International

INTER
NATIO
Marketing
NAL
MARK
Management Dr
ETING
Gautam
MANA
Dutta
GEME
BE, MBA,
NT
PhD (IIT)
Gautam Dutta
BE, MBA, PhD (IIT)

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 Objective of the course

Gain perspectives of international marketing; how is it

different from domestic marketing?
Familiarity with the environmental issues of marketing
beyond national boundaries.
Understand the entry modes for international markets
Expand knowledge about global marketing information
system and research
Analyse international marketing mix decisions

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 Session Plan:

15 Sessions of 120 Minutes Each

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 Framework
The Concept of International Marketing (1)
The International Marketing Environment(2)
Assessing Opportunity & Selection of Markets (2)
Global Market Entry Strategy (3)
Product & Branding Decision for International Markets (2)
Pricing Decisions for International Markets (1)
International Distribution Decisions (1)
Promotional Decisions for International Markets(1)
Research In International Marketing(1)

International Marketing: Strategic Aspects (1)

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 Text Book : Global Marketing Management.
Svend Hollensen
Selected Reading on International Marketing

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 Selected Readings on International
Marketing

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READINGS
MODULE 1:The Concept of International Marketing
• Globalization of Markets. Theodore Levitt
• Managing in a borderless world by Kenichi Ohmae
MODULE 2 & 3The International Marketing Environment
• An integrative framework for cross cultural consumer behaviour by Luna and
Gupta
MODULE 4 & 5 : Assessing Opportunity & Selection of Markets
• Market selection for international expansion by Sema, Eckman and Hyllegard
• Guide line for export market research by Cavusgil
MODULE 6 & 7 : Internationalization Theories & Entry Choices
• Selecting overseas markets and entry modes: two decision processes or one?
By Koch
• The mechanism of internationalization by Johansson and Valne
• Theory of internationalization and their impact of market entry by Jeryl
Whitelock
• Theory Development within International Market Entry Mode - An Assessment
by Flemming Cumberland
• An Eclectic Theory of the Choice of International Entry Mode Author(s): Charles
W. L. Hill, Peter Hwang, W. Chan Kim

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READINGS
MODULE 8 & 9: Product and Branding Decision for International Markets
• International product positioning by Johansson and Thorelli
• The International Dimension of Branding: Strategic Considerations and Decisions
MODULE 10: Pricing Decisions for International Markets
• International pricing decisions: A diagnostic approach by Samli
• The importance of price in international business development
MODULE 11: International Distribution Decisions
• Distribution in Japan; problem and changes by Michael R. Czinkota
• International manufacturing and location designs: balancing configuration and co ordination
aspects.
MODULE 12: Promotional Decisions for International Markets
1. Standardization versus adaptation of international advertising strategies: Towards a framework

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 Evaluation
• Quiz (Two) (at the end of 7th and 14th module) 15%
• Case Presentation and discussion 15%

• Assignments 30%
• End term examination 40%

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 GROUP WORKS

Case Analysis: 9 cases

Assignment: 9 (Each group will select one out of the list
on first come first serve basis )

Submission of assignment

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 Submission of Assignments

Date:

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 Elements of Marketing –
Customer Value

V = Benefit / Price

V = Value
B = Perceived Benefits – Perceived Costs
P = Price

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The Three Principles of Marketing

CUSTOMER VALUE

DIFFERENTIATION FOCUS

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 Marketing beyond national border
Company Domestic market Sales in foreign
market(%)
Nokia 99
Audi
68
Clarion , Japan 48
Apple 41
E bay 35
Papa John’s 1

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 Motives
Proactive motive :
• Profit and growth goals
• Managerial urge
• Technology competence
• Foreign market
opportunities
• Economies of scale
• Tax benefits
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Reactive motive:
• Competitive pressure
• Domestic market saturated
• Overproduction
• Extend sales of seasonal
product
• Proximity to international
customer.
 Marketing internationally is continued
1. Greater purchasing power among peoples of the world
2 Technological advances bringing the world “closer together” such
as satellite TV, wide reaching print media, fax, phone systems,
the Internet, faster and cheaper modes of travel, etc.
3. Increasing commonalities of wants, needs, preferences
4.Higher fixed costs of doing business, thus requiring large
customer bases to achieve economies of scale and scope
5.Decrease of trade barriers and feelings of intense nationalism
6.Increasingly common and quality infrastructures and channels of
distribution
7.Regional trading areas with large internal markets
8.More uniform product standards

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 Internationalization of marketing activities
basic marketing
multidomestic marketing
international marketing
global marketing
glocal marketing

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The Multinational Phase: World War II - 1970

Marketing were not very much developed

Due the sheer need of the people, products were
marketed.
The STP as tool came at the fag end of 1950. The 4P
of Macarthy came early in early 1960. Product
positioning in the perceptual map became popular
only in late 1960 onwards. From 1960-1970.
Multinational marketing was popular where products
and promotions have local adaptations and they
are produced in different countries of world under
the close observation and control of headquarters.

