bottles too big for Spanish fridges

 Johnson’s Floor Wax: made Japanese floors slippery (the

Japanese do not wear shoes indoors)

 McDonald’s: the white face of ‘Ronald McDonald’ (a white

face is seen as a death mask in Japan)

 Johnson & Johnson shampoo: decomposed and gone

off after transportation in freezing temperatures and over
long distances of Russia in the first year of operations
“Gone are the days where a company could sell last
years’ models – or lesser versions of advanced products
– in the less-developed world. And gone are the days
when the prices, margins and profits abroad were
generally higher than at home. Different cultural
preferences, taste and standards, and business
institutions are vestiges of past. Two vectors shape the
world – technology and globalisation”.
(Levitt, 1983)
 Global world – global village?
The world has changed:

 Domestic markets: saturating, slowed growth in mature and

emerging economies

 Raising standards of living

 Global sourcing/alliances – economies of scale

 International expansion: necessity for most companies

 Re-emergence of trade tariffs

 Globalisation (Levitt, 1983) global village?

 Internationalisation:
a necessity, not a luxury
 WTO (GATT) established after WW 2, with 23 member
countries

 1994 - 117 member countries/WTO

 2002 China joined

 2007 Vietnam joined

 2016 Afghanistan joined as 164th member

(this is No to date)
 Global World:
global AND diverse village

 Global village global culture & consumption

 International trade, media, travel/migration
flow/reach/exchange of information, ideas, lifestyles
and elements of consumption culture
 International/global exposure of companies and their
products/services whether they operate internationally or not
 Some consumption practices converge
 National markets are more culturally divers
 Cross-national cultural communities (diasporas, communities of
consumption)
 Change is continuing
 Barriers to trade: 850 ways to reduce imports and overtly
protect nationally manufactured products (Onkvisit &
Shaw, 1988)
 Tariff barriers: direct taxes/charges imposed on import
 Non-tariff barriers: increased government participation &
customs entry procedures
 Nationalistic ‘backlash’ in many countries – protectionism
of local economy, consumption practices & traditions
(Crane, 2002; Wilk, 1995)
 Nostalgia, quest for authenticity, environmental/safety
concerns: anti-Mc’Donaldisation
 Developed vs
developing markets
 80% world population currently live in developing countries.
 By 2025, 85% population will live in emerging markets
 2 out of every 5 people currently live in China and India
 In the next 50 years, the African population will treble
 Developing markets overtook the developed in consumer
buying power growth
 World trading groups: free trade areas; customs unions;
economic & political unions (Single European Market (SEM),
European Monetary Union (EMU), Free Trade Area of
America, (FTAA), Asia Pacific Economic Cooperation (APEC)
 Challenges of IM
• Research complex
• Distant, sometimes wide spread market
• Frequently unstable environment
• Local finance systems and regulating bodies
• Less-known competition & distribution network
• Different language, different culture(s)
• High general, commercial and political risks
 Evaluation of readiness for
internationalization
• Support from government,
banks and other regulating
bodies
• Management attitudes
and ambition
• Productive capacity
• Competitive product
• Availability of finances
• Trained personnel
• Knowledge of foreign
market
• Foreign market
connections
• International experience
 Support activities
• Promotional activities (sponsored by governmental
organizations)
• Financial activities
• Information services
• Export-facilitating activities
• Promotion by private organizations
 Success is about…

 Navigating an uncontrollable macro-environment,

responding to/influencing meso-environment and
managing micro-environment to balance the overall
organisational objectives (growth, profit etc) with ensuring
a salient brand identity and alignment with the specifics of
particular markets

 Greater emphasis on market analysis and understanding

the factors influencing consumer behaviour and response
to marketing activities
All images in this presentation are used for educational purposes. Fair dealing.

11

International marketing
environment - I
 All images in this presentation are used for educational purposes. Fair dealing.

Agenda

• Overview of the analytical tools/frameworks for

assessing the international marketing environment:
– Macro environment: PESTEL
– Meso environment: 5 forces Macro environment
– Micro environment
– SWOT
 All images in this presentation are used for educational purposes. Fair dealing.

Macro marketing environment

• PEST
• STEP
• STEEP POLITICAL/ LEGAL ECONOMIC
 Political condition  Economic system
• PESTLE of the foreign market
 Trade barriers
Purchasing power
 GNP/ GDP (per capita)
 Import/ Export policies  Economic integration
• ….  Tax concessions  Fluctuation in exchange rates

TECHNOLOGICAL ECOLOGICAL
 Technological infrastructure,
for production, communications Government
 Data processing, software Companies
 Level of technology NGOs
(how people use technologies) Consumers

Lecture 2
 All images in this presentation are used for educational purposes. Fair dealing.

