Mba IV International Marketing Management [12mbamm418] Notes

INTERNATIONAL MARKETING MANAGEMENT 12MBAMM418

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Subject Name: INTERNATIONAL MARKETING MANAGEMENT

Sub Code: 12MBAMM418 IA Marks : 50

No.of Lecture Hrs/week : 04 Exam Hrs. : 03 Hours

Total No. of Lecture Hrs. : 56 Exam Marks : 100

Module I (7 Hours)

Framework of international marketing: Definition scope and challenges difference

between international marketing and domestic marketing the dynamic environment of

international trade transition from domestic to international markets orientation of

management and companies

Global e-marketing: The Death of Distance, communications, Targeting the individual

customers, relationship marketing, interactivity, Speed to market, living in an age of technical

discontinuities, new technologies change the rules of competition, components of the electronic

value chain.

Module II (8 Hours)

Developing a global vision through marketing research: Breadth and scope of international

marketing research problems in availability and use of secondary data problems in gathering

primary data multicultural research

a special problem research on internet a new opportunity estimating market demand

problems in analyzing and interpreting research information responsibility for conducting

marketing research communicating with decision makers. Identifying foreign markets

classification based on demand based on the stage of development other bases for division of

world markets

Social and Cultural Environment: Basic aspects of society and culture, Approaches to cultural

factors, Impact of Social and Cultural Environment on Marketing Industrial and Consumer

Products

Module III (7 Hours)

Global marketing management planning and organization: Global

perspective global gateways global marketing management an old debate and a new view

planning for global markets alternative market entry strategies organizing for global

competition

Module IV (6 Hours)


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Products and services for consumers: Quality Green marketing and product development,

products and culture analyzing product components for adaptation products for consumers in

global markets, product development, product adaptation, product standardization, marketing

consumer services globally marketing of services, brands in international markets

Products and services for businesses

Demand in global business to business markets quality and global standards business services

trade shows' crucial part of business to business marketing relationship markets in business to

business context

Module V (8 Hours)

Licensing, Strategic Alliances, FDI: Introduction, Licensing, Strategic Alliances, Manufacturing

Subsidiaries, Entry Modes and Marketing Control, Optimal Entry Strategies.

Global Distribution

Introduction, Distribution as Competitive advantage, Rationalizing Local Channels, Wholesaling,

Retailing, Global Logistics, Parallel Distribution, Global Channel Design

International retailing

International expansion of retailers international retailing defined retail format variations in

different markets general merchandise: retailing issues in international retailing

Module VI (7 Hours)

Pricing decisions: Global Pricing Framework, Pricing Basics, Marginal Cost Pricing and its

importance, Transfer Pricing, Counter trade, Systems Pricing, Pricing and Positioning, price

quotation INCO terms preparation of quotations.

Promotion Decisions

Promotions international advertising sales promotion in international markets international

advertising direct mailing personal selling exhibition generic promotions in international

marketing

Module VII (6 Hours)

Recent trends in India's foreign trade: Institutional infrastructure for exports promotions in

India India's trade policy exports assistance exports documentation and procedures


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including different stages of documentation Globalization in India, Opportunities, Constraints and

Initiatives India - A Hub for Globalization, Globalization in India - Post Liberalization, Indias

Strengths, Strategies for Sustainable Competitive Advantage, Potential for Made in India, Major

Globalization Initiatives from Indian Companies, WTO Regulations and their implications for

India, Undesirable effects of globalization, Government Initiatives needed to foster globalization

Module VIII (2 Hours)

The future of global marketing: Six major changes in global marketing


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Contents

Sl No: Modules Page NO

1 Framework of international marketing 5 14

2 Developing a global vision through marketing research 15 - 28

3 Global marketing management planning and organization 29 39

4 Products and services for consumers 40 49

5 Licensing, Strategic Alliances, FDI 50 72

6 Pricing decisions 73 82

7 Recent trends in India's foreign trade 83 100

8 The future of global marketing 101 119


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Module I (7 Hours)

Framework of international marketing: Definition scope and challenges difference between

international marketing and domestic marketing the dynamic environment of international trade

transition from domestic to international markets orientation of management and companies

Global e-marketing: The Death of Distance, communications, Targeting the individual

customers, relationship marketing, interactivity, Speed to market, living in an age of technical

discontinuities, new technologies change the rules of competition, components of the electronic

value chain.

Framework of international marketing

International marketing is defined as the performance of business activities designed to plan,

price, promote, and direct the flow of a companys goods and services to consumers or users in

more than one nation for a profit

Marketing concepts, processes, and principles are universally applicable all over the world

International marketing is defined as the performance of business activities designed to plan,

price, promote, and direct the flow of a companys goods and services to consumers or users in

more than one nation for a profit.

Marketing concepts, processes, and principles are universally applicable all over the world

Scope and challenges:

Important Points

1. An increasingly larger share of corporate profits are generated by international operations

2. Till last decade competition for the company comes from the local market only, now it is

not so. It comes from all the country

Global Perspective: Recent Events

1. Information technology boom

2. Enron scandals

3. September 11th attacks on the World Trade Center and Pentagon

4. Wars in Afghanistan and Iraq


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5. International conflict among China, Taiwan, and the United States

6. 2003 SARS outbreak in Asia

7. Global terrorism, e.g., Indonesia, Israel, India, and Morocco

8. Transcending these events, international commerce continued

Global Business Trends

The rapid growth of the World Trade Organization and regional free trade

areas, e.g., NAFTA and the European Union

General acceptance of the free market system among developing countries in Latin

America, Asia, and Eastern Europe

Impact of the Internet and other global media on the dissolution of national borders, and

Managing global environmental resources

Difference between international marketing and domestic marketing

International Marketing Vs Domestic Marketing

Sovereign political entities

I. Tariffs Or Customs Duties

II. Quantitative Restrictions

III. Exchange Controls

IV. Local Taxes

Different Legal Systems

Different Monetary Systems

Lower Mobility Of Factors Of Production

Differences In Market Characteristics

Differences In Procedures And Documentation

Greater Degree Of Risk

The Difference

More than one nation, Competition, Legal constraints, Govt. Control, Ecological factors,

Consumer traditions, or any uncontrollable elements.


