1st Semester AY 23/24 AISW IB DP

IB Business Management
Topic 4 - Marketing
Chapter 34 - Unit 4.6 - International Marketing
Note: The content of these slides is based on and copied from the official IB Business
Management textbook by Paul Hoang

Mr. Amr Fahmy

1st Semester AY 23/24 AISW IB DP

Topic Outline

Chapter 23 - Unit 4.1 The Role of Marketing

Chapter 24 - Unit 4.2 Marketing planning
Chapter 25 - Unit 4.3 Sales forecasting (HL only)
Chapter 26 - Unit 4.4 Market research
Chapter 27 - Unit 4.5a The 7 Ps of the marketing mix - Product
Chapter 28 - Unit 4.5b The 7 Ps of the marketing mix - Price
Chapter 29 - Unit 4.5c The 7 Ps of the marketing mix - Promotion
Chapter 30 - Unit 4.5d The 7 Ps of the marketing mix - Place
Chapter 31 - Unit 4.5e The 7 Ps of the marketing mix - People
Chapter 32 - Unit 4.5f The 7 Ps of the marketing mix - Processes
Chapter 33 - Unit 4.5g The 7 Ps of the marketing mix - Physical evidence
Chapter 34 - Unit 4.6 International marketing (HL only)
1st Semester AY 23/24 AISW IB DP

Here we are

Chapter 23 - Unit 4.1 The Role of Marketing

Chapter 24 - Unit 4.2 Marketing planning
Chapter 25 - Unit 4.3 Sales forecasting (HL only)
Chapter 26 - Unit 4.4 Market research
Chapter 27 - Unit 4.5a The 7 Ps of the marketing mix - Product
Chapter 28 - Unit 4.5b The 7 Ps of the marketing mix - Price
Chapter 29 - Unit 4.5c The 7 Ps of the marketing mix - Promotion
Chapter 30 - Unit 4.5d The 7 Ps of the marketing mix - Place
Chapter 31 - Unit 4.5e The 7 Ps of the marketing mix - People
Chapter 32 - Unit 4.5f The 7 Ps of the marketing mix - Processes
Chapter 33 - Unit 4.5g The 7 Ps of the marketing mix - Physical evidence
Chapter 34 - Unit 4.6 International marketing (HL only)
1st Semester AY 23/24 AISW IB DP

Assessment Objectives
1st Semester AY 23/24 AISW IB DP

Activity Time

Let’s do it
1st Semester AY 23/24 AISW IB DP

International marketing defined

International marketing is the marketing of a firm’s

goods and/or services in foreign countries.

International marketing can be challenging for businesses because

they need to deal with external factors and constraints such as
differences in political systems, legislation, language and cultures.
Hence, international marketing usually requires an amended marketing
mix to suit local markets.
A lack of understanding of different cultures can prove problematic for
even large businesses
1st Semester AY 23/24 AISW IB DP

Example

Walmart, the world’s largest retailer, had to sell its stores in Germany
to local rival Metro when it discovered that its American practices
(such as helping customers to pack their bags at the supermarket)
were unsuccessful and did not suit the German culture.
1st Semester AY 23/24 AISW IB DP

Opportunities and Threats

International marketing presents both opportunities and threats to

businesses. Opportunities are external factors that create business
prospects or openings for a firm’s growth and development in
international markets.

By contrast, threats are external factors that create challenges and

obstacles for businesses wanting to expand and operate in overseas
markets.
1st Semester AY 23/24 AISW IB DP

The opportunities of entering and operating internationally

1. Increased customer base

2. Economies of scale
3. Increase brand recognition
4. Spread risks
5. Wider distribution channels
6. Extend the product life cycle
7. Gain more profit
1st Semester AY 23/24 AISW IB DP

Increased customer base

The size of a market can be enlarged by marketing products to

overseas buyers. This should lead to greater sales revenue and
possibly higher market share for the business.