Political/ legal environment

POLITICAL/ LEGAL
 Political condition
of the foreign market
• Political environment  Trade barriers
 Import/ Export policies
 Tax concessions
– Stability, political risk – change of government…
– Government with policies, regulations, procedures, trade
documentation
• Legal environment
– Laws and regulations

Source: Hollensen (2011), pg 204

 Political environment

A risk or benefit due to a sudden or gradual change in a

local political environment that is disadvantageous
/advantageous to foreign firms
 Analysing political environment
1) Government actions which may be a risk for the firm:
 Operational restrictions
 Discriminatory restrictions e.g. special taxes and tariff and non-
tariff barriers (i.e., import taxes, quotas, embargoes, length of
administrative procedures)
 Regulation of business ventures
 Physical actions e.g. nationalisation, riots

2) Government actions which may be a benefit for the firm:

 Programmes to promote foreign investment/ domestic capital
development / import / export (financial subsidies, tax breaks, credit
insurance etc)
 State involvement in trade missions (i.e., developing of trading
relationships, brokering contracts)
 Legal environment
3 dimensions:

 Local domestic law: different in every country

 International law: Rules and principles that nation-states

consider binding among themselves - disputes between
nations. Issues include law of one price, anti-trust/ anti-
monopoly law, state aid, piracy, patents etc

 Domestic laws in the home country: export controls, plus

duty to abide by national laws in all activities
Microsoft fined £340 mil for alleged misuse of its near monopoly in operating systems to squeeze
out rivals by bundling media player into the windows operating system. Then £650 mil fine for
failing to disclose complete and accurate technical information on ‘reasonable terms’ to allow rivals
to develop products that would work with Window
 Some legal systems
• Common law: system where disputes are decided based
on authority of past judicial decisions
• Code law: legal system with structural concepts and
principle Clause x Act y
• Islamic law: governing Muslim conduct (Koran like code
law, Hadith like common law based on practices of
Muhammad, identifies forbidden practices “haram”)
 Analysing legal environment
1) Contracts:
• Import/export regulations
• Dispute settlements
• Involvement of foreign capital / investment law

2) Licences and trade marks

• Registration of trade marks
• Counterfeit/piracy law

3) Other:
• Marcomms/advertising
• Product content/safety requirements
• Product-specific trade restrictions
• Labour restrictions
 Home country impacts
• Home vs. Host & International laws
• Domestic policies
• Political pressures
• Human/animal rights activists
• Third market influencers
• Export licenses
• Foreign Corrupt Practices Act
• Boycott (e.g. US-Cuba, Arab)
 Host country interests and controls
• Interests:
– National identity/ recognition
– Foreign firm prevention of exploitation
– Support local companies and labour force
• Controls
– Entry restrictions
– Price controls
– Quotas/ tariffs
– Exchange control (rationing)
Trade barriers:
Trade laws that favour local firms and
discriminate against foreign ones
 All images in this presentation are used for educational purposes. Fair dealing.

Trade barriers Source: Doole and Lowe (2008)

 Local content laws
• Working with local companies
• Buying local
• For example, Brazil implemented local content laws.
– It created 875, 000 jobs
– Value of equipment and supplies purchased in the domestic
market reached around $14 million.
• The EU has a 45% local content law for foreign –
owned assemblers.
 Company to consider
• Understand and follow system of laws (home + host),
localisation requirements, contributions…
• Understand the impact on business contracts
• Understand the impact on the market strategy
– Product: safety, standards, metric vs. imperial, product liability,
labelling
– Price: resale price maintenance, taxation, control
– Distribution: e.g. door to door, agents and distributor
agreements
– Promotion: message, ads restrictions, promotions/ competitions
 All images in this presentation are used for educational purposes. Fair dealing.

Economic environment ECONOMIC

 Economic system
Purchasing power
 GNP/ GDP (per capita)
 Economic integration
 Fluctuation in exchange rates

• Variations in economic outputs, distribution of wealth and consumer buying power

• Inflation rates

• Urban or rural economy: significant divergence of lifestyles

• Currency risks

• Grey markets

• Form of economic integration: regional country groups (EU, America, Asia)

• Ongoing world economic difficulties – uncertainty

 Other environmental factors
(physical elements)

 Tropical vs non-tropical countries: climate divergence

 Time zone differences

 Infrastructure (i.e., country size, distances, state of the

roads, population density)
 All images in this presentation are used for educational purposes. Fair dealing.