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 Global Phase: From 1970
The global phase saw much more standardization of
product with much more integration of activities
across the countries of the world.
Robert Buzzell’s (1968) article “Can You Standardize
Multinational Marketing ” Theodor Levit’s (1983) “The
Globalization of Market” arguing that markets across
the world are growing more homogenous set the
pace.

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Marketing characteristics Product pricing distribution Advt,
design promotion
Physical environment
packaging
Stage of eco dev
Cultural factor
Industry condition
Stages of PLC/competition

Marketing institutions

Legal restriction

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 Global Marketing ?
Local & domestic International marketing & Multi national
marketing strive to marketing strive to maximize marketing
maximize marketing activities in terms of
activities exclusively in primarily Secondarily
terms of

Adaptation to domestic Standardization across Adaptation to country

situation countries specific need
Tailoring to the need Homogenization Tailoring to the need
Difference within the Similarity across the Difference within
country countries each country
Concentration within Activity concentration Activity Diffusion
national territory
Dependence Dependence on home Independence of
country home country
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 Global Marketing ?
Global marketing strive to
maximize marketing activities
exclusively in terms of
Standardization across
countries
Homogenization
Similarity across the countries Similarity vs Difference across the
Activity diffusion
Dependence on countries of
specific interest
Synchronization
Integration
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Glocal marketing strive to optimize
marketing activities with balance and
harmony in terms of
Standardization vs Adaptation to
country specific need
Homogenization vs Tailoring to the
need
countries
Activity concentration vs Activity
Diffusion
Dependence on home country vs
Independence of home country
Synchronization vs Flexibility
Integration vs Separation
 Existence of Multi-domestic market.
Japanese customers are fastidious and examine
products carefully before purchase whereas
Americans are impulsive and more or less responds
to in store promotion techniques.
Japanese prefers rice and dried fish in breakfast but the
European prefers ham, cheese, coffee
Tea is the standard drink of Chinese dinner while low
alcohol content beer is common for the Swedish
dinner while drinking beer with food is a strange thing
for the French people.
Thin soled shoes are preferred by the stylish
Mediterranean people but thin soled shoed are not
liked by the Americans.
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Country borders are not important segment limit
Gaps in lifestyle ,tastes, behaviors are narrowing
across the globe
Business customers are increasingly having central
purchasing function.
As customers are traveling across countries and are
exposed to the best products, recognizing ability
of best products, brands, are increasing.
As per Prahalad and Hamel (corporate imagination
and expeditionary marketing, 1991, HBR) new
product lead and change preference. (Indian
breakfast are changing fast)
With increasing global communication and
affluences, many multi domestic product markets
are giving away to global products. Affluence lead
to a desire of variety.
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Global market participation Vs Marketing continuum

To have a global level of market participation requires

significant global market share, a reasonable balance
between the business’s geographic spread and the
market’s spread and presence in globally strategic
country markets.
High global market share is important but not the
sufficient for global market participation. a global
business need to have its geographic distribution of
revenues in reasonable balance with that of the
worldwide market.

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Marketing Program Standardization
Product design,
Product positioning,
Brand name,
Packaging,
Retail price,
Basic advertising message,
Creative expression,
Sales promotion,
Media allocation,
Role of sales force,
Management of sales force,
Role of middlemen,
Type of retail outlets,
Customer service
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 Global Market Participation: Requirements?
Transferable business model
The model needs to be transferable in different countries
with more or less same effectiveness.
Business model need to change the customer behavior in
other countries.
The transferability makes the journey from country to
country easy or other wise business model that requires
adaptations finds globalization difficult (Model difficult to
export
E.g. Benetton Vs Marks & Spencer

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 Leverageable competitive advantage
1. Customer market dominance
Xerox , Virgin group
2. Product/ service advantage
Minor Items:
Major Items:

:
3. Value Chain Advantage:
3M and American express

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 Leverageable competitive advantage
Asset/Resources

Partner Advantage
Scale and scope advantage
World car industry. Most car companies use similar
engine and gear boxes across their entire product
ranges so that different model have similar engine
and gear boxes. This generates cost savings

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 3. Participation in the lead countries
Position in the lead country is the surrogate for
excellence in quality, innovativeness.
Japan: consumer electronics
Germany: industrial control equipments
India : Computer software

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1. In general, standardization is more practical in markets that are
economically alike.

