International Marketing: Global Perspective

International
Marketing
Global Perspective
By
Prof Srikanth Venkataswamy
Global Marketing: An overview
Module-1
Introduction to Global Marketing
What Is International marketing?
International marketing is the process of
focusing the resources and objectives of a
company on International opportunities.
Marketing is a set of concepts, tools,
theories, practices & procedures and
experience.
Together these elements constitutes a
teachable and learnable body of knowledge.
3
International Marketing (contd…)
International Marketing consists of finding
and satisfying global customer needs better
than competition, both domestic and
international
and of coordinating marketing activities
within the constraints of global environment
The task of responding to uncontrollable factors in the

firm’s environment.
4
Marketing In the new Millennium-
Challenges and Issues
1. Seamless Global society
2. Basis For competitive advantage
3. Business at the speed of thought
4. Virtual Enterprises
5. Customer: Co-producer of products and
services.
6. Customer: A warehouse of information
7. The Death of business and consumer
marketing
5
Challenges and Issues, Contd…
8. The role Of Distribution Channels
9. The Poor as Market Segment
10. Environment Protection
11. Diversity and Convergence Coexist
6
1. Seamless Global society
The physical Distance, information and Knowledge,
has now become redundant.
Emergence Of global Society and universal values.
Universal value relates to concept of time.Which is
an indicator of opportunity.
By this More and more customers are willing to
accept global products and services.
Further, emergences of these values has altered
concept of space,time and Location.
7
2. Basis For competitive advantage
Technological changes has lead to significant shifts

in Competitive leadership.
The present Day environment, Knowledge
management has become crucial armour for
competitive survival.
8
A = Your point of differentiation. Some questions to
consider:
How sustainable is this?
Is this really as large as we’d like it to be?
How can we make it larger and more sustainable?
B = Points of parity. Some questions to consider:
What do we want to do with these?
C = Competitors’ points of differentiation. Some
questions to consider:
Is this area growing?
How difficult would it be for us to move these to B or A?
D = Opportunity. Some questions to consider:
How do we go after this so we move it into A and not B?
How do we prevent our competitors from moving it to B
or C?
Why is this space so large and A so small?
The only way to do this analysis in a useful way is to get
the information from your target market. Don’t
9
3.Business at the speed of thought

The marketing Challenges Lies In enabling
Customers To overcome their resistance to change.
The Product Life Cycles will Be far shorter.
Interactive technologies will eliminate several roles
in marketing of products and services.
Products will be further standardized and hence the
opportunities to differentiate will no longer exists.
10
4. Virtual Enterprises
In this era of Digital Darwinism and virtual
reality, size and location of an enterprise
will have a very little or no role to play.
A Virtual Enterprise (VE) is a temporary alliance of
enterprises that come together to share skills or
core competencies and resources in order to better
respond to business opportunities, and whose
cooperation is supported by computer networks.
It is a manifestation of collaborative networks
The enterprise is more of an action, rather
than an institution.
11
5.Customer: Co-producer of products
and services.
The Producer will take the product up to certain
level in the value chain and then leave it for the
buyer to customize it to his or her requirements.
Ex- Asian Paints Shade Bay.

McDonald: Customers not only collects the order
but also cleans up after the food is consumed.
Color Worlds are altering the manner in
which products are distributed and
sold.
12
13
6.Customer: A warehouse of information
In this internet and speed age, the customers has

access to huge bank of information from various
national and global sources.
Hence the era of standardization is today replaced
by mass customization.
14
7.The Death of business and consumer
marketing
The differentiation between business and

consumer marketing, urban & rural
marketing and domestic & global marketing
will get more blurred.
The physical difference between the
product & services will cease to exist.
15
8.The role Of Distribution Channels
The conventional dealer and distributors will no

longer Viable.
Service and customized will be the order of the day.
Global SCM will emerge and converge.
16
9.The Poor as Market Segment
Globalization has widened the gap between

the rich and the poor.
Poor people world wide are now a large
segment which get not be ignored.
This segment offers more attractive
opportunity than the rich segment.
17
Globalization Of The Economy
Depends on:
• The role of human migration,
• International trade,
• Movement of capital, and
• Integration of financial markets
18
Globalization:
Globalization refers to increasing global connectivity,
integration and interdependence in the economic,
social, technological, cultural, political, and ecological
spheres.
Globalization is an umbrella term and is perhaps best
understood as a unitary process inclusive of many
sub-processes such as-
• Enhanced economic
• Interdependence,
• Increased cultural influence,
• Rapid advances of information technology, and
• Novel governance and
• Geopolitical challenges that are increasingly binding
people and
• The biosphere more tightly into one global system.
19
Globalization:
• Globalisation of the world economy has
been especially pronounced after World
War II and the Great Depression of the
1930’s in the USA.
• The rise in the volume of trade between
the developed and the developing
countries,
• Increase in cross-border transactions, rise
in immigration and
• Transfer of technology are some of the
key issues of globalisation
20
Percentage of Adopters
Early Majority Late Majority

