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Introduction To International Marketing

This module introduces international marketing. It discusses the process of internationalization and internationalization theories. International marketing differs from domestic marketing in its consideration of factors like cultural differences, regulations, and trade barriers across countries. Firms expand internationally to access new markets or take advantage of comparative advantages like lower costs. The challenges of international marketing are greater than domestic due to complexity of operating in multiple regions. Effective international strategies require an understanding of global integration forces and management orientations.

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Khalil Rushdi
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59 views6 pages

Introduction To International Marketing

This module introduces international marketing. It discusses the process of internationalization and internationalization theories. International marketing differs from domestic marketing in its consideration of factors like cultural differences, regulations, and trade barriers across countries. Firms expand internationally to access new markets or take advantage of comparative advantages like lower costs. The challenges of international marketing are greater than domestic due to complexity of operating in multiple regions. Effective international strategies require an understanding of global integration forces and management orientations.

Uploaded by

Khalil Rushdi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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E13 International Marketing

Module 1

Introduction to International Marketing


This module covers the following themes:
 The process of internationalisation and internationalisation
theories
 Importance of global marketing
 What is different about international marketing?
 Challenges and opportunities of international marketing
 Framework of international marketing
 The dynamics of international competition

Upon completion of this module you will be able to:

 explain the basic foundation of international marketing.


 distinguish between global marketing and international
marketing.

Outcomes
 discuss the process of internationalisation as the first step to
international marketing and internationalisation theories.
 explain the need for international marketing and how it differs
from domestic marketing.
 differentiate between various kinds of management orientation
for international marketing.
 describe the factors that affect the process of global integration
and the global marketing.

Domestic marketing: Marketing practices within the firm’s home


country.

Comparative Advantage: The ability of a firm to produce a certain


Terminology
product at a lower opportunity cost compared
to another.

Competitive Advantage: A condition in which a company is able to


operate in a more efficient manner compared to
companies it competes with.

13
Module 1

Lesson notes2
Markets around the world have disintegrated and reintegrated again. The
United States of America President Barack Obama talks of a likely
dialogue with Cuba, a nation which until yesterday was a sworn enemy of
the United States, EU (European Union) enlargement and its
implications, or the rising power of China and India as global consumers.
All this has implications in the global business environment and
significantly in the way international marketing is done. However, before
the context of international marketing is discussed, it is important to
understand the reasons why firms go global. Sometimes it is for better
price realisation outside the country; decline in domestic market
opportunities and sometimes for better market opportunities outside the
home market. Brands like Nokia have very small and limited markets in
their home country. It is the desire to venture beyond the geographic
boundaries of their home country that helps them get a larger share of the
world market.

Another important factor, which has more of an international economics


imperative, is the comparative and competitive advantages that nations
have. China’s growth as a manufacturing hub and India’s strength as a
knowledge economy are now well-known. Low cost is another
advantage. Nations with lesser competency in related areas therefore take
advantage of such efficiency. The United States and Europe’s depleting
and ageing populations will mean that such initiatives will be further
wrested by India and China.

However, the connectivity between nations has also gone up. It is a


saying that “if the United States catches a cold then the whole world
sneezes.” Case in point is the current global slowdown and the impact of
recession which is being faced across the world. Chapter 1 provides the
rationale and basis to international marketing.

The foundation of this discussion however, remains the international


theories and the process of internationalisation. How have firms managed
to initiate the process of internationalisation even before their first
exports start? What is the import process? How do firms outsource parts
or components or even services for the manufacturing or the delivery
process? How a domestic bank may acquire smart card technology from
any company located outside the country is an example of how firms
initiate the process of internationalisation.

2
Students are encouraged to read the article, Globalisation of Markets by Theodore Levitt, Harvard
Business Review, May-June 1983.

