INTERNATIONAL MARKETING

 CHAPTER 1.MARKETING AND INTERNATIONAL

MARKETING
 CHAPTER 2. THE INTERNATIONAL ENVIRONMENT
 CHAPTER 3. RESEARCHING THE WORLD MARKET
 CHAPTER 4. EXPORT MARKET ENTRY STRATEGIES
 CHAPTER 5. PRODUCT DECISIONS
 CHAPTER 6. PRICING DECISIONS
 CHAPTER 7. CHANNELS AND DISTRIBUTION STRATEGIES
 CHAPTER 8. PROMOTION AND MARKETING
COMMUNICATIONS
 CHAPTER 9. MARKETING ORGANIZATION,
IMPLEMENTATION, AND CONTROL
CHAPTER 1.MARKETING AND
INTERNATIONAL MARKETING

1. INTRODUCTION
2. THE NATURE OF INTERNATIONAL
MARKETING
3. EXPORT MARKETING PLANNING
4. GOALS OF INDIVIDUAL BUSINESS
UNITS
1. INTRODUCTION

 Internationalization and global marketer

Global Marketing Integration
International Marketing

 Total world trade volume in goods and

services is around $8 trillion.
 The world’s five exporting countries are the
United States ($700 billion), Germany ($560
billion), Japan ($390 billion), France ($320
billion), and Britain ($260 billion), collectively
accounting for 42 percent of global trade.
Global Marketing Integration

Fords made in Mexico with Japanese parts,

Honda, Toyota, BMW, and Mercedes Benz
open USA plants, and Isuzu of America makes
Troopers and Rodeos with GM engines via
joint venture.
Honda manufacturing cars in USA, TI
manufacturing semiconductors in Japan.
Macintosh’s PowerBook 100 designed and
manufactured by Sony.
International Marketing - Intro
 The Triad Regions (North America, Western Europe,
and Japan) of the world collectively produce more
than 80% of world GDP.
 In the next ten to twenty years, Emerging Markets –
the Chinese Economic Area (CEA: including China,
Hong Kong, region, and Taiwan), India, South Korea,
Mexico, Brazil, Argentina, South Africa, Poland,
Turkey, and the Association of Southeast Asian
Nations (ASEAN: including Indonesia, Brunei,
Malaysia, Singapore, Thailand, and the Philippines,
and Vietnam) will provide many opportunities in
global business.
2.THE NATURE OF INTERNATIONAL
MARKETING

 What is international marketing?

Export marketing
Foreign marketing
Multinational marketing
Global marketing
 International marketing
 Export marketing

The international marketing dimension involves

marketing across national borders. This is different
from domestic marketing because the mere fact of
crossing the border confronts with new economic,
political, and legal constraints, such as floating
exchange rates, boycotts, and international law.
These constraints will usually force modification of
the firm’s marketing program as it crosses national
boundaries.
 Foreign marketing

The foreign marketing dimension involves marketing

within foreign countries, as a U.S firm markets in
Belgium or Brazil. Such marketing is unlike domestic
marketing because that firm faces different kinds of
competition, consumer behavior, distribution
channels, and promotional possibilities in Belgium or
Brazil from what it is familiar with at home. The tasks
is further complicated because each country has an
individual idiosyncratic marketing environment.
 Multinational marketing

The multinational marketing dimension emphasizes the

coordination and integration of the firm’s marketing
in many diverse foreign environments. The unique
nature of each foreign market fragments the
international marketing effort and brings
diseconomies of scale. The international marketer
must plan and control carefully to maximize the
integration and synergy in the global marketing
program while minimizing the costs of adapting to
each foreign market.
 International Marketing Defined

International marketing: the performance of

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.
 The International Marketing Foreign environment

Task 1
Political/legal
(uncontrollable)

Economic Country market

forces forces C
environment
Domestic environment (uncontrollable)
(uncontrollable)
2
7
Political/ Competitive Competitive
Cultural legal (controllable) structure Forces
forces forces
Price Product Country market A
environment
(uncontrollable)
3
Promotion Channels of
distribution
6

Level of Country market

Geography
and Economic climate Technology B
Infrastructure environment
4 (uncontrollable
5 )
Structure of
distribution

Irwin/McGraw-Hill
Copyright©2002 by The McGraw-Hill Companies, Inc. All rights
Evolution of Marketing

 Domestic Marketing - ethnocentric

 Export Marketing- ethnocentric
 International Marketing - polycentric or
multidomestic
 Multinational Marketing- regiocentric
 Global Marketing - geocentric

Domestic export international multinational global

marketing marketing
Meeting International Challenges
 Be prepared and develop active
responses.
 Develop new strategies.
 New plans are needed.
 Adaptation to the new
environment and markets.
The main steps in the marketing
management process

