International Marketing Management International Marketing Management International Marketing Management Text and Cases U.C Mathur Copyright © U.C Mathur, 2008 All rights reserved No part of this book may be reproduced or utilised in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage or retrieval system, without permission in writing from the publisher First published in 2008 by SAGE Publications India Pvt Ltd B 1/I-1 Mohan Cooperative Industrial Area Mathura Road, New Delhi 110 044, India www.sagepub.in SAGE Publications Inc 2455 Teller Road Thousand Oaks, California 91320, USA SAGE Publications Ltd Oliver’s Yard, 55 City Road London EC1Y 1SP, United Kingdom SAGE Publications Asia-Pacific Pte Ltd 33 Pekin Street #02-01 Far East Square Singapore 048763 Published by Vivek Mehra for SAGE Publications India Pvt Ltd, typeset in 9/11 pt Palatino by Star Compugraphics Private Limited, Delhi and printed at Chaman Enterprises, New Delhi Library of Congress Cataloging-in-Publication Data Mathur, U.C., 1938– International marketing management: text and cases/U.C Mathur p cm Includes index Export marketing—Management Export marketing—India—Management International trade International trade—India I Title HF1416.M32 ISBN: 978-0-7619-3640-4 (Pb) 658.8'4—dc22 2008 2008007161 978-81-7829-786-6 (India-Pb) The SAGE Team: Sugata Ghosh, Vikas Jain, Sanjeev Kumar Sharma and Trinankur Banerjee Dedicated to Bina my best friend and wife with gratitude and love International Marketing Management Contents List of Tables List of Figures List of Abbreviations Preface 10 13 15 10 11 12 13 14 15 International Marketing: An Introduction Market Potential of Countries International Organisations International Trading International Competitive Advantage and Buyer’s Profile International Environment for Business, Customer, Competition and Controls International Pricing International Business-to-Business Marketing International Marketing of Services International Strategic Marketing International Stakeholders International Brands International Marketing Concepts Market Competitive Forces Worldwide Advertising and Promotion in International Markets 17 56 75 100 129 160 183 194 204 217 249 259 279 316 335 16 17 18 19 20 21 22 23 International Public Relations International Marketing Research Distribution of Goods Worldwide International Markets for the Twenty-first Century, Imports and Exports International Management for Marketing Personnel International Marketing Audit International Collaborations, Controls and Global Manufacturing Understanding Case Studies 417 425 454 467 487 496 521 532 Index 573 About the Author 583 List of Tables 1.1 1.2 1.3 1.4 1.5 Difference between TQM and CPR Product Acceptance Plan India’s Ranking in the World Cultural Diversity between Japan and the US Percentage of GNP Spent by Nations on Advertising 32 40 44 48 50 2.1 2.2 2.3 Classification of Countries on the Basis of Per Capita Income (1994) Country Classification on the Basis of Per Capita Income and GNP Comparison of Business Environment amongst Countries 62 63 70 3.1 3.2 3.3 Top 10 IDA Borrowers (FY ’05) Rating Countries for Business Potential Business Attractiveness and Competitive Strength 79 94 94 4.1 World Trade and Output Developments, 2002–2005 (At Constant Prices, Annual Percentage Change) GDP and Merchandise Trade by Region, 2004–2005 (Annual Percentage at Constant Prices) 102 5.1 Product Development Process 155 6.1 6.2 6.3 6.4 Country-wise Inventory Register Multi-product Sales Register Outstanding Payment Register Complaint Register 175 175 175 175 9.1 9.2 9.3 Product and Related Services Hotel Industry Supply Demand Paradigm Customer Value Analysis 208 209 211 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 Product–Market Correlation Correlation between Markets and Competition Market, Firm and Competitive Analysis Summary Benefit Rating for Cars Decision Concepts and Benefits Customer Analysis Matrix Marketing Strategies for Decline Stage of PLC Product Life Cycle Audit 219 219 222 224 224 227 237 238 11.1 Stakeholders of a Firm 250 4.2 104 List of Tables 12.1 Stakeholders of a Firm 260 13.1 13.2 Changes in Industrial Concepts Selling Price Components 287 303 14.1 14.2 Customer Assessment of Competitors Product Price Parity 322 332 15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 Personal Selling Effort and Advertising The Benefit Story Relating to Maruti Esteem Car Advertising Expenditure in Different Countries Women at the Workplace Analysis of a Company’s Marketing Factors with Competitive Factors Marketing Strengths of Different Countries Media-wise Advertising—USA, 1980 Advertising Analysed 337 345 378 394 395 397 399 409 17.1 17.2 Country Ratings Country’s Market Attractiveness and Competitive Company Strength 431 431 18.1 Analysing Distribution Channels 463 21.1 21.2 21.3 21.4 Yearly Growth Rate and their Weightage Link between Cash Flow and Value Chain Working Capital Accounting Market Segment Variables 