Introduction to International Marketing
 Benefits of International Markets
 Market
 A market can be defined simply or rather
complexly.
 In the simplest terms, a market is a system of
institutions, rules and procedures relating to the
exchange of goods and services between persons or
organizations.
Benefits of International Markets

Markets can be defined in different ways,
including by geography, customer, product or even
the behavioral characteristics of consumers.
Benefits of International Markets
 An international market is defined geographically as a
market outside the international borders of a company's
country of citizenship.
 A company, to the extent that it is a legally distinct entity
from its owners like a corporation, is usually a citizen of the
country where it is organized.
 IBM, for example, was formed in the United States. Thus,
any geographic area outside the territorial boundaries of
the United States where IBM conducts business is IBM's
international market.
Benefits of International Markets
 The conceptual opposite of an international
market is the company's domestic market, which
is the geographic region within the national
boundaries of company's home country.
Benefits of International Markets
 International marketing is the performance of
business activities to plan, price, promote and direct
the flow of a company’s good and services to
consumers or users in more than one nation for a
profit.
 Marketing concepts, processes and principles are
universally applicable and the marketer’s task is the
same whether doing business in Pakistan or United
Kingdom.
Benefits of International Markets
 We all know business goal is to make profit by
promoting, price, and distributing products for which
there is a market.
 The answer lie not with different concepts of
marketing but with the environment with in which
marketing plans must be implemented.
 The uniqueness of foreign marketing comes from the
range of unfamiliar problems and the variety of
strategies necessary to cope with different levels of
uncertainty encountered in foreign markets.
Benefits of International Markets
 Competition, legal restraints, government controls,
weather , fickle consumers and any number of other
uncontrollable elements can and frequently do affect
the profitable outcome of good, sound marketing
plans.
 The marketer cannot control or influence these
uncontrollable elements but instead must adjust or
adapt to them in a manner consistent with a
successful outcome.
Benefits of International Markets
 What makes marketing interesting is the challenge of
molding the controllable elements of marketing
decisions (product, price, promotion, distribution, and
research) with in framework of uncontrollable
elements of the market place(competition, politics,
laws, consumer behavior, level of technology, etc)
 Marketing plans changes or need to change
dramatically from country to country or region to
region.
Benefits of International Markets
 The difficulties created by different environments are
the international marketer’s primary concern.
The International Marketing Task
 The international marketer’s task is more complicated
than that of the domestic marketer.
 The international marketer deal different levels of
uncertainty, uncertainty is created by the
uncontrollable elements of all business environments
,(domestic and foreign) but each foreign country in
which a company operated adds its own unique set of
uncontrollable factors.
The International Marketing Task
 Marketing Decision Factors
 The successful manager constructs a marketing
program designed for optimal adjustment to the
uncertainty of the business climate.
 In the figure the inner circle represents the area under
control of the marketing manager.
 Assuming the necessary over all corporate resources,
structures and competencies that can limit or promote
strategic choice , marketer blends price, product,
promotion etc to capitalize on anticipated demand.
The International Marketing Task
 The second circle represents the aspects of the
domestic environment uncontrollable.
 These include home country elements that can have a
direct effect on the success of a foreign venture.
 They are political, legal, economic and competition.
 For example a political decision involving domestic
foreign policy can have a direct effect on a firm’s
international marketing success.
 The domestic economic climate is another important
home based un-controllable variable with far
The International Marketing Task
 Reaching effects on a company’s competitive position
in foreign market
 The capacity to invest in plants and facilities, either in
domestic or foreign market is to large extent a
function of domestic vitality .
 Competition with in the home country affects a
company’s domestic as well as international plans.
The International Marketing Task
 In addition to uncontrollable domestic elements, a
significant source of uncertainty is foreign
environment uncontrollable. [outer circle]
 A business operating in its home country feels
comfortable in forecasting the business climate and
adjusting business decisions to these elements.
