INTERNATIONAL MARKETING

STRATEGY
MODULE 1
• https://www.youtube.com/watch?v=zeerIlGH
oVg
Ad or a Meme?
 Why do companies go abroad?
Reasons for entering new markets:
• –potential demand in foreign countries
• –saturated home market
• –customers expect global presence
• –reducing dependency on one market
• –foreign competitors could enter home
market
• –scale effects in production and marketing
• Reasons: Potential Demand
• –Is the market saturated by competition?
• –Alternately, is there potential demand for a
new product?
• Reasons: Saturated home market
• –Challenges in Home Market
• –Growth Opportunity
• –Saturation
• Reasons: Presence needed
• –Service, regular technical support, or
warranty offerings must be delivered at a cost
consistent with the size and profitability of the
market.
• Reasons: Market Access
• –Geographic proximity
• –Product supply and channel of distribution
access
• –Import restrictions and tariffs
• –Legal and regulatory restrictions
 Reactive vs Pro-active
Reactive Proactive
Market Market
Entry Entry

• Competitive Pressure & • Competitive Advantage

Survival • Sales, Profit Growth
• Overproduction & • Low Cost Production &
Excess Capacity Tax Benefits
• Saturated Domestic
Market
 What is Marketing?

• Marketing
• … is the activity, set of institutions, and
processes for creating, communicating,
delivering, and exchanging offerings that
have value for customers, clients, partners,
and society at large.
Thus marketing involves:
• focusing on the needs and wants of
customers
• identifying the best method of satisfying
those needs and wants
• orienting the company towards the process of
providing that satisfaction
• meeting organisational objectives.
 What is International Marketing?

• International marketing is the process of

focusing the resources and objectives of a
company on international marketing
opportunities.

• It is the performance of business activities that

direct the flow of a company’s goods and
services to consumers or users in more than one
nation for a profit.
 In other words
• International marketing is 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.
 What is the difference between domestic
Marketing and international Marketing?
Domestic Marketing
• It involves the company
manipulating a series of
controllable variables such as
price, advertising, distribution
and
• The product/service attributes in
a largely uncontrollable external
environment
• External Environment includes
different economic structures,
competitors, cultural values and
legal infrastructure within specific
political or geographic country
boundaries
International Marketing
• International marketing, which
involves operating across a
number of foreign country
markets in where the
uncontrollable variables differ
significantly between one market
and another, but
• the controllable factors in the
form of cost and price structures,
opportunities for advertising and
distributive infrastructure are also
likely to differ significantly.
• It is these sorts of differences
that lead to the complexities of
international marketing
 DIFFERENCES BETWEEN
INTERNATIONAL
AND DOMESTIC MARKETING
1 Culture: often diverse and multicultural markets
2 Markets: widespread and sometimes fragmented
3 Data: difficult to obtain and often expensive
4 Politics: regimes vary in stability – political risk becomes an important
variable
5 Governments: can be a strong influence in regulating importers and foreign
business ventures
6 Economies: varying levels of development and varying and sometimes
unstable currencies
7 Finance: many differing finance systems and regulatory bodies
8 Stakeholders: commercial, home country and host country
9 Business: diverse rules, culturally influenced
10 Control: difficult to control and coordinate across markets.
So what is Global Marketing Strategy?
• Global marketing management, which is a larger and
more complex international operation.
• Here a company coordinates, integrates and controls a
whole series of marketing programmes into a
substantial global effort.
• Here the primary objective of the company is to
achieve a degree of synergy in the overall operation so
that by taking advantage of different exchange rates,
tax rates, labour rates, skill levels and market
opportunities,
• Here, the organisation as a whole will be greater than
the sum of its parts.
 Mode of Engagement in International
Marketing
• Export marketing, in which case the firm markets its goods and/or
services across national/political boundaries.
• International marketing, where the marketing activities of an
organisation include activities, interests or operations in more than
one country and where there is some kind of influence or control of
marketing activities from outside the country in which the goods or
services will actually be sold. Sometimes markets are typically
perceived to be independent and a profit centre in their own right,
in which case the term multinational or multi-domestic marketing is
often used.
• Global marketing, in which the whole organisation focuses on the
selection and exploitation of global marketing opportunities and
marshals resources around the globe with the objective of
achieving a global competitive advantage
International Marketing Strategies
 BARRIERS TO INTERNATIONAL
MARKET SUCCESS
If your company's marketing efforts are constrained by keeping domestic
and international marketing messages the same, the challenge of
branding, pricing in international currency, foreign distribution channels
and promotional advertising may not translate well.
• Language: Does your brand name and advertising translate into
meanings that could be embarrassing?
• Non-Verbal Language: Are any cultural norms violated with respect to
numbers, color, and symbols?
• Religion & Values: Does your brand or advertising offend religious
beliefs and/or cultural values?
• Political Stability: The degree that a country is socially and
economically stable.
• Laws & Regulations: The degree that foreign business regulated and
allowed to operate in a country.
• Market Infrastructure: The degree roads, utilities, transportation,
banking, media and retail are in place.
For Example
 Driving Forces of International
Marketing
• Technology: Globe-spanning television networks
such as CNN and MTV, and the Internet are just a few
of the technological factors underlying the
emergence of a true global village.

• Regional Economic Agreements: A number of

multilateral trade agreements have accelerated the
pace of global integration. Ex. WTO, EU,
NAFTA,ASEAN..
 Driving Forces cont..
• Market Needs and Wants: Evidence is mounting that
consumer needs and wants around the world are
converging today as never before. This creates an
opportunity for global marketing.

• Transportation and Communication Improvements:

The time and cost barriers associated with distance
have fallen tremendously over the past 100 years.
 Driving Forces cont..
• Product Development Costs: The pressure for
globalization is intense when new products require
major investments and long periods of development
time.

• Quality: Global marketing strategies can generate

greater revenue and greater operating margins,
which, in turn, support design and manufacturing
quality.
 Driving Forces cont..
• World Economic Trends: World Economic
Growth has created vast economic
opportunities for businesses to expand in to
new markets. Favourable foreign policies by
countries triggered by economic benefits from
international trade
• Scale of Economies and resource utilization
https://www.yo
utube.com/watc
h?v=CdpX6zvYb
Fg
 POLITICAL ENVIRONMENT
• Global marketing activities take place within the
political environmental of governmental institutions,
political parties, and organisations through which a
country’s people and rulers exercise power.
• Any company doing business outside its home country
should carefully study the government structure in the
target country and analyse salient issues arising from
the political environment.
• These include the governing party’s attitude toward
sovereignty, political risk, the threat of equity dilution,
and expropriation.
 Components of political Environment
• National – States and Sovereignty
• Taxes
• Dilution of Equity Control
• Expropriation: Expropriation refers to
governmental action to dispossess a company or
investor. Compensation is generally provided to
foreign investors, although not often in the “
prompt, effective, and adequate” manner
provided for by international standard
• Types of Government: Political Systems
 Political Risks
• 1. Confiscation is the process of a government’s taking
ownership of a property without compensation
• 2. Expropriation differs somewhat from confiscation in
that there is some compensation, though not
necessarily just compensation.
• 3. General instability risk is related to the uncertainty
absolute future viability of a host country’s political
system.
• 4. Operation risk proceeds from the uncertainty that a
host government might constrain the investor’s
business operations in all areas, including production,
marketing, and finance.
Measures to Minimize Political Risk
• Stimulation of the Local Economy
• Employment of Nationals
• Sharing Ownership
• Being Civic Minded
• Political Neutrality
• Behind-the-Scenes Lobby
• Observation of Political Mood and Reduction
of Exposure
 LEGAL ENVIRONMENT
• International law may be defined as the rules and
principles that nation-states consider binding
upon themselves.
• There are to categories of international law;
– public law, or the law of nations;
– and international commercial law, which is evolving.
• International law pertains to trade and other
areas that have traditionally been under the
jurisdiction of individual nations.
 Components of International Legal
Environment
• Establishment: Under what conditions can trade be
established? To transact business, citizens of one country
must be assured that they will be treated fairly in another
country
• Jurisdiction: Company personnel working abroad should
understand the extent to which they are subject to the
jurisdiction of host country courts
• Intellectual Property: Patents and Trademarks: Patents
and trademarks that are protected in one country are not
necessarily protected in another; so global marketers must
ensure that patents and trademarks are registered in each
country where business is conducted.
 Components of International Legal
Environment
• Counterfeiting: Counterfeiting is the practice of
unauthorized and illegal copying of a product.
• Antitrust: Antitrust laws are designed to combat
restrictive business practices and to encourage
competition.
• Licensing and Trade Secrets: Licensing is a contractual
agreement, in which a licensor allows a licensee to use
patents, trademarks, trade secrets, technology, or
other intangible assets in return for royalty payments
or other forms of compensation
• Grey Market: Grey market exists when a manufacturer
ends up with an unintended channel of distribution
that performs activities similar to the planned channel-
hence the term parallel distribution.
 Economic Environment
• Size of The Market: The firm’s concern in
examining world markets is the potential they
offer for its products. The international
marketer must determine market size not only
for present markets but also for potential
markets.
• Population:I t takes people to make a market
and, other things being equal, the larger the
population in a country, the better the market
 Economic Environment
• Distribution of Income: The statistic most frequently
used to describe a country economically is its per
capita income. This figure is used as a shorthand
expression for a country’s level of economic
development.
• Gross National Product (GNP): Another useful way to
evaluate foreign markets is to compare their gross
national products. Gross national product (GNP)
measures the total domestic and foreign value added
claimed by residents. Gross domestic product (GDP) is
GNP less netfactor income from abroad.
 Economic Environment
• Natural Resources: A nation’s natural resources include
its actual and potential forms of wealth sup-plied by
nature-for example, minerals and waterpower-as well
as its land area, topography, and climate.
• Infrastructure of the Nation: A manufacturing firm
generally divides its activities into two major
categories: production and marketing. These
operations depend on supporting facilities and services
outside the firm. These external facilities and services
are called the infrastructure of an economy.
 Economic Environment
• Urbanization: One of the most significant
characteristics of an economy is the extent to
which it is Urbanized the degree of urbanization.
Numerous cultural and economic differences
exist between people in cities and those in
villages or rural areas
• Role of Government: The business environment
and the nature of business operations in an
economy are very dependent on the role
government plays in that economy