International Marketing (TYBMS – Sem 6) For Private Circulation Only
INTERNATIONAL MARKETING: Syllabus:
Unit I: Introduction
1.1: Definition of international marketing-
1.2: Important features of international marketing-
1.3: Need for & advantages of international marketing-
1.4: Difference between international & domestic marketing, Basis of International trade.
1.5: International Business Environment
1.6: External factors: Social/ Demographic /Economic/ Commercial / Political & legal –
1.7: Trade Barriers – Meaning & Objectives,
1.8: Effect of barriers on international trade,
1.9: Types of barriers: Tariff & Non-Tariff barriers-
1.10: Trading Blocs & Growing intra-regional trade-
1.11: WTO & trade liberalization-latest developments at WTO including Doha Round-
1.12: Role of MNCs in International trade,
1.13: FDI
Unit II: Product Packaging and Distribution
2.1: Packaging as a part of product planning-
2.2: Functions of packaging-
2.3: Factors for package design in international markets-
2.4: Criteria for export packing (transport packing) - role of Indian Institute of packaging
2.5: Export marking on outer packing-
2.6: Purpose of export marking,
2.7: Selection of overseas distribution channels and factors influencing selection of
distribution channels,
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
2.8: Types of foreign intermediaries.
Unit III : Pricing Policy in International Markets
3.1: Factors determining price-
3.2: Export costing methods –
3.3: Elements of cost-
3.4: Factors influencing pricing policy
3.5: Information required for export pricing –
3.6: Export pricing strategies –
3.7: Break even pricing –
3.8: Impact of contract conditions on export price offers –
3.9: INTCOTERMS –
3.10: Export assistances, incentives, Govt. of India's initiatives –
3.11: Impact of export incentives on export pricing.
Unit IV : Overseas Market Selection
4.1: Methods of market entry,
4.2: Identifying foreign markets and selecting potential markets –
4.3: Constraints in entering in some global territories –
4.4: Market selection process –
4.5: Objectives entering into international markets -
4.6: Setting parameters,
4.7: Preliminary screening of the probable markets –
4.8: Sources of information –
4.9: Short listing of markets, evaluation & selection of potential markets –
4.10: Market segmentation based on overall market profile,
4.11: Bases for segmentation,
4.12: Factors for segment selection,
4.13: Essential characteristics of market segments
4.14: Preferences available to Indian exporters
Recommended Books:
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
1. International Business, Justin Paul, Tata McGraw-Hill Publishing Company Limited, New
Delhi
2. International Marketing, Francis Cherunilam, Himalaya Publishing House, Mumbai
3. International Marketing Management - An Indian Perspective, Varshney RI,
Bhattacharya B , Sultan Chand & sons. New Delhi
4. International Marketing, P.K. Vasudeva, Excel Books, New Delhi
5. International Marketing (SIE), Cateora and Philip, Tata McGraw-Hill
6. Globalization of Business, Abbas J. Ali, Jaico Pubishing House, Mumbai, 3rd Edn., 2009
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
Unit I: Introduction
1.1: Definition of international marketing-
1.2: Important features of international marketing-
1.3: Need for & advantages of international marketing-
1.4: Difference between international & domestic marketing, Basis of International trade.
1.5: International Business Environment
1.6: External factors: Social/ Demographic /Economic/ Commercial / Political & legal –
1.7: Trade Barriers – Meaning & Objectives,
1.8: Effect of barriers on international trade,
1.9: Types of barriers: Tariff & Non-Tariff barriers-
1.10: Trading Blocs & Growing intra-regional trade-
1.11: WTO & trade liberalization-latest developments at WTO including Doha Round-
1.12: Role of MNCs in International trade,
1.13: FDI
1.1: Definition of international marketing-
International Marketing can be defined as exchange of goods and services between
different national markets involving buyers and sellers.
According to the American Marketing Association, “International Marketing is the multi-
national process of planning and executing the conception, prices, promotion and
distribution of ideal goods and services to create exchanges that satisfy the individual and
organizational objectives.”
