International Marketing Management, VTU

INTERNATIONAL MARKETING MANAGEMENT

Prof.Raghavendran Venugopal 2

Global Marketing Management

• Global perspective is far more than understanding of worldwide business and international career opportunities.– enable people to understand the links between their

own lives and other part of the world.– Incremental growth of economic, social, political

which shape life.– Develop skills, attitudes and values to enable people

working together to bring change for good– Work for sustained world where resources are shared.


GMM: An Old Debate and a New View

• Standardization Vs adaption• Globalization Vs Localization• Internet revolution• Homogeneous Vs Heterogeneous


Planning for global market

• Considerable factors are– Company objectives and resources– International commitment– Planning process

Preliminary analysis & Screening

Adapting the Marketing MIX

to Target markets

Developing Marketing Plan

Implementation and Control

Phases in Planning Process


Alternative Market Entry Strategies

• According to Frank Bradley & Micheal Gannon, “any injudicious selection of the entry mode give rise to opportunity costs & in some cases foil subsequent endeavors in international market”


Level of commitment

1. Domestic purchasing2. Piggy back operations3. Export management

companies4. Trading companies5. Sales force6. Distributors & agents7. Franchising8. Direct marketing

9. Contract manufacture10.Licensing11.Strategic alliance12. Joint venture13.Assembly operations14.Company Acquisition15.Wholly owned

subsidiary


Factors Affecting the selection of entry mode

• External factors– Market size– Market growth– Government regulations– Level of competition– Physical infrastructure– Level of risk

• Political• Economic• Operational

– Production & Shipping Costs– Lower cost of Production


• Internal factors– Company Objectives– Availability of company resources– Level of commitment– International experience– Flexibility


Steps in Entering Foreign Market

• Country Identification• Preliminary Screening• In depth Screening• Final Selection• Direct Experience


Foreign Market Entry Strategies

• Exporting• Joint venture• Acquisition• Assembly operations• Turnkey operations• Wholly owned

subsidiary• Licensing

• Strategic alliances• Franchising• Management

contracts• Free Trade Zones• Contract Manufacture


Exporting• Traditional mode of entering the foreign

market– The volume of foreign business is not large

enough to justify production in foreign marketing– Cost of production in the foreign market is high.– Company may not have permanent interest in the

foreign market and no guarantee of longer markets

– Licensing or contract manufacturing is not a better alternative.


• Factors to be considered in exporting– Government policies– Marketing factors– Logical considerations– Distribution Issues

• Type of Exporting– Indirect Exporting– Direct Exporting


Advantages & Disadvantages of Indirect ExportingAdvantages Free from botheration No need for export firm A boon to new entrants Economy Market information Concentration on productionDisadvantages Ignorant for export trading No scope for product development Availability of middle men Commission No obligation to manufacturer No permanency in business.


Direct Exporting

• Functions:–Direct supervision, including the

development of export policy.– Selling, advertising, sales promotion,

training and services.–Credit & terms of payment.– Financing, exchange, invoicing and bill

collections


Adv & Dis adv• Advantage:

– Better knowledge of customer’s demand– Complete control– Better returns on exports, goodwill– Appreciation of market conditions– Permanency– Supply chain management– Dedication of staff

• Disadvantage:– Large financial resources– Managerial ability– Increased distribution costs– Risk – Miscellaneous limitations


Licensing

• Licensing agreements are most common on the use of patents, trademarks, copyrights & unpatented technology.

• Advantage:– Offers a small business– Relatively low investment– Low financial risk– Less cost MR– Less investment in R&D– Escapes from product failures


Disadvantages

• No control over production & marketing• Licensor can be competitor• Chances of misunderstanding between two

parties• Quality control may be difficult to achieve.


Joint Venture

• When company decides to shares its ownership of specially set up new company for manufacturing & marketing to explore opportunity.

• It is always based on 2 or more companies can contribute complimentary resources or expertise.


Reasons for joint ventures• Cost savings• Expanding customer base• Access to technology• Risk sharing• Entry to emerging Economics & Technical

markets.• Global competition.


Types of Joint Ventures

• Between two firms in one industry.• Between two firms across different industries• Between an Indian firm and foreign company

in India.• Between an Indian firm and foreign company

in foreign country.• Between an Indian firm and foreign company

in a third country.


Adv & Dis Adv

• Advantage:– Large capital flow.– Joint risk burden– Different skills set are available.– Large projects are feasible and possible.– More direct participation in local markets– Exert greater control over the JV.

• Disadvantage:– Potential of conflicts.– Delay in decision making– Life cycle of a JV hindered by many causes of collapse.


Strategic Alliances• It is an agreement between two or more individuals or entities stating that

the involved parties will act in a certain way to order to achieve a common goal. Strategic alliances usually make sense when the parties involved have complementary strengths.

• e.g. ‘code share’ where airlines of a similar type sell each other’s tickets. There is no co-ownership. – Types

• technology swaps• R&D exchanges• distribution relationships

– Driving forces• insufficient resources• High R&D costs• Concentration of firms in mature markets• Market access

Documents

International Marketing Management, VTU