R – STP – MM – I – C
R= research
STP= Segmentation, Targeting, Positioning
MM= Marketing-mix
I= Implementation
C=control
MARKETING-MIX
4 Ps 4Cs
1.Product Customer value
2. Price Cost to the customer
3. Place Convenience
4. Promotion Communication
-------------------------------------------------------------
5. Probe Customer, consumer
6. Phacilitate (Facilitate) Consumption
services
7. Plan Curve
8. People Count
 The activities in international
marketing include:

1. Detailed analysis of current markets and

potential markets;
2. Planning and development of products that
the consumers want, clearly defined in
suitable package;
3. Distribution of products through channels
which provide the services or conveniences
demanded by purchases;
 The activities in international
marketing include:

4. Promotion of products to inform and educate

consumers about products or services;
5. Setting of prices which reflect both a
reasonable value (or utility ) of product to
consumers; and
6. Technical and non-technical services given
to the consumers-both before and after a
sale is made.
 Questions

1.How can international marketing be said to

differ domestic marketing?
2. Identify and discuss the different ways firms
can reach foreign markets.
3.EXPORT MARKETING PLANNING

3.1. Identifying and measuring market

opportunity

3.2. Developing an export marketing strategy

3.3. Making export strategy operational

3.1. Identifying and measuring market
opportunity

a) Preliminary screening
b) Estimating market potentials
c) Estimating sales potentials
d) Segmenting the market
3.2. Developing an export marketing
strategy

a) Setting export objectives

b) Planning the marketing mix
Product, price, channels, promotion.
3.3. Making export strategy operational

a) Sales forecasts
b) Sales budget
c) Sales quotas
d) Production schedules
e) Inventory control
f) Labor requirements
g) Promotional budgets
h) Financial budget
i) Profit budget
Stages in the Marketing Process
The Process
Analysis:
• Collect data from sources- primary and secondary, internal and external,
formal and informal. Screen data for opportunities to employ company
resources for competitive advantage.

Planning:
• Develop a marketing plan which includes a situation analysis, goals and
objectives, long-term strategies and short-term tactics, cost and profit
estimates, and anticipated changes in organizational structure.

Implementation:
• Take actions to put the plan into action. Adjust implementation activities
to account for environmental changes in market conditions.

Control:
• Use annual planning (sales to forecast), profitability, and efficiency
controls to monitor the plan’s successes and failures.
4. GOALS OF INDIVIDUAL BUSINESS
UNITS

4.1 basis goals

Profit or nonprofit( volume of sales, market share, serving customer…).
4.2 specific reasons
 Managerial urge
 Unique product/technology competence
 Risk diversification
 Foreign market opportunities
 Change agents
 Economics of scale
 Foreign marketing advantages
 Extend sales of seasonal product
 Excess capacity of resources
GOALS OF INDIVIDUAL BUSINESS
UNITS

4.2 specific reasons

 Unsolicited foreign orders
 Small domestic market
 Stagnant or declining home market
 Resources
 Multinational, global, world companies
 Other goals
CHAPTER 2.
THE INTERNATIONAL ENVIRONMENT

1. ECONOMIC AND FINANCIAL FACTORS

2. SOCIO-CULTURAL ENVIRONMENT
3. POLITICAL/LEGAL ENVIRONMENT
4. COMPETITION
 ECONOMIC AND FINANCIAL
FACTORS

1. Population, Income (Per capita income, GNP)

2. Convertibility or possibility of effective utilization of
resources; financial stability.
3. Banking facilities available and nature of credit
facilities offered, short medium and long-term
(conditions, terms, interest rates. etc.)
a) Domestic
b) foreign
c) Governmental or other lending institutions and
facilities.
ECONOMIC AND FINANCIAL
FACTORS

4. Availability of local and accounting services.

5. Currency, exchange rates and controls
6. Capital repatriation and remittance of profits,
licensing and other payments.
7. Availabilities of insurance
8. Situation of the Balance of Payments
9. Communications and transports
10. Urbanization
ECONOMIC AND FINANCIAL
FACTORS

11. Market prospect

+ Estimated size, trends, and potential of
market in the country
+ Export markets and estimated size
+ Sources of market information
+ System of distribution of good
12. Product and product modification
2.SOCIO-CULTURAL ENVIRONMENT

1. The elements of culture

Language
Nonverbal language
Religion
Values and attitudes
Manners and customs
Material elements
Aesthetics
Education
Social institutions
Family
2.SOCIO-CULTURAL ENVIRONMENT

2. Adapting to cultural differences

Some companies have made special efforts
to adapt their products or services to various
cultural environments.
Cultural factors

+ Never touch the head of a Thai or pass and object over it. The
head is considered sacred in Thailand
+ Avoid using triangular shapes in Hong Kong, Korea, and
Taiwan.
+ The number 7 is considered bad luck in Kenya and good luck in
the Czech republic and Magical connotation in Benin, Africa.
+ The number 10 is bad luck in Korea
+ The number 4 means death in China
+ Red represents death in many African countries.
+ Red is a positive color in Denmark
Cultural factors

+ In Canada information on products is often provided

in English and French.
+ Swiss chocolate manufactures know that US
customers believe Swiss chocolate product are of
high quality (value), so that companies emphasize
their Swiss origin and thus generate high sales.
(attitude)
In short, by being aware of the value and attitudes of
the people in the culture, a business firm effectively
position its product.
Cultural factors

Education influences many aspects of culture.

