UNIVERSITY OF GOCE DELCHEV SHTIP FACULTY OF ECONOMICS

SUBJECT:

ENGLISH LANGUAGE 3

THEME:

INTERNATIONAL MARKETING

Mentor: Prof. Dragan Donev

Made by:

Shtip, 2011

CONTENTS: Abstract3 Introduction....4

1.

History of international marketing..5 Stages in the international involvement of a firm....8

2. What is Globalization ?.........................................................................7

3.

4. Marketing definition8 4.1. Differences between domestic marketing and international

marketing10 4.2. Organizational orientation of international companies.10 4.3. Marketing research....11 4.4. Marketing environment..12 4.5. Market segmentation.....13 5. Product issues in International Marketing.14 6. Pricing Issues in International Marketing...17 7. International marketing mix.20 7.1. International Product Strategies Standardisation Vs Adaption......20 7.2 International Promotion Strategy.....................................................21 7.3 International Pricing Strategies21 7.4. International Distribution Strategies..22 7. 5. Global Marketing Strategies..23 8. Ethical Problems in International Marketing ...24
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Conclusion.26 References27

Abstract

The process of globalization leads to the increasing integration of the production of goods, services, ideas, culture, communication and environmental pollution on a world-wide scale, imparting locality of populations and labor. Marketing is the process by which companies advertise products or services to potential customers. With the customer as the focus of its activities, it can be concluded that marketing management is one of the major components of business management. . An International company typically operates in, for example, the U.S. but sell or exports worldwide or Internationally. A domestic company will be a company that is within the country of it's own origin. While many of the products that businesses sell are targeted at a global audience using a consistent marketing mix, it is also necessary to understand regional differences, hence the importance of international marketing. Organisations also have to consider different languages, customs and health and safety regulations. The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation.

Key words: international, marketing, globalization, products, business, process, customers.

Introduction
International marketing involves recognising that people all over the world have different needs. Companies like Gillette, Coca-Cola, BIC, and Cadbury Schweppes have brands that are recognised across the globe. While many of the products that these businesses sell are targeted at a global audience using a consistent marketing mix, it is also necessary to understand regional differences, hence the importance of international marketing. Organisations must accept that differences in values, customs, languages and currencies will mean that some products will only suit certain countries and that as well as there being global markets e.g. for BIC and Gillette razors, and for Coca-Cola drinks, there are important regional differences - for example advertising in China and India need to focus on local languages. Just as the marketing environment has to be assessed at home, the overseas potential of markets has to be carefully scrutinised. Finding relevant information takes longer because of the unfamiliarity of some locations. The potential market size, degree and type of competition, price, promotional differences, product differences as well as barriers to trade have to be analysed alongside the costeffectiveness of various types of transport. The product must possess characteristics that make it acceptable for the market - these may be features like size, shape, design, performance and even colour. For example, red is a popular colour in Chinese-speaking areas. Organisations also have to consider different languages, customs and health and safety regulations.

1.

