Chapter - I Introduction The enormous volume of foreign trade implies that for many a dynamic enterprise, the potential

market is not confined to the national frontiers. And for a good number of large companies, the overseas market is not secondary market but the primary market. The world market huge and expanding - often offers greater growth and profit opportunities than the domestic market. The indication of continued increase in buying power, gross national products, and capital investment in many foreign national markets makes it most inevitable that these countries will constitute profitable growth markets (as well as strong competition for many) for many ..Firms. Definition of Export Marketing:If there are no difference in the principles of marketing between domestic marketing and international market what, then, is meant by international marketing? A comprehensive view of international marketing is given by Walsh. Walsh rightly observes that international marketing is perhaps best regarded as shortcut expression for the special international aspects of marketing and defines international marketing as: 1) The Marketing of goods and services across national frontiers, and 2) The marketing operations of an organization that sells and/or produces within a given countries when: a) That organization is part of, or associated with, an enterprise which also operates in other countries; and b) There is some degree of influence on or control of the organizations marketing activities from outside the country in which it sells and / or produces.

Objectives Of International Business:There are several reasons for firms going international .It must ,however, be recognized that the ultimate goal is achieved by taking a number of strategic steps that contribute to the firms growth and profit objectives . A company may, therefore, undertake overseas business for any one more of following reasons:
1. To sell out the Surplus :

When the domestic market is incapable of absorbing, or unwilling into absorb ,the whole of the companys output ,exporting may enable the firm to operates at its optimum capacity and reduce its average cost of production .When excess productive capacity exists, exporting is a worthy proposition even on the basis of marginal cost pricing.
2. To achieve Sales and production Stability :

It is corollary of the first objective. Export sometimes enables a company to maintain sales and production stability. For instance, in the case of products with a seasonal demand, exporting may help in achieving sales ability if, in the export markets ,the seasons are opposite to those at home .Further ,if a company has good business , it may be able to mitigate the effects of domestic recession to a certain extent. It may be mentioned here that one of the important factors that prompted Hindustan Machine tools Ltd.(HMT) to explore the export possibilities very seriously was in the recession in that afflicted in the home in the late 1960s
3. To Pay for Imports :

Another Objective of exporting on the part of a company is to finance own imports. In fact, initially this was one of the important objectives of the export activities of the HMT. In India, in the past, the Governments permission to import certain items was linked with the export performance of the concerned parties.
4. To Contribute to National Goals :

Some socially responsible companies may vigorously promote export to contribute to the national effort to earn valuable foreign exchange. This seems to be one of the important influences on the evolution of the export orientation of the HMT. Embarking upon its social responsibilities to achieve the maximum possible expansion and growth in expert, HMT has

set up a subsidiary - the HMT international Ltd. to promote export on al large scale. 5. Achieve Growth and development: Once the domestic market has been fully exploited, the firm should enlarge its market overseas if it intends to grow further. Many developed country market have saturated or are declining for a number of products. In such cases, growth will have to be sought from foreign markets. Moreover, operations on a global scale are necessary to support the huge expenditure on research and development. MNCs are in getting increasingly interested in a number of developing countries as the income and population are rapidly rising in these countries. 6. To Lower costs Of Business : Multinational business facilities cost reduction. One encouragement to sty up production bases in certain countries is to lower costs of production in those countries because of the availability of factors of production, like labor, cheaply. Further export marketing may help firms to achieve economic of scales because of the enlargement of the market. 7. To Improve Company Image : Multinational business also helps a company to improve its image in the home country. There is a tendency to regard the products of a company which sells in overseas market as standard. Thus, multinational business helps the company to consolidate its position in the domestic market. 8. Nature of the Business : Certain industries, such as the extractive are almost, by nature , multinational, and to be engaged in them calls for a multinational operations because the source of the materials they process are located abroad and exploiting them requires international operations relating in to production , finance and marketing . 9. Political Reasons : In some countries, like India, business house and foreign firms were allowed in the past to enter certain areas of production only if they undertook to export a part of their total output. In some countries, like some developed countries such as USA, government policies and public opinion are hostile to certain types of industries which cause ecological problems. Thus compels companies to shift such industries to countries where there is no such hostility. 10. Economic Incentives :

In countries like India, export oriented industries and export marketing business are offered a number of economic incentives to stimulate export. Some firms may take up exporting in to obtain the benefits of various incentives. Stages of Internationalization:The internationalization process generally includes five stages / steps they are as follows:1. 2. 3. 4. 5.

