International Marketing INTRODUCTIONS

Free National Market Free National Market Banking Legislation Banking Legislation Competition Policy Competition Policy Social welfare Social welfare Work Work Health and Safety Law Health and Safety Law Trade Trade Industrialization and technology Industrialization and technology FDI FDI Political Scenario Political Scenario Foreign Security Foreign Security Human Rights Human Rights

Risk in International Marketing The degree of business risk is higher in case of International Marketing The degree of business risk is higher in case of International Marketing There is no safety net. Nothing to fall back when things do not go right. Exp: Coke/IBM There is no safety net. Nothing to fall back when things do not go right. Exp: Coke/IBM Your company may not be treated on par with local the firms Your company may not be treated on par with local the firms Your company has lesser credibility than a home grown company Your company has lesser credibility than a home grown company The geographical, intercultural, economic, social, political and administrative distances may be far greater for your compamy than the domestic firms The geographical, intercultural, economic, social, political and administrative distances may be far greater for your compamy than the domestic firms

Why do you do International Marketing? Why do firms do Business Internationally: Why do firms do Business Internationally: Seek more and larger markets Seek more and larger markets Seek economic of scales through bigger operations Seek economic of scales through bigger operations Seek economics of global supply chain Seek economics of global supply chain Expand the base of business Expand the base of business Spread business risk over different locations Spread business risk over different locations Seek new Technology and knowledge Seek new Technology and knowledge

Differences between International Marketing and Domestic Business Lengthy Process Lengthy Process Large scale operations Large scale operations Role of Multinational Companies Role of Multinational Companies International Restrictions and Trading Block International Restrictions and Trading Block Market Research Market Research Long-term marketing Plan Long-term marketing Plan Standard of Living Standard of Living Foreign Exchange Foreign Exchange Cultures Cultures International Competitors International Competitors Geographical Diversity Geographical Diversity The New Business Environment The New Business Environment

Way of Doing International Marketing Selection of the Market Selection of the Market

Identifications of the Market / Countries Selections Industrial Economics Market Industrial Economics Market Raw material Exporting Market Raw material Exporting Market Developing Countries Developing Countries Subsistence Economics Subsistence Economics Other Data to be taken into considerations: Other Data to be taken into considerations: Population Growth Population Growth GDP/ Per capita Income GDP/ Per capita Income Standard Of living Standard Of living Government Regulations: Government Regulations: Tariff and Non-Tariff Barriers Tariff and Non-Tariff Barriers Exports Duty Exports Duty Imports Duty Imports Duty

Other data to be taken into considerations Transit Duty Transit Duty Specific Duty Specific Duty Compounded Duty Compounded Duty Revenue Tariff Revenue Tariff Protective Tariff Protective Tariff Antidumping Duties Antidumping Duties Quota Systems Quota Systems Import Licensing Import Licensing Shipping cost Shipping cost Acute shortage of Foreign Exchanges Acute shortage of Foreign Exchanges

Other data to look for…. Climatic conditions Climatic conditions Income level Income level Work habits or cultures Work habits or cultures Political Influences Political Influences Level of literacy Level of literacy Level of technical skill of products Level of technical skill of products Branding Branding Packaging and Color Packaging and Color Sales Promotions Sales Promotions Media Allocations Media Allocations Distributions Strategies or length of distributions channel Distributions Strategies or length of distributions channel

Exports Procedures and Documents International Pricing - Quotations: CIF/C&F/FOB/Ex./FAS International Pricing - Quotations: CIF/C&F/FOB/Ex./FAS Types of Pricing- Skimming Pricing Penetration Pricing, Full cost Pricing, Exchange Rate Fluctuations, SEZ-Sales, Counter Trade, Transfer Pricing, Over Invoicing, Under invoicing Types of Pricing- Skimming Pricing Penetration Pricing, Full cost Pricing, Exchange Rate Fluctuations, SEZ-Sales, Counter Trade, Transfer Pricing, Over Invoicing, Under invoicing Cartels Pricing – OPEC Cartels Pricing – OPEC Administered Pricing – Govt. controlled Administered Pricing – Govt. controlled

