WHAT IS INTERNATIONAL MARKETING?

International marketing is the export, franchising, joint venture or full direct entry of a marketing organization into another country. This can be achieved by exporting a company's product into another location, entry through a joint venture with another firm in the target country, or foreign direct investment into the target country.

The development of the marketing mix for that country is then required - international marketing. It can be as straightforward as using existing marketing strategies, mix and tools for export on the one side, to a highly complex relationship strategy including localization, local product offerings, pricing, production and distribution with customized promotions, offers, website, social media and leadership. Internationalization and international marketing meets the needs of selected foreign countries where a company's value can be exported and there is inter-firm and firm learning, optimization and efficiency in economies of scale and scope. The firm does not need to export or enter all world markets to be considered an international marketer.

As technology creates leaps in communication, transportation, and financial flows, the world continues to feel smaller and smaller. It is possible for companies and consumers to conduct business in almost any country around the world thanks to advances in international trade. According to the World Trade Organization, the volume of international merchandise trade increased 33 times between 1951 and 2010.Brands and products that originate in one country are enthusiastically accepted in others. For example, Louis Vuitton handbags, BMWs, and Columbian coffee, all foreign products, are symbols of status and quality in the United States and many American brands, like Warner Brothers motion pictures, have similar footholds overseas.However, globalization has created just as many challenges as opportunities for brands that venture overseas. Because consumers have so many more options for similar products, companies must ensure that their products are high in quality and affordability. Additionally, these products cannot be marketed identically across the globe. International marketing takes more into consideration than just language it involves culture, market saturation, and customer behaviors. American and European companies especially have turned their international marketing efforts into something more than just exporting they have adapted their branding to account for differences in consumers, demographics, and world markets.Companies who have done this very well include Coca-Cola, who discovered that the word Diet carries a negative connotation in Latin America and changed the name of their zero-calorie product to Coke Lite for those countries. UPS, known in America for their brown trucks, issued a fleet of a different color after learning that their flagship brown trucks resembled Spanish hearses.

INTERNATIONAL MARKETING ENVIRONMENT

What a business is partly due to its environment. In other words everyness is a product of its environment. The influence of environment on business is significantly significant. Take the case of Indian business undertakings. Until 1991, they enjoyed a protective environment. They did not Ice interest in exports, in building competitive strength, in Research and development and the like. Now as economic liberalization is taking place, businesses address issues relating to total quality management, strategic like to meet competition, and so on, Thus as environment changes businesses change their perspectives, strategies, etc. There is no choice, but compulsion.Environment influences international marketing in four ways it provides opportunities to businesses, it poses threats, it strengthens and also it weakens businesses. Hence the significance of business environment.Opportunities are provided by environment. When the culture of a society needs rites, rituals and festivals, industries catering to these needs flourish. When home entertainment culture spreads, businesses in home-entertainment, viz. television, tape record players, etc. make good advances. When monetary policy is relaxed more capital at lesser cost is made available. When laws restricting foreign investment are relaxed, businesses can raise easy capital abroad, as some Indian businesses are doing now through issue of global depository receipts, Euro bonds, etc. Thus it is environment that provides opportunities. Opportunities must be seized timely and regularly.Threats are also posed by environment. When finance related laws are relaxed allowing businesses to raise capital freely, loca1 banking businesses find no takers for credit. Whim foreign companies set up businesses, local firms find the going difficult. The entry of foreign brands of soft drinks, TVs, etc., is a threat to local brands. The entry of Sony and Panasonic in India in 1995: is a threat to the local brands like BPL, Videocon, etc.

Environment also strengthens businesses. An environment that nurtures the culture of efficiency, competitiveness, innovation and growth makes businesses strong. Withdrawal of agro-subsides in rich countries, strengthens the agro-export industries in LDCs.And, environment can also weaken businesses. A policy of the government to protect businesses in effect makes them weak. Withdrawal of fertilizer-subsidy has weakened both the fertilizer and the agri-industries as they were earlier used to the comforts of protection.

FACTORS AFFECTING THE INTERNATIONAL MARKETING ENVIRONMENT

A Key Challenge For International Marketers Is To Develop A Good Understanding Of The International Business Environment. Identify The Key Environmental Factors That Are Of Importance To The Success Of International Marketing And Discuss Their Impacts On International Marketing Decisions.

Due to technological advances and rapid economic growth, the level of world trade has increased considerably over the last four decades. Motivated by the many rewards and opportunities international exchange offers, more and more countries and companies have become largely involved in international marketing. However, the implications entailed in this process of planning and conducting transactions across national borders are rather different to those companies usually have to face when conducting domestic .Differences in cultures, economic conditions, and governmental systems amongst countries mean that the marketing activities of companies taking their operations outside national borders are affected by a new series of environmental factors. In order to be successful at international marketing, it is vital that marketers attain a thorough understanding of these factors as they impact the international business environment and take them into account when carrying out decisions on marketing Various factors affecting marketing function.