Domestic Company International Company Multinational Company ( MNCs) Global Company Transnational Company ( TNCs)

Let us see one by one in detail as follows: 1. Domestic Company : The Domestic Company limit is operations, missions and vision to the national political boundaries. These companys focus its view on the domestic marketing opportunities, domestic suppliers, domestic financial company and domestic customers. This companys analyses the national environment of the country, formulate the strategies to get advantage of the opportunities offered by the environment. The domestic Company never thinks of growing globally if it grows beyond its present capacity, the company selects the diversification strategy of the entering into new domestic marketing. New products, new technology, etc. Domestic company does not select the strategy of expansion or enter into international marketing. 2. International Company : Some of the domestic companys which grows beyond their production or domestic marketing capacity thinks of internationalization their operations. Those Companies who decide to exploit (get more advantage) the stage in two company. There companies remain ethnocentric or domestic country oriented. This companys believes that the practices adopted in domestic business are superior to those of other countries. The focus of this companys is domestic but extends the wins to foreign country. The companys select the strategies of locating braches in the foreign marketing and extend the same domestic operations into the foreign marketing. These companies extend the Domestic products, Domestic price, Promotion and other practices in the foreign marketing.

Normally internationalization process of most of the global companies starts with this stage to process. Most of the companies follow this strategy due to limited recourses and also to learn from the foreign markets. Gradually before becoming a global company without much risk. 3. Multinational Company : The international companies learn that the extension strategy will not work. The best extension is Toyota Company exported Toyota cars produced for Japan. In Japan to USA in 1957. Toyota was not successful in USA. There cars were not suitable for the US market. Therefore Toyota could not sell there cars in USA as they were over priced. Therefore unsold car were shipped back to Japan. From this failure the company learnt that experience and as a source of invaluable intelligence but not as a failure. Toyota based on this experience designed a new model of car for suitable the US market and the international company turn into multinational company. When they start responding to the specific needs of the different countries market regarding products, price and promotion. The stage of multinational company is referred to as multidomestic. Multidomestic company formulates different strategies for different markets. Thus the orientation shifts from ethnocentric to poly centric.
4. Global Company : -

The global company is one of which has either global marketing strategy. Global company either produces the products in home countries or in a single country and focus on marketing these products globally. Ex: - Dr. Reddys lab designs and produces drugs in India and marketing globally. 5. Transnational Company : The Transnational company produce, markets, invests and operates across the world. It is an integrated global enterprise which lines global resources with global marketing at profit. There is a no pure transnational company. However most of the transnational companys satisfy means of the characteristics of the Global Company.

Methods of export promotion:The communication mix, also called promotion mix, has four major elements (or tools or channels), viz, advertising, sales promotion, personal selling and public relations. Which communication tool or tool should be used or the nature of the mix is determined by the marketing environment and the companys objectives and resources. They are as follows.
1. Advertising : -

Advertising is defined as any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. Advertising regulations of different media may be different in different countries. Similarly, media availability and efficiency may also vary. Mass media advertising and direct advertising: Given the resources constraints and the small volume of business of Indian exporter, in many cases direct advertising is preferable to mass media advertising. Mass media are media which reach a large number of the general public like T.V., newspapers, magazines etc. Direct advertising is marketing communication addressed direct to the specific customers targeted. Indian exporters would have difficulties to complete with the large megabudget mass media advertisers in the foreign markets. Important types of direct advertising are sales literature and samples and gifts.
2. Sales Promotion : -

