Inter Nation Marketing

8/8/2019 Inter Nation Marketing

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Sessions By Nidhi Sharma


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` Internal Trade` International Trade` Internal trade is of three types

a) local trade

b) Regional tradec) Interregional trade

International Trade is also of 3 typesa) Import Tradeb) Export Trade

c) Re Export Trade


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` Due to human wants` Factor endowment in various countries

` Technological advancements

` Labour and entrepreneurial skills

` Factors of production differ in different countries

` Difference in prices of goods and services

between countries


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` Because countries have different natural,

human, and capital resources and different ways

of combining these resources, they are not

equally efficient at producing the goods andservices that their residents demand.

` The decision to produce any good or service

has an opportunity cost, which is the amount of

another good or service that might otherwisehave been produced.


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` Given a choice of producing one good or another,

it is more efficient to produce the good with the

lower opportunity cost, using the increased

production of that good to trade for the good withthe higher opportunity cost.


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` When a country can produce more of a good with

the same resources that another country can, it is

said to have an absolute advantage in the

produ

ction of that good.` If the second country has an absolute advantage

in producing a good that the first country wants,

both will be better off if they specialize and trade.


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` Trade is usually beneficial to both countries

even if one has an absolute advantage in the

production of both goods that are to be traded.

` Given any two products, a nation has acomparative advantage in the product with the

lower opportunity cost.

` The terms of trade must be such that both

countries lower the opportunity costs of thegoods they are getting from the trade.


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` Natural Advantages ( can be shared)

` Specialization and division of labor

` Reduces monopolistic exploitation

`

Protects economic interests of a cou

ntry` Optimum exploitation of worlds scarce human

resources

` Economic development


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` Economic self sufficiency

` Economic cooperation and internationalbrotherhood

` Quality of labor and capital

Helps all countries to learn and benefit from each

other in their areas of expertise


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` Results in the depletion of natural resources for

ones own use

` Adversely effects wages

` Import based countries face a threat of being

dominated by other countries if the import supply

is cut off

` It affect the home industries


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` The key word in this marketing definition is "process";marketing involves researching, promoting, selling, anddistributing your products or services

` Marketing is the management process that identifies,

anticipates and satisfies customer requirementsprofitably

` Marketing is the social process by which individuals andgroups obtain what they need and want through creatingand exchanging products and value with others


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` Marketing can be conceived as an integral part of two

processes technical and social

The technical process is same in domestic as well as

international marketing i.e. product, price, cost , Brand

Etc where as

Social Pattern is unique as behaviors patterns , Customs

of society , such as customs, attitudes , values etc differ

in different nations

` International marketing can be defined as marketingcarried on across national boundaries


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` Social Factorsa) National Legal Regimeb) Political Situationsc) Financial System

d) Marketing Infrastructurec) Cultured) Language

Economic Factorsa) Commercial Political variables , tariff quotas, Licensing

, non tariff barriersb) Currency restrictions


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c) Internal demand management policies and instrumentsCompetitions

a) Competition vis-a-vis producers in the importing co

untryb) Competition vis a vis Exporters from the competing

countriesc) Competition vis a vis other exporters form ones own countryLogisticsa) Availability of required type of transport

b) Cost of transportRisksa) Political Risksb) Commercial Risksc) Act ofGod

d) Acts of enemies , pirates , thieves


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The same ad for tooth paste in where a guy and girl

were shown to be affectionate with each other was

successful in USA and did not work well in

Thailand because of the conservative societyprevalent their . When 2 girls did the same ad the

sales picked up


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` Firm Characteristicsa) Product Characteristicsb) Size and growth ofDomestic Marketc) Optimal Scale of Productiond) Potential Export Market

Perceived External Export Stimulia) Future Ordersb) Market Opportunityc) Government stimuli/ Assistance

Perceived internal Export Stimuli ( what are the

management expectations)a) Level of capacity utilization


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b) The highest level of profitc) The growth objective of the firm

