Seminar – I Report & Viva (536321) Assignment Report

Session: 2009-2010

INTERNATIONAL MARKETING
International marketing is simply the application of marketing principles to
more than one country. However, there is a crossover between what is
commonly expressed as international marketing and global marketing, which is
a similar term. For the purposes of this lesson on international marketing and
those that follow it, international marketing and global marketing are
interchangeable. The intersection is the result of the process of
internationalization. Many American and European authors see international
marketing as a simple extension of exporting, whereby the marketing mix is
simply adapted in some way to take into account differences in consumers and
segments. It then follows that global marketing takes a more standardised
approach to world markets and focuses upon sameness, in other words the
similarities in consumers and segments. So let's take a look at some generally
accepted definitions.
International Marketing
At its simplest level, international marketing involves the firm in making one or
more marketing mix decisions across national boundaries. At its most complex
level, it involves the firm in establishing manufacturing facilities overseas and
coordinating marketing strategies across the globe.

Global Marketing
Global marketing refers to marketing activities coordinated and integrated
across multiple country markets.
The result is a global approach to international marketing. Rather than focusing
on country markets, that is, the differences due to the physical location of
customers groups, managers concentrate on product markets, that is, groups of
customers seeking shared benefits or to be served with the same technology,
emphasizing their similarities regardless of geographic areas in which they are
located.

(Managed by Shri Gangajali Education Society, Bhilai)

JUNWANI, P.O. NEHRU NAGAR, BHILAI-490020 (C.G.) INDIA
(AN ISO – 9001:2000 CERTIFIED INSTITUTION)
Seminar – I Report & Viva (536321) Assignment Report
Session: 2009-2010

International Marketing Environment.

Political
 Is there any historical relationship between countries that would benefit or
hinder international marketing?
 What is the influence of communities or unions for trading? E.g. The
European Union and its authority over European laws and regulation.
 What kind of international and domestic laws will your business encounter?
 What is the nature of politics in the country that you are targeting, and what
is their view on encouraging foreign competition from overseas?

Economic
 What is the level of new industrial growth? E.g. China is experiencing terrific
industrial growth.
 What is the impact of currency fluctuations on exchange rates, and do your
home market and your new international market - share a common currency?
E.g. Polish companies trading in Eire will use Euros.
 There are of course the usual economic indicators that one needs to be aware
of such as inflation, Gross Domestic Product (GDP), levels of employment,
national income, the predisposition of consumers to spend savings or to use
credit, as well as many others.

Socio-cultural
 Culture, religion and society are of huge importance.
 What are the cultural norms for doing business? E.g. is there a form of
barter?
Will cultural norms impact upon your ability to trade overseas? E.g.
Putonghua is very difficult for many western people to learn.

(Managed by Shri Gangajali Education Society, Bhilai)

JUNWANI, P.O. NEHRU NAGAR, BHILAI-490020 (C.G.) INDIA
(AN ISO – 9001:2000 CERTIFIED INSTITUTION)
Seminar – I Report & Viva (536321) Assignment Report
Session: 2009-2010

 Do copyright, intellectual property laws or patents protect technology in

other countries? E.g. China and Jordan do not always respect international
patents.
 Does your technology conform to local laws? E.g. electrical items that run on
non-domestic currents could be dangerous.
 Are technologies at different stages in the Product Life Cycle (PLC) in
various countries? E.g. versions/releases of software.

Tariff and Non-Tariff Barriers.

There are a number of fences that companies need to plan for when initializing
international marketing. Tariff and non-tariff barriers are still very common,
even today.
Tariff barriers are charges imposed upon imports - so they are a form of import
taxation. This could mean that your margins are reduced so much that trading
overseas becomes too unprofitable. However they are normally transparent and
you can plan to take them into account.

Non-tariff barriers are trickier to spot. Governments sometimes act in favour of

their own domestic industries rather than allow competition from overseas.
Bureaucracy is a hurdle often encountered by exporting companies - it takes
many forms and includes unnecessary hold-ups and red tape. Quotas are
another form of non-tariff barrier i.e. restricting the quantity of a product that
can be imported into a particular country
International Marketing and Price
Influences on pricing for international marketing.
The cost of manufacturing, distributing and marketing of product.
The physical location of production plants might influence price. For example,
Toyota have plants in their European market, in the United Kingdom and
Turkey.

(Managed by Shri Gangajali Education Society, Bhilai)

JUNWANI, P.O. NEHRU NAGAR, BHILAI-490020 (C.G.) INDIA
(AN ISO – 9001:2000 CERTIFIED INSTITUTION)
Seminar – I Report & Viva (536321) Assignment Report
Session: 2009-2010

Of course fluctuations in foreign currencies affect pricing. Many companies are

benefiting from a relatively low US Dollar price during the 2010s. This make
imports to the United States expensive, but exports relatively cheap to other
nations. However fluctuations make it very difficult for companies to make
long-term decisions - such as building large factories in global markets i.e.
costs of production are cheap today, but could be expensive in the future,
impacting upon the price that your business is forced to charge.
The price that the international consumer is willing to pay for your product.
own business objectives will influence price. For example, large international
companies such as Starbucks may operate at a loss in some locations but still
need a local presence in order to maintain their economies of scale, as well as
their reputation as a global player.
The price that competitors in international markets are already charging.
Business environment factors such as government policy and taxation.

