CORRESPONDENCE LEARNING MODULE

MKTG 1123 – International Marketing

AY 2024-2025

Lesson 1: An Introduction to International Marketing

Topic: The International Marketing Environment

Learning Outcomes: At the end of this module, you are expected to:

1. Discuss the differences between export marketing, international and global marketing;
2. Understand the criteria required to evaluate a company’s international marketing strategy; and
3. Appreciate the key steps in the international marketing planning process

LEARNING CONTENT

MARKETING INVOLVES:
• Focusing on the needs and wants of customers
• Identifying the best method of satisfying those needs and wants
• Orienting the company towards the process of providing that satisfaction
• Meeting organizational objectives

INTERNATIONALIZATION
Refers to the process of designing and adapting products, services, or business operations to be suitable for
international markets. It involves creating systems, frameworks, or strategies that enable a business or product
to be easily localized for different cultures, languages, and regions without requiring major redesigns.

INTERNATIONAL MARKETING
International marketing is the process of planning, creating, placing, and promoting a business's products or
services in one or more countries outside its domestic market. It involves understanding and adapting to
cultural, economic, legal, political, and social differences in various global markets.

DIFFERENT LEVELS OF INTERNATIONAL MARKETING

1. DOMESTIC MARKETING (NO INTERNATIONAL ACTIVITY)

Focus: Selling products/services within the home country.
Characteristics:
 The focus is solely on the home market.
 Products and strategies are designed to meet the needs of local customers.
 Minimal or no interaction with international markets.
Example: A small bakery that only sells locally and has no plans to expand abroad.

2. EXPORT MARKETING (INDIRECT OR DIRECT EXPORTING)

Focus: Selling products in foreign markets without significant investment.
Types:
 Indirect Exporting: Using intermediaries like export agents or distributors.
 Direct Exporting: Selling directly to foreign customers or businesses.

Characteristics:
 Companies begin selling products in foreign markets without significant adaptation.
 Marketing decisions are primarily made in the home country, and international sales are an
extension of domestic operations.

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  Key activities include finding foreign buyers, managing shipping logistics, and ensuring
compliance with export regulations.
Example: A U.S.-based clothing brand selling its products through Amazon or an international
distributor.

3. INTERNATIONAL MARKETING (LICENSING & FRANCHISING)

Focus: Expanding operations through partnerships, licensing, or franchising.
Types:
 Licensing: Allowing foreign firms to produce and sell products under the company’s brand.
 Franchising: Granting rights to foreign businesses to operate under the company’s name and
system.

Characteristics:
 Companies actively enter multiple international markets and adapt strategies to suit local
preferences and conditions.
 There is recognition of cultural, legal, and economic differences among countries.
 Marketing strategies include product adaptation, customized promotions, and local partnerships.
Example: McDonald's franchising its brand in different countries, allowing local entrepreneurs to run
stores.

4. GLOBAL MARKETING (STANDARDIZATION)

Focus: Operating as a multinational or global company with standardized international strategies.
Characteristics:

 Companies adopt a standardized approach across all markets while maintaining flexibility to
adapt when necessary.
 Marketing strategies focus on global branding, economies of scale, and the integration of
markets.
 This level emphasizes the similarities across markets rather than differences.
Example: Apple selling the same iPhone worldwide

5. MULTINATIONAL MARKETING (ADAPTATION)

Focus: Adapting strategies to individual markets, giving companies a competitive edge in foreign
regions.
Characteristics:

 Companies treat each foreign market as a unique entity and develop country-specific strategies.
 Operations are decentralized, with local subsidiaries handling marketing activities.
 This approach often results in highly customized products and promotions tailored to local
tastes.
Example: McDonald's customizing menus per country

FACTORS INFLUENCING INTERNATIONAL MARKETS

1. ECONOMIC FACTORS
Economic conditions play a crucial role in shaping international markets. Countries with stable economies and
growth potential attract foreign investment, while struggling economies pose risks.

Key Economic Influences

 Exchange Rates – Currency fluctuations impact import/export costs and profit margins for multinational
companies. A strong domestic currency makes exports expensive but imports cheaper, whereas a weak
currency boosts exports but increases import costs.
 Inflation & Interest Rates – High inflation erodes consumer purchasing power, while interest rates
influence business borrowing and expansion.

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  GDP & Economic Growth – Strong GDP growth signals a healthy economy, leading to increased
investor confidence and market opportunities.
 Trade Balance (Exports vs. Imports) – A country with a trade surplus (more exports than imports)
may have stronger economic stability, while a deficit can lead to reliance on foreign investments.
 Labor Market & Wages – Lower labor costs in developing countries attract manufacturing businesses,
while high-skilled labor in developed nations supports technological advancements.

