Master of Business Administration

MBA Semester 4
MK0018 International Marketing
1. The orientation of a companys top management, its beliefs and assumptions
significantly impact its approach to international marketing. Discuss the concept of
EPRG framework.
Management orientations

Effect on international marketing

Answer:
Management orientations:
The orientation of a companys top management, its beliefs and assumptions significantly
impact its approach to international marketing. The concept consisting of Ethnocentric,
Polycentric.
The form and substance of a companys response to global business opportunities depend
greatly on managements assumptions or beliefs both conscious and unconscious about the
nature of the world. The worldview of a companys personnel can be described as
ethnocentric, polycentric, regiocentric, and geocentric. Management at a company with a
prevailing ethnocentric orientation may consciously make a decision to move in the direction
of geocentricism.
Effect on international marketing
In a firms internationalization process, one key strategic decision is international market
selection. Entering new markets, in particular foreign markets, involves a major commitment
of recourses (strategic, technical, managerial, and financial). Due to the limitation of
resources, a firm has to make a strategic decision on which markets to enter and allocate
resources accordingly. This decision is especially important in the case of companies that
decide to be international from the inception, as INVs. Nevertheless few efforts have been
done in explaining why and how INVs decide to enter in one or more countries. Firms can
use their international market orientation to overcome cultural distance problems, especially
information asymmetry, opportunistic behaviour, and uncertainty. Market-oriented behaviours
facilitate acquisition and dissemination of knowledge and responsiveness to this intelligence
about foreign markets what is especially important when the firm has no international
experience
EPRG Framework Concept
The Ethnocentric, Polycentric, Regiocentric, and Geocentric Framework (EPRG) dates back
to Perlmuter (1969) and his associates Wind and Douglas (1973). When formulated, the
framework included three stages (EPG). The EPRG framework identifies four management
approaches or orientations of the company while internationalization process is taking place.
The framework is based on the assumption that the level of a company's involvement in the
international business gradually evolves.4 EPRG orientations describe an exporter's process
of evolution and internalization. Companies begin by being Ethnocentric, i.e., they emphasize
their domestic market in decision making. As experience and involvement in exporting is
increasing, companies become Polycentric - they emphasize a host market in decision
making. As the number of export markets increases, the company may become Regiocentric emphasize a region (e.g.. South America, North America) in decision making. Finally,
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Geocentric companies are worldwide oriented and emphasize both multiple markets and
regions in decision making.

2. How do international economic institutions affect international marketing strategy of

MNCs? Explain the role of any two of them.
Effect

Role of any two institutions

Answer:
Effect:
The Organisation for European Economic Cooperation (OEEC) was the parent organisation
of Organisation for Economic Cooperation and Development (OECD), which was created in
1947 under the Marshall Plan to savage Europe post the World War II. In 1961, the OECD
overtook
Education
The level and nature of education in each international market will vary. This may impact the
type of message or even the medium that you employ. For example, in countries with low
literacy levels, advertisers would avoid communications which depended upon written copy,
and would favour radio advertising with an audio message or visual media such as billboards.
The labelling of products may also be an issue.
Social Organizations
This aspect of Terpstra and Sarathys Cultural Framework relates to how a national society is
organized. For example, what is the role of women in a society? How is the country governed
centralized or devolved? The level influence of class or casts upon a society needs to be
considered. For example, India has an established caste system and many Western countries
still have an embedded class system. So social mobility could be restricted where caste and
class systems are in place. Whether or not there are strong trade unions will impact upon
management decisions if you employ local workers.
Technology and Material Culture
Technology is a term that includes many other elements. It includes questions such as is there
energy to power our products? Is there a transport infrastructure to distribute our goods to
consumers? Does the local port have large enough cranes to offload containers from ships?
How quickly does innovation diffuse? Also of key importance, do consumers actually buy
material goods i.e. are they materialistic?
Law and Politics
As with many aspects of Terpstra and Sarathys Cultural Framework, the underpinning social
culture will drive the political and legal landscape. The political ideology on which the
society is based will impact upon your decision to market there. For example, the United
Kingdom has a largely market-driven, democratic society with laws based upon precedent
and legislation, whilst Iran has a political and legal system based upon the teachings and
principles Islam and a Sharia tradition.

