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International Marketing

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InternationalMarketing ­ MKT630
VU
Lesson # 5
ENGAGING IN INETRNATIONAL MARKETS
Why companies engage in internationalbusiness:
Companies engage in international businessfor a variety of reasons.Identifying these reasonsfor any
firm is important to understand the nature and direction of its motivation to engage I international
marketing.
Some of the major reasons whycompanies engage in internationalmarketing are as follows:
­
To expand sales of the firm
­
To acquire resources / technology / skillsfrom foreign countries
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To diversify their sources of sales and supplies
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To capitalize on incentives from governments, local and foreign
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To follow existing customerswho have movedoverseas
Reasonsfor recent growth of business in internationalmarkets:
Internationalbusiness has increase on a rapid pace, especially after the 2nd world war of 1940's.This
expansion in international business hasbeen due to host of reasons.Some of the key reasonsfor
expansion of international business are as follows;
­ Expansion of technology
Quicker and cheaper transportation
·
Communications enable controls fromafar
·
­ Liberalization of cross-border movements of goods,services and factors of production,such
as labor, capital andtechnology etc
­ Development of supporting institutional arrangements forinternational exchange of goods
andfunds
­ Increase in global competition forcing firms to expand in international markets
­ Convergence of world markets in terms of tastes,distribution infrastructure,technologies
andtrade regulations.
­ Supportfrom national governmentsfor internationalization of local firmsand for
attractingforeign direct investments.
­ Growth of resources available to mnc's andwith large pool of fundsands and other
resourcesfirms could easily expandbusinesses in worldmarkets.
Benefits of doing business in internationalmarkets:
A country and its peoplebenefit from selling to or even buying from internationalmarkets.
­ Exports
· Propelcountry's economic growth as itsfirms increase sales and profits
· Exports of quality products and services support or create better jobs (average export-related
jobpays more than averagenational job)
(c)Copyrights Virtual University of Pakistan
16
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InternationalMarketing ­ MKT630
VU
· Selling to international markets diversifies a country's economy and hence hedges against
economic downturns
­ Imports
· Consumers gainfrom lower costs, betterquality and greater variety products on the shelves
· Also createessential competition forlocal companies which thenimprove their products and
processes
· Keep levels of prices and hence inflationlow as with open importsprices of products in
domestic markets would depend on the lowerprices of the products in internationalmarkets
Means of engaging in internationalmarkets:
A company may engage in internationalmarkets in a number of ways. These are categorized in the
following;
­ Merchandize export and import
­ Services export and import
Travel,tourism and transportation
·
Performance of services
·
­ Fees in banking, insurance, rentals etc., turnkey operations, management contractsetc.
· Use of assetsfor royalties
­ Licensing
· Use of assetssuch as trademarks, patents, copyrights, or expertise under contracts
­ Franchising
· Franchiser sells/leases the use of assets and alsoassists the franchisee on a continuing
basis in operations
­ Investments
· Directinvestment - with controlling interest (at least 10% of voting or ownership control)
Whollyowned
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Jointventure
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Mixedventure (when a governmentjoins as a partner)
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· Portfolioinvestment - non-controlling interest
Equityinvestment
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Stockmarket investment - funds
­
Bonds & loans
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Moneymarket investment
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(c)Copyrights Virtual University of Pakistan
17
Table of Contents:
  1. OVERVIEW OF INTERNATIONAL MARKETING:Domestic marketing, Multinational marketing, Globalization of markets
  2. INETRNATIONAL MARKETING PROCESS:Situation Analysis, Implementation and Control, Relationship
  3. INETRNATIONAL MARKETING PROCESS:The Product Concept, The Societal Marketing Concept
  4. INETRNATIONAL MARKETING PROCESS
  5. ENGAGING IN INETRNATIONAL MARKETS:Expansion of technology, Merchandize export and import
  6. INTERNATIONAL TRADE & INVESTMENT THEORIES:Theory of Comparative Advantage, Country Similarity Theory
  7. INTERNATIONAL TRADE & INVESTMENT THEORIES:Global Strategic Rivalry Theory,
  8. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:Foreign exchange info
  9. INTERNATIONAL MARKETING INFORMATION REQUIREMENTS:The Product
  10. FOREIGN NATIONAL ENVIRONMENTS:Political systems in the world, Political risks in international markets
  11. FOREIGN NATIONAL ENVIRONMENTS:Types of legal systems,
  12. FOREIGN NATIONAL ENVIRONMENTS:Conciliation, Mediation, Global relevance
  13. ROLE OF GOVERNMENTS IN INTERNATIONAL MARKETS:Industry-level needs, Promotion of exports by governments
  14. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:The concept of culture, Attitudes & beliefs,
  15. INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS:Culture is a human medium
  16. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Political Environment
  17. DETERMINING EXPORT POTENTIAL IN INTERNATIONAL MARKETS:Product Potential
  18. INTERNATIONAL MARKETING RESEARCH PROCESS:market structure, Implementing the research plan
  19. INTERNATIONAL MARKETING RESEARCH PROCESS:Identify alternative information sources
  20. INTERNATIONAL MARKETING RESEARCH PROCESS:Issues with primary global research:
  21. INTERNATIONAL MARKETING RESEARCH PROCESS:Problems with data, Comparative Analysis
  22. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Export intermediaries, Export and import management
  23. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Licensing contract, Licensing risks
  24. MODES OF ENTRY INTO INTERNATIONAL MARKETS:The franchiser’s balance,
  25. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Forms of countertrade, Specialized entry modes
  26. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Demand factors, Political factors
  27. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Drivers behind successful joint ventures
  28. MODES OF ENTRY INTO INTERNATIONAL MARKETS:Distribution agreements, Critical mass & optimism traps
  29. INTERNATIONAL STRATEGIC ALLIANCES:Impetus for international alliances, Management of strategic alliances
  30. INTERNATIONAL CONSUMER MARKETS:Model of Consumer BehaviorThe Buyer Decision Process
  31. INTERNATIONAL BUSINESS MARKETS:Nature of buying unit, Major influences on international business buyers
  32. INTERNATIONAL TARGET MARKETING:Market segmentation, Market positioning
  33. INTERNATIONAL MARKET SEGMENTATION:Geographic, Behavioral, Situational factors
  34. INTERNATIONAL MARKET SEGMENTATION:Basis for country segmentation, Stages of economics development
  35. INTERNATIONAL MARKET SEGMENTATION:Cultural Variables,
  36. INTERNATIONAL MARKET SEGMENTATION:Market coverage strategy, Socio-economic variables
  37. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Individual product decisions, Branding
  38. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:
  39. INTERNATIONAL MARKETING MIX - PRODUCT POLICY:Modular Approach
  40. INTERNATIONAL MARKETING MIX – PRODUCT POLICY:Issues in labeling, Pricing, Distribution
  41. INTRODUCING NEW PRODUCTS IN INTERNATIONAL MARKETS:The new product development process
  42. PRICING IN INTERNATIONAL MARKETS:Factors influencing international pricing,
  43. ITERNATIONAL MARKETING CHANNELS:Channel membership, Vertical marketing, Control over distribution
  44. PROMOTING IN INTERNATIONAL MARKETS:Advertising, Direct marketing, Public Relationing
  45. REVISION