Rovio Entertainment, the creators of the Angry Birds franchise,

generates over 95% of its sales revenues from outside Finland, its
home country.
According to its website, Coca-Cola’s products are sold in over 200
countries and territories worldwide, with consumers drinking more than
1.8 billion servings of the company’s beverages each day.
1st Semester AY 23/24 AISW IB DP

Economies of scale

By operating on a larger and international scale, a business is likely to

benefit from cost savings known as economies of scale. These cost-
reducing benefits of larger scale operations can enable growing
businesses to gain higher profit margins and/or to reduce their
prices (thereby giving them a price advantage over their
competitors).

Businesses can benefit from lower production costs by operating in

overseas markets, such as access to cheaper labour and raw
material costs.
1st Semester AY 23/24 AISW IB DP

Increase brand recognition

Having a standardized marketing strategy across the world (such

as using identical packaging and advertising for global brands) not
only reduces average costs of production but can also lead
to greater international recognition of a brand. This can
lead to improved brand loyalty and increased global sales
revenues.
1st Semester AY 23/24 AISW IB DP

Spread risks

By operating in various international markets, a business is less

exposed to the risks in one particular country (such as a recession or
changes in fashion and tastes).

In 2020, China was the largest sales market for BMW, accounting for
around 33.5% of BMW’s sales (which include the Rolls- Royce and MINI
brands). The USA was BMW’s second largest market with 13.2% of the
company’s sales (around 1% higher than domestic sales in Germany).
1st Semester AY 23/24 AISW IB DP

Wider distribution channels

Having a wider distribution channel increases the potential number of

foreign buyers.

Developments in e-commerce have also been an effective way to

reduce the costs and risks of international marketing whilst broadening
distribution channels. Many online retailers, such as Amazon and eBay,
have gained access to foreign markets without having to
physically set up production facilities and retail stores.
1st Semester AY 23/24 AISW IB DP

Extend the product life cycle

A business might find that the domestic market for its product is
saturated or in decline. By marketing the product overseas, the
business can expand its life cycle to generate higher sales revenues.

Many smartphone producers and car manufacturers use this strategy

when selling older models of their products in low-income countries.
1st Semester AY 23/24 AISW IB DP

Gain more profit

Ultimately, all the reasons above for international marketing can help
to generate more profits for the business.

Overseas markets provide a significantly larger source of revenue

so can be financially lucrative. Gaining profit can also come about due
to lower costs of operating overseas.

BMW’s manufacturing plant in Chennai (India’s fourth largest city) helps

the German producer to avoid a 60% import tax on its cars.
1st Semester AY 23/24 AISW IB DP

The threats posed by entering and operating internationally

1. Legal Issues
2. Political Issues
3. Social and demographic issues
4. Economic Issues
1st Semester AY 23/24 AISW IB DP

Legal Issues

Entry into international markets can be a problem due to different

legal systems. For example, cigarette advertising is still permissible in
several European countries, but advertising tobacco products on
television has been banned in the USA since 1971.

Even the same law (such as packaging and labelling

regulation on food products) may have different standards in
different countries. This means it might be more difficult (and
hence more expensive) to sell the same products in overseas
markets.
1st Semester AY 23/24 AISW IB DP

Beyond legislation

Governments can also set up other international trade barriers to

protect their domestic industries.
Intellectual property rights must also be adhered to. This covers
copyright, trademark and patent legislations, including matters such as
brand names, slogans, inventions, creative works of art and processes
already legally assigned to other businesses.
Differences in consumer protection laws must also be observed by
international marketers. Many countries have their own code of
conduct on advertising and packaging information, for example, so
these must be respected
1st Semester AY 23/24 AISW IB DP

International trade barriers (Trade protectionist measures)

1. Tariffs
2. Quotas
3. Embargoes
4. Administrative barriers
5. Subsidies
1st Semester AY 23/24 AISW IB DP

Political issues

The degree of political stability within a country can have a major

impact on whether international marketers succeed in overseas
markets.

