INTRODUCTION TO INTERNATIONAL MARKETING

IMR300 – Lecture 1

Agenda

•The international marketing concept•A brief introduction of international

marketing environment•Major obstacles in international marketing•Stages of international marketing

involvement

International marketing• It refers to marketing carried out by

companies overseas or across national borderlines.

•The performance of the business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.

American Marketing Association (AMA)•The 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

INTERNATIONAL MARKETING• In simple words International

Marketing is the application of marketing principles to across national boundaries.

•However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term.

Global marketing• It refers to marketing activities integrated

across multiple country markets.

International Marketing Vs. Domestic Marketing

•The main difference between them is that the marketing activities take place in more than one country.

•more complicated, at least two levels of uncontrollable uncertainty instead of one.

International Marketing Vs. Domestic Marketing•Uncertainty is created by the

uncontrollable elements of all business environments, but each foreign country in which a company operates adds its own unique set of uncontrollable.

International Marketing Vs. Domestic Marketing•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.

International Marketing Vs. Domestic Marketing•Marketer can not control or influence

these uncontrollable elements, but instead must adjust or adapt to them in a manner consistent with a successful outcome.

International Marketing Vs. Domestic Marketing•Marketing objectives are achieved in a

way of molding the controllable elements of marketing decisions (product, price, promotion and distribution) within the framework of the uncontrollable elements of marketplace (competition, politics, laws, consumer behavior, level of technology, and distribution).

International Marketing Environment

(controllables)

Domestic environment(uncontrollable)

Economic climate

Competitive structure

Political/ legal forces

Political/legal forces

Foreign environment(uncontrollable)

Economic forces

Cultural forces

Competitive forces

Geography and infrastructure

Structure of distribution

Level of technology

Environmental uncontrollables

country market A

Source: Philip R. Cateora. International Marketing. Ninth editionSource: Philip R. Cateora. International Marketing. Ninth editionSource: Philip R. Cateora. International Marketing. Ninth editionSource: Philip R. Cateora. International Marketing. Ninth edition

International environmental forces•Marketing controllables: The successful

manager constructs a marketing program designed for optimal adjustment to the uncertainty of the business climate.

•Domestic uncontrollables: This includes home-country elements that can have a direct effect on the success of a foreign venture: political forces, legal structure, and economic climate.

•Foreign uncontrollable: The problem of uncertainty is further complicated by a frequently imposed “alien status” that increases the difficulty of properly assessing and forecasting the dynamic international business climate.

International environmental forces•Thus a strategy successful in one country

can be rendered ineffective in another by differences in political climate, staged of economic development, level of technology, or other cultural variation.

International marketing

• International marketing is often not as simple as marketing your product to more than one nation. Companies must consider ▫language barriers, ▫ideals, and ▫customs in the market they are

approaching.

Language barrier

•Due to a language barrier, it is more difficult to obtain and interpret research data in international marketing.

•Promotional messages needs to consider numerous cultural differences between different countries. This includes the differences in languages, expressions, habits, gestures, ideologies and more.

Language barrier

Language barrier

•United States - "okay" •Mediterranean - "zero" or

"the worst“•Tunisia - "I'll kill you" • Japan - "money".

Language barrier 74 English-speaking nations a word with the same

meaning can differ greatly from each other

• Bar: pub (Britain), hotel (Australia), boozer (Australia, Britain, New Zealand)

• Bathroom: Loo (Britain), Dunny (Australia)• Ghost or monster: Wendigo (Canada), Duppy

(Caribbean), Taniwha (New Zealand)• Truck: Lorry (Britain and Australia)• Sweater: Jumper (England)• French fries: Chips (Britain)• Soccer: Football (the rest of the world)

Language barrier: Misinterpretation •On a sign in a Bucharest hotel lobby: ▫The lift is being fixed for the next day.

During that time, we regret that you will be unbearable.

•From a Japanese information booklet about using a hotel air conditioner: ▫Cooles and Heates: If you want just

condition of warming your room, please control yourself.

SRC And Ethnocentrism: Major Obstacles•The key to successful international

marketing is adaptation to the environmental differences from one market to another.

SRC And Ethnocentrism: Major Obstacles•An unconscious reference to one’s own

cultural values, experiences, and knowledge as a basis for decisions.

•The SRC impedes the ability to assess a foreign market in its true light.

SRC And Ethnocentrism: Major ObstaclesCross-cultural analysis isolating the SRC

influences•Define the business problem or goal in home-

country cultural traits, habits, or norms.•Define the business problem or goal in foreign

cultural traits, habits, or norms. Make no value judgments.

• Isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem.

•Redefine the problem without the SRC influence and solve for the optimum business goal situation.

Stages Of International Marketing Involvement

1. No Direct Foreign Marketing: trading companies, foreign customers, domestic wholesalers, distributors

2. Infrequent Foreign Marketing: Temporary surpluses caused by variations in production levels or demand, few companies today fit this model

3. Regular Foreign Marketing: foreign or domestic overseas intermediaries, own sales force or sales subsidiaries

Stages Of International Marketing Involvement4. International Marketing: fully committed

and involved in international marketing activities. Such companies seek markets all over the world and sell products that are a result of planned production for markets in various countries.

5. Global Marketing: Market segmentation decisions are no longer focused on national borders. Instead, market segments are defined by income levels, usage patterns, or other factors.

Global Economics and Global ExchangeFree trade or Protectionism