Sales promotion is defined as short-term incentives to encourage purchase or sale of a product or service. Sales promotion includes many things like trade fairs and exhibitions, samples, gifts, contests, games, lotteries etc. Regulation regarding sales promotion differs between countries. Trade fairs and exhibitions are effective promotion methods for small exporters. Details are given in a separate section in this chapter.
3. Personal Selling : -

Personal selling is defined as oral presentation in a conversation with one or more purchasers for the purpose of customers is limited. Personal selling may be preferable when the product is technical in nature, is of high unit value, and the number of customers is limited. Sometimes personal selling could be an effective promotion tool for consumer goods also. Details about personal selling are given later in this chapter.
4. Public Relation : -

Public relation includes a variety of programs designed to improve, maintain, or project a company or product image. An important form of public relation is getting positive news and reports about the product or company released through media. This is of particular significance to new products. The export promotion organizations in India have a great role to play in promoting Indias exports through public relations.

TRADES FAIRS AND EXHIBITONS:-

Trade fairs and exhibitions play an important role in international marketing, by bringing potential buyers and suppliers in contact and imparting about the relevant development around the world. In certain cases they have special significance. For example, in Libiya, where advertisement for products is not permitted, the annual Tripol International Trade Fair is very important means to promote business. Friendly countries are also permitted to hold single country / single product exhibition and trade fairs. A trade fair, as its name implies, is target directed. It is stages for the purpose of selling goods or demonstrating new ideas and techniques. An exhibition, on the other hand, is not specifically for trade but for the public. There are two types of fair, viz. 1. General fairs, also known as horizontal fairs 2. Specialized fairs, also known as vertical fairs and solo fairs At a general fairs, the goods displayed cover many different fields. A specialized fair concentrate on products of a particular industry or group of industries. Within that industry or group, a large number of products may be on display. The general fair attract visitors of all ages, tastes and type and, therefore, is a good place to show consumer goods or new products that need to be seen and accepted. National pavilions are often built for general fairs and in them the government organizes an exhibition that gives the visitors good ideas of countrys industry, agriculture, way of life and tourist attraction as well as products it wishes to sell abroad. In other words, the purpose is largely to build up an image of the country in the public mind. If the product that an exporter, actual or potential, wishes to display is one that interests a specific group of buyers and especially if it is technical in nature, the specialized fair because t is not open to general public (or open only at specific times) and people who come have both an interest and some knowledge of the product. There are many well-known international trade fairs held at regular intervals like the Anuga food fair at cologne, Hanover engineering fair, sport good fair held in the USA etc.

Trade fairs are beneficial in the following ways: 1. In countries where media advertisement is not permitted, far and exhibition have a particularly important role in trade promotion?

2. International fairs bring together at a convenient place potential buyers and

sellers from all over the world and facilitate broader communication and information dissemination. 3. Fairs and Exhibitions provide the sellers opportunity to promote their products and to contact both existing and potential customers. They get an opportunity for direct interaction and feedback. 4. Fairs and Exhibition provide an opportunity to know the development and trends in the industry concerned. In trade fairs/exhibitions participant include not only the manufacturers/sellers of the final products but also the suppliers of machinery and technology, raw materials and intermediates, packaging and materials etc. 5. They also often enable participants and visitors to know about business opportunities, government policies, assistance packages etc. For example, at the Indian Seafood Fair, the Seafood Exporter Association and the Marine Products Export Development Authority seek to give wide publicity about the government policies and assistance for the development of Indias seafood export industry, including the scope for foreign participation. 6. Fair and exhibitions facilitate gathering of competitive information. 7. Fair and exhibitions may help the manufacturers in improving the sourcing of technology, material and buyers. Similarly, they help the buyers in improving the sourcing of supplies. Trade fairs and exhibitions, thus, provide multiple benefits to both the manufacturers/marketers and the buyers. Fair and exhibition often generate consideration amount of business enquiries and business for many participants.