Analysing economic environment

• Level of income and market development:
– LDC, developing, NIEs, developed
– Economic system: Market v. centrally planned, capitalism v. socialism
– Economic freedom: Hong Kong, Singapore vs. Zimbabwe, Cuba,
North Korea (Trade policy, capital flow, price control, black market,
property right)
– GDP (actual, growth, growth projections), inflation rates, interest and
exchange rates
– Average income per head/household, unemployment, costs of living
– Degree of urbanisation, infrastructure…
• Local manufacture - ? Other industries?
• Economic integration - ?
 Urbanisation: World Mega Cities

 In 1900 15% of people in the world lived in cities. By 2050, around

60% will be living in urban areas

 Mega city: population of over 10 million

 Some current mega cities Beijing (over 21 million); Shanghai (over 24

million); Mumbai (over 18 million); Moscow (over 11 million); New
York and London (over 8 million)

 All these have population increase projections

 Some future mega cities: Chicago, Bogota, Dar es Salaam, Luanda

Source: Eurominotor International - Vytautas (2018)
 All images in this presentation are used for educational purposes. Fair dealing.

Forms of economic integration

Example

European Monetary Union

European Single Market

Economic Community of West

African States

ASEAN, NAFTA ,Mercosur

Source: Doole and Lowe (2008)

 All images in this presentation are used for educational purposes. Fair dealing.

Global trends and EU

• Global trends of economic integration
₋ Internationalization of markets
₋ Internationalization of companies
₋ Growth of several Regional Trade Areas EU,
NAFTA, ASEAN
₋ Move toward free market system by countries in
Latin America, Asia, Eastern Europe
₋ Large emerging markets (China, India, Argentina,
Brazil, South Korea)
• EU:
– The Treaty of Rome, signed on 25 March 1957,
established the EEC and came into force on 1
January 1958
– Currently 28 members Source: https://en.wikipedia.org/wiki/Member_state_of_the_European_Union
 Impacts of Brexit
• What are the impacts?
• Is a weak pound good or bad for the UK?

– UK manufactures have seen a 13% rise in costs importing raw

materials from the EU
– With a weak pound, UK exports may seem more appealing to
overseas buyers
– https://www.theguardian.com/business/2016/aug/22/tourist-
spending-uk-surges-following-pounds-brexit-slump
 Company to consider
• Understand consumer buying (spending/purchasing)
power – overall, in product/service category
• Understand the impact on the market strategy
– Product: comparability of costs if considering local
manufacture/service, impact of distribution specifics on product
– Price: consumers’ willingness to pay
– Distribution: urban/rural areas – logistics?
– Promotion: functional vs symbolic benefits focus? Luxury
advertising?
 All images in this presentation are used for educational purposes. Fair dealing.

Technological environment TECHNOLOGICAL

 Technological infrastructure,
for production, communications
 Data processing, software

• Include:  Level of technology

(how people use technologies)

– Technological infrastructure
– Data processing, software
– New materials
– Technologies for marketing research, R&D, production,
distribution processes and communications with customers
All images in this presentation are used for educational purposes. Fair dealing.

The digital revolution

• Change the way
business is done, raise
competition, bring
global scope & reach
• Computers, broadband,
mobile phone
• Industry convergence
 Social media
• For context, as of July 2015, total worldwide population is
7.3 billion
• The internet has 3.17 billion users
• There are 2.3 billion active social media users
• 91% of retail brands use 2 or more social media channels
• Internet users have an average of 5.54 social media accounts
• Social media users have risen by 176 million in the last year
• 1 million new active mobile social users are added every day.
That’s 12 each second
• Facebook Messenger and Whatsapp handle
60 billion messages a day
 Analysing
Technological Environment
 And yet, no assumptions! Levels of technological advancement
vary; types of favoured devices vary (PC/tab/other)

 Device ownership per head/household

 Technology penetration/usage per age group/income

group/geographical area

 Cultural aspects of technology-driven rituals and processes

(email culture, text culture, online banking culture etc)

 Levels of population trust in technology

 Availability of technology to businesses

 All images in this presentation are used for educational purposes. Fair dealing.

Ecological environment
• Legislative drivers/barriers
– Paris Summit December 2015 on climate change
– 2030 climate and energy framework
• Cut greenhouse emissions by at least 40%
• Boost the share of renewables to at least 27%
• Increase energy efficiency by at least 27%

Source: http://www.eesc.europa.eu/?
i=portal.en.events-and-activities-
2030greenpaper

Source: http://www.huffingtonpost.co.uk/2015/09/15/photographer-links-heartbreaking-
image-of-polar-bear-to-climate-change-and-post-goes-viral-on-facebook_n_8137966.html
 All images in this presentation are used for educational purposes. Fair dealing.

