PCTI Group

An ISO 9001:2000 Certified Organization

PCTI Group

Document Title(Document Sub-Title)

An ISO 9001:2000 Certified Organization

Introduction to International Marketing

Block-1

© Copyright PCTI Group 2009Presentation Title | April 21, 2023 | <document classification>

3

Unit-1

• International Marketing


4

Marketing

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

Marketing is the process of It is a management process whereby the resources of the whole organization are utilized to satisfy the needs of selected customer groups in order to achieve the objectives of both parties.


5

The Exchange Process

• Giving something of value in return for something of value.

• A product is anything customers will exchange something of value for, because it satisfies their need or want.


6

Conditions for successful exchange

• At least two parties must be involved.

• Each party must have something that interests the other party.

• Each party must be able to communicate and deliver.

• Each party must be free to accept or reject any offer from the other party.


7

Marketing Philosophies• There are 5 marketing philosophies:

• 1.Production concept

• 2. Product concept

• 3. Selling concept

• 4. Marketing concept

• 5. Societal concept


8

Production concept

• This is an approach in which a company believes that customers are interested only in low priced, easily available goods and finer points of the product are not very important to them.

• In this approach a company concentrates on achieving high production efficiency and wide distribution coverage.


9

Product Concept• This is an approach in which a company

believes that customers favors those products that offer the most quality performance and features.

• Customers appreciate quality features and are willing to pay higher price for extra quality.


10

Selling concept• In this approach producers believe that

aggressive persuasion and selling is the crux of the business success.

• Attention is paid to find ways and means to sell.

• Considerable promotional effort is justified.


11

Marketing Concept• Under Marketing concept, the organization

considers the needs and wants of customers and produce according to that.

• Under this concept, the task of marketing begins with finding what the customer wants and produce a product which will meet that want and provide maximum satisfaction.


12

Societal Concept • The societal concept holds that a company

must take into account the needs and wants of consumers and deliver the goods and services efficiently so as to enhance customers satisfaction as well as the societies well being.

• Marketing must be a socially responsible or accountable activity.


13

Difference between Selling and Marketing

• In selling Emphasis is on the product whereas in Marketing Emphasis is on customer wants.

• In selling company first makes the product then figures out how to sell it whereas in Marketing company first determines customers wants then figures out how to deliver it.


14

Marketing Mix• The marketing activities are divided into

four basic elements:

• Product

• Price

• Promotion

• distribution


15

Product

• Products are integral to the exchange process, without them, there is no marketing.

• Product stands for the goods and services offered by the organization.


16

Price

• It is the value, usually in monetary terms, that sellers ask for in exchange for the products they are offering.


17

Place / Distribution

• It is the process of moving products from the producer to the consumer.


18

Promotion

• It includes a variety of techniques, including advertising, sales promotion, public relations and personal selling, that are used to communicate with customers.


19

Functions of Marketing

• Functions of marketing are divided into three categories.

• 1. Merchandising functions.

• 2. Physical distribution functions

• 3. Auxiliary functions


20

Merchandising functions

• Product planning and development.

• Standardization and grading.

• Purchases and collection.


21

Physical distribution functions

• Storage

• transportation


22

Auxiliary functions

• Arrangement of finance

• Risk-bearing

• Collection of market information


23

International Marketing• International Marketing is the multinational

process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.

• International marketing refers to marketing carried out by companies overseas or across national borderlines.

• This strategy uses an extension of the techniques used in the home country of a firm


24

• International marketing is simply the application of marketing principles to more than one country. the process of globalization also provide a country to have a hidden attack to another

• International marketing is often not as simple as marketing your product to more than one nation. Companies must consider language barriers, ideals, and customs in the market they are approaching.


25

International Marketing concepts

• Domestic Marketing:Marketing that is targeted exclusively at the home-country market.

• A purely domestic company operates only domestically.When it reaches growth limits, it diversifies into new markets, products and technologies within the country instead of entering foreign markets.


26

• Export marketing:This is the first stage when the firm steps out of the domestic market and explore market opportunities outside the country.

• In export marketing, the main aim of the firm is to expand the market size.

• Firm produces all its goods in the home country and exports the surplus production to other countries.


27

• International Marketing:

• In International marketing, focus changes from just exporting to marketing in foreign countries.

• Company establishes subsidiaries in the foreign countries to undertake marketing operations.


28

• Multinational Marketing:

• Multinational marketing is the adaptation of the domestic marketing mix suitable to the marketing differences in market environment of each country.


29

• Global Marketing:• Under this strategy the world as a whole is

viewed as the market and the firm attempts to standardize as much of the company effort as is practical on worldwide basis.

• Thus the global marketing views an entire set of country market as a unit, identifying groups of prospective buyers with similar needs as a global market segment and developing a marketing plan that strives for standardization.


30

Reasons for Entering International Markets

• Domestic market constraints• Government policies and regulations• Growth of overseas markets• Increased productivity• Relative profitability• Diversification to reduce business risk• Control inflation and price rise• Counter competition• Strategic vision


31

Domestic market constraints

• If the size of domestic market is very small.• Due to recession in domestic market, companies

may not be able to utilize the full production capacity.

• Market of a number of products tend to saturate or decline in the advanced countries.

• Growth in international markets causes the growth in demand for some products, attracting the manufactures of these products to internationalize.


32

Government policies and regulations

• Government policies and regulations also motivate the firms to internationalize.Government may impose certain restrictions on further growth and capacity expansion of some firms within the domestic market in order to achieve certain social objectives.


33

Growth of overseas markets

• The enormous growth potential of many foreign markets is a very strong attraction for companies to enter into foreign markets.


34

Relative profitability

• International business could be more than domestic markets.The price realized in export markets may be relatively higher then that realized in the home market.


35

Strategic Vision

• The systematic and growing internationalization of many companies is essentially part of their business policy or strategic management.


36

Unit-2

• International marketing orientation and innovation


37

International Marketing Management process

• International marketing management can be defined as the analysis, planning, implementation and control of programmes designed to create, build and maintain beneficial exchanges with the target buyers in overseas market for the purpose of achieving organizational objectives.


38

Steps involved in the international marketing decision making process

1. Deciding to internationalize(SWOT Analysis)2. Market selection(Target market)3. Product selection4. Selection of entry mode5. Marketing strategy selection

a) Product strategyb) Pricing strategyc) Distribution strategyd) Promotion strategy

6. International organization decision


39

Deciding to internationalize

• Whether the firm should internationalize its operation or not?

• If SWOT analysis is favorable to the firm, it may decide to venture into the foreign market.


40

Market selection

• It depends on:

• Geographical proximity

• Market potential of a country i.e size, prosperity and growth of its imports etc.

• Characteristics of the country like population


41

Product selection

• Elasticity of supply

• Elasticity of demand


42

Selection of entry mode

• New firm – through export houses etc

• Established firm- own ways


43

Marketing strategy selection

• Product strategy

• Pricing strategy

• Promotion strategies

• Distribution strategies


44

International organizational decision

• Creation of export department

• Setting up of a international decisions

• Development of a global organization


45

International marketing orientation

• EPRG orientation• It identifies four types of orientation towards

internationalization of business operations

• 1. Ethnocentrism

• 2. Polycentrism

• 3. Reginocentrism

• 4. Geocentrism


46

Implications of EPRG orientations• Ethnocentric orientation: A company follow this

orientation when it does not differentiate between domestic and foreign market and consider that techniques which are applied to domestic market can be applied o international market also.

• In this phase of the firms operations overseas operations are considered secondary to domestic operations and as a means to dispose of domestic surplus production.

