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Session plan
• Introduction to International Marketing
• Definitions of International Marketing
• Motivation for International Marketing
• Domestic Vs. International Marketing
• Importance of International Marketing
• International Dimensions of Marketing
• Benefits of International Marketing
MBA-III (International Marketing) 2Session I
Definitions of International Marketing
“The performance of business activities that direct the flow of goods and services to consumer and user in more than one nation”
Hass & Cateora
“The multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services that satisfy individual and organizational objectives”
American Marketing Association
“The process that allocates company’s resources without regard to national boundaries”
MBA-III (International Marketing) 4Session I
Motivation for international marketing (General)
• Competitive edge
• World wide integration of economies
• Technology edge and infrastructural development
• Growth in purchasing power
• Emergence of demanding customers
MBA-III (International Marketing) 6Session I
Motivation for international marketing (Firm Specific)
• Capacity utilization and economic advantages
• Product life cycle extension
• Experience transfer and benchmarking
MBA-III (International Marketing) 7Session I
Towards internationalization
• What is internationalization?
In economics, internationalization is the process of increasinginvolvement of enterprises in international markets, althoughthere is no agreed definition of internationalization.
MBA-III (International Marketing) 8Session I
Why firms are looking forward to internationalization?
• There are three macro factors tend to underlie the trend towards greater internationalization. They are:• The decline in trade barriers
• Removal of restrictions on foreign investment
• The dramatic change in technology
MBA-III (International Marketing) 9Session I
Strategies for internationalization
• International Cost Leadership Strategies
• International Differentiation Strategies
Session I MBA-III (International Marketing) 10
Factors forcing companies to go global
• Domestic competition
• To avoid dependence on domestic market
• Economies of scale
MBA-III (International Marketing) 13Session I
Difference between International and Domestic Marketing
1. Meaning It refers to those activities which results into transfers of goods and services from one country to another.
It refers to those activities which results into transfers of goods and services inside the country itself.
International Marketing Domestic Marketing
MBA-III (International Marketing) 14Session I
2. Barriers International trade is characteristics by tariff and non tariff barriers.
Domestic marketing has no such restrictions.
3. Currencies It involves exchange on the basis of different currencies.
It involves exchange in the basis of same currencies.
4.GovernmentInterference
Exchange takes place under government rules and regulations. There is high degree of government interference.
Government in interference is zero or minimum only incase of essential commodities.
5. Culture Trade should be done taking diverse into consideration. Even things like colour combination can be affect the trade.
Culture does not affect in domestic marketing.
MBA-III (International Marketing) 15Session I
6.Mode of Payment
Letter of credit is normally as mode of payment.
Cash, Cheques, DD’s are the most common.
7.Mobility of Factors of Production
Factors of Production are relatively immobile as compared to domestic marketing.
Domestic Trade enjoys greater mobility in factors of production.
8. Competition International Trade is subject to intense competition.
Competition is not as intense as it is in international marketing.
9. Documentation International Marketing is subject to complex documentation
Domestic trade does not involve much of documentation.
MBA-III (International Marketing) 16Session I
10. Risk International Marketing is subject to high risk. Political, foreign exchange risk, bad debt risk are few of them.
Domestic Marketing is also subject to risk but not as high as international marketing
MBA-III (International Marketing) 17Session I
Importance of International Marketing
• Now follows the importance of international marketing:• Importance from customer point of view
• Importance from producer’s point of view
• Importance from economic point of view
Session I MBA-III (International Marketing) 18
Importance from customer point of view
• Consumption of goods at a low price
• Enjoying benefits of competition
• Consumption of new products
• Increase in consumption
Session I MBA-III (International Marketing) 19
Importance from producer’s point of view
• Export of surplus production
• Expansion of market in foreign countries
• Production of goods at a low cost
• Increase in production
• More profitable
• Reduce cost
Session I MBA-III (International Marketing) 20
Importance from economic point of view
• Increases total production
• Increases export earnings
• knowledge and cultural progress
• Increases international cooperation
• Extension of industry
• Export of unusual goods
• Progress in technological knowledge
• Image development of country
Session I MBA-III (International Marketing) 21
International Dimensions of Marketing
• It becomes comparative marketing
• Usually part of international trade.
• It is concerned with micro level of market in the country.
• International, multinational and global marketing are used interchangeably
Session I MBA-III (International Marketing) 22
Benefits of International Marketing
• Survival
• Growth of overseas markets
• Sales and profits
• Diversification
• Inflation and price moderation
• Employment
• Standard of living
Session I MBA-III (International Marketing) 23