Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
INTERNATIONAL MARKETING
MANAGEMENT
MBA (G) CLASS OF 2010.
FACULTY INCHARGE:-
MR. VIVEK KUMAR
LECTURER, DEPT. OF MARKETING MGMT.
ABS, NOIDA.
Amity Business School
INTRODUCTION
• AIMS AND OBJECTIVES OF IMM.
– A clear understanding of the basic concepts of
international business/global business
management, in the light of the business scenario
in this 21st century globalized business
environment. Why global business is studied as a
different field, yet encompassing itself into the
body of marketing management.
– Understanding of the complex and a dynamic
definitions related to international marketing/ trade
etc.
Amity Business School
Contd..
– Understanding the concept of globalization & why
it is important and its definition.
– Why globalization is referred in the context of
international business.
– A brief historical background from modern times
to assess the role of globalization being not new in
this 21st century global business scenario.
– Overall competitive scenario, when markets and
business worldwide are facing a paradigm shift
from monopoly to oligopoly.
Amity Business School
Contd..
– Corporate examples from India and other world markets towards
understanding of the global business/ international marketing
management.
– Important mergers and acquisitions by Indian companies abroad.
– Exposure of the students to the global business activities.
– Focus on managing international business, operational as well as
strategic.
– Understanding the macro international business environment,
strategies to enter foreign market.
– Understanding of the global business policy and regulatory
measures in the light of emerging markets.
– Understanding the concept of international trade, balance of trade
and balance of payments. Definitions and importance on the
terms.
Continued… Amity Business School
IMPORTANT Books
Syllabus - MODULE-1
MODULE-2
• International Marketing Environment– Economic
Environment- World Economy, stages of market and
economic development, income and purchasing power
parity, Economic risk analysis, Balance of Payments
concept, Trade patterns, international trade alliances–
GATT and WTO, World Bank, IMF– Regional Economic
Groups– EU, NAFTA, SAFTA, G8, OPEC etc. Social and
Cultural Environment- Culture, analytical approaches to
cultural factors, cultural impact on industrial and
consumer products. Political, Legal and regulatory
environment– political risk, international law, licensing
and trade services, dispute settlement and litigation,
Embargoes and Sanctions
MODULE-3 Amity Business School
Definition of Globalization
Contd..
DEFINITION OF MULTINATIONAL
ENTERPRISES
• A corporation that has production operations in more
than one country, (e.g.:- Toyota having
manufacturing facility in India as also other parts of
the world.) for various reasons such as- securing
supplies of raw materials, utilizing cheap labor
sources, servicing local markets and bypassing
protectionist barriers.
• Important critical comment on multinationals and its
gravity in the light of marketing products in the
‘Third World’ market.
Amity Business School
DOMESTIC MARKET
1. Business Factors
2. Competitive Factors
Continued.. Amity Business School
BUSINESS FACTORS:
-- Profitability
-- Achieving Economies of Scale
-- Growth Factors
-- Marketing due to life-cycle
-- Uniqueness of Product / Services
-- Access to imported inputs
-- Spreading R and D cost
Continued.. Amity Business School
In Continuance:
Competitive Factors/ Other Factors:
-- The company’s domestic market might be attacked by
global firm’s offering better products or at lower prices.
-- Counterattack by the domestic firm in the competitors
home market.
-- Company discovering, some markets presenting higher
profit opportunities than the domestic market.
-- Company wanting larger customer base in order to
achieve economies of scale.
Continued.. Amity Business School
In Continuance:
-- Company wanting to reduce dependence
on anyone market.
-- Reducing risk
Continued.. Amity Business School
6. Technological pirating.
(Explanation: A company locating its plant abroad
worries about foreign managers learning how to
make its product and breaking away to compete
openly or clandestinely- for example in the
diverse area such as machinery, electronics,
chemicals, pharmaceuticals etc.)
7. High cost of product manufacturing and
communication adaptation.
