International Marketing Unit 1

Unit 1 Introduction to International Marketing

Structure:
1.1 Introduction
Objectives
1.2 Globalisation and International Marketing
1.3 Concept of International Marketing
1.4 Domestic vs. International Marketing
Differences in socio-cultural environment
Different legal systems
Differences in economic and financial environment
Geographical variations
Differences in market competition
1.5 Reasons to Enter International Markets
1.6 Multinational Enterprises (MNEs)
1.7 Management Orientation: EPRG Framework
Ethnocentric
Polycentric
Regiocentric
Geocentric
1.8 Summary
1.9 Glossary
1.10 Terminal Questions
1.11 Answers
1.12 Case Study

1.1 Introduction
The rapid pace of globalisation has led to increased integration of markets
in the 21st century. Domestic markets in India as well as in other parts of the
world are increasingly getting flooded by products sold by foreign
companies. Increased market access and reduction in import tariffs,
enabled by multilateral organisations such as World Trade Organisation
(WTO) along with the fiercely rising competition among multinationals, have
tremendously increased international marketing opportunities. Consequent
to economic liberalisation, foreign products are finding increased market
access in India while the liberal investment regimes have enabled
multinationals to establish their own operations in the country. Markets
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across the world are getting increasingly flooded by products of

multinational companies such as Coke, Pepsi, McDonald’s, Pizza Hut,
Samsung, Nokia, etc. On the other hand, Indian food chains such as
Haldiram’s, Sarvana Bhawan, Sagar Ratna, MTR, etc., have also expanded
beyond national markets. Moreover, a large number of Indian companies
such as Tata Motors, Bajaj Auto, Cipla, etc., also operate internationally.
Therefore, international marketing becomes highly significant not only for
the firms that intend to market their products overseas but also for purely
domestic firms, in order to remain competitive.
Objectives:
After studying this unit, you should be able to:
 understand the concept of international marketing
 differentiate between globalisation and international marketing
 differentiate between domestic and international marketing
 analyse the reasons to enter international markets
 appreciate various management orientations
 comprehend the role and scope of multinational corporations

Caselet
Haldiram’s Expansion in International Markets
Haldiram’s began as a tiny shop in Bikaner long ago and set up another
shop in Delhi in 1982. Savouries and sweets are best popularised by word
of mouth and this helped the company to grow its business manifold.
Haldiram’s currently stands for a food company that is synonymous with
taste, hygiene and innovation. Haldiram’s has evolved into a way life for
many Indians, no matter which country they live in; the countries they live
in are also fast developing a penchant for these products.
Haldiram’s started exporting in 2001, grossing about US$ 1.7 million, with
the United States being its first market. The company then started
focussing on the large Indian population there. It began with about 15
products, all savouries, because they are a favourite with Indians. Over
the years, the company started exporting to West Asia, Europe and a few
countries in Latin America and Africa. Presently, Haldirams’ exports are
valued at US$6 million and are expected to sustain a 40% growth over the

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next 5 years. The company strictly adheres to the quality parameters of

USFDA and UK Safety Act.
Haldiram’s is growing at a rate of 40% in the international markets and is
confident of maintaining the pace for the next 5 years. The reason for the
growth cannot be attributed only to the Indians living abroad but it is also
because Indian food is growing in popularity in the worldwide market.
Haldiram’s that began as a small town enterprise in Bikaner has currently
become a highly sought after and internationally recognised company for
Indian sweets and snacks.