• International marketing activities will be controlled from home country.

• This approach will better suit small firms just entering international operations.When a company is small & is not in a position to invest heavily in the overseas operations,it is better for it identify countries which have same characteristics similar to those of the home country & export to them


47

Polycentric orientation• In this each overseas market is different from the

other and local techniques and personnel are best suited with local conditions

• Firms with this orientation are known to organize their international marketing activities on a country by country basis. Each country is treated as a separate entity.Subsidiaries are established overseas.

• This orientation will prove ideal for firms seriously committed to international marketing and have capacity to invest.

• This approach is best suited if there is significant differences between countries.


48

Regiocentric orientation

• In this phase, the firm recognizing the common features of a region, views that region as one market and organizes activities for that region as a whole.


49

Geocentric Orientation• Basic philosophy of this orientation is that

all humans are alike.The entire world is treated as one market.


50

EPRG depends on

• Size of the firm

• Experience in overseas market

• Extent of heterogeneity of the potential market

• Nature of the product


51

Response of Indian corporate sector

• Global approach• Flexibility• Enchasing opportunities• Creativity• Proactive approach• Responding to environmental changes• Working for long term prospectus• Advance action• Value addition


52

Unit-3

Analyzing International Marketing Environment


53

Environment• It can be defined as various external

factors that surround the firm and influence its decisions and operations .

• Two major characteristics of environment:

• 1. These factors and forces are external to the firm.

• 2. These are essentially uncontrollable.


54

Elements of international business environment

• Internal environment

• Micro environment

• Domestic environment

• Foreign environment

• Global environment


55

Internal environment• It can be defined as the factors in the

internal environment.

• It comprises the firms business strategy and decisions with respect to production, finance, marketing, HR etc.

• These are controllable factors.


56

Micro Environment• It can be defined as the factors in the

firm’s immediate environment which directly influence the firms decisions and operations.

• These include suppliers, market intermediaries and service organizations such as middleman, transporters, warehouses advertising etc.

• The factors are semi-controllable


57

Domestic Environment

• It consists of factors such as competitive structure, economic climate and political and legal forces which are essentially uncontrollable by the firm.


58

Foreign environment

• It consists factors like geographic and economic conditions, socio-cultural traits, political and legal forces and technological factors etc.


59

Global environment• Global environment exerts influence over

domestic as well as foreign countries and comprises forces like world economic conditions, international financial system, international agreements and treaties.

• WTO,IMF etc are the example of the global environmental forces having world wide or regional influences on business operation.


60

Components of international marketing environment

• Geographic environment• Demographic market• Economic environment• Technological environment• Social and cultural environment• Political and legal environment• Physical environment• Ecological environment


61

Geographical environment

• It refers to a country’s climate,topography, natural resources and people.


62

Demographic environment

• Demography may be defined as the study of the size,composition by age or racial group,distribution of the human population in relation to the geographic boundaries


63

Economic environment

• It include growth in global trade and increasing internationalization of the business, links and trade flows between neighboring market,pattern of economic development and growth of nation.


64

Technological environment

• It include technological advancement in electronic,communications etc


65

Social and cultural environment

• It often reflect the impact of changing economic and technological conditions

• Culture does not only include classical art,music and literature but to social institution, values, beliefs and behavior

• It include the following characteristics:a) It is learnt

b) It is passed on from one generation to another generation.

c) It facilitates communication d) It is socially shared


66

Physical environment

• It consists of natural resources including minerals, animal population and other aspects of natural world such as changes in ecological system.


67

Ecological environment

• It include the pattern and balance of relationships between plants, animals, people and the environment.

An ISO 9001:2000 Certified OrganizationBlock-2

International Market Selection and Entry


69

Unit -4

International Market Segmentation


70

Market Segmentation• A market segment is a subgroup of

people or organizations sharing one or more characteristics that cause them to have similar product and/or service needs. A true market segment meets all of the following criteria: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment.


71

International Market Segmentation

• International market segmentation is the process of dividing the total market into one or more parts each of which tend to be homogeneous in all aspects.


72

Market Linkages

• Communication linkages

• Travel linkages

• Organizational linkages


73

Basis of International Market Segmentation

• Geographic segmentation

• Demographic segmentation

• Psycho graphic segmentation

• Behavior segmentation

• Benefit segmentation


74

Essentials of Effective Segmentation

• Measurability.

• Substantial or profitable

• Accessible

• Differentiable

• Actionable


75

Advantages of Segmentation

• Understand potential customers better

• Pay attention to specific areas of marketing strategy

• Formulate marketing programmes more effectively

• Understand competition better

• Deploy marketing resources efficiently

• Promote the products more effectively


76

International Market Targeting

• Targeting is the act of evaluating and comparing the identified groups and then selecting one or more of them with the highest potential.

• This is the next step after segmentation in which a company study each of the segment carefully and identify one or more segments where company can focus its marketing efforts.


77

Criteria For Targeting

• Current size of the market segment and growth potential

• Potential competition

• Compatibility and feasibility


78

Targeting Strategies• Undifferentiated international market

targeting

• Differentiated international market targeting

• Concentrated international market targeting


79

Positioning• Positioning has come to mean the

process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. It is the 'relative competitive comparison' their product occupies in a given market as perceived by the target market.


80

• Re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market


81

• De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market.


82

Two approaches of positioning

• Head to head positioning:Involves competing directly with competitors on similar product attributes in the same target market.

• Differentiation positioning: Involves seeking a less competitive, smaller market in which a brand is located.


83

High Tech Positioning• Personal computers, video and stereo

equipment and automobiles are examples of high tech positioning.

• Technical products

• Special interest products

• Products that demonstrate well


84

High Touch Products• Marketing of High touch products requires

less emphasis on specialized information and more emphasis on image.

• Products that solve the common problems

• Global village products

• Products that use universal themes


85

UNIT-5

• FOREIGN MARKET SELECTION


86

Model for selecting Foreign Markets

• 1. Macro level research:

• Economic Status

• The political Environment

• Social structure

• Geographic features


87

2. General Marketing relating to the product:

Growth trends for similar products

Cultural Acceptance of such products

Market size

State of development

Taxes and duties


88

• 3. Micro level research:

• Existing & potential competition

• Ease of entry

• Reliability information

• Sales projections

• Cost of entry

• Profit potential


89

• 4. Target Markets:

• Corporate factors

• Influencing implementation


90

Criteria For Selecting Target Countries

• Market size

• Potential environment

• Legal environment

• Social and cultural environment


91

Market size & Growth

• The larger the potential demand for a product in a country , the more attractive it will be for a company.


92

Macro indicators for market growth

• Geographic factors

• Demographic factors

• Economic conditions


93

Political environment• Political instability

• Restrictions on capital movement

• Government intervention

• Limits of foreign ownership

• Number of riots or assassinations


94

Legal conditions

• In different countries there are different rules & regulations for business.


95

Social & cultural conditions

• Material culture

• Language

• Esthetics

• Education

• religion


96

Process of Market selection

• Market definition

• Market segmentation

• Determining the markets


97

Market Definition

• A company can define market in terms of country characteristics or in terms of product characteristics.


98

Market segmentation

• Market segmentation is dividing the market into sub units.


99

Determining the Market• In this, we determine which market to build, which

to divest(deprive) and which to abandon(dispose off) in order to optimize the company’s return on investment.

• For this purpose, most companies use the country attractiveness/competitive strength matrix.

1. Invest /grow countries2. harvest/license/combine countries3. dominant/divest countries4. selectivity countries


100

Competitive strength matrix

• For determining the markets most companies use country attractiveness/ competitive strength matrix.


