Section A

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Half the people in the world have yet to take
their first picture. The opportunity is huge, and
its nothing fancy. We just have to sell yellow
boxes of film.
- George M.C. Fisher CEO, Eastman
Kodak Company
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• If we only distributed pictures in the U.S.,
  wed lose money. It takes the whole world now to
  make the economics of movie-making work
• - William Mechanic
• President, 20th Century Fox

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• International Marketing

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Course- International Marketing
International Business
International Marketing
International Management
International Trade
International Finance
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Section A

• Major problems faced by the firms in
  International Marketing.
• Theories of International Trade.
• International Product Life Cycle.
• Tariff and Non-tariff Barriers
• Positive and Negative aspects of Multinational
  Companies.
• Ethnocentric, Polycentric and Geocentric
  Orientation.
• Trading Blocks- NAFTA, ASEAN, MERCOSUR, EU etc.
• Marketing Mix for International Marketing
• Standardized Marketing mix vs. Customization of
  Marketing Mix.
• Product Adaptation and Modification
• Pricing, Distribution channels,
• Using Marketing Research for International
  Marketing.
• Information needs and Data Sources.

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Section B

• Business promotion in International Arena
  Traditional way, Online Marketing-Need.
• Various Business Models
• Understanding Online Customer
• Challenges, Ethical Issues, Advantages and
  Disadvantages,
• Strategies push technologies, online catalogues.
• BOP and its relevance for Marketing managers
• Role of Government in Export Promotion
• Export Procedures and Documentation
• Custom Formalities Insurance
• Pre-shipment Inspection

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Section C

• Strategic Orientation in International Marketing
• Which Market to enter, mode of entry, expanding
  Base.
• Negotiations with International Customers,
• Partners and Regulators,
• Relations of International Marketing with other
  Departments,
• Strategy for Building a company wide marketing
  orientation,
• Using Intranet and Extranet,
• Introduction to creating a web' page,
• Performance Evaluation

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International Marketing
The process of planning and conducting
transactions across national borders to create
exchanges that satisfy the objectives of the
organizations.
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- Q Why Study International Marketing?

• - A There is a trend toward a global economy!
• No longer enough to look at domestic market
• Markets across the world being sought after by
  more competitors
• Explosion of international trade
• Global linkages become important

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Domestic Marketing Export Marketing MultinationalMarketing International Marketing
Low or no international commitment Focus on domestic consumers and home country environment Domestic focus Limited international commitment Involves direct or indirect export Ethnocentric Substantial internationalcommitment Focus on different international countries Polycentric Extensive internationalcommitment Focus on regionsmarket segments rather than countries Regiocentric Geocentric

Raising commitment/ involvement to international
markets
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Ethnocentric Orientation

• Guided by domestic market extension concept
• Domestic strategies, techniques, and personnel
  are perceived as superior.
• International markets are secondary, regarded
  primarily as outlets for surplus domestic
  production.
• International marketing plans are developed
  in-house by the international division.
• E.g. Disney resort in France Disneyland Resort
  Paris had to adapt it to local preferences
  European fairy tales, food, and dress code for
  staff.

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Polycentric Orientation

• Guided by the multidomestic marketing concept
• Focuses on the importance and uniqueness of each
  international market
• Firms establish independent businesses in each
  target country.
• Fully decentralized, minimal coordination with
  headquarters
• Marketing strategies are specific to each
  country.

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Regiocentric Orientation

• Guided by the global marketing concept
• World regions that share economic, political,
  and/or cultural traits are perceived as distinct
  markets. (e.g. EU, NAFTA)
• Divisions are organized based on location.
• Regional offices coordinate marketing activities.

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Geocentric Orientation

• Guided by the global marketing concept
• Marketing strategies aimed at market segments,
  rather than geographic locations
• Maximizes efficiencies worldwide and provides
  standardized product or service throughout the
  world
• E.g. McDonalds

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International Product Life Cycle
INTRODUCTION GROWTH MATURITY
DECLINE
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Major problems faced by the firms in
International Marketing
within the company outside
Finances Psychological unknown environment Self-Reference Criterion Government Barriers Barriers imposed by International Competition Tariff Non Tariff Barriers
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Major problems faced by the firms in
International Marketing

• Self-Reference Criterion
• Conscious and unconscious reference to own
  national culture while operating in the host
  country. (e.g. eye contact US-Japan)
• To counter the impact of the self-reference
  criterion, the corporation must select
  appropriate personnel for international
  assignments and engage in sensitivity training.