Innovators
Early
Laggards
Adopters 34% 34%
13.5% 16%
2.5%
21
Early Time of Adoption Late
10.Environment Protection
The biggest Challenge for the new millennium
marketer is protection Of environment.
Be it in product development ,use or disposal,
The marketer will have to make a conscious efforts
to protect and maintain the environment.
This has led To development of eco-friendly
Products ex: Hotels, watches, food products, cars ,
fuels, packaging materials etc
22
Levi’s Eco Jeans Promotes
Sustainability
23
Bio Fuels
•Biodiesel
•Bioethanol
24
11.Diversity and Convergence Coexist
Markets are diverse. The diversity is not just Based
on Demographic & geographical location of the
customers, but also on their response in changes
epically to technological changes for which
converges of needs is also a fact.
It is not only product related but will based on the
organization's culture, systems and hence quality.
Ex- long term vision ,Financial soundness, top-end
technological development, Investment ,Innovation
and new product & market development.
25
Marketing Management Concepts or
Philosophies
There are Five Marketing Management
concepts:
1. Production Orientation Concept
2. Product Orientation Concept
3. Sales Orientation Concept
4. Market Orientation Concept
5. Societal Orientation Concept
26
Market Management Concepts or
Philosophies
1.Production Orientation Concept
The philosophies that consumers will favor

products that are available and that are
available and highly affordable and that
management should therefore focus on
improving production and distribution
efficiency.
Ex –Ambassador car, BAJAJ scooters
27
 Oldest concept in management
 According to this, consumers would
prefer those products that are widely
available and cheap
 Product management done by low
costs and mass distribution
Eg. Lenovo and Haier in China took
advantage of cheap Chinese labour and
became market leaders
28
Marketing Management Concepts or
Philosophies
2.Product Orientation Concept
The Idea that consumers will favor products that

offer the most quality, performance and innovate
features and that the organization to devote its
energy to make continues product improvements.
Ex- Microsoft products
29
Product Orientation
Consumers go for products with superior
quality and innovative features
Product management done by increased
focus on product development and constant
improvisation eg. Nokia 3310 to 7710
30
Sales Orientation
Consumers and businesses, if left alone, won’t
buy enough of the organization’s products
Aggressive push is required for promoting a
product eg. LIC
Sergio Zyman, Coke’s former VP of
marketing said, “The purpose of marketing is
to sell more stuff to more people more often
for more money in order to make more profit”
31
The Marketing
Orientation
Emphasizes on customer centered sense and
respond philosophy rather than product
centered make and sell philosophy
Reactive market orientation eg. iPod
Proactive market orientation eg. Sattelite
navigation systems
Total market orientation– Mix of both
proactive and reactive.
32
Societal
Orientation
 It questions the marketing concept
Eg. Do Fast food chains, create national
obesity epidemic?
Society
Societal
Consumers mrktng Company
concept
33
The Marketing Concept
• Concept has chanced dramatically Past Three
Decades
• 1950’s To 1970’s: Focus on products
• The Focus was On Internal Standards and
values of the company without the customer
focus.
• The objective was to persuade the potential
customer to buy the product in exchange to
money.
34
The Marketing Concept
– 1960’s To 1980’s:
• Focus on customer orientation
• Development of marketing mix: product, price, place,
promotion (4P’s)
• Product
– Enhancements easily matched
• Price
– Without accompanying cost reduction is a losing tactic
• Promotion and advertising
– Without accompanying price, product or service advantage
does not provide long-term success
35
The Marketing Concept (2)
1990’s:
• Product
– Enhancements easily matched
• Price
– Without accompanying cost reduction is a losing tactic
• Promotion and advertising
– Without accompanying price, product or service advantage
does not provide long-term success
Focus on customer in the context of the broader external

environment
• Competition, government policy & regulation
– Focus on stakeholder value

