IM unit 01

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Prof.Mukul Mishra

Introduction to International Marketing

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Prof.Mukul Mishra 2

Globalization

Defined as process of economic integration of theentire world through the removal of trade barriers

and capital mobility as well as through diffusion ofknowledge and information.

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Globalization of Production evaluating various locations

worldwide so as to take advantage of local resources andoptimize manufacturing competitiveness.

Globalization of Markets emergence of a borderless worldwith advances in telecom, transportation, internet

.standardized products from global brands like SONY bought

by customers all over the world.

Globalization

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Lets Define Marketing

Kotler The human activity directed at satisfyingthe wants and needs through exchange process.

AMA Process of planning and executing theconception , pricing, promotion and distribution

of ideas, goods and services to exchanges that

satisfy individual and organizational goals.

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International Marketing Defined

Cateora performance of business activities designed toplan, price, promote and direct the flow of companys

goods and services to consumers or users in more than one

nation for profit.

Keegan Global Marketing is the process of focusing theresources and objectives of an organization on global

marketing opportunities and needs.

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International Marketing ?

Thus International Marketing involves:

Identify needs/wants of international customers in

different countries. Modify Marketing Mix(4Ps) keeping in view consumer

behaviors in different countries and companys

objectives.

Using various modes of entry to penetrate

international markets. Evaluate dynamic international marketing

environment and take appropriate decisions.

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The International Marketing Task

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The Self-Reference Criterion and Ethnocentrism

The key to successful international marketing is

adaptation to the environmental differences

from one market to another. Primary obstacles to success in international

marketing:

SRC

Associated ethnocentrism

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The Self-Reference Criterion and Ethnocentrism(continued)

SRC is an unconscious reference to ones own culturalvalues, experiences, and knowledge as a basis for decisions.

Ethnocentrism is the notion that ones own culture or

company knows best how to do things.

Dangers of the SRC:

Failing to recognize the need to take action

Discounting the cultural differences that exist

among countries Reacting to a situation in a way offensive to your

hosts

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The Self-Reference Criterion and Ethnocentrism(continued)

Ethnocentrism and the SRC can influence an

evaluation of the appropriateness of a

domestically designed marketing mix for a foreignmarket.

The most effective way to control the influence of

ethnocentrism and the SRC is to recognize theireffects on our behavior.

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Framework for Cross-cultural Analysis(Adaptation)

1. Define the business problem or goal in home-countrycultural traits, habits, or norms.

2. Define the business problem or goal in foreign-countrycultural traits, habits, or norms through consultation withnatives of the target country. Make no value judgments.

3. Isolate the SRC influence in the problem and examine itcarefully to see how it complicates the problem.

4. Redefine the problem without the SRC influence andsolve for the optimum business goal situation.

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Developing a Global Awareness

Tolerance of cultural differences:

Understanding cultural differences and accepting and working

with others whose behavior may be different from yours

Knowledge of cultures, history, world market potential, and global

economic, social, and political trends

Approaches to global awareness:

Select individual managers specifically for their demonstrated

global awareness

Develop personal relationships in other countries Have a culturally diverse senior executive staff or board of

directors

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Reasons for Entering Foreign Markets

Growth

Profitability

Achieving economies of scale

Risk spread

Access to imported inputs

Uniqueness of product or services

Marketing opportunities due to life cycle

Spreading R&D cost

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Evolutionary process of global marketing

There are five identifiable stages in the evolution of

marketing across national boundaries( Ref. Global

Marketing Management by Kotabe & Helsen)

1. Domestic Marketing:

Before entry into foreign markets

Marketing Focus-Domestic

Marketing Mix Decisions-Focused on Domestic Customers.

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Strategy- based on information about needs/wants of domesticconsumers, industry trends, economical, technological, politicalclimate at home.