The environmental factors that are affecting marketing function can be classified into:1) Internal environment 2) External environment

Internal Environment of Marketing:This refers to factors existing within a marketing firm. They are also called as controllable factors, because the company has control over these factors :

a) it can alter or modify factors as its personnel, physical facilities, organization and function means, such as marketing mix, to suit the environment.There are many internal factors that influence the marketing function, they are :

1. Top Management: The organizational structure, Board of Director, professionalization of management etc. Factors like the amount of support the top management enjoys from different levels of employees, shareholders and Board of Directors have important influence on the marketing decisions and their implementation.2. Finance and Accounting: Accounting refers to measure of revenue and costs to help the marketing and to know how well it is achieving its objectives. Finance refers to funding and using funds to carry out the marketing plan. Financial factors are financial policies, financial position and capital structure.

3. Research and Development: Research and Development refers to designing the product safe and attractive. They are technological capabilities, determine a company ability to innovate and compete.4. Manufacturing: It is responsible for producing the desired quality and quantity of products. Factors which influence the competitiveness of a firm are production capacity technology and efficiency of the productive apparatus, distribution logistics etc.,5. Purchasing: Purchasing refers to procurement of goods and services from some external agencies. It is the strategic activity of the business.6. Company Image and Brand Equity: The image of the company refers in raising finance, forming joint ventures or other alliances soliciting marketing intermediaries, entering purchase or sales contract, launching new products etc.In organization, the marketing resources like organization for marketing, quality of marketing, brand equity and distribution network have direct bearing on marketing efficiency. They are important for new product introduction and brand extension, etc..External Environment of Marketing.External factors are beyond the control of a firm; its success depends to a large extent on its adaptability to the environment.The external marketing environment consists of:A) Micro environment - The environmental factors that are in its proximity. The factors influence the companys non-capacity to produce and serve the market. The factors are:1. Suppliers: The suppliers to a firm can also alter its competitive position and marketing capabilities. These are raw material suppliers, energy suppliers, suppliers of labor and capital, the relationship between suppliers and the firm epitomizes a power equation between them. This equation is based on the industry condition and the extent to which each of them is dependent on the other.2. Market Intermediaries: Every producer has to have a number of intermediaries for promoting, selling and distributing the goods and service to ultimate consumers. These intermediaries may be individual or business firms. These intermediaries are middleman (wholesalers, retailers, agents etc.), distributing agency market service agencies and financial institutions.3. Customers: It is duty of the company to satisfy the people at large along with its competitors and the consumers. It is necessary for future growth. The action of the company does influence the other groups forming the general public for the company. A public is defined as any group that has an actual or potential interest in or impact on a companys ability to achieve its objective. Public relations are certainly a broad marketing operation which must be fully taken care of

B) Macro environment - Macro environment factors act external to the company and are quite uncontrollable. These factors do not affect the marketing ability of the concern directly but indirectly the influence marketing decisions of the company. These are the macro environmental factors that affect the companys marketing decisions: CULTURAL ENVIRONMENTCulture is the collective programming of the mind which distinguishes the members of one human group from another. Given that culture affects consumers' behavior, understanding cultural dissimilarities is crucial for the success of international marketing.There are high context cultures, such as the Japanese one, where the context is equally as important as the words used, and low context cultures, such as the North American one, where communication is often solely conveyed in words. Companies need to be aware of and adapt their marketing concepts to these differences as otherwise it can easily lead to misinterpretations in communication. They need to take into account the element of language which consists of a verbal (the words used and how they are spoken) and a non-verbal part (e.g. gestures and eye contact). The challenge for them is to attain both a thorough understanding of the language in terms of its technicality and the context in which it is used. In Japan, for example, IBM changed the classification number of its series 44 computer as the pronunciation for the word four is similar to the word death.A further important source of culture is religion. Marketers need to be aware of the differences between the main types of religion as well as the variations within them. In Hinduism, for example, people's capacity of consumption is determined by their status. Companies need to take this into account when making planning their marketing strategy. Also, as the main holidays are linked to religion marketers need to consider when they take place when planning marketing programs. The exchange of Christmas gifts, for example, occurs on 6th December in the Netherlands, whereas in other countries they are opened on 24th or 25th December.Also, companies need to take into account the values and attitudes of countries. The more these shared beliefs or group norms are embedded into the culture the more care companies have to take when implementing marketing activities. Societies that place a high value on tradition are more reluctant to change and may perceive foreign companies with skepticism. In Japan, for example, many bureaucrats feel that the consumption of foreign products is disloyal to their country.Another element of culture is aesthetics which determines what people find appropriate and what not. This can differ considerably from one culture to another meaning that marketers need to be aware of them and adapt their marketing concepts accordingly. Henkel's FA soap, for example, modified its advertisement spot for the North American market by having the model wear a bathing suit instead of being naked, as in the ad for the European market .Furthermore, it is important that managers understand the different manners and customs of countriesThere is also the element of education that needs to be taken into account. When designing products or services, for example, companies need to be aware of the level of intelligence of the consumer so they can adapt the complexity of the product or the service to the user.The best way for companies to overcome these cultural obstacles is to embrace the local culture. They need to take a localized approach by adjusting products to the markets, building relationships with locals and employing them. This allows marketers to gain information and experience at firsthand, attain an in-depth understanding of what influence consumer behavior in the market, and cooperate efficiently with employees, the government, and other local partners. This would also allow companies to avoid accusations of cultural imperialism, which happens when marketing approaches are seen as too radical. McDonald's and Coca-Cola, for example, have been accused of forcing American standpoints into other cultures and consequently had to deal with boycotts from consumers.