101

Countries would fall any of the heads

• 1. Invest / grow countries:

• Such countries call for a high level marketing commitment. They represent a large market size which can be tapped through investment in people and capital.


102

Harvest / divest / license / combine countries

• They represent the direct opposite of grow countries.Country attractiveness is low and competitive strength is also low, such a country must be harvested.


103

Dominant / Divest Countries

• Such countries rank high on country Attractiveness but low on competitive strengths.

• There are two choices in this strategy:

• 1. To sell out

• 2. To develop competitive strength to reap the opportunities offered by such market.


104

Selective countries• Such countries fall in the center of the

matrix representing the fact that they are neither highly attractive countries nor highly unattractive.

• In such situation a company can either unite the market or build the market by introducing new product features through technological up gradations.


105

Unit-6

• International Marketing Entry Decisions


106

Entry Modes

• 1. Exporting

• Under this strategy, the company exports the product from its home base, without any marketing or production or organization overseas.


107

• Exporting may be appropriate under the following circumstances:

• The volume of foreign market is not large enough to justify production in the foreign market.

• Cost of production is higher in the foreign market.

• Foreign investment is not encouraged by concerned foreign market.

• Attractive incentives are available in the foreign market.


108

• Indirect Exporting:

• When the firm delegates the task of selling goods abroad to an outside agency, it is called indirect exporting.


109

• Direct Exporting:

• When the manufacturing firm itself performs the task of selling goods abroad rather than entrusting it to any outside agency it is called exporting.


110

• 2. Licensing:

• Under licensing a company assigns the right to undertake production locally using its patent or a trademark to a local company for a fee or royalty.


111

• A manufacturer should consider licensing when

• Capital is scarce

• Import restrictions discourage direct entry.

• The country is sensitive to foreign ownership


112

Disadvantage of licensing

• The substantial dependence on the local licensee to generate revenue and pay royalties.

• License is granted , royalties will only be paid if the licensee is capable of performing an effective marketing job.

• The parent company’s image may suffer if a local licensee markets a product of standard quality.

• Termination of license may be very complicated task.


113

• 3. Franchising:• It is a special form of licensing in which a parent

company grants another independent company the right to do business in a prescribed manner.

• The franchiser grants the independent operator the right to distribute its products, techniques, and trademarks for a percentage of gross monthly sales and a royalty fee.


114

• 4. Contract Manufacturing:• Under contract manufacturing, a company

arranges to have its products manufactured by an independent local company on a contractual basis.

• A company doing international marketing enters into contract with local firm in the foreign country to manufacture the product, while retaining the responsibility of marketing.

• It is adopted with regard to countries with low market potential combined with high tariff protection.


115

• 5. Assembly :• In assembly operation, the international firm locates a

portion of the manufacturing process in foreign country.• This is the last step of manufacturing and depends on

the ready supply of components or manufactured parts to be shipped from another country.

• Under assembly, most of the components are produced domestically and the finished goods are assembled in the foreign country.

• The assembly is used when there are economies of scale in the manufacturer of parts and when assembly operations are labor intensive and labor is cheap in the foreign country.


116

• 6. Joint ventures:

• A joint venture (often abbreviated JV) is an entity formed between two or more parties to undertake economic activity together. The parties agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise.


117

Advantages of joint venture

1. Build on company's strengths 2. Spreading costs and risks 3. Improving access to financial resources 4. Economies of scale and advantages of

size 5. Access to new technologies and

customers 6. Access to innovative managerial

practices


118

• 7. Strategic Alliances:• A Strategic Alliance is a formal

relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations

• This strategy seeks to enhance the long term competitive advantage of the firm by forming alliance with its competitors instead of competing with each other.


119

Stages of alliances• Strategy Development:

• Strategy development involves studying the alliance’s feasibility, objectives and rationale, focusing on the major issues and challenges and development of resource strategies for production, technology, and people.


120

Partner assessment• Partner Assessment: Partner

assessment involves analyzing a potential partner’s strengths and weaknesses, creating strategies for accommodating all partners’ management styles, preparing appropriate partner selection criteria, understanding a partner’s motives for joining the alliance and addressing resource capability gaps that may exist for a partner.


121

Contract Negotiation• Contract Negotiation:

• Contract negotiations involves determining whether all parties have realistic objectives, defining each partner’s contributions and rewards, addressing termination clauses, penalties for poor performance, and highlighting the degree to which arbitration procedures are clearly stated and understood.


122

Alliance Operation• Alliance Operation: Alliance operations

involves addressing senior management’s commitment, finding the calibre of resources devoted to the alliance, linking of budgets and resources with strategic priorities, measuring and rewarding alliance performance, and assessing the performance and results of the alliance


123

Alliance Termination• Alliance Termination: Alliance

termination involves winding down the alliance, for instance when its objectives have been met or cannot be met, or when a partner adjusts priorities or re-allocated resources elsewhere.


124

Types of alliances

• Technology based alliances

• Production based alliance

• Distribution based alliance


125

• 8. Merger and acquisition:

• A Merger is a combination of two companies into one larger company. Such actions are commonly voluntary and involve stock swap or cash payment to the target. Stock swap is often used as it allows the shareholders of the two companies to share the risk involved in the deal.


126

Classifications of mergers

• Horizontal Merger:• Take place where the two merging companies

produce similar product in the same industry. • Vertical Merger:• occur when two firms, each working at different

stages in the production of the same good, combine.

• Concentric Merger:• occur where two merging firms are in the same

general industry, but they have no mutual buyer/customer or supplier relationship, such as a merger between a bank and a leasing company


127

• Acquisition:

• An acquisition, also known as a takeover, is the buying of one company (the ‘target’) by another. An acquisition may be friendly or hostile. In the former case, the companies cooperate in negotiations; in the latter case, the takeover target is unwilling to be bought or the target's board has no prior knowledge of the offer.


128

Entry Strategy Analysis

• Expected sales

• Costs

• Assets

• Profitability

• Risk factors


129

Block-3

• International product and pricing decisions


130

Unit-7

• International Product Planning


131

Product Decisions

• What is a product:

• Product is a good which effectively meets customer requirements.

• OR

• it may be defined as bundle of utilities or satisfaction


132

• Product Perception in overseas market:

• Firm faces a challenging environment in international market than in domestic market.

• Product perception differs from country to country.The perception of a product by overseas customer is likely to be at variance from that of domestic customer.


133

• Standardization versus adaptation:

• Standardization refers to offering a common product on a world wide basis.(Economies of scale)


134

Advantage of standardization

• Economies of scale

• Savings on common costs of R & D

• Product & package design


135

Factors influencing product adaptation

• Customer orientation(purchasing power, habit, preferences)

• Stage of market development

• Legal considerations

• Climate conditions


136

• Mere adaptation is needed in consumer non-durable goods for the reason of varying tastes and preferences of consumer than in durable and industrial goods.


137

Product Life Cycle Concept

1. Market introduction stage cost high sales volume low no/little competition - competitive

manufacturers watch for acceptance/segment growth losses

demand has to be created customers have to be prompted


138

2. Growth stage costs reduced due to economies of

scale and sales volume increases significantly profitability public awareness competition begins to increase with a

few new players in establishing market prices to maximize market share


139

3. Mature stage Costs are very low as you are well established

in market & no need for publicity. sales volume peaks increase in competitive offerings prices tend to drop due to the proliferation of

competing products brand differentiation, feature diversification, as

each player seeks to differentiate from competition with "how much product" is offered

Industrial profits go down


140

4. Saturation and decline stage costs become counter-optimal sales volume decline or stabilize prices, profitability diminish profit becomes more a challenge of

production/distribution efficiency than increased sales


141

Life cycle stretching strategies

• Reposition the product(cooking oil changed to cholesterol oil).

