International Marketing

C1 Component

“To assess and understand the impact of

Technological environment factors on international
business operations”

Submitted To:
Prof. Pravin Patil

Submitted By:
Samir Diwakarrao Kitukale (09BS0001077)
Section B

Introduction
'International marketing (IM) or global marketing refers to marketing carried out by
companies overseas or across national borderlines. This strategy uses an extension of
the techniques used in the home country of a firm. It refers to the firm-level marketing
practices across the border including market identification and targeting, entry mode
selection, marketing mix, and strategic decisions to compete in international
markets. According to the American Marketing Association (AMA) "international
marketing is the multinational process of planning and executing the conception,
pricing, promotion and distribution of ideas, goods, and services to create exchanges
that satisfy individual and organizational objectives." In contrast to the definition of
marketing only the word multinational has been added. In simple words international
marketing is the application of marketing principles to across national boundaries.
However, there is a crossover between what is commonly expressed as international
marketing and global marketing, which is a similar term.

The Global Market Place

Globalization of Markets and Competition: Trade is increasingly global in scope today.

There are several reasons for this. One significant reason is technological—because of
improved transportation and communication opportunities today, trade is now more
practical. Thus, consumers and businesses now have access to the very best products
from many different countries. Increasingly rapid technology lifecycles also increases
the competition among countries as to who can produce the newest in technology. In
part to accommodate these realities, countries in the last several decades have taken
increasing steps to promote global trade through agreements such as the General
Treaty on Trade and Tariffs, and trade organizations such as the World Trade
Organization (WTO), North American Free Trade Agreement (NAFTA), and the
European Union (EU).

Stages in the International Involvement of a Firm.

We discussed several stages through which a firm may go as it becomes increasingly
involved across borders. A purely domestic firm focuses only on its home market, has
no current ambitions of expanding abroad, and does not perceive any significant
competitive threat from abroad. Such a firm may eventually get some orders from
abroad, which are seen either as an irritation (for small orders, there may be a great
deal of effort and cost involved in obtaining relatively modest revenue) or as "icing on
the cake." As the firm begins to export more, it enters the export stage, where little
effort is made to market the product abroad, although an increasing number of foreign
orders are filled. In the international stage, as certain country markets begin to appear
especially attractive with more foreign orders originating there, the firm may go into
countries on an ad hoc basis—that is, each country may be entered sequentially, but
with relatively little learning and marketing efforts being shared across countries. In the
multi-national stage, some efficiencies are pursued by standardizing across a region
(e.g., Central America, West Africa, or Northern Europe). Finally, in the global stage,
the focus centers on the entire World market, with decisions made optimize the
product’s position across markets—the home country is no longer the center of the
product. An example of a truly global company is Coca Cola.

Note that these stages represent points on a continuum from a purely domestic
orientation to a truly global one; companies may fall in between these discrete stages,
and different parts of the firm may have characteristics of various stages—for example,
the pickup truck division of an auto-manufacturer may be largely domestically focused,
while the passenger car division is globally focused. Although a global focus is
generally appropriate for most large firms, note that it may not be ideal for all
companies to pursue the global stage. For example, manufacturers of ice cubes may
do well as domestic, or even locally centered, firms.

Factor affecting International Trade

Trade balances and exchange rates.

When exchange rates are allowed to fluctuate, the currency of a country that tends to
run a trade deficit will tend to decline over time, since there will be less demand for that
currency. This reduced exchange rate will then tend to make exports more attractive in
other countries, and imports less attractive at home.

Measuring country wealth.

There are two ways to measure the wealth of a country. The nominal per capita gross
domestic product (GDP) refers to the value of goods and services produced per person
in a country if this value in local currency were to be exchanged into dollars.

The political situation.

The political relations between a firm’s country of headquarters (or other significant
operations) and another one may, through no fault of the firm’s, become a major issue.
For example, oil companies which invested in Iraq or Libya became victims of these
countries’ misconduct that led to bans on trade. Similarly, American firms may be
disliked in parts of Latin America or Iran where the U.S. either had a colonial history or
supported unpopular leaders such as the former shah.

Laws across borders.

When laws of two countries differ, it may be possible in a contract to specify in

advance which laws will apply, although this agreement may not be consistently
enforceable. Alternatively, jurisdiction may be settled by treaties, and some
governments, such as that of the U.S., often apply their laws to actions, such as anti-
competitive behavior, perpetrated outside their borders (extra-territorial application). By
the doctrine known as compulsion, a firm that violates U.S. law abroad may be able to
claim as a defense that it was forced to do so by the local government; such violations
must, however, be compelled—that they are merely legal or accepted in the host
country is not sufficient.