Exports Procedures and Documents Contracts – Agreement – SAMCHEM Agreement Contracts – Agreement – SAMCHEM Agreement Types of Payments – D.A/D.P/LC/TT Types of Payments – D.A/D.P/LC/TT LC: Exporters and Importers agree on terms LC: Exporters and Importers agree on terms Buyer requests its foreign Bank to open L/C Buyer requests its foreign Bank to open L/C The Buyer’s Bank prepares an irrevocable Letter of Credit to HSBC Bank The Buyer’s Bank prepares an irrevocable Letter of Credit to HSBC Bank HSBC Local Bank prepares letter of confirmation HSBC Local Bank prepares letter of confirmation Exporter reviews LC Exporter reviews LC The Goods are loaded and shipped The Goods are loaded and shipped Exporter presents documents Exporter presents documents SBI sends documents to Buyer SBI sends documents to Buyer To claim goods, Buyer presents documents to custom To claim goods, Buyer presents documents to custom Goods are released to Buyer Goods are released to Buyer

Exports Procedures and Documents Exports Documentations: Exports Documentations: -Custom documents for noting -Exports declaration -Commercial Invoice -Bill of Lading -Special Certificates -Packing Certificates -Insurance Certificates -Custom Manifest -Vessel Management

International Distribution Strategies -Direct Marketing -Direct Marketing -Trading Company -Trading Company -Manufacturer’s Representatives -Manufacturer’s Representatives -Distributors -Distributors -Foreign Country Brokers -Foreign Country Brokers -Dealers -Dealers -Government Affiliated Middlemen -Government Affiliated Middlemen -E-Commerce / Internet – B2B -E-Commerce / Internet – B2B

Factors Affecting Choice of Channels 1. Identify Specific Target markets 2. Specify marketing goals in terms of volume, market share 3. Specify financial and personal commitments to the distributors 4. Identify control, length of channels, terms of sale and channel ownership

International Branding A global Brand is defined as the worldwide use of a name, term, sign, symbol, design or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors. A global Brand is defined as the worldwide use of a name, term, sign, symbol, design or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors. Top 20 Global Brands and its value: Top 20 Global Brands and its value: COCA-COLAUS$ 70 BN COCA-COLAUS$ 70 BN Microsoft US$65 BN Microsoft US$65 BN IBM US$55BN IBM US$55BN GEUS$45BN GEUS$45BN NokiaUS$30BN NokiaUS$30BN DisneyUS$30BN DisneyUS$30BN McDonald’sUS$25BN McDonald’sUS$25BN MercedesUS$22BN MercedesUS$22BN ToyotaUS$20BN ToyotaUS$20BN CITIBANKUS$18BN CITIBANKUS$18BN

International Branding Global Branding – McDonalds, Sony, Kodak, Marlboro Global Branding – McDonalds, Sony, Kodak, Marlboro National Branding – Nestle, Unilever, Procter & Gamble National Branding – Nestle, Unilever, Procter & Gamble Country of Origin Brands – Made in China, Made in Italy, Japanese Electronics, Jamaican Rum, French wine Country of Origin Brands – Made in China, Made in Italy, Japanese Electronics, Jamaican Rum, French wine Private Brands – Choitaram, Lals, More, Reliance Fresh Private Brands – Choitaram, Lals, More, Reliance Fresh

Gender Bias in International Marketing Asia / Middle East / Latin America : Women not in upper levels Asia / Middle East / Latin America : Women not in upper levels USA – 43% Britain-33% Switzerland 28% USA – 43% Britain-33% Switzerland 28% India -7% of Women employee India -7% of Women employee Jobs in International Marketing: Documentations / Finance / Logistics / Marketing Jobs in International Marketing: Documentations / Finance / Logistics / Marketing

Business Ethics in International Marketing ENRON / WORLDCOM / DAEWOO / SATYAM ENRON / WORLDCOM / DAEWOO / SATYAM FORM OF CORRUPTIONS : Commissions / Bribery / Extortions / Lubrications – Gift and small some of money / Subornation – Giving large sums of money for not doing the jobs against your competitors. FORM OF CORRUPTIONS : Commissions / Bribery / Extortions / Lubrications – Gift and small some of money / Subornation – Giving large sums of money for not doing the jobs against your competitors. AGENT FEES AGENT FEES

Transparency International Corruption Index Finland, Denmark, New Zealand, Iceland, Finland, Denmark, New Zealand, Iceland, Singapore, Sweden, Canada, Luxembourg, Netherlands, United Kingdom, Australia, Norway, Switzerland, Hong Kong, Austria, USA, Chile, Germany, Israel, Belgium, Japan, Spain, Albania, Guatemala, Nicaragua, Venezuela, Georgia, Ukraine, Vietnam, Kazakhstan, Bolivia, Cameroon, Ecuador, Haiti, Moldova, Uganda, Azerbaijan, Indonesia, Kenya, Angola, Madagascar, Paraguay, Nigeria, Bangladesh.