CHAPTER II INTERNATIONAL MARKETING INTELLIGANCE

Sufficient and reliable information is a pre-requisite for proper decision making, be it domestic business or international business.

Viewed in a abroad sense, the general subject of international marketing intelligence includes the collection, processing, analysis and interpretation of all types of information, from all available sources, to aid business management in making international marketing decisions. Proper business intelligence is essential to make all the series of strategic decisions in international business described in chapter 1, viz., international business decision, market selection decision, entry and operating decision, marketing mix decision and organization decision. INFORMATION REQUIREMENTS The broad areas of information requirement for international business are the following: International Marketing Decision Related Information:Different types of information are needed to take the critical decision as to whether to go different or not. These include information about the prospects of the foreign market, competition, other characteristic of the foreign market, domestic market prospects etc. Market Selection Related Information:Information on a large number of factors is needed for evaluation and selection of the market. These are many general factors like political and economic stability, currency stability, Government policy and regulation, etc. about which information is required. Market selection also requires specific information about the product or industry concerned like the demand trends, Government policy and regulation, competitive situation etc. The following chapter provides more details: Product Related Information:This includes consumer tests and preference about the product like unit size/ quantity, shape, colors, product form, packaging etc., mode, time, frequencies and rates of consumption; purpose of use/uses etc.; regulatory aspects and so on. Price Related Information:Price related information needed include prevailing price ranges, price trends, margins, pricing practices, government policies and regulations, Price elasticity of demand, role of price as a strategic marketing variable etc. Promotion Related Information:-

For formulating the promotion strategy data on many aspects like media availability and effectiveness, Government regulations, customs/practices of promotion in the market concerned, competitive behavior etc. are required. Distribution Related Information:This includes information on factors like channel alternatives and characteristics, relatives effectiveness of different channel, customs and practices of the trade, power and influence of channel members etc. Competition Related Information:A company will also need information about the competitive environment including the extent of competition, major competitors, relative strengths and weakness of competitors, strategies and behavior of competitors etc.

SOURCES OF INFORMATION:There are broadly two sources of information, viz., internal sources. An internal source includes sales and cost records, accumulated knowledge of the personnel and any other data available with the company. Experienced companies may have a great deal of available information internally, but companies new to international business may have to rely much on external sources.

An External source includes sources of both primary and secondary data. A company will have to collect primary data when secondary data are not available, not adequate, or reliable. Organizations within India There are a number of export promotion organizations in India which are important source of information pertaining to foreign markets. While some of these are general others are product specific. Most of them have periodic publications which disseminate useful information. Several of them have also brought out publications intended to provide general guidance and education to exporters. They also carry out market potential studies and other relevant studies. These organizations include India Trade Promotion Organization (ITPO), State trading corporation, chambers of Commerce, confederation of India (CII), FIEO, and Export promotion Councils/Commodity Boards/Export Development Authorities. Organization like the Indian Institute of Packaging, Export Inspection Council is also important sources for certain types of information. The EXIM Bank has carried out a number of market studies. Although the EXIM bank is primarily a financial institution, it is also an important source of guidance for exporters. The offices of the consulates in India of foreign governments provide a lot of information about the respective countries. Education and research organization like the Indian Institute of foreign trade, Management schools departments of Universities etc., could also be useful to exporters. Valuable information can sometimes be obtained from other exporters houses and trading houses, banks ECGC etc.

Organizations outside India The international Trade Centre, Geneva, is a very important source of information and assistahnce3 to0 exporters, particularly from developing countries. Offices of the Indian embassies abroad and concerned departments of the foreign government may be approached for certain types of information. Several Governments, like that of Japan, give a lot of importance to import development and they are very much interested in providing the information relevant to importing to these countries. The Japan External Trade Organization) JETRO), for example, has brought out publications entitled Access to Japans

Import market pertaining to every important import items of Japan. These publications give a lot of information related to the import trade of different products. There are also certain international organizations related to specific products (like the infofish, Kaulalmpur, for Seafood, for example). Organization like the World Bank, UNCTAD, also makes studies and reports regarding certain products. The World Trade Organization (WTO) is an important source for different types of information. Publications In many cases a lot of information can be obtained from publications like journals and research publications national, foreign and international. As mentioned earlier, the various export promotion organization have periodical and other publications. Besides these are a number of general and specialized publications carrying useful information for the exporters. Similarly, there are a number of foreign and international publications, general and product specific. Internet In many cases, a readily available, and often up to date, source of information is the internet.

