BBA-IV Semester International Marketing
International Marketing
BBA 4th SEMESTER
IB Specialization
MODULE 1
Introduction
Contents: The Core Concepts, why firms go International, Transition from domestic to global
business, the reactive and proactive processes of internationalization. The Dynamics of the
World Market, Identifying and satisfying global needs.
"Market Entry: Arguably "the most significant international marketing decision [most
companies] are likely to take is how they should enter new markets, as the commitments that
they make will affect every aspect of their business for many years ahead" - (Doole & Lowe,
1999)
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BBA-IV Semester International Marketing
International Marketing is the application of marketing principles to satisfy the varied needs and
wants of different people residing across the national borders. Simply, International Marketing is
to undertake marketing activities in more than one nation. It is often called Global Marketing,
i.e. designing the marketing mix (viz. Product, price, place, promotion) worldwide and
customizing it according to the preferences of people from different nations.
The foremost decision that any company has to make is whether to go international or not, the
company may not want to globalize because of its huge market share in the domestic market and
do not want to learn the new laws and rules of the international market.
But however, there are following reasons that attract the organization to be global:
● Increased Economies of Scale
● High-profit opportunities in the international market than the domestic market
● Huge Market Share
● Elongated life of the product
● Untapped International Market
How to Enter the International Market?
There are following ways through which companies can globalize:
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BBA-IV Semester International Marketing
1. Exports: The easiest way to enter the market is through exports that can be indirect or
direct. In Indirect Exports, the trading companies are involved that facilitates the buying
and selling of goods and services abroad, on the behalf of the companies.
Whereas in Direct exports, the company itself manages to sell the goods and services
abroad, by opting one of the following ways:
● By setting Domestic based Export Department, working as an independent entity
● Through the Overseas sales branch, that carries out the promotional activities and
facilitates sales and distribution.
● The sales representatives traveling abroad
● The distributors or agents in abroad working exclusively on the behalf of the company
2. Global web Strategy: Nowadays, companies need not go to the international trade
shows to show their products, they can very well create the awareness among the
customers worldwide through an electronic media i.e. [Link] the company
website, customers can read the detailed information, generally written in different
languages, about the product and can order online.
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3. Licensing and Franchising: One of the ways to globalize is through licensing, wherein
the domestic company issues the license to the foreign company to use the manufacturing
process trademark, patent, name of the domestic company while facilitating the sales. In
licensing, the domestic company has a less control over the licensee.
But, in the case of franchising, the domestic company enjoys the higher control as it
allows the franchise to function on its behalf, and in line with the terms and conditions of
the domestic company. MC Donalds, Dominos are the examples of franchising.
4. Joint Ventures: The companies can go international by joining hands with other country
based companies with the intention to monetize their existing relationships with the local
[Link] India, TATA AIG, HDFC standard life insurance, TATA Sky are the
examples of joint ventures.
5. Direct Investment: Ultimately, the firms can establish their own business facilities or
own a part of the local company to facilitate the sale of goods and services.
Why firms go International:
The companies go international with the objective to have an increased sales along with the huge
market share. But certain things such as political, social, technological, cultural situations
should be kept in mind while designing the marketing principles since these are different
for the different nations.
Commercial traction:
The most common goal of companies going international is to acquire more customers, boost
their sales, and increase their revenues.
By entering a new country, your company gets access to customers that were not on your radar
yet. Therefore, you can increase your client base and reach revenues that you would not be able
to reach, focusing on your market only.
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BBA-IV Semester International Marketing
It is also nice to keep in mind that increasing the number of potential customers is not the only
interesting aspect for companies looking for commercial traction. Very often, businesses that sell
internationally can charge higher prices for the same services in different countries. This way,
you can increase your margins without making your customer support team go crazy.
Decrease Operating Costs:
#2 Reason why companies expand into international
markets:
It is also common to see companies going international with the goal of reducing their general
costs. In the tech scene, this is very often related to finding cheaper talent and suppliers. In this
way, companies can achieve more results while expending fewer resources.