ECONOMIC ENVIRONMENT

International marketers equally need to be aware of economic factors when undertaking marketing decisions. Population figures provide a basic indication of the attractiveness of the market in terms of size and potential growth by looking at life expectancy, age distribution and population growth. They allow marketers to identify the segments and the geographical areas they should. Low population growth rates, for example, usually characterize highly economically developed countries with good disposal income.Also, income levels need to be taken into account as they provide an indication of the purchasing power of the market and allow companies to adapt their marketing concepts accordingly. A packaged goods company, for example, brought out a more economic version of its product in countries that have lower income levels by using cheaper raw materials. Nonetheless, marketers should not greatly rely on this indicator as there are certain types of products that because of the high value they create for the consumer are not affected by income levels. In China, for example, due to being a good upgrade for bicycles and a cheap alternative for cars, sales of motorcycles are high in the country despite the fact that the price of the product represents a high proportion of salary. Besides, marketers need to consider consumption pattern which allow them to identify the proportion of income that consumers spend on necessities, including food and rent, and consequently the proportion that is left to spend on less important areas of consumption, such as household goods and. Given that purchases in these areas can be cancelled or postponed unexpectedly, companies can determine the level of confidence in the market.Another important economical element is inflation as it strongly affects consumers' buying habits and ability to buy. In markets with high inflation rates companies need to modify their product making it less expensive to produce so that they can lower their prices to respond to customer needs and sustain demand.In addition, marketers need to consider the availability and quality of local infrastructure. Transportation, communication, and energy networks have an important effect on the company's functions. They also provide an indication for the demand of industrial products and services. The fact that two billion people live without electricity and that the access to a telephone is very limited in Asia, for example, informs industrial products and services companies that there are important marketing opportunities for them there.Furthermore, companies need to consider regional economic integrations as they can create both opportunities and benefits, and threats and problems for them. The European Union, for example, provides many benefits to companies operating within Europe, such as economies of scale thanks to the large single market. For non-EU companies, however, this integration may create problems. With the aim of protecting European farmers, for example, the EU has now and again imposed restrictions on the inflow of certain agricultural goods from the U.S.

A thorough understanding of these factors allows companies to obtain a good assessment of the market and reduces the possibility of implementing marketing concepts that could have disastrous results