Education also helps to provide infrastructure
needed for developing managerial talent.
For example, educationally advanced countries
like England, France… are more likely to be
markets for computers and other high –tech
equipment than poor countries.
2.SOCIO-CULTURAL ENVIRONMENT

3. The authors of Managing Culture Differences

(Philip R. Harris and Robert T. Moran, 1987) offer
the following ten tips to deflate the stress and tension
of cultural shock:
 Be culturally prepared.
 Learn local communication complexities
 Mix with the host and nationals.
 Be creative and experimental.
2.SOCIO-CULTURAL ENVIRONMENT

 Be culturally sensitive
 Recognize complexities in host cultures.
 Perceive oneself as a culture bearer.
 Be patient, understanding, and accepting of
oneself and hosts.
 Be most realistic in expectations.
 Accept the challenge of intercultural
experiences
3. POLITICAL/LEGAL ENVIRONMENT

 Role of government
 Government controls
+ License requirements
+ Tariffs
+ Quotas
+ Extra taxes
+ Qualitative controls
+ Exchange controls
 Promotional activities
 Financial activities
 Information services
 Export facilitating activities
 Promotion by private organizations
 4. COMPETITION

4.1.Nature of competition
+ The structure of competition: the number and types of
competitors;
+ The action of competitors: the competitive tools available to
marketing executives in the decision areas of product, channel,
price, and promotion
+ Competition in international markets
4.2. Factors influencing competition
(1) General business, cultural. Economics, and social
conditions; (2) costs; (3) laws and regulations; and (4) The
activities and policies of competitors themselves affect
competition.
CHAPTER 3. RESEARCHING THE
WORLD MARKET

1. SOURCES OF INFORMATION
2. THE EXPORT MARKETING RESEARCH
PROCESS
3. SEGMENTATION
4. FOREIGN MARKET PORTFOLIOS:
TECHNIQUE AND ANALYSIS
INTERNATIONAL MARKETING
RESEARCH

The scope of research:

+ Market measurement studies
+ Competitive studies
+ Environmental studies
International marketing research is used to
make strategies and tactical decisions.
International marketing research

The importance of International marketing

research:
Before making market entry, product position,
or marketing mix decision, a marketer must
have accurate information about the market
size, market needs, competition, and so on.
Marketing research provides the necessary
information avoid the costly mistakes of poor
strategies or lost opportunities.
1.SOURCES OF INFORMATION

1.1. Secondary data

+ Internal source
+ External source

1.2. Primary data

1.1. Secondary data

+ Internal source
Sales and cost records, markets,…
+ External source
UN, OECD, EU, IMF, WB, IBRD, IFC…
Embassy, Consulate;
Non -government agencies;
Universities and other educational institutions…
Internet
CD-ROM
The Business International Market Report.
…
1.1.Secondary data

The major issues are data

availability, reliability and
comparability.
 1.2. Primary data

Primary data can be collected in four broad

ways:
+ Observation
+ Focus groups
+ Surveys
+ Experiments
 Primary data

Observation research: Fresh data can be gathered

by observing the relevant actors and settings.
EX; The American Airlines researchers might hang
around airports, airline offices, and travel agencies to
hear travelers talk about the different carriers and
how agents handle the flight arrangement process.
The researchers can fly on American and
competitors’ planes to observe the quality of in-flight
service and hear consumer reactions. This
exploratory research might yield some useful
hypotheses about how travelers choose their air
carriers.
 Primary data

Focus groups research: A focus group is a

gathering of six to ten persons who spend a few
hours with a skilled interviewer to discuss a project,
service, organization, or other marketing entity. The
discussion is recorded through note taking or Audio
or video tape and is subsequently studied to
understand consumer belief, attitudes, and behavior.

In American Airlines example, the group interviewer

may start with a broad question, such as “ How do
you feel about air travel?”
 Primary data

Survey research: Survey research stands

midway between observational and focus
group research, on the one hand. And
experimental research on the other hand.
Companies undertake surveys to learn about
people’s knowledge, beliefs, preferences,
satisfaction, and so on, and to measure
these magnitudes in the population.
 Primary data

Experiments research: the most scientifically valid

research is experimental research.
Experimental research calls for selecting matched
group of subjects, subjecting them to different
treatments, controlling extraneous variable, and
checking whether observed response differences are
statistically significant. The purpose of experimental
research is to capture cause-and- effect relationships
by eliminating explanations of the observed findings.
 Primary data

Research instrument: Questionnaires

Contact methods:
+ The mail questionnaire
+ Telephone interviewing
+ Personal interviewing
 1.2. Primary data