3. Define the concept and scope of international marketing research.

Concept

Scope

Answer:
Concept:
International Marketing Research is a complete analysis of the market, information regarding
the nature, size, organisation, profitability of different markets, changes in the market and
various factors economic, social and political affecting those changes
.International market research projects may have various objectives and purposes.
Classical market research very often covers cross-country issues. Same question, but being
raised internationally. This may however lead to differing answers from country to country
due to historical or cultural reasons. This implies that country-specific answers will also lead
to internationally differing marketing decision.
Scope
International Market Research shall identify new business opportunities and help assure a socalled area strategy which defines which geographical hemisphere needs to be covered.
Generally, market research intends to provide new ideas, comparisons, and control
information for marketing deciders.
Strategic decision-making requires an outstandingly high quality information base.
Therefore, international market research projects have to consider the following:
globalisation experts are featured by product and industry knowledge, industry-specific
experiences, methodological know-how like research methods, information access (e.g. to
specialising commercial data bases), reputation (e.g. experts with door-opener-quality) and
international experience, language skills, and others more competitive information needs the
right focus, but also needs to be provided fastly, and early enough in order to be effective.
information should be retrieved exclusively for your company if all the industry enjoys the
information there will not be any competitive gain procurement of information may be done
by internal staff (make, e.g. sales force, internal research department), but also by such type
of external market intelligence specialist who are working in the international field.
4. Differentiate between national and international products, global and standardised
products with examples.
Answer:
Differentiate between national and international products:
National products are made for a specific national market whereas international products are
made for regional and multinational markets.
National products and International Products:
A national product is one that, in the context of a particular company, is offered in a single
national market. Sometimes national products appear when a global company caters to the
needs and preferences of particular country markets. For example, Coca-Cola developed a
noncarbonated, ginseng-flavored beverage for sale only in Japan and a yellow, carbonated.
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A national product is offered to a single market. Sometimes national products appear when a
global company caters to the needs and preferences of particular country markets. For
example, Coca-Cola developed a non-carbonated, ginseng-flavoured beverage for sale only in
Japan and a yellow, carbonated flavoured drink called Pasturina to compete with Perus
favourite soft drink, Inca Cola. Such examples show the reasons why national products,
even those that are quite profitable, may represent a substantial opportunity cost to a
company. First, the existence of a single national business does not provide an opportunity to
develop and utilize international leverage from headquarters in marketing, R&D and
production. Second, the local product does not allow for the transfer and application of
experience gained in one market to other markets. The third shortcoming is that a singlecountry product lacks the feature of transferability of managerial expertise acquired in the
single-product area.
Global and standardised products
International products are those that are offered in multinational or in regional markets.
Global products are those which are designed to meet the standards of the global markets.
There are different approaches that can be taken up to add new products to the product mix in
global markets.
Companies with standardized products have strong international brands and reputation, which
enables them to establish a monopoly over customer tastes and preferences. For example,
Barbie is Barbie across the world and Marlboro is Marlboro. Some of the top FMCG (fast
moving consumer goods) MNEs (multinational enterprises) have been able to capture the
markets across the world due to their ability to adapt their product offerings. Coca- Cola and
Pepsi are contrasting and classic examples for the same. Sometimes, a standardized product
may have strong brands. Levis Jeans is an example in this context. Standardized products
also help companies in creating international brands.
5. Write short notes on:
a) Containerization
b) 4 PL operators
a) Role and benefits of containerization
b) meaning and role of 4PL operators
Answer:
a) Role and benefits of containerization:
Containerisation has revolutionised maritime business throughout the world. Cargo-carrying
containers are an integral part of the transport industry. Containers facilitate both the
unitisation and carriage of cargo through different modes of transportation. Containerisation
has ultimately provided an ideal unit load, which meets all the logistical requirements. It not
only eliminates
A number of demographic trends aging population, fewer children, more women working
outside the home, and higher incomes and living standards suggest the emergence of
international segments.
Psychographic segmentation
Psychographic segmentation involves grouping people in terms of their attitudes, values, and
lifestyles. Data are obtained from questionnaires that require respondents to indicate the
extent to which they agree or disagree with a series of statements.
Behavioral segmentation Behavioral segmentation focuses on whether people buy and use a
product, as well as how often and how much they use it. Consumers can be categorized in
terms of usage rates for example, heavy, medium, light, and nonuser.
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The benefits of containerization take place over three main dimensions:

Transport costs. The main transports costs benefits of containerization are jointly the
outcome of lower transshipment costs and economies of scale applied to maritime
shipping and terminal operations. Since containerized cargo is subject to less damage
as well as lower theft levels, insurance rates are generally lower. Another significant
benefit is that the container itself becomes the minimal load unit, implying that a
wider range of exporters and importers can get access to international markets as the
minimal entry unit, a single container load, becomes affordable.

Inventory costs. A container is its own storage unit, implying that warehousing is
blurred and therefore takes place during transport, at the terminal as well as in the
conventional warehouse. Packing (stuffing) costs are reduced as well as the packaging
of the goods being carried. All of this is linked with faster levels of inventory turnover
and cash flow.

Service level. Containerized transport chains tend to be more reliable since the
modes involved are more consistent in their service timeframe. Intermodal operations
are much faster, implying that the same assets can be used more frequently.
Containerized services have therefore a higher service frequency, which facilitates
supply chain management.

Although these benefits mainly concern breakbulk cargo, some bulk cargo have also
benefited from the advantages of containerization.
6. Choose a product and explain how you will prepare seven steps in a global emarketing plan?
Choosing the product

Global e marketing plan

Answer:
Choosing the product
Before breaking into the foreign market, marketers must consider factors that influence
product adoption. As explained by Diffusion Theory at least six factors have a bearing on the
adoption process: relative advantage, compatibility, trialability/divisibility, observability,
complexity and price. These factors are all perceptual and thus subjective in nature. For a
product to gain acceptance it must demonstrate its relative advantage over existing
alternatives. A product must also be compatible with local customs and habits. A freezer
would not find a ready market in Asia where people prefer fresh food. A new product should
also be compatible with consumers other belongings. If a new product requires replacement
of those other items that are still usable, product adoption becomes a costly preposition.
Export pricing and costing
Export pricing should be differentiated from export costing. Price is what we offer to the
customer. Cost is the price that we pay/incur for the product. Price includes our profit margin;
cost includes only expenses we have incurred. Export pricing is the most important tool for
promoting sales and facing international competition. The price has to be realistically worked
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out taking into consideration all export benefits and expenses. However, there is no fixed
formula for successful export pricing. It will differ from exporter to exporter depending upon
whether the exporter is a merchant exporter or a manufacturer exporter or exporting through a
canalising agency. You should also assess the strength of your competitor and anticipate the
move of the competitor in the market. Pricing strategies will depend on various circumstantial
situations. You can still be competitive with higher prices but with better delivery package or
other advantages. Your prices will be determined by the following factors:
1. Range of products offered.

2. Prompt deliveries and continuity in supply.

3. After-sales service in products like machine tools, consumer durables.
4. Product differentiation and brand image.
5. Frequency of purchase.
6. Presumed relationship between quality and price.
7. Speciality value goods and gift items.
8. Credit offered.
9. Preference or prejudice for products originating from a particular source.
10. Aggressive marketing and sales promotion.
11. Prompt acceptance and settlement of claims.
12. Unique value goods and gift items.
Export Costing is basically a cost accountants job. It consists of fixed cost and variable cost
comprising various elements. It is advisable to prepare an export-costing sheet for every
export product.