INTERNATIONAL MARKETING

Que1. The orientation of a companys top management, its beliefs and

assumptions significantly impact its approach to international
marketing. Discuss the concept of EPRG framework.

Ans. Management Orientation: EPRG Framework :

The orientation of a companys top management, its beliefs and assumptions
significantly impact its approach to international marketing. The concept
consisting of Ethnocentric, Polycentric, egiocentric and Geocentric is widely
known as EPRG framework, and it is discussed below.

1. Ethnocentric
A company with ethnocentric approach deals with the whole world, basedon the
home-country perspectives. Marketing strategies used in the domestic market
are extended to the foreign markets. Thus, ethnocentrism is based on ones firm
belief in the superiority of ones own culture. Thus, are exported elsewhere in the
world with little adaptation. under the ethnocentric approach, products designed
for the home market Such ethnocentric approach often leads to ones failure in
the international markets as markets do differ significantly.

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.

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.

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.

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.

Que2. Hofstedes cultural classification helps in understanding the cultural

diversity. Discuss the 4 dimensions with examples.
Hofstedes dimensions

Ans. Hofstedes cultural dimensions :

Hofstedes cultural classification discussed below helps us to understand the
cultural diversity. Let us look into these in detail.

Power distance :
The term power distance refers to the degree of inequality among people who
are viewed equal. Power distance implies the ways through which people develop
interpersonal relationship in a society. The hierarchy of relationships is of two
kinds, namely, vertical and horizontal. In vertical hierarchy, there is a
consideration given to the status, class and other modes of power possessed by
people of a society. For example, in the United States the modes of vertical
hierarchy is race, in the United Kingdom it is class and in India it is the caste
system. The relationship based on equality, informality and egalitarianism are
counted under horizontal relationships. All these parameters affect the social and
cultural set-up of a society and therefore, the firms operating in the international
marketing environment need to understand power distance carefully.

Uncertainty avoidance :
It means the manner in which the people of a society respond to uncertainty,
risk and ambiguous situations. The behaviour, belief and approaches of people
differ from culture to culture. Some cultures encourage an entrepreneurial spirit
and risk taking habits while others may encourage risk-averse behaviour. People

in cultures with high-uncertainty avoidance feel insecure about following new

products, services and other npractices of modern culture. Such types of cultures
with high-uncertainty avoidance are China, India, East European countries, etc.
People in low uncertainty avoidance cultures have enthusiasm towards new
changes, latest practices, products and services. People in such cultures are
eager to try all these. Examples of such cultures are Western Europe, North
American countries, etc.

Masculinity / femininity :
Masculinity refers to the characteristic features of male characters, namely,
assertiveness, command, control and competitiveness. A culture with more of
these attributes is considered masculine. Unlike this, femininity refers to the
feminine attributes which include care, compassion, nurturing, etc. Examples of
countries with masculine culture include the United States, United Kingdom,
Australia, Canada, etc., whereas those with feminine culture include Sweden,
Norway, Denmark, etc.

Individualistic vs. collectivist culture :

The orientation in individualistic culture is towards self-interests. People from
such cultures are driven by their own interests and of their immediate relatives.
Collectivist cultures give a priority to the overall benefits to a community over
self-interest of any individual or a family. Examples of nations that follow
individualistic culture include the American and European countries while China,
Japan, Korea, Taiwan and other community regime based cultures follow the
latter culture. The above discussed Hofstedes cultural dimensions are very
important to understand international communication, international negotiation,
international management and international marketing environment. These
cultural dimensions are analyzed widely in international marketing and
management studies but sometimes they have limited practical applications as
these are primarily psychology based dimensions of an individual personality.

Que3. How are the international markets segmented on the basis of

development?

