Global Marketing

Prof.Arijit Bhattacharya

Prof. Arijit Bhattacharya

 Global Marketing
The marketing of goods, services and
information across political boundaries.
Includes the same elements as domestic
marketing:
Planning, promoting, distributing, pricing, and
support of the goods, services and information to
be provided to intermediate and ultimate
consumers.
Major decisions in international
marketing
Why go International?
Profitabili
ty
Economy
Growth
of scale

Why should
Spreading a firm enter Risk
R&D cost International spread
markets?

opportuni Access to
ty due to imported
life cycle inputs
Unique
products/
services
Risks of going abroad
 EPRG Framework

Proposed by Dr. Howard V. Perlmutter in 1969

Theory of International Business orientation
E -ethnocnetric
P - polycentric
R -regiocentric
G - geocetric
 Ethnocentric
Home country superiority
Centralized extension of domestic marketing
Overseas operation secondary
Advantages:
Easy transfer of core competencies through
expatriate managers
unified corporate culture
Disadvantages:
Cultural myopia
Not promoting the best and the brightest
Nissan car in US, Kellogs launch in India
 Polycentric
Host country focus
Decentralized adaptation approach
Differences exist among markets (PESTLE factors)
Independent subsidiaries run by local experts
Multinationals
Advantages:
Less expensive to implement
Disadvantages:
Less coordination between headquarters and foreign
subsidiaries
 Regiocentric Orientation
In 1979, another dimension was added
A firm treats a region (cluster of markets) as a
uniform single market
E.g. Europe America, Asia-Pacific, Africa, Latin
America
2.Deciding which markets to enter
Product Launch
Five modes of entry into foreign
market
 4.Deciding on the Marketing Program
Global similarities and differences
Marketing adaptation
Global product strategies
Global distribution strategies
 Global Product Strategies
Five international product-communication strategies
Culture
 Country-of-Origin Effects
Mental associations and beliefs triggered by a
country.
Building country images
Make in India
Communication Adaptation
Counterfeit products
 Global Pricing Strategies
1. Determine price elasticity of demand
(inflexible demand will allow for a higher
price)
2. Estimate fixed and variable manufacturing
costs (also product adaptation costs)
3. Identify all costs associated with marketing
programme
4. Select the price that offers the highest
contribution margin
 Factors Affecting Pricing
1. International marketing objectives
2. Costs
3. Competition
4. Product differentiation (Standardization versus adaptation )
5. Exchange rate
6. Market characteristics
1. demand trend
2. income levels
3. importance of product to consumers
4. trade margins
7. Image
8. Government factor
 Global Pricing Strategies
Price elasticity of demand
Price arbitrage
Exchange rate
Tariff barrier
Non-tariff barrier
 Tariff Barriers- Types
Import duty
imposed on goods being brought into the country
Export duty
levied on goods being taken out of the country
Transit duty
imposed on goods passing through the country
 Non-tariff Barriers
All rules, regulations and bureaucratic
delays that help in keeping foreign goods out
of the domestic markets.
 Types of NTB
Import Quota
a limit on number of units that can be imported
Import Licensing
Foreign exchange regulations
Canalization of import/export
State Trading
Embargo
imports from particular country totally banned
Subsidies
Governments directly/indirectly subsidize local production
to make it more competitive in domestic/foreign markets
 Global Distribution Strategies
Whole-channel concept for international marketing
 Distribution: International Marketing
1. Channels between the nations

2. Channels within the foreign market

 Few Export Channels
Export Houses
Agents, Wholesalers, Distributors, Retailers
Government department
Customers
State buying organization
Joint Venture, Franchising, Licensing
Industrial buyers
 General Agreement on Tariffs and
Trade (GATT)
A multilateral agreement regulating international trade created as an agency to
serve as watchdog over world trade and provide a process to reduce tariffs.
GATT also provided a mechanism to resolve trade disputes bilaterally.
GATT covered three basis areas
trade shall be conducted on a nondiscriminatory basis;
protection shall be afforded domestic industries through customs tariffs, not
through such commercial measures as import quotas; and
consultation shall be the primary method used to solve global trade problems
Uruguay round (1986-94)
WTOs creation
created rules for dealing with trade in services, intellectual property, dispute
settlement
Signed in 1947 and lasted until 1994. Replaced by the WTO in 1995.
 WTO
Unlike GATT, WTO is an institution, not an agreement.
Accounting for over 97% of world trade, sets many
rules governing trade between its 153 members
Trade in Goods
GATT
Trade in Services
GATS (General Agreement on Trade in Services)
Intellectual Property
TRIPS (Trade Related Aspects of Intellectual Property
Rights)
Industrial policy of a country for foreign invetors
TRIMS (Trade Related Investment Measures )
 WTO 1
Dispute settlement
WTO provides a panel of experts to hear and rule
on trade disputes between members, and unlike
GATT, issues binding decisions.
Review of governments trade policies