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Reasons for Internationalization

Growth

Access to new markets

Access to resources

Survival

Against competitors with lower costs (due to increased access to resources)

Leveraging Key Success Factors Abroad

Follow Customers Abroad

Pursuing Diversification

Taking Advantage of Different Growth Rates of Economies

Exploiting Product Life Cycle Differences

Internationalizing for Defensive Reasons

The effects of uncontrollable and controllable both in the domestic and foreign

environments

- International marketers deals with at least two uncontrollable Elements

1. Domestic

2. International

- As the number of international market increases: uncontrollable layer increases

- Controllable elements : 4 ps (MARKETING MIX)

- Domestic Uncontrollable elements : Political & Legal, Competition, Economy, Culture &

Technology

- Foreign Uncontrollable elements : Political & Legal, Competition, Economy, Culture,

Technology, structure of distribution, Geography & infrastructure

Dynamic environment of international trade

Environmental Adaptation Needed

Differences are in the uncontrollable environment of international marketing

Firms must adapt to uncontrollable environment of international marketing by adjusting the

marketing mix (product, price, promotion, and distribution)

Adaptation (of Marketing Mix)

Standardization (of Marketing Mix)

Continuum

INFLUENCED BY 7 ENVIRONMENTAL FACTORS

ABCHighlight

ABCHighlight


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Developing a Global Awareness

To be globally aware is to have:

1. Tolerant of Cultural Differences, and

2. Knowledgeable of:

(a) Culture, (b) History, (c) World Market Potential,

(d) Global Economic, Social and Political Trends

Transition From Domestic To International Business

Pre Export Behaviour

1. Firm Characteristics

2. Perceived External Export Stimuli

3. Perceived Internal Export Stimuli

4. Level Of Organizational Commitment

Motivation To Export

a. Bulk Sales

b. Relative Profitability

c. Insufficiency Of Domestic Demand

d. Reducing Business Risks

e. Legal Restrictions

f. Obtaining Imported Inputs

g. Social Responsibility

h. Increased Productivity

i. Technological Improvements

How Much Commitment

a) No Involvement

b) Temporary Involvement

c) Continued Involvement

d) Global Involvement

e) Producing For Export

Stages of International Marketing Involvement


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Generally, four distinctive approaches dominate strategic thinking in international marketing:

Orientation of management and companies

Global orientation

Strategic Orientation: EPRG

Schema Orientation EPRG Schema

Domestic Marketing

Extension

Multi-Domestic Marketing

Global Marketing

(Ethnocentric)

(Polycentric)

(Regio/Geocentric)

In general, firms go through five different phases in going

international:

Infrequent Foreign Marketing

No Direct Foreign Marketing

International Marketing

Regular Foreign Marketing

Global Marketing


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A global orientation means operating as if all the country markets in a companys scope of

operations (including domestic market) are approachable as a single global market and to

standardize the marketing mix where culturally feasible and cost effective or to adapt the

marketing mix where culturally required and cost effective.

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

Polycentric or Multi-Domestic Marketing Concept:

Opposite of ethnocentrism Management of these multinational 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

Regiocentric:

Sees the world as one market and develops a standardized marketing strategy for the entire

world

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

Importance of International Marketing

International expansion helps firm:

Keep pace with competition

Reach a larger market

Reap higher profits

Prolong the lifecycle of their products

Levels of International Marketing

Domestic

Marketing

Export Marketing International

Marketing

Global

Marketing


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Least

international

commitment

Domestic

focus

Limited

international

commitment

Involves

direct or indirect

export

Ethnocentric

Substantial

international

commitment

Focus on

individual countries

or regions

Polycentric or

Regiocentric

Extensive

international

commitment

Focus on

segments, rather

than countries or

regions

Geocentric

Drivers of International Expansion

Competition

Regional Economic and Political Integration

Technology

Improvements in Transportation and Telecommunication

Economic Growth

Transition to Market Economy

Converging Consumer Needs

Firm-Specific Drivers

Product Life Cycle Considerations: opportunity to prolong product lifecycle by entering

growth markets.

Sales

Intro Growth Maturity Decline

Profits

Sales


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Global e-marketing: The Death of Distance

One of the powerful consequences of the widespread adoption and use of computer mediated

communication (CMC) is believed to be the world becoming smaller." Accounts consistently

highlight that CMC technologies such as email, video, audio or text chat, listservs and bulletin

boards create informational environments that enable the bridging of distances among

individuals and groups. The expectation that information and communication technologies lead

users to transcend the constraints of physical separation has been expressed as the death of

distance

ECONOMISTS are beginning to notice that dear oil is having an impact on trade. By making

transportation more expensive, high fuel prices are turning back the clock a bit on the process of

globalisation

Targeting the individual customers

Many startup companies have technologies that are of interest to many different market

segments. Given a startups limited resources, the company needs to prioritize which customers

to target with their technology and marketing efforts.

The International Marketing Environment

7

3. ECONOMY

Environmental uncontrollables country market A

Environmental uncontrollables country market B

Environmental uncontrollables country market C

1. Competition

1. Competition

2. Technology Price Product

Promotion Place or Distribution

6. Geography and Infrastructure

Foreign Environment (Uncontrollables)

7. Structure of Distribution

3. Economy

5. Political- Legal

Domestic environment (Uncontrollables)

(Controllables)

2 .Technology

4. Culture

5. Political- Legal

4. Culture

Target

Market


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Relationship marketing

Relationship marketing was first defined as a form of marketing developed from direct response

marketing campaigns which emphasizes customer retention and satisfaction, rather than a

dominant focus on sales transactions

Speed to market

The elapsed time from order placement to arrival on the retail sales floor. Speed to market is

increasingly a factor in competitiveness of any company in the apparel chain.

Living in an age of technical discontinuities

New Millennium and the Age of the Internet we business journalists can look back knowing we

had front-row center seats at the great events of our time. I feel privileged to have helped

chronicle this extraordinary saga.

And it's not over. The Age of the Internet is, to borrow Peter Drucker's phrase, an Age of

Discontinuity. This is not just another story to cover. We are part of this story. For the spread of

the Internet has the potential to revolutionize the practice of journalism, like nothing since

Gutenberg's printing press.

New technologies change the rules of competition

Two major findings have characterized management literature in the past decades. The first is that

radical innovation, while risky, is one of the major sources of long-term competitive advantage.

For many authors, however, the phrase radical innovation is an ellipsis for a longer construction

that spells radical technological innovation. Indeed, investigators of innovation have focused

mainly on the disruptive effect of novel technologies on industries.

The second finding is that people do not buy products but meanings. People use things for

profound emotional, psychological, and socio-cultural reasons as well as utilitarian ones. Analysts

have shown that every product and service in consumer as well as industrial markets has a

meaning. Firms should therefore look beyond features, functions, and performance, and

understand the real meanings users give to things. The common assumption, however, is that

meanings are not a subject for innovation: they are a given. One must understand these meanings

but they cannot be innovated.


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Components of the electronic value chain

A value chain is a chain of activities that a firm operating in a specific industry performs in order

to deliver a valuable product or service for the market. The concept comes from business

management and was first described and popularized by Michael Porter in his 1985 best-

seller, Competitive Advantage: Creating and Sustaining Superior Performance.

"The idea of the value chain is based on the process view of organizations, the idea of seeing a

manufacturing (or service) organisation as a system, made up of subsystems each with inputs,

transformation processes and outputs. Inputs, transformation processes, and outputs involve the

acquisition and consumption of resources - money, labour, materials, equipment, buildings, land,

administration and management. How value chain activities are carried out determines costs and

affects profits."


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Module II (8 Hours)

Developing a global vision through marketing research: Breadth and scope of international

marketing research problems in availability and use of secondary data problems in gathering

primary data multicultural research a special problem research on internet a new

opportunity estimating market demand problems in analyzing and interpreting research

information responsibility for conducting marketing research communicating with decision

makers. Identifying foreign markets classification based on demand based on the stage of

development other bases for division of world markets

Social and Cultural Environment: Basic aspects of society and culture, Approaches to cultural

factors, Impact of Social and Cultural Environment on Marketing Industrial and Consumer

Products

Developing a global vision through marketing research: Breadth and scope of

international marketing research

Introduction

Marketing research is traditionally defined as the systematic gathering, recording, and analyzing

of data to provide information useful in marketing decision making.