History of international marketing

Marketing abroad is not a recent phenomenon. In fact, well-established trade routes existed three or four thousand years before the birth of Christ. Modern international marketing, however, can arguably be traced to the 1920s, when liberal international trading was halted by worldwide isolationism and increased barriers to trade. The United States furthered this trend by passing the Smoot-Hawley Tariff Act of 1930, raising the average U.S. tariff on imported goods from 33 to 53 cents. Other countries throughout the world imposed similar tariffs in response to the United States' actions, and by 1932 the volume of world trade fell by more than 40 percent. These protectionist activities continued throughout the 1930s, and the Great Depression, to which many say protectionism substantially contributed, was deeper and more widespread than any other depression in modern history. Furthermore, according to the United Nations, this protectionism undermined the standard of living of people all over the world and set the stage for the extreme military buildup that led to World War II. One result of the Great Depression and World War II was strengthened political will to end protectionist policies and to limit government interference in international trade. Thus, by 1944 representative countries attending the Bretton Woods Conference established the basic organizational setting for the post-war economy, designed to further macroeconomic stability. Specifically, the framework that arose created three organizations: the International Trade Organization (ITO), the World Bank, and the International Monetary Fund (IMF). Although negotiations undertaken for the ITO proved unsuccessful, the United States proposed that the commercial policy provisions that were originally be included in the ITO agreements should be temporarily incorporated into the General Agreement on Tariffs and Trade (GATT). In 1947, 23 countries agreed to a set of tariff reductions codified in GATT. Although GATr was at first intended as a
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temporary measure, because ITO was never ratified, it became the main instrument for international trade regulation. GATT was succeeded by the World Trade Organization (WTO), which was established in January 1995 after GATT officially ended in April 1994. The WTO's main function has been to resolve trade disputes, and it developed procedures for handling trade disputes that were much improved over the GATr procedures. In its first 18 months the WTO settled more than 50 trade disputes. In the 1960s and 1970s, world trading patterns began to change. While the United States remained a dominant player in international trade, other less developed countries began to manufacture their own products. Furthermore, the United States became more reliant than ever on imported goods. For example, by 1982 one in four cars sold in the United States was foreign-made and more than 40 percent of electronic products were produced or assembled abroad. To make matters worse, the United States consistently imported a sizable portion of its fuel needs from other countries. All of these elements created a U.S. dependency on world trade. As free market policies continued to be the dominant political force concerning trade around the world, a host of new markets opened. Specifically, in the late 1980s, Central and Eastern European markets opened with the dissolution of the Soviet Union. By the 1990s, world trade began with China, as well as with countries in South America and the Middle Eastnew markets that looked quite promising. In spite of the changes in the world trade arena, the United States, Japan, and Europe continued to play a dominant role, accounting for 85 percent of the world's trade. Interestingly, while the trend of opening new world markets continued, there was another trend toward regional trade agreements. These agreements typically gave preferential trade status to nations that assented to the terms of a pact over those nations that did not participate. Two examples are the creation of a unified European Market and the ratification of the North American Free Trade Agreement (NAFTA). Created in 1958, and renamed most recently in 1993, the European Union (EU) is a regional organization designed to gradually eliminate customs duties and other types of trade barriers between members. Imposing a common external tariff against nonmember countries, EU countries slowly adopted measures that would unify and, theoretically, strengthen member economies. Member nations include Belgium, France, Germany, Great Britain, Italy, Luxembourg, the Netherlands, Denmark, Ireland, Greece, Spain, and Portugal.
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Comprised of Canada, the United States, and Mexico, NAFTA was passed by the U.S. House and Senate in November 1994. In total, 360 million consumers are subject to the agreement, with spending power of about $6 trillion. Therefore, NAFTA is 20 percent larger than the EU. With non-European multinational corporations facing tariff barriers put up by the EU, the most attractive international markets were those emerging in the developing countries of Asia, Russia, and Latin America. According to Christopher Miller, professor of international marketing at the Thunderbird Graduate School of International Management, "There's nowhere else to go. With the advent of the EU, it's harder and harder for non-European companies to get into Europe. Anyone within the boundaries has no tariffs, and those outside it have more barriers." In emerging markets, companies could expect to achieve 30 to 40 percent growth rates, according to Miller.

2. What is Globalization ?

Globalization is a process that has been going on for the past 5000 years, but it has significantly accelerated since the demolishing of the Soviet Union in 1991. The many meanings of the word globalization have accumulated very rapidly and recently. the verb globalize was first attested by the Merriam Webster Dictionary in 1944. In considering the history of globalization, some authors focus on events since the discovery of the America in 1492, but most scholars and theorists concentrate on the much more recent past But long before 1492, people began to link together disparate locations in the world into extensive systems of communication, migration, and interconnections. This formation of interaction between the global and the local has been a central driving force in the world history. Roughly, Economic Globalization means that world trade and financial markets are becoming more integrated. According to Friedman (1999), globalization is: The inexorable integration of markets, nation states, and technologies to a degree never witnessed before- in a way that is enabling individuals, corporations and
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nation-states to reach around the world farther, faster, deeper and cheaper than before, the spread of free-market capitalism to virtually every country in the world. On the other hand, a great number of economists assert that globalization, as an on-going historical process that reached its apex toward the end of the 20th century. This process leads to the increasing integration of the production of goods, services, ideas, culture, communication and environmental pollution on a world-wide scale, imparting locality of populations and labor.
3.

Stages in the international involvement of a firm .

We discussed several stages through which a firm may go as it becomes increasingly involved across borders. A purely domestic firm focuses only on its home market, has no current ambitions of expanding abroad, and does not perceive any significant competitive threat from abroad. Such a firm may eventually get some orders from abroad, which are seen either as an irritation (for small orders, there may be a great deal of effort and cost involved in obtaining relatively modest revenue) or as "icing on the cake." As the firm begins to export more, it enters the export stage, where little effort is made to market the product abroad, although an increasing number of foreign orders are filled. In the international stage, as certain country markets begin to appear especially attractive with more foreign orders originating there, the firm may go into countries on an ad hoc basisthat is, each country may be entered sequentially, but with relatively little learning and marketing efforts being shared across countries. In the multi-national stage, some efficiencies are pursued by standardizing across a region (e.g., Central America, West Africa, or Northern Europe). Finally, in the global stage, the focus centers on the entire World market, with decisions made optimize the products position across marketsthe home country is no longer the center of the product. An example of a truly global company is Coca Cola. Note that these stages represent points on a continuum from a purely domestic orientation to a truly global one; companies may fall in between these discrete stages, and different parts of the firm may have characteristics of various stagesfor example, the pickup truck division of an auto-manufacturer may be largely domestically focused, while the passenger car division is globally focused. Although a global focus is generally appropriate for most large firms, note that it may
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not be ideal for all companies to pursue the global stage. For example, manufacturers of ice cubes may do well as domestic, or even locally centered, firms.

