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Table of Contents
Lecture 1 – Introduction to International Marketing ______________________________________ 1 Lecture 2 – The Environment of International Marketing __________________________________ 8 Lecture 3 – Social, Cultural and Technological Environments ______________________________ 13 Lecture 4 – Contemporary Environmental Issues in International Marketing __________________ 18 Lecture 5 – Researching International Markets and Marketing Entry ________________________ 21 Lecture 6 – Strategies in International Marketing: Internationalisation and Globalisation _______ 26 Lecture 7 – Strategies in International Marketing: Strategic Planning in International Marketing _ 32 Lecture 8 – Modifying Products for International Marketing ______________________________ 41 Lecture 9 – Promotion and Pricing in International Markets _______________________________ 45 Lecture 10 – International Distribution _______________________________________________ 51 Lecture 11 – Marketing Services Internationally ________________________________________ 55
Lecture 1 – Introduction to International Marketing
What is International Marketing?International marketing is the process of planning and undertaking transactions across national boundaries that involve exchange. According to the American Marketing Association, international marketing is a multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to
create exchanges that satisfy individual and organisational objectives. The hub of the wheel includes marketing mix variables such as product, price, promotion and distribution.
These variables can be controlled by the firm.
Products vary in terms of usage patterns, stage in the life cycle and the extent to which they are capable of being standardised as opposed to the degree to which they are sensitive to customer demands.
Business Objectives/
Marketing Strategy
Political Economic Social Technological Legal Environmental
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Starbucks in Australia
1. Starbucks in Australia did not succeed, and it was hard to adapt to the coffee culture in Australia.
2. Starbucks had a sugarier menu with coffee drinks which Australia did not like.
3. Starbucks charged more than local coffee stores, resulting in driving consumers away.
Types of Risks in International Business
Commercial Risks Weak Partner
Operational Problems Timing of Entry
Competitive Intensity Poor Execution of
Strategy
Currency/
Financial Risks Currency Exposure
Asset Valuation Foreign Taxation
Inflationary and Transfer Pricing Global Sourcing
Cross-Cultural Risks Cultural Distance
Negotiation Patterns Decision-Making
Styles Ethical Practices
Country (Political and Legal Risks) Social/Political Unrest and Instability Economic Mismanagement and Inflation
Distribution of Income and Size of Middle Class
Government Intervention, Bureaucracy and Red Tape
Market Access, Barriers and Profit Repatriation
Legal Safeguards for Intellectual Property Rights
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4. 35 million consumers annually purchase from Gloria Jeans due to its menu; which has a wide range of coffee drinks.
Reasons for Entering International Markets Despite Risks and Complexities Reasons for Internationalisation
Proactive Reactive
Internal • Management Desire – How international environment and specific markets is viewed by relevant decision makers in the firm
• Stagnant or Declining Domestic Market – When times are tough in the domestic market, overseas market may provide some relief
• Unique Features of the Offering – These may make the offering attractive to foreign buyers
• Utilise Excess Capacity – Many firms only produce on a one or two shift basis
• Small Size of the Domestic Market – Some products cannot survive on the domestic market alone
• Diversifying Risk – As the business cycle often varies from country to country, involvement in countries other than the domestic market reduces overall risk
• Reduce the Disadvantage of Seasonality – As seasons are reverse in northern and southern hemisphere, it can continue to produce and sell in different parts of the globe
External • Opportunities in Foreign Markets – These can be an outcome of conscious search by firms following a decision to seek business internationally
• Other Sources of Stimulus – Governments, port authorities, banks, chambers of commerce and other bodies in the domestic market can take actions that make international involvement a more attractive option
• Unsolicited Order – Many firms initially become involved in international activities because they receive an order overseas, frequently via an email through their website
Product Life Cycle – Internationalisation starts with direct exporting but later the product is produced in the international market (developing/developed countries).
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Some of the Benefits of International Business
• Higher cultural exchange and awareness (who we are and how we are related to the rest of the world).
• Higher security and less possibility of massive international wars such as World War I and II, as international business has intertwined domestic economics.
• Lower prices and more options in the marketplace available to consumers.
• Increasing competition.
• Transfer of technology, especially to developing countries.
• Breaking down domestic monopolies and oligopolies such as Aldi in Australia.
Comparative Advantage The theory of comparative advantage argues that a country can gain from international trade even if it has a disadvantage in productions of all goods, or even if it is better than other countries at the production of all goods.
The theory is based on the notion that a country should focus on what it does best rather than trying to produce everything.
Comparative advantage is not the result of specialisation but can lead to specialisation and economies of scale.
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Australia’s Top 10 Two-Way Trading Partners Australia’s Top 10 Goods and Services
Exports in 2017-18 (A$ Million)
Australia’s Top 10 Goods and Services Imports in 2017-18 (A$ Million)
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The Changing Scene of International Marketing Australia’s Wealth Growth Forecast by Country
Ranking by Forecasted Wealth (Global Wealth Migration Review 2019)
AfCTFA – The African Continental Free Trade Area has the objective of creating a single continental market for goods and services, with free movement of
businesspeople and investments.