POLITICAL AND LEGAL ENVIRONMENTThe political and legal environment of the company's home country, its host country and the general international environment also has important effects on the marketing activities of international companies.The politics and regulations of the company's home country can determine its opportunities outside national borders. One of the main types of regulation that international marketers need to be aware of are embargoes and sanctions which are used to distort the free flow of trade. They need to know where they are applicable and take them into account when planning marketing activities so that they do not breach them and face subsequent. Governments also employ export and import control systems. Export controls prevent or delay companies from selling their products in certain countries whilst import controls are used to protect and stimulate the domestic market. Marketers need to take them into account so they know where the company can do business and where it can obtain its supply from. Finally, governments may induct special measures to ensure that their companies behave in a correct manner in the international business environment. One of the major areas concerned is boycott, which is when companies reject to conduct business with someone. The government's control in this area can force companies to decide whether to stop transactions and lose profit or to continue trading and pay charges. The Arab nations, for example, have blacklisted a number of companies who conduct business with Israel. In response, the United States imposed several laws to prevent U.S. companies from complying with the Arab boycott as it has political ties with Israel. Companies may lose out to firms whose home country does not employ such measures. Nonetheless it is best to avoid adopting inappropriate behavior as it may lead to damages to the company's reputation, boycotts by consumers and cancellation of transactions. This might cost the company more money than it gained through adopting such behavior.Companies are also affected by the legal and political environment of the host country. Marketers firstly need to determine the level of political risk, i.e. the likelihood of political changes that could adversely affect the company, by looking at the host country's government, its political actions and its. U.S. companies, for example, who are a major target for terrorist attacks because of their home country's actions and capitalistic image, need to particularly take into account the stability of the host country . Marketers also need to be aware of the actions of the host country's government. Price controls, for example, which are used by the government to respond to inflation, can put international companies into a difficult situation where it has to decide whether to stop their operations or to carry on in the hope that the controls will be changed and they can regain the sacrificed profits. Companies also need to be familiar with the laws of the host country and the restraints they place on their operations. In France, Canada, Brazil, and Indonesia, for example, there are laws that restrict imports of U.S. entertainment to protect and preserve their cultural industries. However there are also laws that are aimed at assisting companies with their international operations, e.g. subsidies. Shortages of regulations can also create problems for companies, e.g. the lack of intellectual property rights in China. Therefore, companies need to attain a good understanding of how the country's legal and political systems work to reduce the impact of the problems they cause. By undertaking in-depth research on the country's history, culture and political setting before entering it allows companies to avoid making investments that could have disastrous outcomes. An in-depth knowledge of the country would also allow the company to anticipate, plan and adapt into the local community. Hiring locally, undertaking local charity work and joint ventures with local businesses show the government that the company cares about the local community and does not just see it as an object it can exploit. This reduces the amount of interference by the government giving the company more freedom in its operations.Marketers must also consider the overall international business environment. Relations between countries and governments have important effects on the operations of international companies. The U.S. government's differences with South Africa, for example, forced U.S. companies to leave their operations in the country. Relations between home and host countries are governed by bilateral agreements, as well as by multilateral ones between sets of. Marketers need to continuously monitor the international political environment keeping up to date with political affairs so that they can anticipate changes and plan and modify their marketing strategy accordingly. In terms of the legal environment, managers need to be aware of certain laws and treaties which because of the respect they receive from many countries have a strong influence on the way companies operate. The World Trade Organization, for example, gives an outline on the behavior that it finds acceptable from its member statesInternational marketers are faced with quite many and quite a range of factors in the international business environment that can have profound effects on their marketing activities. They need to be aware of the main sources of culture, such as religion, language, education, values and attitudes, aesthetics, and customs and manners. Given that they are embedded into societies and individuals it is necessary for companies to adapt their marketing activities to the market and not force a different standpoint on the consumer. International marketers also need to consider economic factors, such as population, income, inflation, economic integrations and infrastructure. They allow them to assess the attractiveness of the market and identify the segments and the geographical areas they should target. This reduces the risk of investing money in marketing activities in markets that are unprofitable. Finally, companies need to take into account the legal and political factors affecting the home country, the host country, as well as the overall international business environment. They need to be aware of the different governments, their political actions, their stability, and their relation with other countries, and constantly monitor them by keeping up to date with economic affairs around the world. This allows them to determine the level of political risk so that they can anticipate and plan for threats and take advantage of opportunities political changes offer them.

FACTORS INFLUENCING PRICING STRATERGY IN INTERNATIONAL MARKETING ENVIRONMENT

Some of the most important factors influencing pricing strategy in international marketing are as follows:Pricing decisions are complex in international marketing. A firm may have to follow different pricing strategies in different markets. Whatever might be the strategy followed, pricing has to reflect the proper value in the eyes of the consumer. Pricing is an important strategic and tactical competitive weapon that can be used by a firm in international marketing.It represents that element of the marketing mix, which is controllable by the firm to a large extent. A firm should integrate pricing strategies with the other elements of the international marketing mix.Choice of a pricing strategy is dependent on:1) Corporate goals and objectives2) Customer characteristics3) Intensity of inter-firm rivalry4) Phase of the product life cycleHaving considered the factors influencing the choice of strategy, let us now turn specifically to different strategies:Skimming Strategies:One of the most commonly discussed strategies is the skimming strategy. This strategy refers to the firms desire to skim the market, by selling at a premium price. Skimming refers to the objective of achieving highest possible contribution in a short time. To use this approach, the product has to be unique and the target market should be willing to pay the high price. Success of this strategy depends on the ability and speed of competitive reaction. A firm with a small market share can face aggressive local competition when using skimming. Maintenance of high quality requires lot of resources. If the product is sold cheaply at home, then the problems of gray market can surface.This strategy delivers results in the following situations: When the target market associates quality of the product with its price, and high price is perceived to mean high quality of the product. When the customer is aware and is willing to buy the product at a higher price just to be an opinion leader. When the product is perceived as enhancing the customers status in society. When competition is non-existent or the threat from potential competition exists in the industry because of low entry and exist barriers. When the product represents significant technological breakthroughs and is perceived as a high technology product.