4. Marketing definition

Marketing is the process by which companies advertise products or services to potential customers. It is an integrated process through which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Marketing is used to create the customer, to keep the customer and to satisfy the customer. With the customer as the focus of its activities, it can be concluded that marketing management is one of the major components of business management. The evolution of marketing was caused due to mature markets and overcapacities in the last decades. Companies then shifted the focus from production to the customer in order to stay profitable. The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors. Marketing is defined by the American Marketing Association [AMA] as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." The term developed from the original meaning which referred literally to going to a market to buy or sell goods or services. Seen from a systems point of view, sales process engineering views marketing as "a set of processes that are interconnected and interdependent with other functions, whose methods can be improved using a variety of relatively new approaches." The Chartered Institute of Marketing defines marketing as "the management process responsible for identifying, anticipating and satisfying customer requirements profitably." A different concept is the value-based marketing which states the role of marketing to contribute to increasing shareholder value. In this context, marketing is defined as "the management process that seeks to maximise returns to shareholders by developing
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relationships with valued customers and creating a competitive advantage." Marketing practice tended to be seen as a creative industry in the past, which included advertising, distribution and selling. However, because the academic study of marketing makes extensive use of social sciences, psychology, sociology, mathematics, economics, anthropology and neuroscience, the profession is now widely recognized as a science, allowing numerous universities to offer Master-ofScience (MSc) programmes. The overall process starts with marketing research and goes through market segmentation, business planning and execution, ending with pre and post-sales promotional activities. It is also related to many of the creative arts. The marketing literature is also adept at re-inventing itself and its vocabulary according to the times and the culture.

4.1. Differences between domestic marketing and international marketing

To understand the differences between the domestic marketing and international marketing, we must first distinguish and explain the terms domestic and international businesses. An International company typically operates in, for example, the U.S. but sell or exports worldwide or Internationally. A multinational firm will typically have offices and branches in many different countries and will operate within each country as a local or national firm. An example of an international firm might be Omaha Steaks which operates within the US but exports worldwide. An example of a multinational might be Microsoft or Ford Motors Co. A domestic company will be a company that is within the country of it's own origin . Trade is increasingly global in scope today. There are several reasons for this. One significant reason is technologicalbecause of improved transportation and communication opportunities today, trade is now more practical. Thus, consumers and businesses now have access to the very best products from many different countries. Increasingly rapid technology lifecycles also increases the competition among countries as to who can produce the newest in technology. In part to accommodate these realities, countries in the last several decades have taken increasing steps to promote global trade through agreements such as the General Treaty on Trade and Tariffs, and trade organizations such as the World Trade
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Organization (WTO), North American Free Trade Agreement (NAFTA), and the European Union (EU).

4.2.

Organizational orientation of international companies

In this sense, a firm's marketing department is often seen as of prime

importance within the functional level of an organization. Information from an organization's marketing department would be used to guide the actions of other departments within the firm. As an example, a marketing department could ascertain (via marketing research) that consumers desired a new type of product, or a new usage for an existing product. With this in mind, the marketing department would inform the R&D department to create a prototype of a product/service based on consumers' new desires.The production department would then start to manufacture the product, while the marketing department would focus on the promotion, distribution, pricing, etc. of the product. Additionally, a firm's finance department would be consulted, with respect to securing appropriate funding for the development, production and promotion of the product. Inter-departmental conflicts may occur, should a firm adhere to the marketing orientation. Production may oppose the installation, support and servicing of new capital stock, which may be needed to manufacture a new product. Finance may oppose the required capital expenditure, since it could undermine a healthy cash flow for the organization. A further marketing orientation is the focus on a mutually beneficial exchange. In a transaction in the market economy, a firm gains revenue, which thus leads to more profits/market share/sales. A consumer on the other hand gains the satisfaction of a need/want, utility, reliability and value for money from the purchase of a product or service. As no one has to buy goods from any one supplier in the market economy, firms must entice consumers to buy goods with contemporary marketing ideals.

4.3.