Culture
Culture is part of the external influences that impact the consumer. That is, culture
represents influences that are imposed on the consumer by other individuals.

The definition of culture offered one text is “That complex whole which includes
knowledge, belief, art, morals, custom, and any other capabilities and habits acquired
by man person as a member of society.”

Language issues.

Language is an important element of culture. It should be realized that regional

differences may be subtle. For example, one word may mean one thing in one Latin
American country, but something off-color in another. It should also be kept in mind
that much information is carried in non-verbal communication. In some cultures, we
nod to signify “yes” and shake our heads to signify “no;” in other cultures, the practice is
reversed.

Product Issues in International Marketing

Products and Services. Some marketing scholars and professionals tend to draw a
strong distinction between conventional products and services, emphasizing service
characteristics such as heterogeneity (variation in standards among providers,
frequently even among different locations of the same firm), inseperability from
consumption, intangibility, and, in some cases, perishability—the idea that a service
cannot generally be created during times of slack and be “stored” for use later.
However, almost all products have at least some service component—e.g., a warranty,
documentation, and distribution—and this service component is an integral part of the
product and its positioning. Thus, it may be more useful to look at the product-service
continuum as one between very low and very high levels of tangibility of the service.
Income tax preparation, for example, is almost entirely intangible—the client may
receive a few printouts, but most of the value is in the service. On the other hand, a
customer who picks up rocks for construction from a landowner gets a tangible product
with very little value added for service. Firms that offer highly tangible products often
seek to add an intangible component to improve perception. Conversely, adding a
tangible element to a service—e.g., a binder with information—may address many
consumers’ psychological need to get something to show for their money.
On the topic of services, cultural issues may be even more prominent than they are for
tangible goods. There are large variations in willingness to pay for quality, and often
very large differences in expectations. In some countries, it may be more difficult to
entice employees to embrace a firm’s customer service philosophy. Labor regulations
in some countries make it difficult to terminate employees whose treatment of
customers is substandard. Speed of service is typically important in the U.S. and
western countries but personal interaction may seem more important in other countries.

Product Need Satisfaction. We often take for granted the “obvious” need that products
seem to fill in our own culture; however, functions served may be very different in
others—for example, while cars have a large transportation role in the U.S., they are
impractical to drive in Japan, and thus cars there serve more of a role of being a status
symbol or providing for individual indulgence. In the U.S., fast food and instant drinks
such as Tang are intended for convenience; elsewhere, they may represent more of a
treat. Thus, it is important to examine through marketing research consumers’ true
motives, desires, and expectations in buying a product.

Approaches to Product Introduction. Firms face a choice of alternatives in marketing

their products across markets. An extreme strategy involvescustomization, whereby
the firm introduces a unique product in each country, usually with the belief tastes differ
so much between countries that it is necessary more or less to start from “scratch” in
creating a product for each market. On the other extreme, standardization involves
making one global product in the belief the same product can be sold across markets
without significant modification—e.g., Intel microprocessors are the same regardless of
the country in which they are sold. Finally, in most cases firms will resort to some kind
of adaptation, whereby a common product is modified to some extent when moved
between some markets—e.g., in the United States, where fuel is relatively less
expensive, many cars have larger engines than their comparable models in Europe and
Asia; however, much of the design is similar or identical, so some economies are
achieved. Similarly, while Kentucky Fried Chicken serves much the same chicken with
the eleven herbs and spices in Japan, a lesser amount of sugar is used in the potato
salad, and fries are substituted for mashed potatoes.

Effect of telegraph on International marketing

Telegraphy is the long-distance transmission of written messages without physical
transport of letters. It is a compound term formed from the Greek words tele (τηλε) = far
and graphein (γραφειν) = write. Radiotelegraphy or wireless telegraphy transmits
messages using radio.

Worldwide telegraphy changed the gathering of information for news reporting. Since
the same messages and information would now travel far and wide, the telegraph
demanded a language "stripped of the local, the regional; and colloquial". Media
language had to be standardized, which led to the gradual disappearance of different
forms of speech and styles of journalism and storytelling. It is believed that objective
journalism finds its roots in the communicative strictures of the telegraph.

