What is International Marketing?

International Marketing is the multinational process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

Characteristics of IM
1. What is to be exchanged is not restricted to tangible products alone but may include concepts and services as well. UN-birth control, TB, Polio etc. IM applies not only to market or business transactions but also to non-profit marketing. Government attracting FDI at WEF, Ramdev Baba, Pope etc. It is improper for a firm to create a product first and then look for a place to sell it. Refined edible oil, Slimming centers, Diapers etc. It is improper for any firms to regard their international function as simply to export available products from one country to another. International Marketing process is not a mere repetition of using identical strategies abroad. Dabur, Coca Cola, McDonalds, Sony etc.

2.

3.

4.

5.

Domestic Marketing VS International Marketing

A company is subject to the risks of doing business internationally, including unexpected changes in regulatory requirements, fluctuations in foreign currency exchange rates, imposition of tariffs and other barriers and restrictions, the burdens of complying with a variety of foreign laws, and general economic and geopolitical conditions, including inflation and trade relationships.

Process of Internationalization
HIGH

International Marketing Task

Examples of International Marketing

International Marketing Strategy

Company/Home Country

Brand Name Product Design Product Positioning Packaging Sourcing Distribution

Coca-Cola MacDonald's,Toyota, Ford Uniliver Gillette Toyota, Honda Benetton (Italy)

Economic Blocs and International Marketing

Types of Regional trade Blocks
1. Preferential trading agreement: Where the member countries lower barriers to imports of identified products from one another. Free trade area: Where barriers to trade in respect of all items among member countries are completely eliminated by each member country, which follows its own policy in regard to trade with non-member countries. NAFTA.

2.

3. Customs union: Where, apart from elimination of all barriers to trade among themselves, the member countries follow a common policy in their trade with nonmembers. EU. 4. Common market: Where the region becomes a common market for all factors of production including labour, services and capital. EU. Economic community: Where the member countries follow common policies in respect of all economic matters.

5.

Regional Economic Integration

Benefits Trade creation when locus of production shifts from a high cost point to a low cost point. NAFTA Inter-commodity substitution in favour of goods produced within the union. SAVE FOREIGN EXCHANGE. Dynamic effects in the form of gains arising from the increased size of market, from economies of scale and from growing competition and technological change. EU Development of collective self-reliance among member countries, especially through harmonization of economic policies. EU Increased foreign direct investment within the union and from outside the union, especially in view of the larger market.

Costs Trade diversion when locus of production moves from a low cost point to a high cost point. Trade deflection when outside goods enter a free trade area through a member country having lowest tariff. Polarisation of benefits from integration moving away from the weaker partner in favour of the economically stronger partner, leading to intra-region inequality.

Global Warming
Green Marketing Environmental protection laws Influence on Marketing variables

Cultures and Marketing Mix

Low Context: Languages in which people state things directly and explicitly. High Context: Languages in which people state things indirectly and implicitly. Communications have multiple meanings. Surrogate marketing. Examples : In Japan many middle aged bureaucrats and company officials believe that buying foreign products is downright unpatriotic. Dealing in China and with the Chinese, the international manager will have to realize that making deals has more to do with cooperation than competition. Relationship matters a lot. The Disneyland concept worked well in Tokyo, it had a tougher time in Paris. One of the main reason was that while the Japanese are fond of American pop culture, the Europeans are quite content with their own cultural heritage. In case of communication. Americans often interpret inaction and silence as negative signs. As a result, Japanese executives tend to expect that their silence can get Americans to lower prices or sweeten a deal.

 Even a simple agreement may take days to negotiate in the Middle East because the Arab party may want to talk about unrelated issues. Gift if delivered in person, the actual giving has to be executed correctly; for example in China, by extending the gift to the recipient using both hands. General Foods Tang is positioned as a breakfast drink in the US; in France where fruit juices and drinks are usually not consumed at breakfast, Tang is positioned as a refreshment. Argentines consume jam at tea time, a custom that does not exist in Brazil. In an apparent attempt to preserve the purity of Japanese womanhood, advertisers frequently turn to blue-eyed foreign models to make the point. In introducing the shower soap Fa from the European market to the North American market, Henkel extended its European advertising campaign to the new market. The main creative difference was to have the young woman in the waves don a bathing suit rather than be naked as in the German original. Black is considered the colour of mourning in the US and Europe, whereas white has the same symbolic meaning in Japan and most of the Far East.

