Characteristic of the
environment of the international
marketing.
The INCOTERMS (International Commercial Terms) is
a universally recognized set of definitions of
international trade terms, such as FOB, CFR and CIF,
developed by the International Chamber of
Commerce (ICC) in Paris, France. It defines the trade
contract responsibilities and liabilities between
buyer and seller.
Incoterms consist of 4 groups (E,F,C,D)
and are listed below in order of
increasing risk/liability to the exporter.
Some Incoterms only apply to
ocean/inland, not air, transportation
modes.
• EXW - Ex Works -- The only Incoterm in Group E,
represents the minimum liability to the seller. Risk and
expenses are borne by the buyer, including payment of
all transportation and insurance costs from the seller's
door.
• GROUP “F” - Seller pays for pre-carriage at origin but
does not pay for main carriage.
• GROUP “C” - Seller arranges and pays for main
carriage but does not assume risk.
• GROUP “D” - Seller assumes the most cost/risk
because goods must be made available upon arrival at
agreed destination.
The International Trade
System
The World Trade
Organization and GATT
Regional Free Trade
Zones
The World Trade Organization (WTO) is an organization
that intends to supervise and liberalize international
trade. The organization officially commenced on January
1, 1995 under the Marrakech Agreement, replacing the
General Agreement on Tariffs and Trade (GATT), which
commenced in 1948. The organization deals with
regulation of trade between participating countries; it
provides a framework for negotiating and formalizing
trade agreements, and a dispute resolution process
aimed at enforcing participants' adherence to WTO
agreements which are signed by representatives of
member governments and ratified by their parliaments.
The General Agreement on Tariffs and Trade (GATT)
is an international treaty designed to promote world
trade by reducing tariffs and other international
trade barriers. There have been eight rounds of
GATT talks since its inception in 1948, in which
member nations reassess trade barriers and set new
rules for international trade.
 The European Union
 EFTA
 AFTA
 NAFTA
 ANDEAN PACT
 SADC
 SAARC
 APAC
 MERCOSUR
 UEMOA
Industrial
Economies
Industrializing
Economies
Subsistence
Economies
Country’s
Industrial
Structure
Raw Material
Exporting
Economies
Attitudes
Toward
International
Buying
Government
Bureaucracy
Monetary
and nonmonetary
Regulations
Political
Stability
Tariff – is a tax levied by a
government against certain imported
products. Tariffs are designed to raise
revenue or to protect domestic firms.
Quota – is a limit on the amount of
goods that an importing country will
accept in certain product categories;
it is designed to conserve on foreign
exchange and to protect local industry
and employment.
Embargo – is a ban on the import of a
certain product.
Exchange controls – are government limits
on the amount of its country foreign
exchange smith other countries and on its
exchange rate against other currencies.
Non-tariff trade barriers – is non-monetary
barriers to foreign products, such UK biases
against a foreign company's bind or
product standards that go against foreign
company's product features.
Cultural
Traditions,
Preferences,
and
Behaviors
How
Customers
Think About
and
Use
Products
Behavior
Business
Norms and
 Indicators of market potential
1. Demographic characteristics
 Size of population
 Rate of population growth
 Degree of urbanization
 Population density
 Age structure and composition of the population
2. Geographic characteristics
 Physical size of a country
 Topographical characteristics
 Climate conditions
3. Economic factors
 GNF per capita
 Income distribution
 Rate of growth of GNP
 Ratio of investment to GNP
Direct investment – is an entering a foreign
market by developing foreign-based
assembly or manufacturing facilities.
Exporting – is a faltering a foreign market by
sanding products and selling them through
international marketing intermediaries (indirect
exporting) or through the company's own
department, branch, or safes representatives or
agents (direct exporting).
 Indirect Exporting
 Direct Exporting
Joint venturing – is an entering foreign,
markets by joining with foreign companies
to produce or market a product or service.
Licensing – is a method of entering a foreign
market in 'which the company enters into an
agreement with a licensee in the foreign
market, offering the right to use a
manufacturing process, trademark, patent,
trade secret or other item of-value for a fee
or royally.
Contract manufacturing – is a joint venture in
which a company contracts with
manufacturers in a foreign market to
produce the product.
Management contracting – is a joint venture
in which the domestic firm supplies the
management know-how to a foreign
company that supplies the capital; the
domestic firm exports management services
rather than products.
Joint ownership – is a joint venture in 'which
a company joins investors in a foreign
market to create a local business in which
the company shares joint ownership and
control.
Five International Product and Promotion Strategies
 Straight product extension means marketing a
product in a foreign market without any change.
 Product adaptation involves changing the product to
meet local conditions or wants.
 Product invention – is creating new products or
services for foreign markets.Product invention
consists of creating something new for the foreign
market.This strategy can take two forms, it might mean
re Intro dueling earlier product forms that happen to be
well adapted to the needs of a given country.Or a
company might create a new product 10 meet a need in
another country.
 Communication adaptation – is a global
communication strategy of fully adapting advertising
messages to local markets.
 Companies adopt a dual adaptation strategy
when both the product and communication
messages have to be modified to meet the needs and
expectations of target customers in different country
markets.
Distribution Channels
Deciding on the Global Marketing
Organization
 Export department is an arm of international marketing
organization that comprises a sales manager and a few assistants is
to organize the shipping out of the company's goods 10 foreign
markets.
 International division – is a form of international marketing
organization in which tin: division handles alt of the firm's
international activities. Marketing, manufacturing, research,
planning and specialist staff are organised into operating units
according to geography or product groups, or as an international
subsidiary' responsible for its own sales and profitability.
 Global organization - affirm of international organization
whereby top corporate management and staff plan worldwide
manufacturing or operational facilities, marketing policies, financial
flatus and logistical systems. The global operating unit reports
directly to the chief' executive, not to an international divisional
head.
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ATTENTION!