In order to understand international marketing, one should first comprehend

the concept of what marketing is all about. Over the years, the orientation of
markets has shifted from “the selling” concept to “the marketing” concept
wherein emphasis has increasingly been laid on customer satisfaction.
Marketing is defined as the human activity directed at satisfying needs and
wants through an exchange processes. Thus, customer satisfaction
becomes crucial to the concept of marketing as this leads to repeat sales
rather than a one-time profit under the “sales concept.” The American
Marketing Association defines marketing as “the process of planning and
executing the conception, pricing, promotion, and the distribution of ideas,
goods, and services to create exchanges that satisfy individual and
organisational goals.”
Marketing concepts, processes and participations are universally applicable
and a marketer’s task is the same whether he/she is doing business in
Mumbai, Beijing or New York. In simple terms, international marketing may
be defined as marketing across national borders. It deals with the firm-level
marketing activities across the globe which may include market
identification, targeting, selection, marketing mix, communication, market
plans and decisions, etc., in order to exploit international markets. In a
broad sense, international marketing can be defined as “the exchange of
goods and services between different national markets, involving buyers
and sellers.” It may also be defined as “the performance of business
activities designed to plan, price, promote, and direct the flow of a
company’s goods and services to consumers or users in more than one
nation for a profit.” Thus, the marketing fundamentals remain the same but
its application varies, depending upon the markets wherein it operates.

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This unit explains the basic concept of international marketing, its scope, the
distinctive features and differences between international and domestic
marketing, management orientation to international markets and the role
and scope of multinational corporations.

Self-Assessment Questions
1. In simple terms, _________________ may be defined as marketing
across national borders.
2. Marketing tools employed for domestic market are applicable to foreign
markets without any modifications. (True/False)

1.2 Globalisation and International Marketing

Globalisation has impacted international marketing in a big way.
Globalisation of markets refers to the gradual integration and growing
interdependence of national economies. Globalisation allows firms to view
the world as an integrated marketplace, and this has reduced the cost and
nature of operations of international firms. Globalisation has intensified the
competition, raising the global standards of quality. It has also increased the
demands for advanced technology and innovation along with the value of
customer satisfaction.
The term “market globalisation” refers to the emergence of global markets
for standard products and services and the growth of the world’s large-scale
companies that serve those markets. In a broader sense, it refers to
interconnectedness of national economies and the growing
interdependence of buyers, producers, suppliers and governments in
different countries. Globalisation allows large-, small- or medium-sized firms
to access cheap resources and labour in developing countries. This allows
them to price their products at a lower cost, and it provides a broader
market for people with disposable income to buy more goods and services.
Internet and other communication technologies co-ordinate the international
marketing campaigns from a domestic base. Globalisation has altered the
consumer shopping behaviour and consumers are willing to purchase
products from anywhere in the world, with a choice of better prices. This
shows that these technologies are contributing to a gradual integration of
most national economies into a unified market.

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Developments in information & communication technologies, manufacturing

and transport technologies and in the distribution systems have made the
businesses to operate faster and in a more cost effective way to get their
products to consumers. It has also facilitated rapid globalisation of countless
firms. For example, electronic transfers are playing a major role in fast and
secure international payments. Market competition has been increased
through globalisation and this in turn has increased the significance of
effective international marketing.
Capital is no longer a problem and is easily available to both consumers and
manufacturers. Investors are interested in spreading their investments over
a wider range of markets to reduce their overall level of risk. An increased
availability of capital makes it easier for both small and medium firms to
finance their international marketing efforts.
Globalisation will continue to bring more and more buyers and sellers
together in the future. Companies need to proactively internationalise their
value chain in order to profit from new opportunities and to reduce the harm
of potential threats.
Market globalisation is driven by several factors including falling trade and
investment barriers, market liberalisation and adoption of free-market
economies in formerly closed economies. It is also affected by
industrialisation and economic development, especially among emerging
markets, integration of global financial markets and technological advances.
These factors increasingly drive international trade and marketing efforts.
There is a huge potential to increase customer base and market share and
reduces the reliance on a single market. While many domestic markets are
quite large, they fade in comparison with a truly global market. An increased
global customer base allows the export of far more products and services,
which increases the earnings of a firm. In many developing economies, the
global customer base is growing because of the living standards and
increased levels of employment. A widespread customer base removes the
risks associated with single market. For example, if you only sell to domestic
consumers and there is an economic downturn, your entire customer base
may fall out of work and you will not be able to afford your product.
However, if your customer base is spread over many export markets, the
impact of the domestic market failure is less of an issue.