International Dispute Resolution in International Marketing Reasons for the disputes: Refuses to pay, Product is of inferior quality, arrival of late shipments etc. Reasons for the disputes: Refuses to pay, Product is of inferior quality, arrival of late shipments etc. Remedies: Conciliation (also know as mediation) Remedies: Conciliation (also know as mediation) Arbitrations: - The Inter-American Arbitration commission, - The London Court of Arbitration Arbitrations: - The Inter-American Arbitration commission, - The London Court of Arbitration - The American Arbitration Association - The American Arbitration Association - The International Chamber of Commerce - The International Chamber of Commerce Litigation : Lawsuits in public courts. International Conventions: The Paris Convention Centre The Inter-American Convention Centre The World Intellectual Property Organization The European Patent Conventions Antitrust Law: Price discrimination, supply restrictions etc. Foreign Corrupt Practices Law: Bribing etc.

Emerging Markets in International Marketing – Project China China Taiwan Taiwan India India Brazil Brazil Chile Chile Colombia Colombia Peru Peru Indonesia Indonesia South Korea South Korea Thailand Thailand Vietnam Vietnam Mexico Mexico Azerbaijan Azerbaijan Malaysia Malaysia South Africa South Africa Russia Russia

Setting up of Business with other countries Official Name, Capital, Area, Population, Languages, Religious Affiliations, Currency, Major Trade Partners, Economic Indicators, Objectives for setting up an Enterprises, Action Plan, Anticipated risks and hurdles, End Result, Exports to India, Imports from India Official Name, Capital, Area, Population, Languages, Religious Affiliations, Currency, Major Trade Partners, Economic Indicators, Objectives for setting up an Enterprises, Action Plan, Anticipated risks and hurdles, End Result, Exports to India, Imports from India

International Marketing Take any one co. of your choice Take any one co. of your choice One product line or one sub product line One product line or one sub product line Primary Market : One country or Market where they export Primary Market : One country or Market where they export Secondary Market: Second Market Secondary Market: Second Market Take Two co. a and b ( competitors) Take Two co. a and b ( competitors) One product line One product line One market One market

International Marketing Key Elements of plan: Key Elements of plan: A brief description of Management team A brief description of Management team Pro / Services offered and their unique advt. Pro / Services offered and their unique advt. Industry structures and competition Industry structures and competition Domestic market experience Domestic market experience Foreign Market experience Foreign Market experience

International Marketing Marketing Research Marketing Research Target Market Target Market Primary Market Primary Market Secondary Market Secondary Market Entry Barriers Entry Barriers Foreign Exchange Regulations Foreign Exchange Regulations Pest Factors Pest Factors Porter’s Model Porter’s Model Currency Fluctuations Currency Fluctuations

International Marketing Marketing Decisions Marketing Decisions Distribution Strategies Distribution Strategies Direct Exports Direct Exports Indirect Exports Indirect Exports Pricing Decisions Pricing Decisions Promotions Decisions Promotions Decisions Strategies Alliances Strategies Alliances Import Duty Import Duty

International Marketing Legal Decisions Legal Decisions Agents / Distributor Agreement Agents / Distributor Agreement Patent / Logo / Copy Right Patent / Logo / Copy Right Disputes Resolution Disputes Resolution Arbitrations Arbitrations

International Marketing Manufacturing Decisions Manufacturing Decisions Locations of Export Facility in India Locations of Export Facility in India Capacity of existing facility Capacity of existing facility Expansion plans if any Expansion plans if any Incentive given by government Incentive given by government

International Marketing Personnel Decisions: Personnel Decisions: Personnel needed to manage export Personnel needed to manage export Training needs of existing personnel Training needs of existing personnel Hiring needs in both short and long-term Hiring needs in both short and long-term

Exports Procedures and Documents Discussions on IMF Discussions on IMF Discussions on World Bank Discussions on World Bank Discussions on RBI Discussions on RBI Discussions on ECGC Discussions on ECGC Discussions on EXIM BANK Discussions on EXIM BANK

International Marketing