International Marketing

Part II
 How marketing bring peace?
 Peace is more than the absence of war.

 Peace exists when people anticipate and

manage conflicts without violence.

 Peace exists at a personal, community and

national level.
CONT.
 Marketing is an exciting discipline because it
combines the science and the art of business
with many other disciplines.

 Successful marketing provides the promise of

an important quality of life, a better society
and even a more peaceful world.
CONT.
 Increased trade and economic integration
promote civil and political freedoms directly by
opening a society to new technology,
communications, and democratic ideas.

 Along with the flow of consumer and industrial

goods often come books, magazines, and other
media with political and social content.
CONT.
 Foreign investment and services trade create
opportunities for foreign travel and study,
allowing citizens to experience first-hand the
civil liberties and more representative political
institutions of other nations.
CONT.
 Trade requires at least a minimal level of cross-
cultural understanding, communications, and
collaboration.
 The marketplace facilitates not only the exchange
of goods and services, but also of ideas, beliefs,
and customs, including music, food, and fashion.
 The bridges built between people and cultures
through the marketplace foster understanding
and peace.
CONT.
 During colonization time developed countries
engaged in war to obtain raw-materials from the
colonized countries for their industries, because
these countries follow close door policy which
hinders marketing activities.

 In the prevailing time thanks to the emergence of

marketing, people can obtain what they need and
want through exchange process peacefully outside of
their country.
 How marketing improve the living standard
of the societies?
 Marketing is the management process of
anticipating, identifying and satisfying
customer’s requirements.

 Successful market provide jobs and taxes that

support the economy, and they often provide
products or services to the community as
good corporate citizens. 
CONT.
 Marketers create products and services using
research results and a general understanding
of what society needs and wants.

 When we say a better life to a society, it is the

society that wants to satisfy their basic needs
like food, cloth, and shelter.
CONT.
 In today’s world the existence of competitive
market that can allow consumers or buyers
what they need and want at a competitive
price; from this statement we can infer that
society can get the product/ services at
minimum expenditure.
CONT.
 Marketing makes available everything at the
door of the consumers which means that
buyers can get a product or a service that
highly in need of to solve a problem.

 Society problem solved means society’s living

standard is enhanced.
4. Economic Environment
 Economic factors of a country will influence on
international market.

 The economic factors such as standard of living of

the people, progress in economic development,
trade barriers, bilateral and multilateral
agreements with multinational agencies and
other developed and developing countries
influence international business of a country.
5. Technological Environment

 Science and technology make lot of

differences in economic and social life.

 Small and big industries, agricultural and

service and infrastructural sectors, rural and
urban sectors all need technology.
CONT.
 Availability of appropriate technology,
technology development, and technology
absorption influence export businesses very
much.

 Import of technology and development of

indigenous technology are the two eyes for
industrial and business development.
CONT.
 Technology will create alternatives for the scarce or
limited resources.

 Technology is a weapon to fight in the global market

and it is a stepping stone to maximize export business
in the global market.

 If in a country technology is not given due importance,

its businesses will stand no ground in the competitive
world.
6. Ecological Environment
 Businesses are influenced by the natural
resources available in the regions and
balanced exploitation of the natural resources.

 Unless fuel efficiency is ensured right from the

village homes using firewood to big industries,
the world would suffer serious ecological
hazard with all-round pollutions.
CONT.
 Businesses have to, therefore, be concerned
with the ecology and natural environment.

 Now ecological audit is made part of project

appraisal.
7. Geographical Environment
 International businesses are affected by the
soil and sub-soil characters of the area where
these are functioning, the climate factors, the
rainfall, the wind level, etc.

 In fact the type of business that can be

developed in a place is influenced by the
geographical environment.
CONT.
 The geographical environment in the concerned
country makes them to become leaders in the
specific product in the world market.

 Brazil is a leader in the world coffee market.

 India is a leader in the world tea market and

spices market.
8. Cultural Environment

 Cultural factors are important influences of

the export marketing of goods and services.

 Religion, family set up, education and

language are important cultural factors
influencing export marketing.
CONT.
 Businesses are social sub-systems.

 Businesses exist to cater to people’s needs.

 People’s needs depend on their culture.

CONT.
 Values, belief, norms, symbols, festivals,
leisure activities, works preferred, etc are all
cultural or culture-dependent.