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
Vern Terpstra defines International Marketing as “Marketing carried on across National
Boundaries”
We can define the term as: International marketing means to produce products (goods and
services) for the foreign customers and to make necessary arrangement to supply them.
International marketing concerns with marketing products in foreign counties. In this
reference, we can define it as: Marketing activities across the border can be said as
international marketing. Marketing activities among the countries of the world can be
turned as international marketing.
Finally, it can be said: International marketing is the marketing for the customers of other
countries. It involves designing marketing programme (4P’s) to arrive at desired exchange
with foreign customers that satisfies their needs and wants.
International marketing is simply the application of marketing principles to more than one
country. However, there is a crossover between what is commonly expressed
as international marketing and global marketing, which is a similar term. For the purposes of
this lesson on international marketing and those that follow it, international marketing and
global marketing are interchangeable.
1.2: Important features of international marketing
We can identify following simple features of international marketing:
1. Marketing activities are undertaken across the borders.
2. It is directed to facilitate exchange between the firm and the customers of foreign
countries.
3. It is aimed at satisfying needs of international/global customers.
4. International marketing decisions are taken with reference to the global business
environment.
5. It involves two or more nations.
6. Tailor-made marketing mix is necessary for each of the nations.
7. It is more complex and, hence, difficult.
8. Role of international trade agencies seem very critical in marketing products in other
countries.
9. It offers attractive opportunities along with challenges and threats.
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
10. All other characteristics of modern marketing are also applicable to international
marketing, etc.
1.3: Need for & advantages (importance) of international marketing-
In relation to the need or importance of international marketing, views of Philip Kotler are
worth noted. According to him, two forces essentiality the international marketing are pull
forces and push forces. Push forces lead to force the nation to sell its goods and services in
other nations.
The push forces include lower national income, low per capita income, low domestic demand,
unfavourable approach of government, high rates of tax and duties, government force to
export to earn foreign exchange, tough local market, etc. These forces force the marketer to
opt for international market.
Another set of forces is pull forces. The pull forces pull (attract) businessmen to sell their
products in the foreign market to exploits attractive opportunities in the foreign countries. To
take benefits of more profitable opportunities, they are pulled to business in other nations. The
variable lead to international market may fall either in pull forces or push forces or both.
Let’s have brief explanation of several benefits available due to international
marketing:
1. It ensures survival for a company and a country.
2. Nations can get benefits of division of work and specialization.
3. It also helps in balancing unequal distribution of natural resources.
4. Extending product life cycle by selling products in other nations.
5. It is important for controlling inflation and achieving price moderation.
6. Balancing demand and supply.
7. Promotion of invention and innovation globally.
8. Companies can take benefits of taxes and duties.
9. Technological transmission among countries of the world is easily possible.
10. International marketing can improve standard of living of people.
11. Growth of international marketing results into social and cultural development.
12. Worldwide peace is possible due to interdependency among countries of the world
13. Global employment opportunities can help ease unemployment problems.
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
14. Growth of overseas market leads to global prosperity.
Forces/Variable Leading to the Need of International Marketing:
The world has become the global market. The opportunities emerging in any nation are not
enjoyed by the nation only. Other nations of the world can take benefits of them. Due to
global thinking, liberal dealings with others, positive attitudes toward privatization, available
of necessary guidelines, facilities, and encouragement have ultimately resulted in growth of
international marketing.
Main forces led to need of international marketing are:
1. Unequal distribution of natural resources
2. Specialization and need for marketing surplus
3. Craze for global political empowerment
4. Rapid means of communication and transportation
5. Liberalization
6. Globalization or global thinking
7. Trend for privatization
8. Improved understanding and cooperation among nations for mutual benefits
9. Satisfactory functioning of several international organisations or agencies such as
International Monetary Fund (IMF), World Bank, United Nations Organisation (UNO),
UN Security Council, etc.
10. Growth and Development of Multinational Companies (MNCs)
11. Emergence of global marketing opportunities
12. Technological advancement and transfer of technology.
1.4: Difference between international & domestic
marketing
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
INTERNATIONAL MARKETING DOMESTIC MARKETING
1. Meaning It refers to those activities which results into It refers to those activities which results
transfers of goods and services from one into transfers of goods and services
country to another. inside the country itself.