505 507 507 512 22.1 22.2 Equity Based International Operations Non-Equity Based International Operations 522 522 23.1 23.2 23.3 23.4 23.5 23.6 23.7 23.8 23.9 Imports and Exports GE Head Count vs Revenue—Microsoft Indian Software Industry Indian Software Companies Infosys International Revenue Generating Countries Market Share of Refrigerator Brands Manufacturing Capacity of Refrigerators in India Market Share of Washing Machine Brands in India Ranking of Price Waterhouse 537 541 542 543 544 551 551 552 554 Understanding Case Studies 569 Sales percentage of different brands of the segment are given below for the years 1999 and 2000: Maruti Esteem Opel Astra Honda City Ford Ikon Cielo Mitsubishi Lancer Fiat Siena Hyundai Accent 37 20 16 22 13 21 12 15 FORD IKON REPORT CARD Ford Ikon holds its own amongst other more established players Purchase consideration importance given to various factors while buying a car— Cars proud to own Cars full of life and vitality Good value for money Stylish Family cars Safest cars Better drive than others Solid built Comfortable Quality cars Low running cost Especially designed for India Confidence car Brand 100 91 90 90 85 81 80 78 75 74 32 74 75 99 The statement given below gives the value judgement of different cars in the time frame January to June 2000 Largest selling car in its segment in the first month of the launch Cars you would be proud to own 570 International Marketing Management Task for Students Analyse the strategy adopted by Ford and give your recommendations for keeping pace with the Indian competitive environment ∗ ∗ ∗ ∗ ∗ ∗ CASE STUDY 12: THE CHRYSLER CORPORATION Through the 1970s, Lee Iacocca was the trusted friend of the top man of the Ford Motor Company, Henry Ford, and CEO of Ford Lee and his wife, and Ford and his wife were often seen partying together as the spouses too had a great rapport At that time, Lee got an offer from Chrysler to join them as their CEO, but due to his friendship with the Fords, he rejected the offer In 1977–78, however, the relationship with Ford started souring and Lee was sacked by Ford on ego issues By this time, Chrysler was in real bad shape and they welcomed Lee with great expectations Chrysler was the third largest automobile firm in the world, with a reputation of building tough sturdy cars Unfortunately, with one bad model, the firm started slipping down The Chrysler scenario in 1977 is given next: One million cars called back to the factory for retrofitting to counter serious safety hazards New fuel efficiency and emission norms of the government of the USA, required the firm to invest US$ 7.5 billion for getting new tools to the job Cash flow was threatened Bankruptcy was round the corner due to the firm’s inability to service the huge debts The financial situation of the firm in 1978 is given next: First quarter loss was US$ 120 million Second quarter earnings were US$ 30 million Third quarter loss was US$ 160 million Most of the directors of Chrysler were recommending that the firm should declare bankruptcy Some had faith in Lee and on the day the third quarter results were declared, the directors also confirmed the appointment of Lee Iacocca as the new CEO of Chrysler The Automobile Market of the 1970s and 1980s Henry Ford had stuck on to the T-model Ford car He believed that ‘if the product is selling well as it had done from its inception why change it?’ He also did not budge on the colour issue and wanted all his cars to be black, despite the pleadings of several of his lieutenants Understanding Case Studies 571 General Motors (GM), albeit a late start, had come to the forefront of the car market with their new cars in different colours, shapes and sizes GM was, in fact, the number one firm in the world for all products in terms of assets Chrysler faced the following problems: Poor product quality Drop in sales Suppliers had become arrogant as they were not being paid on time Customers felt they could take full advantage of the situation Chrysler UK was doing better but being so far off, and with only 15 per cent of Chrysler business, could not be depended on to rescue it from disaster After joining, Lee analysed the situation and planned his strategy for bringing Chrysler around in five years He made some top-level changes, threw out the deadwood, the incompetent and nonbelievers of the future success of Chrysler He brought some of his top associates from Ford, who had enough trust in him to leave Ford to join a declared sick firm Lee’s analysis of the scenario was: He needed money for R&D to bring out better cars commensurate with Chrysler’s earlier image of building good, sturdy cars Bank overdrafts had hit the limit and the banks were not interested in backing Chrysler any more Suppliers, car dealers and some senior executives had recommended that Chrysler should declare bankruptcy Lee kept persisting that Chrysler would find a solution to its problems He arranged marathon meetings