 Culture changes, but basic characters remain

the same ever.
CONT.
 Culture varies from region to region and
society to society.

 Businesses try to meet these needs of

different people.

 As culture changes, the businesses have to

change themselves.
CONT.
 Now-a-days cultural change is taking place on
a large scale due to exposure to alien cultures
through media or movement.

 This has enormous business implications in

the export market.
9. Social Environment
 Social environment refers to the social
classification of people, upper, middle and
lower classes on economic basis, community
based classification, social institutions like
family, marriage, societal values like honesty
and various tolerances, etc.
10. Demographic Environment
 The size of the population, age group,
education, and religious composition of
population

 Educational and skill levels of population,

political ideologies and awareness of the
people, values and attitude of the people, etc
constitute the demographic environment.
 Trade Theories
 Whenever a buyer and a seller come together,
each expects to gain something from the
other.
 The same expectation applies to nations that
trade with each other.
 It is virtually impossible for a country to be
completely self-sufficient without incurring
undue costs.
 Why do nations trade?
 A nation trades because it expects to gain
something from its trading partner.
 One may ask whether trade is like a “zero-sum
game”, in the sense that one must lose so that
another will gain.
 The answer is no, because, though one does
not mind gaining benefits at someone else’s
expense, no one wants to engage in a
transaction that includes a high risk of loss.
 CONT.
 For trade to take place, both nations must
anticipate gain from it. In other words, trade is
a “positive-sum game”. Trade is about
“mutual gain.”

 Without trade, a nation would have to

produce all commodities by itself in order to
satisfy all its needs.
 Principle of absolute advantage
 Adam Smith may have been the first scholar
to investigate formally the rationale behind
foreign trade.

 In his book “Wealth of Nations”, Smith used

the principle of absolute advantage as the
justification for international trade.
CONT.
• According to this principle, a country should export a
commodity that can be produced at a lower cost than
can other nations.

• Conversely, it should import a commodity that can only

be produced at a higher cost (if produced by it) than
can other nations.

• It can import a commodity that another country can

produce at a lower cost.
 Principle of comparative/relative/
advantage
 One problem with the principle of absolute
advantage is that it fails to explain whether
trade will take place if one nation has absolute
advantage for all products under consideration.
 According to Ricardo’s principle of relative (or
comparative) advantage, one country may be
better than another country in producing many
products but should produce only what it
produces best.
 CONT.
 Essentially, it should concentrate on either a
product with the greatest comparative
advantage or a product with the least
comparative disadvantage.

 Conversely, it should import either a product for

which it has the greatest comparative
disadvantage or one for which it has the least
comparative advantage.
 UNIT-III

MARKET SELECTION
3.1: Introduction
 One of the most important decisions in international
marketing is market selection.

 Market selection is based on:

1. a thorough evaluation of different markets
2. with reference to certain well defined criteria,
3. given the company resources and objectives.

 Marketing research therefore becomes necessary to

obtain the data required for evaluating the markets.
CONT.
 It is also necessary to prepare a profile of the
selected markets to help the company to
formulate the marketing strategy.

 It may be noted that many of the items of

information contained in the market profile
are collected for the purpose of evaluation of
the markets for market selection.
 3.2: Market Selection Process

Determine Determine Preliminary

International Detailed Evaluation
parameters screening investigation and selection
Marketing for market
Objectives and short
selection listing
 3.1 Market selection process
3.2.1: International marketing objectives

 The first step in any management decision making

process is to determine the objectives.

3.2.2.: Parameters for selection

 For proper evaluation and selection of the markets, it is

essential to clearly lay down the parameters and criteria
for evaluation.
 CONT.
3.2.3: Preliminary screening
 After determining the criteria for market selection,
the next important step in market selection
process is to conduct a preliminary screening of the
markets.

 The objective of the preliminary screening process

is to eliminate the markets which are obviously not
potential enough as revealed by a cursory look.
 CONT.
 The parameters used for preliminary screening may
vary from product to product.

 However, parameters like the size of the population,

per capita income, infrastructural factors, political
conditions, etc. are commonly used.

 Information about some of the factors would enable a

company to eliminate certain markets from its
consideration.
 CONT.
 For example, if the rural areas are not
electrified, there may be no demand for
electrical agricultural pump sets.