2. Barriers International trade is characteristics by tariff Domestic marketing has no such
and non-tariff barriers. restrictions.
3. Currencies It involves exchange on the basis of different It involves exchange in the basis of same
currencies. currencies.
4. Government Exchange takes place under government Government in interference is zero or
Interference rules and regulations. There is high degree of minimum only in case of essential
government interference. commodities.
5. Culture Trade should be done taking diverse into Culture does not affect in domestic
consideration. Even things like colour marketing.
combination can be affect the trade.
6. Mode of Letter of credit is normally as mode of Cash, Cheques, DD’s are the most
Payment payment. common.
7. Mobility of Factors of Production are relatively immobile Domestic Trade enjoys greater mobility
Factors of as compared to domestic marketing. in factors of production.
Production
8. Competition International Trade is subject to intense Competition is not as intense as it is in
competition. international marketing.
9. Documentation International Marketing is subject to Domestic trade does not involve much
complex documentation of documentation.
10. Risk International Marketing is subject to high Domestic Marketing is also subject to
risk. Political, foreign exchange risk, bad debt risk but not as high as international
risk are few of them. marketing.
Basis of International trade
The basis for international trade is that a nation can import a particular good or service at a lower
cost than if it were produced domestically.
In other words, if you can buy it cheaper than you can make it you buy it. This maxim is true for
individuals and nations – This is called specialization and exchange.
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
1.5: International Business Environment
The international business environment can be defined as the environment in different
sovereign countries, with factors originating outside the home environment of the
organization, influencing decision-making on resource use and capabilities. This includes the
social, political, economic, regulatory, tax, cultural, legal, and technological environments.
International business environment is more diverse and complex than the domestic
business environment.
1.7: Trade Barriers – Meaning & Objectives,
Trade barriers are restrictions that governments apply on trade between countries. This
usually goes against the notion of free trade, which occurs when there is smooth and
unhindered trade among nations. In reality, all nations have their own form of trade
barriers. Removing trade barriers would mean loss of revenue in the form of taxes for items
brought into a country. Common forms of trade barriers include tariffs, customs duties and
embargoes.
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
Trade barriers are measures that governments or public authorities introduce to make
imported goods or services less competitive than locally produced goods and services. Not
everything that prevents or restricts trade can be characterised as a trade barrier.
OBJECTIVES of Trade Barriers:
Trade barriers often are set up to ensure that products imported into the country meet
safety, legal and quality standards. They also are imposed in an effort to curb
unemployment. When governments limit the entry of foreign goods, local companies need
not fear threats to their existence. This is particularly useful during recessions, when
unemployment and the cost of living are high. Trade barriers also may be imposed for
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
national defence strategies. Countries sometimes use embargoes to force other nations to
conform or as an open declaration of war.
Let’s discuss in detail:
(1) To Protect Home Industries From Foreign Competition:
Tread barriers are imposed in order to give protection to home industries b avoiding completion
from other countries. Such competition is harmful and may bring home industries in difficulties.
Government has to give support and protection to home industries and for such protection,
imports must be discouraged or stopped. This is possible through the creation of different trade
barriers and restricting imports.
(2) To Promote New Industries And R & D Activities:
The quality of production is also likely to improve through research and development (R&D)
activities. Such R & D activities can be undertaken at the company’s level, at the industry
level and even at the national level. It is type of industrial research activity conducted in the
research laboratories.
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
R & D is a costly and time consuming activity and also requires the services of scientists/
exports. Quality improvement, cost reduction, introduction of new product, modification in
the existing products and making existing products more useful and agreeable to consumers
are some benefits of R & D activities.
(3) To Conserve Foreign Exchange Reserves:
A country has to pay for imports through its foreign exchange reserves. Large scale imports
mean heavy pressure on available reserve of foreign currencies. Such polices will ultimately
lead to foreign exchange crisis. On the other hand, foreign exchange will be saved through
import substitution and import restriction.