In adopting the skimming strategy the firms objective is to achieve an early break-even point and to maximize profits in a shorter time span or seek profits from a niche.

Penetration Pricing Strategies:As opposed to the skimming strategy, the objective of penetration price strategy is to gain a foothold in a highly competitive market. The objective of this strategy is market share or market penetration. Here, the firm prices its product lower than the others do in competition. Penetration pricing uses deliberate low prices to stimulate market growth and capture market share. It can be useful when there is a mass market and price sensitive customers. Japanese companies increasingly resort to penetrative pricing due to intense local competition.This strategy delivers results in the following situations:

When the size of the market is large and it is a growing market. When customer loyalty is not high customers have been buying the existing brands more because of habit rather than any specific preferences for it. When the market is characterized by intensive competition When the firm uses it as an entry strategy Where price-quality association is weak.

Differential Pricing Strategies:This strategy involves a firm differentiating its price across different market segments. The assumption in this strategy is that different market segments do not communicate or have different search costs and value perceptions of the product. In other words heterogeneity in the market motivates a firm to adopt this strategy.

Geographic Pricing Strategies:This strategy seeks to exploit economies of scale by pricing the product below the competitors in one market and adopting a penetration strategy in the other. The former is termed as second market discounting. This second market discounting is a part of the differential pricing strategy where the firm either dumps or sells below its cost in the market to utilize its existing surplus capacity. So, in geographic pricing strategy, a firm may charge a premium in one market, penetration price in another market and a discounted price in the third.

Product Line Pricing Strategies:These are a set of price strategies, which a multi-product firm can usefully adopt. An important fact to be noted is that these products have to be related, in other words belonging to the same product family. Faced with multi-products and fluctuating demand, the firm may adopt a combination of the following strategies to effectively manage its product line or maximize its profits across the product line.

Price Bundling: This strategy is used by a firm to even out the demand for its product. This is useful strategy for perishable; time-bound products like food, hotel room or a seat on a flight and for products cannot be substituted, like the package of stereo music system. Off-season discounts and, season tickets for music festivals are examples of price bundling strategy. This is a passive strategy aimed at correctly bundling the prices of related items so that the firm is able to maximize its profits. Premium Pricing: This strategy is used by a firm that has heterogeneity of demand for substitute products with joint economies of scale. Consider the example of a colour television set. There are different models available with different features, like the one with a remote control and another without it. Both are substitutable and satisfy the customer needs. But the firm may opt to premium price the first model and position it as the top of the product line for high income or upper income group of customers or for whom communicating that they have arrived is important Image Pricing: This strategy is used when consumers infer quality from the prices of substitute models or competing products. The firm varies its prices over different brands of the same product line. This strategy is commonly used in textiles, cosmetics, toilet soaps and perfumes. Complementary Pricing: This strategy is used by a firm that has customers with high transaction costs for one or more of its products. Transaction costs are all those costs that a customer has to incur to buy the product, like the registration fees that a flat buyer has to pay in order to be a legal owner or the processing fees that the bank may charge to give a credit card to the customer. Captive Pricing Strategy: Here a special price deal is offered to loyal customers or those who are regularly buying one of the products of the firm. A typical example is the Gillette shaving system, which offers two twin blades free with its razor to induce the buyer to purchase its blades. Kodak adopted this strategy, when it offered a film roll free to all buyers who bought its camera. As may be observed this is a strategy aimed at building customer loyalty. Loss Leader Strategy: This is another example of complementary pricing strategy. This strategy involves dropping the price on a well-known brand to generate demand or traffic at the retail outlet.

Two-Part Pricing: This strategy is used by products that can be divided into two distinct parts. For example, membership of a video library has two parts one is the membership fee, which is annual and the other is rent for each time frame for which a videocassette is rented. As may be observed the price has two components, the fixed fees and the variables usage fees.

