export marketing 1

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INTERNATIONAL MARKETING

AND EXPORTING

CHAPTER 1


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The importance of international

marketing

Lower barriers to trade

Improvements in transportation

Entrepreneurial and technological innovation

Excess capacity

Expansion of world trade


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Factors leading to internationalization

HOME COUNTRY FACTORS

Smallness

Openness

Location

Domestic push

HOST COUNTRY MARKET FACTORS

Openness Largeness

International pull


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The nature of international marketing

Marketing of goods and services and

information across national boundries

PLANNING, PROMOTION, DISTRIBUTION,

PRICING AND SUPPORT OF THE GOODS AND

SERVICES AND INFORMATION TO BE

PROVIDED TO INTERMEDIATE AND ULTIMATE

CUSTOMERS


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INTERNATIONALIZATION

International ~ marketing activity that is carriedout across national boundries

Multi-national ~ treat each foreign market

separately, developing differentiated productsand marketing strategies specifically for each ofthe markets(ethnocentric, polycentric,geocentric)

Global~ selling the same product in the sameway all over the world

E.g. automotive industry, internet


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Complexities of Export Marketing


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The customer profile in the foreign market isoften very different from that of the customer inthe domestic market, particularly in the areas of

language, religion, ideology, living standards andfashion

Different and unfamiliar cultural, economic, legal,social and political systems may be encounteredin foreign markets Foreign markets representunfamiliar environments

There are greater complexities associated withpayment, distribution, transport and insurance


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The role of documentation assumes added

importance to prevent misunderstanding and

costly litigation

There are new parameters that the exporterwill need to take into consideration, such as

import duties as well as legal restrictions,

different modes of transport, international

trade documentation, foreign currencies, and

different and additional marketing channels


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There is generally more extensive use made of

the fax and e-mail than the telephone andwhen these are used, different time zones anddifferent languages have to be considered

Operating in foreign markets exposes theexporter to far wider and more intensecompetition than would be the case in the

domestic market

Exchange rates, and in some cases exchange

control regulations, are applicable


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Goods are subject to customs control and the

payment of import duty (where applicable)

A number of technical and administrative

regulations may apply to exports - legalrequirements in certain foreign markets in

respect of the technical specifications of a

product, that call for changes to be made

before the product may be imported


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Degree of internationalization

Indicators that show the level of

internationalization of a particular firm ~

based upon the relationship between its

structure, evolution, organizational, product

and attitudinal characteristics of

international expansion


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There are a number of strategies through

which a company can plan its entry into an

international market ~ licensing, exporting,

sales subsidiary, production subsidiary, jointventure.

SMEs and large businesses differ in terms of

international operations


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International Marketing management

Major Dimesions of Internationalmarketing:~

Exporting

ImportingManagement of international operations

Three basic decisions with internationalmarketing management:~

Whether to serve international markets

Which markets to serve

How to serve these markets ( 4 Ps)


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International marketing management involves

the management of marketing not only to but

also in foreign countries ~ what entry mode

the company plans to choose

Market driven marketing approach creating

a market rather than controlling it.

Product / technology driven less concern

among competitors about consumers or

market share than product performance


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Marketing program for international

markets

Controllable factors:~ (FIRM SPECIFIC)

Firms export marketing mix (price, promotion,

product, product modification, export

structure, credit, channel)

Uncontrollable factors:~

Size, export competitiveness, export

experience, export products, export volume


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Domestic environments and foreign

environments(UNCONTROLLABLE)

political forces, cultural forces, geography and

infrastructure, distribution structure,

technology, competition, economic forces


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Factors in domestic and foreign

environment

LEGAL

POLITICAL SYSTEM

CURRENCY

CLIMATE


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Export marketing planning process


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Export marketing strategy and

Planning

1) Identifying and measuring oppurtunity:-

a) Preliminary screening

b) Estimating market potentials

c) Estimating salesd) Segmenting the market


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2) Developing an export marketing strategy:

a) Setting export objectives

b) Planning the marketing mix( 4 Ps)

3) Marketing Export Strategy operational:

a) Sales forecast

b) Sales budget

c) Sales quotas

d) Production schedules

e) Inventory control

f) Labour requirements

g) Promotional, financial and profit budgets


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Demand Management

Marketing may need to be concerned with

managing rather than just stimulating

demand: environmental, legal, supply, and

other concerns.

States of demand: negative, none, latent,

falling, irregular, full, overfull (excess demand

for oil during the oil crisis), unwholesome (viceproducts).


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Obstacles to exporting

Obstacles may be real or only perceived, but

perceptions guide actions.

Barriers affecting many companies,

particularly smaller ones, include: higher

operational efforts required for foreign

market, lack of information, lack of knowledge

and skills, trade barriers, risk, and others

Coping with barriers for smaller companies


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The Internet, WWB and E-Business

All aspects of domestic and internationalbusiness operations have been impacted bythe Internet, the World Wide Web and E-

business. Internet provides greatly increased speed and

lowered costs in communications.

World Wide Web, operating over the Internet,is an easily used system for providingconstantly available displays of information


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Impact of Technology

international markets, and lowered costs of doingbusiness.

Development and marketing of software tosupport e-business has become a major

international industry.

New products have resulted from major advancesin communications technology, medical research

and medicines, and traditional products andmanufacturing processes.

Improvements in shipping equipment and theapplications of information technology in

scheduling and control have reduced costs.


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Entrepreneurial approaches to

international marketing

E-business software allows companies tohandle key functions in a coherent on-linesystem: supply chain and distribution chain

management; ordering, billing, and inventorymanagement; analyses of sales and trends;etc.

Specific software is available to supportCustomer Relations Management (CRM)programs.


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Online marketplaces

The virtual company

Business-government alliances


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The growth of non-traditional exports

EXPORTING SERVICES OF KNOWLEDGEINDUSTRY WORKERS

Greatly increased capabilities and lowered

cost in communications have enabledcrossborder export of information services

Companies in lower-wage nations employ well

educated people in providing services rangingfrom call centers and back office support toadvanced technical support, softwaredevelopment, and design services.

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