International Marketing Management,VTU

International Marketing Management

By Prof. Raghavendran Venugopal

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Meaning & Definition of International marketing

• Marketing activity carried on across the nation boundaries.

• According to AMA: “International Marketing is the multinational process of planning, executing, conception, pricing, promotion and distribution of ideas, goods and services create exchanges that satisfy individual and organizational objectives.”

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International Marketing involves:

• Identifying the needs and wants of the customers in international markets.

• To take market mix decisions keeping in the view the diverse customers and market behavior.

• Penetrating into International Markets using the various modes

• Decisions in view of IBE

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Characteristics Of International Marketing

• Dominance of Multinationals• Large Scale Operations• Boundary Restrictions & Trade Blocks• Marketing Research• Importance of Advanced Technology• Precise competition• Sensitive character.• Want for Specialized institutions• Long term planning• Cultural relations

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Scope of International Marketing

• Exporting– Establishing– JV & Collaborations– Licensing– Consultancy– Know-how(Technical & Managerial)

• Importing• Managing of international operations• Re-exporting

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Objective of International Marketing

• To develop skills, creating marketing challenges & Opportunities.

• To gain experience in developing marketing strategies.

• To gain verbal, written skills for communication• To have decision making ability• To be ethical in practice and urge to learn more

on marketing management.

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Why Firms go international

• Reasons for the firms going international• Profitability• Growth• Economies of Scale• Access to imported inputs/Resources• Marketing Opportunities• USP of product & services• R& D Costs.

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Orientation of management

• ETHNOCENTRIC• POLYCENTRIC• REGIOCENTRIC• GEOCENTRIC

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Process of Internationalization

License

Export Via Agent/ Distributor

Export through own sales representative/ Sales Subsidiary

Local Packaging/ Assembly

FDI

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Transition from Domestic to International Markets

• Pre-Export Behavior• Company characteristics• Perceived Export• Perceived Import• Organizational commitment

• Economic Reasons• Relative profitability• Insufficiency of domestic demand• Reduce Business risks• Legal restrictions• Obtaining Imported inputs• Social Responsibility• Increased Productivity• Technological Improvement

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Process of International Marketing

Growth Profitability Risk Spread

Access to imported inputs

USP of product/Services

Marketing Opportunities

Spreading R & D Costs SWOT Analysis

Decision to Enter into International

Markets

Motivation for International Marketing

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Stages of International Marketing Involvement

• No Direct Foreign Marketing• Infrequent Foreign Marketing• Regular Foreign Marketing• International Marketing• Global Marketing

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Challenges in International Marketing

• Self- reference• Political & Legal Difference• Cultural Difference• Economic Difference• Difference in the currency unit• Differences in the language.• Difference in Marketing Infrastructure• Trade restrictions• High cost of distance• Difference in trade practices

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Difference B/w Domestic and InternationalDifference Point Domestic Marketing International Marketing

Operation Conditions One nation language & culture

Many Nations, Languages & Culture

Transportation cost Major extent Some Extent

Currency One Multiple

Political Same Differ

Nature of market Relatively homogenous Diverse & Heterogeneous

Change control & Tariffs No Problems Obstacles

Data Availability Accurate Formidable, But doubted

Government interferences Relative free Influences

Environmental Effects Little effect Distortion by large companies

Business Environment Stable Unstable

Climate & Nature of Business

Uniform & Understood Varies & Unclear

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Trade in International Marketing

• International Trade is exchange of capital, goods and services across international borders or territories.

TRADEDOMESTIC TRADE

INTERNATIONAL TRADE

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Need for international trade

• Large scale production• Degree of self- sufficiency• Geographic Factors• Occupational Distribution• Means of Transportation• Compensating the production

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Dynamic Environment of International Trade

• Comparative Advantages• Impact of National Policies• Impact of Countries

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Balance of Payment

• It refers to the net results that are drawn recording all the visible and invisible items that are exported and imported from the country.

• Balance of Payments is comprehensive record of economic transactions between residents of home country & residents of the other countries.

• It includes• Current Account• Capital Account• Reserves Account

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Characteristics of Balance of Payment

• It is statement of systematic record of all economic transactions between one country & rest of the world.

• It is a annual statement & pertaining to time.• Listing receipts & payments in international

transactions of a country.• Double entry book keeping system.

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Fundamental of BOP

• Identifying an International Economic Transactions.

• Understanding the flow of goods, services, money & assets.

• Real assets• Financial assets

• Book keeping procedures for accounting.

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Factors Affecting BOP

• Cost of production• Demand of the supply• Cost & availability• Exchange rate movements• Domestic business• Trade agreements• External pressures• Price

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Protectionism

• It is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas and a variety of government regulations designed to discourage imports and prevent foreign take over of domestic markets and companies.

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Reasons for trade barriers

• To protect domestic companies.• BOP position favorable.• To curb prominent consumption.• To mobilize revenue for the government.• To discriminate against certain countries.

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Types of international barriers

• Tariff barrier• Non- tariff barrier• Intended constraint

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Global e-Marketing

• Search of convenience• Internet into purchase process.• Shift loyalties.• Future buying plans.

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Death of distance

• Potential of e-commerce• Lower transactions costs• Reduce inventory costs• Competitive business advantage• Expands market• Reduce the supply chain management.

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Major benefits of e-Marketing

• Global reach• Easy marketing• Economics• Updates• More attractive presentation

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Communications

• Building relationships,• Individual attention• Instant , cheap• Easy transactions

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Targeting an Individual customers

• Customer access• Insight• Dialogue• Emotions• Customers transactions

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Relationship marketing

• It is the process of building the long term, trusting, win-win relationships with customers, distributors, retailers and suppliers.

– Key elements are» Interactions between suppliers and customers» Customers segments to customers satisfaction» Working , developing and enhancing relationship in

internal markets and building strong external markets