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Major problems faced by the firms in
International Marketing

• Government Barriers
• Restriction placed on foreign corporations by
  imposing tariffs, import quotas and other
  limitations, such as restrictive import license
  awards.

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Major problems faced by the firms in
International Marketing

• Barriers imposed by International Competition
• Blocked channels of distribution
• Exclusive retailer agreements
• Cutting prices
• Advertising blitzes

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• TARIFFS AND NON-TARIFFS BARRIES
• To encourage development of domestic
  industry and protect existing industry,
  governments may establish such barriers to trade
  as tariffs, quotas, boycotts, monetary barriers,
  non-tariff barriers, and market barriers.
• Tariffs- A tariff, simply defined, is a tax
  imposed by a government on goods entering at its
  borders. Tariffs may be used as a
  revenue-generating tax or to discourage the
  importation of goods or for both reasons.
• Quotas-A quota is a specific unit or dollar
  limit applied to a particular type of good.
  Quotas put an absolute restriction on the
  quantity of a specific item that can be imported.

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Nontariff Trade Barriers

• An Introduction to Nontariff Trade Barriers
• Import Quota
• An import quota is a physical restriction on the
  quantity of goods that may be imported during a
  specific period the quota generally limits
  imports to a level below which imports would
  occur under free-trade conditions.
• A common practice to administer an import quota
  is for the government to require an import
  license. Each license specifies the volume of
  imports allowed, and the total volume allowed
  should not exceed the quota.
• Import quotas on manufactured goods have been
  outlawed by the World Trade Organization.

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Nontariff Trade Barriers

• Tariff-Rate Quota A Two-Tier Tariff
• a tariff-rate quota displays both tariff-like
  and quota-like characteristics. This device
  allows a specified number of goods to be imported
  at one tariff rate (the within-quota tariff
  rate), whereas any imports above this level face
  a higher tariff rate (the over-quota tariff
  rate).
• a tariff rate quota is a two-tier tariff.

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Nontariff Trade Barriers

• Domestic Content Requirements
• To limit the practice of outsourcing, organized
  labor has lobbied for the use of domestic content
  requirements.
• The effect of content requirements is to pressure
  both domestic and foreign firms who sell products
  in the home country to use domestic inputs
  (workers) in the production of those products.
• Manufacturers generally lobby against domestic
  content requirements, because they prevent
  manufacturers from obtaining inputs at the lowest
  cost, thus contributing to higher product prices
  and loss of competitiveness.

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Nontariff Trade Barriers

• Subsidies
• National governments sometimes grant subsidies
  to their producers to help improve their trade
  position.
• Governmental subsidies assume a variety of forms,
  including outright cash disbursements, tax
  concessions, insurance arrangements, and loans at
  below-market interest rates.
• Two types of subsidies
• a domestic subsidy which is sometimes granted to
  producers of import-competing goods
• an export subsidy which goes to producers of the
  goods that are to be sold overseas.

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Nontariff Trade Barriers

• Dumping
• Dumping is recognized as a form of international
  price discrimination.
• It occurs when foreign buyers are charged lower
  prices than domestic buyers for an identical
  product, after allowing for transportation costs
  and tariff duties. Selling in foreign markets at
  a price below the cost of production is also
  considered dumping.
• Commercial dumping is generally viewed as
  sporadic, predatory, or persistent in nature.
  Each type is practiced under different
  circumstances.

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The International Marketing Mix
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Foreign environment (uncontrollable)
1
Economic forces
Political/legal forces
Domestic environment (uncontrollable)
2
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Competitive structure
Political/ legal forces
Competitive Forces
(controllable)
Cultural forces
Environmental uncontrollables country market A
Price
Product
3
Channels of distribution
Promotion
Environmental uncontrollables country market B
6
Level of Technology
Geography and Infrastructure
Economic climate
Environmental uncontrollables country market C
4
5
Structure of distribution
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Environment and Marketing mix
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MNCs- Positives negatives

• Advantages of MNC investment
• employment
• balance of payments
• technology transfer
• tax revenues
• Disadvantages
• uncertainty
• power and control by the MNC over the host
• transfer pricing
• the environment