INTERNATIONAL INFORMATION SYSTEM:as Terpstra suggest, international marketing intelligence involve the creation of an information system, which should, of course, be a part of the companys overall information system for international business. Viewed from this perspective, international marketing intelligence includes several different tasks, one of which is marketing research on individual foreign markets. The committee on definitions of the American Marketing Association defines marketing research as the systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services.

A modified definition is that marketing research is the systematic planning, gathering, recording, analyzing and interpreting of data for application to specific marketing decisions. Marketing information system is defined as an interacting, continuing, futureoriented structure of people, equipment and procedures. It is designed to generate and process an information flow to aid decision making in a companys marketing program. The marketing information system is, thus, much broader than marketing research. Marketing research, in fact, a part of the marketing information system. It may, however, be noted that many companies which do not have such a well-established information system aid defined above conducts marketing research. The marketing information system handles both external and internal data; in marketing research is a system which operates continuously, marketing research often in fragmented, fashions. Marketing research may be conducted by the company concerned (in-house research )or it may be entrusted to an external agency like marketing research or consultancy organization, advertising agency, management institute etc.

Utility/Importance/Objectives of Marketing Research: Marketing research is very essential to keep pace with the changing environment characterized by such factors as; (a) increasing competition; (b) Fast technological developments;; (c) Changing consumers attitude; (d) changing tastes and requirements. The basic utility of marketing research is that it helps the company to identify the problem areas and environment opportunities and helps to monitor the environment. Once may list several benefits of marketing research, but all these converge to what has been stated above. We may say that marketing research helps to;

1. Identify the deficiencies, if any, of the, 1. Products 2. Pricing 3. Distribution 4. promotion 5. Identify existing and emerging marketing opportunities. 6. Analyze the competitive environment. 7. Identify the environment weakness and strength of the company. 8. Monitor the environmental changes. All these will obviously help the company to take appropriate measures to improve needed for forward planning. Scope of Marketing Research:The scope of marketing research is indeed very wide. The broad areas of research are given below. Under each of these areas, there are a number of specific areas of research. 1. Product research 2. Pricing research 3. Distribution research 4. promotion research 5. Consumer research 6. Marketing environment research 7. Market trend research 8. Marketing efficiency research

TYPES OF MARKETING RESEARCH: Broadly there are two types of research, like exploratory research and conclusive research. Exploratory Research: Exploratory research, as the term indicates, is investigative in nature. For example, the problem may be to find out why the sales of a product are poor or why a particular group of consumers like or dislike the product.

Sometimes, exploratory research, may lead conclusive research. Exploratory research may define a problem which is them solved by conclusive, but the conclusive research may have by-products which are in effect new exploratory studies leading to new hypothesis. An exploratory research may be conducted by; 1. Study of secondary data 2. Survey of Knowledge persons 3. Analysis of selected cases, i.e., intensive study of a relatively small number of situations. Conclusive Research: There are two types of conclusive research, namely, 1. Descriptive research 2. Experimental research Descriptive studies are designed to describe certain things. (For example, the characteristics of uses of a given products; the degree to which products use with demographic variables such as age, sex, income etc.). Descriptive research may be conducted by; 1. Case Study 2. Statistical Study As boyd et al. point out, the statistical method differs from the case method in the number of cases studied and in the comprehensiveness of the study of each case. While the case method involves a complete study of a few cases, statistical method involves the study of a few factors in large number of cases. Statistical Studies, thus, bring out averages, percentages, measures of dispersion, etc. Experimentation may be done in a laboratory situation or in the field. For example, consumer reaction to a new product may be tested in a simulated market situation or in the real market. METHODS OF DATA COLLECTION:For colleting primary data, there are broadly two methods, the observation and survey. 1) Observation research:This method of collection of data by observing the behavior of people in a given situation. The observation may be done in a natural situation. For example, the response of consumers to a particular display may be observed in an actual store.