• Quality improvement in the product through better engineering(technical product).

• Bringing about feature changes(refrigerators being brought out with two or three doors)

• Increase the aesthetic appeal


142

International product life cycle

• Four phases of international product life cycle:

1. Export strength is evident by innovator country.

2. Foreign production starts

3. Foreign production becomes competitive in export market

4. Import competition begins


143

Export strength is evident by innovator country

• Products are normally innovated in developed countries.

• The customers are affluent in the developed countries who may prefer to buy new products.

• Manufacturers are attracted to produce the goods in developed countries.


144

Foreign production starts

• The importing firm realize the demand potential of the product and starts manufacturing the product in the home country.


145

Foreign production becomes competitive in export market

• In this stage the product gets widely disseminated and other countries start initiating the product.

• In this stage products start becoming standardized.


146

Import competition begins

• At this stage the innovator country finally becomes the importer of that product.


147

Product development• Long term growth and prosperity can be

achieved only through product development and companies which have stake in long term business have no alternative but to constantly undertake product development.


148

Risk in product development

• The firm should be clear right fro,m the beginning whether it will be able to Marshall resources to undertake product development

• It is known that there is high wastage rate in research & development.

• High rate of infant mortality rate among products is also very high , particularly in a a competitive environment.


149

Product development process

• Idea generation

• Idea evaluation

• Engineering development

• Test marketing

• Commercialization


150

Characteristics of Product Development

• The product development is a continuous process.

• It relates to the concurrency and interdependence of various activities of the firm.


151

Unit 8

• International branding, packaging and other decisions


152

Branding

• Brand is a name, logo, slogan, and/or design scheme associated with a product or service.


153

Objectives and advantages of branding

• Create identification and brand awareness

• Guarantee a certain level of quality, quantity and satisfaction.

• Help in promotion of the product.

• Brands also satisfy the status need of the customers.


154

Brand strategies

• Branding strategies refer to the pattern of actions to be taken by the firm to brand its products.


155

Family brand versus individual brand

• Family branding is a marketing strategy that involves selling several related products under one brand name.

• There are often economies of scope associated with family branding since several products can efficiently be promoted with a single advertisement or campaign.

• E.g Philips, Bajaj etc.


156

Individual Brands

• In individual branding, each product in a portfolio is given a unique identity and brand name.

• The advantage of individual branding is that each product has a self image and identity that's unique.

• Companies such as Coca-Cola Co. have adopted this approach for instance, Coca-Cola and Bacardi Mixers both which have their own unique brand name but are owned and marketed by Coca-Cola Co.


157

Manufacturers brand versus distributors brand

• Manufacturers normally use their brand name on their products.

The practice of permitting distributors to use their own brand name in some manufacturers products is also prevalent.


158

Local brands versus global brands

• Coca cola, McDonalds etc are global brands because they have become popular all over the world.

• Advantages:

• Provides economies of scale

• It reduces the promotional expenditure.

• It helps to generate good sales.


159

• A firm may tend to choose local brand to suit local tastes and preferences.

• Advantages:

• Easily understood by consumers

• Quick market penetration

• Local brand may be less expensive

• Local tastes and preferences are taken care of


160

Packaging and labeling• Packaging is the science, art and

technology of enclosing or protecting products for distribution, storage, sale, and use.

• Packaging also refers to the process of design, evaluation, and production of packages.


161

Advantages of packaging

• Protection

• Preservation

• Promotion/presentation


162

Factors Influencing Packing Decision

• Physical characteristics

• Chemical Characteristics

• Economy

• Convenience

• Misc. Factors


163

Special consideration in ‘International Marketing

• Regulation in foreign country

• Buyer’s Specification

• Socio –culture factors

• Retailing characteristics

• Environmental factors

• Disposability

• Political factors


164

Special considerations in international marketing

• Regulations in foreign countries

• Buyers specifications

• Socio-cultural factors

• Retailing characteristics

• Environmental factors

• Disposability

• Political factors


165

labelling

• A label is any kind of tag attached to something so as to identify the object or its content.


166

Warranty and guarantee

• A Warranty is an obligation or guarantee that an article or service sold is as factually stated or legally implied by the seller, and that often provides for a specific remedy such as repair or replacement in the event the article or service fails to meet the warranty.

• Buyer will be compensated if the product does not perform upto reasonable expectation.

• Caveat venditor as against caveat emptor.


167

Guarantee

• Guarantees are general assurances that the product can be returned if its performance is unsatisfactory.


168

Unit-9

• International Pricing


169

Objectives of Pricing in International Marketing

• The main objective of pricing in international marketing should be to meet the customers demand in a competitive situation in such a way that sales and profit are maximized.


170

Objectives of pricing related to specific products & specific markets

• Penetration

• Skimming

• Holding market share

• Enhancing share


171

Penetration• Penetration pricing is the pricing

technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers. The strategy works on the expectation that customers will switch to the new brand because of the lower price.


172

Skimming

• Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time.


173

Holding Market Share

• The companies have to take into consideration their competitive position as well as the ability and willingness of their customers to pay.


174

Enhancing Share

• The companies in this context try to out price their competitors either by improving their cost efficiency or by quoting price based on direct costs and not on total costs.


175

Factors Affecting Pricing Decisions

• Cost of the product

• Competition in the foreign market

• Demand for the product

• International transportation cost

• International channel of distribution

• Government trade policies and price regulations


176

Pricing Methods and Practices in International Marketing

• Cost plus method

• Marginal cost pricing

• Differential pricing

• Probe pricing

• Penetration pricing

• Skimming pricing

• Competitive pricing


177

Cost plus method• It first calculates the cost of the product,

then includes an additional amount to represent profit.

• It include all the special costs incurred in international trade such as a special packaging, labelling according to foreign market, transportation, insurance, handling duties , taxes etc.


178

Advantages of cost-plus pricing

1. Easy to calculate

2. Minimal information requirements

3. Easy to administer

4. Insures seller against unpredictable, or unexpected later costs


179

Marginal Cost Pricing• Marginal cost is the change in total cost that

arises when the quantity produced changes by one unit.

• It is the cost of producing one more unit of a good.

• Marginal cost at each level of production includes any additional costs required to produce the next unit. If producing additional vehicles requires, for example, building a new factory, the marginal cost of those extra vehicles includes the cost of the new factory.


180

Differential Pricing• As the nature and extent of competition

and business environment vary from country to country and also from segment to segment, differential pricing may be followed for the same product in different markets according to the principle, “what the traffic can bear”.


181

Probe Pricing• A new entrant to a foreign market who

may not have full knowledge of the market and the nature and strength of competition tries to probe the prospective market by quoting price approximation relating to sales volume and value.


182

Penetration pricing

• Penetration pricing is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers


183

Skimming Pricing

• Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time.


184

Competitive Pricing

• In international marketing, a watchful and seasoned marketer always keep track of the prices quoted by competitors.He tries to adjust and adapt prices to remain In the market.


185

Pricing Process and strategy

• Cost analysis

• Market analysis

• Determination of price limits

• Determination of pricing objectives

• Calculation of price structure

• Price quotation and terms


186

COST ANALYSIS

• Cost of product

• Cost of distribution

• Cost of marketing support


187

MARKET ANALYSIS• Market size and segment relevant to the

product

• Price levels and price categories in respect of the product

• competition


188

DETERMINATION OF PRICE LIMITS

• Lower limits:cost limits

• Upper limits: market limits


189

• Determination of pricing objectives.