For example, trade protectionist measures such as tariffs, quotas

and subsidies for domestic businesses, create major obstacles for
international marketing. Political and social unrest, which can
sometimes spark violent protests, as well as corruption, will destabilize
operational and strategic decisions for international marketers
operating in these countries.
1st Semester AY 23/24 AISW IB DP

Social and demographic issues

Different socio-economic and demographic conditions mean that

businesses may need to reconsider aspects of their international
marketing. For example, Samsung’s product range and prices for its
smartphones will differ when marketing to customers in low-income
countries compared with the products and prices for its smartphones
targeted at customers in high-income nations.

With growing prosperity and income in some parts of the world,

international marketers can target different customers with different
products.
1st Semester AY 23/24 AISW IB DP

Social and demographic issues

Demographics is the study of population trends and it is important for

marketers to recognise that demographic changes will have direct
impacts on international marketing. For example, the median average
age of the population.

Similarly, cultural norms of the population need to be considered. For

example, frozen food products such as microwave-ready meals are
popular in the US and many European countries but are not in most
Southeast Asian nations.
1st Semester AY 23/24 AISW IB DP

Social and demographic issues

Language is another issue that needs to be considered.

Overseas customers in Japan (expatriates and tourists) Vs. those in
Malaysia

Organizations also need to consider societal norms regarding

business etiquette. This refers to the mannerisms and customs by
which business is conducted in different parts of the world.

A final social factor the international marketers need to consider is the

potential threat of pressure groups.
1st Semester AY 23/24 AISW IB DP

Economic issues

International trade also allows citizens to have access to products

that would otherwise be unavailable in their own country because
domestic producers cannot supply certain products in a cost-effective
manner, such as tropical fruits being grown in cold countries. These
arguments can present major international marketing opportunities,
especially for large businesses. However, the main threat in this case is
the high costs of overseas investment, which can harm the cash
flow and profits of the business in the short term.
1st Semester AY 23/24 AISW IB DP

Economic issues

However, international marketing of products also increases the

degree of competition in the marketplace.
Transportation costs, exchange rate fluctuations, interest rates
and communication costs are further economic issues that need to
be considered when marketing products overseas. Furthermore,
marketers need to consider the stability of the economy as this
directly affects the degree of success of international marketing.
During a global financial crisis, for example, most businesses will struggle
irrespective of their marketing strategies, experience and budgets.
1st Semester AY 23/24 AISW IB DP

International marketing and the key concepts

The dilemma facing marketing managers is trying to gain

economies of scale by using a single international marketing
strategy yet still cater for local or regional preferences and tastes.

Firms need to ensure that their international marketing strategies are

carefully researched and planned because failure overseas can be
disastrous to the organization as a whole.

Cultural differences are still widespread so what is ethically

acceptable in one country may not be in others.
1st Semester AY 23/24 AISW IB DP

International marketing and the key concepts

For example, the European Union bans the use of pester power
marketing.

Exporting cultural norms and values is not always an ethical practice.

Globalization is the integration and interdependence

of the world’s economies, resulting in cultures and tastes
converging at an accelerating pace. Pressure groups and the
media have provided another perspective on the negative
impacts of globalization and international marketing.
1st Semester AY 23/24 AISW IB DP

International marketing and the key concepts

“When in Rome, do as the Romans do”

Many businesses choose to use joint ventures and strategic

alliances with local partners, which has proven to be highly practical
for international marketers.

To be a sustainable business, international marketing strategies

need to evolve in response to changing customer preferences
across the world.
1st Semester AY 23/24 AISW IB DP

My dear students,
Thank you, I did enjoy our class today!
I hope you did too :)

Mr. Amr Fahmy

1st Semester AY 23/24 AISW IB DP

Contact

Email
aaly@aiswest.com

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Tuesday at Room 312

I have an open door policy, come and ask for help,

advice, recommendation, or whatever you want,
whenever you need to.