INTERNATIONAL MARKETING Foreign Marketing encompasses the domestic

operations within the foreign country. A US

Broadly, international marketing refers to the
company considers marketing in the United
exchange process across nations. It has gained
States as domestic marketing and marketing in
prominence with the ever-increasing global
Great Britain as foreign marketing.
trade and linkages.
Comparative Marketing is the one when its
Cateora (1997) defines marketing as the
purpose is to contrast two or more marketing
performance of business activities that direct
systems rather than examine a particular
the flow of a company’s goods and services to
country’s marketing system for its own sake.
consumers in more than a nation for profit.
International Trade is concerned with the flow
Jain (1989) refers to international marketing as
of goods and services across national borders.
exchanges across national boundaries for the
The focus of the analysis is on commercial and
satisfaction of human needs and wants.
monetary conditions that affect the balance of
Terpestra (1972) looks upon international payment and resource transfer.
marketing as marketing carried on across
International Marketing, on the other hand, is
national boundaries.
more concerned with the micro level of the
Keegan (1997) comprehends that international market and uses the company as a unit of
marketing as going beyond export marketing analysis.
and becoming more involved in the marketing
The international marketer’s task is more
environment in which it is doing business.
complicated than that of the domestic marketer
International trade is a term that basically deals because the international marketer must deal
with the movement of goods and services with at least two levels of uncontrollable
between countries distinct from normal uncertainty instead of one.
corporate transactions involving buyers and
Marketing is a universal activity that is widely
sellers in different countries. International trade
applicable, regardless of the political, social, and
primarily reflects macro or aggregate supplies
economic systems of a country.
and demand in different countries.
Multinational Corporations (MNC’s) - They are
International business may be defined as those
business entities with one or more foreign
business transactions among individuals, firms,
affiliates in which the parent company holds at
or corporate entities in the private or public
least a 10 percent ownership stake. Because
sector that result in the movement of goods or
most foreign affiliates are 100 percent owned
services across national boundaries.
by their parents, and because more data are
The scope of international business can be available for majority-owned foreign affiliates,
divided into two categories financial. most of our calculations focus on majority-
owned affiliates.
The real or non-financial side of the theory of
international business studies trade theories, they are the global goliaths of modern times,
theory of the multinational enterprises responsible for large portions of world
including the reasons for the choice of entry production, employment, investment,
mode. international trade, research, and innovation.

The financial side of the theory covers the study Advantages of MNCs
of environmental factors affecting multinational
Access to Consumers – Access to consumers is
enterprises such as foreign exchange rates, the
one of the primary advantages that the MNCs
balance of payments, and international
enjoy over companies with operations limited
marketing systems.
to smaller regions. Increasing accessibility to
Domestic marketing is concerned with the wider geographical regions allows the MNCs to
marketing practices within a researcher’s or have a larger pool of potential customers and
marketer’s home country. help them expand, growing at a faster pace as
compared to others.
 Access to Labor – MNCs enjoy access to cheap  Money flows – As MNCs operate in different
labor, which is a great advantage over other countries a large sum of money flows to foreign
companies. countries as payment towards profit which
results in less efficiency for the host country
 Taxes and Other Costs – Taxes are one of the
where the MNCs' operations are based.
areas where every MNC can take advantage.
Many countries offer reduced taxes on exports  Transfer of capital takes place from the home
and imports in order to increase their foreign country to the foreign ground which is
exposure and international trade. unfavorable for the economy.

 Overall Development – The investment level, Characteristics of MNCs

employment level, and income level of the
1. Definition by size The term MNC implies
country increase due to the operation of MNCs.
bigness. But bigness also has a number of
 Technology – The industry gets the latest dimensions. Such factors as market value, sales,
technology from foreign countries through profits, assets, and number of employees, when
MNCs which help them improve on their used to identify the largest multinationals, will
technological parameter. yield.

