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International Marketing Concept
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External Marketing
Comparative Marketing
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Global Marketing
International Trade
Exporting
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International Marketing takes place when an

organization markets its products in two or more
countries .
Global Marketing is concerned with planning and

conducting transactions across national borders to satisfy
the objectives of individuals and organizations . Global
Marketing ranges from export-import trade to licensing
and comprises multinational activities such as joint
ventures , wholly owned subsidiaries , turnkey
operations, and management contracts . Global Marketing
also involves a wide variety of players .

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Mass

production
A firm moves beyond domestic markets into international

trade for several reasons :
* Potential demand in foreign markets .

* Saturation of domestic markets .
* Comparative advantage : some Countries possess unique
natural or human resources .
* Technological advantage : For example the U.S.
dominated the Computer industry for many years because
of technology developed by companies such as IBM and
Hewlett- Packard .
Major Motivations to Internationalize
Proactive
Motivations
Reactive
Motivations
* Competitive Pressures.
* Overproduction.
* Stable or declining
domestic sales .
* Excess Capacity .
* Saturated domestic
market .
* Proximity to
customers and ports .
* Profit advantage .
* Unique Products .
* Technological advantage .
* Exclusive market information .
* Managerial urge .
* Tax benefits .
* Economies of scale .
) : (
Evolution of Global Marketing

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* Globalization

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Internet Marketing
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Electronic Marketing , Home Marketing ,

Cyber Marketing .
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Economic Approach
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Behavioral Approach
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Functional Approach
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Managerial Approach
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Decision Making Approach
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Strategic Approach
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Political Approach
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Cases Study Approach

Integrated Approach
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Systems Approach
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Comparative Approach
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Marketing
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Theories of International Trade
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Classical Theory
Theory of Absolute Advantage
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Theory of Comparative Advantage
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New Classical Theory
- Technological Gap Model

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The fundamentals of marketing apply internationally in
the same way they apply domestically .
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Challenges in International Marketing :
Corruption .
Technological pirating.
High cost of product and
communication
adaptation .
Shifting borders .
Huge foreign
indebtedness
Unstable governments.
Foreign-exchange
problems .
Foreign-government entry
requirements and
bureaucracy
Tariffs and other trade
barriers .

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Organization's Internal Environment

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Stake Holders

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External Environment

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- External Microenvironment

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External Macro environment

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Economic Environment

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Political Environment
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Cultural Environment

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Social Environment
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- Technological Environment

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Biotechnology

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Legal Environment

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Competitive Environment
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Natural Environment
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Organizational Analysis
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) .(SWOTM
External Environmental Scanning
Opportunities
SO
Threats
ST
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Internal
Capability
assessment
wo
wT
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)SWOT Matrix : (
SWOT
. SWOT
:
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) Internal Factors Evaluation Matrix ( IFEM

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) External Factors Evaluation Matrix ( EFEM

). Competitive Profile Matrix (CPM

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Market Size
Market Growth
Market Intensity

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Diversification
Strategy

Large number of
Markets
Concentration
Strategy

Small number of
Markets
: ()
Expansion Strategy is determined by market -, mix-,
and company-related factors .

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Factors Affecting Choice between : ()
Concentration and Diversification Strategies
.
Diversification Concentration
Factor
Low
High
Market growth rate
High
Low
Sales Stability
Increasing
Sales response function
Decreasing
Competitive Lead time
Short
Long
High
Low
Spillover effects
High
Low
High
Low
High
High
High
Low
Low
Low
Need for Product adaptation .
Need for Communication

adaptation
Economies of Scale in
distribution
Extent of Constraints
Program Control requirements

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Secondary Market
Primary Market
( )
( )

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Tertiary Market
: ()
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Bases for
International Market
Segmentation
Marketing
Management Bases
Environmental
Bases
Geographic
Variables
Political
Variables
Product-Related
Variables
Economic
Variables
Promotion Related Variables
Cultural
Variables
Price -Related
Variables
Distribution Related Variables
Bass for Global Market Segmentation : ()
James M. Livingstone
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Western Developed Nations Group .
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Western Developing Nations Group .
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Developing / undeveloped Nations Group .
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Marxist / Communist / Socialist Nations Group .
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Internationalization Decision of Marketing
International Market to be served
Products or Services to be Marketed
Mode of Market Entry
PDF created with pdfFactory

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version
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. Philip Kotler
Politics
. Public Opinion

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Marketing Mix is the set of marketing tools that the firm
uses to pursue its marketing objectives in the target market

