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Mb0046 Unit 15-Slm

Nov 02, 2014

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Mb0046 Unit 15-Slm

Marketing Management

Unit 15

Unit 15

International Marketing Management

Structure: 15.1 Introduction Objectives 15.2 Nature of International Marketing 15.3 International Marketing Concept The strategic concept of marketing 15.4 International Market Entry Strategies 15.5 Approaches to International Marketing 15.6 International Product Policy 15.7 International Promotions Policy Advertising Direct mailing Personal selling Sales promotion Trade fairs and exhibitions 15.8 International Branding 15.9 Country of Origin Effects 15.10 International Pricing 15.11 Summary 15.12 Glossary 15.13 Terminal Questions 15.14 Answers 15.15 Case Study

15.1 IntroductionIn the previous unit we dealt with the contemporary concepts in marketing like CRM and Internet marketing. We analysed rural and services marketing, the definitions, forms, and significance of customer relationship management. In this unit, we will deal with another modern concept that has gained popularity in the last two decades-international marketing. The study of international marketing is intended to provide marketers with a systematic methodology and intellectual framework to understand and work in the global marketplace. It also helps marketers to learn and harness the fundamental integrity that exists within diverse business laws found inSikkim Manipal University Page No. 356

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Unit 15

different countries. International business embraces areas such as outsourcing, third country manufacturing, and manpower deployment in different countries. International trade covers the areas of imports and exports, including technology transfer and international financing for projects. International marketing includes various functions like researching international market, selecting products, pricing, distributing channels, advertising, and promoting in selected countries. International marketing may be distinguished from local marketing as it is governed by the rules and regulations of the host countries. It also deals with the cultural diversities that exist between nations as companies attempt to get benefited by these various cultures, by promoting ethnic products that have remarkable value for the host-country buyers. Multinational Corporations (MNCs) need to understand the work pattern of business in different countries. They may opt for multi-domestic operations where each host country has got separate and unique work system as desirable and useful to the host country. Indian business establishments enjoy several advantages in international markets due to low-cost labour, availability of raw materials, and skilled manpower. International marketing has become significant from the last decade as most countries have preferred globalisation and encompassed the market economy. With changing landscape, India witnessed dramatic changes since 1991 in marketing, with the onslaught of international players, offering better brands and comparatively better products. International marketing can be defined as marketing carried on across national boundaries spanning a number of countries. It is the performance of business activities that direct the flow of goods and services to consumers or users in more than one nation. It is different from domestic marketing as the exchange takes place beyond the frontiers, thereby involving different markets and consumers who might have different needs, wants, and behavioural attributes in their respective countries. The international marketer sets up his own sales subsidiary and participates in developing the entire marketing strategy for foreign markets. International marketing companies need to decide how their internationalisation strategy can be adopted within the overall marketing strategy, including their marketing programmes of sales, advertising, and sales promotion in both domestic and international markets. The firm also needs to understand theSikkim Manipal University Page No. 357

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different international marketing environments that the company plans to operate in. Understanding different cultural, social, and political environments becomes part of the internationalisation process, leading a firm to operate in various foreign markets. International marketing helps in understanding different marketing environments and managing the differences across the markets in tune with its domestic operations.

Case LetIndian Carpet Industry In this era of globalisation, every company and every industry wants to go global. India also wants to sell carpets to the foreign markets. This can only be done through exports when the profits in the exports increase we go in for International Marketing, which lead to international trade and international business. How it happens? This happens only when our company becomes international, multinational and transnational. The carpet industry at present is passing through international marketing stage. The carpets that are exported follow the concept of Ethnocentricity. It means they see only similarities in markets and assume the products and practices that succeed in the home country will, due to their demonstrated superiority, be successful anywhere In order to make the carpet industry an MNC the export of carpets have to increase to more than $ 100 million turnover per annum. This can only happen in case this industry is properly organised and given more incentives by the Government being a labour intensive industry. The question of its becoming transnational cannot arise unless this industry falls in the hands of MNC itself and a large number of carpet weavers are trained on a large scale through Carpet Management Schools which is a far of dream. However, effort should be made to give more incentives to the carpet weavers so that the child labour in this industry is completely abolished and the objection of the importers on the use of child labour is removed.(Source: International Marketing-3rd Edition, PK Vasudeva, Excel Books)

Sikkim Manipal University

Page No. 358

Marketing Management

Unit 15

This unit provides answers to the following questions: What is the nature and concept of international marketing? How can companies enter the international market? Why companies want to enter the international market? How do companies operating in international market decide their product mix, promotion mix and prices?

Objectives: After studying this unit, you should be able to: describe the nature of international marketing realise the concept of international marketing explain the international market entry strategies analyse the approaches to international marketing realise the international product policy explain the international promotion policy analyse the international branding policy describe the concept of country of origin effects realise international pricing policy

15.2 Nature of International MarketingInternational marketing, with its certain distinctive characteristics, is functionally very similar to domestic marketing. What is dissimilar in international marketing is the scope of the product market situation and strategies followed by players to cater to the international markets. Marketing can be conceived as an integral part of two processes. They are: 1. Technical 2. Social In technical process, domestic and international marketing are identical. The technical process includes non-human factors such as product, price, cost, brand, etc. The basic principles regarding these variables are of universal applicability. The social aspect of marketing is unique in any given stratum, because it involves human elements, namely, the behavioural pattern of consumersSikkim Manipal University Page No. 359

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Unit 15

and the given characteristics of a society, such as customers, attitudes, values, etc. It is obvious that international marketing, to the extent it is visualised as a social process, will be different from domestic marketing. International marketing has to take care of such barriers to free trade, which may be both visible and invisible. Even when there is complete free trade, logistics may create problems totally different from those experienced in domestic operations. Since human needs and wants will have different attributes in foreign markets, perception of these needs will require an overall appreciation of the environment, and the social and individual value systems will be prevalent in each country. Self Assessment Questions 1. International marketing is very similar to domestic marketing, only the products are modified according to cultures. (True/False) 2. Price is a part of the ____________ process that forms a part of marketing.

15.3 International Marketing ConceptDuring the past three decades, the concept of marketing has changed dramatically. It has evolved by focussing on the product to make it a better product, where better was based on internal standards and values. The objective was profit, and the means to achieve that objective was selling or persuading the potential customer to exchange his/her money for the companys product. 15.3.1 The strategic concept of marketing By the 1990s, it was clear that the new concept of marketing was outdated and the times demanded a strategic concept. The strategic concept of marketing, a major evolution in the history of marketing thought, shifted the focus of marketing from the customer or the product to the customer in the context of the broader external environment. To succeed, marketers must know the customer in a context including the competition, government policy and regulation, and the broader economic, social, and political macro forces that shape the evolution of markets. In International marketing, this may mean working closely with home-country government trade negotiato