Ans. Classification of International markets on the basis of Development:

International markets have been classified into four categories on the basis of
development, namely:
a. Industrialised or developed market economies
b. Most rapidly developing economies
c. Developing economies
d. Subsistence economies or under/least developed economies

a. Industrialised/developed market economies :

Industrialised/developed market economies are those economies that give
importance to research and development and allocate their resources to the
production of more sophisticated products. They would therefore, like to import
goods of simpler technology from simpler manufacturers. These countries also
have an acute shortage of labour and would therefore, tend to import labourintensive products such as electronics and light engineering goods. They also
tend to import spares and components and raw materials to feed their industries,
along with many decorative articles. They are very particular about preventing
further pollution and hence, they often import not only anti-pollution equipment
but also articles whose production has been banned for risks of pollution. They
are willing to provide technology to set up production and processing facilities in
developing countries. They provide a large market as they have no import
restrictions.

b. Most rapidly developing countries

This category includes countries like Brazil, Mexico, Hong Kong, India, China, etc.
These countries would like to update their technology for their current range of
manufacturers. Also, they would be keen to import machinery and equipment to
set up new manufacturing facilities. They are also interested in setting up joint
ventures in other less-developed countries.

c. Developing economies
This category includes countries in the Gulf area and many countries in Africa
and Latin America. They are generally faced with large changes in foreign
exchange earnings because of fluctuations in their export prices. Form example,
the Gulf countries are presently benefiting because of the ncrease in oil prices.
They have inadequate infrastructure and therefore, they need various types of
goods such as consumer durables, food products, transport equipment, service
facilities, etc. They are also offer opportunities for setiing up turnkey projects.

Changes in these countries take place rather slowly and therefore, the level of
sophistication in products required by these countries is much lesser, compared
to those required by developedcountries.

d. Subsistence economies
Subsistence economies need equipment to exploit their untapped resources as
well as nfrastructural facilities like railways, roads, buildings, transport
equipment, power generation equipment, transmission line towers, etc. They
provide a lot of scope for turnkey projects like housing, schools, hospitals, etc.
Latest technology in production may not be offered by competitors to these
countries and therefore, the opportunities are much greater for developing
countries like India to export their products to subsistence economies.

Que4. Differentiate between national and international products,

global and standardised products with examples.

Ans. National and International Products

Many firms believe that for expanding existing businesses or for acquiring a new
business, the most obvious approach is to export domestic products. This is a
relatively low-cost approach. In the context of global product development,
national and international products are important.

National vs. international products

A national product is offered to a single market. Sometimes national products
appear when a global company caters to the needs and preferences of particular
country markets. For example, Coca-Cola developed a non-carbonated, ginsengflavoured beverage for sale only in Japan and a yellow, carbonated flavoured
drink called Pasturina to compete with Perus favourite soft drink, Inca Cola.
Such examples show the reasons why national products, even those that are
quite profitable, may represent a substantial opportunity cost to a company.
First, the existence of a single national business does not provide an opportunity
to develop and utilise international leverage from headquarters in marketing,
R&D and production. Second, the local product does not allow for the transfer
and application of experience gained in one market to other markets. The third
shortcoming is that a single-country product lacks the feature of transferability of
managerial expertise acquired in the single-product area.

International and global products

International products are those that are offered in multinational or in regional

markets. Global products are those which are designed to meet the standards of
the global markets. There are different approaches that can be taken up to add
new products to the product mix in global markets. All depend on the firms
competitiveness in the context of global market environment. Firms prefer to
introduce new products to stay in global markets. MNEs (Multi national
enterprises) have different approaches to develop global products. Though there
is a slight difference between the terms global and international products,
they are often used interchangeably.

Que5.Write short notes on:

a) Containerization
b) 4 PL operators

ANS : Containerization- Containerisation has revolutionised maritime business

throughout the orld.Cargo-carrying containers are an integral part of the
transport industry. Containers facilitate both the unitisation and carriage of cargo
through different modes of transportation. Containerisation has ultimately
provided an ideal unit load, which meets all the logistical requirements. It not
only eliminates conventional time consuming methods of cargo handling, but
also benefits ship owners, shippers and port authorities. The added advantage is
that containerisation simplifies the procedures and documentation related to
transportation of cargo.
Containerisation is an increasingly popular method of shipment. A container is a
large box made of durable material such as steel, aluminium, plywood and glassreinforced plastics. A container varies in size, material and construction. Its
dimensions are typically 8 ft. high and 8 ft. wide, with lengths usually varying in
multiples of 10 ft. up to a maximum of 40 ft. A container can accommodate most
cargo but is most suitable for packages of standard size and shape. Containers
can take care of most of the four main packing problems. Because of the
containers construction, a product does not have to have heavy packing. The
container by itself provides good protection for the product against breakage,
moisture and temperature.
Fourth Party Logistics operators
Third Party Logistics (3PL) operators had limited success so far, and this is
nattributed to their priority to manage only the logistics rather than the supply
chains for their clients (this is mostly with regard to shipping companies). 3PL
companies co-ordinate with various components of the logistics chain such as

transport operators, shipping lines, warehouse operators, freight forwarders and

so on, but in the process they tend to ignore the real need of the customer, that
is, to manage the customer's supply chains in the world. 4PL operators provide a
complete business process outsourcing solution to their clients. Information
technology plays an important role in 4PL operations, comprising elements of
people, process and technology. In 3PL operations, clients themselves kept a
track of incoming inventories by continuously following up with all the supplies
as well as following up with the 3PL operator. Communication and transportation
of documents through conventional e-mails and fax messages were also proving
to be tedious and time

Que6. Choose a product and explain how you will prepare seven steps
in a global e-marketing plan?

Ans : e-Marketing
e-marketing deals with issues of online advertising, marketing strategies, and
customer behaviour. So, we can define e-marketing as the use of internet and
related digital information and communication technologies to achieve marketing
objectives. (Institute of direct marketing) Similar to traditional marketing,
online marketing (another term for emarketing) also starts with the process of
identifying the needs and wants of customers. Here, you should know at what
price to sell the product, how to sell (i.e. instruments to sell), and how to
distribute your product. This too requires extensive marketing research and
marketing plan.
Product
A product is the main offering of a company to its customers. It defines the
customer segments and competitors for the company. Let us look at five aspects
of the product namely features, quality look and packing, branding and customer
support.

Features What does the product do and what it does not do? Colour, taste,
size, and style are all features of a product. The product should offer those
benefits, which satisfy the needs of customers. If the benefits satisfy the needs
of customers then the customers are likely to buy the product again.

Quality The quality of the product should match the message that the
company is trying to communicate. This quality should at least match the
promise the company makes to the customers. The overall service i.e.,ordering,
follow-up, and even delivery should give the customer the confidence about the
quality of the product.
Look and packaging The product should look appealing and the packaging
should complement the look. The packaging should be functional too.

Branding It is one of the crucial decisions in the e-marketing arena. When the
company decides to go the e-marketing way it should take a decision whether an
existing brand (if the company is doing business offline too) must be used or a
new brand is needed. The company will want the customers to recognise its
brand when they see it online. Also, when the company is looking for domain
names there might be a probability that the name already exists. In such a
scenario, it is difficult for the company to get that domain name which represents
its brand.
Customer support In case of e-marketing, the support services represent
services during and after the purchase. Sometimes, online transactions or
shopping experience can cause frustrations. Successful companies recognise this
fact and give due importance to support services during the purchase process.
Price
Importance of price There are some websites designed to search the Internet
and return the best prices available for the product. Therefore, a company has to
compete in such price-centric online market where pricing decisions hold more
importance. Companies have to set the price such that it is not very high. They
should be able to cover their costs and make some profit. Another factor in case
of e-marketing is that the customer can easily access competitors website.
Hence, the company has to be responsive to any price change in the market or
else it will lose sales. If a firm is not able to reduce costs, then it has to position
itself in the market by offering some mother services associated with the
product.

Macro environment If a company has an offline store it needs to decide

whether to use the same price or different price for its online store. The
consistency in pricing always pays but we need to look at other cost like shipping
(which is a very important factor during online purchase). Sometimes,
government regulations also have an impact on the prices like sales tax. in the
host or home country (if it is an international transaction). Different states of a
country can also have different tax structures. The market structure may also
change the pricing of the product.