Marketing research

Marketing research involves conducting research to support marketing activities, and the statistical interpretation of data into information. This information is
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then used by managers to plan marketing activities, gauge the nature of a firm's marketing environment and attain information from suppliers. Marketing researchers use statistical methods such as quantitative research, qualitative research, hypothesis tests, Chi-squared tests, linear regression, correlations, frequency distributions, poisson distributions, binomial distributions, etc. to interpret their findings and convert data into information. The marketing research process spans a number of stages including the definition of a problem, development of a research plan, collecting and interpretation of data and disseminating information formally in form of a report. The task of marketing research is to provide management with relevant, accurate, reliable, valid, and current information. A distinction should be made between marketing research and market research. Market research pertains to research in a given market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing. Thus, market research is a subset of marketing research. 4.4.

Marketing environment

The term marketing environment relates to all of the factors (whether internal, external, direct or indirect) that affect a firm's marketing decision-making or planning and is subject of the marketing research. A firm's marketing environment consists of two main areas, which are: Macro environment: On the macro environment a firm holds only little control. It consists of a variety of external factors that manifest on a large (or macro) scale. These are typically economic, social, political or technological phenomena. A common method of assessing a firm's macro-environment is via a PESTLE (Political, Economic, Social, Technological, Legal, Ecological) analysis. Within a PESTLE analysis, a firm would analyze national political issues, culture and climate, key macroeconomic conditions, health and indicators (such as economic growth, inflation, unemployment, etc.), social trends/attitudes, and the nature of technology's impact on its society and the business processes within the society.
Micro environment

A firm holds a greater amount (though not necessarily total) control of the micro environment. It comprises factors pertinent to the firm itself, or stakeholders
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closely connected with the firm or company. A firm's micro environment typically spans:

Customers/consumers Employees Suppliers The Media

By contrast to the macro environment, an organization holds a greater degree of control over these factors.

4.5. Market segmentation

Market segmentation pertains to the division of a market of consumers into persons with similar needs and wants. As an example, if using Kellogg's cereals in this instance, Frosties are marketed to children. Crunchy Nut Cornflakes are marketed to adults. Both goods aforementioned denote two products which are marketed to two distinct groups of persons, both with like needs, traits, and wants.The purpose for market segmentation is conducted for two main issues. First, a segmentation allows a better allocation of a firm's finite resources. A firm only possesses a certain amount of resources. Accordingly, it must make choices (and appreciate the related costs) in servicing specific groups of consumers. Furthermore the diversified tastes of the contemporary Western consumers can be served better. With more diversity in the tastes of modern consumers, firms are taking noting the benefit of servicing a multiplicity of new markets.Market segmentation can be defined in terms of the STP acronym, meaning Segment, Target and Position. Segmentation involves the initial splitting up of consumers into persons of like needs/wants/tastes. Four commonly used criteria are used for segmentation, which include:

Geographical (e.g. country, region, city, town, etc.) Psychographic (i.e. personality traits or character traits which influence consumer behaviour)

Demographic (e.g. age, gender, socio-economic class, etc.)

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Behavioural (e.g. brand loyalty, usage rate, etc.)

Once a segment has been identified, a firm must ascertain whether the segment is beneficial for them to service. The DAMP acronym, meaning Discernible, Accessible, Measurable and Profitable, are used as criteria to gauge the viability of a target market. DAMP is explained in further detail below:

Discernable - How a segment can be differentiated from other segments. Accessible - How a segment can be accessed via Marketing Communications produced by a firm.

Measurable - Can the segment be quantified and its size determined? Profitable - Can a sufficient return on investment be attained from a segment's servicing?

The next step in the targeting process is the level of differentiation involved in a segment serving. Three modes of differentiation exist, which are commonly applied by firms. These are:

Undifferentiated - Where a company produces a like product for all of a market segment. Differentiated - In which a firm produced slight modifications of a product within a segment.

Niche - In which an organisation forges a product to satisfy a specialised target market.

Positioning concerns how to position a product in the minds of consumers. A firm often performs this by producing a perceptual map, which denotes products produced in its industry according to how consumers perceive their price and quality. From a product's placing on the map, a firm would tailor its marketing communications to suit meld with the product's perception among consumers.

