International Marketing

Definition of International Marketing

Definition of International Marketing

Consists of the activity, institutions and processes across national borders. - Czinkota and Ronkainen

Export and trade

Selling goods or services to other nations and importing from them.

Licensing

Right to use a technical solution.

Joint ventures

Two existing companies merge into a new one.

Wholly owned subsidiaries

You own 100% of a company (all the control and all the risks).

Turnkey operations

On my behalf, do my production and I’ll pay you everything! (no risk taken)

Management contracts

Sign contracts with pros who know what they are doing. You control the hotel strategically, not as a manager.

Why is international marketing a key agent of societal change?

It influences what we buy so it can change our society.

Why is international marketing a key instrument that responds to business strategy?

The decisions are based on international issues.

Dates of Booming Growth

2015-2019 and then CoVid

Situation in 2023

Post-COVID-trade recovers but there are dramatic shifts.

Definition of Trading Blocs

Two or more countries who agree on trade policies.

Name the different trading blocs

NAFTA, MERCOSUR, ASEAN, (EU)

What’s the world’s largest trading bloc?

RCEP with 1/3 of all economic activity

What does RCEP stand for?

Regional Comprehensive Economic Partnership, it’s made of the Asia-Pacific nations

What does FDI stand for?

Foreign Direct Investment

How do FDIs lead to the end of international cooperation?

FDI → Global interdependence → Deglobalisation → Protectionism → Every man for himself

Who has more power between domestic & global economic activity?

Global economic activity: Global Market Forces impose increasing tight limits on national economic regulation.

How do currency flows affect trade?

Currency flows → Exchange rates more or less expensive → Higher or lower levels of trade

What are 4 policy makers?

Tariffs, quotas, trade barriers, import regulations

What are 2 consequences of global linkages?

🙂 Closer economic relations but ☹ interdependence

Why should countries trade with each other?

More global business activities = More opportunities

What’s the difference between efficiency and effectiveness?

Efficiency is about using less resources and time in the production process, while effectiveness is about the quality of the outcome.

Is WTO for or against protectionism?

Against

What does WTO stand for?

World Trade Organisation

What does the WTO do?

It regulates trade restrictions.

What are the 8 market characteristics?

(P P U D I I I C): Population, Purchasing Power Parties, Urbanisation, Data on product saturation/diffusion, Inflation, Income, Infrastructure, Consumption patterns

Definition Emerging Market

Country that tries to change and improve its economy.

What does economic integration create for the international marketer?

Opportunities and potential problems

Give 4 examples of natural resources

Minerals, land, water and energy

Why are natural resources important?

They are attractive for PRODUCTION and they determine the ECONOMIC STRUCTURE of a country.

What are the 4 physical characteristics added to natural resources?

TICU: Topography, Infrastructure, Climate, Urbanisation

What are the 6 socio-cultural elements?

Ramole: Religion, Aesthetics, Material culture, Organisation, Language, Education

2 things to know about the political environment in international marketing

1) Stability of government policy and 2) Risks of harrassment from political policies

What are the 3 ways to reduce political risks?

Identifying vulnerability, establishing positive interactions and regulating international transfers of resources.

What are 4 foreign market entry strategies?

Indirect export, direct export, foreign production and cooperative export

What is indirect export?

R&D, production marketing and S&S in home country

What is direct export?

S&S are abroad

What is foreign production about?

Licensing, franchising and contract manufacture

What is cooperative export?

Marketing and S&S abroad

What are 4 proactive stimulis?

Unique products, profit advantage, technological advantages and exclusive information

What are 3 reactive stimulis? = reaction that leads to internationalisation of exports

Not competitive enough home, overproduction and saturated domestic market

What are 2 internal change agents in the internationalisation process?

New management and significant internal event

What are 3 external change agents in the internationalisation process?

Demand, government and proximity to ports

Definition of licencing agreement

The licensor permits the licensee to use its intellectual property in exchange for compensation designated as a royalty.

What are 3 advantages of licensing?