Continued.. Amity Business School
In Continuance:
8. Times at which business is done
9. What is polite and impolite
10. Social priorities
11. Literacy levels
12. Communication infrastructure
13. Distribution facilities
14. Methods of transaction
Continued.. Amity Business School
In Continuance:
15. Political differences
16. Legal differences
17. Regulatory differences
18. Different technical standards (may be
operating in the country)
19. Different taxation policy
20. Economic complications/situations – at a
particular time
Continued.. Amity Business School
In Continuance:
Uncontrollable Factors:
-- Economic
-- Political
-- Logistics (controllable to a certain extent only, especially in the
domestic market )
-- Competition
-- Legal Affairs
-- Socio-cultural
-- Geography
Continued.. Amity Business School
In Continuance:
Micro Environment-the Controllable Factors:
-- Product
-- Price (subject to certain limitations, taking
competitors offer prices into consideration)
-- Place
-- Promotion
Management’s Orientation Amity Business School
E---- Ethnocentric
P---- Polycentric
R---- Regiocentric
G--- Geocentric
Continued.. Amity Business School
In Continuance:
The Ethnocentric Orientation:
-- It is a belief which considers- one’s own country/ culture,
products as superior
-- It views similarities in all markets/ foreign country market.
-- Product’s/ services/ management practices/ methods that
is being offered/ followed in one’s own country/
successful in one’s own country will be acceptable in
other world markets, anywhere.
-- Adaptation of the product is not required.
-- Shades of egoism encircled herewith
Continued.. Amity Business School
In Continuation:
Criticism of Ethnocentrism
-- Ethnocentric oriented companies ignore foreign market
and therefore loose great opportunities.
-- the product of the ethnocentric oriented company might
be of a very high quality, and might be accepted in other
world markets- (this is accepted in the first instance,
subject to certain limitation), but will the marketing
methods/ practices that is being followed in the home
country does not need any adaptation in any form? For
example if a- Benz Car or a Lincoln or a Ferrari or a
BMW is to be marketed in a ‘Third World’ country. A
critical examination is required.
Continued.. Amity Business School
In Continuation:
The Polycentric Orientation:
-- Opposite of Ethnocentrism .
-- It views each country as unique.
-- Each subsidiary is to develop its own
unique business.
-- Each subsidiary to develop its own
marketing strategies to succeed in its own
right.
Continued.. Amity Business School
In Continuation:
The Regiocentric Orientation:
-- Management views regions as unique.
-- Management seeks to develop an integrated
regional strategy, to market product/services- in
the particular identified region.
-- Regions are considered to be one- i.e.
consumers having one taste, choices,
preferences, one regional identity etc.
-- NAFTA, EU, SAARC etc are examples.
Continued.. Amity Business School
In Continuation:
The Geocentric Orientation:
-- The Company views the entire world as a
potential market.
-- Company strives to develop integrated world
market strategies.
-- It views similarities and differences in markets
and countries.
-- It seeks to create a global strategy- responsive
to local needs and wants.
Continued.. Amity Business School
In Continuation:
International trade defined:
Simply explained international trade refers to trade
between countries/nations/state’s. It is always
compared with inter-regional trade- meaning
trade between different regions within the same
country.
NB: Here little attention is given to the
company level marketing methods and
strategies
International trade contd.. Amity Business School
In continuation:
The Fundamental basis of International Trade:
It lies on the fact that different countries of the
world are endowed by nature with different
elements of productive powers. Factor
endowments are unevenly distributed among the
countries of the world. For example- West
Bengal in India for the production of Jute, Arab
countries for oil resources etc.
Continued.. Amity Business School
In continuation:
Is International Trade Inevitable?
In Continuation:
Other Factors affecting International Trade:
1. Stage of economic development
2. Accumulation of capital by a nation
3. Foreign investments by a nation
4. Technological progress
5. Trade
6. Finance regulations
7. Political affiliations- etc.
International Trade Theories Amity Business School
A. Theory of Mercantilism:
Capitalism continued:
--Under capitalism, all farms, factories and other
means of production are the property of private
individuals and firms. They are free to use them,
with a view to making profit or not to use them, if
it so suits them.
-- Desire for profit is the main motive behind the
capitalist economy system.
-- In a capitalist economy everyone is free to take
up any line of production he likes and is free to
enter into any contract with other fellow citizens
for his profit.
Continued.. Amity Business School
Socialism Defined:
Based on the command allocation system or the
so called Central Plan allocation system,
socialism is an alternative to capitalism. In a
nutshell, it implies social ownership of means of
production. Here the major instruments of
production is under the state control, so that the
economy is run for social benefit rather than
private profit.
Continued-----
Continued.. Amity Business School
Balance of Payments :
-- Balance of Payment or BOP, is a
comprehensive record of economic
transactions of the residents of a country
with the rest of the world during a given
period of time.
