INTERNATIONAL MARKETING

( MS-213 ) By

DR. LOKESH JINDAL

Overview
1. Why Global Marketing is Imperative 2. Globalization of Markets: Convergence and Divergence 3. Evolution of Global Marketing 4. Theories of International Trade and the Multinational Enterprise

Introduction
According to the World Trade Organization (WTO), the worlds five exporting countries were the United States ($781 billion), Germany ($552 billion), Japan ($479 billion), France ($298 billion), and Britain ($284 billion), collectively accounted for 38 percent of global trade in 2002. The Triad Regions (North America, Western Europe, and Japan) of the world collectively produce over 80 percent of world GDP.

Introduction (contd.)
Big Emerging Markets (BEMs): In the next ten to twenty years, BEMs such as the Chinese Economic Area (CEA: including China, Hong Kong Region, and Taiwan), India, South Korea, Mexico, Brazil, Argentina, South Africa, Poland, Turkey, and the Association of Southeast Asian Nations (ASEAN: including Indonesia, Brunei, Malaysia, Thailand, the Philippines, and Vietnam)

Introduction (contd.)
will provide many opportunities in global business.

1. Why Global Marketing is Imperative

Saturation of domestic markets: Domestic-market saturation in the industrialized parts of the world and marketing opportunities overseas are evident in global marketing. Global competition: Competition around the world and proliferation of the Internet are on the rise. Need for global cooperation: Global competition brings global cooperation.

1. Why Global Marketing is Imperative (contd.)

Internet revolution: The Internet and electronic commerce (e-commerce) are bringing major structural changes to the way companies operate worldwide. The term global epitomizes both the competitive pressure and expanding market opportunities. Whether a company operates domestically or across national boundaries, it can no longer avoid competitive pressures from around the world.

2. Globalization of Markets: Convergence and Divergence

International trade consists of exports and imports. International business includes international trade and foreign production. Extensive international penetration of companies is called global reach. International trade and foreign production activities are managed on a global basis. Growth of Multinational Corporations (MNCs) and intra-firm trade is a major aspect of global markets.

3. Evolution of Global Marketing

Five stages in the evolution of global marketing (see Exhibit 1-2): 1. Domestic Marketing (domestic focus; home country customers; ethnocentric orientation). 2. Export Marketing (indirect vs. direct exporting; country choice, exports; ethnocentric orientation; home country customers). 3. International Marketing (markets in many countries; polycentric orientation; use of multidomestic marketing when customer needs are different across national markets).

3. Evolution of Global Marketing (contd.)

4. Multinational Marketing (many markets; consolidation on regional basis; regiocentric orientation; standardization within regions). 5. Global Marketing (international, multinational & geocentric orientation; companys willingness to adopt a global perspective; global products with local variations).

3. Evolution of Global Marketing (contd.)

Global Marketing: Global marketing refers to marketing activities that emphasize the following: 1. Standardization efforts. 2. Coordination across markets. 3. Global integration.

4. Theories of International Trade & the Multinational Enterprise

Theory Absolute Advantage Comparative Advantage Factor Endowment Theory International Product Cycle Theory (see Exhibit 1-4) Economies of Scale

4. Theories of International Trade & the Multinational Enterprise (contd.)

Stages of International Product Cycle Theory: Introduction Stage A U.S. company innovates on a new product in its home country.

4. Theories of International Trade & the Multinational Enterprise (contd.)

Growth Stage Product standards emerge and mass production becomes feasible. Maturity Stage Many U.S. and foreign companies vie for market share in the international markets.

4. Theories of International Trade & the Multinational Enterprise (contd.)

Decline Stage Companies in the developing countries also begin producing the product and marketing it in the rest of the world.

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