IMM Summary

Domestic Marketing vs. International Marketing Challenges

Overseas Environmental
Challenges (Uncontrollables)

Economic
Domestic Environmental Political
Challenges
Marketing (Uncontrollables)
Challenges
Economic Legal
in country Y Competition
(Controllables)

Socio Product
Marketing
Challenges Cultural
in country X
Place Consumer Price
Socio
Political Cultural
Political
Marketing Promotion Legal
Challenges
in country Z Competition Infrastructure

Logistics
Geography
 Evolutionary Process of Global Marketing

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 Theories of International Trade
Theory of mercantilism

Theory of absolute advantage

Theory of comparative advantage

Factor endowment theory

Country similarity theory

Theory of international product life cycle

Theory of competitive advantage

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Attributes for an Effective Market Segment
Measurable: The size, purchasing power, and characteristics of the
segments can be measured.

Substantial: The segments are large and profitable enough to serve.

A segment should be the largest possible homogeneous group
worth going after with a tailored marketing programme.

Accessible: The segments can be effectively reached and served.

Differentiable: The segments are conceptually distinguishable and

respond differently to different marketing-mix elements and
programmes.

Actionable: Effective programmes can be formulated for attracting

and serving the segments.
 Types of Segmentation
Geographic Segmentation
Demographic Segmentation
Country Segmentation on the Basis of Income
Segmentation of Markets on the Basis of Age

Psychographic Segmentation
Segmentation on the basis of Stages of Development
Segmentation on the Basis of International Marketing
Opportunity
Segmentation on the Basis of Market Attractiveness
 Modes of International Market Entry
Production in home country
Exports: Production is carried out in home country and finished goods are shipped to the overseas markets for
sale
Indirect Exports: Process of selling products to an export intermediary in the companys home country who in
turn sells the products in the overseas markets
Direct Exports: Process of selling the firms products directly to an importer in the overseas market
Complementary Exporting: Use of distribution channels of an overseas firm to make the product available in
the overseas market

Provide Offshore Services: To overseas clients with the help of information and communication technology

Overseas Turnkey Projects: Turnkey means handing over a project to the client, when it is complete in all
respect and is ready to use on turning the key for an overseas client organization. Major variants of turnkey
projects: Built and Transfer (BT), Built, Operate, and Transfer (BOT) Built, Operate, Own (BOO)

International Marketing 2e Oxford All rights reserved

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Investment Entry Modes
Assembly in overseas markets: refers to exporting various components of the
product in completely knocked down (CKD) condition and assembles them overseas
International joint ventures: equity participation of two or more firms resulting into
formation of a new entity
Wholly owned foreign subsidiaries
To have complete control and ownership of international operations a firm opts
for Foreign Direct investment through:
Acquisition: Acquiring a foreign company and all its resources in a foreign
market
Greenfield Operations: The establishment of production and marketing facilities
by a firm on its own from scratch

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 Product Strategy for International Markets
Product Standardization
Product standardization refers to marketing a product in the overseas
markets with little change except for some cosmetic changes such as
modifying packaging and labeling
Factors
High level of technology-intensity
Formidable adaptation costs
Convergence of customer needs worldwide
Country-of-origin (CoO) impact
Product Adaptation

International Marketing 2e Oxford All rights reserved

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Product Adaptation
Making changes in a product in response to the needs of the target market is termed
product adaptation or customization
Mandatory factors
Government regulations

Standards for electric current

Operating systems

Measurement systems

Packaging and labeling regulations

Voluntary factors

Culture

Local Customs and Traditions

Consumer demographics

Conditions of use

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Approaches to New Product Launch
Waterfall approach: the launch of a new product in international markets in a phased manner
Sprinkler approach: simultaneous product launch in various international markets

International Competitive Posture Matrix

The resources available with a firm for expansion of international markets and strengthening the
product features are limited.
Product strengthening is necessary to create and maintain a products competitive position in the
markets.

International Marketing 2e Oxford

University Press, 2014
 Building Brands in International Markets
Types Of Brands
No Brand or Branding the Product

Manufacturers Own Brand or a Private Brand

Local, National, or Global Brand

Single or Multiple Brands

Strategies for building brands

Brand based on Tangible Product Component
Brand Based on Intangible Product Component
Balance Brand Based on Tangible-Intangible Product Component

International Marketing 2e Oxford All rights reserved

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International Marketing 2e Oxford All rights reserved
University Press, 2014
 Implications of Life Cycle Concept in Brand Building
Embryonic, Growth, Maturity, Decline

Category development index (CDI) and Brand development index (BDI)

are the most widely applied tools for determining international branding
strategy
 Pricing Decisions for International Markets
Pricing Approaches for International Markets
Cost-based Pricing
Full cost pricing
Marginal cost pricing
Market based Pricing

Terms of Payment in International Transactions

Advance Payment
Open Account
Consignment Sales
Documentary Credit

International Marketing 2e Oxford All rights reserved

University Press, 2014
 Counter-trade is a practice where price setting and trade financing are tied together in
one transaction
Types: Simple Barter, Clearing Arrangement, Switch Trading, Counter Purchase, Buy-
back (Compensation), Offset
Dumping: It means selling of a product or commodity below the cost of production or
at a lower price in overseas markets compared to domestic markets.
Forms of dumping:
Sporadic Dumping, Predatory Dumping , Persistent Dumping

Transfer pricing refers to the price between related parties in an international

transaction.
Grey marketing refers to import or export of goods and their distribution through
unauthorized channels. Parallel importing, Re-importing, Lateral re-importing
 International Distribution
Indirect Channels: In indirect channels, an international marketing firm has to deal with domestic agents or market
intermediaries without any direct dealing with a foreign-based firm.
Direct Channels: Direct marketing channels involve selling of goods directly to a market intermediary based overseas.

Communication Decisions for International Markets

Consumer Response Hierarchy Models
AIDA Model
In this approach the main objective of a firm is to make the customers aware of the product and seek their attention
through effective marketing communication, such as through effective advertising.

International Marketing 2e Oxford All rights reserved

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Marketing Communication Strategies
Push Strategy
In push strategy, the promotional programme is primarily directed at the market
intermediaries in the distribution system.
Pull Strategy
The process of motivating the customers to buy the product from the retailers
through promotional programmes.
The marketing communication mix involves advertising,
sales promotion, public relation, personal selling, and
direct and interactive marketing.

International Marketing 2e Oxford All rights reserved

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Strategic Framework for International Product-promotion Decisions
Straight Adaptation
In cases, when the need satisfied and the conditions of product use is the same, the product as well as
the marketing communication is extended.
Product ExtensionPromotion Adaptation
When the condition of product use remains the same whereas the needs satisfied or the product
function is different, the product is extended as such but the promotion strategy is adapted.
Product AdaptationPromotion Extension
When the need remains the same and the condition of the product use differs across markets,
modifications are carried out in the product but the promotional strategy is often adapted.
Dual Adaptation
A company has to customize both the product and the promotional strategies while marketing in
countries where the functions of the product and need satisfied are different and the conditions for
the product use is also different.

International Marketing 2e Oxford All rights reserved

University Press, 2014