 A British bank was interested in expanding its operations to Singapore and wanted to use blue and green as its identification colours. A consulting firm was quick to tell the client that green is associated with death in that country. Packaging of eatables in Malaysia in green packing. Purple colour in Myanmar. Japan and South Korea emphasize the sciences, especially engineering, to a greater degree than do Western countries. Nissan USA doesnt have any extra privileges for its employees according to hierarchy. They do not have privileged parking space and no private dining rooms, the president sits in the same room with a hundred other white-collar workers. For the Chinese, contracts form a useful agenda and a symbol of progress, but obligations come from relationships. McDonalds found this out in Beijing, where it was evicted from a central building only after 2 years despite having a 20 year contract. The incomer had a strong opposition, whereas McDonalds had not kept its in good repair.

 Japanese are likely to say, What has that piece of paper got to do with the situation? If we cant trust each other enough to go ahead without it, why bother? Americans generally consider it impolite to mound food on a plate, make noises when eating. However, some Chinese feel it is polite to take a portion of every food served and consider it evidence of satisfaction. In Saudi Arabia, it is an insult to question a host about the health of his spouse, show the soles of ones shoes, or touch or deliver objects with the left hand. In Korea, both hands should be used when passing objects to another person and is considered impolite to discuss politics, communism. In Korea formal introductions are very important. In both Japan and Korea ranks and titles are expected to be used in addressing hosts. In US, there is not a clear rule on this behavior, except in select fields such as armed forces. In Indonesia it is considered rude to point at another person with a finger. In US bathtub and toilet are likely to be in the same room, however Japanese consider as unhygienic. In Indonesian hotels toilet paper is not found.

HOFSTEDS CULTURAL TYPOLOGY

According to Hofsted cultures of different nations can be compared in terms of four dimensions. The First, power distance, is the extent to which the less powerful members of a society accept-even expect-that power is to be distributed unequally. The Second dimension is a reflection of the degree to which individuals in a society are integrated into groups. In individualist cultures, each member of society is primarily concerned with his or her own interest and those of the immediate family. In collectivist cultures, all of societys members are integrated into cohesive in groups. Masculinity, the Third dimension, describes a society in which men are expected to be assertive, competitive, and concerned with material success, while women fulfill the role of nurturer and are concerned with issues such as the welfare of children.

Femininity, on the other hand describes a society in which the social roles of men and women overlap, with neither gender exhibiting overly ambitious or competitive behavior. Hofstede notes that the first three dimensions refer to expected social behaviour; the fourth dimension is concerned with, in Hofstede words, mans search for Truth. Uncertainty avoidance is the extent to which the members of a society are comfortable with unclear, ambiguous, or unstructured situations. Some cultures express strong uncertainty avoidance with aggressive, emotional, intolerant behavior; they are characterized by a belief in absolute truth. The manifestation of low uncertainty avoidance is behavior that is more contemplative, relativistic, and tolerant.

How to enter Foreign Markets?

Choice of Entry Modes

Non-equity modes

Equity (FDI) modes

Exports Direct Exports

Contractual Agreements Licensing/franchising Turnkey Projects R & D Contracts Co-marketing

JVs Minority JVs 50/50 JVs Majority JVs

Wholly owned subsidiaries Green-fields Acquisitions Others

Indirect Exports Others

Modes of Entry-Advantages & Disadvantages

ENTRY MODES ADVANTAGES DISADVANTAGES

1.Non-equity modes Exports

Documents used in Foreign Trade

Documents are used to record a written evidence of having carried out a transaction in both local and international trade. A list of the various documents required in cross border trade is given below. 1. Commercial Invoice 6. Customs Invoice 2. Bills of Lading 7. Certificate of Origin 3. Marine Insurance Policy 8. Inspection Certificate and Certificate 9. Packing List 4. Bills of Exchange 5. Consular Invoice Commercial Invoice: It is the sellers bill for the merchandise. It contains a description of the goods, the price per unit at a particular location and total value of the goods, packing specifications, terms of sale, terms of payment, identification markets of the packages, bill of lading number, etc. Each exporter designs his own format of commercial invoice.

Bills of Lading: This document is an evidence of shipment of the goods. It is a receipt duly signed and issued by a shipping company acknowledging that the goods mentioned in the document have been shipped or received for shipment and an undertaking to deliver the goods at the agreed destination. Consular Invoice: A consular invoice is a special type of invoice required by some countries for their imports. Such invoices are required by the US, Canada, Philippines and some Middle East countries, etc. It is made out on a prescribed format certified by the consulate of the importing country stationed in the exporters country. The main purpose of it to the importing country is to have authenticated particulars of the goods that are imported into their country. It also facilitates the clearance of the goods at the port of entry by avoiding delay arising from the customs formalities. Customs Invoice: Certain countries such as Canada and the US need customs invoice. Canada has prescribed a specific form of customs invoice of allowing entry of merchandise at preferential tariff rates. The US in addition to the special customs invoice, requires a particular annex to the invoice, for cotton manufacturers.