Grey Markets
A business can expect problems with grey markets where it trades across
national boundaries. So if Company Y is English it will trade in Sterling or
Pound notes. If it trades in the United States during the 2010s, to be
competitive it will need to sell at a reduced price in the US. However, there is
little to stop an entrepreneur from traveling to the US, filling up a transport
container with products, which have been exported from Company Y in
England, then returning them back to England and marketing the same product
at a lower price than Company Y is willing to trade. This is an example of
parallel trade, which is legal - just. Therefore it is known as grey marketing.

(Managed by Shri Gangajali Education Society, Bhilai)

JUNWANI, P.O. NEHRU NAGAR, BHILAI-490020 (C.G.) INDIA
(AN ISO – 9001:2000 CERTIFIED INSTITUTION)
Seminar – I Report & Viva (536321) Assignment Report
Session: 2009-2010

International Pricing Approaches

Export Pricing - a price is set for by the home-based marketing managers for
the international market. The pricing approach is based upon a whole series of
factors which are driven by the influences on pricing listed above. Then
mainstream approaches to pricing may be implemented - see below.
Non-cash payments - less and less popular these days, non-cash payments
include counter-trade where goods are exchanged for goods between companies
from different parts of the World.
Transfer Pricing - prices are set in the home market, and goods are effectively
sold to the international subsidiary which then attaches its own margin based
upon the best price that local managers decide that they could achieve. Then
mainstream approaches to pricing may be implemented - see below.
Standardization versus adaptation - do you use a standard, common approach to
pricing in each market, or do you decide to adapt the price to local conditions?

International marketing and prices

However, international product decision-making often centers around the
standardization versus adaptation debate. Essentially, do we market the same,
standard product in an international market or segment, or do we localize it, and
adapted it so that it pleases local tastes? Here are some of the advantages and
disadvantage of standardization.

(Managed by Shri Gangajali Education Society, Bhilai)

JUNWANI, P.O. NEHRU NAGAR, BHILAI-490020 (C.G.) INDIA
(AN ISO – 9001:2000 CERTIFIED INSTITUTION)
Seminar – I Report & Viva (536321) Assignment Report
Session: 2009-2010

Advantages of Standardization.
International uniformity has its own advantages. As people travel the World,
they can be assured that wherever they go the product that they buy from you
will be same and that it will have the same, standard benefits. This could mean
the components that they buy from you in different local markets as they
themselves become global.
Standardization reinforces positive consumer perceptions of your product. One
of the payoffs of great quality for a single product category is that the
reputation of your product will help you sell more of it. Positive word-of-mouth
pays dividends for brand owners.
Cost reduction will give economies of scale. Since you are making large
quantities or the same, non-adapted product - you benefit from the advantages
associated with manufacturing in bulk. For example, components can be bought
in large quantities, which reduces the cost-per-unit. There are other benefits
relating to economies of scale, including improved research and development,
marketing operational costs, lower costs of investment, and in an age where
trade barriers are coming down - standardization is a plausible product strategy.
Quality is improved since efforts are concentrated upon the single product.
Staff can be trained to enhance the quality of the product and manufacturers
will invest in technology and equipment that can safeguard the quality of the
standardized product offering.
Disadvantages of Standardization.
Since the product is the same wherever you buy it, it is wholly undifferentiated.
It is not unique in anyway. This leaves the obvious opportunity for a competitor
to design a tailor-made, differentiated or branded product that meets the needs
of local segments. Of course products have different uses in different countries
(for example cycling is a leisure activity in some nations, and a form of
transport in others). Local markets have local needs and tastes. Therefore by
standardizing, you could leave yourself vulnerable.

(Managed by Shri Gangajali Education Society, Bhilai)

JUNWANI, P.O. NEHRU NAGAR, BHILAI-490020 (C.G.) INDIA
(AN ISO – 9001:2000 CERTIFIED INSTITUTION)
Seminar – I Report & Viva (536321) Assignment Report
Session: 2009-2010

International Marketing Communications (Promotion)

Marketing communications in international markets needs to be conducted with
care. When promoting products or services in overseas markets. There will be
influences upon our media choice, cultural issues to be considered, as well as
the media choices themselves - personal selling advertising, and others.

Influences upon International Media Choice.

There are a number of factors that will impact upon choice and availability of
media such as:
The nature and level of competition for macros channels in target market.
Whether or not there is a rich variety of media in target market.
The level of economic development in target market (for example, in remote
regions of Africa there would be no mains electricity on which to run TVs or
radios).
The availability of other local resources to assist the campaign will also need to
be investigated (for example, sales people or local advertising expertise).
Local laws may not allow specific content or references to be made in adverts
(for example, it is not acceptable to show naked legs in adverts displayed in
Muslim countries).
And of course a lot depends upon the purpose of the international campaign in
the first place. What are your international marketing communications
objectives?

(Managed by Shri Gangajali Education Society, Bhilai)

JUNWANI, P.O. NEHRU NAGAR, BHILAI-490020 (C.G.) INDIA
(AN ISO – 9001:2000 CERTIFIED INSTITUTION)