Download International*Marketing* *

International*Marketing*
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Exam*Revision*
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Topic*1:*Role,*Scope*&*Importance*of*International*Marketing*
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International*Marketing:*
• The"process"of"planning"and"undertaking"transactions"across"national"boundaries"that"involve"
exchange"
• Involves"taking"the"marketing"mix"across"international"borders"
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Drivers*of*International*Marketing:*
• Market"needs"
o Transcend"international"boundaries/new"needs"and"wants"
o Often"created"by"promotion"
• Technology"
o No"cultural"boundaries"apart"from"application"eg"iPhone"
• Cost"
o Economies"of"scale"drive"costs"down"
o Cost"pressure"
o Need"to"reach"bigger"markets"
• Government"
o Policies"and"measures"that"facilitate"international"involvement"
• Communication"
o Rapid"diffusion"and"innovation"–"little"time"delay"between"markets"
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Holistic*Marketing:*
• In"marketing"everything"matters;"consumers,"employees,"competition,"government*
• Includes:*
o Relationship"marketing:"relationships"with"key"partners*
o Integrated"marketing:"Programs"to"create"and"deliver"value*
o Internal"marketing:"So"everybody"in"company"is"driven*
o Social"responsibility"marketing:"Broader"ethical"social"context*
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Classification*of*Firms:*
• Ethnocentric"Orientation"
o Approach"in"home"country"is"applies"in"every"country"–"no"adaptation"
• Polycentric"orientation"
o Each"country"is"different"and"should"have"its"unique"marketing"approach"
• Regiocentric"Orientation"
o Views"the"region"as"the"market"and"develops"region"based"strategies"
• Geocentric"Orientation"
o Views"the"world"as"the"market"with"the"flexibility"to"respond"to"local"needs"and"wants"
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Restraints*in*International*Marketing:*
• Differences"between"national"markets*
o Need"to"adapt"marketing"mix"due"to:*
! Economic"development*
! Culture*
! Legal/political"requirements*
• Controls"over"entry"and"access"to"national"markets*
o Tariff"bariers"to"support"local"businesses*
• Actual"or"perceived"risk*
o Commercial,"crossQcultural,"country,"financial*
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Risk*in*International*Marketing:*
• Commercial"risk"
o Weak"partner" "
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○ Competitive"intensity"
o Timing"of"entry" "
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○""""Poor"execution"of"strategy"
• Financial"risk"
o Foreign"taxation"
o High"transfer"pricing"
• Country"risk"
o Social/political"unrest"
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○""""Market"access"
o Economic"mismanagement"
○ Government"intervention"
• CrossQcultural"risk"
o Cultural"distances""
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○""""Decision"making"styles"
o Negotiation"patterns"
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○ Ethical"practices""
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Concepts*Underlying*International*Marketing:*
• Comparative"Advantage"
o Countries"should"focus"on"what"they"do"well"rather"than"trying"to"produce"everything"
• Product"lifecycle"extension"
o As"a"product"matures,"firms"seek"international"markets"in"which"the"product"is"still"in"
earlier"stages"
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Topic*2:*Deciding*Which*Market*to*Enter.*
Addressing*the*Economic*&*Financial*Environment*for*International*Trade*
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Recent*Trends:*
• Increase"global"markets"and"competition"
"""""World"economy"effects"local"economies"
• Reduction"of"trade"barriers"
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"""""Growth"of"eQcommerce"
• Increase"in"manufacturing"productivity"
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Measuring*Environments:*
• Income""
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•""""Physical"quality"of"life"(life"expectancy,"literacy"rate)"
• Population"
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•""""Debt"(ability"to"borrow,"attractiveness,"interest"on"debt)"
• Geography"
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•""""Resources"(influences"source"and"diversity"of"export"income)"
• Infrastructure"(energy,"transport,"communication)"
• Purchasing"Power"Parity"(PPP)"–"how"many"units"of"currency"are"needed"to"buy"in"country"A"
what"one"unit"of"currency"will"buy"in"country"B."Shows"the"purchasing"power"
Marketing*Implications*–*Need"to"monitor"environment"of"both"global"&"country"basis."Importance:"
• Target"specific"markets" "
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•""""Marketing"mix"
• Identify"most"important"segments"
•""""Market"potential"
• Entry"strategy"
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Financial*Environment*
• Affects"relations"and"marketing"opportunities"between"countries*
• Rates"of"exchange"fluctuate"and"are"influenced"by"economic"and"political"factors*
• Having"transactions"in"foreign"currencies"involves"risk*
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Financial*Management*–*Source*of*Funds:*
• Banks""
o Provide"financing"depending"on;"relationship"with"exporter,"nature"of"transaction,"
perceived"risk,"availability"of"insurance"
o Often"don’t"insure"in"promising"or"emerging"markets"
• Government"
o When"risks"aren’t"commercially"insurable,"or"the"gov."decides"that"it’s"in"the"nation’s"
best"interest"to"fund"sales"to"a"country"with"a"high"credit"risk,"it"may"extend"a"loan"
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Financial*Management*–*Coping*with*Recession:*
• Pull"out"–"shortQterm,"easy"option"with"long"term"consequences"eg"untrustworthy"in"Asia*
• Emphasise"product"value"–"despite"recession,"people"want"to"maintain"lifestyle*
• Repackage"goods"–"Make"smaller"and"therefore"more"affordable*
• Maintain"stricter"inventory"–"reducing"unnecessary"inventory,"and"improving"product"range*
• Look"outside"region"for"expansion"opportunities*
• Increase"advertising"in"the"region*
• Increase"local"procurement"–"local"sourcing"is"cheaper*
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International*Political*and*Legal*Environment*
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Role*of*the*Government*in*International*Marketing:*
• Participator:"
o Commercial"activities"undertaken"by"government"(education,"health,"transport,"
defence,"infrastructure)"
• Facilitator:"
o Facilitate"marketing"through"export"incentives"
o Operate"as"facilitator"to"overseas"business"
• Regulator:"
o Government"planning"activities"(influence"funding,"tax,"export"&"import"standards"and"
controls"
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Political*Risk:*
• General"Instability"Risk"–"internal"threats;"revolution,"external"threats;"invasion*
• Ownership"Risk"–"risk"to"property"and"expat"employees*
• Operating"Risk"–"Interference"from"company"overseas*
• Transfer"Risk"–"Prevention"of"moving"funds"between"countries*
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Legal*Environment:*
• Countries"differ"in;"legal"systems"&"laws,"degree"to"which"law"is"applied,"dispute"settlement"
• Legal"complexities"are"greater"for"international"trade"than"domestic"
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Impact*of*Law*in*Marketing*Mix:*
• Product"–"Laws"to"protect"consumers*
• Price"–"Price"control"(tariffs,"profit"margins)*
• Distribution"–"Regulations"for"physical"distribution,"nature"of"channel*
• Promotion"–"Prohibition"of"advertising,"words"or"expressions*
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Marketing*Implications*of*Legal*Risk:*
• Differing"laws"in"host"country"
• International"law"may"prevent"international"marketing"activities"
• Different"legal"systems"and"approaches"to"interpretation"
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