 The process of evaluating the uncontrollable elements
in an international marketing program often involves
substantial doses of cultural, political, economic
shock.
The International Marketing Task
 Political and legal forces and the level of technology
are only two of the uncontrollable aspects of the
foreign environment .
 The uncertainty of different foreign businesses
environment creates the need for a close study of the
uncontrollable elements with in each new country.
Environmental Adaptation Needed
 To adjust and adapt a marketing program to foreign
markets, marketer must be able to interpret effectively
the influence and impact of each of the uncontrollable
environmental elements on the marketing plan for
each foreign market in which they hope to do
business.
 In broad sense the uncontrollable elements constitute
the culture; the difficulty facing the marketer in
adjusting to the culture lies in recognizing its impact.
Environmental Adaptation Needed
 The task of cultural adjustment, is the most
challenging and important one confronting
international marketer.
 In dealing with unfamiliar markets, marketers must be
aware of the frame of reference they are using in
making their decisions or evaluating the potential of
market.
 Frame of reference is a set of criteria in relation to
which judgments can be made.
 "the observer interprets what he sees in terms of his
own cultural frame of reference"
Environmental Adaptation Needed
 Cross cultural misunderstanding can also occur.
 Cultural conditioning is very important in any study of
the market system of different people, their political
and economic structures, religion, and other elements
of culture.
 foreign markets must constantly guard against
measuring and assessing the markets against the fixed
values and assumptions of their own culture .
.
The self-Reference Criterion and ethnocentrism
 Adaptation is a conscious effort on the part of the
international marketer.
 It is to anticipate the influences of both foreign and
domestic uncontrollable factors on a marketing mix
and then to adjust them.
 The primary obstacle to success is self criterion
reference and an associated ethnocentrism.
 The SRC is an unconscious reference to one’s own
cultural values, experiences and knowledge as a basis
for decision.
The self-Reference Criterion and ethnocentrism
 Closely connected is ethnocentrism that is notion that
people in one’s own company, culture or country know
best to do things.
 Ethnocentrism is generally problem when managers
from affluent countries work with managers and
markets with less affluent countries.
 Mostly reactions are based on meaning, values,
symbols, and behavior, relevant to own culture and
usually different from those of the foreign culture.
The self-Reference Criterion and ethnocentrism
 SRC can prevent you from being aware of cultural
differences or from recognizing the importance of
those differences.
 For example
 In US a polite refusal is certainly acceptable but in Asia
a host is offended if you refuse hospitality.
 Learning ever yculture in depth and being aware of
every important difference is almost humanly
impossible.
The self-Reference Criterion and ethnocentrism
 To avoid errors in business decisions , the
knowledgeable marketer will conduct a cross cultural
analysis
 This will help in isolates the SRC that influences and
maintain vigilance regarding ethnocentrism.
 The following steps are suggested as a framework for
such an analysis.
 Define the business problem or goal in homecountry cultural traits, habits or norms.
The self-Reference Criterion and ethnocentrism
 Define the business problem or goal in foreign-
country cultural traits, habits or norms through
consultation with natives of the target country.
Make no value judgments.
 Isolate SRC influence in the problem and examine
it carefully to see how it complicates the problem.
 Redefine the problem without SRC influence and
solve for optimum business goal judgment.
Developing Global Awareness
 Opportunities in global business abound for those
who are prepared to confront numerous obstacles with
optimism and willingness to continue new ways.
 To be globally aware is to have
 Tolerance of cultural differences.
 Knowledge of cultures
 History
 World market potential
 Global, economic, social and political trends.
Developing Global Awareness
 Example can be the former republics of the Soviet
Union, along with Russia , Eastern Europe, China,
India, Africa and Latin America are undergoing
economic, social and political changes that have
already altered the course of trade and redefined new
economic powers.
Developing Global Awareness
 Global awareness can and should be built in to
organizations using several approaches.
 Select managers specifically for their demonstrated
global awareness.
 Global awareness can also be obtained through
personal relationships in other countries