Prof. Anand Narasimha

In this module we will learn about…
 Definition and Scope of International Marketing
 International Marketing Orientations
 ‘Globalization’ and ‘Glocalization’
 Why Companies pursue International Marketing
 Driving and Restraining Forces for International Marketing
 Ethical issues in International Marketing
 10 Commandments of International Marketing

Definition & Scope of International Marketing

Do the terms ‘International Marketing’ and
‘Global Marketing’ mean the same thing,
or is there any difference between the two?

International Marketing
• Marketing of products, services, ideas or entities across
geographical borders to foreign markets
• From ‘home country’ to ‘host’ countries

Global Marketing
• Targeting products, services, ideas and entities to consumers
across the globe based on their similarities and differences
• Looks at the world as a ‘borderless’, seamless entity
• Offshoot of ‘Globalization’
• A more evolved form of ‘International Marketing’

Domestic Marketing Exporting
International/Multinational Marketing Global Marketing
EVOLUTION

Domestic Marketing
• Marketing that is aimed at a single market (firm’s home market).
• Firms face only one set of competitive, economic and market
issues.
Export Marketing
• When a firm sells its products outside its home base of operation
and products are physically shipped from one market to another.
• Domestic market remains of primary importance.
• Major challenge: the selection of appropriate markets,
determination of appropriate product modifications to meet the
requirements and development of export channels.

International Marketing
• Much more directly involved in the local marketing environment
• Is likely to have sales subsidiaries
• Necessary adaptations to the firm’s domestic marketing strategy
• Participate in the entire marketing mix for the foreign markets
• Major challenge: the need to understand the different local environments.
Multinational Marketing
• The result of development of multinational corporations.
• Maximum amount of localization
• MNCs operate in several foreign countries as if the firms were local companies
• Multi-Domestic strategy: each strategy is tailored to a particular local market
• Major challenge: to find the best possible adaptation of a complete marketing
strategy for an individual country

Global Marketing
• Opportunities for economies of scale and enhanced
competitiveness will be greater if marketing strategies are
integrated into a global scale
• Global marketing strategy a single strategy for a product, service
or company for the entire global market
• Rather than tailor a strategy perfectly to an individual market, the
company settles on one general strategy that can be applied
throughout the world, while at the same time maintaining
flexibility to adapt to local market if necessary.
• Major challenge: design marketing strategies that can work well
across multiple markets

Let’s talk about examples of the types
of companies/strategies

International Marketing = Global Marketing
• While academicians define the two terms distinctly, in the industry
they are used interchangeably
• Especially in today’s ‘Globalized World’
• In our course we will treat both terms as one and the same for the
sake of simplicity and use the term: ‘International Marketing’
• We will also use a common, widely used term for the firms:
‘MNC’ (Multinational Corporation)

In today’s context an MNC is a firm that as
a rule-of-thumb:
- Generates more than 50% of its revenue from outside
its home country
- Has direct operations in more than 20 countries

What are the similarities and differences between
Domestic Marketing and International Marketing?
• Similarities: basic concepts, practices and tools are almost identical,
key success factors are the same
• Differences: more variables, more complexity, cultural differences,
legal constraints, information sources, managing distances, entry
mode choices

International Marketing Complexity
• Value Creation & Competitive Advantage: varied macro & micro
environments and competition
• Customer needs & wants: cross-cultural diversity
• STP: country/region-based variables & decisions
• Branding: country of origin affect
• Marketing Mix: extension, adaptation or creation
 Product
 Price
 Place
 Promotion

• Marketing discipline is universal but markets and customers across
geographies are quite different
• Three domains of knowledge relevant to International Marketing
• Cross-Cultural Knowledge
• Country/ Regional Knowledge
• Cross-Border Transactions Knowledge
• Strategies for ‘Extension vs. Adaptation vs. Creation’

Find out more about the different ways in which
International Marketing and Global Marketing
are defined.

International Marketing Orientations

• Ethnocentric: everything is centered on the domestic market.
• Polycentric: several important foreign markets exist.
• Regiocentric: the market is composed of several large economic regions.
• Geocentric: the world is one large global market.

Ethnocentric Polycentric Regio/Geocentric
Approach International
operations are
secondary
Each country is
relatively independent
The world/region is
one common market
Vision Centered on the
domestic market
Each market is unique Global/Regional vision
of the world
Priority Searching for identical
segments in foreign
markets
Taking into
consideration
differences in foreign
markets
Unifying differences in
the world/regional
markets
Planning center National headquarters Subsidiary in each
country
World/Regional
headquarters
Structure International division Division for each zone Matrix structure

Ethnocentric Polycentric Regio/Geocentric
Staff Citizens from the
domestic market
Citizens from each
market
Most qualified from
the world/region
Marketing strategy Extension Adaptation Extension, Adaptation,
Creation
Management style Centralized Decentralized Integrated and
interactive
Production Domestic Local Global/Regional low-
cost sources of supply
Partnerships Exporting, Licensing Joint-ventures,
Franchising
Strategic alliances,
Direct investments
Performance
measures
Domestic market
share
Local market share Global/Regional
market share

Let’s discuss examples of these

Four cases of internationalization of a firm
The early starter The late starter
The lone
international
The international
among others
Degree of
internationalization
of the firm
Low
High
Degree of internationalization of the market
Low High

Top Global Firms Based in Developing Markets
• America Movil
• Cemex
• China Mobile
• CNOOC
• Embraer
• Gazprom
• Haier
• Huawei Technologies
• Infosys Technologies
• Koc Holding
• Lenovo Group
• MMC Norilsk Nickel
• Mahindra & Mahindra
• Hisense

Globalization and Glocalization

Globalization
The production and distribution of products and services
of a homogenous/standardized type and quality
on a worldwide basis, based on the assumption that the
world is converging and becoming similar

Yesterday’s Globalism
In yesterday’s ‘one-size-fits-all’ world, big companies could often migrate
something that was a hit in the U.S. or Europe with a little tweaking
• Mercedes-Benz, traded on its reputation for building highly engineered
automobiles to drive into foreign markets.
• Coca-Cola Co. and Marlboro cigarettes traded on their “Americaness” to
create large overseas following.
• Sony Corp. found that compact, economical and reliable electronics like
the Walkman, struck a chord with people everywhere.