The local tax system also plays an essential role for companies chasing this goal. Countries such
as Ireland, the Netherlands and Panama attract a lot of companies by offering better conditions
than other countries.
Boost competitiveness:
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BBA-IV Semester International Marketing
#3 Reason why companies expand into international
markets:
Accessing new markets can provide much more than just “tangible” results. For example, more
customers and cheaper suppliers. By accessing new markets, you will automatically have to face
new competitors. And also adapt your proposition to different local needs. Therefore, your
company is forced to innovate and find new solutions to stand out in the market.
Being in a new country can also give you access to several great opportunities. Such as new
talents, R&D incentives, strategical partnerships, and many other benefits to increase your
(national and global) competitiveness.
More than that: your authority grows exponentially when you start selling abroad. As a
consequence, you can also get many more clients and/or charge higher prices in your own
country.
Diversifying risks:
#4 Reason why companies expand into international
markets:
Last but not least, risk diversification is another essential reason why companies expand into
international markets. Companies very often chase this goal when they are based in countries
with high political and economical instability.
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BBA-IV Semester International Marketing
Because there are a lot of uncertainties related to their market, it is safer to tackle other countries
and as a result minimize the impact in case something goes wrong. This strategy allows
companies to be more stable and therefore afford risks that were not possible before.
Transition from domestic to global business:
The transformation of a company from domestic to international is by entering just one
market or a few selected foreign markets as an exporter or importer. Competing on a
truly global scale comes later after the company has established operations in several
countries across continents and is racing against rivals for global market leadership.
Thus, there is a meaningful distinction between a company that operates in few
selected foreign countries and a company that operates and markets its products across
several countries and continents with manufacturing capabilities in several of these
countries. Thus international company acquires the status of the global company.
Example of Transformation of Business: Domestic to Global:
The Swedish home-furnishings giant, IKEA, started out as one store in Sweden.
Founded in 1943, it sold pens, picture frames, jewelry, and accessories. The company
published its first catalog in 1951, opened its first furniture showroom in 1953, and its
first full-fledged store – as a domestic company – in 1958. Thus its operations were of
the domestic company. Twenty years after its founding, the first IKEA store outside
Sweden opened in 1963, in Oslo, Norway, making the entry of the company in the
international business. By 1984, IKEA had 167 stores in 16 countries, and by 1985 it
opened a store in the United States. It became an MNC. Today, the IKEA Group is a
prime example of globalization, owning and operating 276 stores throughout the
world. Thus it is a global company now.
Indian Examples of Transformation of Business: Domestic to International:
● Amul
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● Vicco Laboratories
● Aditya Birla Group
● Mahindra and Mahindra
Indian Examples of Transformation of Business : Domestic to Global:
● TCS (Tata Consultancy Services)
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BBA-IV Semester International Marketing
The reactive and proactive processes of internationalization.
REACTIVE MOTIVES: Reactive motivated firms view internationalization as a necessary
response to unfavorable conditions in their current markets. Such conditions may be
increased competitive pressures, excess capacity given domestic market conditions, a
declining domestic market or saturation of the home market.
Reactive motives
● Competitive pressures
● Domestic market: small and saturated
● Overproduction/excess capacity
● Unsolicited foreign orders
● Extend sale of seasonal products
● Proximity to international customers/psychological distance
Proactive companies likely view internationalization optimistically as an opportunity primarily
because of the existence of some internal advantage that may allow the firm to exploit
successfully a new international market. Internal advantage allows the firm to operate from a
position of strength and may arise from proprietary market knowledge, skills and know-how,
technology, or a successfully differentiated and unique product. Likewise, researchers have
indicated the importance of external opportunities that were aggressively sought out by SMEs.
Proactive motives
● Profit and growth goals
● Managerial urge
● Technology competence/unique product
● Foreign market opportunities/market information
● Economics of scale
● Tax benefits
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BBA-IV Semester International Marketing
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BBA-IV Semester International Marketing
We could see the internationalization process in the Market Development and Diversification
grids of the Ansoff's Matrix
The Dynamics of the World Market:
Global market dynamics are characterized by constant change. This affects customer demand,
offerings, supply chains and the pricing of goods and services. These changes are influenced by a
variety of factors, including geopolitical events, technological advances and consumer behavior.
