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International Marketing INTERNATIONAL MARKETING MCOM Semester - I MCOM - 103 SHRI VENKATESHWARA UNIVERSITY UTTAR PRADESH-244236 BOARD OF STUDIES Prof (Dr.) P.K.Bharti Vice Chancellor Dr. Rajesh Singh Director Directorate of Distance Education SUBJECT EXPERT Dr. S.N.Sahoo, Professor Dr. Shrinivas Shirur, Professor Mr. Ashotosh, Asst. Professor COURSE CO-ORDINATOR Mr. Shakeel Kausar Dy. Registrar Authors Raj Agarwal, Director, College of Management Studies,IILM Academy for Higher Learning, Noida Units (1.2.1, 3.10, 4.3, 5.3, 5.5-5.5.1) © Raj Agarwal, 2019 Arun Kumar, Professor, NIILM Centre of Management Studies, New Delhi N Meenakshi, Asstt. Professor, NIILM Centre of Management Studies, New Delhi Units (1.3.1, 2.2-2.2.1, 3.5.1, 3.6.2, 3.10.5, 4.4) © Reserved, 2019 Rajagopal PhD, FRSA (London), Professor, Department of Marketing, Business Division, Monterrey Institute of Technology and Higher Education, ITESM Mexico City Campus, Mexico Units (1.2, 1.3, 1.4, 2.2.2, 2.3, 3.2-3.5, 3.6-3.6.1, 3.7- 3.9) © Reserved, 2019 Vikas Publishing House: Units (1.0-1.1, 1.5-1.9, 2.0-2.1, 2.4-2.12, 3.0-3.1, 3.11-3.15, 4.0-4.2, 4.5-4.9, 5.0-5.2, 5.4, 5.5.2) © Reserved, 2019 All rights reserved. No part of this publication which is material protected by this copyright notice may be reproduced or transmitted or utilized or stored in any form or by any means now known or hereinafter invented, electronic, digital or mechanical, including photocopying, scanning, recording or by any information storage or retrieval system, without prior written permission from the Publisher. Information contained in this book has been published by VIKAS® Publishing House Pvt. Ltd. and has been obtained by its Authors from sources believed to be reliable and are correct to the best of their knowledge. However, the Publisher and its Authors shall in no event be liable for any errors, omissions or damages arising out of use of this information and specifically disclaim any implied warranties or merchantability or fitness for any particular use. Vikas® is the registered trademark of Vikas® Publishing House Pvt. Ltd. VIKAS® PUBLISHING HOUSE PVT LTD E-28, Sector-8, Noida - 201301 (UP) Phone: 0120-4078900 Fax: 0120-4078999 Regd. Office: A-27, 2nd Floor, Mohan Co-operative Industrial Estate, New Delhi 1100 44 Website: www.vikaspublishing.com Email: [email protected] SYLLABI-BOOK MAPPING TABLE International Marketing Unit I Framework of International Marketing: Concept, scope its growing Unit 1: Framework of International importance, factors affecting international marketing; Controllable and Marketing (Pages 3–21) uncontrollable factors; International Marketing environment: cultural, political, geographical economic and legal requisitions trade clearance (tariff and non tariff behaviours). Unit II Market Selection-Market profiling, market segment selection. Market Unit 2: Market Strategies and entry strategies: MNCs and World Markets. Market Agreements in Export Finance (Pages 23–61) Force-Free trade zones. Export Finance-EXIM Bank, Institutional Finance for import; IDBI ECGC and export credit insurance. Unit III International Marketing decision; International product planning Product Unit 3: International Marketing design strategy, new product development; branding packaging and Decisions (Pages 63–121) lebeling. International pricing strategy. Pricing objectives, pricing methods dumping, transfer pricing, retrograde pricing, International Channels of Distribution International channel system direct exports, indirect exports, marketing environment and distribution strategies, international logistics. International promotion: determining advertising strategy, communication mix role of export organization, management of sales force. Unit IV Organization and Planning International Marketing. New perspectives Unit 4: Organization and Planning on organization-corporate networking; dimensions of international (Pages 123–143) planning and strategy. International marketing information system and marketing research. Unit V WTO and trade liberalization International Marketing institutions; Central Unit 5: Trade Liberalization and advisory council; Export development councils, commodity boards, Export Procedure Export promotion council. Trade development authority; Trade fair (Pages 145–169) authority, STC, MMTC, India’s foreign trade and balance of payment position. Export procedure, export incentives and subsidies. CONTENTS INTRODUCTION 1 UNIT 1: FRAMEWORK OF INTERNATIONAL MARKETING 3–21 1.0 Introduction 1.1 Objectives 1.2 International Marketing: Concept and Scope 1.2.1 Importance of Marketing 1.3 Factors Affecting International Marketing 1.3.1 Controllable and Uncontrollable Factors 1.4 Marketing Environment 1.5 Summing Up 1.6 Key Terms 1.7 Answers to ‘Check Your Progress’ 1.8 Questions and Exercises 1.9 References and Suggested Readings UNIT 2: MARKET STRATEGIES AND EXPORT FINANCE 23–61 2.0 Introduction 2.1 Objectives 2.2 Market Selection 2.2.1 Market Profiling 2.2.2 Market Segment Selection 2.3 Entry Strategies of MNCs 2.3.1 Developing an Entry Plan 2.4 Free Trade Zones 2.5 Export Finance 2.5.1 