with the bankers, who were aware of Lee’s reputation, but seeing Chrysler’s plight decided against giving any loans to the firm Unruffled, he went to Washington and met some of his senator friends, who agreed to help (There were a few senators totally opposed to any help to Chrysler.) His senator friend prevailed on the bankers, who agreed to consider giving the loan on a specific stipulation that the US government guarantees the loan Lee decided to meet the president of the USA and on his intervention the US government agreed to give the requisite guarantee on some difficult conditions like the following: Chrysler would reduce expenses Get some capital of its own Defer payments even further to their suppliers At this juncture, it was the sagacity, statesmanship and discipline that Lee possessed, which was of great importance to Chrysler He took the following actions in order to meet with the loan stipulations: Lee cut down his own salary to US$ till the good times were back at Chrysler and the loan had been repaid With his immense persuasive power he made other managers work with full force and vigour at half their salary 572 International Marketing Management Lee met all the suppliers personally and after he had explained the position they agreed to deferred payments while continuing the supplies Lee arranged some loans from private placements from his friends and completed the compliance of the US government loan guarantee Lee got the money, invested it in R&D The new product was test marketed and the sales boomed (see Figure 23.4) Repayment started and was over in three years—two years in advance Banks volunteered to give more money as required by Chrysler Chrysler was truly on its way to becoming a force to reckon with in the automobile business again It could ward off the competition from Japanese cars for quite a while Figure 23.4 Chrysler’s Operating Income (in US$ million) Index ABB 68 Ad-valorem duty 113 advertising 286 and creativity 371–72 art direction 375–78 as means of communication 147 copy writing 373–75 creative strategy, art and copy 371–75 definition of 336–37, 435 five Ms of 351 focus on controversial matters 405–9 forms of 49 international 379 mass communication system 409–12 media selection plans 398–405 mix factors 337–38 objectives address of distribution channels 348–49 aid in going global 350 announcing financial results 350 attitude change 346 attracting investors 350 benefit story 345 communication 344 educating customers 349 industrial products 350 package 348 price changes 344, 348 product launches 346 product success stories 345 promotional plans 348 prompt direct action 344 reassurances 346 recruiting staff 349 reminder advertisements 349 retreiving lost sales 349 sales as 343 of industrial products 350 public relations (PR) consultants 341 sales promotion 380–83 segmentation 147–48 tasks in the twenty-first century 337 telemarketing 340 teleshopping 340 the creative art 394–96 trade promotion 381 advertising agencies account executive (AE) 352 agency of records 353 ancillary services 341–42 client brief 352 creative department 352 full-function agencies 339 full-service 353 in-house agencies 356 limited-service 353 media director 352 ratings 356 role of 338–39, 352 selection process 353, 354–56 specialised 353 specialised agency of records (AOR) 339 specialised hotshops 339 specialised technical agencies 339 types of 338 working of 351–53 advertising budget, methods competitive parity method 369 composite 370 meeting the objectives method 369 sales volume percentage 369 unit of sale 369 advertising campaign 389–94 advertising creativity 395, 405 advertising process 409 advertising research and DAGMAR 447–48 by observation 357 sample size 450 planning 357–58 process 449 methodology 449–50 573 574 International Marketing Management questionnaire preparation differential scale questions 360 guidelines 360, 452–53 Likert scale questions 360 multiple choice questions 360 steps 452 agreements, international collaboration franchise agreements 523 joint ventures 523 licensing agreements 523 management contracts 523 airway bill 111, 480 Alcatel-Alsthom 68 Alcatel-Modi 35 alternate duty 113 American Marketing Association (AMA) 336 American Society for Quality Control 296 anti-dumping duty 113 anti-dumping laws 41, 97, 106, 472 Associated Chambers of Commerce and Industry of India (ASSOCHAM) 93, 264, 423, 430, 437 Association for South East Asian Nations (ASEAN) 34, 45, 91, 466, 498 AT&T 40, 96 Audit Bureau of Circulation (ABC) 147 aviation turbo fuel (ATF) 420 balance of payment 58, 102 balance of trade 107 Balance Scorecard 158 barter system 90, 112–13, 184 Boston Consulting Group (BCG) 179, 239, 241, 302, 475, 501, 543 BCG Matrix 179, 241, 302, 475, 543 bill of exchange 111 bill of lading 111 BOT (build, operate and transfer) 200 bottom line 252 brands 284 building, sales promotion 272 buyer factor 275 definition of 41, 266 development of integrated focused