• Calculation of price structure

• Price quotation and terms


190

Cost and price calculations for export

• Main elements of cost leading to price:

• Direct cost

• Indirect cost

• General and administrative cost

• Distribution and selling expense

• Market support cost


191

Main elements of price structure for export

• Factory cost of goods

• Export packaging, marketing and labeling

• Loading for transport

• Port / airport handling charges

• Cost involved in documentation

• Import duty and taxes


192

Price Quotation and Terms of Sale

• Ex-works:

• According to this term, the exporter undertakes to make the goods available to the importer or his representative at specific time and place which is usually his place of business or warehouse.

• The importer takes delivery at the exporter’s premises and bears all the risk and expenses from that point onwards


193

• FAS: Named point of shipment• It stands for ‘Free Along with ship’.• Under this term the price includes all expenses

up to delivery of goods along side the vessel or other means of transport.

• It does not include cost of loading


194

• FOB:Named port

• It stands for ‘ Free on Board’.FOB price includes the cost and expenses till the goods are placed on board the ship.

• The exporter's responsibility does not end until the goods have actually been placed abroad the ship and a bill of lading issued


195

Transfer Pricing• Transfer pricing refers to the pricing of

contributions (assets, tangible and intangible, services, and funds) transferred within an organization. For example, goods from the production division may be sold to the marketing division, or goods from a parent company may be sold to a foreign subsidiary.


196

Alternative approaches to transfer pricing

• Transfer at cost

• Transfer at cost plus overhead and margin

• Transfer at price derived from end market prices

• Transfer at ‘arms length price’


197

Transfer at cost• This approach is based on the assumption

that lower cost lead to better performance by the subsidiary / affiliate.

• The companies using this method of transfer pricing do not have expectations of profit on transfer sale.

• The receiving unit(subsidiary or affiliate) is expected to generate profit by subsequent sale.


198

Transfer at cost plus method

• This method is applied in recognition of the principle that profit must be shown for every product or service at every stage of movement through the corporate system.


199

Transfer at price derived from end market prices

• Under this method the price is derived from the competitive foreign market prices.it may therefore be too low for the selling subsidiary and the production cost may not be covered.


200

Transfer at ‘ Arms length Price’

• In this method, the transfer price is the price that unaffiliated parties in a similar transaction agree on.

• The basic premise behind the extension of an arm’s length price is to ensure that even though both the buyer and seller are affiliated through a parent company, the rates or prices extended will still reflect fair market value.


201

Counter trade

• Counter trade is exchanging goods or services that are paid for, in whole or part, with other goods or services.


202

Types of counter trade• Barter: Exchange of goods or services

directly for other goods or services without the use of money as means of purchase or payment.

• Switch trading: Practice in which one company sells to another its obligation to make a purchase in a given country


203

• Counter purchase: Sale of goods and services to a country by a company that promises to make a future purchase of a specific product from the country.

• Buyback: occurs when a firm builds a plant in a country - or supplies technology, equipment, training, or other services to the country and agrees to take a certain percentage of the plant's output as partial payment for the contract.


204

• Offset: Agreement that a company will offset a hard - currency purchase of an unspecified product from that nation in the future. Agreement by one nation to buy a product from another, subject to the purchase of some or all of the components and raw materials from the buyer of the finished product, or the assembly of such product in the buyer nation.


205

Block-4

• International distribution and promotion


206

Unit-10

• International distribution


207

International Distribution

• Distribution is a process of moving a product from manufacturer to the customer.

• Frequently there may be a chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.


208

International channel system

• Two channels are there in international marketing:

• Channels between the nations(domestic system)

• Channels within the foreign market(foreign system)


209

Indirect exporting

• In indirect exporting, the manufacturer transfers the responsibility for selling the goods to some other organization.


210

Advantages of indirect exporting

• Standing in the market

• Economies of scale


211

Direct exporting

• Direct exporting refers to the sale in the foreign market by the manufacturer himself.


212

Advantages of direct marketing

• Control

• Customer satisfaction

• profit


213

Direct exporting channels

• Importers

• Foreign distributors

• Foreign retailers

• Government department/ state owned trading companies

• End users


214

Importer• Importers identify local market

requirements and find products from world markets to satisfy these requirements.

• Importers purchase goods in their own names and act independently of the manufacturers.


215

Foreign Distributor

• A foreign distributor is a firm in the overseas country that has exclusive rights to undertake the distribution function for the manufacturer in its country or specific area.

• The distributor purchases merchandise from the manufacturer at discount and resells it to retailers.


216

Foreign retailers

• If the manufacturer directly supplies to foreign retailers it means the products in question are consumer products.


217

Government department/ state owned trading company

• In some countries government departments or government owned companies buy large quantities of certain goods often on long term basis directly from suppliers.


218

End users

• Sometimes a manufacturer may sell directly to foreign end users with no intermediary involved in the process.


219

Indirect channel• Domestic agents

• Domestic merchants


220

Domestic agents

• Domestic agents never take title to the goods, regardless of whether they take possession of the goods or not.


221

Domestic merchants

• Domestic merchants own the merchandise regardless of whether they take possession of the goods or not.


222

Domestic agents• Export management companies

• Export broker

• Manufacturers export agent

• Purchasing agent

• Country controlled buying agent

• Resident buyer


223

Export management companies

• Export management companies manages the entire export activities of the manufacturer.

• These companies have greater freedom and authority.


224

Export broker• The function of export broker is to bring

buyer and seller together for a fee.

• The broker may be assigned one or two foreign markets by the seller.

• He negotiates the terms for the seller.


225

Manufacturers export agent

• Export agents are individuals or firms that assist manufacturers in exporting goods.

• Unlike EMC, these provide limited services.

• These agents focus more on sale and handling of goods.


226

Purchasing agents• The purchasing agent represents the

foreign buyer.

• By residing and conducting the business in the exporters country, the purchasing agent is in favorable position to seek a product that matches the foreign buyers preferences and requirements.


227

Country controlled buying agents

• The kind of agent performs exactly the same functions as the purchasing agent, the only distinction being that a country controlled buying agent is a foreign governments agency.


228

Resident buyer• A resident buyer is an independent agent

who is located near highly concentrated production centers.

• Retained by a buyer on a long term basis to maintain continuous search for suitable new products.


229

Domestic merchant

• Export merchant

• Export houses

• Trading companies

• piggybacking


230

Domestic merchant • Export Merchant:

• The domestic based export merchant buys the manufacturers product and sells it abroad on his own.


231

• Export Houses:

• Export houses export products produced by manufacturers.

• Some companies have established their own export houses to perform export marketing functions for manufacturing companies including promotion in overseas market leaving the manufacturer to concentrate on production activities


232

• Trading companies:• A trading company is active in both exports and

imports.• The trading companies offer a broad range of

services from marketing research to financing and present a relatively inexpensive choice for small and medium enterprises to undertake international business.


233

• Piggybacking:• It is an arrangement with another company, which

sells the same customer segment, to take on the new products as if it were the manufacturer.

• The products retain the name of the manufacturer and both partners normally sign a multi year contract to provide for continuity.

• The new company is piggybacking its products on the shoulders of established company


234

Factors affecting channel choice

• Characteristics of the product

• Who is the buyer

• Volume of the sale expected

• Firm,s own resources


235

Unit 11

• International marketing communication


236

Marketing communication

• It is that function of marketing which is charged with the task of informing the target customer about the nature and type of the firms product and services, their unique benefits, uses and features as well as the price and place at which those would be available in the market place.