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International marketing can help a company in two ways – it increases a

company’s share in the market in which it is operating and also offers
opportunities to expand business operations across borders. Holding a big
market share is important as it gives a better foundation to compete with
other large and established organisations. Small businesses with smaller
market share often find themselves priced out of the market and unable to
compete.
Global firms are able to develop networks and linkages with foreign supply
chains. This can help them to negotiate for better deals, reduce their overall
costs and improve the value chain. Many large companies around the world
remain small until they open themselves up to the global market through
international marketing.

Activity 1:
Identifying changes in the local market
Visit the market in your neighbourhood and find out the products
marketed by foreign companies. Discuss with the shopkeeper/seller and
an elderly person and find out how markets in India have changed in last
10 years.
Hint: Take one product category and compare the availability of Indian
and Foreign brands

1.3 Concept of International Marketing

The concept of International Marketing primarily involves an application of
marketing tools and techniques to develop and manage trade across
international boundaries. The principle of international marketing in its
simplest meaning is based upon an understanding of the consumer needs
in global markets. Therefore, the traditional definition of a successful
marketing programme focuses on two concepts, determining the needs of
market consumers in a selected market, delivering those needs and serving
those consumers in a better manner than other global players in
consonance with the rules and regulations of exporting as well as of
importing country. In this manner, international marketing offers a scope of
competitive advantage to a company. If domestic markets are served
successfully, international markets may be seen as a logical extension of

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the current business lines for capitalising on the expertise gained in the
domestic market. In fact, marketing a product or service internationally
offers a vast scope of growth and profit opportunities that may not exist in
the domestic market.
Management students should understand the related terms in international
marketing as discussed below:
 Domestic marketing – It deals with marketing practices within a firm’s
own country.
 Foreign marketing – When a domestic firm markets its products in a
foreign country, it is known as foreign marketing. For instance, an Indian
firm marketing its products in the United States or Japan is foreign
marketing for the Indian firm.
 Comparative marketing – This deals with the evaluation of two or more
different marketing systems to identify the similarities and differences
between them.
 International trade – It deals with the flow of goods and services across
national boundaries from a country’s macroeconomic perspective.
 International marketing – It is concerned with the marketing practices
applied at the firm level and the strategies employed. This includes
decisions related to product, pricing, distribution and communication to
consumers in more than one country, for a profit.
 Global marketing – This refers to marketing practices for the whole
world focussing on global marketing opportunities. Some literature also
uses the terms “multinational” or “world marketing,” and these terms are
often used interchangeably.

Self-Assessment Questions
3. International marketing concerns firm-level marketing activities.
(True/ False)
4. The term multinational marketing may be used interchangeably with
global marketing. (True/ False)
5. _____________ deals with marketing practices within a firm’s own
country.

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1.4 Domestic vs. International Marketing

Though the principles of marketing have universal applications, it does not
mean that the marketing strategy that works in a certain domestic market
may be extended as such to international markets. A marketer has to design
and implement a marketing strategy in such a manner so as to satisfy the
customers in a more competitive way, compared to other players operating
in the market. As shown in Figure 1.1, a marketer needs to design and
implement a marketing mix so as to respond effectively to various
environmental challenges, which are uncontrollable for a firm and adapt
them for different overseas markets.

Domestic vs International Marketing Challenges

Overseas Environmental Challenges

(Uncontrollables)

Domestic Environmental Political

Challenges (Uncontrollables)
Marketing
Challenges in
Economic Legal
country Y Competition
Economic (Controllables)
Product
Marketing
Challenges in
country X
Place Consumer Price

Political Socio
Cultural
Promotion Legal

Competition Infrastructural
Marketing
Challenges in Logistics
country Z Geography

Fig. 1.1: Domestic vs. International Marketing Challenges

th
(Source: Reproduced from Joshi R. M. (2012). International Marketing (17 ed.).
New Delhi: Oxford University Press, p. 13.)