Level of organizational Commitmenta) What kind of people available to go on for

international marketing ( resources required tohire new staff) hiring of consultants for carryingout overseas market potential studies

Motivation to exportsa) Relatively profitableb) Insufficiency of domestic demandc) Reducing business risks ( fluctuation in one

country can be countered by another)


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d) Legal Restrictions- Their might be restrictionson certain sectors within our country but we

might find a market for it abroade) Obtaining import inputs- Nations have to payfor imports by doing exports so for a fewindustries might have an obligation to export (which are in need of imports)

f) Social Responsibility-It is considered abusinessman's responsibility to contribute

towards the nation by increasing exportsg) Increased Productivity- Increased productivity

is necessary forultimate survival of the firm.After increased productivity the firm might seek

export markets


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` Technological Improvement ( entry into the foreign

market may enable a firm toa) Pick up new product ideas and add to product

line

b) Improve its products

c) Reduce costs

d) Discover new applications for its products


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` Government restrictions` Complacent and domestic oriented firms

` Lack of coordinated export assistance

` Expenses on exporting

`

Trade barriers` Complications of exporting

` Lack of financial assistance

` Lack of competitiveness

` Lack of export incentives

` Credit risks

` Paper work


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No involvement The firm is not involved inexport market yet the product may enter exportmarket due to

a) foreign buyers coming on her own andpurchasing their requirements]

b) Domestic intermediaries like export housespurchasing their goods and selling themoverseas

Temporary involvement The firm is involved in

export business to dispose of temporary s

urpl

usutilize temporary excess capacity


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` Capacity involvement the firm makes a seriouscommitment to export . IT may demarcate adefinite percentage of capacity for exports. Visit toforeign countries for frequently

` Global Involvement in such a case a firmbecomes a truly international company involvingitself in international operations

How will you

decide abou

tI

nternational bu

sinessa) Do you have management knowledge to operate ininternational market

b) Do you or can you acquire financial resourcesc) Do you want to make a commitment to approach

international markets properly


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` Producing for exports- some industries are just

producing for exports like diamond industry ,

garment industry


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Motivation for internationalMarketing

a) Growthb) Profitabilityc) Risk Spreadd) Excess to import inputsf) Market Opportunitiesg) Spreading the R & D Costs

SWOT Analysis

Decision to enter the InternationalMarket( Continued )


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` International Marketing Decisions

a) Market identification and targeting

b) Entry Mode Selectionc) Product Decision

d) Distribution Channel Decision

e) Market Promotion Decision

Entry international Market

Review Performance

ConsolidateMarketing Efforts to Global Marketing


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` Classification on the basis of stages of demanda) Existing Marketb) latent Market ( hidden)c) Incipient Market ( do not exist in the present)

Classification in the basis of stages of

developmenta) Industrial Economiesb) More developed developing economiesc) Raw material exporting economiesd) Subsistence Economies


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` Industrial Economies - will go for research anddevelopment and production of sophisticated goods alsoenvironmental friendly products

` More developed, developing economies - wouldlike to update technology for current range ofmanufacturing and would like to have joint venture withthe less developed Countries

` Raw Material Exporting Economies- this categoryincludes countries like those in the gulf country these

countries are interested in importing turnkey projectschanges in these countries takes place slowly and levelof sophistication on product required by these countriesis much less

` Subsistence economies - They will need equipment toexploit theiruntapped resources as also infrastructure

facilities will be less ( turnkey projects) Latestdevelopment in technology in production may not havebeen offered by competitors market forIndia


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1 ) Population ( higher the population the bigger themarket) obviously it is necessary to look at

a) Age group and sexb) Social Class

c) Educational Backgroundd) Number of Householde) Geographical Concentration and Difference2) GNP It is the rate of growth as also the standard of

living of its population could provide another basis forclassification of countries, (per capita income might not

be good indicator) as it also depends on whatprogrammers the government are backing


