INTERNATIONAL MARKETING

MARKETING

Creating, communicating, and delivering value while managing customer relationships.

PRODUCT

What value do we offer?

PRICE

What does the customer give in exchange?

PLACE

How does the offering reach the customer?

PROMOTION

How do customers learn about it?

INTERNATIONAL MARKETING

Marketing activities conducted across national borders.

External factors that can shape marketing decisions:

Culture, Society, Economy, Politics, Law, and Competition

STAGES OF INTERNATIONAL MARKETING:

Domestic Marketing → Export Marketing → Multinational Marketing → Global Marketing

EXPORT MARKETING

Selling goods or services across national or political borders.

EXPORT MARKETING:

Indirect exporting
Semi-direct exporting
Direct exporting

MULTINATIONAL

Multiple countries; markets may be managed relatively independently; local adaptation is important. (Polycentric perspective)

GLOBAL

Worldwide perspective; markets and resources are coordinated to create global competitive advantage. (Geocentric perspective)

INTERNATIONAL MARKETING ORIENTATIONS:

ETHNOCENTRIC
POLYCENTRIC
REGIOCENTRIC
GEOCENTRIC

WHY INTERNATIONAL MARKETING MATTERS:

GROWTH
REVENUE
PROFIT
DIVERSIFICATION
ADVANTAGE

GROWTH

New customers and markets

REVENUE

Additional sources of sales

PROFIT

Potential for stronger returns

DIVERSIFICATION

Reduced dependence on one market

ADVANTAGE

Global resources and capabilities

GLOBALIZATION

Increasing economic, cultural, political, and technological interconnectedness across countries and markets.

DRIVING FORCES OF GLOBALIZATION:

Technology, Transportation, Communication, Market needs, Cost advantages, Quality improvements, and Global opportunities.

FORCES THAT RESTRAIN GLOBALIZATION:

Market differences
Management myopia
Organizational culture
National controls
Non-tariff barriers

FLATTENING WORLD

Markets are becoming increasingly interconnected and accessible.

MULTIDOMESTIC WORLD

National differences remain important and shape business decisions.

CAGE FRAMEWORK: 4 DIMENSIONS OF DISTANCE

C – CULTURAL
A – ADMINISTRATIVE
G – GEOGRAPHIC
E – ECONOMIC

CULTURAL

Language, values, beliefs

ADMINISTRATIVE

Government, laws, institutions

GEOGRAPHIC

Distance, transport, location

ECONOMIC

Income, resources, purchasing power

STANDARDIZATION

Using a similar or consistent marketing approach across markets.

CUSTOMIZATION

Adapting the marketing approach to local market conditions.

STANDARDIZATION

Global consistency, Economies of scale, Efficient coordination, Consistent brand

CUSTOMIZATION

Local relevance, Market responsiveness, Cultural fit, Local flexibility

THE HYBRID APPROACH:

GLOBAL CORE
LOCAL ADAPTATION

GLOBAL CORE

Brand identity, Core technology, Corporate values, Strategic direction

LOCAL ADAPTATION

Product features, Packaging, Pricing, Communication, Distribution

ETHNOCENTRIC

Home-country focused

POLYCENTRIC

Country-by-country perspective

REGIOCENTRIC

Regional market focus

GEOCENTRIC

World-oriented perspective

Marketing

Creating, communicating, and delivering value while managing customer relationships.

International Marketing

Marketing activities conducted across national borders.

Export Marketing

Selling goods or services across national or political borders.

Multinational Marketing

Multiple countries; markets may be managed relatively independently; local adaptation is important. (Polycentric perspective)

Global Marketing

Worldwide perspective; markets and resources are coordinated to create global competitive advantage. (Geocentric perspective)

Globalization

Increasing economic, cultural, political, and technological interconnectedness across countries and markets.

Standardization

Using a similar or consistent marketing approach across markets.

Customization

Adapting the marketing approach to local market conditions.

CAGE Framework

A framework explaining four dimensions of distance between countries — Cultural (language, values, beliefs), Administrative (government, laws, institutions), Geographic (distance, transport, location), and Economic (income, resources, purchasing power). It helps explain why countries are not interchangeable markets.

International Trade

The exchange of GOODS + SERVICES across NATIONAL BORDERS

SPECIALIZATION

Countries concentrate on activities where they can be relatively efficient.

COMPARATIVE ADVANTAGE

A country has a __ when it can produce something at a lower opportunity cost than another country.

Absolute Advantage

● Can produce more efficiently
● Focuses on productivity
● "Who produces more?"

Comparative Advantage

● Has lower opportunity cost
● Focuses on trade-offs
● "Who gives up less?"

MERCANTILISM

Economic theory stating a country's wealth is measured by its gold and silver holdings; nations should maximize exports and minimize imports to run a trade surplus.

TRADE THEORIES

Mercantilism > Absolute Advantage > Comparative Advantage > Modern / Firm-Based Theories

BALANCE OF PAYMENTS

A record of a country's economic transactions with the rest of the world

TRADE SURPLUS

Exports > Imports

TRADE DEFICIT

Imports > Exports

Trade Surplus

A situation where the value of a country's exports exceeds the value of its imports.

Trade Deficit

A situation where the value of a country's imports exceeds the value of its exports.

Merchandise Trade

are Physical Goods like Cars, Technology, Food, Machinery, Clothing

Services Trade

are Intangible Activities like Tourism, Banking, Consulting, Transportation, Banking Services

FOREIGN EXCHANGE

The mechanism for exchanging one currency for another.

Appreciation

Currency becomes more valuable

Devaluation/Depreciation

Currency becomes less valuable

HEDGING

A strategy used to manage exposure to currency fluctuations

GATT

General Agreement on Tariffs and Trade
Established in 1947.
Main Purpose: Reduce trade barriers and encourage freer trade.

MFN

Most-Favored-Nation

Most-Favored-Nation

If a country gives a trade benefit to one participating country, it generally extends that benefit to other participating members under the agreed rules.