237

Communication process

• Communication is a process of influencing others behavior by sharing ideas, information or feelings with them.


238

Elements of communication process• Sender

• Receiver• Encoding• Message• Medium• Decoding• Response• Feedback• noise


239

Main four elements of communication process

• Encoding

• Decoding

• Response

• feedback


240

Steps in communication process

• Identifying the target audience

• Determining the response sought

• Choosing the message

• Selecting source attributes

• Collecting feedback


241

Concept of promotion mix

• The four elements of marketing communication advertising, personnel selling, sales promotion and publicity are together referred to as promotion mix.


242

Advertising • Any paid form of non-personal

communication through mass media about the product, a service or an idea by an identified sponsor is called advertising.


243

Personal selling• Person selling is a person to person

dialogue between buyer and seller, where the purpose of this face-to-face contact is to persuade the buyer to accept a point of view or to convince the buyer to take a specific course of action.


244

Publicity • Non-personal stimulation of demand for

the product, service or business unit by generating commercially significant news about it in published media or obtaining favorable presentation of it on radio, television, or stage.


245

Sales promotion• It is a means of communicating with the

target audience in a way that is not possible by using other elements of promotion mix.

• Those promotional activities other than personal selling, advertising and publicity that are intended to stimulate buyer purchases or dealer effectiveness in a specific time period.


246

Major difficulties in international communication

• The message may not get through to the intended recipient.

• The message may reach the target audience but may not be understood or may be misunderstood.

• The message may reach the target audience and may be understood but still may not induce the recipient to take action desired by the sender.


247

Objectives of international marketing communication

• Introduction of new products

• Inducing potential customers to buy

• Reminding users about an existing product.

• To create an international brand image.

• To highlight brand character internationally.


248

Key issues in International marketing communication

• Straight extension

• Product adaptation

• Global advertising


249

Major marketing promotion tools

• Sales Literature

• Trade fair

• Publicity

• Point of purchase


250

Unit-12

• International Advertising


251

International Advertising

• It is defined as any sponsored, paid communication of ideas, goods, or services placed in a mass medium vehicle.


252

Budgeting for international advertising

• Percentage of sales or gross margin:

• One rule of thumb used in setting advertising budget is relating it as a percentage to sales, revenue, past sales or forecasted future sales.


253

The percentage of sales need to be changed in dynamic situations

• Making a move: With increase in sale, advertising expenditure also increased

• Established brand: when brand become established the advertising expenditure reduced

• New brand: A new brand has to increase the advertising expenditure


254

Competitive parity and share of voice

• Adjust the advertising budget in comparison with the competitors budget.

• The logic is that the collective minds of the firms in the industry will probably generate adverting budgets that are somewhat close to optimal.


255

Share of voice• Setting a brand’s share of total category

advertising, called share of voice (SOV) close to its share of market(SOM)


256

Objective and task• The advertising objective is first

established in specific terms.

• The tasks which are required to accomplish this objective are then detailed.


257

International advertising: Adaptation vs. standardization

• According to standardization Argument, since the people everywhere want the same products for the same reasons, companies can achieve economies of scale by adopting an uniform advertising campaign around the globe.


258

• Adaptation:

The advertisers who follow the localized adaptation approach do not buy into the global village argument, rather they assert that consumers still differ from country to country and must be reached by advertising tailored to their specific countries.


259

Selecting Advertising Agencies

• Company Organization

• National responsiveness

• Area Coverage

• Buyer perception


260

Direct Mail

• Direct mail has 2 basic advantages:

1) The ability to target the specific individual consumers

2) The ability to directly measure response.


261

Chapter-13

• Personal selling, publicity and sales promotion


262

Personal selling• Personal selling is an oral presentation in

a conversation with one or more prospective purchasers for the purpose of making sales.

• It involves one to one communication between the salesman and the intending buyer.


263

Under following conditions personal selling plays a prominent role

• Sales of high unit value, infrequently purchased products, such as machinery and durable consumer goods, warrant personal attention.

• When large purchase volumes are involved by a single buyer, it is better to supplement the other marketing effort by personal selling.

• When market is concentrated• When a new product is introduced


264

Personal selling-steps• Prospecting

• Qualifying

• Pre-approach

• Approach

• Presentation and demonstration

• Handling objections

• Closing the sale

• Follow-up


265

Prospecting • Identifying the prospective customer.

• Identification of prospectus may be done by building a referral source that may include current customers, dealers, bankers, journals, newspaper etc.


266

Qualifying • Identify the good prospectus, and screen

out the poor ones.


267

pre-approach• This step involves collection of as much

information and data about the prospect before the sales person calls on the prospect.


268

Approach • During this stage the aim of sales person

should be to get off to a good start. This is largely ensured by pleasing appearance and positive attitude.


269

Presentation and demonstration

• The salesperson presents the offer to the prospect, highlights as to how his offer will be better than competitors offer , in terms of customer benefits.


270

Handling the objectives• It is the job of a salesperson even to seek

out unspoken objectives and clarify them.


271

Closing the sale• In this step, the salesperson closes the

sale and ask for order.


272

Follow-up• It is the responsibility of a company, after

the order is secured, to ensure that product is delivered as per contractual terms.


273

Relationship marketing• Relationship marketing is a form of

marketing developed from direct response marketing campaigns conducted in the 1970's and 1980's which emphasizes customer retention and satisfaction, rather than a dominant focus on 'point of sale' transactions.


274

• Relationship marketing differs from other forms of marketing in that it recognizes the long term value to the firm of keeping customers, as opposed to direct or "Intrusion" marketing, which focuses upon acquisition of new clients by targeting majority demographics based upon prospective client lists.


275

Sales force Management

• Setting objectives• Designing strategy• Sales force structure• Sales force size• Sales force compensation• Recruitment and selection• Training• Supervision• evaluation


276

Publicity • It refers to activities that are undertaken to

promote a company and its offer by planting news about it in media, not paid for by the sponsor.


277

Managing publicity• Setting objectives

• Choosing publicity messages and vehicles

• Implementing the plan

• Evaluation


278

Sales promotion• It comprises short term incentives to

encourage purchase/sale of products or service.

• It offers reasons to buy now.


279

Consumer promotion tools

• Samples

• Coupons

• Rebates

• Price packs

• Premiums

• Advertising specialties


280

Trade promotion• Sales promotion by manufacturers for

retailers and wholesalers than to consumers.

• This is because shelf space is so scarce these days that manufacturers often have to give incentives to the distributors to stock their products.


281

Business promotion

• Manufacturers spend substantial sums on promotion to industrial customers and their own salesperson.


282

BLOCK-5• INTERNATIONAL MARKETING

PLANNING, ORGANISING AND CONTROL


283

Developing an international marketing plan

• International marketing plan can be developed at two levels:

• At the country level

• At international level


284

At the country level• It lays down the strength and weaknesses

of the organization and the opportunities and threats faced by the organization.

• It lays down a broad action plan, the organization structure and the control system.


285

At international level• It seeks to direct and coordinate the

activities of the corporation on the global basis and at country level.

• These variables are: knowledge of the market, knowledge of the product and knowledge of marketing systems.

• The corporation must decide how well it obtain information about all these variables on a global and country basis.


286

Issues in framing the multinational marketing plan

• Standardized approach:

• This refers to standardization in four major decision areas of marketing: product decision, price decision, promotion decision and distribution decision.


