Introduction to International Marketing

Introduction to International Marketing

• The presentation is about international marketing, taught by Prof. Dr. Kristina Klein at Uni Tübingen.
• The agenda outlines key topics, including introduction to international marketing, market selection, market entry, the role of culture, product and brand decisions, international pricing, distribution, and communication/advertising.
• Additional topics covered include What is international marketing?, Internationalization theories, Globalization versus localization, and Decisions of the international marketing process.
• The presentation discusses the global versus local marketplace paradox highlighting that while markets are interconnected globally, they are also locally specific (illustrated by BMW ads in different countries).
• Key differences between Global, International and National marketing are highlighted. International marketing is distinct from both, not just one nation.

Definitions of International Marketing

• International marketing is the performance of business activities to plan, price, promote, and direct the flow of a company's goods and services to consumers/users in more than one nation for profit.
• Global marketing refers to coordinated marketing activities across multiple country markets, focusing on firms selling and distributing products worldwide.

International Marketing – Scope Issue

• International marketing focuses on new and existing markets with existing/new products.

Why Internationalize?

• Motivations for firms internationalizing include risk reduction (stabilizing sales across different business cycles and diversifying market risks), and realizing opportunities (developing new sales opportunities, extending sales of seasonal products, capitalizing on cost advantages).

What are these theories of Internationalization?

• Key internationalization theories discussed include:
  • Uppsala Model: A gradual internationalization process, starting with nearby markets and expanding to more distant ones through successive stages (sporadic exporting, using independent representatives, establishing foreign sales subsidiaries, and finally foreign production). Market commitment increases as a firm expands. Factors like psychic distance (perceived differences between markets) influence decisions. This model highlights an incremental/sequential approach.
  • Traditional Cost Model: Focuses on using existing transaction or set of transactions to create lower cost of production and/or service to maintain competitive advantage
  • Born Globals: Businesses that immediately enter international markets with high growth potential, often leveraging technology and entrepreneurial vision, minimizing psychic distance to new markets.

Two Pathways to Internationalization

• Organic Pathway (Uppsala Model approach): Firms expand internationally gradually, starting with their home market and gradually moving into new markets which are closer in terms of cultural/market distance
• Born Global Pathway: Companies initially design themselves to be global. These firms enter international markets from the beginning

Summary of Internationalization Theories

• The presentation compares and contrasts the Uppsala model, traditional cost model, and network model. It includes an examination of the implications and applicability of each theory.

International Marketing Process Stages

• The international marketing process involves analyzing internal and external conditions (SWOT and political analysis for instance), selecting target markets, positioning products, establishing entry strategies (modes of entry), determining the international marketing mix which is critical for internationalizing companies.

Globalization vs Adaptation

• Globalization involves converging markets and standardizing products; adaptation involves customizing products to local markets. One size doesn't fit all. Decisions are based on a contingency perspective based on contextual factors.

Anti-Globalization

• Consumer opposition to globalization, particularly corporate practices, is observed to be prevalent in first world countries. This trend is fueled by issues like financial crises, unemployment, and political ideologies. It's an important consideration for companies operating globally