1.4.1 Differences in socio-cultural environment

Culture is perhaps the most sensitive and critical parameter of variation
between domestic and international marketing. Culture defines the belief
systems, thinking patterns and behaviour of people in any country. Western
economies, including America and Europe, are very tolerant and

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accommodating with respect to cultural diversity, which may not be the case
in the Middle East, North Africa or in East Asia. The Indian sub-continent
itself is a typical example. Although most Chinese products find space in the
Indian domestic market, Indian products may not be honoured equally due
to cultural differences in the Indian and Chinese population. Socio-cultural
parameters have a direct influence on the buying behaviour. For example,
during festival seasons such as Diwali, Durga Puja, Onam, etc., market
demand in different parts of the India significantly improves similar to the
way in which it changes the market behaviour in the western economies
during Christmas and in the Islamic countries during Ramalan.
Therefore, it is important to carry out groundwork on cross-cultural issues of
the country/s in which a company intends to market. Understanding these,
often sensitive issues, would mean that you are better prepared while
entering a new market.

1.4.2 Different legal systems

No two countries have the same political and legal systems. Each
government has its own policies relating to foreign firms and products. The
key is to understand that once you are in a foreign market you must abide
by the rules and laws of that country and not the ones applicable in your
own country. These laws and regulations can severely impact the potential
long-term success of your business. It would be wise to consult the legal
counsel, based in that country, to ensure that you reduce the risk posed by
the laws and regulations that could have an effect on your firm.
Most of the countries follow English Common Law as modified from time to
time. Japan and Latin American countries are important exceptions to this
rule. The existence of different legal systems makes the task of
businessmen more difficult as they are not sure as to which particular
system will apply to their transactions. This difficulty does not arise in case
of domestic trade, as the laws remain the same for the whole country.
1.4.3 Differences in economic and financial environment
There is a wide variation in the economic environment in different countries
in terms of the size of the economy, income level, population, distribution of
earnings among the people, exchange rates, inflation, price levels, etc.
Countries such as China, India and the United States, which have a large
population and a big economy, generally have a large market size; the
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consumption patterns often vary with per capita GDP. The growth rate in
population and the economy implies the future trends in market size.

1.4.4 Geographical variations

Countries vary significantly in terms of their geographical conditions. Large
countries such as Russia, China, US, Brazil and India have significant
differences in their climatic conditions within the countries. In India, the
weather changes significantly across the year with temperature rising to
48–49 C in its western plains whereas it is sub-zero in the hilly terrain in the
north. The weather conditions in countries such as Singapore remain the
same more or less. Given the length of Russia, railway transportation is an
important mode of transportation and logistics, whereas in several countries
including Africa and Latin America, the railway system is hardly developed,
leading to increased costs. Geographical distances in large countries often
make it difficult to evolve national distribution systems.

1.4.5 Differences in market competition

The competitive intensity of the markets largely depends upon the market
size, customers’ buying capacity and products available in the market.
Government restrictions often interfere with free-market forces and influence
market competition. Planned economies in the erstwhile communist
countries such as Russia and China closely control their markets and
decide on what products are to be sold, at what price they should be sold
and in which distribution channels they are to be sold. With economic
liberalisation, even these markets have become highly competitive. Besides,
governments of all the countries interfere in the free operation of markets by
way of imposing differential import tariffs, taxes and its regulatory
framework.
In view of the above, international marketing becomes much more complex
than domestic marketing. Companies need to understand the differences as
mentioned above and adapt its marketing mix depending upon country.

Self-Assessment Questions
6. International marketing is much less complex than domestic marketing.
(True/ False)
7. _____________ defines the belief systems, thinking patterns and
behaviour of people in any country.