-- The system generally adopted for
recording transactions is the ‘Double
Entry Book- Keeping System’
Continued.. Amity Business School
Importance of BOP:
Every nation carrying out economic
transactions with foreign countries prepare
its BOP accounts periodically :
-- To know/taking stock of its assets and
liabilities.
-- To know its receipts from and payment
obligations to the rest of the world.
Continued.. Amity Business School
A. CURRENT ACCOUNT
B. CAPITAL ACCOUNT
Continued.. Amity Business School
TRADE PATTERNS :
• Merchandise trade. i.e. trade in
commodities- a visible trade
• Services trade, i.e. intangible items for
example human resources skills etc, is
an invisible trade.
Continued.. Amity Business School
Chief Characteristics of an
ECONOMIC UNION
1. Unified central bank.
2. Common policies on agriculture.
3. Social services and welfare.
4. Transport services requirement.
5. Regional development.
6. Taxation policy.
7. Single currency
8. Construction and building infrastructure.
9. Political unity requirements.
Continued.. Amity Business School
Objectives of GATT:
A. Establishing Standards for the non-
discriminatory commercial policies of the
contracting parties.
B. Settling trade disputes and encouraging
mutual consultation between nations.
C. Discouraging non-tariff barriers and sponsoring
tariff reductions.
D. Meeting the above through a series of
multilateral negotiations and rounds.
THE WTO Amity Business School
IMPORTANT
It should never be forgotten that
companies/firms/corporations/business
enterprises are not allowed to make complaints
to the WTO. They must persuade a government
to do so, for it falls under the world trade laws of
WTO, to be accepted by one and all, and the
international economic protocol so desires, to be
respected in toto. NB: WTO is also charged
with advancing the agenda of free-trade with
new trade rounds.
Continued… Amity Business School
SAARC: --
-- South Asian Association for Regional
Cooperation. The first South Asian summit
held in Dhaka, Bangladesh in December 1985,
culminated in the formation of the South Asian
Association for Regional Co-operation.
-- Members of SAARC are: India, Bangladesh,
Pakistan,Sri Lanka, Bhutan, Nepal and
Maldives.
Continued… Amity Business School
Direct Export:
Foreign Production:
A. Licensing represents a simple way for a
manufacturer to become involved in international
marketing. Here the licensor licenses a foreign
company to use a manufacturing process,
trademark, patent, trade secret, or other item of
value for a fee or royalty.The licensor gains entry
into the foreign market at little risk; the licensee
gains production expertise or a well-known
product or name without having to start from
scratch.
Continued… Amity Business School
BASIC CONCEPTS
Product Defined :
-- A product is often considered in a
marketing sense that can be offered to a
market for attention, acquisition, use or
consumption – that may satisfy a want or
need. Continued……
Continued … Amity Business School
Marketing of Products
Products that are marketed include:
-- Physical Goods such as automobiles, books
etc.
-- Services such as engineering services,
marketing services.
-- Persons such as Amitabh Bacchan, Aishwarya
Rai, Sachin Tendulkar etc.
-- Places such as Delhi, Agra, Jodhpur etc.
-- Organizations such as AIIMS, Escort Heart
Research Institute, NGO’s etc.
Continued… Amity Business School
Brand Defined:
A particular product, or a line of products,
offered for sale by a single producer or
manufacturer and made easily
distinguishable from other similar products
by a unique identifying name and or a
symbol or term.
Continued… Amity Business School
Brand Image :
The perception of a product formed in the
mind of the consumer which is the result of
the symbols and meanings associated
with a particular brand. Advertising is often
employed to create brand image: e.g.
automobile advertising on television
commonly sells a lifestyle rather than a
mode of transportation.
Continued… Amity Business School
Brand Marketing :
Brand Name :
Brand Position :
LOCAL PRODUCTS :
National products
-- Product that is offered in a single national
market
-- Product specially developed for a
particular country.
-- Products that are not sold outside the
home country.
Continued … Amity Business School
International Products :
-- Offered in multinational and regional markets.
-- A multiregional product can become an
international product.
[The Gist is that initially a product can be a great
player in a regional market, and having the
quality to become an international player, it can
come out of the regional market, and can also
be a player and thus marketed into other
targeted world markets- through the route of
acquisition or joint venture or any other specific
route.]
Continued … Amity Business School
Important:
The concept of Global Products revolves
around the concept of Global Brands.
Please Note:
A product is not a brand. Any Global brand
like the generic concept of brand has a
general perception and image.