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4C 'S
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4 P' S
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4 Ps
Product
Price
Place
Promotion
4Cs
Customer Value / Solution
Customer Cost

Convenience
Communication

4Cs
. 4Ps
Promotion Mix
Sales Promotion
Offering Mix
Advertising
product
Company Services
Prices
Sales Force
Distribution
Channels
Public relations
Direct mail ,
telemarketing ,
and Internet
Marketing Mix Strategy
Target
Customers
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Standardization Strategy
VS.
Customization Strategy
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) Globalization of the Marketing Mix : (
Standardization
Partial
Full
C
N
C
C
C/N
C
C
C
Adaptation
Full Partial
N
N
N
N
C
C
C
N
N
N
N
Marketing Mix Elements

Product design
Brand name
Product Positioning
Packaging
Advertising theme
Pricing
Advertising Copy
Distribution
Sales Promotion
Customer Service
'Key : C = coca - cola ; N = Nestle

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Major Decisions in International Marketing
Deciding on
the
marketing
organization
Deciding on
the
marketing
Program
Deciding
how to
enter the
market
Deciding
which
markets
to enter
Deciding
whether
to go
abroad
) : (

:
C
MM
STP
Feedback
) : (
Research = R .
Segmentation , Targeting , and Positioning = STP

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Marketing Mix = MM .
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Implementation = I .
Control = C
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. Brand's Value Proposition

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Core Product
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Actual Product
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Augmented Product
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Augmented
Product
Installation
Tangible
Product
Packaging
Features
Core
Product
AfterSale
Service
Brand
Name
Delivery
and
Credit
Core
Benefit
or
Service
)Elements of a Product : (

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In deciding the form in which the product is to be

marketed abroad , the firm should Consider three sets of
factors :
the market (s) that have been targeted ,
the product and its characteristics ,and
Company characteristics , such as resources and
policy .

International product life Cycle Theory

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)New Product Stage ( Product Orientation Phase

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Ethnocentric Approach

. Home Country mentality

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Mature Product Stage ( Market Orientation Phase or
) Maturity Phase

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) Standardized Product Stage ( Price Orientation Phase

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Globalization Stage
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Geocentric Approach Super national
Mentality

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Intra-Industry Cycle
:
Inter-Industry Cycle

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To say that a product has a life cycle is to assert four
things :
products have a limited life .
product sales pass through distinct stages ,each
posing different challenges , opportunities , and
problems to the seller .
Profits rise and fall at different stages of the product

life cycle .
Products require different marketing ,financial ,
manufacturing , purchasing and human resource
strategies in each stage of their life cycle .
Most product life - cycle curves are portrayed as bellshaped . This curve is typically divided into four stages :
introduction , growth , maturity , and decline .
.
Not all Products exhibit a bell-shaped PLC. Researchers
have identified from six to seventeen different PLC patterns .
Scalloped
Pattern
Cycle-recycle
pattern
Primary
Cycle
Recycle
Time
Fad
Growth -slumpmaturity pattern
Time
Time
Style
Fashion

Time
Time
Time
Product Positioning

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A firm has four basic alternatives in approaching
global markets :
1- Selling the product as is in the global marketplace ,
2- modifying product for different countries and / or regions ,
3- designing new products for foreign markets , and

4- incorporating all the differences into one product design
and introducing a global product .
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Standardization Strategy
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CentoCentric Approach or Classical global mentality .

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Adaptation / Customization Strategy

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Polycentric Approach or Host Country mentality

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High
Need of
Adaptation
Degree of
Cultural
Grounding
Low
Consumer
Industrial / Technology Intensive

Nature of Product
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Strategic Adaptation to Foreign Markets
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Adaptation /
Customization
Strategy
Standardization
Strategy
VS.
The need to customize Products
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Physical Characteristics of goods
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Product Quality .
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Design .
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Product
Develop New
Product
Adapt
Product
)(2) Product adaptation (5

(4) Dual adaptation Product
invention .
.
Do Not change
Product
(1) Straight extension.
)(3
Communication
adaptation .
Do Not change
Promotion
Adapt
Promotion
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Five international Product and Promotion Strategies
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Price is the only element of the marketing mix that is

revenue-generating ; all of the others are costs .