 R&D – MNCs help in improving the R&D for 2. Definition by performance Definition by
the economy. performance depends on such characteristics as
foreign earnings, sales, and assets.
 Exports & Imports – MNC operations also
help in improving the Balance of payment. 3. Definition by behavior Behavior is somewhat
more abstract as a measure of multinationalism
 MNCs help in breaking protectionism and also than either structure or performance, though it
help in curbing local monopolies if at all it exists is no less important.
in the country.
a. Ethnocentricity Ethnocentricity is a strong
Disadvantages of MNCs for the Host Country orientation toward the home country. Markets
 Laws – One of the major disadvantages is the and consumers abroad are viewed as unfamiliar
strict and stringent laws applicable in the and even inferior in taste, sophistication, and
country. MNCs are subject to more laws and opportunity. The usual practice is to use the
regulations than other companies. home base for the production of standardized
products.
 Intellectual Property – Multinational
b. Polycentricity Polycentricity, the opposite of
companies also face issues pertaining to
ethnocentricity, is a strong orientation to the
intellectual property that are not always
host country.
applicable in the case of purely domestic firms.
c. Geocentricity Geocentricity is a compromise
 Political Risks – As the operations of the
between the two extremes of ethnocentricity
MNCs is widespread across national boundaries
and polycentricity.
of several countries they may result in a threat
to the economic and political sovereignty of The Process of Internationalization
host countries.
Exporting: The risk is low in exports and the
 Loss to Local Businesses – MNCs products profits are immediate with almost negligible
sometimes lead to the killing of domestic gestation periods. Exports also provide
company operations. significant learning opportunities to the
managers operating in domestic market.
 Loss of Natural Resources – MNCs use natural
resources of the home country in order to make Licensing: Licensing is a preferred mode of
huge profits which results in the depletion of entry in technology-driven businesses such as
the resources thus causing a loss of natural software, electronic hardware, pharmaceuticals
resources for the economy. etc.
 Joint Ventures: The joint ventures are often becomes a basis for the flow of foreign
established by MNCs with local partners with direct investment in a country.
the aim of reducing the risks associated with
a.8. Stimulates Competition: International
working in foreign markets.
business fosters healthy competition and helps
Turnkey project: turnkey projects are for in checking inefficient monopolies.
production of standardized product.
a.9. Technology Sourcing: In today’s rapidly
Overseas Production: Exporting and other changing world, it is important to keep pace
techniques may limit a company to release sales with the changing technology.
potentials for various products.
b. Microlevel effects of International Business:
Exporting vs International Marketing An individual firm can reap several benefits by
resorting to international marketing and
Exporting is usually a short-term solution to an
international business.
immediate problem of under-capacity of
production or over-capacity of the stocks. b.1. Growth: By all standards, domestic
However, international marketing is a long- markets have a limitation of growth potential.
term approach to sustained business from a After a particular level, it is very difficult for a
market. firm to achieve growth.

Benefits of international Marketing b.2. Fighting Competition: As the protectionist

measures by nations are being reduced, firms
a. Macro level benefits in national perspective:
operating in domestic market only are facing
International trade results in macro-economic
increased levels of competition.
effects for each economy.
b.3. Increased efficiency: By operating on
a.1 Increase in national Income: A country’s
global scale, a firm can select for its expansion
export activity promotes industrial and trade
lucrative opportunities.
activity that generates employment and income
for various sections of society. b.4. Scale economics: Higher level operations
on account of international operations produce
a.2. Efficiency: While exporting, the countries
benefits of scale and thus enhance the
try to attain specialization in production of
profitability of firm.
goods. In this process, there is optimum and
efficient utilization of the resources. b.5. Innovation: By operating in large markets,
companies can afford to invest in research and
a.3. Employment generation: Exports
technology development.
constitute a significant portion of different
nations and breed opportunities for more and b.6. Risk Cover: By operating on global scale,
gainful employment. the fluctuations of demand levels in an
individual country does not make much
a.4. Increased linkages: The staple theory of
difference on the aggregate sales.
economic growth recognizes that foreign trade
results into increased backward and forward MODULE 2
linkages with other sectors of the economy.
The dynamic environment of international
a.5. Optimal utilization of resources: marketing refers to the complex and ever-
International business makes possible the changing landscape of global markets,
utilization of agricultural resources as the characterized by cultural, economic, political,
farmers get a greater access to the overseas and legal differences across countries and
markets. regions.

a.6. Educative effect: Exports and international McDonald's is a great example of a company
business exposes the executives to overseas that has successfully adapted its marketing
market which develops greater skills in them. strategies to different cultural contexts.

a.7. Promotes Foreign Direct Investment: The International market segmentation is a

level of international business of a country marketing strategy that involves dividing a wide
target market into subsets of customers, Google is a company that has successfully
enterprises, or nations based on common implemented a continuous learning strategy in
requirements, choices, and priorities. its international marketing efforts.