EXIM Bank 2.6 IDBI 2.7 Services of Export Credit Guarantee Corporation (ECGC) 2.7.1 Export Credit Insurance Covered by ECGC 2.8 Summing Up 2.9 Key Terms 2.10 Answers to ‘Check Your Progress’ 2.11 Questions and Exercises 2.12 References and Suggested Readings UNIT 3: INTERNATIONAL MARKETING DECISIONS 63–121 3.0 Introduction 3.1 Objectives 3.2 International Product Planning 3.3 Product Design Strategy 3.4 New Product Development 3.4.1 Factors Obstructing Growth of New Products 3.4.2 New Product Development Process 3.5 Branding, Packaging and Labelling 3.5.1 Packaging and Labelling 3.6 International Pricing Strategy 3.6.1 Pricing Objectives 3.6.2 Pricing Methods 3.7 International Channels of Distribution 3.8 Marketing Environment and Distribution Strategies 3.9 International Logistics 3.10 International Promotion and Advertising 3.10.1 Promoting Product/Service in International Market 3.10.2 Advertising Decisions 3.10.3 Communication Mix 3.10.4 Role of Export Organization 3.10.5 Management of Sales Force 3.11 Summing Up 3.12 Key Terms 3.13 Answers to ‘Check Your Progress’ 3.14 Questions and Exercises 3.15 References and Suggested Readings UNIT 4: ORGANIZATION AND PLANNING 123–143 4.0 Introduction 4.1 Objectives 4.2 New Perspectives on Organization: Corporate Networking 4.3 Dimensions of International Planning and Strategy 4.3.1 Strategic Planning 4.3.2 Marketing Planning 4.4 International Marketing Information System 4.4.1 Types of Marketing Research 4.4.2 Changing Perspectives in Marketing Research 4.5 Summing Up 4.6 Key Terms 4.7 Answers to ‘Check Your Progress’ 4.8 Questions and Exercises 4.9 References and Further Readings UNIT 5: TRADE LIBERALIZATION AND EXPORT PROCEDURE 145–169 5.0 Introduction 5.1 Objectives 5.2 WTO and Trade Liberalization 5.2.1 Liberalization and Indian Economics 5.3 International Marketing Institutions 5.4 India’s Foreign Trade and Balance of Payments 5.4.1 Trends in Balance of Payments 5.4.2 Role of Services in Balance of Payments 5.4.3 Non-Resident Inflows 5.4.4 Allocation or Cancellation of Special Drawing Rights (SDRs) 5.4.5 Double Entry System of Recording 5.4.6 Balance of Payments and International Economic Linkages 5.5 Export Procedure 5.5.1 Export Documentation and Procedure 5.5.2 Export Incentives and Subsidies 5.6 Summing Up 5.7 Key Terms 5.8 Answers to ‘Check Your Progress’ 5.9 Questions and Exercises 5.10 References and Further Readings INTRODUCTION Introduction International marketing or Global marketing refers to marketing carried out by companies NOTES overseas or across national borders. In other words, international marketing is the application of marketing principles to expand trade across national boundaries. This implies an extension of the techniques used in the home country of a firm. Advances in technology and communication have facilitated cross-border trade and business. For companies seeking to go global, however, there are a number of issues at stake. Doing business in a foreign location is not the same as doing business in one’s home country. One needs to examine the international marketing environment in detail. There could be significant legal, cultural and political barriers as well. The same mix of products, marketing strategies and pricing that works so well in the home country may be a complete failure in a foreign market. Therefore, it is important that the potential market is studied and analyzed carefully. Product and market segmentation is an essential step in that direction. It is also important to know the standards and product rules and regulations followed in the country and the cultural habits prevailing in the target market. This book, International Marketing , deals with the issues mentiond above and gives a new prespective on the emerging trends. It also looks at how liberalization has changed the global marketing scenario and the role of international marketing institutions. The book will give you an idea about India’s froeign trade and balance of payment. The learning material in this book, International Marketing , has been presented in the self-learning format, wherein each unit begins with an Introduction to the topic followed by an outline of the Objectives . The detailed content is then presented in a simple, structured and easy-to-grasp style interspersed with ‘ Check Your Progress ’ questions to test the student’s understanding. At the end of each unit, a Summing Up and a list of Key Terms have been provided for recapitulation. Self-Instructional Material 1 Framework of UNIT 1 FRAMEWORK OF International Marketing INTERNATIONAL MARKETING NOTES Structure 1.0 Introduction 1.1 Objectives 1.2 International Marketing: Concept and Scope 1.2.1 Importance of Marketing 1.3 Factors Affecting International Marketing 1.3.1 Controllable and Uncontrollable Factors 1.4 Marketing Environment 1.5 Summing Up 1.6 Key Terms 1.7 Answers to ‘Check Your Progress’ 1.8 Questions and Exercises 1.9 References and Suggested Readings 1.0 INTRODUCTION Whether an organization markets its goods and services domestically or internationally, the definition of marketing remains almost the same.
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