communication 276–77 use of best practices 276 features of 266 focus and strength sources 274 equity 190, 214, 222–24, 265–67, 298, 323, 331, 386, 446, 548 extensions, marketing research process 267 image, role in buying decision 292 international 265–68 loyalty 221, 222, 227, 242, 265, 272–73 managers 308 positioning strategy 273–76 role for products 40 value 266 values added 41 Brand India 27–29 British Council Library 176 Burlington 340 business, global 37, 91–92 and the cultural divide 68–71 complexities to be considered 28 controls 524–25 expatriate managers, role in host country 493 foreign direct investment 494 foreign exchange rate arrangements 494 foreign exchange 494–95 environmental factors t 27–28 global policy 69 HR operations 491 HRD activities 488–89 hybrid policy 69 knowledge of the host country 489–91 multi-domestic policy 69 policy variations to be adopted 69 suitability criteria for staff 489 variants 488 business buying decision-making process 197 decision triangle 195–96 distinction from consumer buying 195 features of 195 purchase negotiations Government tender business 199 umbrella buying or turnkey solutions 199 business environment 73, 161–62, 180, 297 recent changes in relation to WTO 169–70, 171, 173 activity ratios 505 activity-based cost analysis 506 areas required for planning strategies in firms 500–506 balance scorecard 502 core processes and systems 501–2 critical success factors 500 customer 502–3 finance 503 levarage ratios 505 liquidity ratios 504 operations 503 Index organisation 503 other financial ratios 505–6 profitability ratios 504 qualitative analysis 504 quantitative analysis 504 value chain analysis 500–501 business scene, global 249–52 buyers, and sellers 287–88 buying behaviour, organisational buying situations 156 system for buying 156 culture 290–91, 290 structures flat 311–12, 311 networking teams 312 virtual 312–13 case studies (see marketing, case studies) Commonwealth of Independent States (CIS) 70, 102, 103, 104 competition international 23–25, 28 types fragmented market 319 monopoly 318 oligopoly 318 and markets 219 competitive advantage of firms 158–59 competitors customers’ assessment of 322 generic products as 323 completely built units (CBUs) 71 Confederation of Indian Industries (CII) 93, 264, 423, 430, 437, 546 consumer behaviour 140, 156 perception 154 buying roles 141 goal substitution 148 goals and needs 148 habitual buying behaviour 142, 143 motivational research Freudian theory 149 persuasion strategy 153–55 post-Freudian personality theories 149–51 price and quality relationship 151–52 need satisfaction 141 product personality types 148–49 segmentation 147–48 core process reengineering (CPR) 30, 31, 32 575 corporate styles 252–53 corporate vision 298 corporation, Keegan typology of the stages of development of 176 cost, factors of 277 countervailing duty 113 ‘Country of Origin’ Certificate 111, 118 countries, classification basis of 61–64 on cultural ambience 69–70 on per capita income and GNP 63 democratic system 66 economic growth 64 business enviroment 73–74 inflation, definition of 64 legal environment 67 manager and political system 66–67 political and legal business environment 64–67 technological environment 71 creative art 405 credit 286–87 Crips, Richard D 435 Critical Success Factors (CSFs) 157, 210 Cross Parry 19, 35, 293, 323 custom duties 113–14 customer value analysis (CVA) 192, 211 customers gaining and retaining 296–98, 296 needs of 280–81, 287–88 structural support to 291 and prospective customers 280 Customs Act (1962) 477 Daewoo Electronics 139 Daewoo Motors 523 DAGMAR (Defining Advertising Goals for Measuring Advertising Results) 356, 358, 447, 448, 451 data analysis 176, 177, 447 data processing 447 DCM Group 523 decision triangle of business buying 195 demand management 311 differentiation 218, 264, 265, 319 Directorate of Advertising & Visual Publicity (DAVP) 93 distribution chains of 285 systems 135, 222, 285, 302, 454, 460, 476, 525 consumer goods agency operation 458 catalogue sales 457 576 International Marketing Management consignment agents 458 franchise outlets 457 mail order 457 own shops 457 stockists 458 web marketing 457–58 channels 18, 137, 191, 198, 227, 302, 311, 427, 434, 476, 479, 501, 509 Drucker, Peter 250 duty drawback 477 economic environment, host countries 25–27 economic systems 26 economic value added (EVA) 158 Einstein, Albert 109 environmental analysis 297–98 European Union (EU) 34, 45, 52, 89, 91, 102, 104, 171, 466, 498 export documentation 118 export markets 97, 477–79 Export Promotion Councils of India 121–27 export-oriented units (EOUs) 478 exports Indian firms 45 routes for 35 export certificate, India 111 and imports 477–85 fast moving consumer goods (FMCG) 29, 236, 525 Federation of Indian Chambers of Commerce and Industry (FICCI) 93, 264, 423, 430, 437 fibre agreements 106 financial support 291 firms activities of 302, 311 advertising and promotion 254 and society 422–23 