 If the household income of the majority of a

population is very low, the demand for costly
consumer durables product will be limited.
 CONT.
3.2.4: Short-listing of markets
 Preliminary screening enables to eliminate markets which
obviously do not merit consideration at the very outset.

 There would be a large number of markets left even after

the preliminary screening.

 They are further screened with the help of more

information than used at the preliminary screening stage.
 CONT.

 The objective is to distill out a small number

of markets which are likely to satisfy the
company’s criteria for market selection for a
detailed analysis for ranking them and final
selection.
 CONT.
3.2.5: Evaluation and Selection

 A through evaluation of the short-listed markets is

done with reference to the specific parameters
and criteria and the markets are ranked on the
basis of their overall attractiveness.

 One or more market(s) is/are selected from the

rank list.
Determination of Market Selection
Firm Related Factors
 A firm whose export objective is only to sell out a
marginal surplus will select a foreign market suited to
serve this purpose.

 Another firm with the same product, which wants to

export a very large quantity, forming a very significant
share of its total output, may have different
consideration than the first firm in market selection.
 CONT.
 In the case of the second firm, as the total
quantity involved is large and as it forms a
significant share of its total output, market
diversification would be important to minimize
the risk.

 Another very important determinant is the

company resources comprising financial,
human, technological and managerial factors.
 CONT.
Market Related Factors
 There are a number of market related factors which need
to be carefully evaluated for market selection.

 The market related factors may be broadly grouped in to

general factors and specific factors.

 General factors are factors general to the market as a

whole where as the specific factors are factors which are
specific to the industry concerned.
 General Factors
 Economic factors: Include factors like
economic stability, income distribution, per
capita income, and others.

 Business Regulations: tax laws; import

restrictions and local content stipulations; and
so on.
 CONT.
 Currency stability: Stability of the national currency
is another very important consideration in the
market selection.

 Political factors: Character of the political system

including the nature and behavior of the ruling
party/parties and opposition party/parties, the
government system etc. and political stability are
among the most important determinants of market
selection.
 CONT.
 Ethnic factors: Ethnic factors like ethnic
characteristics, including ethnic differences,
and their implications for the business, ethnic
harmony etc. should also be analyzed.

 Infrastructure: Infrastructural facilities seriously

affect business. For example, power shortage
could cause considerable production losses.
 CONT.
 Bureaucracy and Procedures: The nature and
behavior of the bureaucracy and the
procedural system or styles are also important
factors to be considered.
 Specific Factors

 Besides the general factors, there are a

number of factors specific to the industry
which needs to be analyzed for evaluating the
market.
 Important specific factors are:

 Nature of competition.
 Government policy and regulations pertaining to
the industry.
 Infrastructure relevant to the industry.
 Supply conditions of raw materials and other
inputs.
 Trade practices and customs.
 Cultural factors and consumer characteristics.
 Market Profile
 Profiles of selected markets are prepared to help
formulate appropriate marketing strategies.

 The term market profile is used in two contexts, it may

refer to the overall profile of a market i.e., the general
characteristics of a nation like the demographic
characteristics, economic characteristics, political
characteristics, economic policies and business
regulations in general, nature and pattern of foreign
trade etc.
 CONT.
 In the other case, the market profile is a description of
relevant characteristics of the market for a specific
product in a country.
 The market profile of product is a fairly detailed
account of relevant market characteristics.
 It provides that information which is needed for the
formulation of the marketing strategy.
 A market profile will, for example, help in the
formulation of appropriate product strategy, pricing
strategy, distribution strategy and promotion strategy.
The market profile for a product should contain the following:

 Competitive characteristics - the competitors,

their competitive strategies, strengths and
weakness of the competitors.

 Market segment characteristics – the number

of segments and their size, the success factors in
each segment, determinants of demand in each
segment, competitive characteristics of each
segment, growth potentials of the segments etc.
 CONT.
 Customer characteristics including tastes and
preferences, attitudes, buying habits, usage
characteristics, etc.
 Promotion characteristics.
 Factors relevant to pricing, laws related to
product, distribution, etc.
 Assignment Two: Individual
Write in Detail About the Following Topics:
1. Export Documents and Shipment
1.1 Export Documents
1.2 Principal export documents
1.3 Export shipping
1.4 Decision areas in shipment
 (Not less than 7 pages). Indicate appropriate reference for
your work.
 Submission date: May 21, 2022

 Submission after the due date have no value.