Chapter 1 - The Rationale of International Marketing

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Chapter 1
The rationale for international marketing
What is international marketing?
International marketing is the process of planning and undertaking transactions across national boundaries that involve exchange
Copyright Pearson Australia (a division of Pearson Australia Group Pty Ltd) 97814425277201/Fletcher/International Marketing/5th edition
Why undertake international marketing?

Reasons for undertaking international marketing can be proactive or reactive, internal or external
Leads to four possible reason combinations:

Proactive internal Reactive internal Proactive external Reactive external
Internal rationales
Proactive - internal
Management desire Unique offering Utilise excess capacity Size of domestic market Stagnant or declining domestic market
Reactive - internal
Diversification risk Reduce problems of seasonality
External rationales
Proactive - external
Opportunities in foreign markets Other sources of stimulus e.g. government grants
Reactive - external
Unsolicited order or approach
Stakeholders of the international firm
Universal stakeholder model

Generalised model of stakeholder orientation used across different economies Leads to concept of holistic marketing
Driving forces in international marketing

Market needs Technology Cost Government Communications
Monetary framework
World trading system
Restraining forces in international marketing

Political systems Legal requirements
Cultural norms
Economic development
Drivers of growth in the international economy

Management orientations
Ethnocentric orientation: home country approach should be applied in every country Polycentric orientation: each country is different and develops its own unique approach Regiocentric orientation: the region is the market and region based strategies are developed Geocentric orientation: the world is the market with the flexibility to respond to local needs and wants
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Risks in international marketing
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Approaches to international marketing

From domestic to transnational
Domestic orientation - export to overseas agent Move to international marketing commit resources to overseas market
Take multinational stance - adapt for the market

Move to global marketing - provide competitive global offering
12
Approaches to international marketing (cont. 1)

From indirect exporting to FDI
Use Australian agent
Export to overseas intermediary

Set up a sales office overseas Arrange for an overseas firm to manufacture under license FDI in overseas market to avoid import restrictions
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International trade cycle
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Wheel of international marketing
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Australias trading environment: Export activity

2008 exports worth A$555 billion Main export partners: Japan, China, Republic of Korea, India, USA, New Zealand, UK, NZ, Taiwan, Singapore and Thailand Main exports: minerals, energy products, growth in knowledge intensive products (biotech, software)
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Australias top 10 exports 2009

90 80 70 60
A$ billions
50 40 30 20 10 0 Coal Iron Edu Gold Travel Gas 2008 A$b Oil Alum Wheat Beef 2009 A$b
Australian Bureau of Statistics, 2010
Australias top 10 exports (% change) 2009

2008 A$b Coal Iron ore and concentrates Education-related personal travel services Gold Personal travel (excl education) services Natural gas Crude petroleum Aluminium ores 46.6 30.1 15.1 14.7 11.7 9.2 10.3 6.5 2009 A$b 39.2 29.9 17.7 15.6 12.1 7.7 7.2 4.8 % change -16 -0.7 17.1 6.1 4 -17.1 -30.7 -25.7
Wheat
Beef
3.8
5
4.8
4.3
25.4
-13.2
Australian Bureau of Statistics, 2010
Australias trading environment: Import activity

2008 imports worth A$279 billion Major suppliers: China, USA, Japan, Singapore, Germany, Thailand, UK, and Malaysia Main imports manufactured goods
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Australias trading environment: Service sector

2008 service exports valued at $107 billion Increasing in relative importance Main service exports: tourism, international education, computer software
20
Australias trading environment: Australia-Asia trade

Historical affinity with for Europe and USA decreasing in importance relative to Asia Need to expand and strengthen links with Asian countries
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Chapter 1 - The Rationale of International Marketing

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PowerPoint

The rationale for international marketing

What is international marketing?

Why undertake international marketing?

Leads to four possible reason combinations:

Stakeholders of the international firm

Universal stakeholder model

Driving forces in international marketing

Restraining forces in international marketing

Drivers of growth in the international economy

Risks in international marketing

Approaches to international marketing

Take multinational stance - adapt for the market

Approaches to international marketing (cont. 1)

Export to overseas intermediary

International trade cycle

Wheel of international marketing

Australias trading environment: Export activity

Australias top 10 exports 2009

Australian Bureau of Statistics, 2010

Australias top 10 exports (% change) 2009

Australian Bureau of Statistics, 2010

Australias trading environment: Import activity

Australias trading environment: Service sector

Australias trading environment: Australia-Asia trade

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