International marketing research involves two additional complications.

(i) Information must be communicated across cultural boundaries. That is , executive in

Chicago must be able to translate their research questions into terms that consumers in

Guanszhou, China can understand.

(ii) The environment within which the research tools are applied are often different in foreign

markets. Rather that acquire new and exotic method of research, the international marketing

research must develop the ability for imaginative and deft application of tried and tested

techniques in sometimes totally strange milieus.

BREDTH AND SCOPE OF INTERNATIONAL MARKETING RESEARCH

The basic difference between domestic and foreign market research is the broader scope

needed for foreign research, necessitates by higher levels of uncertainty. Research can be

divided into three types based on information needs:


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(i) General information about the country, area and/or market

(ii) Information necessary to forecast future marketing requirement by anticipating social,

economic consumer, and industry trend within specific market or countries

(iii) Specific market information used to make product, promotion, distribution, and price

decisions and to develop marketing plans.

A countrys political stability, culture attributes and geographical characteristics are some

of the kind of information not ordinarily gathered by domestic marketing research.

THE RESEARCH PROBLEM

A marketing research study is always a compromise dictated by limits of time, cost, and the

present state of the art. The research must strive for the most accurate and reliable information

within existing constraints. A key to successful research is a systematic and orderly approach

to the collection and analysis of data. The research process should follow these steps:

(i) Define the research problem and establish research objectives.

(ii) Determine the source of information to fulfill the research objectives.

(iii) Consider the costs and benefits of the research effort.

(iv) Gather the relevant data from secondary or primary sources, or both.

(v) Analyze, interpret, and summarize the results.

(vi) Effectively communicate the results to decision makers.

DEFINING THE PROBLEM AND ESTABLISHING RESEARCH OBJECTIVES

The research process should being with a definition of the research problem and the

establishment of specific research objectives. the major difficulty here is converting a series of

often ambiguous business problem into tightly drawn and achievable research objectives.

PROBLEMS OF AVAILABILITY AND USE OF SECOUNDARY DATA

:- The problem of availability and use of secondary data are as follows:

(i) Availability of data;-detailed data on the numbers of wholesalers, retailers,

manufacturers, and facilitating services, are unavailable for many parts of the world, as are data

on population and income. Most countries simply do not have governmental agencies that

collect on a regular basis the kind of secondary data readily available in the united state.


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(ii) Reliability of data;- Available data may not have the level of reliability necessary for

confident decision making for many reasons. Official statistics are sometimes too optimistic,

reflecting national pride or politics rather that practical reality, while tax structures and fear of

the tax collector often adversely affect data.

(iii) Comparability of data:- Comparability of available data is the third shortcoming faced by

foreign marketers. In United States, current sources of reliable and valid estimates of

socioeconomic factors and business indicators are readily available. In other countries,

especially those less developed, data can be many years out of data as well as having been

collected on an infrequent and unpredictable in many of these countries makes the problem of

currency a vital one.

(iv) Validating secondary data:- many countries have similarly high standard for the

collection and preparation of data as those generally found in the United States, but secondary

data from any source, including the United States must be checked carefully and interpreted

carefully..

GATHERING PRIMARY DATA: QUANTITATIVE AND QUALITATIVE RESEARCH

:- If, after seeking all reasonable secondary data sources, research questions are still not

adequately answered, the market research must collect primary data.- that is , data collected

specially for the particular research project at hand.

In most primary data collection. The researchers questions respondents to determine what

they think about some topic or how they might behave under certain conditions. Marketing

research methods, can be grouped into two basic types: quantitative and qualitative research. In

both methods, the marketer is interested in gaining knowledge about the market.

(i) Quantitative research:- in quantitative research, usually a large number of respondents are

asked to reply either verbally or in writing to structure questions using a specific response

format or to select a response from a set of choices. Questions are designed to obtain specific

responses regarding aspects of the respondents behavior, intentions, attitudes, motives and

demographic characteristics. Quantitative research provide the marketer with responses that can

be presented with precise estimations.


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(ii) Qualitative research:- In qualitative research, if questions are asked they are almost always

open-ended or in-depth, and unstructured responses that reflect the persons thoughts and

feelings on the subjects are sought. Direct observation of consumers in choice or product usage

situations in another important qualitative approach to marketing research.

Qualitative research is used in international marketing research to formulate and define

a problem more clearly and to determine relevant questions to be examined in subsequent

research. It is also used where interest is centered on gaining an understanding of a market,

rather the quantifying relevant aspects.

Qualitative research is also helpful in revealing the impact of socio-cultural factors on

behavior patterns and in developing research hypotheses that can be tested in subsequent studies

designed to quantify the concepts and relevant relationship uncovered in qualitative data

collection.

PROBLEMS OF GATHERING PRIMARY DATA

Most problem in collecting primary data in international marketing research stem from

cultural differences among countries, and range from the inability of respondents to

communicate their opinions to inadequacies in questionnaire translation.

(i) Ability to communicate opinions:- The ability to express attributes and opinions about a

product or concept depends on the respondents ability to recognize the usefulness and value of

such a product or concept.

(ii) Willingness to respond;- Cultural differences offer the best explanation for the

unwillingness or the inability of many to respond to research surveys. The role of the male, the

suitability of personal gender-based inquiries, and other gender-related issues can affect

willingness to respond.

(iii)Sampling in Field Surveys:- The greater problem in sampling stems the lack of

demographic data and available lists from which to drawn meaningful samples. If current,

reliable lists are not available, sampling becomes more complex and generally less reliable.

(iv) Language and comprehension:-

(v) The most universal survey research problem in foreign countries is the language barrier.

Differences in idiom and the difficulty of exact respondents answer. Equivalent concept may

not exist in all language.


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MULTICULTURAL RESEARCH

As companies become global marketers and seek to standardize various parts of the

marketing mix across several countries, multicultural studies become more important. A

company need to determine to what extent adaptation of the marketing mix is appropriate. Thus

market characteristics across diverse culture must be compared for similarities and difference

before a company proceeds with standardization on any aspect of marketing strategy.

Multicultural research involves dealing with countries that have different languages,

economies, social structure, behavior, and attitude patterns. It is essential that these differences

be taken into account.

RESEARCH ON THE INTERNET

For many countries the internet provides a new and increasingly important medium for

conducting a variety of international marketing research. Indeed, a survey of marketing research

professionals suggests that the most important influences on the industry are the internet and

globalization. It has been suggested that there are at least seven different uses for the internet in

international research:-

(i) Online survey and buyer panels

(ii) Online focus groups.

(iii) Web visitor tracking

(iv) Advertising marketing lists

(v) E-mail marketing lists

(vi) Embedded research.

