International Marketing

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Globalization
Defined as process of economic integration of
the entire world
removal of trade barriers
capital mobility and
diffusion of knowledge and information.

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Globalization
Globalization of Production evaluating various locations
worldwide so as to take advantage of local resources and
optimize manufacturing competitiveness.
Ford has established a major manufacturing base in
South India.
Globalization of Markets emergence of a borderless
world with advances in telecom, transportation, internet
standardized products from global brands like SONY
bought by customers all over the world.
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Lets Define Marketing

Kotler The human activity directed at satisfying
the wants and needs through exchange
process.
AMA Process of planning and executing the
conception , pricing, promotion and distribution
of ideas, goods and services to exchanges that
satisfy individual and organizational goals.

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International Marketing Defined

Cateora performance of business activities
designed to plan, price, promote and direct the flow
of companys goods and services to consumers or
users in more than one nation for profit.
Keegan Global Marketing is the process of
focusing the resources and objectives of an
organization on global marketing opportunities and
needs.
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International Marketing ?
Thus International Marketing involves:
Identify needs/wants of international customers
Modify Marketing Mix(4Ps) (consumer behaviors/
companys objectives)
Using various modes of entry to penetrate international
markets.
Evaluate dynamic international marketing environment and
take appropriate decisions.

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The International Marketing Task

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The Self-Reference Criterion and

Ethnocentrism
The key to successful international marketing is
adaptation to the environmental differences from
one market to another.
Primary obstacles to success in international
marketing:
SRC
Associated ethnocentrism
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The Self-Reference Criterion and

Ethnocentrism (continued)
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 best how to do
things.
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 Dangers of the SRC:

Failing to recognize the need to take action
Discounting the cultural differences that exist among
countries
Reacting to a situation in a way offensive to your hosts

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The Self-Reference Criterion and

Ethnocentrism (continued)
Ethnocentrism and the SRC can influence an
evaluation of the appropriateness of a domestically
designed marketing mix for a foreign market.
The most effective way to control the influence of
ethnocentrism and the SRC is to recognize their
effects on our behavior.

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Framework for Cross-cultural Analysis

(Adaptation)
1.

Define the business problem or goal in home-country

cultural traits, habits, or norms.

2.

Define the business problem or goal in foreign-country

cultural traits, habits, or norms through consultation with
natives of the target country. Make no value judgments.

3.

Isolate the SRC influence in the problem and examine it

carefully to see how it complicates the problem.

4.

Redefine the problem without the SRC influence and solve

for the optimum business goal situation.

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Reasons for Entering Foreign Markets

Growth
Profitability
Achieving economies of scale
Risk spread
Access to imported inputs
Uniqueness of product or services
Marketing opportunities due to life cycle
Spreading R&D cost
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Evolutionary Process of Global Marketing

There are five identifiable stages in the evolution of marketing

across national boundaries :
( Ref. Global Marketing Management by Kotabe & Helsen)
1.

Domestic Marketing:

Before entry into foreign markets

Marketing Focus-Domestic

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Marketing Mix Decisions-Focused
on Domestic Customers.

 Strategy- based on information about needs/wants of domestic

consumers, industry trends, economical, technological, political
climate at home.
Competition-look at domestic competition
Orientation-Ethnocentric (pay little attention to changes in global
marketplace e.g. changing lifestyles, market segments, emerging
competition & better products yet to arrive in domestic market)
Firm vulnerable to sudden changes forced upon it by competition.
E.g. U.S automobile & consumer electronics industry suffered from its
ethnocentrism in 1960s & 1970s ( neglected imminent competition
from Japanese low cost manufacturers)

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2.

Export Marketing :

Begins with unsolicited orders from foreign customers.

Reluctant at first, gradually learns the benefits of overseas

marketing.

Motivators-additional marketing outlets, risk spread, more

profitability

Early export marketing stage indirect exporting ( trading

house services)

Later stage as firm gains know how & experience

exports directly.
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 Marketing Focus - overseas (targeting and entering

foreign markets)
Orientation-Ethnocentric
Marketing Mix Decisions focussed mainly on domestic customers
overseas marketing-generally an extension of domestic
marketing
decisions made at headquarters
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3.

International Marketing:

Firm caters to specific needs or few overseas markets

( noticeable market share)

Orientation-Polycentric ( product/promotional adaptation):

firm realizing that there exists considerable cultural
difference across markets

Operation in each market viewed independently.

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Competition- fiercely competitive marketing strategies by

competition.

Firm may : allocate a potion of manufacturing for exports/set

up manufacturing abroad to utilize inexpensive resources &
be closer to consumers.

Marketing Focus-Differentiation in country markets by way

of developing or acquiring new brands.

Marketing Mix Decisions Developing local products depending upon country needs.
Decisions by Individual subsidiaries.
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 Multi Domestic Marketing :

Extreme form of International Marketing
Independent foreign subsidiary in each and every foreign
market.
Subsidiaries operate independently without headquarter
control.
Product development, manufacturing ,marketing all
executed for local market by subsidiary.
Few economies of scale benefits.
Useful only if consumers differ across national markets
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4.

Multinational Marketing:

Firm realizes benefits of economy of scale in product

development, manufacturing & marketing by
consolidation on regional basis.

Orientation-Regiocentric ( product planning may be

standardized within a region but not across)

Marketing Mix Decisions-Product standardization within

regions but not across
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5.

Global Marketing:

International/Multinational Orientation results in market

fragmentation worldwide (higher costs)

Global Marketing refers to:

1. Standardization efforts- marketing programs across
different countries ( product offering, promotional mix,
price & channel structure)
2. Coordination across Markets-reducing cost inefficiencies
& duplication of efforts among national and regional
subsidiaries)
3. Global Integration-gain competitive leverage and effective
integration of firms competitive campaigns across these
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markets.

 Marketing Focus-Consolidating firms

operations on a global basis
Orientation-Geocentric
Marketing Mix Decisions Globalization of Marketing Mix Decisions with local
variations.
Joint Decision making across the firms global
operations.
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EPRG Concept
The orientation of firms personnel affects the ability of a company to
adapt to a foreign marketing environment
Behavioral attributes-EPRG Framework

Degree of Internationalization

Management commitment
Influences International strategies of firm
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1. Ethnocentric Orientation:

Belief that ones own culture is superior to others

Managers believe that domestic marketing strategy will

work in foreign markets too

Ignore environmental differences between markets

Firms generally do domestic marketing/export

marketing as an extension of domestic marketing

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Ethnocentric companies market their products in countries

where demand is similar to home markets

Generally used to dispose surplus production in overseas

markets

Goods manufactured domestically/decisions taken at

headquarters.

Difficult to sustain once sizeable market share attained.

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2. Polycentric Orientation :
. Highly market oriented
. Belief-substantial difference exists among various markets.
. Marketing mix decisions/pricing strategies/ product
development strategies involve local experts from different
countries.
. Little coordination between affiliates
. Duplication of activities
. Economies of scale in international operations cant be
achieved.
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3. Regiocentric Orientation:
. Firm treats a region as a uniform market segments
similar marketing strategy for the region
. E.g., McDonaldss doesnt serves pork and slaughters
animals through Halal Process in Middle East.

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4. Geocentric Orientation:
. Firm considers entire world as a single market and
formulates integrated marketing strategies.
. Similarities identified between markets for uniform
marketing strategy formulation.

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THANK YOU!!

Mukul Mishra