SCHOOL OF BUSINESS

MASTERS PROGRAMME
MKT 506- INTERNATIONAL MARKETING

TOPIC 1:
DEFINITION, SCOPE &
CHARACTERISTICS OF
INTERNATIONAL MARKETING
 IM DEFINED
• Marketing across the national frontiers
• the strategy, process & implementation of
marketing activities in international arena
• Activities related to sale of goods &
services of one country into another,
subject to rules & regulations framed by
host countries
• Marketing activities & operations among
world countries that following different
political & economic systems
• Marketing abroad i.e., beyond political
boundaries of a country
• Brings countries closer due to economic
needs & facilitates understanding & co-
operation among them
• A constructive economic & commercial
activity, useful & beneficial to all
participating countries
• Acts an instrument of global growth &
development
• Performance of business activities, direct
flow of goods & services to consumers or
users in more than one nation
• A human activity directed at satisfying
needs & wants through exchange process
(working with other markets; attempts to
actualize potential exchange to satisfy
human needs & wants; Includes analyzing
markets for their potentials -assess needs
of customers, etc.)
 Kotler’s Definition
• Analysis, planning, implementation & control
of programs designed to bring about desired
exchanges with target audiences for mutual
personal gain (satisfying human needs)
• Relies heavily on adoption & co­ordination of
product, price, promotion and place for
achieving effective response
To succeed in internationally, marketing
manager need to understand environment; way
of thinking regarding consumers, competitors,
suppliers or employees in the new country
• Marketing environment generally becoming
more and more global
• In competitive, technological & the socio-
cultural dimensions
-Hence definition of I.M.;
• Marketing in an internationally competitive
environment, whether the market is home
or foreign
 UNDERSTANDING IM ENVIRONMENT
• Technological revolution has levelized global
economic playing field, enabling so many
people globally to compete, connect, &
collaborate thus ushering in globalization
-Globalization has huge impact on politics,
economics, & military & social affairs
• Liberalization and globalization have
enhanced expansion of marketing
environment
• Liberalization? Indicators?
• Globalization? Indicators?
 Indicators of Liberalization
• Reduced barriers to trade; e.g., tariffs,
Embargos, quotas (Meaning???)
• Subsidies
• Trading blocs, e.g. EAC, SADC, ECOWAS,
ECOMOG
 Indicators of Globalization
• Value of trade (goods and services) as % of
world GDP increased from 42 in 1980 to
about 60 by 2016
• FDI increased from 10% of world GDP in
1990 to 33% in 2014.
• Number of minutes spent on cross-border
telephone calls, on a per capita basis,
increased from 7.3 in 1991 to 28.8 in 2006.
• Number of foreign workers increased from
78m (2.4% -world population) in 1965 to
191m (3% in 2005, upward trend continues
• Growth in global markets has helped to
promote efficiency through competition &
division of labour/specialization that allows
people & economies to focus on what they
do best
• Global markets offer greater opportunity
for people to tap into more diversified &
larger markets around globally(they can
access more capital, technology, cheaper
imports & larger export markets
• Not all markets ensure that the benefits of
increased efficiency are shared by all
-Countries must be ready to embrace policies
needed; Poorest countries need support of
international community as they do so (what
is the situation in Kenya???)
• Most rapid economic increase has been
experienced by advanced economies
(emerging & developing countries have also
become more financially integrated)
 Requirements for Involvement IM
• Competence in marketing, (sound grasp
of marketing concepts, tools &
techniques)
• Ability to perceive consumer behaviour
patterns in different countries & ability
to evaluate essential differences &
similarities between markets
• Management skill to organize, plan, co-
ordinate & control operation of greater
complexity, mainly in its human relations
 Scope of International Marketing
• Establishing branch in foreign market for
processing, packaging/assembling goods
according to market needs (Sometimes
complete manufacturing is done by branch
through direct investments)
• Joint Ventures and Collaborations in
foreign countries with some foreign firms
for manufacturing and/or marketing
product (Here company works in
collaboration with foreign firm in order to
exploit foreign markets
 Scope of International Marketing
• Licensing Arrangements: company, under this,
establishes licensing arrangements with foreign
term (foreign enterprises are granted right to
use exporting company’s know- how, e.g.,
patents, processes or trademarks according to
agreed up terms with or without financial
investment
• Consultancy Services: Exporting company offers
consultancy services (undertakes turnkey
projects in foreign countries (the exporting
company sends its consultants & experts in
foreign countries to guide & direct
 Scope of International Marketing
• Technical and Managerial Know-How:
The technical & managerial know-how
provided by exporting company to
importing company
-Technicians & managerial personnel of
the exporting company guide and train
technicians & managers of importing
company
Characteristics of International Marketing
• Different Legal System: Country has own
legal system (English Common OR civil law)
• Some of the European countries have own
legal system (Different legal systems among
different countries increases difficulties of
doing business, e.g., which legal system will
be applicable to their business activities)
-Need for uniform legal system, as supported
by United Nations Commission on
International Trade Law; Making efforts to
bring uniformity in International trade Law
Characteristics of International Marketing

• Market Characteristics: Every Country has

different market characteri­stics due to
environmental factors, demand patterns,
government controls, etc.
In some countries like India &USA the market
characteristics are different from state to
state
Monetary System: Government decides its
own country’s monetary system as well as
country’s currency exchange value (mainly
determined by forces of supply & demand)
Characteristics of International Marketing

• Procedure & Documentation:

-Every country has its own procedure of
documentation requirements for the
purpose of experts
-Every business house has to comply
with these rules and regulation for the
purposes of export and imports
 IM Significance: Survival and Growth of
International Marketing
• Survival: Most world countries lack ideal
market size, resources & opportunities
necessitating to trade with other
countries for survival, e.g., the European
countries are small, without overseas
markets their firms would not have
sufficient economies of scale to be
competitive with U.S. based firms
(International competition is not a
matter of choice when the survival is at
stake)
IM Significance: Survival and Growth of
International Marketing
• Growth of International Market:
-Despite having numerous problems like
economic & marketing problems, developing
nations are considered excellent market to do
business, Why?
• Sales & Profits: Large potential to sell
products on international market (it
constitutes large amount of share of total
business of many firms & many large U.S.
based companies have performed well in
overseas market, e.g., IBM & Compaq)
 IM Significance: Survival and Growth of
International Marketing
-IBM & Compaq have maximized their sales in
abroad compared to domestic market
-Coca-cola: More than 80% of total operating
profit is from international
Thus, international markets provide huge
potential to increase sales value and profits
of the firms.
 IM Significance: Survival and Growth of
International Marketing
• Benefit from Diversification: Demand of
certain products is affected by cyclical
factors like recession & seasonal factors like
climatic change
-Sale of certain products fluctuate adversely
due to such variables (Solution: Diversify a
company’s risk & consider foreign market to
overcome with variable demand)
-Such markets can be outlets for excess
production capacity & easily counter such
fluctuations
 IM Significance: Survival and Growth of
International Marketing
Seasonal factors may affect consumption
level of soft drinks; solution spread marketing
activities throughout global market (Global
selling has enabled Coca-cola to carry on
with production year round; helps companies
to stabilize their business.
• Inflation & Price Modernization: Exports
(and imports, in moderation) can be
beneficial to a country
 IM Significance: Survival and Growth of
International Marketing
• International Marketing & Standard
of Living:
-IM helps countries/citizens to increase their
standard of living (without trade, product
shortage may arise forcing people to pay
more or less (international trade enhances
industries specialization to get & gain access
to raw materials
-IM fosters competition & efficiency,
(international trade is helpful- provides
citizen higher living standard