Introduction to Global Business

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Introduction to Global Business


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International Marketing

Philips Cateora and John M Hess

International Marketing is defined as

Performance of business activities that direct

the flow of a companys goods and services to

consumers and users in more than one nation.


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Nathalie Prime

Internationalmarketing consists in

identifying and satisfying consumer needs

abroad; better than the national and

international competitors, under the constraints

of the internationalization stage of the firm and

the global environment.


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Changing Business environment

1.Liberalisation

2.Privatisation

3.Globalisation

4.Technology


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Indian Economy

1.In the past one year, the Indian rupee has been loosing

momentum continuously .2. While a weak rupee may be good for certain sectors, it

certainly is bad for the Indian economy on the whole.

3. The rupee-dollar exchange ratetoday??

4. Rupee depreciation is making

a. Imports expensive

b. Not helping exports because of economic slow down.


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FACTORS AFFECTING THE RUPEE

MOVEMENT

1. Fiscal deficit of a country is an important factor

that drives the currency of that nation.

2. Dollar Demand-Supply

Rising oil prices mean more dollars are required by Indian

oil companies to import crude oil since oil price is quoted in

the US dollar in the international market.


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FACTORS AFFECTING THE RUPEE MOVEMENTcont.

3. Global Factors

The current crisis in the Euro zone triggered

-by political uncertainty in Greece- the recent election results in France and Germany are pointing

towards negative sentiments for austerity measures taken bythe government.

Overall, there may be more bad news coming from the Euro

zone. Hence, the dollar is getting stronger against othercurrencies, including the rupee


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1. Rise of Brazil, Russia,

India, Chinaand

S.Africa

(BRICS)

2. Euro zone Crisis

3.Strengthening of US Dollar

Global Perspective: Recent Events


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History of International Marketing

International Business in 3000BC in India.

Indian goods reached Egypt, Mesopotamia,

South East Asia.

Latter half of 20th century large US, European

and Japanese companies expanded their

markets as well as production facilities beyond

national borders.


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Factors for growth in International Markets

Profit

PLC Stage

Competition

Excess Capacity

Geographic Diversification

Increase in Market Size

ICT and transportation facilities

Income Growth

Lower trade barriers

Desire for new products (consumes) and new markets(marketers)


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Domestic Marketing

Market Focus Domestic

Orientation Ethnocentric

Marketing Mix Decisions Focused on Domestic

Customers


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Export Marketing

Market Focus

Market Focus Overseas (Targeting and Entering

Foreign Markets)

Orientation Ethnocentric

Marketing Mix Decisions Focused on Domestic Customers

Overseas Marketing-Generally

extension of Domestic MarketingDecisions made at Headquarters


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International Marketing

Market Focus Caters to specific needs of a

few overseas market

Orientation Polycentric Orientation

Marketing Mix Decisions Products manufactured in homecountry with separate product

adaptations for different markets

Product Decisions made by

individual subsidiaries


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Multinational Marketing

Market Focus DomesticMarket Focus Consolidation of operations onregional basis

Gains from Economies of Scale

Orientation Regiocentric

Marketing Mix Decisions Product Standardization withinregions but not beyond them

On regional basis


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Geocentric

Market Focus Consolidating firms operations on

Global Basis

Orientation Geocentric

Marketing Mix Decisions Globalization of marketing mixdecisions with local variations

Joint decision making across firms

global operations


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Global Retailing

Global Retail limited to luxury goods.

- Such as Gucci, Cartier

ORSpecialty firms

Ikea, Body Shop

RecentlyMass market retailers- WalMart, Carrefour.


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II. Competitive Structure

Porters Framework- competitive structure within the

industry

-Degree of rivalry among existing firms, a consequenceof

a. No. of Competitors

b. Industry Growthc. Product Differentiation

d. Exit Barriers


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Threat of new entrants

Some barriers make it difficult.

Economies of scaleLimited access to channels of distribution, high

switching cost, government policy.

Firms with favorable raw materials, technologybenefit, hence absolute cost advantage.


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Threat of Substitute Products

Bargaining power of buyers

Bargaining power of Suppliers


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Theory of Competitive Advantage(Competitive Advantage of Nations, Michael Porter)

Porters Diamond Model

-Factor Conditions (Input)

-Demand Conditions

-Related and Supporting Activities.(IT Hub

Bangalore, gems andjewellery (Jaipur), MetalHandicrafts- Moradabad)


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-Firm Strategy, Structure,Rivalry

2 other factors

-Chance- Govt.


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Thank You

Documents

Introduction to Global Business