287

• Multi-domestic approach:

• It assumes that markets are heterogeneous and therefore the marketing strategy decision in a country should specifically cater the needs of that country.


288

Organization for international marketing

• Planning will not give success unless it is properly implemented.

• Resources have to be deployed and efforts have to be directed to utilize resources effectively.

• This is possible only when the structural framework exists for allocating the requisite authority and responsibility.


289

In organizing the following parameters are taken

• Company objectives and history• Government policies influencing the firms

operations• Decision making policy and the levels

involved in decision making• Length of chain of command• Degree of control• Degree of involvement in marketing

functions


290

Framework for international marketing planning

• Steps of marketing planning• Diagnosis of the situation and situation analysis• Identification of corporate strength and

weaknesses as well as environmental opportunities and threats

• Definition of objectives• Forecasted estimates of sales, costs, and profits• Designing an appropriate marketing programme

based on objectives and estimates• Deciding on the relevant appropriation of plan


291

Strategic planning• Strategic planning in international

marketing should encompass following decision areas.

• 1. Commitment decision

• 2. Area of operation decision

• 3. Entry mode and operation decision

• 4. Marketing organization decision

• 5 Marketing mix decision


292

1.Commitment decision

• The commitment decision is based upon valid and defensible reasons for entering international markets.


293

Reasons for entering into international markets

• Saturation in domestic markets

• Greater profitability

• Competition

• Alternative growth strategy

• Securing source of supply


294

Own resources, strength and weakness

• Domestic operation under control

• Differential advantage

• Image of high quality

• Cost advantage

• Manpower skills

• Finances


295

Own objectives and philosophy

• Growth objectives

• Growth strategies

• Profitability, return on investment

• Attitude and preference regarding risks.

• Market share desired


296

Country preferences• Developed, industrialized countries.

• Developing countries

• State trading countries


297

2.Area of operation • International environment

• 1. Relations between domestic country and country chosen

• 2. Relation between country chosen x and and third countries

• Tariffs and non tariff barriers in country x


298

Local marketing environment

• Population size

• Government stability

• Income size, growth per capita.

• Inflation

• Local business culture

• Business ethics


299

Marketing infrastructure

• Availability and reliability of marketing data.

• Literacy

• Media

• Advertisement agencies

• Destructive network facilities


300

Financial needs and analysis

• Short term:

• Investment needs

• Sales volume forecast

• Profitability estimate

• Long-term:

• Taxation, incentives etc.

• Current stability

• profit


301

3.Entry mode and operation

• What is mode through which you are entering into international marketing.

• Specify that mode.


302

4.Marketing mix strategy

• Product

• Price (skimming vs. penetration)

• Distribution channels

• Functions to be performed

• Post transaction service

• Location of service points

• Training of service personal


303

5.International marketing organization

• This checklist includes among various factors, the type and nature of coordination between headquarters and international units, scheduling, performance evaluation and preview of subsequent planning period.


304

Headquarters service and coordination

• Manpower allocation at headquarters and overseas

• Reporting direction

• Pricing and other policies


305

schedules

• Step by step timing of activities

• Budgeting

• Master budget


306

Action potential at the end of the planning period

• This is an advance audit of operational performance, assuming full implementation of the plan.

• Resource profile, including personnel skills• Differential advantage• Market structure and demand• Trust and goodwill• Patents and trademarks• Competitive position


307

Contingency plan• It is a standby plan for emergencies, such

as labor strike, import restriction, fluctuation in exchange rate, problems in obtaining finance etc.

• Some vital assumptions regarding the future turned out to be incorrect.


308

Long-term plan• The long term plan should at least present

the sketch for the next 3 years to five years.


309

International marketing control

• In order to perform at optimum profit levels constantly, all functional areas need systematic control and coordination.


310

International marketing control system

• Establish objectives

• Select control methods

• Set standards

• Locate responsibility

• Establish communications

• Continuous review of the results

• Corrective action


311

Establish objectives• A company have to outline its specific long

run and short run objectives in respect of specific international markets.


312

Select control system• The methods chosen for international

control may be direct or indirect.

• Direct control methods include contractual arrangements, and equity sharing.

• Communication and competition are used as indirect control methods.


313

Set standards• Standards of performance are used to

evaluate performance of the operating units.


314

Locate responsibility• Coordination between the respective

functional area of the parent company and foreign subsidiary becomes imperative.

• As far as possible, there should be centralized action and control.


315

Establish communication

• Formalized defined communication systems become imperative in the context of international control procedures.


316

Continuous and review of results

• Continuously review the results.


317

Unit-15• International marketing of services


318

Services • Services are those separately identifiable,

essentially intangible activities which provide want satisfaction and which are not necessarily tied to the sale of a product or another service.


319

Service differentiated from products

• Intangibility

• Heterogeneity

• Simultaneous production and consumption

• Perish ability


320

Interdependence of the products and service

• Sales prospectus of the products that are in need of substantial technological support and maintenance will be badly affected if proper arrangement of service is not made.

• Customers not only expect high quality goods, but also expect high levels of the services along with them.


321

Barriers to international marketing of services

• Legal barriers

• Quantitative and qualitative border prohibitions and restrictions

• Laws and regulations discriminating against foreign firms

• Direct and indirect subsidies to local firms


322

• Cultural barriers

• Language

• Values and attitudes

• Manners and customs

• Material culture

• Education


323

General agreement on trade in services(GATS)

• OBJECTIVES:

• Improving trade and investment conditions through multilaterally agreed disciplines.

• Stabilizing trade relations through policy binding on an MFN basis.

• Achieving progressive liberalization through subsequent rounds of negotiations.


324

Members • All WTO members, over 130 countries, at

present are members of the GATS and have assumed specific commitments in individual service sectors.


325

CHAPTER-16

• EMERGING TRENDS AND ISSUES IN INTERNATIONAL MARKETING


326

MERGER• The phrase mergers and acquisitions

(abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity.


327

Classification of mergers

• Horizontal merger - Two companies that are in direct competition and share the same product lines and markets.

• Vertical merger - A customer and company or a supplier and company. Think of a cone supplier merging with an ice cream maker.


328

• Market-extension merger - Two companies that sell the same products in different markets.

• Product-extension merger - Two companies selling different but related products in the same market.


329

Acquisitions• An acquisition, also known as a takeover

or a buyout, is the buying of one company (the ‘target’) by another. An acquisition may be friendly or hostile. In the former case, the companies cooperate in negotiations; in the latter case, the takeover target is unwilling to be bought or the target's board has no prior knowledge of the offer. Acquisition usually refers to a purchase of a smaller firm by a larger one.


330

Consolidation • Consolidation or amalgamation is the act of

merging many things into one. In business, it often refers to the mergers or acquisitions of many smaller companies into much larger ones. The financial accounting term of consolidation refers to the aggregated financial statements of a group company as consolidated account. The taxation term of consolidation refers to the treatment of a group of companies and other entities as one entity for tax purposes.


331

Information technology and international marketing

• Telemarketing

• Internet and e-business


332

Telemarketing • Telemarketing (known as telesales in the

UK and Ireland) is a method of direct marketing in which a salesperson solicits to prospective customers to buy products or services, either over the phone or through a subsequent face to face or Web conferencing appointment scheduled during the call.


333

E-business• Electronic Business, commonly referred to as

"eBusiness" or "e-Business", may be defined as the utilization of information and communication technologies (ICT) in support of all the activities of business. Commerce constitutes the exchange of products and services between businesses, groups and individuals and hence can be seen as one of the essential activities of any business. Hence, electronic commerce or eCommerce focuses on the use of ICT to enable the external activities and relationships of the business with individuals, groups and other businesses.


