International

Marketing
Second Edition

Rakesh Mohan Joshi

© Oxford University Press 2015. All rights
reserved.
Chapter 1

© Oxford University Press 2015. All rights

reserved.
 Learning Objectives
• To highlight the significance of international marketing
• To understand globalization and its marketing implications
• To explain the concept of international marketing
• To delineate the evolutionary process of global marketing
• To develop a theoretical background of international trade
• To identify the reasons for entering international markets
• To expound the international marketing framework

© Oxford University Press 2015. All rights

reserved.
Globalization and its Marketing Implications

The breakthroughs in information and communication

technology and means of transport have contributed to the
convergence in tastes and preferences of the consumers around
the world. Besides consumers, competitors too have become
global in their outlook and approach to business and are ready
to experiment and adopt different competitive marketing
strategies in various markets.

© Oxford University Press 2015. All rights

reserved.
 Globalization
• The process of integration and convergence of economic,
financial, cultural, and political systems across the world
brought about by breakthroughs in Information and
Communication Technology (ICT) and means of transport and
the breaking down of artificial barriers to the flow of goods and
services, capital, knowledge, and (to a lesser extent) people
across the borders.

• Globalization of production

• Globalization of markets

© Oxford University Press 2015. All rights

reserved.
 Measuring Globalization

• Trade Openness

• Globalization Index

© Oxford University Press 2015. All rights

reserved.
 Impact of globalization
• Breaking down of marketing boundaries
• Intensifying competition
• Rising economic instability and market volatility
• Ever increasing customer sophistication
• Growing fragmentation of markets
• Increased product diversification
• Shortening of product life cycles
• Proliferation of global brands
• Growing pervasiveness of e-marketing

© Oxford University Press 2015. All rights

reserved.
 The Concept of International Marketing

• International marketing is defined as the marketing activities

carried out across national boundaries.

• Every firm has to operate in a given set of environmental

factors on which s/he has little control.

• Although the fundamentals of marketing remain the same

and have universal applicability, the flexibility of marketing
decisions is limited by a variety of uncontrollable factors, such
as social, economic, political, legal, and technological
environment.

© Oxford University Press 2015. All rights

reserved.
 Domestic Marketing vs. International Marketing
Challenges
Overseas Environmental
Challenges (Uncontrollables)
Economic
Domestic Environmental Political
Challenges
Marketing (Uncontrollables)
Challenges Economic Legal
in country Y
(Controllables)

Socio Product
Marketing
Cultural
Challenges
in country X
Place Price
Consumer
Socio
Political Cultural
Political
Marketing Promotion Legal
Challenges
in country Z Competition Infrastructure

Logistics
Geography

© Oxford University Press 2015. All rights

reserved.
Evolutionary Process of Global Marketing

Domestic marketing

Marketing Focus Domestic

Orientation Ethnocentric

Marketing Mix Decisions Focussed On Domestic

Customers

© Oxford University Press 2015. All rights

reserved.
 Evolutionary Process (Contd)
Export marketing

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

© Oxford University Press 2015. All rights
reserved.
 Evolutionary Process (Contd)

Multinational Marketing

Marketing Focus Consolidation of operations on

regional basis

Gains from economies of scale

Orientation Regiocentric

Marketing Mix Decisions Product standardization within

region but not across the region

© Oxford University Press 2015. All rights

reserved.
 Adaptation

The Critical Success Factor in

International Markets

© Oxford University Press 2015. All rights

reserved.
 EPRG Concept
• Ethnocentric Orientation
• Polycentric Orientation
• Regiocentric Orientation
• Geocentric Orientation

© Oxford University Press 2015. All rights

reserved.
 Theories of International Trade
• Theory of mercantilism
• Theory of absolute advantage
• Theory of comparative advantage
• Factor endowment theory

• Country similarity theory

• Theory of international product life cycle
• Theory of competitive advantage

© Oxford University Press 2015. All rights

reserved.
Reasons for Entering International 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

© Oxford University Press 2015. All rights

reserved.
International Marketing Framework

© Oxford University Press 2015. All rights

reserved.