businesses of 299 buyers 318 competition checklists 324 competitor’s plans 320–22 continuous market information 322 competitive actions 323–24 competitive advantage cost differential 319 differentiation 319 market focus 319 response to market 319 service 319 vertical integration 320 competitors 318 core processes of 294 corporate styles 252–53 cost centre approach 300 cross-functional structures of 311 customer targets 328 distribution channels of 303 economic business environment 162–63 employees and customers 253 environmental issues 256 functions of 302 futuristic global marketing advertising 167 capitalistic society 164–65 communities 167–68 corporate governance 165–66 employees, customers and suppliers 167 environment 168 global markets 166 quality 167 quality and quantity audit 166 resource constraints 166 safety norms 166–67 goals of 298 government and society 255–56 industries specialising in 299 international marketing plans 327–28 market plan implementation 178–82 market share and sales 327 marketing myopia 328 marketing of, planning process 300 marketing plan checklist 324–26 marketing plans and policies brand equity 330, 331 distribution channels 330 personnel 331 product 330 quality 330 service 330 warranties 330 marketing strategy 331–32 movement of goods 303 objectives of 299 outbound logistics of 302–3 planning sales targets 328–29 price-quality strategy 332 primary social stakeholders customers 260 global citizens 262–63, 262 Index investors 261 local communities 262 managers and employees 261–62 suppliers 260–61, 260 and secondary non-social stakeholders 264–265 products 299 profit centre approach 300 profits, the bottom line 252 resources required 290 responsibility towards workers and customers 254 rolling plans 329 secondary social stakeholders competitors 264 host government 263 media and communicators 263 society 263 trade bodies 264 unions 263 selling strategy 332–33 skills and competencies of 299 stakeholders of 250, 393 strategic mission of 298 success, planning for 293–95 suppliers 317 suppliers and business partners 255 value chain analysis of 302 value-based management 253–54 Five Force Model, Michael Porter’s 22, 28, 98 focus group research 438 Ford, Henry 109 foreign direct investments (FDIs) 64, 74, 105, 128, 428, 482, 486, 531 Foreign Exchange Management Act (FEMA) 65 Foreign Exchange Regulation Act (FERA) 65 Foreign Investment Advisory Services (FIAS) 83 franchising 35 free market 407 free trade 52, 105 Free Trade Zones 34–35, 530 Free-Trade Agreement of the Americas (FTAA) 171 FTAs 171 fully-owned foreign subsidiary 36 Gandhi, Mahatma 109 GDP 62 General Agreement on Trade and Tariff (GATT) 51, 76 General Electric (GE) 68 GlaxoSmith Kline 165 globalisation, advantages and disadvantages 76 577 Gross National Product (GNP) 26, 36, 49, 50, 61, 62, 63, 64, 334, 378, 396, 407, 526, 539 goal substitution 148 goals 298 Government of India export–import (exim) policy 477 trade policy 477 gross domestic product (GDP) 25, 58, 61, 101, 131 hawala transactions 65 Hero Honda 267 Hindustan Aeronautics Ltd 419 Hindustan Levers 308 Hindustan Unilever Limited (HUL) 133 home country 19 host country 19 HSBC Bank 71 IDA 79–80 idea research 449 Indian economy 59, 60 industrial buying (see business buying) industrial buying process aspects of buyers’ organisation 201 buyers’ considerations 201 backward vertical integration 203 forward vertical integration 203 purchase decisions 202 quotations 200 vendor selection process 202 Industrial Revolution 39 inflation 64 International Bank for Reconstruction and Development (IBRD) 78 International Centre for Settlement of Investment Disputes (ICSID) 78, 84–86 International Development Association (IDA) 78 International Finance Corporation (IFC) 76, 78, 80 International Industrial Marketing Research 202 International Management, organisational behaviour: attitudes towards firm and each other 514 energy and motivation levels 514 manager, supervisor and worker 514 team controls 515 team work 514 International Market Information System 173–76 International Monetary Fund (IMF) 24, 76, 86, 87, 88, 93, 97, 102, 430, 486–87, 494 International Trade Centre (ITC) 88–89 inventory management, and JIT 530 ISO 9001 527 578 International Marketing Management ISO 9002 528 ISO 9003 528 joint ventures 36 just in time (JIT) technique 137, 201, 530, 531, 557 just noticeable difference (JND) 154 JWT 339 Keegan typology of stages of development of the global corporation 176 Kotler, Philip 351 labels 284 letter of credit (LC) 48, 111, 112, 480 licensing 35 Life Insurance Corporation of India (LIC) 389 lifestyle, factors for measurement of 62 Lintas 339 local pricing 184 logistics 304, 306 macroeconomic factors 62 managed trade 52 manpower deployment 18 Manslow’s hierarchy of needs 40, 96 manufacturing and service organisations, global 525–28 in India, categories of 218 market and customers 291–92 and its culture 295–96 economy 29, 59 driven economy 59, 60, 