International Marketing

There will be two kinds of CEOs who will exist in the next five
years: those who think globally and those who are unemployed
Drucker

International Marketing:
Definition
International Marketing is the

performance of the business activities

that direct the flow of a companys
goods and services to consumers or
users in more than one nation for a
profit.

Customers, Suppliers and Competitors

International marketing

Domestic-Environment
Controllables
Price
Promotion
Product
Channels of Distribution

International marketing

Uncontrollable International
Environment Factors
Political/Legal forces
Economic Forces
Competitive Forces
Level of Technology
Structure of Distribution
Geography and Infrastructure
Cultural Forces
International marketing

The importance of
international marketing
Times and distance are rapidly shrinking

with the advent of faster communication,

transportation, and financial flows.
Products developed in one country
Gucci purses, Monte Blanc pens,
McDonalds burgers, Japanese Sushi,
Pierre Cardin suits, German BMWs are
finding enthusiastic acceptance in other
countries
International marketing

The importance of
international marketing
Nestle, Shell, Bayer, Toshiba and other

multinationals have been doing this for decades

Newspaper headlines report daily on Japanese
victories over U.S. producers in consumer
electronics, motorcycles, copying machines,
cameras, and watches
The French firm Bics successful attacks on
Gillette; on Nestl gains in coffee and candy
markets and the loss of textile and shoe
markets to Third World imports

International marketing

The importance of
international marketing
Is generally undertaken by large businesses

which had grown too big for domestic markets

Today basically due to globalization e.g.
international transport and
telecommunications
Due to which businesses need to consider the
threat from foreign competition and the
opportunities which might be gained
For many businesses, its not an option, it is
necessary for survival
International marketing

Why go International?
Profits overseas markets more

lucrative, manufacturing and distribution

costs may be lower abroad. The product
might also sell for a higher price than
home market
Spreading the risk
Unfavorable trading conditions e.g.
British American Tobacco industries
Legal differences e.g. pharmaceutical co.
International marketing

Why the overseas market is

different?

Political differences Political stability. Unrest,

change in government etc.

Cultural differences Language e.g. English, product
name, colours, bribe etc.
Differences in Legislation Product labeling, Product
safety, Environmental impact, Advertising
Economic and social differences levels of income,
levels of sales and corporate taxes, how income is
distributed, demographics, import tariffs and
barriers. Social factors such as literacy rates, role of
women, religious attitudes, readiness to accept new
ideas etc.
Differences in business practice adapting vs.
original
International marketing

Methods of entering overseas

markets
Exporting: It involves manufacturing products at

home but selling them abroad. It minimizes the

risk of operating abroad. Also a means of testing
out ground. No Control. Example:
No direct Foreign Marketing
Infrequent Foreign Marketing
Regular Foreign Marketing

International marketing

 International Marketing
Global Marketing

International marketing

Methods of entering
overseas markets
Franchising: The license allows one firm to

use anothers name, product or service in

return for an initial payment and further
commission on royalties. Quick and
relatively easy way. Allows franchiser a high
degree of control over the marketing of the
product. A share of the profit does go to the
franchisee. Use in service industries, such
as Budget rent-a-car, Pizza Hut, KFC etc.

International marketing

Methods of entering overseas

markets
Licensing: Involves one firm producing

anothers product and using its brand name,

designs, patents and expertise under
license. Goods do not have to be physically
moved abroad instead produced abroad by
the foreign licensee. Success and failure is in
the hands of the licensee
Joint ventures: Two companies from separate
countries combining their resources. Risks
are shared. Businesses can draw on each
others strength. Many broken due to conflict.
International marketing

Methods of entering overseas

markets
Direct Investment: Requires the setting

up of production and distribution facilities

abroad. Can be obtained by merger or
takeover or built for specific purpose. E.g.
Toyota and Honda. Import duties can be
avoided, advantages of relatively low
costs and relatively cheap labour,
advantage of government incentives,
lower distribution costs, advantage of
local knowledge
International marketing

Methods of entering overseas

markets
Mergers and takeovers: Buying a

business in another country. Often

used by multinationals.

International marketing

International Marketing
Concept
Domestic market extension concept
Multidomestic market concept
Global marketing concept

International marketing