5. Product issues in international marketing

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Some marketing scholars and professionals tend to draw a strong distinction between conventional products and services, emphasizing service characteristics such as heterogeneity (variation in standards among providers, frequently even among different locations of the same firm), inseperability from consumption, intangibility, and, in some cases, perishabilitythe idea that a service cannot generally be created during times of slack and be stored for use later. However, almost all products have at least some service componente.g., a warranty, documentation, and distributionand this service component is an integral part of the product and its positioning. Thus, it may be more useful to look at the product-service continuum as one between very low and very high levels of tangibility of the service. Income tax preparation, for example, is almost entirely intangiblethe client may receive a few printouts, but most of the value is in the service. On the other hand, a customer who picks up rocks for construction from a landowner gets a tangible product with very little value added for service. Firms that offer highly tangible products often seek to add an intangible component to improve perception. Conversely, adding a tangible element to a servicee.g., a binder with information may address many consumers psychological need to get something to show for their money. On the topic of services, cultural issues may be even more prominent than they are for tangible goods. There are large variations in willingness to pay for quality, and often very large differences in expectations. In some countries, it may be more difficult to entice employees to embrace a firms customer service philosophy. Labor regulations in some countries make it difficult to terminate employees whose treatment of customers is substandard. Speed of service is typically important in the U.S. and western countries but personal interaction may seem more important in other countries. a. Product Need Satisfaction We often take for granted the obvious need that products seem to fill in our own culture; however, functions served may be very different in othersfor example, while cars have a large transportation role in the U.S., they are impractical to drive in Japan, and thus cars there serve more of a role of being a status symbol or providing for individual indulgence. In the U.S., fast food and instant drinks such
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as Tang are intended for convenience; elsewhere, they may represent more of a treat. Thus, it is important to examine through marketing research consumers true motives, desires, and expectations in buying a product. b. Approaches to Product Introduction Firms face a choice of alternatives in marketing their products across markets. An extreme strategy involves customization, whereby the firm introduces a unique product in each country, usually with the belief tastes differ so much between countries that it is necessary more or less to start from scratch in creating a product for each market. On the other extreme, standardization involves making one global product in the belief the same product can be sold across markets without significant modificatione.g., Intel microprocessors are the same regardless of the country in which they are sold. Finally, in most cases firms will resort to some kind of adaptation, whereby a common product is modified to some extent when moved between some marketse.g., in the United States, where fuel is relatively less expensive, many cars have larger engines than their comparable models in Europe and Asia; however, much of the design is similar or identical, so some economies are achieved. Similarly, while Kentucky Fried Chicken serves much the same chicken with the eleven herbs and spices in Japan, a lesser amount of sugar is used in the potato salad, and fries are substituted for mashed potatoes. There are certain benefits to standardization. Firms that produce a global product can obtain economies of scale in manufacturing , and higher quantities produced also lead to a faster advancement along the experience curve . Further, it is more feasible to establish a global brand as less confusion will occur when consumers travel across countries and see the same product. On the down side, there may be significant differences in desires between cultures and physical environmentse.g., software sold in the U.S. and Europe will often utter a beep to alert the user when a mistake has been made; however, in Asia, where office workers are often seated closely together, this could cause embarrassment. Adaptations come in several forms. Mandatory adaptations involve changes that have to be made before the product can be usede.g., appliances made for the U.S. and Europe must run on different voltages, and a major problem was experienced in the European Union when hoses for restaurant frying machines
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could

not

simultaneously

meet

the

legal

requirements

of

different

countries. Discretionary changes are changes that do not have to be made before a product can be introduced (e.g., there is nothing to prevent an American firm from introducing an overly sweet soft drink into the Japanese market), although products may face poor sales if such changes are not made. Discretionary changes may also involve cultural adaptationse.g., in Sesame Street, the Big Bird became the Big Camel in Saudi Arabia. Another distinction involves physical product v.s. communication adaptations. In order for gasoline to be effective in high altitude regions, its octane must be higher, but it can be promoted much the same way. On the other hand, while the same bicycle might be sold in China and the U.S., it might be positioned as a serious means of transportation in the former and as a recreational tool in the latter. In some cases, products may not need to be adapted in either way (e.g., industrial equipment), while in other cases, it might have to be adapted in both (e.g., greeting cards, where the both occasions, language, and motivations for sending differ). Finally, a market may exist abroad for a product which has no analogue at homee.g., hand-powered washing machines. c. Branding

While Americans seem to be comfortable with category specific brands, this is not the case for Asian consumers. American firms observed that their products would be closely examined by Japanese consumers who could not find a major brand name on the packages, which was required as a sign of quality. Note that Japanese keiretsus span and use their brand name across multiple industries e.g., Mitsubishi, among other things, sells food, automobiles, electronics, and heavy construction equipment.1

http://www.consumerpsychologist.com/international_marketing.html

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6. Pricing Issues in International Marketing

There are several ways that the price can be changed: 2

"Sticker" price changesthe most obvious way to change the price is the price tag you get the same thing, but for a different (usually larger) amount of money.

Change quantity. Often, consumers respond unfavorably to an increased sticker price, and changes in quantity are sometimes noticed lesse.g., in the 1970s, the wholesale cost of chocolate increased dramatically, and candy manufacturers responded by making smaller candy bars. Note that, for cash flow reasons, consumers in less affluent countries may need to buy smaller packages at any one time (e.g., forking out the money for a large tube of toothpaste is no big deal for most American families, but it introduces a greater strain on the budget of a family closer to the subsistence level).

