INTERNATIONAL MARKETING MANAGEMENT

1. THE SCOPE AND CHALLENGE OF INTERNATIONAL MARKETING

A) Giant Swiss multinational company, Nestlé, “the food company of the
world”, it claims its products are sold in every country in the world. It has
factories in more than 80 countries and it has many brands that are
recognized all over the world.
B) Gaint Toyota corporation and its subsidiaries sell their cars in more than
170 countries, giving it a presence in more countries than any other auto
manufacturer.

We frequently hear terms such as global markets, global competition, global

technology, and global competitiveness.

What are the reasons?

What about the local markets, local competition, etc)?

Have forgotten it?

Who should integrate them how?

What are the differences between domestic, international and global

marketing ?

1. Domestic marketing:
• It focuses exclusively on a single country or a specific geographic region.
• The target market consists of consumer within the borders of the
country where the marketing efforts are taking place.
• Strategies: marketing strategies are tailored to the local economic
context and the local culture, language, and preferences of the
domestic market
2. International marketing:
• It extends beyond national borders and involves marketing activities in
multiple countries.
 • The target audience may include consumers from various countries, but
the marketing approach often considers regional differences.
• Marketing strategies need to be adapted to different competitive
situations, cultures, languages, and legal requirements in each country.
Ompanies may offer variations of their products to suit local
preferences.
3. Global marketing:
• It encompasses a worldwide approach, treating the entire world as a
singles market.
• The target audience is the global consumer base, with a focus on
creating standardized products or services that can be marketed
informally across various countries.
• Companies develop standardized marketing strategies, branding,
and products to achieve economies of scale. This approach assumes
that consumer preferences and needs are similar world wide.

Why is international marketing imperative?

External drivers of internationalization of companies

1. Nations have significantly lowered their trade restrictions

1. Declining barriers to cross-borders trade and investment. Trade
liberalization
2. Growth of regional trading arrangement (Free trade areas,
costoms unions, economic integrations, monetary
integrations,..)
3. The new orientation of most regimes has led to an enormous
amount of activity in the international marketplace

New global economic orders: not country can completely isolate its internal
affairs from external forces (political, technological, social, demographic,…)

2. Saturation of domestic markets Saturation of products and offerings the

consumers demand more.
3. Emerging markets
• The increase in wealth and growth in most parts of the world, causing
enhanced purchasing power
• The economic and population growth in developing countries also gave
those companies and additional incentive to venture abroad
• The most inward-looking regimes have realized the limitations of their
owne resources as well as the benefits of opening up their borders
 4. Global competition About 40 years ago, the world’s greatest automobile
manufacturers were General Motors, ford, and Chrysler. Today, companies
such as Toyota, BMW, Renault, and Hyundai, among other, stand out as
competitive nameplates in the global automobile market.
5. Global cooperation and collaborations. Eg due to the increasing pressure
to invest i new technologies and from slower growth in the industry. Eg BMW
and Toyota are already working together on fuel-cell technology and
recently showed a prototype vehicle, a converted BMW-5 with a hydrogen
engine
6. Communications and internet revolution
7. Transportation revolution
8. Emergence and establishment of international institution (WTO, WORLD
Bank, …)

World merchandise exports: Merchandise trade balance :

Main world bilateral import flow, 2018

 Factors influencing the global integrations foregoing investment and trade
descisions:

A) Demand factors
• Declining Home – Countries sales
• New host markets and sources of demand
• Top foreign markets that cannot be maintained only by export products
(Licensing rights)
• Paren company – Productive capacity not sufficient to meet domestic
demand
• Market comptetition in the host country
• Direct exporting

B) Internal factors and cost factors

• Motivated by higher rates of return on investment
• Reductions in production costs. Economies of scale
• Skills and wages cost of labour. Major inventive for a multinational to
invest abroad it to outsources labour – intensive production to countries
with lower wages
• Higher averages labor productivity
• Better acquisition of essential raw materials and commodities
• Decreased transportation costs
• Government economic and stability policies
• Improved management and better technology
• Tax rates. Larges multinationals, such as Apple, Google and Microsoft
have sought to invest in countries with lower corporation tax rates.
• Clustering effects. Foreign firms often are attracted to invest in similar
areas to existing FDI
• A weak exchange rate in the host country can attract more FDI becuuse
it will be.cehaper for the multinational to purchase assets.