Effect of internet and computer on International Marketing

Scholars from a variety of fields study phenomena that can be described under the
umbrella term of CMC. For example, many take a socio-psychological approach to
CMC by examining how humans use "computers" (or digital media) to manage
interpersonal interaction, form impressions and form and maintain relationships. These
studies have often focused on the differences between online and offline interactions,
though contemporary research is moving towards the view that CMC should be studied
as embedded in everyday life . Another branch of CMC research examines the use of
paralinguistic features such as emoticons, pragmatic rules such as turn-taking and the
sequential analysis and organization of talk, and the various sociolects, styles, registers
or sets of terminology specific to these environments (see Leet). The study of language
in these contexts is typically based on text-based forms of CMC, and is sometimes
referred to as "computer-mediated discourse analysis".

Effect of TV on international Marketing

Television (TV) viewing is the dominant recreational pastime at all ages, especially for
children and adolescents. Many studies have shown that higher TV viewing hours are
associated with higher body mass index (BMI), lower levels of fitness and higher blood
cholesterol levels. Although the effect size estimated from observational studies is
small (with TV viewing explaining very little of the variance in BMI), the results of
intervention studies show large effect sizes. The potential mediators of the effect of
higher TV viewing on higher BMI include less time for physical activity, reduced resting
metabolic rate (for which there is little supporting evidence) and increased energy
intake (from more eating while watching TV and a greater exposure to marketing of
energy dense foods). Electronic games may have an effect on unhealthy weight gain,
but are less related to increased energy intake and their usage is relatively new,
making effect size difficult to determine. Thus, TV viewing does not explain much of the
differences in body size between individuals or the rise in obesity over time, perhaps
because of the uniformly high, but relatively stable, TV viewing hours. Reducing TV
viewing hours is a difficult prospect because potential actions, such as social marketing
and education, are likely to be relatively weak interventions, although the evidence
would suggest that, if viewing could be reduced, it could have a significant impact on
reducing obesity prevalence. Regulations to reduce the heavy marketing of energy
dense foods and beverages on TV may be the most effective public health measure
available to minimize the impact of TV viewing on unhealthy weight gain.

Effect of business process software on international marketing

Begin with understanding market opportunity

You may have received a customer enquiry or even closed a sale in a foreign country -
but is that sufficient justification to make a long term investment to establish a presence
there? Business process software can analyze the market for you to help you
determine the issues such as knowing the size of the addressable market for your
application, the number of
local and international competitors already present, what is your unique differentiation
and pin point the geographical and industry segments to prioritize first.
Make a plan
Your goal may be to increase sales, however, entering a new market will require
preparation, investment and a multi-year plan that enables you to test the priority
market segments, build targeted sales strategies, implement marketing programs that
create demand for your applications and deliver support to your new customers. With
our knowledge of the local market and the reseller ecosystem, AIM can help you build a
business plan that serves as a compass to chart the step by step journey to penetrate
and grow in a new market.
Establish a local presence

While setting up your own subsidiary will enable you to provide local support to your
new customers and partners, are you prepared to invest $500,000 or more in a new
country even before your business has taken a foothold? There is an attractive
alternative business in the US and Asia at a low cost per month. You will gain local
market presence with local business hours response by telephone, email and website.
You will also have a great vehicle to test the market, make new contacts, see trends
and identify partners.
Build a partner channel

Resellers: If you are looking to ramp up your sales quickly without a major up front
investment building a reseller channel that already has experience selling into your
target market and with an installed base of customers, may be the best strategy. AIM's
Partner Search services can save you much time and effort by researching many
partner databases to identify the resellers that are the best fit. AIM can then qualify
them through interviews and set up executive level meetings that can lead to a new
partnership. Once you have agreed that a qualified partner is the right fit, AIM
Partner Recruitment services can take the discussions all the way to a reseller
agreement being.
Create demand

Having signed up a reseller channel doesn't guarantee a rapid ramp in sales. Fuel the
momentum of the new partnerships with demand generating marketing programs that
can create a brand presence for your company and bring leads to your reseller
channel.
Services can develop and help execute high impact marketing programs that can
include press briefings, telemarketing campaigns, customer events and trade show
participation.
Leverage Partnership

If your application is strategic to another company by providing a unique solution in a

market segment where they want to grow, they may want to partner with you to do joint
market development. services can help you map your application and value
propositions to their strategies and help you secure partnerships with much larger
companies so that you can leverage their marketing resources and brand presence.