CHAPTER 1

International Marketing and Exporting

DEFINITION of Export Marketing

Marketing of goods, services and information across political boundaries. Internationalization may be thought of as a process, an end result or a way of thinking Examples are: exporting, licensing, opening a sales subsidiary abroad etc.

Terms used interchangeably

International, multinational, and global International marketing: Any marketing activity that is carried out across national boundaries.

Multinational marketing: Approach used by companies with strong commitment to international marketing. (Adjusting products and practices in each country, with relatively high costs)
Global marketing: selling same products the same way, everywhere (Global implies standardized products
and practices with relatively lower costs)

Think globally, act locally

(Combination approach, Roth and Morrison, 1994)

Growing Importance of International Marketing

International marketing is gaining increasing importance worldwide It is due to: Technological advances Entrepreneurial innovations Emergence of e-commerce Advances in communication (etc)

Similarities and differences between International and Domestic Marketing

Similarities: Same elements such as marketing mix Basic marketing concepts (PLC, market segmentation, etc) Environmental factors (social, economic, political and geographic) The broad approach to the solution of marketing problems is identical.

Continued

Differences: Domestic business is conducted over intranational political boundaries Consumer tastes and needs Market structures Ways of doing business Laws and regulations (etc) Puts more liabilities/responsibilities on the management Rules and regulations vary from country to country Environmental differences (language barriers etc)

Business activities carried out in Marketing

Analysis of markets and potential markets Planning and development of products and services The distribution of products through channels The promotion of products and services Price setting Technical and non-technical support offered to the consumer

Firm Factors Company-specific Advantages Smallness Largeness Domestic Push International Pull

Openness

Location Enabling Environment Global Factors

Openness

Home Country Market Factors

Host Country Market Factors

Movement towards increased Internationalization

Degree of Internationalization Management needs to think about: How international the company is now? How international the company can be? How international the company wants to be?

Small and Medium-sized companies vs. Large Companies

Large companies introduce products globally Small/medium sized companies enter similar markets first
Note: When companies expand their sales internationally, often it becomes necessary to: make purchase abroad, invest in overseas production facilities.

International Marketing Management

Three important decisions: Whether to engage in international marketing activities at all? What specific individual markets are to be served? How will these markets be served? (Basic Marketing Mix Decision)

Dimensions of International Marketing

Exporting Importing Management of International operations

Marketing Program The planned and coordinated combination of marketing methods / tools employed to achieve a predetermined goal is called marketing program or the MARKETING MIX. Elements in the marketing program are interrelated or interdependent. Sometimes they act as substitute or sometimes they are complements or sometimes both.

Market driven marketing: A central feature of marketing is consumer orientation. Firms concerned with what consumers want, will buy and create a solid relationship with the consumer are market driven. An on-going process, oriented towards creating rather than controlling a market.

Product or Technology driven marketing: If you build a mousetrap, the world will beat a path to your door. Product driven marketing cannot adapt as quickly or as easily as possible.

Export marketing planning and strategy

Strategic and tactical issues are very important to consider as they relate to export marketing decisions. Strategic decisions: choice of countries, product markets, target segments, etc Tactical decisions: product positioning, product adaptation, advertising, etc

Adoption of Strategic Export Plan

Export Markets

1 Identifying and measuring opportunity

2 Developing an export marketing strategy

3 Making Export Strategy Operational

Target Export Market

Information Feedback

Export Marketing Planning Process

It is often important to control rather than just stimulate demand for some products. Different overseas marketing may have different demand states.

Various States of Demand

1. Negative Demand Segments of a potential market dislike the product and may even pay a price to avoid it. 2. No Demand Segments of a potential market are uninterested or indifferent to a particular product, service or idea. 3. Latent Demand Numerous people share a strong need for something that does not exist as an actual product. 4. Falling Demand When the demand for a product is less than its former level and where further decline is expected unless changes are made in the target market, product or marketing program

5. Irregular Demand Fluctuations in demand differ from the timing pattern of supply. 6. Full Demand Most desirable situation as the level and timing of supply and demand are in equilibrium. 7. Overfull Demand The demand for a product may be substantially greater than the level at which the seller wants to supply it. 8. Unwholesome Demand A state in which any demand is felt to be excessive because of the undesirable qualities associated with the product.

Obstacles to Exporting Obstacles may be real or may only be perceived to exist. Major obstacle is the greater operational effort involved in export and foreign market penetration Discussion: how a small company can cope with such barriers?

Impact of Technology Advances in technology have affected international marketing in two ways: Trade in technology-related products and services has grown rapidly Development of new channels of communication, lower costs, and an increase flow of communication. Result: Development of increasingly efficient and responsive production and distribution systems.

Entrepreneurial approaches to International Marketing

New approaches to international marketing have been made feasible by: Technological advances E-business Logistics
(Example: Online market places, The virtual company)

Competitive advantage cannot only be gained by exporting products or services, but the following can help achieve it too:

Exporting services of knowledge-industry workers And exporting business models

The End