Title: Section A
1Half 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
2- 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
3 4Course- International Marketing
International Business
International Marketing
International Management
International Trade
International Finance
5Section 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.
6Section 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
7Section 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
8International Marketing
The process of planning and conducting
transactions across national borders to create
exchanges that satisfy the objectives of the
organizations.
9- 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
10Domestic 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
11Ethnocentric 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.
12Polycentric 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.
13Regiocentric 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.
14Geocentric 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
15International Product Life Cycle
INTRODUCTION GROWTH MATURITY
DECLINE
16Major 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
17Major 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.
18Major 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.
19Major problems faced by the firms in
International Marketing
- Barriers imposed by International Competition
- Blocked channels of distribution
- Exclusive retailer agreements
- Cutting prices
- Advertising blitzes
20- 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.
21Nontariff 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.
22Nontariff 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.
23 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.
24 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.
25Nontariff 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.
26The International Marketing Mix
7
Foreign environment (uncontrollable)
1
Economic forces
Political/legal forces
Domestic environment (uncontrollable)
2
7
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
27Environment and Marketing mix
28MNCs- 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
29Trading Blocks
- EU
- NAFTA
- ASEAN
- Brunei, Cambodia, Indonesia, Laos, Malaysia,
Myanmar, the Philippines, Singapore, Thailand,
and Vietnam - MERCOSUR
30Global 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
31SOURCES OF MARKET INFORMATION
- HUMAN SOURCES
- DOCUMENTARY SOURCES
- INTERNET SOURCES
- DIRECT PERCEPTION
32FORMAL 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.
33MARKETING 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
34MARKETUNG 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.
35DISTRIBUTION 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.
36DISTRIBUTION 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
37DISTRIBUTION 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 .
38- 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
39- 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.
40Quick 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
41