The challenges:
+ Comparability of data
+ Willingness of potential respondent
+ Ability of the respondent to understand and
communicate.
( Challenge in survey research involves
translation from one language to another)
1.2. Primary data

To avoid these translation errors, experts suggest the

technique of back-translation. First, the questionnaire
is translated from the home language into the
language of the country where it will be used, by a
bilingual who is a native speaker of the foreign
country. Then this version is translated back to the
home language by bilingual who is native speaker of
the home language. Another translation technique is
parallel translation, in which two or more translators
translate the questionnaire. The results are
compared, and differences are discussed and
resolved.
Using the internet and e-mail data
collection

Some problems:
+ Sampling
+ Language
+ Respondent cooperation
2.THE EXPORT MARKETING
RESEARCH PROCESS

 Problem formulation
 Research method and design
 Data collection techniques
 Sample
 Data collection
 Analysis and interpretation
 Reporting results
Research study report

+ Cover: topic, organization, name of author, time…

+ Abstract
+ Table of contents
+ List of figures
+ List of tables
+ Chapter1. Introduction
Problem statement
Objectives of study
Scope and research method
Structure of study
Research study report

+ Chapter 2. Literature review

+ Chapter 3. Introduction of the company or Sector of…
+ Chapter 4. Research design
+ Chapter 5. Presentation and critical discussion of
results
+ Chapter 6. Conclusions and recommendations,
further research
+ References
+ Appendix
3. Foreign consumers and foreign
markets

3.1. Foreign consumers

+ How foreign consumers differ
+ What they buy
+ Why they buy
+ Who makes the purchase decision
+ How they buy
+ when they buy
+ Where they buy
3. Foreign consumers and foreign
markets

3.2. Foreign industrial markets

+ What they buy
+ Why they buy
+ Who makes the purchase decision
3. Foreign consumers and foreign
markets

3.3 Foreign government

+ The size of government’s role as customer, however,
varies from country to country
+ Another variable in the economic role of government
is the kind of economic activity undertaken.
+ Government markets differ from consumer and
industrial markets in what they buy, how they buy,
and why they buy- and government in different
countries also vary among themselves on these
dimensions.
Export market segmentation

1) It is important to note that any decision to

segment on particular basis should be
evaluated in term of the following:
+ Measurability
+ Accessibility
+ Profitability
+ Actionability
Export market segmentation

2) Base of segmentation
+ Country market level; demographic and population
characteristics ; socio-economic characteristics;
political characteristics; cultural characteristics.
+ Customer market level: Demographic
characteristics: age, gender, life cycle, religion,
nationality, etc;
socio-economic characteristics : income, occupation,
education, etc.
Psychographic characteristics: personality
Export market segmentation

The four strategies:

+ Increase penetration (existing product and
markets)
+ Develop products (new products in existing
markets)
+ Extend markets (existing products in new
markets)
+ Widen activities (new products and markets)
4. Foreign market portfolios: technique
and analysis

Country attractiveness/ competitive strength matrix

Using these variables, and some scheme for
weighting them, countries are classified into one of
the nine cells depicting relative market investment
opportunity.
+ Invest/grow countries
+ Harvest/divest/license/combine countries
+ Dominant/divest countries
+ selective countries
4. Foreign market portfolios: technique
and analysis

Country attractiveness
Market size (total and segments)
Market growth (total and segments)
Market seasons and fluctuations
Competitive conditions (concentration, intensity, entry
barriers, etc.)
Market prohibitive conditions ( tariff, non tariff barriers,
import restrictions, etc.)
Economic and political stability.
4. Foreign market portfolios: technique
and analysis

Competitive strength
Market share
Marketing ability and capacity
Product fit
Contribution margin
Image
Technology position
Product quality
Market support
Quality of distributions and service
4. Foreign market portfolios: technique
and analysis

Invest/grow Invest/grow Dominate/divest

Join venture

Invest/grow Selectivity
strategies

Harvest/divest/
License/combine
countries
CHAPTER 4. EXPORT MARKET ENTRY
STRATEGIES

1. ENTRY AS STRATEGY
2. FACTORS INFLUENCING CHOICE OF
ENTRY MODE
3. EXPORT ENTRY MODES
4. NON-EXPORT ENTRY MODES
5. SELECTING THE ENTRY MODE
1.ENTRY AS STRATEGY

 The elements of entry strategy:

+ The objectives and goals in target market;
+ Needed policies and resource allocations;
+ The choice of entry modes to penetrate the
market;
+ The control system to monitor
performance in the market
+ A time schedule
2. FACTORS INFLUENCING CHOICE
OF ENTRY MODE

 Target market
 Product
 Availability of marketing organization
 Company considerations
 Government policies
3. EXPORT ENTRY MODES

3.1. Indirect export

+ Export merchants
+ Trading company
+ Export commission house
+ Resident buyer
+ Broker
+ Export management company
+ Manufacturer’s export agent
+ Cooperative organization:
Piggyback marketing; Exporting combination
3. EXPORT ENTRY MODES

