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Section A

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Half the people in the world have yet to take their first picture. The opportunity is huge, and it s nothing fancy. We just have to sell yellow boxes of film. – PowerPoint PPT presentation

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Title: Section A


1
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
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
  • International Marketing

4
Course- International Marketing
International Business
International Marketing
International Management
International Trade
International Finance
5
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.

6
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

7
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

8
International 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

10

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
11
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.

12
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.

13
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.


14
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

15
International Product Life Cycle
INTRODUCTION GROWTH MATURITY
DECLINE
16
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
17
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.


18
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.


19
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


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.

21
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.

22
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.

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.

25
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.

26
The 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
27
Environment and Marketing mix
28
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

29
Trading Blocks
  • EU
  • NAFTA
  • ASEAN
  • Brunei, Cambodia, Indonesia, Laos, Malaysia,
    Myanmar, the Philippines, Singapore, Thailand,
    and Vietnam
  • MERCOSUR

30
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

31
SOURCES OF MARKET INFORMATION
  • HUMAN SOURCES
  • DOCUMENTARY SOURCES
  • INTERNET SOURCES
  • DIRECT PERCEPTION

32
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.

33
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

34
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.

35
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.

36
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

37
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 .

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.

40
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

41
  • Thank You! ?
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