A vexing challenge facing international marketers will be the cross-cultural concern about

privacy and the enlistment of cooperative consumer and customer group. As more of the general

population in countries gain access to the internet. This tool will be all can be used one of

several methods of collecting data offering more flexibility across countries. Today the real

power of the internet for international marketing research is the ability to easily access volumes

of secondary data.

There are volumes of good secondary data that can be accessed from your computer that

will make international marketing research much easier and more efficient that it has ever been.

New opportunity

The chapter starts with identifying the types and categories of information which are useful in

marketing decision making on a global scale and discusses the two main ways of getting


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information by surveillance or by research. Details are given on some of the sources of

information available to marketers. The chapter then describes in some detail the process of

global marketing research and highlights the dangers and pitfalls in the process.

Uncertainty

In international marketing, the marketer is faced with a dilemma of having too much data and too

little information. There is plenty of global data from sources like the World Bank, but often a

lack of specific information on countries and markets. In helping to reduce uncertainty around

decision making, precise information is the key, getting it is quite another thing.

Whilst searching for opportunities globally, uncertainties will arise due to four main factors: lack

of knowledge of the existence of possible new market alternatives, the conditions internal and

external to the firm which will determine the consequences of a new alternative, what

consequences these conditions when known may have for the firm, and how these consequences

may be expressed in relevant terms of goal fulfilment. Uncertainty arises due to the time lapse

between the decision and the outcome of the action decided on. Carlson (1975)1 also believes that

uncertainty increases with the degree of "foreignness" of the place of outcome, the cost of

information and the learning effect, that is, when entering a foreign market knowledge of it builds

slowly, usually by experience and its attendant uncertainty.

When marketing domestically the system is fairly easy to learn. When crossing global boundaries

the whole process is exaggerated by necessary paperwork, exchange rates, cash flows and

transportation problems to name but a few. This uncertainty gives rise to the need for information.

Table 5.1 Specific information

Marketing decision Marketing intelligence

Go international or

remain domestic

Assessment of global market and firm's potential share in it, in view of

local and international competition, compared to domestic opportunities.

Which markets to

enter

A ranking of world markets according to market potential, local

competition and the political situation.

How to enter target

markets

Size of markets, international trade barriers, transport costs, local

competition, government requirements and political stability.

How to market in For each market, buyer behaviour, competitive practice, distribution


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target markets channels, media, company experience

Elements of the information system

The following constitute the elements of the global information system. Data may be specific or

general or both and used for decisions on whether to enter markets or not, in what degree and

what emphasis in terms of the marketing mix. General information includes data on the following:

Economic - rate of growth of GNP, level of inflation, incomes

Social - people, demographics, culture, subculture

Political - risk, instability, attitudes to "foreigners"

Technology - current, rate of change, infrastructure

Resources - money, manpower, materials, acquisitions, joint ventures

Fiscal - taxes, exchange rates

Institutions - money markets

Managerial - funds

ESTIMATING MARKET DEMAND

In assessing current product demand and forecasting future demand reliable historical data are

required. Despite of limitations, there are approaches to demand estimation that are usable with

minimum information. The success of these approaches relies on the ability of the researcher to

find meaningful substitute or approximations for the needed economic, geographic, and

demographic relationships.

When the desired figures are not available, a close approximation can be made using local

production figure plus imports, with adjustments for exports and current inventory levels. In a

rapidly developing economy, extrapolated figures may not reflect rapid growth and must be

adjusted accordingly. Given the greater uncertainties and data limitations associated with

foreign markets, two methods of forecasting demand are particularly suitable for international

marketers:

(i) Expert Opinion: - for many market estimation problems, particularly in foreign countries

that are new to the marketer, expert opinion is advisable. In this method, expert are polled for

their opinion about market size and growth rates. Such expert may be companies, own sales

managers or outside consultants and government officers. the key in using expert opinion to


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help in forecasting demand is triangulation, that is, comparing estimates produced by different

sources.

(ii) Analogy: - This assumes that demand for a product develops in much the same way in all

countries as comparable economic development occurs in each country.

A relationship must be established between the item to be estimated and a measurable

variable. Once a know relationship is established, the estimator then attempt to draw an analogy

between the known situation and the country in question.

PROBLEM IN ANALYZING AND INTERPRETING RESEARCH INFORMATION

After data are collected, the final steps in the research process are the analysis and interpreting

of findings in light of the stated marketing problem. There are so many factors, the researchers

must take consideration these factors and, despite their limitations, produce meaningful guides

for management decisions.

Accepting information at face value in foreign market is imprudent:- The meanings of words,

the consumers attitude toward a product, the interviewers attitude, or the interview situation

can distort research findings. Just as culture and tradition influence the willingness to give

information, so they also influence the information, so they also influence the information

given.

News paper circulation figures

Readership and listener ship studies

Retail outlet figures

Sales volume can all be distorted through local business practice.

To cope with such disparities, the foreign marketing researcher must possess three talented to

generate meaningful marketing information.

First, the researcher must possess a high degree of cultural understanding of the market in

which research is being conducted.

Second, a creative talent for adapting research methods is necessary. A researcher in

foreign markets often is called on to produce result under most difficult circumstances and short

deadlines.

Third, a skeptical attitude in handling both primary and secondary data is helpful.


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RESPONSIBILITY FOR CONDUCTING MARKETING RESEARCH

Depending on the size and degree of involvement in foreign marketing, a company in need of

foreign market research can rely on an outside foreign-based agency or on a domestic company

with a branch within the country in question. It can conduct using its own facilities or employ a

combination of its own research force with the assistance of an outside agency.

Many companies have executive specifically assigned to the research function in foreign

operations;

Other companies maintain separate research department for foreign operations or assign a full-

time research analyst to this activity

A trend toward decentralization of the research function is apparent. In terms of efficiency, it

appears that local analysts are able to provide information more rapidly and accurately than a

staff research department.

A comprehensive review of the different approaches to multi-country research suggests that the

ideal approach is ti have local research in each country, with close coordination between the

client company and the local research companies.

COMMUNICATING WITH DECISION MAKERS

As concert with the decision maker, it should be clearly recognized, however that getting the

information is only half problem/job. That information must also be given to decision makers in a

timely manner. High-quality international information system design will be an increasingly

important competitive tool as commerce continues to globalize, and resources must be invested

accordingly. At the most basic level, marketing research is mostly a matter of talking to

customers. Marketing decisions makers have questions about how best to serve customers, and

those questions are posed and answered often through the media of questionnaires and research

agencies. Even when both managers and customers speak the same language and are from the

same culture, communication can become garbled in either direction. That the customer

misunderstands the questions and/or managers misunderstand the answers. Throw in a

language/cultural barrier, and the changes of misinformation expand dramatically. The four kind

of company-agency-customer relationships possible are presented in overcoming the cultural

barriers


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Identifying foreign markets

Selection of markets is the first stage in International marketing. No matter how much attempt is

made, the firm will not succeed unless it is marketing the right product in the right export market.