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` Information can be received from various

chambers of commerce , libraries maintained by

foreign embassies in India, United nations publish

detailed international trade statistics which cou

ldhelp the exporter to locate markets of their

products


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` There are 200 countries in the world and it is notpossible to do business in all of these markets so

there are criteria for selection and rejection of

various markets


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` Embargo by GOI if any` Restrictions and prohibitions on exporters of some

commodity` Incompatibility of technical standards may eliminate

some markets` I

n some cases the cost of product adaptation may be sohigh that the exporters may not be able to afford it

` In some cases the importing countries impose embargoor quotas on the imports of some specific products

` Their may be formidable tariff barriers which may makethe product extremely costly for the consumers of the

countries` More strong competition which makes it impossible to

enter the market


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` In some cases the shipping costs may be far too

high

` In case of technically sophisticated products toomuch money may have to be spent on preparing

sales literature and catalogues in many different

languages

` Acute shortage of foreign exchange in importing

countries may lead to uncertainty in payments

` Political relations with India


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` Examination ofIndias export statistics which areofficially published in the Monthly statisticsrelating to Indias Foreign Trade this enableexporters to find out where similar products are

going` Examination of import statistics of selected

importing countries is the next step

` Examination ofIndias Export Statistics andforeign import statistics both may give an idea ofpossible unit valuation


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` Examination of research studies made by Indian institute of foreigntrade , India trade promotion organization and export promotioncouncil these reports contain useful marketing information aboutvarious markets and products covered by them

` In general pays good dividends to talk to some experiencedexporter

` The Economic times and other economic dailies often publishsupplements covering one particular country giving lot of informationuseful to the marketers

` Commercial Banks may also provide a lot of information about thepayment position and exchange control restrictions in variouscountries

` Indias Commercial representatives abroad may help collectinginformation regarding health , sanitary and other regulations likemarketing and labeling requirements and in selection of agents


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` Generalized System of Preferences (GSP) - Under thegeneralized system of preferences , the developedcountries are granting duty free entry or entry atreduced rates to imports coming from developingcountries to take advantage ofGSP exporters mustknow

1) Whether his product is covered by GSP2) The preference margin enjoyed by the product3) Quotas if any4) Procedural formalities to avail himself of the

preferences information from Indian institute of foreign

trade, India trade promotion organization , Ministry ofcommerce and export promotion councils


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` India is also a party to Bangkok Agreement where

developing countries of ESCAP ( Economic and

Social Commission for Asia and the Pacific) are

extending preferences on each other on 93products ( this info can also be got by above

mentioned organizations)


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` Some Countries have established import promotioncenters to promote import from developing countriesand to provide assistance to their exporters

A directory of import promotion offices and similarorganizations has been compiled by international tradecenter such import promotion centers exist in variouscountries

There are various services offered for instancea) Statistical information on markets concernedb) Information on sales opportunities in the market

concernedc) Trade fair exhibition assistanced) List of importers, wholesalers agents and distributorse) Training programmers.

f)Information on training possibility in

university andresearch institutions etc


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` Give assistance to overseas companies seeking a

U.K joint venture partner ( in most cases these

services are provided withou

t any charges)


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` We can also see ifIndia has any particularadvantage in the market

1) Proximity

2) Trade domination by person ofIndian Origin

3) Ethnic Population

4) Existing of Shipping Facilities

5) Political relations

Again a specialist researcher can help ( he canhelp you avail information regarding more then1 country and research which Is relevant )


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` Know first hand information on country like to knowsuitable dates to visit various markets ( in month ofRamzan forGulf Countries and Christmas for EuropeanCountries is not a suitable date to travel)

`

The man visiting must know his prod

uct well

` Some adaptation in food habits is also necessary

` Better to visit the market when the trade fair is on ( tohave an idea of prevailing prices as well as otherinformation also)

Inter Nation Marketing

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