Continued… Amity Business School
IPLC Theory
The understanding
The entire result of the great game of the
stages encircled with its particular
characteristics- is governed by the fact that
in the end the initiating country and the
advanced nations become a victim of its own
creation.
NB: The IPLC is examined from the marketing
perspective, and marketing implications for both
innovators and initiators are taken from the
paradoxical angle of marketing only.
Continued… Amity Business School
Stages of IPLC
The stages of international product life cycle
begins from Stage 0 to Stage 4.
STAGE 0 --- Local Innovation
STAGE 1 --- Overseas Innovation
STAGE 2 --- Maturity
STAGE 3 --- Worldwide Imitation
STAGE 4 --- Reversal
Continued… Amity Business School
Why USA…….?
Since many of the products found in the world’s
markets were originally created in the USA,
before being introduced and refined in other
countries and in most instances, regardless of
whether a product is intended for later export or
not, an innovation is initially designed with an
eye to capture the US market, the largest
consumer nation in the world.
Continued… Amity Business School
Stage 0 …………….
-- At this stage firms in advanced nations
have both the technical know-how as
well as abundant capital to develop
new products.
Continued… Amity Business School
Important:
It is at this stage only that, the innovating
firm will look to overseas market in order
to expand its sales and profit.
-- Stage 1 is also called as the
‘Pioneering Stage’ or ‘International
introduction’ stage.
Continued… Amity Business School
Competition in Stage 1
--Competition at this stage usually comes from
US firms, since firms in other countries may
not have much knowledge about the
innovation.
-- Production costs tend to decrease at this
stage for the competitive firms, because by
this time the innovating firm will normally
have improved the production process.
Continued… Amity Business School
Stage 2 – Maturity
-- Growing demand in advanced nations,
will lead firms to conceptualize the
product, and learn to make it in their
home country.
-- Local production will start in advanced
nations
Continued… Amity Business School
Stage 2 …… continued..
-- Competition grows more at this stage.
-- More players in the market place.
-- Innovating firm’s sales see the light of the start
of suffering, at the cost of advanced nations
products, but still the export level remains stable.
-- The LDC’s now enter the imitation field.
-- Introduction of the product in LDC’s helps offset
any reduction in export sales to advanced
nations.
Continued… Amity Business School
Stage 4– Reversal
-- In this stage two functional characteristics
makes appearance
A. Product Standardization
B. Comparative Disadvantage
Continued… Amity Business School
PRODUCT POSITIONING
Continued… Amity Business School
Positioning defined
1. ATTRIBUTE OR BENEFIT
2. QUALITY / PRICE
3. USE / USER
4. HIGH-TECH POSITIONING
5. HIGH-TOUCH POSITIONING
NB: 1,2 and 3 are considered to be general
product positioning tenets, whereas 4
and 5 are two special positioning that is
considered for international product.
Continued… Amity Business School
High-Touch Positioning
Here more emphasis is given on IMAGE.
Examples:
A. Products solving a common problem, such
as thirst problem solved by a cola drink, coffee
drink, etc. a birthday cake, a birthday card etc.
This category actually uses ‘products important’
from day to day particular important moments /
special moments of life.
Continued… Amity Business School
Introduction
Companies can pursue three generic basic global
strategies to penetrate foreign markets:
1. STRAIGHT EXTENSION i.e. adapting the same
product or communication policy used in their home
market.
2. ADAPTATION STRATEGY i.e. adapting as per the
market situation. This enables the firm to cater to the
needs and wants of its foreign customers.
3. INVENTION STRATEGY i.e. products are designed from
scratch for the global market place.
Continued… Amity Business School
• Standardization means:
--- Offering a uniform product on a regional
or world wide basis.
--- Minor alternations are usually made to
meet local regulations or market
conditions
-- A standardized / uniform product
capitalizes on the common platform
requirements across countries.
Continued… Amity Business School
Customization means
Under customization process management
focuses on cross-border differences in the
needs and wants of the firms target
customers. Under customization,
appropriate changes are made to match
local market conditions.
Continued… Amity Business School
Most important:
Each group of companies in which the
item is to be sold, the company needs
to identify towns, cities, or rural
locations that possess characteristics
as near as possible to the averages for
the region as a whole.
DUMPING Amity Business School
Important characteristics
-- Gray market channels refer to the legal export / import
transactions involving genuine products into a country by
intermediaries other than the authorized distributors.