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8. Which of the following two countries are exceptions to the English

common Law?
A. Britain and France
B. Germany and France
C. Japan and Latin American countries
D. China and India

1.5 Reasons to Enter International Markets

The reasons to enter international markets vary widely. It depends upon the
objectives, resources and nature of a firm and the country of its operations.
However, there are some select reasons to enter international markets,
which are as follows:
Growth – Companies often resort to expansions into the international
markets when the domestic markets get saturated. This is more relevant for
companies producing specific products with high technological intensity
such as aircraft, motherboards or microprocessors for computers, etc.
Besides, in cases when the market size of a country is small, such as
Japan, Korea, Singapore or Hong Kong, the companies need to expand to
international markets in order to maintain growth.
Profitability – To take advantage of cross-country differences in the prices
of a product, a company may resort to market in the most profitable
countries.
To spread the marketing risks – It is advisable to diversify the markets
served by the firm so as to reduce the market risks. For instance, the
economic slump in the United States and western markets makes it
necessary for Indian companies to find alternate markets in East Asia and
Africa to offset the reduced demand in the west.
To utilize excess capacity – Often companies may be saddled with excess
capacity due to insufficient local demand or due to the viable scale of plants.
Exporting could be a way of utilising the capacity.
Competitiveness – Companies may be globally competitive due to the
technologies used, scale of manufacture or due to local inputs being lower
in cost.

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Activity 2:
Explore the Internet and identify a few Indian companies that have
expanded their markets overseas. Find out the reasons for their
expansion to international markets.
Hint: Refer a particular industry and its history .

1.6 Multinational Enterprises (MNEs)

Multinational Enterprises (MNEs) refers to a business enterprise that carries
its business operations in multiple countries across the world. MNEs are
sometime known as multinational corporations (MNCs), transnational
corporations (TNCs) or as a global or multi-domestic company. MNEs are
the agents of globalisation and they have helped in integrating the global
markets. They have become some of the most powerful economic and
political entities in the world today.
MNEs may either be privately owned companies, stock-held firms or state
owned enterprises. The companies could be in the manufacturing or
services sector. MNEs possess enormous financial, technological and
manpower resources, and are spread across the globe. They operate in
many countries and enjoy considerable influence in the international market.
A MNE engages in various activities like exporting, importing and
manufacturing in different countries and has a global perspective in its
management and decision-making.
UN offices often use the term Transnational Corporation (TNC) for
Multinational Enterprises. The world’s top ten non-financial TNCs (Table
1.1), ranked by foreign assets, are General Electric, Royal Dutch Shell, BP,
Exxon Mobil Corporation, Total SA, GDF Suez, Vodafone Group, Enel SpA
and Telefonica SA. Among the top 100 TNCs, 22 are from the United
States, 16 from France, 12 from Germany, 6 from Japan and the rest are
from other countries. The giant American conglomerate General Electric
(GE) holds more assets abroad than any other non-financial firm in the
world – valued at over $500 billion – and its foreign assets comprise over
70% of its total assets. Out of the 100 companies that hold assets in foreign
countries, 17 hold over 90% of their assets abroad, including Arcelor Mittal,
Nestlé, Anheuser-Busch InBev and Vodafone. Their share of foreign sales
is also substantially larger than that of GE's. More than half of GE’s

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300,000-strong workforce is based outside America. Three of the top five

firms are oil companies. Exxon Mobil had the largest foreign sales last year
at $317 billion, comprising 73% of its total.

