International Marketing
ATM Semester 2
Tutorial 10
By Dildara Gapparova / Pavel Galkin
What is International Marketing?
International marketing can be
defined as "marketing carried on
across national boundaries".
Philip Kotler.
Additional definition of International
Marketing
International marketing has also been defined as '
the performance of business activities that direct
the flow of goods and services to consumers or
users in more than in one nation'.
Why do the companies go International?
• Reduce dependence on current markets
by spreading your risk.
• Declining domestic sales.
• Overproduction.
• To increase Sales.
• Saturated domestic markets, etc.
Culture: what is it?
Culture can be define as the sum of knowledge,
beliefs, art, morals, laws, customs and any
other capabilities and habits acquired by
human members of society
Culture is ‘everything that people have, think and
do as members of their society’
Cultural Factors
• Never touch the head of a Thai or pass an object over it – the
head is considered sacred in Thailand.
• Avoid using triangular shapes in Hong Kong, Korea and
Taiwan – the triangle is considered a negative shape.
• The number 7 is considered bad luck in Kenya and good luck
in the Czech Republic.
• The number 10 is bad luck in Korea while The number 4
means death in Japan.
• Red represents witchcraft and death in many African countries
but it is a positive colour in Denmark.
Seminar Exercise
Examples of Company Failure Due
to Cultural Mistakes
When Gerber, a Nestle owned purveyor of baby foods
first started selling their baby food in Africa, they used
the same packaging as in the USA – with the cute baby
on the label. Later they found out that in Africa
companies routinely put pictures on the label of what is
inside the package, since most people cannot read.
Examples of Company Failure Due
to Cultural Mistakes
A golf ball manufacturing company packed golf
balls in packs of four for convenient purchase
in Japan. Unfortunately, pronunciation of the
word “Four: in Japanese sounds like the word
“Death” and items packaged in four are
unpopular.
What are the Foreign Market Entry
Modes?
•Exporting
•Licensing
•Joint Ventures
•Direct Investments
Seminar Exercise
What kind of Market Entry
mode companies should use
in order to enter Uzbekistan
market?
Exporting
Exporting is the marketing and direct sale of domestically –
produced goods in another country.
Advantages and disadvantages of Exporting
Advantages :
Disadvantages:
• Low financial Risks
• Logistical complexities
• Speed of entry
• Potential conflict with distributors
• Acquire knowledge about local
• Limited access to local information
market for further decisionmaking process.
• Company viewed as an outsider
Licensing
Licensing is when a firm, called licensor, leases the right to use its intellectual
property – technology, work methods, patents, copyrights, brand names, or
trademarks – to another firm called the licensee, in return for a fee.
Advantages and disadvantages of licensing
Advantages :
• Low financial Risks
• Low cost as well as fast way to
assess foreign market
• Licensee provide knowledge of
local market to the licensor
Disadvantages:
• Limited market opportunities /
profit
• Dependence on licensee
• Potential conflicts with licensee
Joint Ventures
A joint venture is an entity formed between two or more parties to undertake economic
activity together. The parties agree to create a new entity by both contributing equity, and
then they share in the revenues, expenses, and control of the enterprise.
Advantages:
Benefits from local partner`s knowledge
Disadvantages:
Risk giving control of technology to Partner
Shared costs/ risks with partner
Reduce political risk
Shared ownership can lead to conflict
Difficult to manage
Direct Investments
Companies enter the international market through FDI,
invest their money, establish manufacturing and marketing
facilities through ownership and control from scratch.
Advantages and disadvantages of Direct Investments
Advantages :
Disadvantages:
• High degree of control
• Requires a high level of recourses
• Ability to better understand the
• Higher risk than other modes
consumer needs
Ways of foreign market penetrations
A firm does not have to be a global giant like Mitsubishi or Boeing to look for
business opportunities abroad.
Most important thing while going internationally is to choose proper strategic
orientation which will suit the company.
Strategic orientation is an indication of the direction in which a business wants
to or should go in the future, and how well it is set up to do so.
International Marketing Orientations
• Domestic market extension
• Multi-domestic market
• Global marketing
Domestic market extension
Domestic market extension of a firm considers that the products, marketing
strategies and techniques applicable in the home market are equally so in the
overseas market as well.
In such a firm, all foreign marketing operations are planned and carried out from
home base, with little or no difference in product formulation and specifications,
pricing strategy, distribution and promotion measures between home and overseas
markets.
The firm generally depends on its foreign agents and export-import merchants for its
export sales.
Multi-domestic market
Is when the firm attempts to organize its international marketing activities on a
country to country basis.
Each country is treated as a separate entity and individual strategies are worked out
accordingly.
Local assembly or production facilities and marketing organizations are created for
serving market needs in each country.
Multi-domestic market orientation could be most suitable for firms seriously
committed to international marketing and have its resources for investing abroad for
fuller and long-term penetration into chosen markets.
Global marketing
• In Global marketing orientation approach, the firm accepts a regional marketing
policy covering a group of countries which have comparable market
characteristics.
• The operational strategies are formulated on the basis of the entire region
rather than individual countries.
• The production and distribution facilities are created to serve the whole region
with effective economy on operation, close control and co-ordination.
Global marketing orientation con...
• This orientation favors neither home country nor foreign countries where the
company operates.
• It is also called a global approach the main idea of which is to target “global
consumers” who have similar tastes.
• The main idea of this orientation is to borrow from every country what is best.
Reading
• P. Kotler, K.Keller, 2006, Marketing Management, 12 ed, Prentice Hall
• D.Jobber, Principles and Practice of Marketing, 3ed, 2001, McGrawHill
• Isobele and Lowe, (2008). International Marketing Strategy [Online]. Available
from:
https://www.cengagebrain.co.uk/content/doole07630_1844807630_02.01_chap
ter01.pdf
• International Marketing Strategy and Theory (2008) by John Shaw