MKT630 Official Handouts

Table of Content

Lesson No.

Title / Topic

Page No.

International Marketing Process (continued)……………………………… International Marketing Process (continued)……………………………… Engaging In International Markets………………………………………... International Trade & Investment Theories………………………………. International Trade & Investment Theories (continued)………………….. International Marketing Information Requirements……………………….. International Marketing Information Requirements (continued) Foreign National Environments…………………………………………... Foreign National Environments (continued)……………………………... Foreign National Environments (continued)……………………………... Role of Governments in International Markets…………………………… International Cultural and Social Environments…………………………... International Cultural and Social Environments (continued)……................... Determining Export Potential in International Markets…………………… Determining Export Potential in International Markets (continued)............... International Marketing Research Process………………………………… International Marketing Research Process (continued)…………………….. International Marketing Research Process (continued)…………………….. International Marketing Research Process (continued)…………………….. Modes of Entry into International Markets Modes of Entry into International Markets (continued)…………………… Modes of Entry into International Markets (continued)…………………… Modes of Entry into International Markets (continued)…………………… Modes of Entry into International Markets (continued)…………………… Modes of Entry into International Markets Modes of Entry into International Markets (continued)…………………… International Strategic Alliances…………………………………………… International Consumer Markets………………………………………….. International Business Markets……………………………………………. International Target Marketing……………………………………………. International Market Segmentation………………………………………... International market segmentation (continued)……………………………. International market segmentation (continued)……………………………. International market segmentation (continued)……………………………. International Marketing Mix - Product Policy International Marketing Mix - Product Policy (continued)………………… International Marketing Mix - Product Policy (continued)………………… International Marketing Mix - Product Policy (continued)………………… Introducing New Products in International Markets Pricing In International Markets…………………………………………... International Marketing Channels…………………………………………. Promoting In International Markets………………………………………. Revision…………………………………………………………………...

Lesson # 1

• “Marketing is defined as a process by which individuals and groups obtain what they need & want by creating and exchanging products and value with others.
• The term “International Marketing” refers to exchanges across national boundaries for the satisfaction of human needs and wants.
• The extent of a firm’s involvement abroad is a function of its commitment to the pursuit of foreign markets.
• Global industries are defined as those where a firm’s competitive position in one country is affected by its position in other countries, and vice versa.

Q. Global marketing passed through different evolutionary changes, describe all steps in detail.

Evolution of Global Marketing:

Firms, depending on their level involvement in foreign markets, pass through following five evolutionary phases.

1. Domestic marketing:

• Domestic marketers tend to be ethnocentric (focus is solely on domestic market) & pay little attention to changes taking place in the global market place.
• Such firms produce and sell products and services only in their home country.
• Firms that keep focus only on their domestic markets may be vulnerable to the sudden changes forced on them from foreign competition, when foreign firms enter the markets or even when foreign firms develop better or cheaper products.

2. Export marketing:

• Exporting firms fulfill unsolicited / solicited orders from foreign countries.
• For growth in export marketing, however, a company requires physical, financial and managerial resources.
• When a firm attempts to export it faces many issues that include difficulties in import/export restrictions, cost and availability of shipping, exchange rate fluctuations, collection of money, development of distribution channels etc.
• Export marketers still tend to take ethnocentric (a belief in or assumption of the superiority of the social or cultural group that a person belongs to) approach, since they mostly make products in their home countries and have no direct involvement in the foreign markets.

3. International marketing:

• An international marketing firm has polycentric orientation with emphasis on product and promotional adaptation in foreign markets whenever necessary.
• They make strategic decisions that are tailored to suit the cultures of the foreign countries.
• The company may establish an independent foreign subsidiary in each and every foreign market it services
• such efforts are also called multi-domestic marketing.

4. Multinational marketing:

• More involvement than international marketing many international marketing in multinational marketing
• Multinational firms are those that sell products or services in many countries.
• Economies of scale in product development, manufacturing, and marketing are achieved by multinational firms by consolidation of some of their activities on regional basis.
• In this regiocentric approach product planning may be standardized within a region (e.g. a group of contiguous and similar countries).

5. Global marketing Emphasizes:

• Through global operations firms achieve reduction of cost inefficiencies and duplication of efforts among their national and regional subsidiaries.
• Global operations allow opportunities for the transfer of products, brands, and other ideas across subsidiaries.
• Opportunities to operate worldwide are supported by the emergence of global customers, and
• Improved linkages among national marketing infrastructures leading to the development of a global marketing infrastructure

Dynamics of international marketing:

Modern marketers have to deal with customers who are changing.

• With channels of distribution that are changing
• And with the technological advances that are changing the nature of their products & services and requiring them to operate imaginatively & effectively in the emerging markets.

The basic nature of Marketing does not change from domestic to international marketing, but marketing outside national boundaries poses special problems, such as dealing with multiple environments, managing operations in distant markets, optimizing businesses in more than one country, dealing with foreign nationals etc. International marketing therefore, unlike domestic marketing, requires operating simultaneously in more than one kind of environment, coordinating these operations, and using the experience gained in one country for making decisions in another country. The demands are tough and the stakes are high. International marketers not only must be sensitive to different marketing environments internationally, but also must be able to balance marketing moves worldwide to seek optimum results for the company.

Globalization of markets:

It is widely asserted that we are living in an era in which the greater part of social life is determined by global processes, in which national cultures, national economies and national borders are dissolving. Central to this perception is the notion of a rapid and recent economic globalization. “In France the word is mondialisation. In Spain and Latin America it is globalization. The Germans say Globalisierung”.

Many authors cite Wallerstein as the first one to open up the theme of ‘globalization’ in his book “The Capitalist World-Economy”, published in 1979. Since then the topic has attracted much attention from diverse perspectives. The common themes that run through the discourse of globalization are: a) Ecological interdependence: The recognition that most places on the earth are linked to all others by air, water, and overland links. Rapidly increasing interdependence of world is rendering national boundaries meaningless. b) Dominance and dependency: Falling barriers to international trade and world’s markets expose everyone to domination by most powerful players and role of nations in weakening into service structures for corporate interest. c) Hologramatic diversity: The argument that each place reflects the same ‘diversity’ as each other. What is perceived as human, social or cultural diversity is essentially all the same. d) Homogenization of cultures: The view that both material and non-material cultures are becoming more the same wherever one goes and the argument that a single ‘socioculturalpolitical’ system is the only viable solution for the problems of interdependency. e) Ubiquitous communication: The belief that communication is now becoming more and more universal in all places at all times in all directions are called ubiquitous communication.

The above can probably be split into just two concerns:

(i) The awareness of (and probably inevitability of) a global ecosocial dynamics of interdependency. (ii) Standardization in social, political, cultural, and material life in order to limit or control the chaos (or to maximize economic gain).

‘Globalization’ has been defined in many ways. Some definitions are relatively concise while others are more vague and evocative. A more precise definition of ‘globalization’ is as follows: