2 IntroductionInternational marketing is defined as the performance of business activities designed to plan, price, promote, and direct the flow of a company´s goods and services to consumer or users in more than one nation for a profit.
3 DefinitionThe activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large in more than one country.
4 International marketing consists of the activity, institutions, and processes across national borders that create, communicate, deliver, and exchange offerings that have value for stakeholders and society.Forms of international marketing include export–import trade, licensing, joint ventures, wholly owned subsidiaries, turnkey operations, and management contracts.Marketing serves as a key agent of societal change and as a key instrument for the development of societal responsive business strategy.
5 Scope of International Marketing Exports and Imports: International trade can be a good beginning to venture into international marketing. By developing international markets for domestically produced goods and services a company can reduce the risk of operating internationally, gain adequate experience and then go on to set up manufacturing and marketing facilities abroad.Contractual Agreements: Patent licensing, turn key operations, co – production, technical and managerial know – how and licensing agreements are all a part of international marketing. Licensing includes a number of contractual agreements whereby intangible assets such as patents, trade secrets, know – how, trade marks and brand names are made available to foreign firms in return for a fee.Joint Ventures: A form of collaborative association for a considerable period is known as joint venture. A joint venture comes into existence when a foreign investor acquires interest in a local company and vice versa or when overseas and local firms jointly form a new firm. In countries where fully owned firms are not allowed to operate, joint venture is the alternative.
6 Cont… Wholly owned manufacturing: Contract manufacturing: A company with long term interest in a foreign market may establish fully owned manufacturing facilities. Factors like trade barriers, cost differences, government policies etc. encourage the setting up of production facilities in foreign markets. Manufacturing abroad provides the firm with total control over quality and production.Contract manufacturing: When a firm enters into a contract with other firm in foreign country to manufacture assembles the products and retains product marketing with itself, it is known as contract manufacturing. Contract manufacturing has important advantages such as low risk, low cost and easy exit.Management contracting: Under a management contract the supplier brings a package of skills that will provide an integrated service to the client without incurring the risk and benefit of ownership.
7 Cont… Third country location: Mergers and Acquisitions: When there is no commercial transactions between two countries due to various reasons, firm which wants to enter into the market of another nation, will have to operate from a third country base. For instance, Taiwan’s entry into china through bases in Hong Kong.Mergers and Acquisitions: Mergers and Acquisitions provide access to markets, distribution network, new technology and patent rights. It also reduces the level of competition for firms which either merge or acquires.Strategic alliances: A firm is able to improve the long term competitive advantage by forming a strategic alliance with its competitors. The objective of a strategic alliance is to leverage critical capabilities, increase the flow of innovation and increase flexibility in responding to market and technological changes. Strategic alliance differs according to purpose and structure.
9 Why Firms go International Proactive StimuliProfit advantageUnique productsTechnological advantagesExclusive informationEconomies of scaleMarket sizeReactive StimuliCompetitive pressuresOverproductionStable or declining domestic salesExcess capacitySaturated domestic marketsProximity to customers and ports
10 Reasons for marketing abroad Economies of scale and scopeExistence of lucrative markets in foreign countriesSaturated markets in the home countryHigh R&D costsInternational opportunitiesLess competitionNew trade agreements…
11 Differences between domestic and international marketing Research data is available in a single language and is usually easily accessedResearch data is generally in foreign languages and may be extremely difficult to obtain and interpretBusiness is transacted in a single currencyMany currencies are involved, with wide exchange rate fluctuationsHead office employees will normally possess detailed knowledge of the home marketHead office employees might only possess and outline knowledge of the characteristic foreign marketsPromotional messages need to consider just a single national cultureNumerous cultural differences must be taken into accountMarket segmentation occurs within a single countryMarket segments might be defined across the same type of consumer in many different countries.
12 Differences between domestic and international marketing (continued) Communication and control are immediate and directInternational communication and control might be difficultBusiness laws and regulations are clearly understoodForeign laws and regulations might not be clearBusiness is conducted in a single languageMultilingual communication is requiresBusiness risks can usually identified and assessedEnvironments may be so unstable that it is extremely difficult to identify and assess risksPlanning and organizational control systems can be simple and directThe complexity of international trade often necessitates the adoption of complex and sophisticated planning, organization and control systems
13 Differences between domestic and international marketing (continued) Functional specialization within a marketing department is possibleInternational marketing managers require a wide range og marketing skillsDistribution and credit control are straightforwardDistribution and credit control may be extremely complexSelling and delivery documentation is routine and easy to understandDocumentation is often diverse and complicated due to meeting different border regulationsDistribution channels are easy to monitor and controlDistribution is often carried out by intermediaries, so is much harder to monitorCompetitors’ behavior is easily predictedCompetitors’ behavior is harder to observe, therefore less predictableNew product development can be geared to the needs of the homeNew product development must take account of all the markets the product is sold in.
14 Opportunities and Challenges in International Marketing To handle newly emerging forces and dangers of unforeseen influences from abroad, firms need to:Be prepared and develop active responses.Envision new strategies.Develop new plans.Change the way of doing business.
15 Cont…The growth of global business activities offers increased opportunities.Knowledge transfer around the globe helps an international firm to build and strengthen its competitive position.International opportunities require an awareness of global developments, an understanding of their meaning, and a development of capabilities to adjust to change.
16 Benefits of International Marketing Coca Cola in India
18 The Nestlé WayNestlé sells more than 8,500 products produced in 489 factories in 193 countriesNestlé is the world’s biggest marketer of infant formula, powdered milk, instant coffee, chocolate, soups, and mineral waterThe “Nestlé way” to dominate markets is summarized in four points:think and plan long termdecentralizestick to what you knowadapt to local tastes
19 Benefits of Global Marketing Economies of scaleUnifying product development, purchasing, and supply activities across countriesTransfer of experience and know-how across countries through improved coordination and integration of marketing activitiesStability of revenues and operations
20 4 P’s OF INTERNATIONAL MARKETING MIX Product adaptation and development for international marketingPackaging and labellingTranslation of technical literatureQuality managementLicensing and contract manufacturingChoice of pricing strategyCompetitor analysisDetermination of discount structuresCredit managementChoice of delivery termsCosting and budgetingProductPricePlacePromotionInternational advertising, public relations and sales promotionInternational direct marketingControl of salespeopleTranslation of sales literatureExhibitingMarket researchInternational distributionControl of agentsExport documentationCargo insuranceEstablishment of joint ventures and subsidiaries