• employees, customers, shareholders, society
36
The Marketing Concept (3)
• Today:
– Two key tasks of marketing
• Focus on customer & his/her environment
• Create value for consumers & stakeholder
– Shift towards
• Focus on managing strategic partnerships
• Positioning of firm in value chain to optimize value creation
– Profit as a measure of success, not an end in
itself
37
Product Dimension
Time Dimension
Geographic Dimension
Three-dimensional structure Of international Marketing
38
Source: Text Edited by Stadtler & Kilger
Research & Product Process
Development Design Development
Raw
Materials Goods
Labor Services
Technology After-Sale
Infrastructure
Country A Country B
Country C Country D
39
The Global Supply Chain: Intra-Firm Coordination.
Potential opportunities
exploited by Dell
• Cost opportunities
– Reduce facility costs
– Geographical centralization and
reduced inventories: Most effective
for low volume, hard to forecast
books, least effective for high
volume best sellers
40
Nature
Three major developments in global markets and
technologies which have brought customer to
the forefront:
1. The information revolution
2. Customer demands in areas of
product and service cost, quality,
delivery, technology, and cycle time
brought about by increased global
competition
3.The emergence of new forms of
inter-organizational relationships 41
Distributor Storage with
Carrier Delivery Dell inventory
Factories
Warehouse Storage by
Distributor/Retailer
Customers
Product Flow
Information Flow
42
Dealing with Product Variety:
Mass Customization
Long
Lead Time
Short
Mass
Customization
t i on High Low Co
iza st
to m
s
Cu
Low High
43
Nature
For the global firm, the value-adding activities
(meaning the nodes) will be located in different
countries.
As a result the material, information and cash flows

(meaning the arcs) must cross national boundaries to
support operation of the global supply chain.
VALUE-ADDING ACTIVITIES: R&D, product design,

sourcing and procurement, production, distribution
and service, marketing, finance and accounting
44
Understanding the
Customer
Customer demand from different
segments may vary along several
attributes
– Lot size
– Response time
– Service level Implied
– Product variety Demand
– Price Uncertainty
– Innovation
45
Scope
• A global Marketing can realize such advantages
only if the management of the chain’s
geographically dispersed activities are
effectively coordinated and are flexible enough
to adjust the value-adding activities throughout
the world in response to the changes in the
competitive environment.
Thus COORDINATION & FLEXIBILITY are

the key concepts in implementing a
global Marketing Strategy
46
Need Based Economy
Need Based Economy
– Global Competition
– Liberalized Economy
– Compete or Perish
– Change Agents Needed

48
Challenges faced by the Manufacturing Sector
rapid tech.
innovation increasing global
Just-in-time
comptn
inventory
rapid response
Demanding Individual cust
time-to-market
delivery sched. omized prodn.
globalisation
(raw matl of markets
delivery:
road, rail,sea, air
or raw materials
(customer service
pipeline) inventory FACTORY A by wholesale and
retail outlets)
work in
process
inventory
pressures on
FACTORY B pricing
finished goods
inventory
A Production-Distribution System
small industries
pressures on
stress on quality time-to-mkt
shorter pdt. life
cycles
49
Foreign Policy’s Global Top 20
50
Globalization Of The marketplace:
Challenges faced due to the
Globalization of the marketplace:
• Increased competition
• Rising consumer expectation
• Growth of product variety, and
• The convergence of consumer tastes in
disparate geographical regions
Leading to a highly integrated corporate
structure known as Global Supply
Chain.
51
Levels of Product
Augmented Product
After
Delivery & Sales
Credit Actual Product Services
Features
Brand Name
Core
Benefits
Quality
Design
Level
Packaging
Installation
Warranty
52
Product & Services Classification
Classified As :
1. Consumer Products
2. Industrial Products
53
Marketing Mix
• Product
• Place (Distribution)
• Promotion
• Price
54
Core Product,
Basic cost, Profit
Actual Product
Other Terms Augmented product
Price Product
Marketing Mix
Media Advertising
Location,
Direct marketing,
Sales Promo, PR Channel Type
Promotion Place
55
Advertising Personal selling
Publicity Relationship
Promotion Mix Marketing
Direct Marketing Sales promotion
56
Domestic VS International Marketing
Domestic Marketing Global Marketing
1. One nation, same language and 1. Many nations, Many languages
culture. and cultures
2. Transport cost is one of the 2. Transport cost influences to
major expenses. some extent.
3. One currency 3. Different currencies in different
countries.
4. Market is relatively 4. Markets are diverse and highly
homogeneous. heterogeneous.
5. Political environments and 5. Different political environments
factors are the same. and factors in different countries
and are vital.
No problem of exchange control 6. There are problem of exchange
6.
and tariffs controls and tariffs.
57
Domestic VS International Marketing (contd….)