Web table 28. The world's top 100 non-financial TNCs, ranked by foreign assets, 2011 a
(Millions of dollars and number of employees)
Ranking by: Assets Sales

Foreign b TNI b
TNI Corporation Home economy Industry c Foreign Total Foreign Total
assets (Per cent)

1 67 General Electric Co US Electrical & electronic equipment 502 612 717 242 77 480 147 300 59.7
Netherlands/
2 31 Royal Dutch Shell plc Petroleum expl./ref./distr. 296 449 345 257 282 673 470 171 76.4
UK
3 21 BP plc UK Petroleum expl./ref./distr. 263 577 293 068 308 437 386 463 83.8
4 51 Exxon Mobil Corporation US Petroleum expl./ref./distr. 214 231 331 052 316 686 433 526 66.0
5 86 Toyota Motor Corporation Japan Motor vehicles 214 117 372 566 142 888 235 200 52.1
6 29 Total SA France Petroleum expl./ref./distr. 211 314 228 036 197 480 256 732 77.7
7 63 GDF Suez France Utilities (Electricity, gas and water) 194 422 296 650 82 731 126 040 60.6
8 10 Vodafone Group Plc UK Telecommunications 171 941 186 176 65 448 74 089 90.2
9 73 Enel SpA Italy Electricity, gas and water 153 665 236 037 66 817 110 528 58.1
10 27 Telefonica SA Spain Telecommunications 147 903 180 186 63 014 87 346 78.3
Source: UNCTAD.
a. Preliminary results based on data from the companies' financial reporting; corresponds to the
financial year from 1 April 2011 to 31 March 2012.
b. TNI, the Transnationality Index, is calculated as the average of the following three ratios: foreign
assets to total assets, foreign sales to total sales and foreign employment to total employment.
c. Industry classification for companies follows the United States Standard Industrial Classification as
used by the United States Securities and Exchange Commission (SEC).

Table 1.1: World’s Top 10 Non-Financial TNCs

Earlier, most MNEs were from developed countries, though currently the
number of MNEs based in developing and emerging economies are
increasingly catching up. As we have already discussed, MNEs play a
critical role in the economic growth of a country. Hence, it is the obligation of
the country to provide a platform for supporting MNEs and to safeguard their
interests. MNEs offer their resources, investments, technology, innovation
and expertise to the host markets and contribute to the economic growth of
the host countries. Their professional working environment and culture offer
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a learning window for local companies through best management and

business practices. Conflicts of interests, increasing materialism, corruption,
crime, brain drain, negative marketing, human rights violation, unethical
practices and deteriorating family are some of the negative aspects of
MNEs which should be equally noticed.

1.7 Management Orientation: EPRG Framework

The orientation of a company’s top management, its beliefs and
assumptions significantly impact its approach to international marketing.
The concept consisting of Ethnocentric, Polycentric, Regiocentric and
Geocentric is widely known as EPRG framework, and it is discussed below.
1.7.1 Ethnocentric
A company with ethnocentric approach deals with the whole world, based
on the home-country perspectives. Marketing strategies used in the
domestic market are extended to the foreign markets. Thus, ethnocentrism
is based on one’s firm belief in the superiority of one’s own culture. Thus,
under the ethnocentric approach, products designed for the home market
are exported elsewhere in the world with little adaptation.
Such ethnocentric approach often leads to one’s failure in the international
markets as markets do differ significantly.
1.7.2 Polycentric
Contrary to the ethnocentric approach, a polycentric approach emphasises
on the host-country orientation. It believes that local market tastes and
preferences are most important and that market strategies need to be
adapted accordingly for different countries.
1.7.3 Regiocentric
Under this approach, the firm employs a single marketing strategy within the
region but not across the regions. For instance, a firm may use a single
marketing approach within the Middle East or Far East.
1.7.4 Geocentric
Under the geocentric approach, a global approach to the market is followed
and the whole world is treated as a single market. Therefore, under this
approach, global marketing strategies are evolved and implemented.

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The ethnocentric company is centralised in its marketing management, the

polycentric company is decentralised, and the regiocentric and geocentric
companies are integrated on a regional and global scale, respectively. A
crucial difference between the orientations is the underlying assumption for
each. The ethnocentric orientation is based on a belief in the home-country
superiority. The underlying assumption of the polycentric approach is that
there are so many differences in cultural, economic and marketing
conditions in the world that it is an impossible and futile attempt to transfer
experience across national boundaries.
There is a likelihood of a geocentric company not identifying itself with any
particular country. Therefore, it is difficult to determine the firm’s home
country, except the location of its headquarters and its corporate
registration.