(4) To Maintain Favourable Balance Of Trade & Payments Position:
Large scale imports lead to deficit in the balance of trade and balance of payments. Such
deficit is undesirable and puts heavy strain on the available foreign exchange. For removing
such deficit, imports should be restricted and exports should be promoted. Trade barriers
are useful for reducing imports. They are advocated for reducing deficit in the balance of
trade and payment position.
The term Balance Of Trade suggests the difference between exports and imports which may
be positive/negative. It is positive when exports made are more than the imports. It is
treated as negative when exports are less as compared to imports within a specific period
normally one year. Poor and developing countries normally have to face the problems of
negative balance of trade.
(5) To Protect National Economy From Dumping:
Foreign countries may try to capture domestic market by offering their goods at very low
prices. The purpose is to sell surplus production. Such technique of dumping is profitable to
reach countries but harms poor countries. To avoid such situation (anti-dumping duties) are
imposed. As a result, foreign goods become costly and the adverse effects on home markets
are avoided.
(6) To Curb Conspicuous Consumption:
Domestic consumers may like to purchase costly imported goods for prestige purpose. This
tenancy is a socially undesirable and can be checked by restricting the imports of luxury
items by making them too costly and there by restricting their sale within the country.
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
(7) To mobilise Additional Revenue through Heavy Duties on Imports:
Trade barriers in the form of revenue tariffs are introduced. Such policy restricts imports
and in addition gives substantial revenue to the government for various purposes. Here,
trade barriers are created for collecting revenue from foreign suppliers. It is used as tool for
collecting revenue.
(8) To make the country strong and self-sufficient:
Trade barriers are useful for making the country strong & the self-sufficient. Import
restriction lead to production of new commodities within the country through import
substitution. Dependence on other countries is reduced considerably. A domestic industry is
made competitive in the long run.
(9) To counteract trade barriers imposed by other countries:
Sometime, trade barriers are introduced against the countries which have already imposed
such restrictions. For example, country A may ban imports from country B. country B will
adopt similar policy as a protest to the policy adopted by country A.
(10) To encourage the use of domestic production:
Trade barriers are introduced in order to encourage people to use goods manufactured with
in the country. People will have no choice but to purchase domestic goods when imports are
stopped or restricted considerably. Thus, trade barriers widen the scope of marketing to
home industries and give them an opportunity to grow.
1.8: Effect of barriers on international trade,
Trade barriers come in many forms. Quota is one. This is when a country sets a limit to the
imported products. This is done for a number of reasons. One is because the government of
the importing country wants to protect its domestic manufacturers. Other barriers or
limitations are added costs such as tariffs, duties, and taxes.
In this way, trade barriers can affect international trade by preventing the flow of goods
from producers to consumers. Where quotas, tariffs, and duties prevent this flow, it impacts
the productivity of the producers, although these will usually seek other markets without
these barriers.
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
Without net exports, a country cannot remain a consumer of other countries’ goods without
incurring large debts through the imbalance of trade. It is usually economically beneficial to
all parties to maximize the production of their industries, through open markets to a wide
consumer base.
Countries in order to protect their economies apply methods of restrictions such as tariffs,
quotas, subsidies and exchange controls. By applying protectionism a country can gain from
it in such as protecting infant industries, dumping and protecting manufacturing industries,
but on the other hand can also have problems such as firms remaining inefficient,
retaliation, and misallocation of resources, and related directly to international trade
countries benefit on comparative and absolute advantage, and economies of scales it affects
the international trade.
International trade increases the number of goods that domestic consumers can choose
from, decreases the cost of those goods through increased competition, and allows
domestic industries to ship their products abroad. While all of these seem beneficial, free
trade isn’t widely accepted as completely beneficial to all parties. Let us examine why this is
the case, and how countries react to the variety of factors that attempt to influence trade.
1.9: Types of barriers: Tariff & Non-Tariff barriers-
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
Non-Tariff Barriers
May directly affect either the price or quantity of
goods traded internationally
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
1.10: Trading Blocs & Growing intra-regional trade-
1.11: WTO & trade liberalization-latest developments at WTO
including Doha Round-
1.12: Role of MNCs in International trade,
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International Marketing (TYBMS – Sem 6) For Private Circulation Only
Prof. Abdul K Khan Page 20
