Chapter 1 International Marketing

IM is the performance of business activities designed to plan, promote and direct the flow of a companys goods and services to consumers or users in more than one nation for a profit.

The international marketing task

Domestic controllable elements
Price Product Promotion Channels of distribution research

Domestic environment uncontrollable

Political/legal forces Competitive structure Economic climate

 Foreign environment uncontrollable

Economic forces Competitive forces Level of technology Structure of distribution Geography and infrastructure Cultural forces Political/legal forces

 US placed a total ban on trade with Libya to condemn Libyan support to terrorist attacks. South Africa and apartheid Iraq threat to national security with US PNTR- Permanently Normalised Trade Relation with China. Competition within the home countryKodak and Fuji in US market

 Polar extremes in political stability, class structure and economic climate- critical elements in business decisions China- communist rule to commercial legal system- legal person and legal representative. CocoCola plant in China

 The level of technology

Concept of preventive maintenance Technical expertise for product support Special training for local people

Political and legal issues

alien status of the company alien that foreigner control the business and culture of host country is alien to management

 Environmental adaptation
Cultural change affects marketers job Judgments are derived from experience result of experience in home country White is a symbol of mourning in parts of Asia bridal dress in west Time consciousness of Americans Can lead to ineffective advertising and/or lost sales Cross cultural misunderstanding- hand gesture giving different meanings

 The self reference criterion and ethnocentrism:

SRC is an unconscious reference to ones own cultural values, experiences and knowledge as a basis for decisions. Ethnocentrism is the notion that ones own culture or company knows the best how to do things. America managers

 Managers from affluent countries to less affluent Impedes the ability to assess foreign market in its true sense Reaction is based on meanings, values, symbols and behaviour relevant to our own culture. Personal space between people of different culture

 Stages of IM involvement
No direct marketing
Company does not cultivate customers outside national boundary

Infrequent foreign marketing

Sales to foreign market are made as goods are available without any interest in retaining market representation.

Regular foreign marketing

Production of goods to be marketed in foreign markets. Primary focus is domestic market Ex: meterman agricultural measuring devicesdomestic to Europe and now 35 countries Sometimes critical to existence

 International marketing

Global marketing

Seek market all over the world Possible production outside the domestic market Ex: Fedders room air conditioners- Whirlpool and Matsushita- mature US marketOpportunity in Asia potentially India, Indonesia, China Fedder Xinle in China-introduced split type ac other Asian market and export back to USA Change is orientation towards markets and associated planning Companies treat the world as one market including home market

 Market segments are defined by income levels, usage patterns or country/region All business operation elements take global perspective Cocoa cola global company initially all international divisions reported to Exe.VP who along with VP Us operations reported to President The new organisation consists of six international divisions US operations is one among these

Strategic orientation
Domestic market extension concept Orientation to IM by domestic company with domestic products to foreign market. Foreign business is profitable extension Such firms are ethnocentric Multi-domestic market concept Strong sense that country markets are vastly different Market success requires independent programs Independently operate country wise and product adaptation is done They are polycentric companies Global marketing concept Global marketing company Is geo-centric Strives for efficiencies of scale Standardised product but country specific advertising Cultural feasibility and cost effectiveness