Change quality. Another way candy manufacturers have effectively increased prices is through a reduction in quality. In a candy bar, the "gooey" stuff is much cheaper than chocolate. It is frequently tempting for foreign licensees of a major brand name to use inferior ingredients.

Change terms. In the old days, most software manufacturers provided free support for their programsit used to be possible to call the WordPerfect Corporation on an 800 number to get free help. Nowadays, you either have to

http://www.referenceforbusiness.com/encyclopedia/Int-Jun/International-Marketing.html

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call a 900 number or have a credit card handy to get help from many software makers. Another way to change terms is to do away with favorable financing terms.

Reference Prices. Consumers often develop internal reference prices, or expectations about what something should cost, based mostly on their experience. Most drivers with long commutes develop a good feeling of what gasoline should cost, and can tell a bargain or a ripoff. Reference prices are more likely to be more precise for frequently purchased and highly visible products. Therefore, retailers very often promote soft drinks, since consumers tend to have a good idea of prices and these products are quite visible. The trick, then, is to be more expensive on products where price expectations are muddier. Marketers often try to influence people's price perceptions through the use ofexternal reference pricesindicators given to the consumer as to how much something should cost. Examples include:

Manufacturer's Suggested Retail Price (MSRP). This is often pure fiction. The suggested retail prices in certain categories are deliberately set so high that even full service retailers can sell at a "discount." Thus, although the consumer may contrast the offering price against the MSRP, this latter figure is quite misleading.

"SALE! Now $2.99; Regular Price $5.00." For this strategy to be used legally in most countries, the claim must be true (consistency of enforcement in some countries is, of course, another matter). However, certain products are put on sale so frequently that the "regular" price is meaningless. In the early 1990s, Sears was reported to sell some 55% of its merchandise on sale.

"WAS $10.00, now $6.99." "Sold elsewhere for $150.00; our price: $99.99."

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Reference prices have significant international implications. While marketers may choose to introduce a product at a low price in order to induce trial, which is useful in a new market where the penetration of a product is low, this may have serious repercussions as consumers may develop a low reference price and may Selected thus resist paying higher prices in the future. International Pricing Issues. In some cultures, particularly where retail

stores are smaller and the buyer has the opportunity to interact with the owner, bargaining may be more common, and it may thus be more difficult for the manufacturer to influence retail level pricing. Two phenomena may occur when products are sold in disparate markets. When a product is exported, price escalation, whereby the product dramatically increases in price in the export market, is likely to take place. This usually occurs because a longer distribution chain is necessary and because smaller quantities sold through this route will usually not allow for economies of scale. "Gray" markets occur when products are diverted from one market in which they are cheaper to another one where prices are highere.g., Luis Vuitton bags were significantly more expensive in Japan than in France, since the profit maximizing price in Japan was higher and thus bags would be bought in France and shipped to Japan for resale. The manufacturer therefore imposed quantity limits on buyers. Since these quantity limits were circumvented by enterprising exchange students who were recruited to buy their quota on a daily basis, prices eventually had to be lowered in Japan to make the practice of diversion unattractive. Where the local government imposes price controls, a firm may find the market profitable to enter nevertheless since revenues from the new market only have to cover marginal costs. However, products may then be attractive to divert to countries without such controls.

7. International marketing mix

When launching a product into foreign markets do you standardise or adapt your marketing mix to the foreign market? A company can adopt to use a standardised marketing mix around the world or an adapted marketing mix in each country.
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7.1. International Product Strategies Standardisation Vs Adaption

So what should an organisation do? Adapt or sell a standardised product? Basic marketing concepts tell us that we will sell more of a product if we aim to meet the needs of our target market. In international markets ,we have to take into consideration consumers cultural background, buying habits, levels of personal disposable income etc in order to deliver a tailored marketing mix program to suit their needs. The arguments however for standardisation suggest that if you go through the process of adapting the product to local markets it does little but add to the overall cost of producing the product and weakens the brand on the global scale. In todays global world, where consumers travel more, watch satellite television, communicate and shop internationally over the internet, the world now is becoming a lot smaller. Because of this there is no need to adapt products to local markets. Brands such as Coca-Cola, MTV, Nike, Levis are all successful global brands where they have a standardised approach to their marketing mix, all these products are targeted at similar groups globally. In many circumstances a company will have to adapt their product and marketing mix strategy to meet local needs and wants that cannot be changed. Mcdonald is a global player however, their burgers are adapted to local needs. In India where a cow is a sacred animal their burgers are served with chicken or fish. In Mexico burgers come with chilli sauce. Coca-cola is some parts of the world taste sweeter then in others. Yes we can argue that standardisation is better for the organisation because it reduces cost, however many organisations will have to think global, but act local if they are to successfully establish them selves in foreign markets.