7. Data Collection relatively easy, 7. Data Collection a formidable
accurate and at less cost. task, requiring significantly higher
budgets and personnel
8. Relative freedom from Govt. allocation.
Interferences. 8. Govt. influences business
9. Individual company has little decisions.
effect on environment. 9. “Gravitational” distortion by Large
10. Relatively stable business companies.
Environment. 10. Multiple environments, many of
which are highly unstable.
11. Chauvinism helps.
12. Uniform Financial climate 11. Chauvinism hinders.
12. Variety of financial climates ,
procedures. to wildly inflationary.
58
Domestic VS International Marketing (contd….)
13. No major Legal & taxation 13. Legal & taxation issues not
issues relatively Smooth.
14. No major constrains in 14. Advertisements & promotions
advertisements & promotions have to be carefully handled.
(messages, language, costs, (messages,language,costs,medi
medium etc..) um etc..)
15. Marketing costs: is minimal, 15. Marketing costs: is a Variable,
Traveling, communication,
Presentations
16. Business “rules of the game” 16. Rules
mature and understood diverse,varied,changeableand
unclear sometimes.
59
Benefits Of International
Marketing
Benefits
1. Survival
2. Growth in Markets
3. Sales & Profits
4. Diversification
5. Inflation & Price
moderation
6. Standard of living
7. Immigration &
Employment
8. Consumer Benefits
9. National Benefits
61
Benefits of Competitiveness
More and better
Increased jobs Stronger
standard of national
living security
Increased competitiveness Decreased

Reduction budget deficit
trade deficit in world market
Improved domestic
performance
Technology Human
resources
Capital
High productivity of resources
What the customer

wants in products
and services
62
START HERE
Challenges
WHAT MAKES INTERNATIONAL MARKETING
CHALLENGING?
OPERATIONS IN A MULTI-COUNTRY CONTEXT

● Different Environments

Economic/Financial
Political/Legal
Social/Cultural
● Differences in Customer Behavior/Market
Segments
● Differences in Competition
● Different Marketing Infrastructures
Media
Distribution
Logistics
NEED TO:
64
● Adjust to These Differences
The Three Principles of
Marketing
CUSTOMER VALUE
DIFFERENTIATION FOCUS
65
Key Principles/Elements of
Marketing –
1. Customer Value
• Goal: create customer value that is greater
than the value created by competitors
• Strategy:
– Expand or improve product and/ or service
benefits
– Reduce the price
– Combine these two elements
66
Elements of Marketing –
Value Equation
V=B/P
V = Value
B = Perceived Benefits – Perceived Costs
P = Price
67
Customer Product Support
Meeting Customer Req
• FITNESS FOR USE
• Product service
• PROCESS INTEGRITY) • FLEXIBILITY TO MEET
• ELIMINATION OF WASTE CUSTOMER DEMANDS
• CONTINUOUS IMPROVEMENT • FLEXIBILITY TO MEET
MARKET CHANGE
Quality X Service
Value =
Cost X Cycle
DESIGN & ENGG
TIME-TO-MARKET
• CONVERSION
TIME-TO-MARKET
• QUALITY ASSURANCE (CONCEPT-TO- DELIVERY, ORDER
• DISTRIBUTION ENTRY TO DELIVERY)
• ADMINISTRATION RESPONSE TO MARKET FORCES, LEAD
TIME
• MATERIALS
(DESIGN, CONVERSION, ENGINEERING
68
AND DELIVERY)
Marketing –
2. Differentiation or Competative
Advantage
• Goal: create competitive advantage through
differentiation
• Advantage can exist in any element of a
company’s offer
• One way to penetrate a new national market
is to offer a superior product at a lower
price.
• Competitive Advantage Through Price,
Innovative Leadership & Quality
69
Marketing –
3. Focus
• Goal: Focus On concentration of attention &
resources On Customers
• Requirement to create customer value at a
competitive advantage
• A viable way for small & medium sized companies
to achieve dominant position in world market
• A clear focus on customer needs & wants
70
Management Orientation and
Global Marketing
• Different Management Orientations
in the Global Arena – EPRG
Framework
Polycentric
Ethnocentric
Regiocentric Geocentric
71
Stages
72
Managerial Orientation
 Ethnocentricity – Orientation to home
country