Main export product, 2018. Annual growth rate in services by category

Key Facets of globalization I:

1. Globalization of trade
2. Globalization of markets and consumers (coca cola, McDONALDS, IKEA,
STARBUCKS):
i. The emerging of historical distinct & Separate national
markets into one huge global marketplace.
3. Globalization of consumerism and material culture similar all over the
world
i. In many markets today, tasted and preferences of consumers
in diferent nations are converging upon global norm.
4. Global of production (EG Boeing):
• Sourcing of good and services from locations around the globe to take
advantage of national differences in cost+quality of factors of
production (Labot energy, land, and capital),
• Lower overall cost structure
• Improve quality/functionality of product to compete more effectively
5. Globalization of resources
6. Globalization of capital flows (FDI, Stocks, Group G20,…)
7. Globalization of money (Bitcoins, …)
8. Globalization of knowledge

Too much globalization, standardization, …

What happens to the individual and his/her particular needs?

Are they more global, local or both ?

 Forum discussion: Does globalization leas to culture convergence or
divergence?

What is international marketing imperative ?

Internal (Companies ) drivers of internationalization of companies

1. Increased market potential: Acces to a larger costumer base. Expansion

of the business
2. Diversification of revenue streams: Operating in multiple countries can
helot mitigate risks associated with economic fluctuations in specific
markets
3. Reach economies of scales: It enables companies to produce and
distribute goods or services more efficiently, which can result in lower per-
unit costs.
4. Add competitive advantages: Allows them to offer uniques products,
reach untapped markets, and sty ahead of cometitors who are limited to
domestic operations.
5. Access to new resources and talent: Allows companies to leverage
resources, technologie, and expertise that may be available in specific
regions
6. Brand recognition and repudiation. Enchance brand visibility and
reputations and consumer trust.
7. Profit potential: It offers higher profit potential, especially in regions with
growing economies or higher demand for specific products or services.
8. Innovation and learning: Comaonies can gain sight into offering consumer
behaviors, preferences, and trends, leading to the development of more
innovative product or services
9. Political and economic stability. Operating in multiple countries can helo
companies mitigate risk associated with political or economic instability in
a single market
10. Utilization of surplus production capacity: It can help utilize a company’s
surplus capacity more efficiently.
11. Strategic alliances and partnerships: it provides opportunities for forming
strategies alliances and partnerships with local businesses, facilitating
better market penetration and understanding
12. Technological advancements: Acces to advances technologies and
innovations in different markets can contribute to a company’s
competitiveness and ability to stay at the forefront of industry trends.

International marketing defined.

International marketing is the performance of business activities that

direct the flow of a company’s goods and services to consumers or users in
more than one nation for a profit.

-The only difference in the defeinitions of domestic marketing and international

marketing is that the marketing Activites rank place in more than one country.

-This apparently minor difference account for the complexity and diversity
found international marketing operations.

-The uniqueness of foreign marketing comes from:

-Uncertainty: the range of unfamiliar problems

-Differentiated competitive scenarios, market structures and injuries
I’ve cycles

-Different social contexts: Culture, values, customs, beliefs, expectations,

social norms

-The variety of strategies necessary to copes with diffents levels of

uncertainty encountered in forefinger markets

-It’s uniques local, environment/context: Its level of competition, legal

restraints, government controls, weather, fickle consumers and any number
of other uncontrollable elements can frequently do, affect the profitable
outcome of good, sound marketing plans.

-A strategic successful in one country can be rendered ineffective in

another by differences in political climate, states of economic
development, level of technology o other cultural variations.

How to cope with these differences ?