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Uncontrolable Factors
Controlable Factors

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Uncontrolable Factors
Controlable Factors

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The Firm has to consider many Factors in setting its
pricing policy .
Target Market Analysis
)(1
(2) Mix Composition

Market
)(2
Pricing Policy Selection
)(3
Pricing Strategy Determination
)(4
Specific Price
)(5
)Stages in Setting of Prices : (
SELECT PRICING OBJECTIVE
SELECT METHOD OF DETERMINING THE BASE PRICE :

Cost - Plus
Price based on
Price Set in
pricing
both demand
relation to
and costs
market alone
DESINGN APPROPRIATE STRATEGIES

Price VS. nonPrice
Freight Payments
Leader Pricing
Competition
One Price VS. Flexible Price
Everyday low VS. high- low
Skimming VS. Penetration
Psychological Pricing
Pricing
Discounts and Allowances
Resale Price Maintenance
The Price - determination Process : ()
(1) Selecting the pricing objective

(2) Determining demand
(3) Estimating Costs
(4) Analyzing Competitors' Costs,

Prices , and offers
(5) Selecting a Pricing method
(6) Selecting a the Final Price
Setting Pricing Policy : ( )

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International Involvement
Exporting Intra company Foreign -Market
Pricing
Pricing
Situation
Pricing
First-Time
Pricing
Changing
Pricing
MultipleProduct Pricing
)International Pricing Situations : (
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Export Pricing

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Ex-Factory
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CIF
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Cost Oriented Pricing Strategy
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Competition Oriented Pricing Strategy

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Demand Oriented Pricing Strategy

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Market Skimming Pricing Strategy

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Market Penetration Pricing Strategy
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Lead Pricing Strategy
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Pricing Discrimination

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Market Oriented Pricing Strategy
Oligopoly

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ROI Pricing Strategy
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Transfer/ Intracorporate Pricing

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. Headquarter
.
Transfer pricing , or intracorporate pricing , is the
pricing of sales to members of the corporate family .
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Influences on Transfer Pricing Decisions:
1. Market conditions in the foreign country .
2. Completion in the foreign country .
3. Reasonable profit for the foreign affiliate .
4. Income taxes in the home country .
5. Economic conditions in the foreign country .
6. Import restrictions .
7. Customs duties .
8. Price controls .
9. Taxation in the foreign country .
10. Exchange controls .

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Intra- Country Transfer Price

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%
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Intercountry Transfer Price

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Transfer Price Lower Than Arm's Length Prices
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Transfer Price Higher Than Arm's Length Prices
:
.

Transfer Pricing Objectives :
Competitiveness in the international marketplace .
Reduction of taxes and tariffs .
Management of Cash Flows .
Minimization of Foreign exchange risks.
Avoidance of Conflicts with home and host governments .
Internal Concerns Such as goal Congruence and motivation
of Subsidiary managers.
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Transfer Prices can be based on costs or on market
prices or on arm's - length price .

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Cost - based Transfer Pricing
. ACS
*
* ) SCS (.
* . MCS
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+ .
+ .
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Market - based Transfer Pricing

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:
MPS
.
MMPS
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* )Negotiated Price Strategy (NPS
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* ) (CPS
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Arm's-Length
. Prices
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Cost Factors
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International
Transfer Price

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- Export Pricing Challenges
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Low
(3) Super - Value
Strategy
(6)Good-Value
Strategy
Price
Medium
(2) High-Value
Strategy
(5)Medium-Value
Strategy
(8) False
(9) Economy
economy Strategy Strategy
High
(1) Premium
Strategy
)(4
Overcharging
Strategy
(7) Rip-off
Strategy
High
Medium
Low
) Nine Price-Quality Strategies : (

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Transfer Pricing Challenges

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Intrafirm Transactions
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) :(

The term channel design refers to the length and the
width of the channel employed . Length is determined by
the number of levels , or different types , of intermediaries.
Customer
Retailer
Wholesaler
Producer
) : ( .
But this traditional channel will vary by product type
and the company's position in a specific market . channel
width is determined by the number of institutions of each
type in the channel .

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In general , companies use one or a mixture of the

following distribution systems :
1- the firm sells directly to customers through its own field
sales force ;
2- the company operates through independent intermediaries
,usually at the local level ; or
3- the business depends on an outside distribution system

that may have regional or global coverage .