It costs lot of time and money to find out a suitable market for a product. No firm has unlimited

resources. Proper selection of markets would avoid waste in time and effort. The time and care

taken to select the product and the market for initial export venture can minimize the risks and

make ultimate success quicker and more certain. One product may be more acceptable in some

countries than in others. It would, therefore, be better to concentrate on a few fruitful markets than

to spread too thinly. Market concentration can lead to better debt collection and cash flow and

savings in administration. Of course, after having established in one market, the firm can always

move on to the other markets. This is what Larsen and Toubro did while it entered the export

markets for the first time. They concentrated on Indonesia. After having established in Indonesia

they moved on to other nearby markets. It is easier to extend operation in other markets because

of the experience already gained in entering the first market. It is easier to increase business

where you have a stronghold rather than increase business in new areas.

In some instances products to be exported might by their very nature have only a small number of

possible customers in any one country making it essential to approach a large number of foreign

areas simultaneously. This applies to some large items such as complete cement plants or to

extremely specialized apparatus like the equipment to measure electrical voltages in the human


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muscle. So also in some cases, success might depend on high volume of production that it is

essential to aim at every possible market simultaneously.

Criteria for classifying world Markets: The basic problem that a firm has to solve in the initial

stage of planning its international marketing strategy is to identify global marketing opportunities.

To identify and shortlist markets which offer or might offer in future opportunities that can be

exploited by it, a classification scheme for segmenting the world markets is required. There are

several bases of classification, principal among then are:

Classification based on demand

Classification on the basis of stages of demand: Keegan has produced a threefold classification of

world marketers:

1. Exiting markets

2. Latent markets

3. Incipient markets

In the existing markets, consumer needs are known and are already being serviced by some

products. The market opportunities can be assessed by estimating the consumption rate and the

share of imports in current consumption. Latent markets have potential customers but because no

one has offered a product to fill the latent need there is no existing market. Incipient markets do

not exist in the present, however conditions and trends can be identified that point towards the

emergence of future needs and preferences for product and services that will create a potent

market, which if supplied will become an existing market.

Based on the stage of development other bases for division of world markets

Classification on the basis of Stages of Development: The world markets can be divided into four

distinct segments, viz., industrial economies, more developed developing countries, raw material

exporting economies and subsistence economies. Industrial Economies: These countries lay more

emphasis on research and development and devote their resources to production of more

sophisticated products and will therefore like to import goods of simpler technology and simpler

manufactures. These countries also have an acute shortage of labor and would, therefore tend to

import intensive products like electronics and light engineering goods. They also tend to import

spares and components and raw materials to feed their industries and many decorative articles

because of their affluence. They are very particular about preventing further pollution and,

therefore they would like to import not only anti-pollution equipment but also articles whose


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production has been banned for risks of pollution. They are willing to provide technology to set

up production and processing facilities in developing countries. They provide a large market as

they have no import restriction. In fact, the five major importing countries viz., United States, the

United Kingdom, France, Japan and Germany, account for 40 per cent of world imports

Social and Cultural Environment: Basic aspects of society and culture,

The social environment, social context, sociocultural context, or milieu, refers to the

immediate physical and social setting in which people live or in which something happens or

develops. It includes the culture that the individual was educated or lives in, and the people

and institutions with whom they interact.

The interaction may be in person or through communication media, even anonymous or one-

way, and may not imply equality of social status. Therefore the social environment is a broader

concept than that of social class or social circle.

Cultural environments consist of the influence of religious, family, educational, and social

systems within the marketing system. Marketers who intend to market products overseas must be

sensitive to foreign cultures. While the differences between our cultural background in the United

States and those of foreign nations may seem small, marketers who ignore these differences risk

failure in implementing marketing programs.

This task is not as easy as it sounds, as various features of a culture can create an illusion of

similarity. Even a common language does not guarantee similarity of interpretation. For example,

in the U.S. we purchase "cans" of various grocery products, but the British purchase "tins". The

following are a few cultural differences that may cause marketers problems in attempting to

market their products overseas.

Approaches to cultural factors

Keegan (1989) suggested a number of approaches to the study of culture including the

anthropological approach, Maslow's approach, the Self- Reference Criterion (SRC), diffusion

theory, high and low context cultures and perception. There are briefly reviewed here.

Anthropological approach

Culture can be deep seated and, to the untrained can appear bizarre. The Moslem culture of

covering the female form may be alien, to those cultures which openly flaunt the female form.


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The anthropologist, though a time consuming process, considers behaviour in the light of

experiencing it at first hand. In order to understand beliefs, motives and values, the anthropologist

studies the country in question anthropology and unearths the reasons for what, apparently,

appears bizarre.

Maslow approach

In searching for culture universals, Maslow's (1964) hierarchy of needs gives a useful analytical

framework. Maslow hypothesized that people's desires can be arranged into a hierarchy of needs

of relative potency. As soon as the "lower" needs are filled, other and higher needs emerge

immediately to dominate the individual. When these higher needs are fulfilled, other new and still

higher needs emerge. The self-reference criterion (SRC)

Perception of market needs can be blocked by one's own cultural experience. Lee

(1965)4 suggested a way, whereby one could systematically reduce this perception. He suggested

a four point approach.

a) Define the problem or goal in terms of home country traits, habits and norms.

b) Define the problem or goal in terms of the foreign culture traits, habits and norms.

c) Isolate the SRC influence in the problem and examine it carefully to see how it complicates the

pattern.

d) Redefine the problem without the SRC influence and solve for the foreign market situation.

The problem with this approach is that, as stated earlier, culture may be hidden or non-apparent.

Uneartherning the factors in b) may, therefore, be difficult. Nonetheless, the approach gives

useful guidelines on the extent for the need of standardization or adaption in marketing planning.

Diffusion theory

Many studies have been made since the 1930's to assess how new innovations are diffused in a

society. One of the most prolific writers was Everett Rogers8. In his book, "Diffusion of

Innovations" (1962) he suggested that adoption was a social phenomenon, characterized by a

normal distribution


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Impact of Social and Cultural Environment on Marketing Industrial and Consumer

Products

Potential impacts from the Proposal considered relevant to indigenous cultural heritage in

proximity to Anketell Point include:

Possible disturbance of heritage sites during vegetation clearing, infrastructure establishment or

operations;

Possible disturbance or contamination of heritage sites by the workforce during construction or

operation; and Possible restrictions or access to certain areas.

Assessment of potential impacts

A preliminary assessment of known indigenous cultural heritage sites on the DIA register within

proximity to the Proposal has identified a number of archaeological and ethnographic sites

(Figure 3.26). Information available from the DIAs databases indicates that a total of 12

indigenous cultural heritage surveys have been completed in proximity to the Proposal; many

completed over 15 years ago. Detailed surveys in consultation with Traditional Owners is planned

for the Proposal area. Based on previous surveys in the Proposal area and the wider Pilbara, it is

also considered likely that Aboriginal archaeological sites will be located in the vicinity of major

creeks and rivers. The DIA register identifies numerous archaeological and ethnographic sites that

are located in proximity to the Proposal. No rock shelters have been publically recorded to date.


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Module III (7 Hours)

Global marketing management planning and organization: Global perspective global

gateways global marketing management an old debate and a new view planning for global

markets alternative market entry strategies organizing for global competition

Global marketing management planning and organization: Global perspective:

Confronted with increasing global competition for expanding markets, multinational companies

are changing their marketing strategies and altering their organizational structures. Their goals

are enhance their competitiveness and to ensure proper positioning in order to capitalize on

opportunities in the global marketplace.

