PPT on Controllable and Uncontrollable factors of Marketing, Globalization and Role of MNC

1. BY-
Gurleen Kaur
Student of UIAMS, PU
The Uncontrollable and
Controllable Factors of
Marketing. Globalization and
Role of MNCs

2.  Controllable factor - often called as
"Marketing Mix". It includes: Product, Price,
Place and Promotion.
 Uncontrollable factors- often called as
"Environmental Factors“ which are out of
control.

4. Uncontrolled Factors
 Political Conditions
 Economic Conditions
 Socio-Cultural Conditions
 Technological Conditions
 Legal Conditions
 Competition
 Marketing Channels

5. Political Forces
The political environment includes the
characteristics and policies of the political party,
the nature of the constitution and the government
system and environment encompassing the
economic and business policies. The most
important policies are:
 Industrial Policy
 EXIM and Trade Policy
 Fiscal Policy

6. Economic Forces
 Global factors that are outside of the control of individual
organizations, but that can affect the way that
businesses operate.
 Economic factors include:
 Unemployment rates,
 Inflation rates,
 Labor costs,
 Per capita income,
 Market size

7. Socio-Cultural Forces
 Countries with cultural similarity can generally
be approached more easily as compared to
countries with cultural diversity.
 Social environment also affects the motives to
make a buying decision and the communication
strategy needs to be customized as per the
varied social traits for different market.

8. Technological Conditions
 There are vast variations in availability of technology
between developed and emerging markets.
 Bajaj Auto accounts for 85% of the market share of
three-wheelers in the Bangladesh market.
 Technological factors include ecological and
environmental aspects, such as R&D activity,
automation, technology incentives and the rate of
technological change. They can determine barriers to
entry, minimum efficient production level and influence
outsourcing decisions. Furthermore, technological shifts
can affect costs, quality, and lead to innovation

9. Legal Forces
 Well-developed sound legal systems in the target
market help to reduce the marketing risk and a firm can
expect a relatively unbiased and fair treatment.
 Countries at a higher stage of economic development
and democratic form generally provide a relatively
independent and a more just legal system.

10. Competition
 The competition in international market includes
products imported from various parts of the
world and also from the goods produced
domestically in the target markets. The products
imported from other competing countries that
have significantly different business
environment affect the competitiveness of the
products.

11. Marketing Channels
 The differences in the structure of marketing channels
necessitate appropriate changes in the marketing mix.
Generally, high-income countries, which have organized
large-scale outlets have higher stake in business
negotiations.

12. CONTROLLABLE FACTORS –
MC DONALD’S INDIA

13. International Marketing Mix

14. Mc Donald’s – Marketing Mix India

15. • Indian Preferences :
• Vegetarian Food
• Spicy Food
• So Mc Donald’s markets a product range tailor made for
Indian needs.
Product

16. Place

17. Price
• Product Line Pricing:
• McDonald’s offers a range of products prices according to use.
• So one can order just a Coke or a Coke with a Burger at
additional price.
• Product Bundle Pricing:
• McDonald’s combines several products in the same package.
• For example one can buy a McAloo Tikki alone or buy a
customized meal.
• Promotional Pricing:
• McDonald’s clubs three or four products together as one and price
of this new one will be lesser than the sum total of individual
product.
• Value Pricing:
• McDonald’s has realized that Indian market is a price conscious
market and this has forced McDonald’s to provide value products.
Examples are economy meal and value meal served by
McDonald’s in India.

18.  Advertising
 TV Commercials, Billboards,
Pamphlets
 Personal Selling
 Mcdonald’s hires employees in
its stores to cater customer
needs.
 Sales Promotion
 Coupons, Online Deals
 Public Relations
 News Stories, Sponsorships,
events
 Direct Marketing
 Home Delivery, Emails
Promotion

19. Globalisation
 Definition:
 An economic phenomenon?
 A social phenomenon?
 A cultural phenomenon?
 The movement towards the
expansion of economic and
social ties between countries
through the spread of
corporate institutions and the
capitalist philosophy that leads
to the shrinking of the world in
economic terms.