()
Vs.
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INTENSIVE
SELECTIVE
Distribution
through every
reasonable
outlets in a
market
Convenience goods
EXCLUSIVE
Distribution
through multiple,
but not all
reasonable
outlets in a
market
Distribution
through a single
wholesaling
middleman
and / or retailer
In a market
shopping goods
specialty products
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Culture
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: ( )
Channel Intermediary Types: ( )
Foreign ( Direct )
Brokers
Manufacturer's
Representatives
Factors
Managing agents
Purchasing agents
Agents
Domestic ( Indirect )
Brokers
Export agents
EMCs
Webb-Pomere associations
Commission agents
Distributors
Distributors / dealers
Domestic wholesalers
Import jobbers
EMCs
Wholesalers / retailers
ETCs
Complementary marketing
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Sources for Finding Intermediaries :

Governmental Agencies .
Private Sources .
: ( )
Data Sources for Locating Foreign Intermediaries
1. Distributor inquiries .
2. U.S. Department of Commerce :
New Product Information Service
Trade Opportunities Program
Foreign Traders Index
Agent / Distributor Service
World Traders Data Report
3- Trade Sources :
Magazines , journals
Directories
Associations
Banks , advertising agencies , carriers
4-Field Sales Organizations .
5- Customers .
6- Direct- mail solicitation / contact of previous applicants.
7- Trade Fairs
8- Independent Consultants
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Selection Criteria for Choosing an International
Distributor
Characteristics
Goals and Strategies
Size of the Firm
Financial Strength
Reputation
Trading areas covered
Compatibility
Experience
Sales Organization
Physical Facilities
Willingness to carry inventories
After-Sales Service Capability
Use of Promotion
Sales Performance
Weight Rating
Relations with local government

Communications
Overall attitude

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PUSH STRATEGY
Consumer
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Wholesaler
Producer
PULL STRATEGY
Consumer
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Communication is the verbal or nonverbal transmission of
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Message
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Response
Feedback
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ENCODING
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display, or Sales
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message to frame
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MESSAGE
CHANNEL
Select the media
or other vehicle
to carry the
message
MESSAGE As
INTENDED
A promotional
idea in
marketer's mind
FEEDBACK
Impact measured
using research,
Sales, or another
measure
MESSAGE As
RECEIVED
Knowledge,
beliefs, or
feelings of
receiver changed
NOISE
Competing
ads, other
distractions
RESPONSE
Ranges from
simple
awareness to
purchase
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an identified sponsor .

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3 Basic Sources of Sales Force
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Nationals
Host Country
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THE END
The global environmental changes affecting international
marketers and alternative managerial responses to these
changes . Global marketing is a complex and difficult
activity , yet it affords many challenges and opportunities .

If the global environment were constant , there would
be no challenge . To benefit from the opportunities and
deal with the adversities of international trade , business
needs to adopt the global marketing concept .

:
. : : .

:

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.
. : .
. : .
. : .
. : :
.
. . : :
.
. : .
. . :
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. . :
:
- Michael J.Etzel et al., Marketing , N.Y.:
McGraw-Hill Companies , Inc ., 1997 .
- Michael R. Czinkota and Llkka A . Ronkainen ,
Global Marketing , N.Y.: Harcourt Brace&
Co.1995.
- Philip Kotler, Marketing Management , The
Millennium Edition ; N.J.: Prentice Hall
International , Inc. , 2000 .
* .
*
*

.
*

.
*

.
*
)
" . " .
*
.
*
.
*

) - -
(
.
) : (
MISSION
* Sales goals .
* Advertising
objectives .
MONEY
Factors to consider :
* Stage in PLC .
* Market share and
consumer base .
*Competition and
clutter .
* Advertising
Frequency .
* Product
substitutability
MESSAGE
* Message generation .
* Message evaluation
and selection .
*Message execution.
* Social - responsibility
review.
MEASUREMENT
*Communication
impact .
* Sales impact .
MEDIA
* Reach , frequency,
impact.
*Major media types.
*Specific media
vehicles .
* Media timing .
* Geographical
media allocation .
The Five Ms of Advertising : ( )

Sales Force
Objectives
Sales Force
Strategy
Sales Force
Structure
Designing a sales force
Recruiting and
selecting sales
representatives
Training sales
representatives
Sales Force
Size
: ( )
Supervising
sales
representative
s
Managing the sales force
Sales Force
Compensation
Motivating
sales
representatives
: ()
Evaluating
sales
representatives

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International Marketing takes place when an

Global Marketing is concerned with planning and

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A firm moves beyond domestic markets into international

* Potential demand in foreign markets .

Major Motivations to Internationalize

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Evolution of Global Marketing

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Decision Making Approach

Cases Study Approach

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Theory of Absolute Advantage

New Classical Theory

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- Technological Gap Model

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. Government - Business Relationship

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). Competitive Profile Matrix (CPM