162 entry 52 environment 282–83 globalisation 90–97 information advertising and promotion 476 competitive advantage 474–75 distribution channels 476 market information system 476 product customisation 475–76 market information system (MIS) 435 leader 321 life cycle 414, 415 methods 436–37 need for 280 profile 71–72 research 433–35, 436, 439, 440–42, 444–45 segment 301 segmentation 144, 299 acquisitions 512 advertising and promotion 513 benefit segment factors 147 competitors 513 demographic factors 144–45 distribution channels 512 educational and occupational factors 145 elasticity of demand 512 geographic factors 144 government’s price regulations 513 market growth 511–12 price and quality 513 pricing and promotions 513 pricing policy 512 product strategy 513 psychological/psychographic factors 145 situation use factors 146 socio-cultural factors 145–46 use-related factors 146 share 180, 322–23 situation analysis 301 surveys 23, 43, 110, 308, 436 marketing advertising and economy creating social awareness 385 market share 384 product launch 384 providing sales persons with sales opportunities 385 retail business 385 and society 386–89 audit competitive analysis model 498 competitive business environment 498–500 financial analysis 515–20 host country’s general business environment 497–98 case studies Chrysler Corporation 570–72 Exhibitions India Pvt Ltd 545–46 Ford India 559–69 Gillette 535–36 Hindustan Graphite Electrodes 536–39 Infosys 541–44 Japan 556–58 Maruti Udyog 547–48 Microsoft 540–41 Price Waterhouse 553–56 Raychem corporation 533–34 Index Whirlpool of India Ltd 549–53 channel 43 continuous, process of 288 factors advertising and promotion 43 cultural aspects of global business 45–47 distribution channels 42–43 global communications 49–50 market globalisation 43–45 marketing channels 50–51 organisation for exports 48–49 price 42 product innovation product 39–42 expenses, components of 180–81 logistics 301–6 mix factors 283, 388–89 organisation 307–9, 310–11 Plan Process 390 research conducting, in the international market 426 methods 437 primary research 437 secondary research 437 plan 432–33 process 267, 428, 435 definition 426 types 432 market scorecards (MSCs) 181 strategy 218–219 targeting 280 Maruti-Suzuki 35 Maslow’s hierarchy of needs 141 Mcdonald’s 35 media 339–41 media planning above the line media 366 and product positioning 360–67 below the line media 366 cable TV and satellite channels 365–66 direct mail 365 magazines 362 miscellaneous media 366 newspapers 361–62 outdoor media 364 point of purchase (POP) 364 radio 363 television 363–64, 363 merchandising 286 Mercosur 34, 85, 171 579 Multilateral Investment Guarantee Agency (MIGA) 78, 80, 81, 82, 83, 84 and FDI 81 focus areas 81–82 functions of 80 operations in China 63–64, 83 role in PRI market 82 mixed economies 60–61 Monopolies and Restrictive Trade Practices (MRTP) Act 465 MSCs 181 multinational corporations (MNCs) 18, 24, 71, 102, 132, 490, 497, 525 Nadar, R 407 non-banking financial company (NBFC) 421 non-tariff barriers 23, 101, 109, 127, 169, 428 North Atlantic Free Trade Agreement (NAFTA) 34, 45, 91, 466, 498 order fulfilment 311 OTS 338, 339 outsourcing 18, 65, 263, 290–94, 306, 526, 527, 531 and manufacturing 528–30 overseas 529 packaging 111, 284 per capita income 25, 36, 38, 58, 62, 95, 131, 432 classification of countries by 38 personal selling 286 personality, and self concept 141 PLC 42, 97, 229–38, 290, 302, 329, 332, 346–47, 351, 369, 475, 485, 499, 501 point of purchase (POP) 154 Porter, Michael 22, 28, 98, 136, 137, 297, 302, 316–17, 470, 483, 498, 500, 539 analysis of 302 Five Force Model 317, 318 public relations (PR) activities 419 and government 423 and investing public 423 base 419 campaigns 418 crisis management 424 features of 418–19 job 418 objectives of 419 people 418 press conferences 423–24 580 International Marketing Management press releases 423 responsibilities 420 role in firm 419 probability sampling methods 442 product acceptance 47 and markets 219 and services 281 benefits 281 categories of 296, 455–64 consumer-based 155 customer convenience buying 459 customer reach 459 demand, variables of 26 development 155, 311, 530–31 distribution method choices 463 distribution systems channels 464–65 distributors/wholesalers 465 retailers 465 wholesalers (distributors) 460–61 global 96–97 industrial goods 455–56 innovation 92, 155 leasing and hire purchase 464 product life cycle (PLC) 23, 42, 97, 101, 108, 151, 178, 290, 331, 333, 346, 370, 462, 475, 499 market-based 155 multiple product manufacturers 460–61 packaging 284 personality images 267 positioning 301, 367 prices 284–85 pricing 184 barter system 184 discounts 191 elements considered 185 finalisation, attributes considered 190 formulae 189–90 tendering process 190 hierarchy of the distribution network 187 in retailing 191 in service marketing 191–92 market situations 185 monopoly market situation 185 oligopoly market situation 185 