TRIGGERS OF

INTERNATIONALISATION
Prof Suraksha Gupta
LEARNING OBJECTIVES
Comprehend rationale behind international
marketing
Identify triggers of internationalisation
Understand link between international
marketing and international trade
Identify barriers to internationalisation and what
triggers companies to internatioanlise
INTERNATIONALISATION
?
From a national standpoint, economic isolation
has become impossible
International marketing gives new perspective to
marketing for dealing with foreign markets
Foreign markets provide new set of customers to
be served
New markets provide new opportunities of
growth for the business
MARKETING
A process of anticipating, identifying and satisfying customer
requirements profitably (CIM, 2001)
It is an activity processed through creation, communication, delivery,
and exchange offers to create value for customers, clients, partners
and societies at large (AMA, 2007)
INTERNATIONAL
MARKETING
Applying marketing techniques internationally

Modifying marketing techniques based on the specific needs of the

host market

Activities manages through processes that engage stakeholders

across borders

Create, communicate, deliver and exchange stakeholder value to

international stakeholders
INTERNATIONAL
MARKETING ISSUES
– Where are my current and potential customers?

– Does my “need to have” market have borders?

– Does international activity increase risk?

– What marketing adjustments are or will be necessary for cross-borders?

– What threats from global competition should be expected

– What are my strategic global alternatives?

 INTERNATIONALISATION
MOTIVES
Dunning (1993) distinguished 4 main motives...
Market-seeking: companies go abroad to find new customers
Efficiency-seeking: companies go abroad to lower the costs associated with
performing economic activities and/or with the aim of rationalising their already
existing operations in various locations
Resource-seeking: to access resources that are not available at home or are cheaper
abroad
Strategic asset-seeking: to obtain strategic tangible or intangible assets which are
crucial to LT strategy and not available at home
 EXPORTING MOTIVES
Proactive Reactive

Profit and Growth Competitive pressure

Managerial Urge Saturation in home market

Unique product Excess capacity

Opportunity based on market Foreign orders received

information
Economies of scale Extend sale of seasonal
products
Tax benefits Proximity to international
customer
INTERNATIONAL
TRIGGERS
Change agents: An event that initiates the process and carries it
through to implementation

Internal External
Perceptive Market demand
Management
Specific internal event Network partners
Importing Competing firms
Trade associations
Financing
INTERNATIONAL
MARKETS
G8: USA, UK, Canada, France, Germany, Italy, Japan and Russia
G20: Argentina, Australia, Barzil, China, Indonesia, Italy, Japan,
Germany, France, Canada, Mexico, Russia, Saudi Arabia, South
Africa, South Korea, Turkey, UK, USA
Emerging Economies: Brazil, Chile, China, Colombia, Czech
Republic, Egypt ,Greece, Hungry, India, Indonesia, Korea, Malaysia,
Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa,
Taiwan, Thailand, Turkey and United Arab Emirates
 INTERNATIONAL
MARKETS
BRICS: Brazil, Russia, India, China and South Africa

MINT: Mexico, Indonesia, Nigeria and Turkey

ASEAN: Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand,

Malaysia, Vietnam, Laos, Burma and Combodia

EU: Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia,

Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia , Lithunia,
Luxemburg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia,
Slovenia, Spain, Sweden, United Kingdom
 BARRIERS TO
INTERNATIONALISATION
General Market Risks

 Additional organisational costs

 Differences in language and culture

 Adaptation–product and services

 Competition

 Distribution–finding suitable host market

BARRIERS TO
INTERNATIONALISATION
Commercial Risks

 Exchange Rate fluctuations

 Failure of export customers to pay

 Delays and/or damage in the export process

 Difficulties obtaining export financing

BARRIERS TO
INTERNATIONALISATION
Political Risks

 Foreign Government Restrictions

 National Export policy

 Foreign Exchange controls

 Lack of tax incentives for companies that export

 Confusing regulations and procedures

 Civil strike, revolution and wars disrupting foreign markets

 Can be so bad it leads to De-Internationalisation

INTERNATIONALISATION
?
It needs a balance between the costs and benefits

Internationalisation is not always the right strategy

“less is more” and firms need to find their “optimal level”

SO..
What impact does International Marketing have on firms and
consumers?

Is it beneficial to all concerned?

Consider examples from your home country to demonstrate your

understanding
Thank you!