2 Standardization strategy is more effective if worldwide customers,

not countries, are the basis of identifying the segment(s) to serve .
3 The greater the similarity in the markets in terms of customer
behavior and lifestyle, the higher the degree of standardization.

4 The higher the cultural compatibility of the product across the host
countries, the greater the degree of standardization.
5. The greater the degree of similarity in a firm’s competitive positions
in different markets, the higher the degree of standardization

6 . Industrial and high technology products are more suitable for

standardization than consumer products,

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7. Standardization is more appropriate when the home market positioning
strategy is meaningful in the host market.

8. The greater the difference in physical, political, and legal environments

between home and host countries, the lower the degree of
standardization.

9 The more similar the marketing infrastructure in the home and host
countries, the higher the degree of standardization .
10 Companies in which key managers share a common world view, as
well as a common view of the critical tasks flowing from the
strategy, are more effective in implementing a standardization
strategy.
11. The greater the strategic consensus among parent- subsidiary
managers on key standardization issues, the more effective the
implementation of standardization strategy.
12 The greater the centralization of authority for setting policies and
allocating resources, the more effective the implementation of
standardization strategy

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HIGH
PHARMACEUTICALS
MICRO CHIPS
FORCES

MILITARY
AUTOMOBILE AIRCRAFT
BULK
CHEMICALS TELECOMMUNICATION
GLOBALISATION

EQUIPMENT

CIVIL TELECOMMUNICATION
AIRCRAFT SERVICES

PACKAGED FOODS

RETAIL BANKING

LOW FOOD RETAILING

LOW LOCALISATION FORCES HIGH

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 Global Marketing : Controllability
Foreign environment
(uncontrollable)

Political/legal 1 Economic
forces forces

Domestic environment
(uncontrollable) 2
7
Competitive
Political/
structure Competitive
legal (controllable)
Cultural forces Forces
forces
Environmental
Product Price
uncontrollable
country market A
7 3
Channels of Promotion Environmental
distribution uncontrollable
6
country
market B

Geography Level of
and Economic climate Technology
Environmental
Infrastructure uncontrollable
4 country
5 market C
Structure of
distribution

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 Organizational Orientation

EPRG Concept

Ethnocentric

Polycentric

Regiocentric

Geocentric

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 Strategic Orientation: EPRG Schema
Generally, four distinctive approaches dominate strategic thinking:

1. Ethnocentric or Domestic Marketing Extension Concept:

Home country marketing practices will succeed elsewhere
without adaptation; however, international marketing is
viewed as secondary to domestic operations

2. Polycentric or Multi-Domestic Marketing Concept:

Opposite of ethnocentrism
Management of these firms place importance
on international operations as a source for profits
Management believes that each country is unique and
allows each to develop own marketing strategies locally

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 Strategic Orientation: EPRG Schema
Generally, four distinctive approaches dominate strategic thinking:

3. Regiocentric:
Sees the world as one market and develops a standardized
marketing strategy for the entire world

4. Geocentric:
Regiocentric and Geocentric are synonymous with a Global
Marketing Orientation where a uniform, standardized
marketing strategy is used for several countries, countries in
a region, or the entire world

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 Self Reference Criteria
Self Reference Criteria (SRC):

Represents viewing rest of the world from the

perspective of home market.

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 Avoiding the Self Reference Criterion
To
To avoid
avoid the
the SRC,
SRC, the
the following
following steps
steps are
are suggested:
suggested:

1: Define the business problem or goal in home-country cultural traits,

habits, or norms
2: Define the business problem or goal in foreign-country cultural
traits, habits, or norms. Make no value judgments
3: Isolate the SRC Influence in the problem and examine it carefully to
see how it complicates the problem
4: Redefine the problem without the SRC influence and solve for the
optimum business goal situation.

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intelligence

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 www.mckinsey
quarterly
.com

www.ama.org

www.trbi.co.uk

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 www.ictsd.org
development and environment concerns
in the context of international trade.

www.ala.org/library

www.worldbank.org/
data/databytopic/
class.xls

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