International Marketing Chapter 1 “The Scope and Challenge of International
Marketing”
Learning Objectives:
- What is meant by international marketing.
- The scope of the international marketing task.
- The meaning and the importance of the self-reference criterion (SRC) in international
marketing.
- How to identify and manage the factors influencing the internationalization of companies.
- How to evaluate the progression of becoming an international marketer.
- How international marketing concepts influence international marketers.
- The increasing importance of global awareness and marketing opportunities.
Introduction
Whether or not a company wants to participate directly in international business, it cannot escape:
Effect of increasing number of domestic firms exporting, importing and/or manufacturing
abroad.
Number of foreign-based firms operating in most markets.
Growth of regional trade areas.
Rapid growth of world markets.
Increasing number of competitors for global markets.
Five trends affecting global business today stand out as the ones influencing the shape of
international business. These forces have led to dramatic growth in international trade and
contributed to perception that the world is a more interdependent place.
The interdependence of the world economies, and globalization of production and
consumption.
Growth of regional free-trade areas – where products can move freely, without tariffs and
restrictions.
More purchasing power throughout the world.
Evolution of large emerging markets – e.g., Brazil, Russia, India, China (BRIC) now BRICS.
Advanced communication & transportation methods.
Free Trade Areas:
EU – 28 members
NAFTA – US, Canada, Mexico
ASEAN – 10 members, Association of Southeast Asian Nations
APEC – 21 members, Asia-Pacific Economic Cooperation
As competition for world markets intensifies, the number of companies operating solely in domestic
markets is decreasing. Or it is increasingly true that the business of any business is international
business.
The Internationalization of Business
There is hardly any country that is not involved in international trade and investment.
For the firm venturing into international marketing (both first- time and experienced), the
requirement is the same – a complete commitment to foreign markets.
, International Marketing Defined
International Marketing = Performance of business activities that direct the flow of a company’s
goods to consumers in more than one nation for a profit.
The difference in domestic marketing and international marketing is that the marketing activities take
place in more than one country.
Marketing concepts, processes and principles are largely universally applicable.
Goal of a business: to generate profit by promoting, pricing, and distributing products for which
there is a market.
The difference between domestic and international marketing lies not with different concepts of
marketing, but with the environment within which marketing plans must be implemented.
The International Marketing Task (Important)
The international marketer’s task is more complicated than that of the domestic marketer because
the international marketer must deal with at least two levels of uncontrollable uncertainty instead of
one. The exhibit below illustrates the total environment of an international marketer:
Inner circle – Controllable elements that constitute a marketer’s decision area.
Second circle – The environmental elements at home that have some effect on foreign-operation
decisions.
Outer circle – The elements of the foreign environment for each foreign market within which the
marketer operates.
Thus, the greater the number of foreign markets in which a company operates, the greater the
possible variety of foreign environmental uncontrollable with which to contend.
Marketing”
Learning Objectives:
- What is meant by international marketing.
- The scope of the international marketing task.
- The meaning and the importance of the self-reference criterion (SRC) in international
marketing.
- How to identify and manage the factors influencing the internationalization of companies.
- How to evaluate the progression of becoming an international marketer.
- How international marketing concepts influence international marketers.
- The increasing importance of global awareness and marketing opportunities.
Introduction
Whether or not a company wants to participate directly in international business, it cannot escape:
Effect of increasing number of domestic firms exporting, importing and/or manufacturing
abroad.
Number of foreign-based firms operating in most markets.
Growth of regional trade areas.
Rapid growth of world markets.
Increasing number of competitors for global markets.
Five trends affecting global business today stand out as the ones influencing the shape of
international business. These forces have led to dramatic growth in international trade and
contributed to perception that the world is a more interdependent place.
The interdependence of the world economies, and globalization of production and
consumption.
Growth of regional free-trade areas – where products can move freely, without tariffs and
restrictions.
More purchasing power throughout the world.
Evolution of large emerging markets – e.g., Brazil, Russia, India, China (BRIC) now BRICS.
Advanced communication & transportation methods.
Free Trade Areas:
EU – 28 members
NAFTA – US, Canada, Mexico
ASEAN – 10 members, Association of Southeast Asian Nations
APEC – 21 members, Asia-Pacific Economic Cooperation
As competition for world markets intensifies, the number of companies operating solely in domestic
markets is decreasing. Or it is increasingly true that the business of any business is international
business.
The Internationalization of Business
There is hardly any country that is not involved in international trade and investment.
For the firm venturing into international marketing (both first- time and experienced), the
requirement is the same – a complete commitment to foreign markets.
, International Marketing Defined
International Marketing = Performance of business activities that direct the flow of a company’s
goods to consumers in more than one nation for a profit.
The difference in domestic marketing and international marketing is that the marketing activities take
place in more than one country.
Marketing concepts, processes and principles are largely universally applicable.
Goal of a business: to generate profit by promoting, pricing, and distributing products for which
there is a market.
The difference between domestic and international marketing lies not with different concepts of
marketing, but with the environment within which marketing plans must be implemented.
The International Marketing Task (Important)
The international marketer’s task is more complicated than that of the domestic marketer because
the international marketer must deal with at least two levels of uncontrollable uncertainty instead of
one. The exhibit below illustrates the total environment of an international marketer:
Inner circle – Controllable elements that constitute a marketer’s decision area.
Second circle – The environmental elements at home that have some effect on foreign-operation
decisions.
Outer circle – The elements of the foreign environment for each foreign market within which the
marketer operates.
Thus, the greater the number of foreign markets in which a company operates, the greater the
possible variety of foreign environmental uncontrollable with which to contend.