3.2.Direct export
+ Home country based department:
1) Built-in department
2) Separate export department
3) Export sales subsidiary
+ Foreign sales branch
+ Storage or warehousing facilities
+ Traveling salesperson
+Foreign based distributors and agents
3.2.Direct export

With direct export, manufacturer of

exportable goods undertakes the entire
export process without any intermediaries.
By becoming a direct export exporter, the
firm takes responsibility for the entire range
of export activities starting with identifying
customers through to collecting payment.
3.2.Direct export

In order to export directly, the firm may have

to establish an export department from
domestic sale division which could be funded
on the basis its requirements. Employees of
the department must be trained in foreign
trade affaires.
3.2.Direct export

Direct exporting has several advantages such as:

2. The firm is able to control the whole process of export.
3. The firm can increase net profit because of operating without
expenditure for intermediary.
4. The firm can develop closed relation with foreign partners.

But, the firm is responsible for the following aspects:

7. The firm have to spent time and money to success in foreign
market.
8. The firm must suffer directly risks may be occurred.
What is involved in a typical export
process?

An export process involves three main functions: feasibility

analysis, planning foreign market entry, and implementation.
These functions involve 20 steps.
FEASIBILITY
3. Analyze domestic performance of the business
4. Assess the firm’s capability.
5. Research various factors of population, economy, politic and
society of target markets.
6. Confer with experts of international trade concerning
marketing, financial, legal problems and delivery term of
goods and services.
7. Select target market
What is involved in a typical export
process?

PLANNING FOREIGN MARKET ENTRY

6. Conduct market research concerning section of good and
specific products to be exported.
7.Make plan, strategy or entering target markets.
8. Collect knowledge about country’s requirements concerning
certificates, standards and licenses of target countries.
9. Collect necessary documents concerning license, trade.
Copyright protection of target countries.
10. Identify internal: import taxes, quotes or other non-tariff trade
barriers of the target countries.
11. Establish pricing schedule.
What is involved in a typical export
process?

IMPLEMENTATION
12. Determine method of sale.
13. Establish marketing methods.
14.Choose sale representatives or sales methods.
15. Negotiate financial problems.
16. Obtain insurance of good
17. Complete the required paper work.
18. Package and label products.
19. Ship products
20. Get payment.
The most common mistakes made by
exporters

The following are twelve most common mistakes often made by

small firm as they begin to export or expand business on
foreign markets:
1. Lack of full investigation of market, lack of qualified export
expert enable to make international business strategy and
marketing plan before starting an export business;
2. Lack of support by administrative offices to overcome initial
difficulties and financial problems of exporting;
3. Inadequate care in selecting overseas sales representatives or
distributors.
4.Seeking orders from a lot corners of the world rather than
concentrating on one or two main geographical areas;
The most common mistakes made by
exporters

5.Neglecting export to foreign markets when domestic

markets booms;
6. Lack of treating international distributors and
customers on an equal basis with domestic
counterparts;
7. Assuming that a particular trade technique and
product will automatically be successful in many
countries;
8. Unwillingness in modifying products in order to meet
regulations or cultural preferences of foreign
countries
The most common mistakes made by
exporters

9. Lack of printing information of sale, guarantee and

after-sale service in foreign language;
10. Lack of considering the use of an export
development company if the firm cannot afford its
own export department because of lacking financial
or other conditions;
11. Worry about expenditure for investigating new
markets, so that lacking of definitiveness in export;
12. Lack of providing after-sale services for the product.
4. NON-EXPORT ENTRY MODES

Licensing
Franchising
Assembly operations
Contract manufacturing
Joint venture
Wholly owned plant
Management contracting
5. SELECTING THE ENTRY MODE

 Naive rule

 Pragmatic rule

 The strategy rule

CHAPTER 5. PRODUCT DECISIONS

1. PRODUCT PLANNING AND

DEVELOPMENT
2. PACKAGING
3. BRANDING ISSUES
4. PRODUCT MIX DECISIONS
5. STANDARDIZATION VS ADAPTATION
1. PRODUCT PLANNING AND
DEVELOPMENT

1.1. New product development

1.2. Changes in existing products
1.3. Finding new uses for existing products
1.4. Product elimination
1.1.New product development

New product decision process:

 Idea generation
 Initial screening
 Business analysis
 Develop the product
 Market testing
 Commercialization
2. Standardization vs. adaptation

+ Standardization is common for certain agricultural

products, raw materials, and processed commodities
sold to industry.
+ Adaptation can be mandatory or voluntary.
Mandatory adaptation may be required because of
such things as language differences, differing
electrical systems, differing measurement systems
and product specifications, and government
requirements.
2. Standardization vs. adaptation

In general, however, some type of mandatory

adaptation may have to be made or a voluntary
change (minor or major) may be beneficial.
EX: Product Adaptation
+ Sony TV Voltage, broadcast standard
+ McDonald’s Menu, decor of restaurant
+ Levi jeans Size mix, fabric, cut
+ Coca-cola Brand name (China), package
3.PACKAGING

VIEW
V- visibility
I- informative
E- emotional impact
W- workability
4. BRANDING ISSUES

A brand; a brand name; a trademark; label;

logo; slogan
 Brand protection
 Branding decisions
Choosing a brand name

(1) It should suggest something about the product’s

benefits
EX: Beautyrest mattress, Craftsman tools
(2) It should suggest product qualities such as action or
color.
EX: Sunkist oranges, Firebird automobile
(3) It should be easy to pronounce, recognize, and
remember, short names help.
EX: Tide, Crest
Choosing a brand name

(4) It should be distinctive.