7.2. International Promotion Strategy

As with international product decisions an organisation can either adapt or standardise their promotional strategy and message. Advertising messages in countries may well have to be adapted because of language barriers or the current message used in the national market may be offensive to overseas residents.
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The use of certain colours may also need to be thought about. In India red is the colour worn by the bride in weddings, white is the colour for mourning in Japan. The level of media development has to also be taken into account. Is commercial television well established in your host country? What is the level of television penetration? How much control does the government have over advertising on TV and radio? Is print media more popular then TV? Many organisation go for a strategy of adapting advertising messages to local markets to best meet consumer demand.

7.3. International pricing strategies

Pricing on an international scale is difficult. As well as taking into account traditional price considerations3 1. Fixed and variable costs, 2. Competition, 3. Company objectives , 4. Proposed positioning strategies, 5. Target group and willingness to pay, The organisation needs to consider the costs of transport, any tariffs or import duties that may be levied on their product(s) when they are sold on the international scale. Also what currency do you expect to be paid in? Will it be home or international currency? Exchange rate fluctuation will also impact profitability and influence pricing decisions. Other factors to consider include local incomes, what are income and PDI levels. What is the general economic situation of the country and how will this influence pricing? The internet is now making pricing more transparent for consumers. Goods can be purchased online from any overseas organisations at local currency prices, a prime examples is dvds which are purchased from sites like www.dvdsoon.com which deliver internationally.
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7.4. International distribution strategies

A standard distribution channel in the UK may go from a Manufacturer, wholesaler, retailer to consumer or direct from a manufacturer to a retailer. In an overseas market there may well be more intermediaries involved. For example in Japan there are approximately five different types of wholesaler a product goes through before the product reaches the final consumer. In your international market , is it dominated by major retailers or is the retail sector made up of small independent retailers? Is internet distribution common for your product .

7.5. Global marketing strategies

Although some would stem the foreign invasion through protective legislation, protectionism in the long run only raises living costs and protects inefficient domestic firms (national controls). The right answer is that companies must learn how to enter foreign markets and increase their global competitiveness. Firms that do venture abroad find the international marketplace far different from the domestic one. Market sizes, buyer behavior and marketing practices all vary, meaning that international marketers must carefully evaluate all market segments in which they expect to compete. Whether to compete globally is a strategic decision (strategic intent) that will fundamentally affect the firm, including its operations and its management. For many companies, the decision to globalize remains an important and difficult one (global strategy and action). Typically, there are many issues behind a company`s decision to begin to compete in foreign markets. For some firms, going abroad is the result of a deliberate policy decision (exploiting market potential and growth); for others, it is a reaction to a specific business opportunity (global financial turmoil, etc.) or a competitive challenge (pressuring competitors). But, a decision of this magnitude is always a strategic proactive decision rather than simply a reaction (learning how to business abroad). Reasons for global expansion are mentioned below:

a) Opportunistic global market development (diversifying markets) b) Following customers abroad (customer satisfaction) c) Pursuing geographic diversification (climate, topography, space, etc.)
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d) Exploiting different economic growth rates (gaining scale and scope) e) Exploiting product life cycle differences (technology) f) Pursuing potential abroad g) Globalizing for defensive reasons h) Pursuing a global logic or imperative (new markets and profits) Moreover, there can be several reasons to be mentioned including comparative advantage, economic trends, demographic conditions, competition at home, the stage in the product life cycle, tax structures and peace. To succeed in global marketing companies need to look carefully at their geographic expansion. To some extent, a firm makes a conscious decision about its extent of globalization by choosing a posture that may range from entirely domestic without any international involvement (domestic focus) to a global reach where the company devotes its entire marketing strategy to global competition. In the development of an international marketing strategy, the firm may decide to be domestic-only, home-country, hostcountry or regional/global-oriented. Each level of globalization will profoundly change the way a company competes and will require different strategies with respect to marketing programs, planning, organization and control of the international marketing effort.

8. Ethical problems in international marketing

The moral question of what is right or appropriate poses many dilemmas for domestic marketers. Even within a country, ethical standards are frequently not defined or always clear. The problem of business ethics is infinitely more complex in international marketplace, because value judgments differ widely among culturally diverse groups. That which is commonly accepted as right on one country may be completely unacceptable in another. Giving business gifts of high value, for example, is generally condemned in the United States, but in many countries of the world gifts are not only accepted but also expected (www.business-ethics.org). Upon examination of existing ethical frameworks in the field of international marketing from a macro marketing perspective, it is argued that marketers cannot always rely on universally accepted ethical norms, such as hyper
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norms or core values that have been suggested by a deluge of marketing literature (Dunfee,1995; Dunfee, Smith, and Ross, 1999: 14; DeGeorge, 2000). Some basic moral values could be used in evaluating international accepted as ethical problems. After studying the literature related to international marketing, it is easily seen that most of the marketing ethics studies involve the use of scenarios as research instruments and relate to the following (Armstrong, management, 1992: 167): market research, retail advertising management, marketing marketing sub-disciplines management, management, purchasing industrial marketing ethical issues. Violations of basic moral values in international marketing settings should be

