Chapter 1: Introduction to

International Marketing

Instructor: Dang Thi Mai Huong (Sarah)

Department of Economics and Management
Email: sarahhuong11@gmail.com
 Learning outcomes

After reading and studying this chapter, you

should be able to answer the following
questions:
1. What are the meanings of the terms
“multinational corporation,” “born-global,”
“home country,” and “host country?”
2. What are the essential ingredients in the
marketing mix as they relate to international
markets, needs, and wants?
3. How have the drivers of globalization
influenced international marketing?

4. How are the factors that create international

marketing complexity linked to creating a
global mindset for marketing activities?
 Chapter Outline

1. The Worldwide Marketplace

2. Types of Global Businesses
3. The Essence of Marketing
4. The Marketing Mix
5. Markets, Needs, Wants
6. Marketing in an International Context
7. The Factors That Create International
Marketing Complexity
1. The Worldwide Marketplace
 International marketing

• International marketing may be defined as the

“utilization” and “adaption” of the best
marketing practices for the purpose of
conducting commerce in other countries.

• It includes conducting commerce with

customers, clients, partners, society at large and
the overall global community.
• Consumers purchase variety of items
over the week
- Buy coffee or tea --- in the morning
- Purchase rise, tofu --- lunch
WHILE others buy fish, chips ----- small
restaurant
- People purchase clothes, electronics --- these
product are increasingly sold by companies in
other countries.
• Globalization has fundamentally change the
ways marketers approach business and how
people consume products.

• Globalization is the process of international

integration arising from the interchange
of world views, products, ideas, and other
aspects of culture.
• Increasing global competition and opportunities
in new countries ---- more choices for
marketers.
• Other countries may have million of new
consumers --- the consumers have chance to try
new products and brands.
• To be successful in the international
marketplace---- marketers learn about new
cultures
• Business partner speak different languages
• Different laws and regulations govern business
activities

• Marketing in an international context

requires comprehension of these and many
other forces and factors
2. Types of Global Business
• Many different types of companies are
international in scope
• Give example……
 1. Multinational Corporations ( MNCs)

Multinational Corporations conduct business

activities at least one other country that differs
from the home country in which the
organization is headquartered.
• Many MNCs operate in hundred of countries.
Example: The Coca-Cola Corporation.
• How many countries sell Coca Cola??
----->…………………………………..
Coca – Cola products and brands in
different countries
 In India

http://www.coca-colaindia.com/our-products/product-list-descriptions/maaza/
 Spain

• Bonaqua Mineral Water

 United States

• Aquarius Spring Bottled Water

 Argentina
• A juice drink
 England (UK)

• Coca-Cola Orange
 Types of Global Businesses

 Born-global firms: Businesses that operate in

two or more different countries from inception.
- Skype (Internet/software application)
- Mavi (Clothing)
- HTC (Smartphones)
- These firms from Estonia, Turkey, Taiwan and
Australia, respectively, are all "born global“
companies
 Types of Global Businesses

• Home country is the nation in which the

business is located or the country that houses
the company’s main headquarters.’
*Example: Nestle’s home country is Switzerland
• Host country is the nation being targeted for
expansion
*Example: If Nestle’s decides to enter the nation
of Belarus by selling its chocolate products,
Belarus becomes the host country
3. The Essence of Marketing
 The Essence of Marketing

• Definition of Marketing:
Marketing may be defined as “ discovering consumer
needs and wants, creating the goods and services that
meet those needs, and then pricing, promoting and
delivering those goods and services”.
• The American Marketing Association (AMA)
notes that marketing activities include a set of
institutions, and process for creating,
communicating, delivering, and exchanging
offerings that have value for customers, clients,
partners, and society at large.
4. The Marketing Mix
 The Marketing Mix

• Marketing Mix which consists of the major

activities used to develop and sell goods and
services.
• The four Ps of the marketing mix are product,
price, place (or distribution), and promotion.
 The Marketing Mix

Product A good or service that satisfies

consumer needs by providing
value
Price The value of what is exchanged in
return for the product
Place (or Movement of the product from the
distribution) seller to the buyer
Promotion Communication of product value
from the buyer to the seller
• Effectively combining and managing 4
components of marketing----develop product
consumer desire.

• Price set at a level consumers are willing to pay.

• Product --- distributed ---allows consumers to

make purchase.

• Item--- promoted in manner --- makes consumer

aware of product.
5. Markets, Needs and Wants
 Markets, Needs and Wants

• A market consists of people with wants and

needs, money to spend, plus the willingness
and ability to spend money on those wants and
needs.
 Markets, Needs and Wants

• Needs are the necessities of life that all human

require for their survival and well-being.
Abraham Maslow’s hierarchy of needs
approach suggests that physiological needs
include food, clothing, shelter, air, water, and
sex for the purposes of survival
Maslow’s hierarchy of needs
 Markets, Needs and Wants

• Wants are specific expressions of needs

through the desire for specific objects.
* Example: A luxury car may be something that
the majority of consumer want. Only a small
subset of consumers has the financial ability
to satisfy this desire due to the product’s high
price.
 Markets, Needs and Wants

• Demand reflects the amounts of a goods or

services that consumers will purchase at
various price level.
* Example: A higher-priced car has a smaller
demand because fewer consumers are willing
and able to pay what is needed to buy the
product.
 Segmentation, target markets and
positioning (STP)

• Any given product --------- different types of

customers who might wish to buy it, may use
same product such as using baking soda for
baking or as a tooth cleanser.
• Consumers demand
• want ---- products--- needs,
attitudes and interest ---------> Market
segmentation
• International marketers ----- consider --------
differences in nationalities and customs ---------
identifying market segments.
• A target market specific --------- seek
to reach identifiable
• The marketing mix helps establish positioning --
--- creating a perception in consumer’s mind ----
- nature of company & its product relative to
competitors.
Product Price

Target Market

Place Promotion
(Distribution)

The Marketing Mixed Applied to Target Markets

6. Marketing in an International Context
 Marketing in an International Context

1. The Drivers of Globalization

2. The Factors That Create International
Marketing Complexity
 1. The Drivers of Globalization

• Channels of Communication
• Lower Transportation Costs
• Immigration and Emigration Patterns
• Governmental Action
 Channels of communication

• The methods consumers use to communicate

with companies are changing, as are the
methods consumers use to communicate with
one another.
• New channels of communication such as:
social networks--- allow consumers to gossip
about product.
• Customers – go online to register thoughts with
companies about products.