2012 Greendex score Source: http://environment.nationalgeographic.com/environment/greendex/

 All images in this presentation are used for educational purposes. Fair dealing.

Ecological environment (2)

• Company drivers:
Source:
http://www.confectionerynews.com/Manufacturers/Divine-
Chocolate-breaks-into-mainstream-US-retail

– CSR values
– Not “green washing”
– Green start-ups:
• Niche markets and opportunities
– An example: Divine Chocolate
• the only Fairtrade chocolate company which is 44% owned for cocoa
farmers.
• Mission: to improve the livelihoods of West African cocoa farmers by
creating a branded chocolate proposition that puts farmers higher up the
value chain
• Originally set up in the UK, it now operates in the USA and now has a
banking range with whole foods.
 All images in this presentation are used for educational purposes. Fair dealing.

Ecological environment (3)

• Customer drivers:
– Consumer Boycotts or ‘buycotts’
(action to stop purchasing of products)
– Green consumers Source: http://www.infactcanada.ca/Nes
tle_Boycott_News.htm
– Positive buying e.g. Fairtrade products

Source: https://www.change.org/o/baby_milk_action

Source: http://www.babymilkaction.org/pics/gifs/spit.gif
All images in this presentation are used for educational purposes. Fair dealing.

11

Assignment briefing
 Assessment briefing – I
(full details on Blackboard)

• This is a brief overview, you must read through the

full briefs on Blackboard

• 2 assignments, both coursework-based:

– Video recorded presentation (group) 35%
– Report (individual) 65%

• Both assignments are based on one case study

BOOJA-BOOJA
 Assessment briefing - II

• Company case: Booja-Booja

https://boojabooja.com/
• Manufactures chocolate
• Vegan, organic & dairy, gluten & soya free
• Booja-Booja chocolates are all plant based, free from animal
products and produced using organic ingredients
• Products manufactured in the UK, ingredients sourced from farmers
and suppliers who are certified as organic
• Ingredients are produced by farmers using sustainable farming and
production
• Resources are used by responsibly caring for the soil, the natural
ecosystem and the well being of the people who work on the land
 Assessment briefing - III
• Has become a multi-award winning company for e.g. won
the ‘great taste’ award in 2020.
• Currently available for purchase from retailers in the UK for
e.g. Amazon, Waitrose, Asda, Harvey Nichols, Holland &
Barrett & independent health food stores.
• Also, available in Germany
• Booja-Booja is now interested in further international
expansion
• International markets of interest include: Western & Eastern
Europe, North America (USA & Canada) and Asia (North &
South) & Australia
 Assessment briefing - IV
• In both assignments you will work imagining yourself as international
marketing consultants
• Group assignment (cw1): choose two country markets in different
regions (for e.g. any country in Western or Eastern Europe, but not
the UK or Germany) or North America (USA or Canada) or any country
in Asia or Australia;
• Key focus – overview of Booja-Booja and brand USP, competitor
analysis, analysis of key macro-environment factors, SWOT and
market entry recommendations
• Individual assignment (cw2): choose one country in Europe (any
country in Western or Eastern Europe, but should be different from
the one you cover in the group assignment). In-depth macro and
micro environment analysis; brand positioning strategy and marketing
mix recommendations
 Key expectations

• Macro-environment analysis should be focused on

international marketing decisions implications. Must
examine cultural environment conditions when analysing
sociocultural component of macro-environment.
• Application of specialist international marketing theories
and models. Engagement with academic literature. See
module readings and FAQs
• Ability to source, draw and synthesise market and
industry information
• Use of credible sources throughout
 A final note – group allocations

• Ability to work effectively and professionally in

teams, often comprising or involving at some point
as consultants, individuals with different cultural
backgrounds is a major part of a professional
marketing career in contemporary realities
• Rarely these teams are formed taking into account
our individual preferences: group allocation, with an
element of flexibility
• Professionalism component of the cw1 mark (15%),
based on the peer assessment
 A final note – group allocations (cont’d)
• Group allocation – if you can please sit in your tutorial groups.
• Remote students will be placed into a group by the module leader
• Form a group of 4-5 people. The key requirement is for your group to be
culturally diverse. Remember that cultural diversity comes in many
forms: countries or regions people are from, gender, experiences that
they had (travel, living/working in places where they experienced
different cultures), and so on
• Once you form your group you will be required to present your group to
the tutor and explain how your group meets the requirement. The tutor
may decide to reallocate students into different groups.
• Please exchange contact details
• One group member to email the module leader with their group
members names and student ID number by the end of the week