Competition-look at domestic competition

Orientation-Ethnocentric (pay little attention to changes in globalmarketplace e.g. changing lifestyles, market segments, emergingcompetition & better products yet to arrive in domestic market)

Firm vulnerable to sudden changes forced upon it by competition.

E.g. U.S automobile & consumer electronics industry suffered fromits ethnocentrism in 1960s & 1070s ( neglected imminentcompetition from Japanese low cost manufacturers)

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2. Export Marketing :

Begins with unsolicited orders from foreign customers.

Reluctant at first, gradually learns the benefits ofoverseas marketing.

Motivators-additional marketing outlets, risk spread,more profitability

Early export marketing stage indirect exporting ( usetrading house services)

Later stage as firm gains know how & experience exports directly.

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Marketing Focus - overseas (targeting and

entering foreign markets)

Orientation-Ethnocentric Marketing Mix Decisions-

focussed mainly on domestic customers

overseas marketing-generally an extension of domestic

marketing

decisions made at headquarters

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3. International Marketing:

Firm caters to specific needs or few overseas markets( noticeable market share)

Orientation-Polycentric ( product/promotional

adaptation): firm realizing that there existsconsiderable cultural difference across markets

Operation in each market viewed independently.

Competition- fiercely competitive marketing

strategies by competition. Firm may : allocate a potion of manufacturing for

exports/set up manufacturing abroad to utilizeinexpensive resources & be closer to consumers.

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Marketing Focus-Differentiation in country markets by wayof developing or acquiring new brands.

Marketing Mix Decisions-

Developing local products depending upon country needs.

Decisions by Individual subsidiaries.

Multi Domestic Marketing :

Extreme form of International Marketing

Independent foreign subsidiary in each and every foreign market.

Subsidiaries operate independently without headquarter control. Product development, manufacturing ,marketing all executed for

local market by subsidiary.

Few economies of scale benefits.

Useful only if consumers differ across national markets

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4. Multinational Marketing:

Firm realizes benefits of economy of scale in product

development, manufacturing & marketing by

consolidation on regional basis.

Orientation-Regiocentric ( product planning may bestandardized within a region but not across)

Marketing Mix Decisions-Product standardization

within regions but not across them

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5. Global Marketing: International/Multinational Orientation

results in market fragmentation worldwide (higher costs)

Global Marketing refers to:1. Standardization efforts- marketing programs across

different countries ( product offering, promotional mix,

price & channel structure)

2. Coordination across Markets-reducing cost inefficiencies

& duplication of efforts among national and regional

subsidiaries)

3. Global Integration-gain competitive leverage and

effective integration of firms competitive campaigns

across these markets.

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Marketing Focus-Consolidating firms

operations on a global basis

Orientation-Geocentric

Marketing Mix Decisions- Globalization of Marketing Mix Decisions with

local variations.

Joint Decision making across the firms global

operations.

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EPRG Concept

The orientation of firms personnel affects the ability of

a company to adapt to a foreign marketing environment

Behavioral attributes-EPRG Framework

Degree of Internationalization

Management commitment

Influences International strategies of firm

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EPRG Concept

1. Ethnocentric Orientation: Belief that ones own culture is superior to others

Managers believe that domestic marketing strategy willwork in foreign markets too

Ignore environmental differences between markets

Firms generally do domestic marketing/export marketingas an extension of domestic marketing

Ethnocentric companies market their products in countrieswhere demand is similar to home markets

Generally used to dispose surplus production in overseas

markets Goods manufactured domestically/decisions taken at

headquarters.

Difficult to sustain once sizeable market share attained.

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EPRG Concept

3. Regiocentric Orientation: Firm treats a region as a uniform market segments

similar marketing strategy for the region

E.g., McDonaldss doesnt serves pork and slaughters

animals through Halal Process in Middle East.

4. Geocentric Orientation:

Firm considers entire world as a single market and

formulates integrated marketing strategies. Similarities identified between markets for uniform

marketing strategy formulation.

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THANK YOU!!

IM unit 01

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