EX: Kodak, Exxon.
(5) It should not carry poor meaning in other
countries and language.
EX: Nova Is a poor name for a car to be sold in
Spanish-speaking countries; it “doesn’t go”
 Brand protection

+ The international Convention for the

protection of Industrial Property (Paris
Union).
+ The Madrid Agreement for International
Registration of Trademarks.
Branding decisions

+ Selecting a good brand

+ Determining how many brands should be in
the company’s product line
Branding decisions

(1) A single brand, or family brand

(2) Individual (local) brands
(3) Multiple brands
Tools for building the brand identity

(1)Owned word
EX: Company Word
Volvo “Safety”
BMW “Driving performance”
Federal Express “Overnight”
Apple computer “graphics”
Kodak “Film”
Tools for building the brand identity

(2) Slogan
EX: AT&T: “The Right choice”
Budweiser: “The King of Beers”
Fort: “ Quality is Our Number One job”
General Electric: “ We bring Good Things
to life”
British Airways: “The Word’s Favorite
Airline”
Tools for building the brand identity

(3) Colors
EX: Yellow is also the corporate color of Kodak firm.
IBM uses blue in its publications
(4) Symbols and logos
Chanel No.5 used Catherine Deneuve, One of the word’s most
beautiful women, as its symbol,
(5) A set of stories
Some brands will be associated with stories, which are benefit if
favorable and interesting, about the company or brand. The
stories might relate to the founder (s) and the struggle to create
the company.
4. Positioning

In searching for a specific positioning, the business unit

should consider the following possible sources:
+ Attribute positioning:
EX: A hotel describes itself as the city’s tallest hotel
+ Benefit positioning:
EX: Volvo claims that its cars are safer
+ Use/application positioning:
EX: Nike might describe one of its shoes as the best to
wear for racing and another as the best to wear for
playing basketball
 4. positioning

+ User positioning
EX: Apple Computer describes its computers and
software as the best for graphic designers
+ Competitor positioning
EX: 7 UP called itself the Uncola
+ Category positioning
EX: Kodak means film; Xerox means copy machines
+ Quality/price positioning
EX: Chanel No 5 is positioned as a very high-quality,
high-price perfume.
Choosing a specific positioning

Companies need to go beyond a broad positioning to

express a more concrete benefit and reason to buy:
 Best quality
 Best performance
 Most reliable
 Most durable
 Safest
 Fastest
 Best value of the money
Choosing a specific positioning

 Least expensive
 Most prestigious
 Best designed or style
 Easiest to use
 Most convenient.
CHAPTER 6. PRICING DECISIONS

1. DETERMINANTS OF AN EXPORT PRICE

2. FUNDAMENTAL EXPORT PRICING
STRATEGY
3. RELATION OF EXPORT TO DOMESTIC
POLICIES
4. CURRENCY ISSUES
5. SETTING UP EXPORT PRICE?
6. TRANFER PRICING
1. DETERMINANTS OF AN EXPORT
PRICE

 Costs
 Market conditions (demand)
 Competition
 Legal/political influence
 Environmental factors ( Exchange rate
fluctuations, inflation rates, price controls)
 Company policies
 Marketing-mix
2. FUNDAMENTAL EXPORT PRICING
STRATEGY

 Skimming pricing
 Penetration pricing
 Extinction pricing
 Marginal cost pricing
3.RELATION OF EXPORT TO
DOMESTIC POLICIES

 Export prices lower than domestic

 Export prices higher than domestic

 Export prices on a par with domestic prices

 EXPORT PRICE ESCALATION


Domestic Sale Export sale
Factory Price $ 7.50 $ 7.50
Domestic Freight .70 .70
8.20 8.20
Export Documentation .50

8.70
Ocean Freight & Insurance 1.20
9.90
Import Duty (12% of landed cost) 1.19
11.09
Wholesale Markup (15%) 1.23
9.43

Importer/Distributor Markup (22%) 2.44

13.53
Retail Markup 50 % 4.72 6.77
14.15 20.30

Final consumer Price $14.15 $20.30

4. The price quotation

There are two systems of definition that are

used by exporters throughout the world:
+ INCOTERMS 2000

+ The revised American Foreign Trade

definitions -1941
Selection of trade terms
In deciding when to use each term exporters should consider the
following factors:
 Whether shipment will be made on domestic or foreign carries.
 Availability of insurance coverage
 Availability of information on costs
 Exporter’s need for cash ( reason against C&F and CFR/CPT)
 Needs of importers to have quotes from several suppliers that
can be readily compared ( reason for CIF and CIP)
 Currency convertibility problems. FOB vessel is often desirable
so that the buyer pays freight in his own currency. Of course,
the carrier still has the convertibility problem, unless it is the
buyer’s country.
 Requirements of the government of the importing nation.
How does an exporter prepare an
accurate quote?