Today’s Globalism
Times have changed…
No company can safely assume there will be viable foreign markets
for an existing product.
Any company seeking to expand globally needs to ask if its
offerings are culturally and socially appropriate for its
targeted market.

Today’s Challenges
Companies find it difficult to succeed in new markets that are
culturally unfamiliar
They often underestimate differences in the patterns of daily life in
the new markets
This makes it difficult to develop products and services that fit
peoples’ lives
It becomes difficult to extend their brand and manage culturally
diverse teams

Hybrid Strategy
It’s often a mistake to set out to create a
worldwide strategy. Better results come from
strong regional/local strategies, brought together
into a global whole

‘Glocalization’
Think Global. Act Local.
At best, global marketing activities may exist at a strategic
level, while at an operational/tactical level they are
becoming less appropriate

Western companies are now paying a great deal of attention
to the growing number of people with expendable income in
China, India, and other developing/emerging regions where
the cultures are very different from those in the West.

Today, the Global Marketing Strategy used by firms is to
employ the practice of:
- standardizing marketing activities where cultures are similar
- adapting them where cultures are different

In the case provided, which elements of HSBC’s strategy
are ‘global’ and which are ‘local’?

Do a comparative study of the different view points
on the Globalization of business and its evolution

The New Reality
Emergence of a Networked Global Marketplace
Global Competition among Global Companies
for Global Consumers

In Hong Kong, a German businessman is driving a Lexus Hybrid;
he’s wearing Salvatore Ferragamo shoes, Irish Cashmere socks,
Calvin Klein underwear, an Armani suit, with a Gucci belt and
Ray Ban sunglasses.
He has a Mont Blanc pen, in his Hugo Boss shirt pocket and is
carrying an Apple i-phone 6S.
He’s going to meet an American investor at a Starbucks.
On the way back home late evening, he picks up a Baskin-Robbins
ice cream sundae. When he gets home, sitting on his Ikea Couch,
he enjoys a Bacardi with Coke, while listening to Blues and Jazz on
his Bang & Olufsen music system. He also orders a Pizza from
Dominos from his Mobile App. on Google Plus and checks his
T witter, Face Book and Linkedin updates.

Why Companies pursue International Marketing

• Activities in the international arena are of eminent importance to
companies in achieving maximum growth potential
• For US-based companies, 75% of sales potential is outside the US.
• For Japanese companies, 85% of potential is outside Japan.
• For German and EU companies, 94% of potential is outside
Germany.
• About 90% of Coca-Cola’s and McDonalds operating income is
generated outside the US.
• Trend: A large number of industries will be dominated by a
handful of global companies

PROACTIVE MOTIVES
• Accelerating profit and growth
• Aligning with national economic policies
• Driving leadership vision and desire
• Extending unique competencies
and competitive advantage
• Leveraging brand power
• Tapping foreign market opportunities-
for market development
• Developing economies of scale-
for cost advantage
• Availing tax benefits
REACTIVE MOTIVES
• Competitive moves and pressure
• Small and saturated domestic market
• Overproduction/excess capacity
• Tactical opportunities/ unexpected
orders
• Change in trade policies & regulations

Driving and Restraining Forces
for International Marketing

DRIVING FORCES
• Global economic integration
• Regional economic agreements
• Slow-down in developed markets
• High growth in emerging markets
• Converging consumer aspirations
• Rising price-quality expectations
• Increasing cost of doing business
• Highly networked world
• Growth of Internet, E-Commerce and
Technology
• Peace, political stability and
free markets
RESTRAINING FORCES
• Management myopia
• Ethnocentric organization culture
• National controls
• Cultural differences
• Limited long- term Investment potential
• Conflicts and political instability
• Economic downturns

What are the factors that are driving, as well as inhibiting,
Indian Companies from going Global?

Ethical Issues in International Marketing

Is Globalization of business the new form of Imperialism?
What is your point-of-view on this?

Is Free Basics truly promoting
digital equality, or is there a
hidden agenda behind this of Face Book?

10 Commandments for International Marketing

1. Understand similarities and differences in the
global landscape
2. Don’t take shortcuts in marketing and brand building
3. Establish a robust marketing infrastructure
4. Embrace integrated marketing strategies and
new technologies
5. Cultivate business partnerships
6. Balance standardization and adaptation
7. Balance global and local control
8. Define operable guidelines
9. Implement a global brand equity measurement system
10. Be ethical and socially responsible

Do an analysis of any global brand
that you think is following the
‘10 Commandments’ and demonstrate how?

Assignment-1: KYC of a Global Corporation/MNC (10 marks)
A large MNC will be assigned to each team and they will make a KYC
(Know Your Company) presentation, with specific focus on the
company’s ‘Global Strategies and Operations’.
Companies assigned will be such as P&G, Nestle, Tata Motors, Google,
Amazon, Samsung, Coca Cola …