An alternative is to observe the consumer behavior in a simulated situation. Fro example, a mock store may be established to observe the consumer behavior. The observation may be made is helpful to collect information that people are unwilling or unable to provide. Merits: The merits of the observation method are the following: 1. It provides information about the actual behavior of consumers. 2. Chances of bias are limited. 3. It helps to obtain information which consumers are unwilling or unable to provide. Limitations: The limitations of the observation method are the following; 1. It is helpful in getting information only about certain aspects of consumer behavior. 2. It provides information only about how consumers behave: it does not provide any information as to why consumers behave so. 3. In most cases, it is useful only as a supplement to other method. 2) Survey Research:This method enables collection of information directly from the consumers. The important contact method used to collect information by the survey method is: 1. Personal interviewing 2. Telephone interviewing 3. Mail questionnaires 1) Personal interviewing: There are two forms of personal interviewing, viz., 1. Individual interviewing 2. Group interviewing Individual interviewing is more suited than group interviewing for collecting information that is too personal. Group interviewing is less costly that personal interviewing. Certain information which may not be readily forthcoming from individual interviewing may be forthcoming from group interviewing. In group interviewing, the respondent are likely to be more controlled that in individual interviewing. This has both positive and negative effects. Merits: The merits of personal interviewing are as under: 1. It is the most direct way of eliciting information from the respondent.

2. It enables the researcher to take the respondent into confidence so as to get

his full cooperation. 3. It enables clarification of points. 4. It enables the cross-checking of the information provided. 5. It also provides for certain flexibility for data collection. 6. It enables the investigator to observe the environment of ten respondents. Limitations: 1. It is time-consuming and costly, particularly If the respondents are large in number and widely scattered. 2. Some respondents may be hesitant to reveal certain information in a face to face interview. 3. This method needs trained people who are tactful in collecting information. 2) Telephone Interviewing:An easy method of collecting information is telephone interviewing. It is very common in advance countries where most people are available on phone. In countries like India this method can be employed only in certain cases because of the limitations of telephone ownership. However, this can be employed when the sample of certain specific strata. Merits: Important merits of telephone interviewing are the following: 1. Easy and quick method. 2. Like personal interviewing, this method also enables taking the respondent into confidence, classification of points cross-checking of information to some extent, etc. 3. as it avoid a face to face situation, it is a better method than personal interviewing to get certain types of information, like those which are very personal or sensitive. 4. It saves time and cost compared to personal interviewing. Limitations: following are the important limitations of telephone interviewing 1. It scope of is limited in countries where most people are not available on the phone and where the telephone system is inefficient. 2. One limitation of this method in comparison with personal interviewing is that there is no scope for personal observing the respondent and his environment. 3. Many people are annoyed by such unsolicited calls.

3) Mail Questionnaire:One common method is to send the questionnaire pre-postage paid the respondent by post and get it back, after filling up, by post. Merits: important merits of this method are: 1. When the respondents are large in number and scattered over distance place, this is a preferable method. 2. It is also a very economic method. 3. Respondents can fill in the questionnaire at their leisure and hence they may be in a position to do justice to the requirements. 4. It avoids embarrassment of taking in person about certain sensitive matters. Limitations: Limitations of the questionnaire method include: 1. It cannot used to collect information from the illiterate. 2. It does not provide scope for clarification. 3. It does not provide as much scope for cross-checking as in case of personal or telephone interviewing. 4. There are chances of the respondent leaving some parts of the questionnaire blank. 5. The respondents may have to be remained over and again to send back the Questionnaire. 6. The response rate(i.e., the percentage of people who fill properly and return the Questionnaire) is normally very low.