CASE STUDY: INTERNATIONAL MARKETING STRATERGIES OF STARBUCKS

Starbucks one of the most internationally renowned coffeehouse, based in Seattle, United States , specialises in buying , roasting and selling speciality coffee and coffee based drinks all over the world with the help of retail chain outlets. Starbucks, the worlds largest coffeehouse company earned the credit of altering the way people all around the world consumed and perceived coffee and this is the reason why Starbucks has always been under limelight globally. The swiftness in its growth, lead to its expansion internationally and it targeted international markets of Europe , Middle East , new Zealand, Australia, Asia-Pacific and Latin America. This international expansion needed strategic planning which could face the challenges and utilize the opportunities hidden in these markets for Starbucks to earn revenues.Here we are going to find out the problems and issues which Starbucks had to face while tapping the specialty coffee markets worldwide and what kinds of changes in the strategy already planned might prove beneficial for Starbucks in future. The first step towards diversification worldwide was to organize Starbucks in to two separate business units corresponding to organizations operational segments: North America and International. Thus in the year 1995 Starbucks Coffee International which was wholly possessed by Starbucks Coffee Company was created to handle the sole international businesses of Starbucks except for North America. Its main tasks included creating a niche for Starbucks by opening solely company owned, licensed and joint venture based retail stores worldwide. In order to be the leading coffeehouse all over the world Howard Schultz framed a distinct and unique Starbucks model whose goals is to Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining uncompromising principles as we grow. It is very important to mention that Schultz still considers Starbucks in growing stage worldwide as they plan to open one or two stores everyday all over the world. This clearly indicates his vision and the guiding principles on which the organization works. The few things which they ensure for permanent and long term growth of the stores are:

Securing the finest and high quality coffee Arabica beans from all over the world. Vertically integrating the roasting process of coffee beans just like an art form. Making a cup of coffee A Starbucks Experience and not just selling it. Building a unique culture of happy employees. Leveraging the brand using brand extensions and multiple channels of distribution International Marketing Strategies of StarbucksAfter expanding and growing in the U.S. markets, the need of the hour is global expansion for continuous growth of Starbucks and that is why International Marketing Strategies were being framed. Starbucks coffee International has hired multi lingual and multinational managers to work towards the worldwide expansion in a planned manner. This group has the responsibilities like: Developing new businesses Financing and planning new stores across the world Managing operation and logistics Merchandising Developing trained International mangers for Starbucks

Starbucks hold the honor of opening first non-North American store in Tokyo , Japan in 1996 and here its no-smoking policy served as an oasis in Japan and helped in creating a brand recognition in Japan. From 1996 off shore Starbucks stores are a force to wrecken with as now they have more than 7,800 units worldwide and mostly on the prime locations like shopping centers and airports.

Most of the products offered overseas are seasonal and locality specific across various countries. A global Marketing Strategy Mix has been designed for effective global growth and impact. This says:

Follow the same retailing formula all across the world

The product offerings are modified and catered to local tastes and it tries to make them according to the local taste.The advertising strategy of Starbucks is quite unique as it does not follow any international campaign or formula for advertising rather it focuses on using stores as their brand ambassadors. Thus the strategy of advertising is differentiated and localized rather than standard.It follows the store expansion very rapidly all over the world thus not giving any time to other local organizations to imitate their concept. They follow the strategy of Starbucks Everywhere approach while expanding their Follow extensive employee training and recruitment programs where they have a proper system of recruiting, hiring and training baristas and store managers.Focusing on the store design, planning and proper construction of the stores across the world. There is a broad range of formats which are adopted for store designs. Mostly the stores are located or planned in high traffic and high visibility and most prominent areas of the city.The bottom-line of the strategy is to spread the American flavor of coffee all around the world by developing a diverse international business portfolio along with profitability and growth. Thus Starbucks keeps on adding new stores and that too in all the prime locations across all the fastest growing economies of the world (Starbucks International Strategy, slideshare.net).

Starbucks does not introduce its products in one go; it follows the product innovation and introduction in phases. Thus introduces the whole range of products of coffee and tea one by one, so that all the products get visibility and the customers get to relish the taste of every product of Starbucks and then choose and decide their favorite one. Starbucks is selective about introducing certain specific products which are not introduced worldwide like the ready-to-drink coffee beverages in just few countries like Japan, Taiwan, and Korea etc. to increase its profits.Since North America just caters to just 20% of coffee markets so it was imperative for Starbucks to enter markets which had dedicated coffee and tea drinkers.

Framing a Starbucks way

According to US news and World report it has been found that venturing overseas, Starbucks has its own way. It first searches for local business associates in foreign countries and then does a test run by opening handful stores in trendy and chic districts with the help of well trained and experiences Starbucks managers. Then the local baristas are sent for a 13 week training program in Seattle. Now it starts opening stores by dozens in numbers while maintaining the same coffee line-up in each store. However the food is modified as per the local gourmet. Like in Britain it serves mince pies and even won awards for them, while in Asia it serves meat buns and curry pies. On the other hand the interior decor is also altered as per the local architecture mostly in the historical buildings.