1.8 Summary
Let us recapitulate the important concepts discussed in this unit:
Globalisation has led to increased integration of markets in the 21st century.
Domestic markets in India as well as in other parts of the world are
increasingly getting globalised and hence are more competitive.
Over the years, the orientation of markets has shifted from the concept of
“selling” to “marketing,” wherein emphasis has increasingly been laid on
customer satisfaction. Marketing is the process of planning and executing
the conception, pricing, promotion, and the distribution of ideas, goods, and
services to create exchanges that satisfy individual and organisational
goals.
The basic driver of international marketing is to develop a global customer
base. An increased global customer base allows for the export of more
products and services. The global customer base is growing because of the
living standards and also because a level of employment increase is seen in
many developing economies. Thus, the principle of international marketing,
in its simplest meaning, is based upon understanding the consumer needs
in global markets.
Multinational Enterprises possess enormous resources such as financial,
technological and manpower resources, and are spread across the globe.
MNE’s engages in various activities like exporting, importing and
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manufacturing in different countries. MNEs have worldwide involvement and

a global perspective in its management and decision-making. These have
been growing and spreading their operations within the EPRG framework.

1.9 Glossary
Comparative marketing: Evaluation of two or more different marketing
systems and identifying similarities and differences between them.
Domestic marketing: Marketing practices within a firm’s own country.
Ethnocentric: The whole world market is dealt with, based on the home-
country perspectives. Marketing strategies used in the domestic market are
extended to the foreign markets.
Foreign marketing: Marketing in a foreign country by a domestic firm.
Geocentric: To follow a global approach to the market. The whole world is
treated as a single market in this approach.
Global marketing: Marketing practices for the whole world focussing on
global marketing opportunities.
Globalisation: Gradual integration and growing interdependence of
national economies.
International marketing: Exchange of goods and services between
different national markets involving buyers and sellers.
International trade: Flow of goods and services across national boundaries
from a country’s macroeconomic perspective.
Polycentric: Emphasises on host-country orientation. It believes that the
local market’s tastes and preferences are most important and that market
strategies need to be adapted accordingly for different countries.
Regiocentric: The firm employs a single marketing strategy within the
region but not across the regions.

1.10 Terminal Questions

1. Explain the significance of international marketing in the rapidly
globalising economy.
2. Differentiate between the following:
a. Foreign marketing
b. Comparative marketing

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c. International marketing
d. Global marketing
3. Briefly explain the concept of international marketing with suitable
examples.
4. Give reasons as to why international marketing is much more complex
compared to domestic marketing. Explain the difference between the
two.
5. Discuss the concept of EPRG framework.

1.11 Answers
Self-Assessment Questions
1. International marketing
2. False
3. True
4. True
5. Domestic marketing
6. False
7. Culture
8. Japan and Latin American countries

Terminal Questions
1. The Rapid pace of globalisation has led to increased integration of world
markets in the 21st century. Globalisation has an increasingly significant
impact on international marketing. Globalisation of markets refers to the
gradual integration and growing interdependence of national economies.
Globalisation allows firms to view the world as an integrated
marketplace. The term market globalisation refers to the emergence of
global markets for standard products and services and the growth of
world’s large-scale companies that serve those markets. Increased
market access and reduction in import tariffs have given many
international marketing opportunities. (Refer to Sections 1.1 and 1.2 for
further information.)
2. Foreign marketing: When a domestic firm markets in a foreign country, it
is known as foreign marketing.

