Introduction to

International Marketing
Chapter 1
Dr. Le Nguyen Hoang
Learning Objectives
LO1 Understand the benefits of international markets
and definition of international marketing
LO2 Compare and contrast single-country marketing
strategy with international marketing strategy
LO3 Understand the scope of the international marketing
task and different stages in the evolution of marketing
across national boundaries
LO4 Recognise the importance of the self-reference
criterion (SRC) and global awareness in international
marketing
LO5 Understand the several types of trade barriers, free
trade agreements and institutions
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Exhibit 1.2 Selected U.S. Companies and
Their International Sales

Source: Compiled from annual reports of listed firms, 2012

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Benefits of International Markets

• To leverage operations on a worldwide scale

(economies of scale)
• To take advantages of the know-how knowledge
(e.g. knowledge of how to do things; save costs
on R&D)
• To obtain the strategic value of the geographic
location (e.g. being close to the target market or
the cheap labour forces)

1-4
Definition of International Marketing

• International marketing is “the performance of

business activities designed to plan, price,
promote, and direct the flow of a company’s
goods and services to consumers or users in
more than one nation for a profit”. (Cateora et
al., 2011: 10)

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Single-Country Marketing versus
International Marketing
Single-country Marketing International Marketing
(Domestic Marketing)
Domestic market participation International market participation

Marketing Mix Development Marketing Mix Development

• Product • Product Adaptation or

Standardisation
• Price • Price Adaptation or Standardisation

• Promotion • Promotion Adaptation or

Standardisation
• Place • Place Adaptation or Standardisation

Sources: Keegan & Green (2013: 10)

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Product Adaptation-Coca Cola

• Entering the Chinese market near

the end of the 1920s
• The translation of Coca Cola into
Mandarin ( 可口可菜 ) carries
negative or even no meaning:
“female horse fastened with wax”
• Coke Marketing Executives overcame
the language barrier by using the
phrase “ 可口可乐” which means
“happiness in the mouth”
(Morse, 2009: 162)

1-7
Product Standardisation-Best Buy

• Entering the Chinese market

since 2003

• The translation of Best Buy into

Mandarin ( 百思买 Bai Si Mai)
carries negative meaning:
“Think one hundred times
before buying”
(Basciano, 2016)

1-8
Standardisation versus Adaptation

• Standardisation (or Globalisation) means

offering a uniform product/service on a regional
or world wide basis (international products
without local variations)
• Adaptation (or Localisation) focuses on the
cross-border differences in the needs and wants
of the firm’s largest customers (international
products with local variations).
(Kotabe & Helsen, 2010: 11)

1-9
Case Study-McDonald's food
throughout the world

1-10
Group Discusion Questions (20 mins)

(discuss in group of 5 students)

1/ Would McDonald's ™ prefer to globalise or
localise their menu across the world?
2/ In your opinion, what are the advantages of
the above strategy?
3/ What are other product/menu ideas do you
think McDonald's ™ could introduce in the
Vietnamese market?

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 The International Marketing Task

Four One

Three Two

Source: Cateora et al. (2011: 11)

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Stages in the evolution of marketing
across national boundaries
• Domestic Marketing
• Export Marketing
• International Marketing
• Multinational Marketing
• Global Marketing

1-13
Source: Kotabe & Helsen (2010: 15)

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Self-Reference Criterion &
Ethnocentrism
• Self-Reference Criterion (SRC) is an
unconscious reference to one’s own cultural
values, experiences, and knowledge as a basis for
decisions.
• Ethnocentrism is the notion that people in one’s
own company, culture, or country know best
how to do things.
• Both the SRC and ethnocentrism impede the
ability to assess a foreign market in its true light.

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Self-Reference Criterion &
Ethnocentrism
• Self-Reference Criterion (SRC) is an
unconscious reference to one’s own cultural
values, experiences, and knowledge as a basis for
decisions.
• Ethnocentrism is the notion that people in one’s
own company, culture, or country know best
how to do things.
• Both the SRC and ethnocentrism impede the
ability to assess a foreign market in its true light.

1-16
Developing Global Awareness

To be globally aware is to have:

• tolerance of cultural differences and
• knowledge of cultures, history, world market
potential, and global economic, social, and
political trends

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Trade Barriers

• Barriers to trade are one of the major issues

confronting international marketers
• They can be tariff (i.e. tax) or non-tariff (i.e.
quotas, antidumping laws etc.) barriers
• Tariff barriers have reduced considerably in recent
years

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Protectionism

• The reality of trade is that this is a world of

tariffs, quotas, and nontariff barriers designed to
protect a country’s markets from foreign
investment
• Although the World Trade Organization has
been effective to some extent in reducing tariffs,
countries still resort to measures of
protectionism
• Countries use legal barriers, exchange barriers,
and psychological barriers to restrict the entry of
unwanted goods
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Steel tariff toward China

1-20
China through Vietnam steel tariff
evasion

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General Agreement on Tariffs and
Trade (GATT)
• Covers three basic areas:
– trade shall be conducted on a nondiscriminatory
basis;
– protection shall be afforded domestic industries
through customs tariffs, not through such commercial
measures as import quotas; and
– consultation shall be the primary method used to
solve global trade problems.

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World Trade Organisation (WTO)

Unlike GATT, WTO is an institution, not an agreement

• It sets many rules governing trade between its
132 members
• WTO provides a panel of experts to hear and
rule on trade disputes between members, and,
unlike GATT, issues binding decisions

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The IMF and the World Bank

• The International Monetary Fund (IMF) and

the World Bank Group are two global
institutions created to assist nations in becoming
and remaining economically viable.
• These organisations play important roles in
international trade:
– by helping maintain stability in the financial markets
and
– by assisting countries that are seeking economic
development and restructuring

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 Major Regional Trade
Agreements/Institutions
 Major Regional Trade
Agreements/Institutions