• Ex: A customer might inquire about the correct

method to use a new soap or cleaning agent for
a shower or tub. Website FAQs (frequently
asked questions) make it easier to explain
product benefits and uses to a wider audience,
especially when the website has been translated
into more than one language
 Lower transportation Costs

• Reduced shipping costs make it possible for a

greater number of companies to enter markets
• Unilever sells a large number of personal
grooming products around the world. Each
can be adapted to the specific needs of a
culture, region, or infrastructure. Salespersons
from Unilever are now able to travel to remote
places seeking out new markets.
 Immigration and Emigration Patterns

• As a group of people moves from one country

to another.
• It presents marketing opportunities. Someone
who has moved into a new country may still
desire products from her former home. If a
sufficient number of individuals who have left
a country share the same want, a company may
be able to export that product to their new
home.
 Governmental actions

• Governments play an important role in

increasing connections between countries. One
governmental action has been to reduce barriers
to commerce.
• Market liberalization, another form of
governmental action, refers to the removal of
governmental control over economic activity.
• Countries that were part of the former Soviet
Union, and nations in Eastern Europe, China
and Vietnam, have all experienced some form
of market liberalization.
• Typically, liberalization means the government
remove barriers to trade and opens market to
competition.

• Market such as China have become primary

destinations for foreign investments. China has
become a leading global exporter as a result.
 7. The Factors That Create
International Marketing Complexity
• Marketers face an increasingly complex
global context for many business decisions.

• Complexity ---found in differences--- in

business environments --- within each
country.
• Each country has distinct differences, as
summarized in the following figure:
Culture
Language
Political and legal systems
Economic systems
Infrastructure
7.1. Culture:
Culture: beliefs, customs and attitudes of a
distinct group of people.

Culture exhibits-----powerful influence on all

aspects of international marketing.

Finding local partner----navigate differences

when expanding operation into a new country.
• Culture----strongly influence product
positioning.
• Culture plays an important role in the
promotion of products.
• To be successful---marketing communication
(advertising, social media, sell promotions,
personal selling activities -----> should account
for cultural differences.
7.2. Language: the system used to communicate
between peoples, including verbal and nonverbal cues.

• Consumers may know one or more languages that

differ from the home country

• The movement of products across boundaries may

require translation and adaption of advertising, labels
on products and basic communication between host
country and home country marketers.
7.3. Political and legal systems:
• Political systems are administered by the
people in a government who posses power and
maintain the country’s power structure.
• Types of political systems: democracies,
authoritarian governments and anarchies.
• Governments create laws that regulate
commerce and establish trading
7.4. Legal system: constitute the methods for
applying and implementing the laws of a
country.
• Legal system include common law, civil law
and theocratic law.
• Governmental activities through both
regulations and actions of governmental
official (what marketers can do within a
country’s borders).
• Both political and legal issues influence the
adaption or changing of products when
entering new countries.
7.5. Economic systems: The means by which a
company allocates resources, goods, and
services to citizens its economic systems.
Types of economic systems include capitalist,
communist and mixed structures.
7.6.Infrastructure: consists of the organizational and
physical structures that are essential for societies to
operate.

Examples of the presence or lack of infrastructure

include the availability of roads, the degree of Internet
access, the percentage of the population owning cell
phones, the quality of educational institutions and the
availability of water, electricity and natural gas.
• A poor infrastructure can increase production
and marketing costs.

• Roads in India, as one example, are notorious

for being undeveloped and crowded. Infosys
Technology Ltd,. a leading Indian technology
firm , spent $5 million in 2006 to pay for a fleet
of buses, minivans and taxis to transport its
employees in Bangalore.
 Terms
International Marketing Needs
Multinational Corporations Wants
Born-global firms Demand
Home country Market segmentation
Host country Target market
Marketing Positioning
Marketing mix Differentiation
Market Globalization
Culture Economic systems
Language Infrastructure
Political systems Sustainability
Legal systems
 Review questions

1. Define international marketing and marketing?

What is the difference between them?
2. What are the four components of the marketing
mix?
3. Define a market and given an example.
4. What is the difference between needs and
wants?
5. Define globalization and identify the four
drivers of this process?
6. What are the five factors that create
international marketing complexity?
7. Define culture.
8. Describe how language might influence
marketing.
 Discussion questions

1. The marketing mix is manipulated to meet target

market needs and wants. How might the following
companies use this process to satisfy customers?
• Sony
• Hyundai
• Unilever
• Coca Cola
• P&G
• Samsung
2. There are four main drivers of globalization: (1)
channels of communication, (2) lower
transportation costs, (3) immigration and
emigration patterns, and (4) governmental
actions. How have these forces influenced your
own life? Consider both your social life and
your interaction with businesses
3. Identify, in simple terms, differences in the factors
creating international marketing complexity for the
following countries. These factors are culture,
language, political and legal systems, economic
systems and infrastructure.
India Slovenia
Brazil Mongolia
Kenya Indonesia
Thank you