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Trading Blocks

• EU
• NAFTA
• ASEAN
• Brunei, Cambodia, Indonesia, Laos, Malaysia,
  Myanmar, the Philippines, Singapore, Thailand,
  and Vietnam
• MERCOSUR

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Global Marketing Information Systems and
Research

• Information, or useful data, is the raw
  material of executive action. The global marketer
  is faced with a dual problem in acquiring the
  information needed for decision making. In
  high-income countries, the amount of information
  available far exceeds the absorptive capacity of
  an individual or an organization

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SOURCES OF MARKET INFORMATION

• HUMAN SOURCES
• DOCUMENTARY SOURCES
• INTERNET SOURCES
• DIRECT PERCEPTION

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FORMAL INTERNATIONAL MARKETING RESEARCH

• Information is a critical ingredient in
  formulating and implementing a successful
  marketing strategy The process of collecting data
  and converting it into useful information canal
  vided into five basic steps
• identifying the research problem,
• developing a research
• collecting data,
• analyzing data, and
• presenting the research findings.

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MARKETING RESEARCH

• STEP 1 IDENTIFYING THE RESEARCH
  
  PROBLEM.
• STEP 2 DEVELOPING A RESEARCH PLAN.
• STEP 3 COLLECTING DATA.
• Secondary Data
• Primary Data and Survey Research
• Sampling

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MARKETUNG RESEARCH

• STEP 4 ANALYZING RESEARCH DATA
• Demand Pattern Analysis
• Income Elasticity Measurements
• Market Estimation by Analogy
• Cluster Analysis
• Analyzing Results
• STEP 5 PRESENTING THE FINDINGS.

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DISTRIBUTION CHANNELS

• Distribution channels are systems that link
  manufacturers to customers. Although channels for
  consumer products and industrial products are
  similar, there are also some distinct
  differences. Consumer channels are designed to
  put products in the hands of people for their own
  use industrial channels deliver products to
  manufacturers or organizations that use them in
  the production process or in day-today operations.

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DISTRIBUTION CHANNELS

• CONSUMER PRODUCTS
• A consumer products manufacturer can sell to
  customers directly (using a door-to-door sales
  force), through mail-order selling (using a
  catalog or other printed materials), through
  manufacturer-owned or independent retailers, or
  the Internet.
• Door-to-Door Selling
• Manufacturer-Owned Store
• Franchise Operations
• Combination Structures

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DISTRIBUTION CHANNELS

• INDUSTRIAL PRODUCTS
• It summarizes marketing channel alternatives
  for the industrial product company. Three basic
  elements are involved
• the manufacturer's
• sales force agents, and
• wholesalers.
• GLOBAL RETAILING
• Global retailing is any retailing activity that
  crosses national boundaries .

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• THEORIES OF INTERNATIONAL TRADE
• Comparative cost theory
• Adam Smith put forward the theory that
  international trade would occur in situations
  where nations had 'absolute advantages' over
  rival states, i.e. they could produce with a
  given amount of labor and capital larger outputs
  of certain items than any other country.
• David Ricardo, the eminent economist who in
  1817 alleged that trade among nations resulted
  from differences in the 'comparative' advantages
  of countries in the production of various items,
  not differences in absolute advantage.

Item A Item B
3 days labour 4 days labour
6 days labour 5 days labour
Table 1.1 Country 1 Country 2
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• THEORIES OF INT.TRADE
• The Heckscher-Ohlin theory of international trade
• According to the Heckscher-Ohlin theory,
  goods prices differ be production costs differ,
  and production costs themselves depend on the
  amounts and costs of labour, capital and natural
  resources used when making various products. Each
  country possesses a specific mix or labour,
  capital and other 'factor endowments'' some have
  abundant supplies of labour others are rich in
  natural resources etc.
• In other words, differences in factor
  endowments determine differences in comparative
  advantage, which themselves shape the pattern of
  international trade.

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Quick Review

• Major problems faced by the firms in
  International Marketing.
• International Product Life Cycle.
• Tariff and Non-tariff Barriers
• Positive and Negative aspects of Multinational
  Companies.
• Ethnocentric, Polycentric and Geocentric
  Orientation.
• Trading Blocks- NAFTA, ASEAN, MERCOSUR, EU etc.
• Marketing Mix for International Marketing

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• Thank You! ?