Airbnb is a company that has successfully Airbnb is a company that has demonstrated
implemented a market analysis strategy in its flexibility and agility in its international
international marketing efforts. marketing efforts, particularly in response to
the COVID-19 pandemic.
Geographic segmentation is a common
approach, where dealers segment the market Important Aspects of Internationalization:
based on geographic criteria such as nations,
Cultural differences can significantly impact the
states, regions, countries, cities, neighborhoods,
success of a product or marketing campaigning
or postal codes.
different countries
Coca-Cola is a company that has mastered the
Global competition can pose a significant
art of geographic segmentation. The beverage
challenge to businesses, particularly those that
giant tailors its product offerings and marketing
delay international expansion.
campaigns to different regions around the
world. International marketing strategy involves
making several key decisions, including
Nike is a company that has effectively
researching the global marketing environment,
positioned itself as a leader in the global sports
deciding whether to expand internationally,
apparel market.
choosing which markets to enter, deciding how
International segmentation, targeting, and to enter the chosen market(s), creating an
positioning strategies are crucial for international marketing plan, and deciding on
international schools to gain a competitive organizational factors.
advantage in the market.
The key concepts of international marketing
Apple is a company that has successfully include making decisions on how a firm should
implemented an undifferentiated targeting enter new markets.
strategy.
Localized market research is essential for
Effective international marketing requires creating effective international marketing
strategic planning, market analysis, adaptation, campaigns.
and execution to successfully enter and
Cultural sensitivity audits are an essential step
compete in international markets.
in preventing unintended messages,
Global Competitive Brands with their misinterpretations, or potential offense in
differentiated Marketing Strategies that made international marketing campaigns.
them who they are now:
Leveraging local influencers can help
Netflix is a company that has successfully businesses boost brand credibility and gain
adapted its content offerings and marketing insights into the local market's subtleties.
campaigns to different cultural contexts.
Implementing dynamic currency conversion
Starbucks is a company that has successfully tools on e-commerce platforms can allow
implemented a brand localization strategy in its customers to view prices and make payments in
international marketing efforts. their preferred currency.

Nike is a company that has successfully Efficiently gathering and interpreting data
implemented a social media marketing strategy from various global sources is essential for
in its international marketing efforts. international marketing.

Facebook is a company that has faced Understanding the language and culture of a
regulatory challenges in its international target market is essential for creating effective
marketing efforts, particularly in the area of international marketing campaigns.
data privacy.
Thorough market research is vital to any ENTRY STRATEGIES IN INTERNATIONAL
marketing campaign, particularly in MARKETING
international markets.
 Exporting
Building up global SEO is a better long-term  Licensing
approach for international marketing. By using  Franchising
proper language tags and canonical links,  Contract Manufacture
businesses can maximize their SEO and provide  Management Contracts
a smooth user experience for consumers.  Joint Ventures
There are several types of international  Strategic Alliances
marketing, including export marketing,  Mergers & Acquisition
franchising, joint ventures and partnerships,  Wholly-Owned Subsidiary
direct investment, and licensing.  Turnkey Projects

Localization involves tailoring a product, EXPORTING

marketing materials, and communication to
Exporting is the most traditional and well
align seamlessly with the local culture and
established form of operating in foreign
language.
markets.
Establishing a pricing strategy that factors in
Exporting can be defined as the marketing of
local market conditions, competitive pricing,
goods produced in one country into another.
and cost considerations is essential for
businesses operating in international markets. The tendency may be not to obtain as much
detailed marketing information as compared to
Carefully selecting the channels for promoting
manufacturing in marketing country.
a product is essential for ensuring effective
reach to the target audience. Forms of exporting include direct exporting and
indirect exporting.
ENTRY STRATEGIES IN INTERNATIONAL
MARKETING FRANCHISING

International marketing means marketing • Players: Franchisor & Franchisee.