Example:
 China’s low labor costs and high productivity levels have made it a global manufacturing hub, while the
United States leads in technology and innovation due to its strong economy and skilled workforce.

2. POLITICAL & LEGAL FACTORS

The political environment of a country determines how businesses operate within its borders. International
markets are affected by government policies, regulations, and trade relationships.

Key Political & Legal Influences

 Government Stability – Countries with unstable governments or frequent policy changes discourage
foreign investment.
 Trade Agreements & Tariffs – Free trade agreements (e.g., USMCA, EU, ASEAN) reduce trade
barriers, while tariffs and quotas limit foreign competition.
 Regulatory Environment – Strict labor laws, environmental regulations, and taxation policies affect
foreign businesses' operations and profitability.
 Corruption & Bureaucracy – High corruption levels can create obstacles for businesses through
bribery, delays, and unfair practices.
 Intellectual Property Rights (IPR) – Strong patent and copyright laws encourage innovation and
attract global technology firms.

Example:
 The European Union’s General Data Protection Regulation (GDPR) has impacted global businesses,
requiring companies worldwide to comply with strict data privacy laws when dealing with EU citizens.

3. SOCIAL & CULTURAL FACTORS

Understanding cultural differences is essential for businesses to succeed in international markets. Consumer
behaviors, preferences, and social norms influence product demand and marketing strategies.

Key Social & Cultural Influences

 Consumer Preferences & Brand Perception – Companies must tailor their products to fit local tastes,
traditions, and expectations.
 Demographics & Population Trends – Age distribution, income levels, and urbanization affect market
potential.
 Language & Communication – Language barriers and cultural misunderstandings can affect branding
and advertising effectiveness.
 Workforce Diversity & Education – A skilled workforce with high literacy and technical expertise
attracts multinational companies.

Example:
 McDonald's adapts its menu to local tastes:
 In India, it offers vegetarian and chicken-based meals instead of beef due to cultural preferences.
 In Japan, it sells Teriyaki Burgers to cater to local tastes.

4. TECHNOLOGICAL FACTORS
Technology is a driving force in global markets, influencing innovation, business efficiency, and communication.

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Key Technological Influences
 Digital Transformation & E-commerce – Online businesses and digital payment systems make it
easier for companies to operate across borders.
 Research & Development (R&D) – Countries that invest in innovation attract high-tech industries and
startups.
 Infrastructure & Connectivity – Reliable internet, transportation, and logistics infrastructure support
global trade and investment.
 Automation & AI – Advancements in artificial intelligence and automation improve production
efficiency but can disrupt labor markets.

Example:
 Amazon and Alibaba dominate global e-commerce due to their strong technological capabilities, supply
chain management, and AI-driven customer service.

5. ENVIRONMENTAL FACTORS
Sustainability and climate change concerns are reshaping global markets. Governments and consumers are
increasingly demanding eco-friendly practices.

Key Environmental Influences

 Climate Change Policies – Regulations on carbon emissions and pollution affect industries like
energy, automotive, and manufacturing.
 Natural Resource Availability – Countries rich in resources (e.g., oil in Saudi Arabia, lithium in Chile)
have strong global trade leverage.
 Sustainability & Green Business Practices – Companies investing in sustainable practices gain a
competitive edge in eco-conscious markets.
 Natural Disasters & Risks – Hurricanes, earthquakes, and floods can disrupt supply chains and
market stability.

Example:
 Many automakers, including Tesla and Toyota, are shifting towards electric vehicles (EVs) due to global
environmental regulations and consumer demand for sustainable transportation.

6. GLOBAL MARKET TRENDS & EMERGING RISKS

Beyond the core factors, global trends also shape international markets.

Current Trends Impacting International Markets

 Rise of Emerging Markets – Countries like India, Brazil, and Indonesia are becoming major players in
global trade.
 Supply Chain Disruptions – Events like the COVID-19 pandemic and geopolitical tensions (e.g., US-
China trade war) have exposed vulnerabilities in global supply chains.
 Consumer Demand for Ethical & Socially Responsible Businesses – Companies are under
pressure to adopt fair trade, gender equality, and environmental responsibility.
 Cryptocurrency & Digital Finance – The rise of blockchain technology and digital currencies is
changing financial markets and global transactions.

Example:
 The semiconductor shortage during 2021-2022 disrupted industries worldwide, leading countries to
invest in domestic chip production rather than relying on imports.

*** END of LESSON 2***

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