In fact, the flexibility of a smaller company may enable it to reflect the demands of global

markets and redefine its program more quickly than larger multinationals. Acquiring a global

perspective is easy, but the execution requires planning, organizations, and a willingness to try

new approaches-from engaging in collaborative relationships to redefining the scope of

company operations.

Global gateways

A gateway that global resource manager programs use to access resources outside a CS or

TSAF collection

GLOBAL MARKETING

Definition:

Marketing on a worldwide scale reconciling or taking commercial advantage of global

operational differences, similarities and opportunities in order to meet global objectives.

Why global marketing?

Here are three reasons for the shift from domestic to global marketing

Saturation of Domestic Markets

For a company to keep growing, it must increase sales. Industrialized nations have, in many

product and service categories, saturated their domestic markets and have turned to other countries

for new marketing opportunities. Companies in some developing economies have found

profitability by exporting products that are too expensive for locals but are considered inexpensive

in wealthier countries.


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World Wide Competition

One of the product categories in which global competition has been easy to track is in U.S.

automotive sales. Three decades ago, there were only the big three: General Motors, Ford, and

Chrysler. Now, Toyota, Honda, and Volkswagen are among the most popular manufacturers.

Companies are on a global playing field whether they had planned to be global marketers or not.

E-Commerce

With the proliferation of the Internet and e-commerce (electronic commerce), if a business is

online, it is a global business. With more people becoming Internet users daily, this market is

constantly growing. Customers can come from anywhere. According to the book, Global

Marketing Management, business-to-business (B2B) e-commerce is larger, growing faster, and

has fewer geographical distribution obstacles than even business-to-consumer (B2C) e-

commerce.

GLOBAL MARKETING EVOLUTION

PHASE 1

Leverage of domestic capabilities:

Foreign market entry

Objective:- Economies of scale

PHASE 2

Expansion of foreign market presence

Objective :-Economies of Scope

PHASE 3

Coordination of global operations

Objective :-Exploit synergies

throughout network


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Benefits Of Global Marketing:

Economies of scale in production and marketing can be important competitive advantages for

global companies

Unifying product development, purchasing, and supply activities across several countries it

can save costs

Transfer of experience and know-how across countries through improved coordination and

integration of marketing activities

Diversity of markets by spreading the portfolio of markets served brings an important stability

of revenues and operations to many global firms

Helps to establish relationships outside of the "political arena"

Helps to encourage ancillary industries to be set up to cater the needs of the global player.

Disadvantages

Differences in consumer needs, wants, and usage patterns for products

Differences in consumer response to marketing mix elements

Differences in brand and product development and the competitive environment

Differences in the legal environment, some of which may conflict with those of the home

market

Differences in the institutions available, some of which may call for the creation of entirely

new ones (e.g. infrastructure)

Differences in administrative procedures

Differences in product placement.

Global Marketing: A Old Debate and a New View

Global Marketing Management thought has undergone substantial revision

In the 1970s the argument was framed as standardization vs. adaptation

In the 1980s it was globalization vs. localization or Think local, act local

In the 1990s it was global integration vs. local responsiveness

The basic issue is whether the global homogenization of consumer tastes allowed global

standardization of the marketing mix


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PLANNING FOR GLOBAL MARKETS

Planning is a systematized way of relating to the future. It is an attempt to manage the

effects of external, uncontrollable factors on the firms strengths, weakness, objectives and

goals to attain a desired end. Planning is the job of making things happen that might not

otherwise occur.

The difference between planning for a domestic company and for an international company

Domestic Planning International Planning

1. Single language and nationality 1. Multilingual/multinational/multicultural factors

2. Relatively homogeneous market 2. Fragmented and diverse markets

3. Data available, usually accurate

and collection easy

3. Data collection a large task requiring significantly

higher budgets and personnel allocation

4. Political factors relatively

unimportant

4. Political factors frequently vital

5. Relative freedom from

government interference

5. Involvement in national economic plans;

government influences business decisions

6. Individual corporation has little

effect on environment

6. "Gravitational" distortion by large companies

7. Chauvinism helps 7. Chauvinism hinders

8. Relatively stable business

environment

8. Multiple environments, many of which are highly

unstable (but may be highly profitable)

9. Uniform financial climate 9. Variety of financial climates ranging from over-

conservative to wildly inflationary

10 Single currency 10. Currencies differing in stability and real value

11 Business "rules of the game"

mature and understood

11. Rules diverse, changeable and unclear

12 Management generally

accustomed to sharing

responsibilities and using

financial controls

12. Management frequently unautonomous and

unfamiliar with budgets and controls

Planning allows for rapid growth of the international function, changing markets, increasing

competition, and the turbulent challenges of different national markets. The plan must be blend

the changing parameters of external country environments with corporate objectives and

capabilities to develop a sound, workable marketing program.


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Planning relates to the formulation of goals and methods of accomplishing them, so it is both a

process and a philosophy. Structurally, planning may be viewed as corporate, strategic, or

tactical. International Corporate Planning is essentially long term, incorporating generalized

goals for the enterprise as a whole. Strategic planning is conducted at the highest levels of

management and deals with products, capital, and research, and long and short-term goals of the

company. Tactical planning or market planning, pertains to specific and to the allocation of

resources used to implement strategic planning goals in specific markets.

The Key success of planning is evaluating company objectives, including managements

commitment and philosophical orientation to international business.

THE PLANNING PROCESS

Guidelines and systematic procedures are necessary for evaluating international opportunities

and risks and for developing strategic plans :

International planning process includes 4 phases:

T

Phase 1: Preliminary Analysis and Screening-Matching Comapany and Country Needs

A critical first step in the international planning process is deciding in which existing country

market to make a market investment. A companys strengths and weakness, products,

philosophies, and objectives must be matched with a countrys constraining factors and market

potential. In the first part of the planning process, countries are analyzed and screened to

eliminate those that do not offer sufficient potential for further considerations. The next step is


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to establish screening criteria against which prospective countries can be evaluated. These

criteria are ascertained by an analysis of company objectives, resources, and other corporate

capabilities and limitations. It is important to determine the reasons for enetering a foreign

market and the returns expected from such an investment. Minimum market potential,

minimum profit, return on investment, accepatable competitive levels.

Phase 2: Adapting the Marketing Mix to Target Makets:

When target markets are slelected, the market mix must be evaluated in light of the data

generated in the phase 1. Incorrect decisions at this point lead to products inappropriate for the

intended market or to costly mistakes in pricing, advertising, and promotion. The primary goal

of phase 2 is to decide on am marketing mix adjusted to the cultural constraints imposed by the

uncontrollable elements of the environment that effectively achieves corporate objectives and

goals. Phase 2 also permits the marketer to determine possibilities for applying marketing

tactics across national markets.//

Phase 3: Developing the Marketing Plan

At this stage of the planning process, a marketing plan is developed for the target market-

whether it is a single country or a global market segment. The marketing plan begins witn a

situation analysis and culminates in the selection of an entry mode and a specific action

program for the market. The specific plan establishes what is to be done, by whom, how it is to

be done, and when. Included are budgets and sales and profit expectations.

