NATURE OF INTERNATIONAL
MARKETING
1
What is Marketing?
 Marketing function charged with defining
target markets and determining the
BEST way to satisfy their needs and
wants competitively and profitably
2
What is International Marketing?
 “Performance of business activities
designed to plan, price, promote, and direct
the flow of a company’s goods and services
to consumers or users in more than one
nation for a profit”
3
What is International Marketing?
 It is a multinational process of planning and
executing
the
conception,
pricing
,promotion, and distribution of ideas, goods,
and services to create exchanges that
satisfy
individual
and
organizational
objectives
AMA
4
International marketing vs.
Domestic marketing
Foreign environment
(uncontrollable)
1
Political/legal
forces
7
1-5
Cultural
forces
Domestic environment
(uncontrollable)
Political/
legal
forces
(controllable)
Price
Promotion
6
Geography
and
Infrastructure
Economic
forces
2
Competitive
structure Competitive
Forces
Product
Channels of
distribution
7
Level of
Technology
Economic climate
5
4
Structure of
distribution
3
Environmental
uncontrollable
country market A
Environmental
uncontrollable
country
market B
Environmental
uncontrollable
country
market C
5
International trade
 Flow of goods and capital across national
boarders
No specific attention for marketing intervention
6
Exporting vs. International Marketing
Exporting
International Marketing
Process is narrower like selling Broader managerial process
Supply an order
Distant end-user
Up & Down demand patterns
Trading-oriented only
Diagnostic studies
-Who is buyer?
-What is the Market?
-Opportunities, Channels etc.
Not always a long term activity Long-term activity
Market patterns, demand etc.
cannot be considered short-term.
Legal & other protection
Legal & other protection
Minimum level
Higher level
Strategic decisions are less involved
Long term corporate
patterns/strategies are considered 7
Exporting
International Marketing
Customer satisfaction is not
considered
The only marketing mix
element to tailor is the Place
Customer satisfaction is a
major concern
4P ‘s are manipulated to tailor
the offer according to the
target market’s requirements.
8
The Internationalization Process
 Management is not interested and would not
even fill an unsolicited order.
 Management is willing to fill solicited orders
but makes no effort to explore the feasibility
of active exporting.
 Management actively explores the feasibility
of exporting.
9
 The firm exports experimentally to some
psychologically close country.
 The firm is an experience exporter to that
country.
 Management explores the feasibility of
exporting to additional countries,
psychologically more distance.
10
Management orientations
Ethnocentric
Home country is superior
See similarities in foreign countries
Regiocentric
See similarities and differences
in a world region
Polycentric
Each host country is unique.
See differences in foreign countries
Geocentric
Worldview.
See similarities and differences
in home and host countries
11
International Product Life Cycle
12
13
Stage 0- Local Innovation

Innovations in highly developed countries
1.
2.
3.
4.
Consumers are affluent
Unlimited wants
Technological know how
Abundant capital
14
Cont…

Products are first introduced to the local
market.
1. Markets are familiar with local desires and
market conditions
2. Risk is smaller
3. Products may require modifications after
introduction
15
Stage 1 – Overseas Innovation




New product is well developed
Original market well cultivated
Local demands adequately supplied
Look to overseas markets specially other
advanced nations
 Competition among U.S. firms.
 Production cost decreases- Economies of scale
16
Cont…
 Heavy cost for educating customers
 More export from U.S.
 More imports from other advanced nations
17
Stage 2 - Maturity
 Local production in other advanced nations
 Demand from LDC’s
 Innovating firm’s exports will still keep stable.
18
Stage 3 – World wide Imitation
 Innovating firm’s export begins to decline
 Low production will increase the cost.
 U.S. production for local consumption.
 Advanced nations export product through
differentiation.
19
Stage 4 - Reversal
 LDC’s provide products to the whole world
 Low labor cost in LDC’s
20
stage
Import/export
Target market
Competitors
Production cost
Local
innovation
none
U.S.A
Few: local
firms
Initially high
Overseas
innovation
Increasing
export
U.S.A. and
other advanced
nations
Few: local
firms
Declining due
to economies of
scale
Maturity
Stable export
Advanced
nations and
LDCs
Advanced
nations
Stable
World wide
imitation
Declining
export
LDCs
Advanced
nations
Increase due to
lower
economies of
scale
Reversal
Increasing
import
U.S.A
Advanced
nations and
LDCs
Increase due to
comparative
disadvantage
21