INTERNATIONAL MARKETING

Course Code : PGMKT 3.4

Faculty:

Dr.SUMESH RAIZADA
Ph.D, M.B.A, B.E. (Electrical)

Why is International Marketing Important?

Global business environment is rapidly changing with several MNC opening up ventures in India and Indian firms expanding abroad. Immense employment scope in these MNCs, in India as well as at their operations in other countries. Understanding of International Marketing shall make students aware of the foreign business environments such as social, cultural, legal, political, technological and economic. Students shall also be exposed to the marketing mix (4Ps) strategies that are being followed in the International business. The knowledge about business practices of MNCs shall be of immense help in your future corporate life

UNIT - I

INTERNATIONAL BUSINESS

INTERNATIONAL MARKETING

INTERNATIONAL BUSINESS

Country B

Country A

Country C

Country D

What is International Business?

International business

is a term used to collectively describe all commercial transactions (private and governmental, sales, investments, logistics, and transportation) that take place between two or more nations
It

is exchange of goods and services for a profit, across national boundaries

Usually,

private companies undertake such transactions for profit; governments undertake them for profit as well as for political reasons

History of International Business

Silk Route 3000 yrs.ago between China, India, Persia, Egypt, Rome, Arabia
Movement of traders, missionaries, silk, spices, potteries, gold, silver, etc.

Discovery of America and sea route to India 16th & 17th century
European Traders and sailors traveled across the oceans to trade with Asia, Africa and America and to gain control over resources

Industrialization in Europe and Expansion of USA

18th & 19th century Rise of imperialism and colonization in Asia,

S.America and Africa. Trading by British, French, Portuguese, Spanish, Dutch companies

History of International Business

19th & early 20th century Inventions and scientific discoveries mainly in Europe and USA
Use of technology, machines and engines in the manufacturing leading to surplus production. Railways and steam driven ships facilitated faster transportation and movement of goods and people

Post World War I & II

Restructuring and Rehabilitation of war hit nations was carried out with financial support from USA and by US multinational companies Rise of Japanese MNCs with the protection and support of government

Factors driving International Business: Present Trend

Globalization : Integration of trade, culture, currencies, ideas,
people, technologies, capital, goods and services across nations without any barriers

Liberalization : Removal of protectionist measures, licenses,

quotas, tariffs, etc.to encourage domestic and foreign participation in the economic process. Manufacturing, trading, investment, FDI, JV, mergers, SEZ, etc.

Privatization : Private participation in loss making govt./ public

sector or encouraging private investment in categories earlier reserved for government sector.

Factors driving International Business: Present Trend

Growth of MNC & Global Economic Trends : Due to

stagnation in domestic economies of industrialized countries, many companies moved to international locations to remain profitable

Innovation in Technologies : ICT, Electronics, transportation,

etc.(Internet, mobile, fax, e-mail, aviation, automobiles, etc.)

To spread product development costs and to check piracy Regional Integrations : EU, NAFTA, MERCOSUR, SAARC, etc Growing demands and aspirations of customers

Factors driving International Business: Present Trend

To increase quality & efficiencies; reduce costs and expand market base : Shifting of manufacturing & services to low
cost locations

Breakup of Soviet Union and formation of several new countries having market economies Setting up of WTO in January,1995 and later China joining it in 2001 IMF and IBRD (WB) introduced structural adjustment & reform programs in several developing countries

Why do firms go in for International Business?

To expand sales and increase profits To minimize risks and uncertainties in domestic markets To gain access to resources, factors of production & markets

To counter competition in domestic and foreign markets

To avail concessions and benefits

How to enter International Markets?

Market Entry Strategies
Exports Direct & Indirect E-Commerce (direct through internet) Tourism and Transportation Licensing & Franchising Contract Manufacturing Joint ventures,Strategic Alliances,Mergers & Acquisitions Management Contracts & Turnkey operations Assembly operations Direct Investment, Fully owned subsidiaries and manufacturing locations

Market Entry Strategies

Direct investment Assembly Operations Level Of Control, Risk, Profit Management Contracts & Turnkey operations

JV, Alliances, Mergers

Licensing & Franchising

Tourism & Transportation

Exporting Level of Investment

International Marketing Process

Co.Resources International Mktg.Decision Company Objectives

Market Potential
Market Selection Decision

Environmental Factors

Entry & Operating Decision Product Marketing Mix Decision Place Marketing Organization Decision Promotion Price