14
E13 International Marketing

Reading: Chapter 1
Keegan Chapter 1
You should now read Chapter 1 of the Keegan text (Global Marketing, 4th
edition).
Reading

In applying your understanding of this material, you should take note of


the following:

 The concept of international marketing and its foundation is


Note it! laid through the concept of domestic marketing. The issues of
marketing mix, consumer behaviour and segmentation, targeting and
positioning will be as relevant in international marketing as in
domestic marketing. However, the aspects of the business
environment, the operational issues and differential consumer
markets make the context of international marketing more dynamic.
Today, as the context of globalisation and integration has become
more pronounced, the process of international marketing has become
more integrative.

 Another aspect which is loosely and interchangeably used with


international marketing is the term Global Marketing. Are they
different? Global Marketing has a larger scope compared to
international marketing. Global Marketing means widening business
horizons to encompass the world in scanning for opportunity and
threat. As participants to the programme, you must also understand
the importance of Global Marketing today both in the context of large
multinational enterprises and the MSME (Micro, Small and Medium
Enterprises). The role and scope of Global Marketing for each of
these enterprises is different, based on the nature of markets and the
products they produce. The last part will be the concept of
standardisation and localisation in the framework of international
marketing.

 The third aspect to be understood is the management orientation


process. The concept of EPRG (Ethnocentric, Polycentric,
Regiocentric and Geocentric) framework explained the different
approaches to international marketing and affects the way marketers
deploy differential strategies. The McDonalds versus Gillette strategy
of entering markets may be different. The form and substance of a
company’s response to global market opportunities depend greatly on
management’s assumption or beliefs - both conscious and
unconscious - about the nature of the world.

 The last part in this module that you need to be aware is the forces
that affect the global integration and Global Marketing process.
You should understand the driving forces and the restraining forces.

15
Module 1

The driving forces act as a catalyst for process integration and the
restraining forces act as a roadblock to the integration process.

Activity 1.1
1. When Louis V. Gertsner, Jr was Vice-Chairman of American
Express, he stated: “The split between international and domestic is
very artificial – and at times dangerous.” Do you agree with the
statement? Offer your rationale.
Activity 2. Do you feel that marketing is relevant to and should be used locally
as well as internationally by:

a) International agencies (e.g., the United nations)

b) National, state, and/or city governments

c) Socially/communist countries

d) Developing countries, and

e) Priests, monks, churches, and/or evangelists?

16
E13 International Marketing

Summary
In this module, you learned:

 The concept of international marketing and difference between


global and international marketing.
Summary
 The process of internationalisation and internationalisation
theories.

 The various management orientations for marketing


internationally.

 The factors that affect the process of global integration and Global
Marketing.

Assignment
Case Study: McDonald’s Expands Globally While Adjusting Its
Local Recipe

Read through the case study entitled, McDonald’s Expands Globally


While Adjusting Its Local Recipe on pages 31-35 of the Keegan text and
respond to the following questions:
Assignment
1. Identify the key elements in McDonald’s Global Marketing strategy.
In particular, how does McDonald’s approach the issue of
standardisation?

2. Do you think government officials in developing countries such as


Russia, China and India welcome McDonald’s? Do consumers in
these countries welcome McDonald’s? Why or why not?

3. At the end of 2003, McDonald’s announced it was selling the


Donatos Pizza unit. In light of this decision discuss McDonald’s
prospects for success beyond the burger and fries model.

4. Is it realistic to expect that McDonald’s or any well-known company


can expand globally without occasionally making mistakes or
generating controversy? Why do anti-globalisation protestors around
the world frequently target McDonald’s?

Submit your responses to the case study questions to your instructor or


tutor for evaluation.

17
Module 1

Assessment
1. Distinguish between:

a) Domestic marketing
Assessment
b) Foreign marketing

c) Comparative marketing

d) International marketing

e) Multinational marketing

f) Global Marketing and

g) World marketing.

2. Are domestic and international marketing different only in scope and


not in nature?

3. Distinguish between ethnocentrisms, geocentricism and


polycentricism.

4. Identify and briefly describe some of the forces that have resulted in
increased global integration and the growing importance of Global
Marketing.

18

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