It is immensely important for companies to understand these global market dynamics in order to
remain competitive. Short-term trends can thus be distinguished from major transformation
processes. In today's highly competitive market, it is crucial for companies to be aware of the
constant mobility of economic regions. This continuous analysis offers the only way to maintain
its position in the market.
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BBA-IV Semester International Marketing
In order to gain a deep understanding of one's market position and potential, fundamental factors
are considered:
1. Consumer behavior
2. Direct and indirect competitors
3. Technological innovations and industry trends
Identifying and satisfying global needs:
A customer needs analysis is a comprehensive analysis that determines the value customers seek
from your products and services. It provides valuable insights about your target audience which
you can incorporate into your market positioning to ensure that it allows for exceptional
customer value.
Here are 4 ways to carry out a customer needs analysis.
● Surveys and interviews
● Means and analysis
● Feedback
● Social listening
Interviews
You can also conduct interviews with some of your existing customers. A 1:1 setting may allow
you to obtain more detailed responses than a simple survey.
During the interview, ask questions like:
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● What are you hoping to accomplish with this product?
● Now that you have the product, does it match your expectations?
● What do you feel we can do to improve?
● What do you like about the product?
Means-end analysis
A means-end analysis examines customer responses to ascertain why they would purchase your
product.
Generally, buyers choose to buy products for 3 reasons:
● Attributes: For example, a customer might purchase a TV because it has a sleek
design.
● Perceived benefits: The user may select the TV because it is smart.
● Personal values: The user selected the TV because owning one improves their
social status.
As you might expect, customers' purchasing motivations vary, so it is essential to conduct
surveys, collect responses, and organize them into these 3 categories.
Then, you can determine which motivating factors you’ll address and which can be enhanced to
make your product or service more competitive.
Feedback
Ask customers about their experiences working with your business. Customer and service team
member interviews can enhance the customer lifecycle.
Identify friction points and unexpected moments of delight in your customer needs analysis.
The following questions can help you in resolving customer issues:
● What can your business alter in its products and services?
● What are the building blocks that you can use for product improvement?
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BBA-IV Semester International Marketing
● What aspects of the experience require improvement?
You can also conduct surveys to get feedback. Surveys provide businesses with a picture of their
market position in meeting the needs of their target customers.
The survey should include questions about your brand, competitors, product awareness, and
brand attitudes.
You can conduct in-person, phone, or online surveys. Use open-ended questions that allow
respondents to express their thoughts without being influenced by a list of options. An example
of such a question is: "What additional features would you like to see in our product?”
Social listening
Keeping track of social mentions is also a great way to identify customer needs. This is called
“social listening.” People frequently use social platforms, like Facebook, Instagram, or Twitter,
to provide frank feedback on products and services. Monitoring their opinions and potential
annoyances will help you identify unmet needs and areas for business improvement.
As you identify customer needs, compile the results and implement the suggestions.
How to address customer needs?
Now that you’re familiar with the basics, let’s look at some strategies for addressing your
customers' needs.
Develop buyer personas
To get a grasp of your customer's needs, you must first understand who they are. You can begin
by developing a buyer persona.
A buyer persona is a fictional description of your ideal customer based on market researchand
your current clientele. It should describe the psychographics and demographics of your target
market.
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BBA-IV Semester International Marketing
Demographics include their likely age, gender, location, income, and interests. Psychographics
include their attitude and mindset—values, goals, interests, lifestyle, emotions, etc.
If you already have some customer data, then this is the optimal starting point for your research.
Can you deduce pain points from this customer data? Are there any notable patterns?
Keeping track of your current customers and their past interactions with your brand will give you
a better understanding of where your customers come from and whether you're meeting their
demands.
For example, consider a company that sells shoes. Children will have different requirements than
men in their 70s. While children may need more colorful shoes, older men prefer more
comfortable ones.