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Comparative marketing: This deals with evaluation of two or more

different marketing systems to identify similarities and differences
between them.
International marketing: Exchange of goods and services between
different national markets involving buyers and sellers.
Global marketing: Marketing practices for the whole world focusing on
global marketing opportunities. (Refer to Section 1.3 for further
information.)
3. The concept of International Marketing primarily involves an application
of marketing tools and techniques to develop and manage trade across
international boundaries. The principle of International Marketing is
based on an understanding of the global consumer needs in the global
markets. (Refer to Section 1.3 for further information.)
4. The principles of marketing have universal applications, but a marketer
has to design and implement the marketing strategy in such a manner
so as to satisfy the customers. The strategy should also be implemented
in a competitive manner, compared to the other players in the overseas
markets. A marketer should design and implement the marketing mix in
response to various environmental challenges, which are uncontrollable
for a firm, and adapt them for different markets. (Refer to Section 1.4 for
further information.)
5. EPRG framework offers us a good tool to understand management
orientation. A company’s assumptions significantly impact its approach
to international marketing. The concept consisting of Ethnocentric,
Polycentric, Regiocentric and Geocentric is widely known as EPRG
framework. (Refer to Section 1.7 for further information.)

1.12 Case Study

Impact of Globalisation on Marketing in India
Economic liberalisation in India that began in 1991 has opened up the
Indian market for foreign marketers. As a result, a number of multinationals
entered India, giving fierce competition to the Indian firms which were
accustomed to operate in a highly protected internal environment. Today
numerous multinationals brands such as Coca Cola, Pepsi, Samsung,
Nokia, LG, Panasonic, Sony, etc., have become household brands.

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Traditional Indian firms such as Dabur, Himalaya, Godrej, etc., which served
the Indian markets are currently catering to the needs of both the local and
international markets in several countries.
The rise in competition from foreign multinationals has brought Indian firms
under tremendous pressure in terms of price, quality as well as services,
exposing the Indian customers to global products and service quality.
Companies operating solely in the domestic market found it increasingly
difficult to survive, employing their traditional marketing strategies. Domestic
companies were compelled to develop the basic know-how of international
marketing strategies of foreign firms and evolve their own plans to expand in
international market, wherever feasible.
The whole format of marketing witnessed a tremendous change. Even
traditional food sellers such as Haldiram’s, Sarvana Bhawan, Sagar Ratna,
etc., modernised their food outlets and expanded their chains of restaurants
across India. Moreover, these restaurants also expanded overseas primarily
to cater to the needs of ethnic Indian population. Over the period, these
outlets have gained popularity among foreign customers especially in the
United States, the United Kingdom, Middle East, Singapore and other parts
of South East Asia.
On the other hand, the foreign food outlets that operate globally, such as
McDonalds, Samsung, Nokia, LG, KFC, Domino’s Pizza, Pizza Hut, etc.,
have modified their menu to cater to the Indian palate. McDonalds refrains
from serving beef and pork in India in view of its large Hindu and Muslim
population. KFC (Kentucky Fried Chicken), which is known worldwide for its
crispy chicken, includes an authentic vegetarian menu in India.
Discussion Questions:
1. Identify the reasons for Indian firms to expand in international markets.
2. How did globalisation change the marketing strategies of Indian food
firms?
Hint: Refer section 1.2, 1.4. 1.5.
References/E-references/Further Readings
 Joshi R. M. (2012). International Business (7th ed.). New Delhi: Oxford
University Press.
 http://www.oecd.org/india/

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 http://www.esomar.org/
 http://www.wto.org/

Further Readings:
 Keegan, W. J. "Global Marketing Management" 4th Edition. Prentice
Hall International Edition 1989.
 Carter, S. "Multinational and International Marketing in Constraint
Economies." The Quarterly Review of Marketing, Summer 1988,
pp 13-18.
 Smith, P. "International Marketing." University of Hull, MBA Notes, 1990.
 Terpstra, V. "International Marketing", 4th ed. The Dryden Press, 1987.
 Subhash C Jain, 3rd Edition, International Marketing Management, CBS
Publishers and Distributors Pvt. Limited, New Delhi, 2008.

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