perfect competition 185, 186–88 customer parameters 189 production efficiency 526 quality 296 relative advantages 155 retail business area distributors 462 boutiques 461 discount store 461 manufacturers’ own shops 462 non-exclusive distributors 462 shop-less shops 462 sole distributors 462 consignment sale stockists 462 stockists 462 supermarkets 461 superstore chains 283, 459–60, 461–62 sales with service 459–60 types of 283 profits 252, 288–90 projective techniques 268–69, 270–72 Purchase Decision Triangle 195 purchasing power 62 quality, definition of 296 quality of life 62 quantitative analysis 257 questionnaires 439 Readers Digest 340, 343 regional trade agreement (RTA) 171 relationship marketing 138–40, 282 Reserve Bank of India (RBI) 59, 111, 478 retail sales 286 return on investment (ROI) 158 Roman, James 408 RTAs 171 SAARC 34, 171 sales contracts 281–82 persons 287 promotion 180, 272, 283, 285–86, 323, 333, 381–82 salesmanship 286 samples non-probability 443 planning for 443 probability 442 selection 442 size 442 SCA 209, 236, 329, 330 secondary data 438 Securities and Exchange Board of India (SEBI) 60 sellers, and buyers 287–88, 287 Index selling price 303 semi-knocked down (SKD) units 71 services and products 207 as product 207 definition 205 marketing ABC analysis 209 complaints 207, 211–213 critical success factors (CSF) 210 customer satisfaction 214 customer delight 214 customer value analysis (CVA) 210–11 guarantee of 213–14 inseparability elements in 205, 206 intangibility elements in 205–6 market segment 210 perishability elements in 205, 206 personalisation of service 210 personality elements in 206–7 product pricing 210 revenue generation 209 sector 205 service delivery guidelines 209–10 service product market research 214–15 service quality 207–10 strategic valuation 216 total quality in service management 209 variability elements in 205, 206 Seven S Model 172, 491–93 shared values 492 skills 493 staffing 492 strategy 493 structure 492 style 492 systems accounting 492 control 492 recruiting 492 reporting 492 resourcing systems 492 Siemens 68, 523 sight draft 111 Smith, Adam 24, 106, 108, 113, 165, 251 ‘invisible hand’ 252 The Wealth of Nations 164, 251 theory of absolute advantage of nations in business 130–31 581 South Asian Association for Regional Cooperation (SAARC) 171 Special Drawing Rights (SDRs) 86 special economic zones (SEZs) 478 stakeholder-inclusive corporations 250 stakeholders 293 Standard Vacuum Oil Company 523 Strategic Business Unit (SBU) 132 strategic competitive advantage 219 strategic marketing business-to-business or industrial segmentation 228 competitive analysis 221–23 core competencies of a firm 219–20 customer analysis 224, 225 customer segmentation 218, 227 international marketing strategies 243–47 across the product life cycle cost leadership gaining methods 231 costs, volumes and experience curve 231–32 decline stage 237–38 experience curve cost reduction areas 231–32 growth stage strategy 233–34 introductory stage 230–33 late growth stage 234–35 market share strategy 232–33 maturity stage 235–37 market analysis 226–27 planning 223–27, 243–47 portfolio management analysis BCG matrix 239–41 GE matrix 241–42 product positioning 228–29 product related analysis 220–21 segmentation and positioning 227–29 SWOT analysis 222 subliminal perception 154 supply chain information process flow 305 model (1960) 306 product push 306–07 push pressure 306 management 291 sustainable competitive advantage (SCA) 209, 236 tariff barriers 23 tariffs 28, 42, 113, 169, 190 television rating points (TRPs) 147 temporary export surcharge 113 theory of comparative advantage 106 theory of relativity 109 582 International Marketing Management third country manufacturing 18 threshold level 154 time draft 111, 112 total customer management (TCM) 32–34 total quality management (TQM) 30–32, 137, 214, 244, 296, 507, 527, 529, 531, 535, 557 totalitarian economy 26 trade and government regulations 108–9 barriers placed by governments 107 documents required by RBI 111–12 export imperatives for India 110 India, export documentation 114–20 Indian firms, finances, sources of 110–11 lower cost of manufacture 107 natural advantage of some countries, reasons for 107 recent developments 101–3, 104–8 strategies for the 21st century in India 109–10 theories of 108 transactions 111–13 trade draft 111 trade policies 106–7 trade theory 106 trademarks 284 transfer of technology 18 transportation 285, 304 turnaround strategy 415 United Nations Conference on Trade And Development (UNCTAD) 76, 87, 88, 89 United Nations (UN) 76, 105 United Nations Industrial Development Organization (UNIDO) 89–90 United Nations Organization (UNO) 24, 76 Uruguay Round 77 US Library 176 unique selling proposition (USP) 57, 246, 333, 410, 541, 553 ‘Vasudhaiv Kutumbhkam’ 24 variable import duty 113 warehousing 305 Weber’s Law 154 World Bank 24, 58, 62, 76, 78–88, 93, 170, 430, 555 World Trade Organization (WTO) 