Phase 4: Implementation and Control

A go decision in phase 3 triggers implementation of specific plans and anticipation of

successful marketing. However, the planning process does not end at this point. All marketing

plans require coordination and control during the period of implementation. An evaluation and

control system requires performance-objective action, that is, bringing the plan back on track

should standards of performances fall short. A global orientation facility the difficult but

extremely important management tasks of coordinating and controlling the complexities of

international marketing.


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ALTERNATIVE FOREIGN MARKET ENTRY STRATEGIES:

When a company makes the commitment to go international, it must choose an entry strategy.

This decision should reflect an analysis of market characteristics ( such as potential sales,

strategic importance, cultural differences, and country restrictions) and company capabilities

and characteristics, including the degree of near-market knowledge, marketing involvement,

and commitment that management is prepared to make.

Alternative Market-Entry Strategies

Import regulations may be imposed to protect health, conserve foreign exchange, serve as

economic reprisals, protect home industry, or provide revenue in the form of tariffs.

A company has four different modes of foreign market entry from which to select

exporting

contractual agreements

strategic alliances, and

direct foreign investment

EXPORTING

Exporting can be either direct or indirect. In direct exporting the company sells to a customer in

another country. In contrast, indirect exporting usually means that the company sells to a buyer

(importer or distributor) in the home country who in turn exports the product. The internet is

becoming increasingly important as a foreign market entry method. Direct sales, particularly for

high technology and big ticket industrial products a direct sales force may be required in a foreign

country. This may mean establishing an office with location expatriate managers and staff

depending of course on the size of the market and potential sales revenues.


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CONTRACTUAL AGREEMENTS

Contractual agreements are long term, non-eqauity associations between a company and another

in a foreign market. Contractual agreements involve the transfer of technology, processes,

trademarks, or human skills.

Contractual forms of market entry include:

(1)Licensing: A means of establishing a foothold in foreign markets without large capital

outlays is licensing of patent rights, trademark rights, and the rights to use technological

(2)Franchising: In licensing the franchiser provides a standard package of products, systems,

and management services, and the franchisee provides market knowledge, capital, and personal

involvement in management.

STRATEGIC INTERNATIONAL ALLIANCES

Strategic alliances have grown in importance over the last few decades as a competitive

strategy in global marketing management. A strategic international alliance (SIA) is a business

relationship established by two or more companies to cooperate out of mutual need and to share

risk in achieving a common objective.. SIAs are sought as a way to shore up weaknesses and

increase competitive strengths. SIAs offer opportunities for rapid expansion into new markets,

access to new technology, more efficient production and marketing costs.

An example of SIAs in the airlines industry is that of the Oneworld alliance partners made up of

American Airlines, Cathay Pacific, British Airways, Canadian Airlines, Aer Lingus, and

Qantas.

INTERNATIONAL JOINT VENTURES

International joint ventures (IJVs) have been increasingly used since 1970s.JVs are used as a

means of lessening political and economic risks by the amount of the partners contribution to the

venture. JVs provide a less risky way to enter markets that pose legal and cultural barriers than

would be the case in an acquisition of an existing company. A joint venture is different from

strategic alliances or collaborative relationships in that a joint venture is a partnership of two or

more participating companies that have joined forces to create a separate legal entity. Joint

ventures are different from minority holdings by an MNC in a local firm.


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Four factors are associated with joint ventures:

1. They are established, separate, legal entities

2. They acknowledge intent by the partners to share in the management of the Jv.

3. They are partnerships between legally incorporated entities such as companies, chartered

organizations, or governments, and not between indiciduals

4. Equity positions are held by each of the partners.

CONSORTIA

Consortia are similar to joint ventures and could be classified as such except for two unique

characteristics.

(1)They typically involve a large number of participants.

(2)They frequently operate in a country or market in which none of the participants is currently

active.

Consortia are developed to pool financial and managerial resources and to lessen risks

DIRECT FOREIGN INVESTMENT

A fourth means of foreign market development and entry is direct foreign investment.

Companies may manufacture locally to capitalize on low-cost labor, to avoid high import taxes,

to reduce the high costs of transportation to market, to gain access to raw materials, or as a

means of gaining market entry. Firms may either invest in or buy local companies or establish

new operations facilities.

Comparison of Market Entry Options

The following table provides a summary of the possible modes of foreign market entry:

Comparison of Foreign Market Entry Modes

Mode Conditions Favoring

this Mode

Advantages Disadvantages

Exporting Limited sales potential in

target country; little

product adaptation

required

Distribution channels

close to plants

Minimizes risk and

investment.

Speed of entry

Maximizes scale;

uses existing

facilities.

Trade barriers &

tariffs add to costs.

Transport costs

Limits access to

local information

Company viewed as


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High target country

production costs

Liberal import policies

High political risk

an outsider

Licensing Import and investment

barriers

Legal protection possible

in target environment.

Low sales potential in

target country.

Large cultural distance

Licensee lacks ability to

become a competitor.

Minimizes risk and

investment.

Speed of entry

Able to circumvent

trade barriers

High ROI

Lack of control over

use of assets.

Licensee may

become competitor.

Knowledge

spillovers

License period is

limited

Joint

Ventures

Import barriers

Large cultural distance

Assets cannot be fairly

priced

High sales potential

Some political risk

Government restrictions

on foreign ownership

Local company can

provide skills, resources,

distribution network,

brand name, etc.

Overcomes

ownership

restrictions and

cultural distance

Combines

resources of 2

companies.

Potential for

learning

Viewed as insider

Less investment

required

Difficult to manage

Dilution of control

Greater risk than

exporting a &

licensing

Knowledge

spillovers

Partner may become

a competitor.

Direct

Investment

Import barriers

Small cultural distance

Assets cannot be fairly

priced

High sales potential

Low political risk

Greater knowledge

of local market

Can better apply

specialized skills

Minimizes

knowledge

spillover

Can be viewed as

an insider

Higher risk than

other modes

Requires more

resources and

commitment

May be difficult to

manage the local

resources.

ORGANIZING FOR GLOBAL COMPETITION

An international marketing plan should optimize the resources committed to company

objectives. The organizational plan includes the type of organizational arrangements to be used,

and the scope and location of responsibility. Companies are usually structured around one of

three alternatives:

1. Global product divisions responsible for product sales throughout the world;

2. Geographical divisions responsible for all products and functions within a given geographical

area; or


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3. A matrix organization consisting of either of these arrangements with centralized sales and

marketing run by a centralized functional staff, or a combination of area operations and global

product management.


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Module IV (6 Hours)

Products and services for consumers: Quality Green marketing and product development,

products and culture analyzing product components for adaptation products for consumers in

global markets, product development, product adaptation, product standardization, marketing

consumer services globally marketing of services, brands in international markets

Products and services for businesses

Demand in global business to business markets quality and global standards business services

trade shows' crucial part of business to business marketing relationship markets in business to

business context

PRODUCTS AND SERVICES FOR CONSUMERS

QUALITY:

The ability of a product or service to meet customer needs. It can be defined on 2

dimensions,

Market perceived quality

Performance quality

Both are important but consumer perception of a quality product often has to do more with

market perceived quality. It is also measured in many industries by objective third parties.

