UNIT-1-INTRODUCTION TO

INTERNATIONAL
MARKETING
 INTRODUCTION

In recent times, companies are not restricted

to their national borders, but are open for
international marketing. With the increasing
change in customers’ demands, choices,
preferences and tastes, the economies are
expanding and giving way to more competitive
marketing. Thus, organizations need to
respond rapidly to the demands of the
customers with well-defined marketing
strategies.
 DEFINITION OF INTERNATIONAL MARKETING

International marketing is “the performance of

business activities that direct the flow of goods
and services to consumers or users in more
than one nation.” Hess and Cateora

International marketing is the performance of

business activities designed to plan, price,
promote and direct the flow of a company’s
goods and services to consumers or users in
more than one nation for a profit.
Cateora and Graham
 PHASES IN INTERNATIONAL MARKETING

a) Indirect Foreign Marketing

b) Infrequent Foreign Marketing
(c) Regular Foreign Marketing
(d) International Marketing
(e) Global Marketing:
 (a) Indirect Foreign Marketing

In this stage, a firm doesn't involve itself in

international marketing.
The indirect ways of entering a foreign market
are:
• The firm sells the products to foreign buyers
who actually come for tourism and purchase
the products according to their needs.
• The firm sells its products to export house, or
to some domestic manufacturers or to other
agencies who ultimately export them.
 b) Infrequent Foreign Marketing

In this stage, the firm gets involved in foreign

marketing just to dispose its temporary surplus
or to utilize excess capacity. The firm at this
stage prefers to operate in markets similar to
home market .
 (c) Regular Foreign Marketing

During this stage, a domestic firm fully devotes

its resources for international market
operations. The firm makes serious efforts to
develop its trade in foreign markets. It may
appoint foreign or domestic middlemen or set
up its own distribution channel and sales force
in foreign markets to explore the marketing
potentials.
 d) International Marketing

In this phase, the firm completely dedicates its

operations to marketing internationally. The
firm develops different marketing mix and
marketing strategies for domestic market and
international market.
For example, Unilever and Nestle
 e) Global Marketing

At this stage, companies treat the whole world,

including their home market as one market. All
marketing strategies regarding products,
pricing, advertising, distribution, etc. are
formulated considering the entire population of
the world. For example, Coca~ cola and Pepsi
 MAJOR PARTICIPANTS IN INTERNATIONAL
MARKETING

Multinational Corporations (MNCs) − A multinational

corporation (MNC) is an organization that ensures the production
of goods and services in one or more countries other than its home
country.
Exporters − They are the overseas sellers who sell products, and
provide services across their home country by following the
necessary jurisdiction.
Importers − They are the overseas buyers who buy products and
services from exporters by complying with the jurisdiction. An
import by one nation is an export from the other nation.
Service companies − A service company generates revenue by
trading on services and not on physical commodities. A public
accounting company is the best example of a service company.
Revenue here is generated by preparing returns of income tax,
performing audit services, and by maintaining financial records.
 PROCESS OF INTERNATIONAL MARKETING:

1) Motivation for International Marketing

2) Situation Analysis
3) International Marketing Research
4) Decision to intent international Markets
5) International Marketing Mix
6) Implementation and control
 Motivation for International Marketing

There are various factors which may motivate a

firm to internalize. Some of these factors are
proactive while some others are reactive.
Higher profits, goodwill and reputation,
financial benefits and Incentives, technological
edge, tax, incentives, etc. are proactive factors
while domestic market saturation, competitive
pressure, domestic recession, excess capacity,
government policies, etc
 Situation Analysis

Once the decision to enter International market has

been taken, a thorough analysis of the internal and
external factors should be undertaken to identify
opportunities and threats. The firm must evaluate
its own capabilities to serve international markets.
Various external factors such as economic, social,
cultural, technical, regulatory, etc. must be well
understood before internationalizing. There are
several tools such as PEST analysis, SWOT
analysis ,etc. which can be used to serve the
purpose.
 International Marketing Research

Information is the key component in

developing
successful marketing strategies and avoiding
marketing failures, especially in the
international market. Information need ranges
from the general data required to assess
market opportunities to specific market
information for decisions about product, price,
promotion and distribution.
 Decision to Enter International Markets:

It consists of a number of inter-related

decisions such as identification of potential
buyers, demand forecasting, market
segmentation and targeting, market
positioning and decision on mode of entering
the market. There are various modes of entry
available in the International market
such as direct exporting, Indirect exporting,
franchising ,licensing foreign collaboration,
point ventures.etc.
 International Marketing Mix Decision

Marketing Mix is referred to as the set of four

controllable variables: - Product, Price, Place and
Promotion that the firm blends to produce a response it
wants in the target market. A firm's marketing mix will
normally have to be adapted to international marketing in
the view of many national differences that exist in relation
to the Stages of economic development, social systems,
technological environment, legal framework, competitive
situation, business practices and cultural perspectives.
 Implementation and Control

During this stage, the marketing plan is

developed and the product is launched in the
international market, Planning and developing a
good marketing programme is not enough.
International marketing operations need to be
monitored and controlled effectively. The
international marketing environment is highly
volatile. Therefore, continuous adaptation to
changes in the marketing environment is a key
to successful international marketing operations.
 Difference between domestic and International Marketing

Following are the points of difference between domestic and

international marketing:
Domestic Marketing
 The activities of production, promotion, advertising,
distribution, selling and customer satisfaction within one’s
own country.
 There is less government influence.
 More reliance on indigenous technology.
 Cultural adjustment issues are less challenging.
 The risk factor and challenges are comparatively less in the
case of domestic marketing.
 Requires less investment for acquiring resources and involves
less research due to the familiarity of the market.
International Marketing
 Marketing activities are undertaken across the globe.
 Companies have to deal with the rules and regulations of
various countries.
 There is an advantage that the business organizations can
have access to the latest technology of numerous countries.
 Cross cultural adjustment issues are very challenging.
 The risk involved and challenges in the case of
international marketing are very high due to some factors
like sociocultural differences, exchange rates, setting an
international price for the product and so on.
 Requires huge capital investment and in depth research of
the foreign markets.
 IMPORTANCE OF INTERNATIONAL MARKETING

These are the importance of international

marketing:
 Expand Target Market
 Boost Brand Reputation
 Connect Business with World