activity carried on across the national
• In terms of distribution, the franchisor is a
boundaries.
supplier who allows an operator, or a
According to AMA, “International marketing is franchisee, to use the suppliers trademark and
the multinational process of planning and distribute the supplier’s goods.
executing the conception, pricing, promotion,
• In return, the operator pays the supplier a fee.
and distribution of ideas, goods and services to
create exchanges that satisfy individual and • Thirty-three countries, including the United
organisational objectives.” States, and Australia, have laws that regulate
franchising.
Importance of International Marketing
• Franchising is the practice of using another
 Expansion opportunities
firm’s successful business model.
 Increased market share
 Career opportunities Examples: McDonald’s, Starbucks, Subway etc.
 Reaching new customers
LICENSING
 Investment opportunities
 Increased standard of living Licensing is defined as "the method of foreign
 Diversification opportunities operation whereby a firm in one country agrees
to permit a company in another country to use
A market entry strategy is the planned method the manufacturing, processing, trademark,
of delivering goods or services to a new target know-how or some other skill provided by the
market and distributing them there. licensor".
• Licensing involves little expense and • By both the foreign and local entrepreneurs
involvement. jointly forming a new enterprise.

• The only cost is signing the agreement and STRATEGIC ALLIANCES

policing its implementation.
This strategy seeks to enhance the long term
• It is quite similar to the "franchise" operation. competitive advantage of the firm by forming
alliance with its competitors, existing or
• Coca Cola is an excellent example of licensing.
potential in critical areas, instead of competing
• In Zimbabwe, United Bottlers have the license with each other.
to make Coke.
The goals are to leverage critical capabilities,
CONTRACT MANUFACTURE increase the flow of innovations and increase
flexibility in responding to market and
• A company doing international marketing technological changes.
contracts with firms in foreign countries to
manufacture or assemble the products while MERGERS AND ACQUISITIONS
retaining the responsibility of marketing the
Mergers and acquisitions (abbreviated M&A)
product.
are both aspects of corporate strategy,
• This is a common practice in international corporate finance and management dealing
business. with the buying, selling, dividing and combining
of different companies and similar entities that
• Many multinationals employ this in India can help an enterprise grow rapidly in its sector
example: Park Davis Hindustan Lever, Ponds. or location of origin, or a new field or new
MANAGEMENT CONTRACTS location, without creating a subsidiary, other
child entity or using a joint venture.
A management contract is agreement between
two companies, whereby one company This strategy is also known as an expansion
provides managerial assistance, technical strategy.
expertise and specialized services to the second • M&As have been imp & powerful driver of
company of the argument for a certain period in globalization.
return for monetary compensation.
• A large no. of foreign firms has entered India
It emphasizes the growing importance of through acquisition.
services, business skills and management
expertise as saleable commodities in • Example: Automobiles, Pharmacy, banking,
international trade. telecom etc.

JOINT VENTURES WHOLLY-OWNED SUBSIDIARY

Joint ventures can be defined as "an enterprise  A wholly owned subsidiary is a company
in which two or more investors share ownership that is completely owned by another
and control over property rights and operation. company called the parent
company or holding company.
• It is a very common strategy of entering the
 A wholly owned subsidiary is the
foreign market.
costliest method of serving a foreign
Any form of association which implies market.
collaboration for more than a transitory period  Companies taking this approach have to
is a joint venture. bear the full costs and risks associated
with setting up overseas operations.
• A joint venture may be brought about by a
foreign investor showing an interest in local TURNKEY PROJECTS
company.
• A turnkey operation is an agreement by the
• A local firm acquiring an interest in an existing seller to supply a buyer with a facility fully
foreign firm or equipped & ready to be operated by the buyer,
who will be trained by the seller.
• The term is used in fast food franchising when - Ability to differentiate from
a franchiser agrees to select a store site, build competitors
he store, equip it, train the franchisee & - Potential for higher customer
employee. satisfaction and loyalty