Benefits from new development, reduced risk of failures and not many skills required

What are two disadvantages of licensing?

Limited expertise and the licensor creates its own competitor

Definition of franchising

The franchiser grants the franchisee the right to do business in a specified manner. = How to do business

What’s the difference between a retailer system and a wholesaler system?

Retailer = small quantity / Wholesaler = big quantity

What are the 3 types of franchising?

• manufacturer-retailer system

• manufacturer-wholesaler system

• service-firm-retailer system

Definition of FDI

Investment in which an investor resident in one economy establishes a lasting interest in an enterprise resident in another economy

Definition of portfolio investment

Focus on the purchase of stocks and bonds internationally

What are 3 advantages of FDI?

More employment, competitiveness, managerial skills

What are 2 disadvantages of FDI?

Dependence and competition for local firms

Definition of strategic alliances

Arrangement between 2 or more companies with a common business objective

Definition of government consortia

A collaborative partnership between multiple government entities.

Definition of standardised global marketing

Same marketing strategy and mix in all of the company’s international markets

Definition of adapted global marketing

Adjust the strategy to each target market

What is it called when: neither the product nor the communication change?

Straight extension

What is it called when: the product is adapted but the communication doesn’t change?

Product adaptation

What is it called when: the product doesn’t change but the communication adapts?

Communication adaptation

What is it called when: the product and the communication adapt?

Dual adaptation

What is it called when: a new product is developed?

Product invention

What would examples of ‘core product benefits’ be? (2)

Performance, functional features

What would examples of ‘product attributes’ be? (3)

Brand name, price, staff behaviour

What is predictive maintenance?

Maintenance before the product breaks

What’s the main marketing difference between linear and circular economy?

In the circular economy, the after-sales service is more important than the actual product sale

What does noise do?

It prevents the message from being heard and that people remember and act

What would an example of noise be?

Lack of authenticity in an influencer’s words

What 4 types of differences can prevent communiation?

SELL: Sociocultural, Economic, Language and Legal differences

What is the main indicator of a firm’s sales?

The price

Definition of usury

To lend money at unreasonably high rates of interest

What are 2 external factors of price?

The environment & the market

What are the 4 pricing strategies?

Price-level (1st time), price changes, pricing across products and pricing across countries

Definition of goods

Fixed in form and require physical distribution

Definition of services

Intangible, personalised and perishable

What is the most product-dominant entity?

Salt

What is the most service-dominant entity?

Teaching

What are the 6 unique characteristics of services?

PQCHTS: Perishable, Quality perception, Custom-made, Heterogen, Transparent and Sensitive culture

What are the 3 types of services?

People processing, Possession-possessing and Information-based

What are 3 examples of people-processing services?

Education, healthcare, lodging

What are 3 examples of possession-processing services?

Car repair, equipment installation, laundry

What are 3 examples of information-based services?

Telecommunication, banking, internet

What is the most standardised type of service?

Information-based services

What is the least standardised type of service?

People-processing services

What does ITO stand for?

International Trade Organisation

What is the International Trade Organisation?

An organization that promotes global trade and economic cooperation by setting a series of agreements

When was the ITO founded?

1948

What does GATT stand for?

General Agreement on Tariffs and Trade

When was the GATT founded?

1947

What was the GATT’s main role?

Settlement of disputes

When did the GATT become WTO?

In January 1995

What does IMF stand for?

International Monetary Fund

When was the IMF founded?

1944

What does the IMF do?

It provides fixed exchange rates between countries to create stability

What is the Doha Round?

Round of trade negotiations among the WTO membership

What is the World Bank?

Founded in 1944, it provides economic assistance for the reconstruction of war-torn countries

What is the European Coal and Steel Community?

Regional organization established in 1951 to promote economic cooperation among 6 European countries → Create a common market for coal and steel = essential for post-war reconstruction

What are customs unions?

Trade agreements between countries that eliminate tariffs on goods traded within the union and establish a common external tariff for goods from outside the union.

European Union, values

Free movement of capital, services and people + development of common international policies