marketing, and marketing education. Few studies relate to International Marketing Ethics have been most prominent (Armstrong and Everett, 1991:61-71; Armstrong, Stening, Ryands, Marks, and Mayo, 1990: 6-15; Armstrong, 1992). Major International Marketing Ethical Problems derived from applied researches by Armstrong (Ibid) are presented with their short definitions as follows 4: Traditional Small Scale Bribery - involves the payment of small sums of money, typically to a foreign official in exchange for him/her violating some official duty or responsibility or to speed routine government actions (grease payments, kickbacks). Large Scale Bribery - a relatively large payment intended to allow a violation of the law or designed to influence policy directly or indirectly (eg, political contribution). Gifts/Favours/Entertainment - includes a range of items such as: lavish physical gifts, call girls, opportunities for personal travel at the company`s expense, gifts received after the completion of transaction and other extravagant expensive entertainment. Pricing includes unfair differential pricing, questionable invoicing where the buyer requests a written invoice showing a price other than the actual price paid, pricing to force out local competition, dumping products at prices well
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below that in the home country, pricing practices that are illegal in the home country but legal in host country (eg, price fixing agreements). Products/Technology includes products and technology that are banned for use in the home country but permitted in the host country and/or appear unsuitable or inappropriate for use by the people of the host country. Tax Evasion Practices - used specifically to evade tax such as transfer pricing (i.e., where prices paid between affiliates and/or parent company adjusted to affect profit allocation) including the use of tax havens, where any profit made is in low tax jurisdiction, adjusted 101 International Research Journal of Finance and Economics - Issue 26 (2009) interest payments on intra-firm loans, questionable management and service fees charged between affiliates and /or the parent company. Illegal/Immoral Activities in the Host Country practices such as: polluting the environment, maintaining unsafe working conditions; product/technology copying where protection of patents, trademarks or copyrights has not been enforced and shortweighting weight. Questionable Commissions to Channel Members unreasonably large commissions of fees paid to channel members, such as sales agents, middlemen, consultants, dealers and importers. Cultural Differences between cultures involving potential overseas shipments so as to charge a country a phantom

misunderstandings related to the traditional requirements of the exchange process (e.g., transactions) may be regarded by one culture as bribes but be acceptable business practices in another culture. These practices include: gifts, monetary payments, favours, entertainment and political contributions. Involvement in Political Affairs- related to the combination of marketing activities and politics including the following: the exertion of political influence by multinationals, engaging in marketing activities when either home or host countries are at war and illegal technology transfers (Armstrong, Ibid).

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Concluding remarks
When marketing their products firms need to create a successful mix of: the right product, sold at the right price , in the right place , using the most suitable promotion. To create the right marketing mix, businesses have to meet the following conditions: The product has to have the right features - for example, it must look good and work well. The price must be right. Consumer will need to buy in large numbers to produce a healthy profit. The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation. Changes in the world market and in technological conditions in the world economy in the recent past, in particular in the last decade, pose new challenges to industrialization and the development of a competitive manufacturing sector in Africa. Three main categories of changes are most relevant: changes in market conditions, in technology hardware and software and in the organization of production. In many respects the conventional advantage of low labour cost is being undermined by the increasing importance of competitive characteristics other than cost of production, notably product/service quality and just-in-time delivery. To cope with these requirements, greater effort will be required to develop design, marketing and new organizational and linkage capabilities, in addition to selectively acquiring new manufacturing technologies. These market and technological changes are likely to have considerable implications for the shift in the direction of knowledge-intensive production and for the kinds of capabilities that must be developed to cope with the changing situation. First, greater effort will be needed to monitor these changes with a view to adapting to the new situation. This will often imply selective adoption of new technologies in production and marketing at the right time and in the right applications according to the dictates of quality, precision, speed and productivity requirements. Second, greater effort will be needed to create a conducive environment for the creation and development of core capabilities within firms and in the institutions that interact with those firms so as to cope with the changing conditions.

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References: Internet researches:

http://www.consumerpsychologist.com/international_marketing.html http://www.referenceforbusiness.com/encyclopedia/Int-Jun/InternationalMarketing.html http://www.learnmarketing.net/internationalmarketingmix.htm http://www.eurojournals.com/irjfe_26_08.pdf

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