Polycentricity – Orientation to host country
 Regiocentricity – Orientation to a region
 Geocentricity – Orientation to the whole
world.
73
Management Orientation &
Global Marketing
• Ethnocentric Orientation:
– Characteristic of domestic &
international companies
– Opportunities outside the home
market are pursued by extending
various elements of the marketing
mix
74
Global Marketing
• Polycentric Orientation
– Characteristic of multinational
companies
– Marketing mix is adapted by
autonomous country managers
75
Global Marketing
• Regiocentric or Geocentric
Orientation:
– Characteristic of global & transnational
companies
– Marketing opportunities are pursued by
both extension & adaptation strategies
in global markets
76
Forces
Affecting Global
Integration
Driving Forces
1. Market Needs
2. Technology
3. Cost
4. Quality
5. Communications and Transportation
6. Leverage
• Systems
• Experience
• Scale
• Resources Utilizations
• Global Strategy
78
Restraining Forces
1. Market Difference
2. Product Image and History
3. Management Myopia
4. Organizational Culture
5. National
Controls/Barriers to Entry
79
Global Marketing An Insight
Additional Reading
The International Marketing Task
Foreign environment
(uncontrollable)
Political/legal Economic
forces forces
Domestic environment
(uncontrollable)
Political/
Cultural legal Marketing Competitive Competitive
forces forces (controllable) structure Forces
Price Product
Promotion Channels of
distribution
Environmental
uncontrollables
country market A
Geography
and Economic climate Level of Environmental
Infrastructure Technology uncontrollables
country market B
Structure of Environmental
distribution uncontrollables
country market C
81
ll
Foreign environment
(uncontrollable) The international marketer
Political/legal
forces must deal with two levels of
Economic
forces
Domestic environment uncontrollable uncertainty

(uncontrollable)
Political/
forces forces (controllable) structure Forces
Price Product
distribution
Environmental
uncontrollables
country market A
Geography
country market B
country market C
82
ll
Foreign environment
(uncontrollable) The international marketer
Political/legal
forces must deal with two levels of
Economic
forces
Domestic environment uncontrollable uncertainty

(uncontrollable)
Each foreign country in which
Cultural
Political/
legal Marketing a company
Competitive Competitive operates adds its
forces (controllable) structure
forces
Price Product
own
Forces
unique set of
uncontrollables
distribution
Environmental
uncontrollables
country market A
Geography
country market B
country market C
83
ll
Foreign environment
(uncontrollable)
forces forces
Domestic environment
(uncontrollable)
Marketing controllable
Political/
Cultural legal Competitive Competitive
forces forces structure Forces
Price
Price
Product
Product
Channels of
Promotion
Promotion Channels
distribution of
Distribution Environmental
uncontrollables
country market A
Geography
country market B
country market C
84
Foreign environment
(uncontrollable)
forces forces
Domestic uncontrollables
Political/
Political/legal
Cultural legal Marketing Competitive
Competitive Competitive
forces (controllable) structure
forces
forces structure Forces
Price Product
Channels of
Promotion
distribution
Environmental
uncontrollables
country market A
Geography Economic
Economic climate
and Level of Environmental
Infrastructure climate Technology uncontrollables
country market B
country market C
85
Foreign
Foreignuncontrollable
environment
(uncontrollable)
forces Domestic environment forces
(uncontrollable)
Political/
Cultural forces forces
Competitive
(controllable) structure
forces forces
Forces
Price Product
Channels of
Promotion
distribution
Environmental
uncontrollables
country market A
Geography and
Infrastructure
Geography
and Economic climate Level of
Level of Environmental
Technology country market B
Structure
Structure of of Environmental
distribution
country market C
86
The process (stages) of
Internationalization
Stages
1. Domestic
2. Export
3. International
4. Multinational
5. Global/Transnational
88
Stages
89
ALTERNATIVE STRATEGIES
High
Trans-
Global
Global Co-ordination Integration
National
Multi-
International
Low National
Low National differentiation, Responsiveness High
90

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International

The task of responding to uncontrollable factors in the

2. Basis For competitive advantage

Technological changes has lead to significant shifts

3.Business at the speed of thought

Ex- Asian Paints Shade Bay.

In this internet and speed age, the customers has

The differentiation between business and

The conventional dealer and distributors will no

Globalization has widened the gap between

Early Majority Late Majority

The philosophies that consumers will favor

The Idea that consumers will favor products that

Ex- Microsoft products

Focus on customer in the context of the broader external

– Focus on stakeholder value

Three-dimensional structure Of international Marketing

As a result the material, information and cash flows

VALUE-ADDING ACTIVITIES: R&D, product design,

Thus COORDINATION & FLEXIBILITY are

– Change Agents Needed

Direct Marketing Sales promotion

Domestic Marketing Global Marketing

Increased competitiveness Decreased

High productivity of resources

What the customer

OPERATIONS IN A MULTI-COUNTRY CONTEXT

Domestic environment uncontrollable uncertainty

Domestic environment uncontrollable uncertainty

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