23–26, 45, 51–53, 61–65, 76–78, 88–106, 165–71, 430, 485 measures to be taken by India to comply with 78 problems faced by 77 tasks of 51, 76 WTO GATTS Agreement 170 About the Author U.C Mathur is Dean and Professor at Integrated Academy of Management and Technology, Ghaziabad, an ISO 9001: 2000 prestigious management institute Previously, he was a Senior Professor at the Maharishi Institute of Management, Noida, as well as the Director of the PGDBA programme there He has 36 years of experience in the corporate sector, has held positions like CEO Escorts Telecom, President and CEO World Digital in India, and has served as a consultant in advertising, strategic audit and market surveys to various MNCs and major Indian companies A prolific writer, he has several management textbooks and inspirational management books to his credit 583 [...]... with the subject of international marketing in a lucid style using simple language for the benefit of students Chapter 21 ( International Marketing Audit’) will help students gain a practical understanding of how to conduct an international marketing audit by providing them the example of an actual international marketing company The author wishes to thank Pankaj Mathur, Sanjoy Mathur and Punam Dayal... Hong Kong and Shanghai Banking Corporation International Bank for Reconstruction and Development International Chamber of Commerce International Centre for Settlement of Investment Disputes International Development Association International Finance Corporation International Monetary Fund Internet protocol Internet service providers 13 14 International Marketing Management JIT LANs LC MIME MIS MIGA MNC... Continuous Marketing Process Functional Structures Cross-functional Structures Supply Chain Sample Core Processes Marketing Process before 1970 Marketing Process Post-1970 Marketing Planning Process Value Chain Analysis Supply Chain Information Process Flow Supply Chain 1960 Model Organisational Structure Based on Sales International Marketing Department Based Organisational Structure Special International Marketing. .. marketing organisation best suited to the host country 4 Advertising and promotional plans 5 Selection of the distribution channels 6 Optimising resource usage (human resources, finance, information and technology) with better allocation and monitoring 7 Global or multi-domestic management positioning 20 International Marketing Management INTERNATIONAL MARKETING CONCEPTS Companies venturing into international. .. ensure its acceptance? 2 Options available for differentiating the product 3 Possible strategies for pricing and distribution 4 International marketing and government relations 5 Advantages accruing to the firm from international marketing International Marketing 29 International marketing helps tide over problems that may arise while doing business in one market only It becomes an insurance against political... probing the subtleties of international marketing The systems of coordinating foreign exchange and the organisations that facilitate international marketing have been given major importance Countries and businesses are now increasingly focusing on international marketing and this forms the theme of the book The selection process of the countries and strategic planning for going international take away... international business, exports and international trade International business, today covers areas like outsourcing, third country manufacturing and manpower deployment in different countries International trade covers the areas of imports and exports, including transfer of technology and international financing for projects International marketing takes care of functions like international market research,... important subject in an easy-to-understand language 17 18 International Marketing Management INTRODUCTION T his chapter introduces students to the different aspects of international marketing that will enable them to learn its various nuances with relative ease Students will learn about the major differences between domestic and international marketing The methods of scanning the business and competitive... chapter This will help students to plan marketing in a number of host countries with diverse cultural backgrounds The students are expected to have a healthy curiosity of the subject as they master the art and science of international marketing They will learn about the theories of international marketing and the United Nations (UN) bodies that help in international marketing including the World Trade... business establishments have several advantages in international markets due to low-cost labour, availability of raw materials and trained manpower OBJECTIVES OF STUDYING INTERNATIONAL MARKETING 1 To develop skills in analysing marketing challenges and opportunities 2 To develop decision-making capabilities in marketing 3 To gain experience in developing marketing strategies and plans that integrate functional