International marketing

UIAMS, Panjab University Chandigarh Session 2

Evolutionary process of global marketing

Domestic marketing :

Marketing Focus Orientation Marketing Mix Decisions

domestic ethnocentric focussed on domestic customers

Evolutionary process (contd)

Export marketing:

Marketing Focus

overseas (targeting and entering foreign markets)

Orientation Marketing Mix Decisions

ethnocentric focussed mainly on domestic customers overseas marketing-generally an extension of domestic marketing decisions made at headquarters

Evolutionary process (contd)

Multinational marketing:

Marketing Focus

consolidation of operations on regional basis gains from economies of scale

Orientation Marketing Mix Decisions

regiocentric product standardization within regions but not across the region

Major obstacles of IM
SRC

Unconscious reference to ones on cultural values, experiences as a basis for decision making

ethnocentrism

The notion that ones own culture or company knows best how to do things

Adaptation
Adaptation is conscious effort on part of the international marketer to anticipate the influences of both the foreign and domestic uncontrollable factors on a marketing mix and then to adjust the marketing mix to minimize the effects.

Continue
Your SRC can prevent you from being aware of cultural differences or from recognizing the importance of these differences. Example: Esso, the brand name of a gasoline, was a successful name in the US and would seem harmless enough for foreign countries, however in Japan, the name phonetically means stalled car, an undesirable image for gasoline.

continue..
Strategy to isolate self-reference criteria
Step 1: define the business problem or goal in terms of the home-country traits, habits or norms Step 2: define the business problem or goal in terms of the foreign country cultural traits, habits, or norms Step 3: isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem Step 4: redefine the problem without the SRC influence and solve for the optimum business goal situation

EPRG concept

ethnocentric orientation polycentric orientation regiocentric orientation geocentric orientation

Major implications of WTOs multilateral trade regime

Security of access of international markets Stability of access to international markets Implications for importers of raw materials and other inputs

From GATT to WTO

Year 1947 1949 1951 1956 1960-61 1964-67 1973-79 1986-94 Round/Name Geneva Annecy Torquay Geneva Dillon Kennedy Tokyo Uruguay Countries 23 13 38 26 26 62 102 123 Average Tariff Cut (%) 35 NA 25 NA NA 35 33 36

Functions of WTO
Facilitates the implementation, administration, and operation of the trade agreements Provides a forum for further negotiations among member countries on matters covered by the agreements as well as on new issues falling within its mandate Responsible for the settlement of differences and disputes among its member countries

Functions

(contd)

Responsible for carrying out periodic review of the trade policies of its member countries Assists developing countries in trade policy issues through technical assistance and training programmes Encourages cooperation within the international organization

Principles of multilateral trading system under WTO

Trade without discrimination
Most-Favoured Nation (MFN) treatment National treatment
Gradual move towards freer markets through negotiations Increased predictability of international marketing environment Promoting fair competition in international markets

WTO agreements
An umbrella agreement (the agreement establishing WTO) Agreements for each of the broad areas of trade covered by WTO
goods services intellectual Property

Dispute settlement Review of governments trade policies

General Agreement on Tariffs and Trade (GATT)

Increasing opportunities for goods in international markets Creating marketing opportunities in the industrial section Reduction in Tariffs Tariffs Bindings Creating fairer markets in agriculture sector Elimination of non-tariff measures through the ratifications process Binding against further increase of tariffs Domestic support Export subsidies Opening up marketing opportunities in textiles

Standards and safety measures for international markets

Agreement on Sanitary and Phytosanitary (SPS) Measure sets out the basic rules on food safety and plant health standards Agreement on Technical Barriers to Trade (TBT) ensures that regulations, standards, testing, and certification procedures do not create unnecessary obstacles to trade

General elements of GATS

General Agreement on Trade in Services (GATS) are first and only set of multilateral rules governing international trade in services The main text containing general obligations and disciplines Annexes dealing with rules for specific sectors Individual countries specific commitments to provide access to their markets and also indicting sectors where countries are temporarily not applying the MostFavoured-Nation principle of non-discrimination

Complexity of international trade in services

Trade in services is much more diverse compared to trade in goods and GATS address this diversity through rules governing: movement of natural persons financial services telecommunications air transport services

Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)

Lays down minimum standards for the protection of intellectual property rights as well as the procedures and remedies for their enforcement. It establishes a mechanism for consultations and surveillance at the international level to ensure compliance with these standards by member countries at the national level.

Curbing unfair marketing practices

Agreement on anti-dumping practices (ADP) allows governments to act against dumping where there is genuine injury to the competing domestic industry
Procedure to initiate dumping:

- governments should be able to show that dumping has taken place - calculate the extent of dumping - demonstrate that dumping is causing injury or threatening the local industry

Top ten users of anti-dumping measures 1995-2003

2500 2000 1500 1000 500 0

379 329 274 180 166 163 122 109

2416

73

72

European Union

Canada

South Africa

India

Mexico

Country

All countries

Emergency protection from imports

A WTO member may restrict imports of a product temporarily (take safeguard actions) if its domestic industry is seriously injured or threatened with injury caused by a surge in imports The WTO agreements on safeguards prohibit greyarea measures, and it sets time limits ( a sunset clause) on all safeguard actions

The implications of WTO on international marketing

Binding of concessions and commitments Valuation of goods for customs purposes (Agreement on Customs Valuation) Use of pre-shipment inspection services (Agreement on Pre-shipment Inspection) Import licensing procedures (Agreement on Import Licensing Procedures) Rules applicable to exports Anti-dumping and countervailing action

THANK U!