1. The international marketer cannot control or influence these

uncontrollable elements, but instead must adjust or adapt to them
in a manner consistent with the local needs for a successful
outcome.
2. Enhancing research and testing to understand these uncontrollable
elements
3. Moulding/ crafting the controllable elements by
1) Applying all marketing principles and concepts that are
universally applicable and can be adapted
2) Adjusting all marketing strategies, tools, methodologies and
decisions (research, targeting, positioning, product, price,
promotion and distribution) within the framework of the
uncontrollable elements of the marketplace (competition,
politics, laws, consumer behaviour, level of technology and
so forth) in such a way that marketing objectives are
achieved.
International marketing management

- It is the strategic and tactical process of planning, organizing,

executing, directing, and controlling of marketing activities of a

given company on a global scale.

- It involves the development and implementation of marketing

strategies, tactics and actions to promote products or services

across international borders.

- The goal of international marketing management is to enable a

company to effectively and efficiently reach and satisfy the needs

of consumers in different countries while navigating the challenges

posed by diverse cultures, economies, and regulatory environments.

The international marketing tasks

We need to do a lot of research, research, research, …

- Scan opportunities

- Collect data and information (consumers, competitors, …)

- Analyze it and find relationships

- Interpret your findings, find trends, estimate, predict, etc

- Prepare you conclusions

- Report your findings and discuss your conclusions with

transversal and multicultural teams

- Make- decisions and elaborate adequate marketing entry strategies

and programs

- Prepare testings and make adjustments

- Follow-up your decisions

The evolution of international marketing

-There are five identifiable stages in the evolution of marketing

across national boundaries.

- These evolutionary stages are explained in the following slide .

Export Marketing:

International Marketing:

Multinational Marketing:
Global Marketing:
 2. THE DYNAMICS OF INTERNATIONAL BUSINESS AND THE STRATEGIC
PROCESS OF INTERNATIONAL MARKETING

What are the gains from international trade ?

a) Specialization: trade benefits countries by allowing them to

- Export goods made with abundant resources that they have available

- Import goods made with scarce resources that are hardly available for
them

Countries use finite resources to produce what they are most

productive at (compared to their other production choices), then
trade those products for goods and services that they want to
consume.

b) Efficicency: When countries specialize, they may be more efficient due to

larger-scale production.

Countries can specialize in production, while consuming many goods and

services through trade

c) Sourcing: Countries may also gain by trading current resources for future
resources

- International borrowing: acquire international financial resources for

various purposes such as infrastructure development, economic projects,
or addressing budget deficits.
 - International lending: lending funds to other nations, they can earn
interest or other returns on their investments.

- International migration: it contributes to the countries’ knowledge and

expertise and help address labor market imbalances.

Drivers and impediments to international trade

1. Distance between markets influences transportation costs and therefore

the cost of imports and exports.
2. Cultural affinity: close cultural ties, such as a common language, usually
lead to strong economic ties.
3. Geography: ocean harbors and a lack of mountain barriers make
transportation and trade easier.
4. Multinational corporations: corporations spread across different nations
import and export many goods between their divisions.
5. Borders: crossing borders involves formalities that take time, often different
currencies need to be exchanged, and perhaps monetary costs like tariffs
reduce trade.
6. Political factors, such as wars, can change trade patterns much more than
innovations in transportation and communication.
7. Economic policies, protectionist policies and trade agreements
8. Access to technology and infrastructures for trading
(communication,ports, …)

The 4 risks of international business

Persil Black and Persil Abaya = glocalization (same product, but different

packaging and market communication)

The patterns of trade

The pattern of trade describes who sells what to whom.

1. Differences in climate and resources explain why Brazil exports coffee and
Saudi Arabia exports oil.
2. … But why does Japan export automobiles, while the U.S. exports aircraft?

• Why some countries export certain products can stem from differences in:
1. Labor productivity and knowledge background
2. Relative supplies of capital, labor and land and their use in the production
of different goods and services
3. Easy access to technology and resources
4. Etc

Economies integration and trade agreements

“The removal of any kind of restriction to the free

mobility of goods, services and production factors

(capital and labor) between two or more countries”.

Integration: a process with multiple meanings

1. For people (proximity, mobility, culture)

2. For companies (markets, currency)

3. For governments (cooperation, federalism)