A buyer persona lets you keep your ideal customer in mind while researching and defining their
needs in later stages.
Provide quality customer service
Don’t mistake thinking customers only want good quality products. The truth is, there are so
many brands that can produce quality products. However, customers favor brands that provide
real-time assistance.
Research shows that customers will spend more with companies that personalize their customer
service.
After establishing rapport and gaining a client's trust, it becomes difficult for a rival to win them
over. Customers will continue to shop with you until the quality of service drops.
Therefore, your support teams should prioritize frictionless service delivery and enhance
customer handoff.
Below are 2 practical tips to improve the quality of your customer service:
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● Automate your customer service: Use a chatbot template for information
collection to interact with customers around-the-clock and promptly respond to
their simple questions.
● Use live-assistance solutions: You can provide solutions more quickly by reducing
the number of touchpoints and utilizing tools such as co-browsing and video chat.
You can connect with your customers via live chat to provide real-time assistance
for sales and support inquiries.
Measure customer satisfaction regularly
It’s not enough to identify and solve customer needs—you need to measure customer satisfaction
continuously.
Customer needs change over time, and you need to identify the changes and adapt proactively.
Apple is one of the best examples in this regard, as the company has continued to have the
highest customer satisfaction rating in the US since 2019.
One of the reasons the company stays ahead of competitors is the company's ability to recognize
and satisfy consumers' psychological need to purchase premium products.
Apple consistently meets many customer requests with enhanced functionality and improved
aesthetics. It has a voting system where users can vote and decide what features they want to see
on their new devices. This helps Apple cut costs and provide only what its target market wants.
There are several ways to measure customer satisfaction to stay updated. The standard
techniques are:
● Net promoter scale: uses a pointer scale of 1 to 10 to rate customer satisfaction,
where 10 means most likely to recommend, and 1 isn’t likely to recommend.
● Customer satisfaction score: rates the satisfaction of a customer using a score; its
scale ranges—very unsatisfactory, unsatisfactory, neutral, satisfactory, and very
satisfactory—the more positive answers you get, the higher your score.
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BBA-IV Semester International Marketing
Monitor your competitors
Your competitors also play a role in determining the needs and desires of your customers.
You can examine your competitors to know what works and what doesn’t.
When you start devising your market entry strategy, consider who the biggest players in your
target markets are, and what their customers might complain of.
Analyze your competition, conduct focus groups where the two products are compared side by
side, conduct interviews with customers of the competing business, and monitor their social
mentions.
You can then use this information to improve your products and position your brand.
Localize your product and services for each target market
Product localization is adapting and modifying your product, be it a web or mobile app, website,
or video game, to make it more suitable for a target market.
Some people confuse this with translation. Translation transfers your original product from one
language into another. Localizing your product, on the other hand, involves incorporating
cultural specifics, local slang, beliefs, expectations, and many other aspects along with
translation.
That way, you aren’t just producing another product for your new market. Instead, you’re
creating a product that meets the psychological needs of people in the new environment.
Research shows that 76 percent of customers prefer purchasing products with information in
their native language. Interestingly, only 20% of the world’s population speaks English.
If you seek a global audience, this means that about 80% of your potential market is inaccessible
to you—unless you invest in localization.
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BBA-IV Semester International Marketing
Localization is what most big brands are doing right now. Brands like Netflix, Slack, Airbnb,
Nike, etc., all develop localized products for all their target markets. That way, they can meet
their customers' physical and psychological needs.
Let’s take Slack as an example. Slack has over 10 million daily active users presently spread
across over 150 countries, including Japan, India, Germany, and France.
To break into these new markets, Slack localized its application to meet its customers'
communication needs. More importantly, their app meets the cultural needs of the people in these
business regions.
According to Slack's localization manager, “localization builds customer trust in a language they
understand and with cultural references they recognize.”
There are many paths to implementing a localization strategy as part of your global growth plan.
However, the most reliable way is to use a robust localization technology. A complete
localization solution designed to bring teams together, automate workflows, and flex for your
evolving needs, Phrase can help you truly connect with your global audience.
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