• Many turnkey contracts involve Adaptation Disadvantages:

government/public sector as buyer.
 Higher development and production
• A turnkey contractor may subcontract costs
different phases/parts of the project.  Complexity in managing multiple
product variants
Lesson: Product and Pricing Strategies in
- Potential loss of economies of scale
International Set-up
Standardization Advantages:
 Product and Pricing Strategies
Overview - Lower development and production
costs
Product and pricing strategies are fundamental
- Easier to manage and scale the
components of a company's overall marketing
business
and business strategy. These strategies
- Potential for higher economies of scale
determine how a company positions its
products or services in the market, how it sets Standardization Disadvantages:
prices, and how it adapts to different market
conditions and customer needs. Effective  Risk of not meeting local customer
product and pricing strategies can help a needs
company achieve its business objectives, such  Difficulty in differentiating from
as increasing market share, generating revenue, competitors
and maintaining profitability  Potential for lower customer
satisfaction and loyalty
 Product Adaptation versus
Standardization Pricing Strategies for International Markets

One key decision companies face is whether to Pricing strategies for international markets can
adapt their products to local markets or to be more complex than domestic pricing due to
standardize them globally. Product adaptation factors such as currency fluctuations, trade
involves modifying the product to better fit the barriers, and varying customer preferences and
needs and preferences of a specific market, purchasing power. Some common pricing
while product standardization involves offering strategies for international markets include:
the same product across multiple markets. Cost-based Pricing
Factors Influencing Product Adaptation vs. Setting prices based on the company's
Standardization production and distribution costs, plus a desired
- Customer preferences and cultural profit margin.
differences Competition-based Pricing
- Regulatory and legal requirements
- Availability of raw materials and production Aligning prices with those of competitors in the
capabilities local market to remain competitive.
- Competitive landscape and market Value-based Pricing
dynamics
- Economies of scale and cost considerations Setting prices based on the perceived value of
the product to the customer, rather than just
Advantages and Disadvantages of Product costs or competition.
Adaptation and Standardization Adaptation
Advantages: Skimming Pricing

- Better fit with local customer needs and Setting high initial prices to "skim" the market
preferences and then gradually lowering prices over time.
Penetration Pricing labeling, and environmental impact, influencing
market entry and operations.
Setting low initial prices to quickly gain market
share and then gradually increasing prices over Asia
time.
Customer Preferences: Asian customers value
Psychological Pricing tradition, family, and community in products
and services. They also appreciate personalized
Using pricing strategies that appeal to the
and culturally relevant offerings.
customer's psychology, such as odd-even
pricing or bundling. Purchasing Power: Purchasing power in Asia
varies significantly across countries, with some
Dynamic Pricing
regions experiencing rapid economic growth
Adjusting prices in real-time based on factors and increasing disposable income.
such as supply, demand, and competitor
Competition: The Asian market is diverse and
actions.
competitive, with a mix of local and
North America international brands competing based on price,
quality, and cultural relevance.
Customer Preferences: North American
customers tend to value convenience, quality, Regulatory Environment: Asia has a complex
and innovation in products and services. They regulatory landscape, with varying levels of
are often early adopters of new technologies government intervention, trade agreements,
and trends. and intellectual property protection.

Purchasing Power: The purchasing power in Africa

North America is relatively high compared to
Customer Preferences: African customers value
other regions, allowing consumers to spend on
affordability, durability, and functionality in
a wide range of goods and services.
products and services. They often prioritize
Competition: The market in North America is basic necessities and products that cater to
highly competitive, with a strong emphasis on local needs.
branding, customer service, and product
Purchasing Power: Purchasing power in Africa
differentiation.
varies widely across countries, with some
Regulatory Environment: North America has regions experiencing economic growth and
stringent regulations governing various urbanization, leading to increased consumer
industries, ensuring consumer protection, fair spending.
competition, and product safety.
Competition: The market in Africa is diverse,
Europe with a mix of local businesses, international
brands, and informal markets competing for
Customer Preferences: European customers consumer attention.
value sustainability, quality, and authenticity in
products. They are increasingly conscious of Regulatory Environment: Africa has a range of
environmental and social issues. regulatory challenges, including political
instability, corruption, and infrastructure
Purchasing Power: Purchasing power in Europe limitations that impact market dynamics and
varies across countries but is generally strong, business operations.
supporting a diverse range of consumer goods
and services.

Competition: The European market is

competitive, with a focus on quality, design, and
customer experience to differentiate products
and services.

Regulatory Environment: Europe has strict

regulations regarding product standards,