Listed below are variables that should be considered while preparing the quote
 Packaging, marking and labeling costs
 Rates of interest at which export finance has been availed
 Costs of direct materials and labor for the production of the goods
 Factory overhead expenses
 Clearing and forwarding charges
 Port trust charges
 Insurance premium, export duties, warfare and portage
 Shipping charges
 Commission
 Incentive available from government such as duty drawback
After calculating to above mentioned expenditures, a reasonable profit margin may
be added to arrive at a final price. If there still other subsidiary expenditures, it’s
necessary to add while making quotation.
 STRUCTURE OF EXPORT PRICE
1. Base cost per unit
2. Export packing, labeling, marking
3. Product inspections charges
4. Profit or mark-up
5. Inland freight to
6. Unloading at port/air port
7. Terminal charges
8. Export duty (if any)
9. Loading charges
-----------------------------------
1-9 FOB
10. Ocean/air freight to destination
-------------------------------------------
1-10 CFR
11. Insurance
--------------------------------------------
1-11 CIF
The choice of currency for export price
quotes

There are two basic alternatives available:

The quote in U.S dollars, or quote in
customers’ currencies.
 EX: In this example the goods are
planned to be moved by sea and
shipment is not containerized.
Product charges and price ($)
Product cist: $10 per unitx100 units 1000
Target mark-up: 10% of product cost 100
Oversea agent’s commissions: 5% 50
-------
1150
Financing costs on production: 8% 80
Export packing charges 100
Labeling and marketing for 100 units 50
Other direct export costs 20
EXW price (ex factory) 1400
EX: In this example the goods are planned to be
moved by sea and shipment is not containerized.

Inland freight to port of shipment 100

Unloading, other charges at port of
shipment 100
FAS price (port of shipment) 1600
Loading charges on ship 50
Export documentation, clearance for export 30
FOB Price (port of shipment) 1680
Ocean freight to port of destination 300
CFR price (product costs and freight/port of destination 1980
Insurance coverage 20
CIF Price (product costs, insurance, freight/port of destination) 2000

Notice how the CIF price is double the initial product cost. This shows how
important it is to work through these costing carefully.
5. TRANFER PRICING

 Decentralization and profit centers

 Transfer pricing to wholly-owned foreign
subsidiaries:
+ The factor: Competitive market price
Cost
Legal restrictions
+Transfer pricing to partially-owned foreign
enterprises
CHAPTER 7. CHANNELS AND
DISTRIBUTION STRATEGIES

1. CHANNEL STRUCTURE
2. MANAGING THE DISTRIBUTION SYSTEM
3. GAINING ACCESS TO DISTRIBUTION
CHANNELS
4. GLOBAL TRENDS IN DISTRIBUTION
SYSTEM
5. INTERNATIONAL PHYSICAL
DITRIBUTION
1. CHANNEL STRUCTURE

1.1. Indirect export

1.2. Direct export
+ Home country based department:
1) Built-in department
2) separate export department
3) Export sales subsidiary
+ Foreign sales branch
+ Storage or warehousing facilities
+ Traveling salesperson
+Foreign based distributors and agents
2. MANAGING THE DISTRIBUTION
SYSTEM

2.1. Motivating channel participants

2.2.Controlling channel participants

2.1. Motivating channel participants

 Financial incentives
 Annual conferences
 Help to the management of distributorship
 Special programs
2.2.Controlling channel participants

 Spell out the specific responsibilities

 The awarding of exclusive distribution rights

3. GAINING ACCESS TO
DISTRIBUTION CHANNELS

3.1. The “locked-up” channel

3.2. Alternative entry approaches
+ Piggybacking
+ Joint ventures
+ Original equipment manufacturers (OEMs)
+ Acquisitions
+ Starting your ventures
4.GLOBAL TRENDS IN DISTRIBUTION
SYSTEM

Five major trends seem dominant throughout

the world:
 Large-scale retailers
 International retailers
 Direct marketing
 Discounting
 Information technology
5. INTERNATIONAL PHYSICAL
DITRIBUTION

 Export restrictions
 Foreign market import restrictions
 Export documentation
 The foreign freight forwarder
 Export packing
CHAPTER 8. PROMOTION AND
MARKETING COMMUNICATIONS

1.INTRODUCTION
2.INTERNATIONAL ADVERTISING
3. PUBLICITY AND PUBLIC RELATIONS
4. PERSONAL SELLING
5. SALES PROMOTION
6. PROMOTIONAL PROGRAM AND
STRATEGY
7. DIRECT MARKETING
 1.Introduction

