International

Marketing:

Introduction to
International
Marketing
Marketing is an organizational function and a set of
processes for creating, communicating, and
delivering value to customers and for managing
customer relationships in ways that benefit the
organization and its stakeholders.
Marketing is the process of
planning and executing the
conception, pricing,
promotion, and distribution
of ideas, goods, and
services to create exchanges
that satisfy individual
( c u st o m e r ) a n d
organizational objectives.
International At its simplest
m a r ke t i n g i s t h e level, international
application of marketing involves
marketing principles the firm in making
by industries in one one or more
or more than one m a r k e t i n g
country. decisions across
n a t i o n a l
boundaries.
At its most complex, it
involves the firm in Thus, how international

establishing manufacturing marketing is defined and

and marketing facilities interpreted depends on

overseas and coordinating the level of involvement of

marketing strategies across the company in the

markets. international marketplace.

Stages of International Business
Firms typically approach involvement in international marketing rather cautiously, and
there appears to exist an underlying lifecycle that has a series of critical success factors
that change as a firm moves through each stage.

A domestic corporation refers to a company

that is incorporated in and conducts business
affairs in its own country. It may carry out
activities in other regions of the country
where it incorporates.
Domestic corporations may have to pay duties or fees on imported
products. Like all corporations, domestic corporations must abide by
domestic regulations and business practices. Many corporations operate in
multiple countries and are domestic corporations only in the home country.

Domestic company limits its operations to national, political boundaries.

International companies:
Such companies import and export either raw materials, spare parts
of ready products from different countries but they do not have any
direct business realisation in each of those countries. In other words,
they do not invest in any other country that the one they are located
and their business with other countries limits with buying and selling
certain products / materials.
Apple - a company that produces
Any small local business who
consumer electronics such as
may purchase materials from,
computers, tablets, mobile phones,
or s e l l p ro d u c t s to, o t h e r
etc. Apple sells its products around
countries is technically an
the world, but the headquarters
international business.
and all product development are
located within the U.S.

International companies focus on domestic practices, but

extend the wings to foreign countries.
The multinational company (MNC) - Multi means many and national means the
state.
- known as a company with headquarter in one country and its branches or
subsidiaries are spread across many different countries. Presence across one more
geography allows the generation of higher revenues for the MNC.
A multinational corporation is a company incorporated
• in its home country (country of origin)
•carries out business operations beyond that country in many other
foreign countries, we call the host countries.
•Its head office will be in the home country.
•In addition to a primary headquarters in its home country, a
multinational corporation makes a direct investment in a foreign
country by establishing operations there.
 Types of Multinational Company

• A company having a strong home presence and a decentralized

corporation.

• Centralized firms having a cost advantage through the global

presence and having head office at home country

• An international company that is based on the parent company’s

technology or R&D.

• A transactional firm with having all the above three components.

Starbucks, where most of the
Honda, whose headquarters
menu is the same, but offerings
is in Japan, but has
change based on local tastes.
established branches all
Starbucks also customizes its
over the world. The product
locations to the local culture,
lineup varies by country –
providing different seating and
for example, Honda trucks
setup to make local customers
were developed for the U.S.
more comfortable.
market.
Models of MNCs
1. Centralized
In the centralized model, companies put up an executive headquarters
in their home country and then build various manufacturing plants
and production facilities in other countries. Its most important
advantage is being able to avoid tariffs and import quotas and take
advantage of lower production costs.
2. Regional
The regionalized model states that a company keeps its headquarters
in one country that supervises a collection of offices that are located
in other countries. Unlike the centralized model, the regionalized
model includes subsidiaries and affiliates that all report to the
headquarters.
3. Multinational
In the multinational model, a parent company operates in the home
country and puts up subsidiaries in different countries. The difference
is that the subsidiaries and affiliates are more independent in their
operations.

MNCs formulate different strategies for different markets.

 Global Company
T h e w o rd g l o b a l l i t e ra l l y m e a n s
worldwide, or all over the world. So,
There aren’t many
you'd think a global company must do
companies in the world that
business all over the world.
can boast of having a
It makes sense to assume that a global
business presence in every
company is a company that does
major country.
business all over the world.
A global company is any company that operates in at
least a country other than the country where it
originated.

If you are operating in one country, selling your products

around the world and shipping them to customers in
countries in Europe while you’re in the United States, that
doesn’t necessarily mean you’re a global company. It takes
more than that to earn the name a global company.
A global company - an international company
that centralizes management and other
decisions in the home country.

This approach to globalization reflects the

ethnocentric attitude. Global companies
treat the world market as an integrated
whole and focus on the need for.
A global company is the one, which has either global marketing
strategy or a global strategy. Global company either produces in
home country or in a single country and focuses on marketing these
products globally, or produces the products globally and focuses on
marketing these products domestically.
Transnational companies - refer to businesses that cross over borders,
armed with capital as well as products, processes, marketing methods,
trade names, skills, technology, and most importantly management.
Operate in many countries, and there isn’t a centralized management
system. These companies might start in one country, and later on they
might expand to other nations as well. However, they do not have a
home company to manage them and will start as a new company.
A transnational product keeps its same characteristics, regardless of
the country in which it is sold. The product does not change according
to local customs or preferences, so that the product sold in Asia or
Mexico is exactly the same as the version sold in the United States or
Europe.
A transnational company:

• Does not have subsidiaries. may take decisions suitable to the

operating context.

• May not be loyal to the operating country’s value system but only
will look into their expansion of businesses, since they may have no
connection with the particular country.

• Are there all around the world, and they operate truly at the global
level.
 INTERNATIONAL BUSINESS APPROACHES

International business approaches are similar to the stages of

internationalization or globalization.
Douglas, Wind and Perlmutter advocated four approaches of
international business. They are:
1. Ethnocentric Approach 3. Regioncentric Approach
2. Polycentric Approach 4. Geocentric Approach
Click on the link below to understand more about International
Marketing.

Assignment: Read about International Business Approaches (on the

same link). Make a summary on what you have read.

http://www.himpub.com/documents/Chapter572.pdf