334

Block-6

• International market research


335

Unit-17

• Introduction to international marketing research


336

Market research• Market research is for discovering what

people want, need, or believe. It can also involve discovering how they act. Once that research is completed, it can be used to determine how to market your product.

• Examples of market research would be in the form of questionnaires and surveys.


337

International Market Research

• It is the systematic and objective process of collecting , recording, and analyzing data for aid in making international marketing decisions.

• The required data and information may be not always readily available. If it is available, it may not be in the form in which you require.So considerable efforts need to be put in the collection of information.


338

Complexities in international marketing research

• Political and economic factors

• Social and cultural factors


339

• Market information • Market information is known as the prices of

the different commodities in the market, the supply and the demand. Information about the markets can be obtained from several different varieties and formats.

• Examples of market information questions are:

1.Who are the customers? 2.Where are they located and how can they

be contacted? 3.What quantity and quality do they want? 4.When is the best time to sell?


340

INTERNATIONAL MARKETING INFORMATION

• It is a continuing and interacting structure of people, equipment and procedures designed to gather, sort, analyze, evaluate and distribute pertinent, timely and accurate information for use by international marketing decision makers.


341

Two sources of information collection

• Internal sources:

• This imply the officials of the company posted for the specific purpose of information gathering and the records, registers and balance sheet of the company.


342

• External sources:

• External sources include banks and financial institutions, chambers of commerce and trade associations, government agencies, embassies and high commissions etc.


343

International marketing research process

• Definition of objectives

• Determining information requirements

• Selection of methodologies

• Collection of data and information

• Tabulation, analysis and interpenetration of data of information

• Report preparation


344

Unit-18 Data collection

• Data :-Raw facts and figures.


345

Importance of data in marketing research

• Problem identification

• Market selection

• Environmental changes

• Selection of marketing mix strategies

• Strategy assessment


346

Primary data and secondary data

• The data which is collected for the first time for your own use is known as primary data.

• The data which has been collected, classified and analyzed by someone else, such data is known as secondary data.


347

Methods of collecting primary data

• Observation

• Questionnaire

• Interviewing


348

Observation

• It is the process of recording relevant information without asking specific questions to any one.

• It includes:

- observing salesman’s behavior on slaes calls

- observing the stocking pattern of retailers

- observing the turnover etc


349

Sampling • In case of sampling only a part of

something is studied.

• For example population projections.

• It is relatively less expensive as compared to census Study.


350

Types of sampling There are two categories of sampling:

1. Probability sampling methods:

2. Non- probability sampling:

3. In case of probability sampling method, each and every item in the population has a probability or chance of being included in the sample.in this method every member of the population has an equal chance of selection into the sample.


351

Methods of probability sampling

• Simple random sampling:

• This is also known as chance or lottery sampling method. In this case each and every item in the population has an equal chance of inclusion in the sample and each one of possible samples has the same probability of being selected.


352

• Systematic sampling:

• Under this method, population is arranged in alphabetical, serial order etc. then the sample units appearing at fixed intervals are selected.


353

• Stratified sampling:

• This method is generally used when population is not a homogeneous group. Under this method population is divided into a number of homogeneous sub-populations or strata.


354

• Cluster sampling:

• This method involves grouping the population into heterogeneous groups called clusters and then selecting a few of such groups by simple random sampling method.


355

• Multistage sampling:

• This method is suitable for big surveys extending to a considerably large geographical area or the population is heterogeneous.


356

Non-probability sampling methods

• This involve of the universe for constituting a sample.

• Convenience sampling:

• When we select the sample items from the population based on ease of access, the method is called convenience sampling.


357

• Judgment sampling:

• When investigators judgment is used for selecting sample items for constituting a representative sample, we call it judgment sampling.


358

• Quota sampling:

• Under this method population is first divided into homogeneous groups and the interviewers are simply allotted quota to be filled from each group.


359

Unit-19 data analysis and report writing

• Classification :

• Classification means grouping the mass of data into different classes or groups on the basis of their similarities and resemblances.


360

Classification objectives

• It decides the mass of data based on characteristics and resemblances so as to enable comparison.

• It pinpoints the most significant features of the data.

• It provides you prominence to the important information.

• It provides basis for tabulation and analysis of data.


361

Tabulations • It is the process of counting the responses

given in the survey according to the categories selected.

• Tabular presentations means arranging data in orderly manner in rows and columns.


362

Data analysis• Data analysis is a process of gathering,

modeling, and transforming data with the goal of highlighting useful information, suggesting conclusions, and supporting decision making. Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names, in different business, science, and social science domains.


363

Steps in data analysis• Editing

• Coding

• Data conversion

• Data analysis


364

Editing

• It is process of reviewing the data to ensure maximum accuracy and unambiguity and removal of overlapping duplication and inconsistencies.

• If the sample is not large, a single editor usually edits all the data to reduce variations in treatment.

• While editing the following points requirements should be fulfilled:

a) Legibility of entries

b) Completeness of entries

c) Consistency of entries

d) Accuracy of entries


365

Coding

• It is the process by which response are assigned to data categories and symbols are assigned to identify them with the categories.

• Since different countries use different terms to refer to a product and every country brings out its own language, trade publications in its use of codes makes identification of product easy.


366

Checking reliability

• The reliability of data should be checked during research stages and unreliable and inaccurate data should be discarded.


367

Bias

• Bias can be caused by number of factors like:

• Errors in original sample selection

• Interviewing the wrong people

• Inexperienced interviewers.

• A low response rate in surveys

• Dishonesty

• Reliance on secondary sources.


368

Data Conversion

• It is the process of transforming data from a research project to computer.


369

Report writing • This a final phase of marketing research. It

is a function through which findings of research are communicated to decision makers.

• It is conclusion of all that has gone before.


370

Guidelines for report writings

• Consider the readers

• Address the information needs

• Be concise, yet complete

• Be objective

• style


371

The report format

• A report must use the format that best fits the needs and desires of its readers.

• The report format can be structured into the following parts:– The Preamble– The summary of findings and conclusion– The main body/executive summary– The appendices


372

The Preamble

• It represents basic introductory information about the research project. It contain 4 parts:– Letter of transmission– Title page– Table of contents– The introduction


373

Summary of findings and conclusions

• It should not take more than 2-3 pages with no more than 1-2 summary tables.

• It should summarize the main findings of the research in a clear , brief and concise manner.


374

Main body of the report

• It must accurately cover all the facts of the study.

• It must contain all the information necessary for decision makers to draw their conclusion from the research findings, independently of any interpretations offered by the market research itself. it contains:-A description of research methods-General background information-Nature of the market-Conclusion and recommendation


375

Appendices

• Its purpose is to include as much relevant data and information as possible to support the information already contained in the report’s main body.

• It should include:- Statistical tables and tabulations- A list of names & addresses of sources and contacts - Copies of any questionnaires- relevant details


376

Oral Presentations

• This type of presentation is usually in addition to a written research report.

• It is of 2 types:

1) Informal oral presentation

2) Formal oral presentation


377

Informal Oral presentation

• This is a simple ‘sit-down and discuss’ situation where the researchers presents a summary of findings and the audience seeks clarifications.

• It is assumed that the audience has read the report before taking part in discussion.


378

Informal oral presentation

• A researcher is expected to make exhaustive preparations and has to be a good communicator so as to handle all the questions.

• He may distribute the summary of findings and recommendations before commencing the presentation.

PCTI Group

Documents