Maintaining performance quality is critical, but frequently a product that leaves the factory at

performance quality is damaged as it passes through the distribution chain.

A product may have to change in a number of ways to meet the physical or mandatory

requirements of a new market, ranging from simple package changes to total redesign of the

physical core product.

Green marketing is a term used to identify concern with the environmental consequences

of a variety of marketing activities.

Quality is associated with customer satisfaction. It is a means to an end.

Q: QUEST FOR EXCELLENCE.

U: UNDERSTANDING CUSTOMERS NEEDS.


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A: ACTION TO ACHIEVE CUSTOMERS APPRECIATION.

L: LEADERSHIP.

I: INVOLVING ALL PEOPLE.

T: TEAM SPIRIT TO WORK FOR A COMMON GOAL.

Y: YARDSTICK TO MEASURE PROGRESS.

GREEN MARKETING

At the forefront of the green movement, with strong public opinion and specific legislation

favoring environmentally friendly marketing and products.

Green marketing is a term used to identify concern with the environmental consequences of a

variety of marketing activities. The designation that a product is environmentally friendly is

voluntary, and environmental success depends on the consumer selecting the eco-friendly

product. In some countries each level of the distribution chain is responsible for returning all

packaging, packing, and other waste materials up the chain

PRODUCTS AND CULTURE:

A product is the sum of physical and psychological satisfactions it provides the user. A

product is more than a physical item. It is a bundle of satisfaction that the buyer receives. A

products physical attributes generally are required to create its primary function. The meaning

and value imputed to the psychological attributes of a product can vary among cultures and are

perceived as negative or positive.

To maximize the bundle of satisfaction received and to create positive product attributes

rather than negative ones, adaptation of the nonphysical features of a product. The adoption of

some products by consumers can be affected as much by how the product concept conforms to

norms, values, and behavior patterns as by its physical or mechanical attributes.

An important first step in adapting a product to a foreign market is to determine the degree

of newness as perceived by the intended market. Any idea perceived as new by a group of

people is an innovation. Product diffusion is the process by which innovation spreads. A critical

factor in the newness of a product is its effect on established patterns of consumption and

behavior.


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Analyzing the 5 characteristics of an innovation can assist in determining the rate of

acceptance or resistance of the market to a product. A products,

Relative advantage The perceived marginal value of the new product relative to the old.

Compatibility With acceptable behavior, norms, values.

Complexity The degree of complexity associated with product use.

Trial ability The degree of economic and/or social risk associated with product use.

Observability The ease with which the product benefits can be communicated.

After the degree of its acceptance or resistance.

ANALYZING PRODUCT COMPONENTS FOR ADAPTATION:

A product is a multidimensional, and the sum of all its features determines the bundle of

satisfactions received by the consumer.

Core Component: It consists of the physical product, the platform that contains the essential

technology and all its design and functional features. It is on the product platform that product

variations can be added or deleted to satisfy local differences. Alterations in design, functional

features, flavors, color can be made to adapt the product to cultural variations. Functional features

can be added or eliminated depending on the market.

Packaging Component:

Includes style features, packaging, labeling, trademarks, brand name, quality, price of a

products package. Packaging component frequently require both discretionary and mandatory


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changes. Care must be taken to ensure that corporate trademarks and other parts of the

packaging component do not have unacceptable symbolic meanings. Labeling law create a

special problem for companies selling products in various markets with different labeling laws

and small initial demand in each.

Support Services Component:

Includes repair and maintenance, instructions, installations, warranties, deliveries and the

availability of spare parts. Repair and maintenance are difficult in developing countries.

The product component model can be a useful guide in examining adaptation

requirements of products destined for foreign markets. A product should be carefully evaluated

on each of the 3 components for mandatory and discretionary changes that may be needed.

MARKETING CONSUMER PRODUCTS & SERVICES GLOBALLY:

Products are often classified as tangible, whereas services are intangible. The intangibility

of services results in characteristics unique to a services. It is inseparable, heterogeneous, and

perishable. A service can be marketed as a B2B or consumer service.

There are various barriers to entering global markets for consumer services:-

Protectionism

Restrictions on Transborder data flows

Protection of Intellectual Property

Cultural Barriers and Adaptation

PRODUCTS AND SERVICES FOR BUSINESS:

B2B marketing requires close attention to the exact needs of customers. Basic differences

across various markets are less than for consumer goods, but the motives behind purchases

differ enough to require a special approach. Global competition has risen to the point that

industrial goods marketers must pay close attention to the level of economic and technological

development of each market to determine the buyers assessment of quality. Companies that


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adapt their products to these needs are the ones that should be the most effective in the market

place.

The demand for products and services in B2B markets is by nature more volatile than in

most common markets. The demand also varies by level of economic development and the

quality of educational systems across countries. Ultimately, product or service quality is defined

by customers, but global quality standards such as ISO 9000 are being developed that provide

information about companys attention to matters of quality. After sale services are hugely

important aspect of industrial sales. The demand for other kinds of business services is

burgeoning around the world. Trade shows are an especially important promotional medium in

B2B marketing.

product adaptation

Definition

Marketing strategy whereby new products are based on modification or some improvement on

existing or competing products, and not on pioneering innovations. It is the strategy of a follower.

PRODUCT STANDARDISATION

Even though product adaptation becomes inevitable in the case of certain products, it should

be realized that there is sound economics logic behind a product policy which suggests

uniformity in all markets. Terpstra has identified six factors which may favour international

product standardization.

1. Economies of Scale in Production: When only one standard version is marketed in all the

areas, it will be possible to have larger production runs, which will result in lower

manufacturing costs.

2. Economies in Product Research and development: Similarly, product standardization will

allow recovery of all costs incurred in product research and development from the entire

sales. This will reduce the recovery period as also lower the break-even point. Moreover,

additional expenditure on adapting product to each individual market can be avoided.


SJBIT/MBA Page 45

3. Economies in Marketing. When the same product is to be launched in different markets,

economies can be achieved in terms of sales literature, sales force training, inventory

management, advertising and after-sales requirements.

There are 3 marketing factors which may reinforce the standardization level:

1. Consumer Mobility: Consumers are becoming increasingly more mobile and

transcontinental travel in now fairly common. A consumer who is loyal to a particular

brand in his home market is more likely to remain loyal in a foreign country as well when

the product in question is the same.

2. Made-in Image: When the name of a country is associated with a high standard of quality

in the minds of the consumers, a product manufactured in that country may enjoy a

psychological premium in the foreign markets.

3. Impact of Technology: Industrial products generally tend to have standard and

specifications and do not require much adaptation for foreign markets unless climatic and

similar considerations call for it.

Consumer services globally marketing of services

MARKETING OF SERVICE

Advice regarding adapting products for international consumer markets also applies to adapting

services or intangible products

However, many c

Mba IV International Marketing Management [12mbamm418] Notes

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