While planning overseas expansions it has left the sole ownership strategy as adopted in North America, in other countries they go for local partnerships. The main focus and the key point which is followed during international expansion is partnership first, country second. The main policy that they follow is to establish local connection for getting everything done and working. The main focus is to hit upon the apt local partner who can help in negotiations with local regulations and other country specific issues. They search for partner who carries the same values, goals and culture related to effective community development. The main features that they are interested in local partners are:Parallel guidelines regarding the corporate citizenship, shared values and commitment to business for long term just like Starbucks. Vast multi unit restaurant experience in the industry. Extensive financial resources so that they can expand the concept of Starbucks with a jet speed before competitors imitate it. Unparalleled real estate experience along with great knowledge too, in order to pick and choose prime locations in real estate. Good knowledge of retail market Strong commitment to the Starbucks project along with the availability of people.In case of Starbucks way of international ventures they give the partners whole sole responsibility of preparing and selection work and that includes the store sites too. Then the Starbucks retains the rights to approve the location. Then after entering the new market they start searching for different things and start brand building for Starbucks. The stores are treated as biggest means of advertising as they do not spend extra cot on advertising anywhere.Then they start looking for sites which have high visibility like well and heavy traffic areas focusing on major points like:i) Demographic factorsii) Branding potentialiii) Financial aspectsiv) Establishing Starbucks as International Brand Worldwide

According to Business Week (2000) it has been highlighted that Starbucks has been rated the topmost brand amongst top 100 all over the world and has never faltered, satisfying millions of customers. Starbucks franchises worldwide only if it has to contribute less than 20% of the gross income of the franchisees and are not diluting the brand image. They could easily foray into the Japanese markets as Japan is the country which adopts American culture like Blue Pepe jeans and Coca Cola was accepted very easily but finding a market for paper cups and coffee in tea dominated country was a task but around 30% of Japanese now adopt the nonsmoking policy and carry takeaways in throwaway cups (Starbucks International Strategy, slideshare.net).Similarly they had to cater to the historical cafe culture driven markets of France but Starbucks caramel coffee created its magic over there too. Chinese traditional market which is highly dominated by tea is also going crazy for Starbucks coffee as the young generation wants to flaunt their lifestyle and status through these expensive luxuries like Starbucks coffee.Starbucks Cultural DiversityIt follows the rule of creating human connections by involving the whole community and celebrating all the cultures in each and every country. That is why it has become the most diversified and admired coffeehouse in the world . Here diversity is defines as:- Diversity = Inclusion + Equity + AccessibilityThat is why it has global presence in about 50 countries where passion for specialty coffee, communities connect and reliable service surpasses cultural and language barriers. They follow a supplier diversity programs by trusting and welcoming warmly the suppliers and create a culturally diverse workplace where people from varied backgrounds are values and respected. That is why they developed committed and highly motivated employees to create a motivated pool of HR. They do so by framing employee friendly human resource policies like: Supportive work environment and employee friendly policies Extension of earned benefits to its part time workers which is not done by most of the companies. Create most productive employees with comparatively very low turnover of employees. Provide employee training to regular as well as part timers at all levels of hierarchy. Employees completing the Coffee Master Course wear black aprons depicting Coffee Master in front.

It does effective Global Knowledge Management by using Onyx system for managing the activities related to corporate sales which means effectual management of leads and delivery, effective pipeline management, quick activation of new accounts and faster resolution of Foodservice business by resolving customer issues as quickly as possible. That is why it has installed Blue Martinis order management system for its retailers and channel partners.

It has distributed Starbucks cards to loyal customers and mystarbucks iPhone App can be used on iPhones for various special services by the Starbucks cards owners ( Starbucks International Strategy, slideshare.net).

Pros and Cons of Strategies

But this comes with a risk factor too as Starbucks has to share its profit with the local retailers in each and every store worldwide. Since they establish operations with local partners the opportunity to earn money becomes lesser because of joint ventures. If partnering with local partners makes easier establishments on foreign soil, the profit share gets reduced to 50% to 20%.At the same time the firm is becoming an open target by the anti- globalization firms. Even Starbucks had to face and is still facing the perils of globalization and the biggest one is protest by anti-globalization activists against Starbucks global presence. The reason behind the popular global brands being soft targets of anti-globalization protestors is that these are convenient symbols which can be easily targeted and the common man will know the protestors. The Starbucks was targeted for its overseas activities like paying fewer wages to its workers in Third world countries, involving labour into activities and environmental practices which are totally banned in U.S. These protestors blamed the company or cultural imperialism and said that Starbucks was driving local competitors out of business and was taking their share of market. Then Starbucks is many times accused of hiring child labour or bonded labour but if we see the brighter side they give jobs to people who are poverty stricken in developing.However some multinational supporters say that the entrance of Starbucks in international markets has positive effects on the economy and the livelihood as these multinationals offers and create new job opportunities and pay their employees good pay packages which are better than the local organizations. The best part of these multinational organizations is that they share their market share with local retailers with whom they partner and follow all the environmental norms and local labour laws fully without any glitches and shortcuts. It has been found the better they perform on foreign turf the more they plan to invest their capital and reduce the poverty. In order to counter the blames with which they have been charged Starbucks has developed:

Corporate code of conducts Partnerships with nongovernmental organizations Corporate social responsibility programs etc.But it has become a regular feature that whenever it tries to open a new store the global concerns are presented sugar coated with local issues. Like when Starbucks planned to open a store in Cambridge it was opposed by local activists along with community push backs against Starbucks. In London to the Primrose Hill case is living example of mixing local issues like the local community never wanted a price rise in that area of the rent so they never wanted Starbucks to open a store in the Primrose Hall but they created a media hype by opposing and saying that Starbucks is not paying the coffee growers well and any such issues. This is the most prominent kind of disadvantage Starbucks has to face in other countries. Finally Starbucks had to withdraw their proposal from Primrose Hall, London.

Suggestions to the company

In order to improve relationship between coffee producing nations and US I would take some steps like launching schemes for workers working in coffee fields and work towards community development of the coffee growing nations.Since recession has been a constant phenomenon all across the world the disposable incpo0me has influenced the purchasing levels so, design new products which are pocket friendly and are of good quality. Before consumer shifts its preference from coffee to any other beverage why not do some product innovation and develop a brand which attracts not just the youth but each and every section of society.Reduce the serving time of the orders so that the customers do not have to wait for longer time for their order. Make the coffee vending machines technology driven by blending tastes with technology using Knowledge Management in order to stay in the growing markets all across the world.They should become a bit stringent in allowing smoking in special smoking zones, because the percentage of people who smoke is growing day by day and they either drop the idea of buying a cup of coffee or do not enter the cafe because they cannot smoke. Same way if a group of friends want to enjoy a cup of coffee sharing quality time at Starbucks and some of them smoke, then they would ditch Starbucks for their friends and might enter another coffeehouse where they can enjoy with their friends.The market getting technology driven they should plan on some advertising and use at least internet or social media for gathering more customer base. Like Procter and Gamble and many more big companies are creating global presence by joining esteemed social sites like Facebook or Twitter. Here they can use many marketing strategies like contests, iTunes downloading section etc. This will promote them all over the world and that too amongst all the sections of the society.They need to learn to manage cultural diversity more strategically like they need to tap the Indian market where the whole South Indian market is great coffee lovers and they would love to enjoy their cup of coffee in a traditional ambience, so they can focus on region specific ambience development to enhance their customer base.Growing economies like India have more scope in tier two cities too where the spending power of people has grown and they love to spend on luxury and leisure activities and for that they travel all the way down to metros, which is quite expensive experience for them, So Starbucks can now plan to expand in tier two cities where people have spending power and want to spend money and flaunt their rich lifestyle by visiting coffeehouses like Starbucks.Products can be diversified as per the cultural aspects like in India people love giving unique gifts to their friends and families on most auspicious occasions and festivals. So they should launch new products like coffee hampers and gift hampers for festivals like Diwali, Christmas etc. which will help them in increasing sales by multiples during the festival seasons. These hampers can be marketed in shopping malls, individual stores and can be distributed as festival gifts in big offices to their employees too.I would like to add some greenery too, since globalization means caring for the community as well as the environment too. So they can launch few new products just like green tea etc. which are much popular amongst environment conscious and health conscious people. Something like Eco-Coffee is a great idea which will be much appreciated and will show Starbucks concern towards environment.

BIBLOGRAPHY

http://www.bms.co.in/what-is-the-significance-of-international-marketing-environment/ http://businesscasestudies.co.uk/business-theory/marketing/international-marketing.html http://www.learnmarketing.net/international%20marketing%20environment.htm http://www.shutterstock.com/s/%22international+market%22/search.html http://www.yourarticlelibrary.com/marketing/factors-influencing-pricing-strategy-in-international-marketing/5800/ http://www.ukessays.com/essays/marketing/environmental-factors-for-international-marketing.php http://www.yourarticlelibrary.com/marketing/factors-influencing-pricing-strategy-in-international-marketing/5800/ http://myassignmenthelp.info/assignments/marketing-strategies-of-starbucks/ http://www.starbucks.in/ http://www.slideshare.net/DistilledSEO/starbucks-marketing-web-3 https://www.linkedin.com/today/post/article/20140616170650-15184025-starbucks-plans-to-send-its-employees-to-college-for-free INTERNATIONAL MARKETING ENVIRONMENT-INTERNATIONAL MARKETING BY MICHAEL VAZ AND MEETA SETA

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