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INTRODUCTIONto

INTERNATIONAL MARKETINGMANAGEMENT

(2012)

SESSION - 1

³..GLOBALISATION MUST BE TAKEN FOR GRANTED. THERE WILL

BE ONLY ONE STANDARD FOR CORPORATE SUCCESS:

i.e. INTERNATIONAL MARKET SHARE.

THE WINNING CORPORATIONS WILL WIN BY FINDING MARKETS ALLOVER THE WORLD.´

---JACK WELCH, CEO, GE

IMM ± SESSION - 1 Prof. KRISHNA KUMAR V.

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International Marketing in the 21st Century

The world is shrinking rapidly with the advent

of faster communication, transportation, and

financial flows.

Global competition is intensifying.

Higher risks with globalization.

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INTERNATIONAL MARKETINGDEFINED

I.M. IS 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. -- A.M.A.

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The Importance of Going GlobalThe Importance of Going Global

For U.S. companies, 70% of total world marketfor goods and services is outside the country ± Coca-Cola earns 75% of operating income and two-

thirds of profit outside of North America

For Japanese companies, 90% of world marketis outside the country

94% of market potential is outside of Germanyfor its companies

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Why Firms Seek Global Markets

R eact to inquiry from abroad Seek more sales and profits

Product maturity in home market

R espond to a domestic competitive shock 

Follow major customers abroad

Leverage economies of scale and scope

Geographical diversification

Potential purchasing powerIMM ± SESSION - 1 Prof. KRISHNA KUMAR V.

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Driving Forces

R egional economic agreements

Market needs and wants

Technology

Transportation and communicationimprovements

Product development costs

World economic trends

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World institutions to foster trade

World Bank ± need for international capital

International Monetary Fund ± need for 

international liquidity

GATT/ WTO ± liberalisation of trade and tariffs

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Characteristics of 

International marketing

Diverse cultures

Widespread and fragmented markets

Data expensive and difficult to obtain

Politics and associated risk 

Government business regulations

Stages of economic development

Financial systems & regulatory bodies

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Management Orientations

Ethnocentric

Polycentric

R egiocentric

Geocentric

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Management Orientations Ethnocentric orientation

 ±  Home country is superior to others

 ±  Sees only similarities in other countries

 ±  Assumes products and practices that succeed at

home will be successful everywhere

 ± 

Leads to a standardized or extension approach

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Management Ori ent ations

Polycentric orientation ±  Each country is unique

 ± Each subsidiary develops its own uniquebusiness and marketing strategies

 ±  Often referred to as mul tinational 

 ±  Leads to a l ocal ized or adaptation approach thatassumes products must be adapted to localmarket conditions

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Management Ori ent ations

R egiocentric orientation

 ±  A region is the relevant geographic unit

E

x: The NAFTA orE

uropean Union market ±  Some companies serve markets

throughout the world but on a regional

basis

Ex: General Motors had four regions for

decades

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Management Ori ent ations

Geocentric orientation ±  Entire world is a potential market

 ±  Strives for integrated global strategies

 ±  Also known as a  g l obal  or transnational com pany

 ±  R etains an association with the headquarters country

 ±  Pursues serving world markets from a single country or

sources globally to focus on select country markets

 ±  Leads to a combination of extension and adaptationel ements

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What is Global Marketing?

Domestic Marketing Carried out within a defined national or geographic

boundary

R elatively free to plan, implement and control marketingplans within a known marketing environment

International Marketing Begins to explore markets outside national boundaries of domestic

market

Direct and indirect exporting to neighbouring countries

The need to manage uncontrollable international environmentalelements

Emphasis on central production, planning, implementation andcontrol, with deference paid to different market conditions

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What is Global Marketing?

Global Marketing The notion that the world has no centre, but a

µborderless¶ global marketplace that encompassesthe participation of all countries

Marketing operations that seeks to lever its assetsacross political and cultural boundaries

Maximising opportunities and exploiting marketingsimilarities and differences in search for globalcompetitive advantage

Seek to add stakeholders¶ values by: organizing world-wide efforts researching of domestic and foreign markets

pursuing international partnerships

sourcing of raw materials and support services

managing international transactions

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The Changing Face of the Marketplace

Changing demographics Older people are the most prosperous group

R educed birth rate ± larger proportion of 

disposable incomes concentrated on children

The increasing number of µgrey consumers¶ has

significant implications on patterns of demand

and expectation

The marketing challenges of catering to theµgrey consumers¶

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The New Global Economic

Architecture

Emergence of new economic powerhouses ± Brazil,R ussia, India and China (the BR IC countries)

Asia to become the production hub and the West theservice hub

By 2050, Asia will have the world¶s most populatedconsumer markets with growing, young and highlyeducated populations

Arising tendency to global instability R equires more rigorous risk assessment

Crisis and catastrophe planning and management

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Matching the Needs of 

New Global Consumers

Consumers born in the 1990s and 2000s grew

up in digitally enhanced environments. They

do not respond to conventional marketing

stimulus as previous generations

Emergence of µglobal consumers¶

Convergence in global consumption patterns?

Diversity and subcultures

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Achieving Global Competitiveness

µMarket dominance¶ and µhyper-competition¶

as bipolar extremes

The challenge is to overcome:

Shortening product life cycle

Demand for high quality at low prices

The µgreen¶ issue

Changing rules of competition

Demanding customers

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Marketing Using New Technologies

The Internet and CommunicationTechnologies (ICTs) revolution

The nature of interaction between

organization and customers have changed Increasing interactivity and transparency

Fragmentation of media

Technology for technology¶s sake or strategic

integration?

IMM ± SESSION - 1 Prof. KRISHNA KUMAR V.