1.1. Promotion -mix

1.2. Communication barriers
1.3. Export marketing promotion and
communication decisions
 1.Introduction

1.1. PROMOTION-MIX
Advertising
Sales promotion
Publicity
Personal selling
 1.2. Communication barriers

Communication barriers
+ Language differences
+ Government regulations
+ Media availability
+ Economic differences
+ Tastes and attitudes
+ Buying process
1.3. Export marketing promotion and
communication decisions

What message?
What communications media?
How much effort or money to spend?
2.SALES PROMOTION

+ Foreign catalogs
+ Samples
+ House organ and company-published
magazines
+ Films, slides, and personal computers
+ Trade fairs and exhibitions
+ Point-of-purchase materials
+ Consumer promotion materials
 3. PUBLICITY AND PUBLIC
RELATIONS

3.1.PR
PR consists of a set of tools that can be classified under the
acronym of PENCILS, namely:
+ Events (sponsoring athletic or art events or trade shows)
+ Publication (company magazines, annual reports, helpful
customers brochures, etc.)
+ News (favorable stories about the company, its people, and
products)
+ Community involvement activities (contributions of time and
money to local community needs)
+ Identity media( stationery, business cards, corporate dress
codes)
+ Lobbying activity (efforts to influence favorable or dissuade
unfavorable legislation and ruling)
+ Social responsibility (building a good reputation for corporate
social responsibility)
3. PUBLICITY AND PUBLIC
RELATIONS

3.2. Publicity: Any form of nonpaid,

commercially significant news or
editorial comment about ideas,
products, or institution.
4. INTERNATIONAL
ADVERTISING

4.1.Advertising involves making decisions on

the five Ms
+ Mission
+ Message
+ Media
+ Money
+ Measurement
4. INTERNATIONAL
ADVERTISING

4.2.International advertising strategies

+ Uniform approach to advertising
+ Adapting domestic advertising to foreign
markets
Uniform approach to advertising

+ There are no notable differences on customer’s product

awareness.
+ Buying motives, purchase behaviour, and product usage are
identical or nearly so.
+ Copy translation does not lead to obvious misunderstanding,
negative connotations or undesirable associations.
+ Product quality, design and package variations between markets
are non-existent or insignificant.
+ In general, it appears that successful standardization is
dependent on a similarly of the motivations for purchase and a
similarity of use conditions
Adapting domestic advertising to
foreign markets

Modification may be requires a company to

adapt adverting strategy to current culture
variations and trends.
Literacy rates and standards of education will
have a direct bearing on the amount of
adaptation needed in advertising methods.
5. PERSONAL SELLING

One of the most expensive marketing

communication tools is the company’s sales force,
especially when out in the field, traveling a lot, and
spending considerable time hunting for prospects
and keeping existing customers satisfied.
The salesperson sees the customer and can take
him to lunch, gauge his interest, answer questions
and objections, and close the sale. The more
complex the product or service, the more necessary
it is to use salespeople.
 PERSONAL SELLING

Today’s salespeople needs a laptop

computer, printer, copy machine, fax
machine, cellular phone, electronic mail,
software, and so on.
With their laptop, they can access industry,
product, and customer data, download
brochures, and print contracts.
 PERSONAL SELLING

KEY ACCOUNT MANAGEMENT SYSTEM

An increasing number of company are setting up key
account management system. Companies know that
a few customers account for large share of their
sales and profits. The company appoints key
account managers to manage their more important
accounts, thus increasing the likelihood that
important customers will be better served and will
remain loyal.
6. Promotional program and strategy

This involves the following:

+ Setting promotional objectives;
+ Deciding on types of advertising and
promotional messages;
+ Selecting media;
+ determining how much time, effort, and
money to spend.
 7.DIRECT MARKETING

Direct marketing includes a number of

marketing approaches that involve direct
access to the customer. Direct mail, door-to-
door selling and telemarketing are the
primary direct marketing tools used in some
countries.
7.DIRECT MARKETING

Many companies posses proprietary databases

comprising profiles on thousands or millions of
customers and prospects. Consider the following:
+ General Motors has a database of 12,000,000 names
showing everything that these customers charged to
their GM credit cards.
+ Land’s End has a database of more than2,000,000
names of people who bought one or more clothing
items from Land’s End.
CHAPTER 9. ORGANIZATION OF
INTERNATIONAL MARKETING
ACTIVITIES

1. Main considerations of being organized

internationally
2. Organizational structures
1. Main considerations of being
organized internationally

 Definitionof organizational subunits

 Centralization vs. decentralization
 Communication and control systems
2. Organizational structures

2.1.Functional export department ( built-in or separate

export unit )
2.2.International division structure
2.3.International organization structure based on
product
2.4.International organization structure based on
geographic area or customer groupings
2.5.International mixed structure; the matrix
organization
Questions for discussion