20. Integration of Economies
 Made possible by:
 Technology
 Communication
networks
 Internet access
 Growth of economic
cooperation :
trading blocs (EU,
NAFTA, etc.)
 Collapse of
‘communism’
 Movement to free
trade

21. ROLE OF MULTINATIONAL
CORPORATIONS

22. MULTINATIONAL CORPORATION
It is a corporation that:
Manages
production &
Operation
In more than
one country
Delivers
servicesAnd/Or

23. How Is A Company Classified As An
MNC?
Subsidiaries
in foreign
countries;
Operations
in a number
of
countries;
High proportion
of assets or/
and revenues
from global
operations;
Stakeholders
are from
different
countries.

24. Globalization of business
„Globalization is a way of corporate life
necessitated, facilitated and nourished
by the transnationalisation of the world
economy and developed by corporate
strategies
The internationalization process
It is a process by which a company enters a foreign
market.

25. MNCs and International trade
„The sale of foreign subsidiaries in the host
countries are three to four times as large as
total world exports
Significant increase in the export intensity of
the foreign affiliates of MNCs
The abilities of multinationals to manipulate
financial flows by the use of artificial
transfer prices is bound to be a matter of

26. Reasons for The Establishment of
MNCs
To increase market share.
To secure cheaper premises and labour.
Employment and Health & Safety Legislations in other
countries may be more relaxed.
To avoid or minimise the amount of tax to be paid.
To take advantage of government grants available.
To save on costs of transporting goods to the market
place.
To develop an international brand.

27. Advantages
To the Home
Country
To the Host
Country

28. Benefits of MNCs to the Home
Country
Acquisition of raw materials from abroad.
Technology and management expertise acquired
from competing in global markets.
Export of components and finished goods for
assembly or distribution in foreign markets.
Inflow of income from overseas profits, royalties and
management contracts.

29. Benefits of MNCs to the Host
Country
Transfer of technology, capital and entrepreneurship.
Increase in the investment level and thus, the income and
employment in the host country.
Greater availability of products for local consumers.
Increase in exports and decrease in imports.

30. Drawbacks of MNCs:
Trade restrictions imposed at the government-level
Limited quantities (quotas) of imports.
Effective management of a globally dispersed
organization.
Slow down in the growth of employment in home
countries.
Destroy competition and acquire monopoly.

31. MNCs in INDIA
„In India the government policy confined
the foreign investment to the priority areas
like high technology and heavy investment
sectors of national importance and export
sectors. Firms which had been established
in non-priority areas prior to the
implementation of this policy have,
however, been allowed to continue in
those sectors.

32. „Several Indian outfits of MNCs are in
the low technology consumer goods
sector. There are many MNCs which are
in high technology area.
„Since the economic liberalization
unshared in 1991, many multinationals
in different lines of business have
entered the Indian market.

33. Fortune Global 500 List 2011: Top 10
RANK COMPANY COUNTRY FIELD
1 Wal-Mart Stores United States Retail
2 Royal Dutch Shell Netherlands Petroleum
3 Exxon Mobil United States Petroleum
4 BP United Kingdom Petroleum
5 Sinopec China Petroleum
6
China National
Petroleum
China Petroleum
7 State Grid China Power
8 Toyota Motor Japan Automobiles
9 Japan Post Holdings Japan Diversified
10 Chevron United States Petroleum

34. Indian companies in fortune global
500 list 2011:
COUNTRY
RANK
COMPANY GLOBAL
500 RANK
CITY REVENUE
($ millions)
1 Indian Oil 98 New Delhi 68,837
2 Reliance
Industries
134 Mumbai 58,900
3 Bharat
Petroleum
272 Mumbai 34,102
4 State Bank of
India
292 Mumbai 32,450
5 Hindustan
Petroleum
336 Mumbai 28,593
6 Tata Motors 359 Mumbai 27,046
7 Oil & Natural
Gas
361 Dehradun 26,945
8 Tata Steel 370 Mumbai 26,065

35. T H A N K Y O U