UNIVERSIDAD DE ZAMBOANGA

SCHOOL OF BUSINESS MANAGEMENT

ACCOUNTANCY DEPARTMENT

INTERNATIONAL MARKETING

CHRISTINE LEAL-ESTENDER, LPT

Instructor
 2021
UNIVERSIDAD DE ZAMBOANGA
SCHOOL OF BUSINESS MANAGEMENT
DEPARTMENT OF ACCOUNTANCY

APPROVAL

This is to certify that this module has been approved for use, exclusively in the School
of Business Management, Department of Accountancy of Universidad de Zamboanga in the
course Management Science for the Second Semester S.Y 2020-2021. 

Copyright:
All rights reserved. No part of this module may be reproduced, stored in a retrieval system  or
transmitted in any form or by any means, electronic, mechanical, photocopying,  recording or
otherwise, without the prior written consent of the Author/s and Universidad  de Zamboanga. 

CHRISTINE LEAL-ESTENDER, LPT

Instructor

Approved by:

Dr. Jo-Anne Bernardo

Vice-President for Academic Affairs
COURSE GUIDE
The International Marketing module will apply many of the concepts studied in the
earlier parts of the MBA programmers, with emphasis on the global context and environment
of marketing. The emphasis throughout will be on the management decisions and processes
required in developing markets and in identifying and prioritizing international marketing
opportunities. We shall be exploring the following:

 Creating sustainable competitive advantage in a global context

 implementing strategies to take into account both the convergence and
divergence of business and consumer preferences
 Creating global products and brands that have near universal application and
appeal, wherever possible.
 Positioning and adapting product, brand, and communications strategies for
International and Global markets
 The importance of ethical, environmental, and social issues in the global
marketplace

Many organizations that traditionally have concentrated on satisfying domestic markets are
now finding themselves increasingly subject to competition from overseas. In many sectors
supply is outstripping demand due to falling country market growth rates. Trade barriers,
especially tariffs have been falling, particularly as the result of the formation of trading blocs
such as the EU and NAFTA etc. Non-tariff barriers however are still very much in evidence.
Engaging in international and global market entry and development is becoming more complex
and each market served must be considered as unique. The creation of sustainable networks is
becoming more and more essential to success. This module will bring together the theory and
the practice and should serve as a valuable experience for future careers. As always, you are
encouraged to bring issues and examples for discussion. The diversity of cultures in the global
marketplace presents one of the greatest challenges to organizations wishing to trade with
other countries. Understanding the norms and traditions of other cultures without stereotyping
and without reference to one’s own culture is a key success factor for international marketing.
This is a lot easier said than done, however, and is an area where many organizations have
made significant errors. It will be an enlightening and enriching experience for the tutor and all
members of this class to share traditions and values of our diversity of cultures with each other
and to try to understand the significance for international marketers.
 Submission of requirement must be done on time. Late requirements will not be given
credit. There will be formative assessment and evaluation that will be done in every topic and a
summative assessment at the end of the course. This is to determine how far have you learn
from the topics presented. Please be guided by the grading system we observed in this class as
follows: 

GRADE (Quantitative) Percentage Equivalent) Qualitative Description

1.0  95%-100%  Excellent

1.1  94%  Very Good

1.2  93%  Very Good

1.3  92%  Very Good

1.4  91%  Good

1.5  90%  Good

1.6  89%  Good

1.7  88%  Fair

1.8  87%  Fair

1.9  86%  Fair

2.0  85%  Passing

2.1 below  FAILED  No Credit

For Assessment and Evaluation:

Major Exams (Midterm and Final Exam) 60%

Activities 20% 

Quizzes 20% 

Total 100% 

It is compulsory that you focus in every topic and if you don’t understand, don’t hesitate
to consult me. My contact information is included in this course guide. I would like also to
emphasize with utmost integrity that cheating is punishable in whatever form be it verbal and
written. Let me also remind you of what is plagiarism. It is copying someone’s work like from
the book without his or her consent or not citing his or her name as author of the book.
However, there are  also references that you can use openly as those found in the open, like in
the  internet as an open source but it is also incumbent upon you to cite the author’s  name. In
this connection, I fully trust your honesty and integrity to avoid the temptation to cheat.  

 The references cited in this module maybe augmented by using other books, journals and
other publications. You can use other references other that those mentioned in this module. 

You may contact me in the following address, email and numbers: 

CHRISTINE LEAL-ESTENDER
School of Business Management  
Department of Business Management & Accountancy
UZ Ipil Campus, Poblacion, Ipil 
Zamboanga Sibugay Province
Mobile phone No. 0999-5356-828
Email: Christine.leal@uz.edu.ph
 MODULE 1: INTRODUCTION TO INTERNATIONAL MARKETING

TOPIC NO. TOPIC TITLE TIME DURATION

TOPIC 1 The process of internationalization and internationalization 1 HR.
theories
TOPIC 2 Importance of global marketing 1 HR.
TOPIC 3 What is different about international marketing? 1 HR.
TOPIC 4 Challenges and opportunities of international marketing 1 HR.
TOPIC 5 Framework of international marketing 1 HR.
TOPIC 6 The dynamics of international competition 1 HR.

LEARNING OBJECTIVES
At the end of this module, YOU should be able to:
1. explain the foundation of international marketing.
2. distinguish between global marketing and international marketing.
3. discuss the process of internationalization as the first step to international marketing
and internationalization theories.
4. explain the need for international marketing and how it differs from domestic
marketing.
5. differentiate between various kinds of management orientation for international
marketing.
6. describe the factors that affect the process of global integration and the global
marketing.

OVERVIEW
The word ‘International Marketing’ is defined as the exchange of goods and services across
national borders to meet the requirements of the customers. It includes customer analysis in
foreign countries and identifying the target market.

The major participants in international marketing are as follows −

Multinational Corporations (MNCs) − A multinational corporation (MNC) is an organization that

ensures the production of goods and services in one or more countries other than its home
country. Such organizations have their offices, help desks or industrial set-up across nations and
usually have a centralized head office where they co-ordinate global management.

Exporters − They are the overseas sellers who sell products and provide services across their
home country by following the necessary jurisdiction.

Importers − They are the overseas buyers who buy products and services from exporters by
complying with the jurisdiction. An import by one nation is an export from the other nation.

Service companies − A service company generates revenue by trading on services and not on
physical commodities. A public accounting company is the best example of a service company.
Revenue here is generated by preparing returns of income tax, performing audit services, and
by maintaining financial records.

Many companies believe that their targets are limited if they only concentrate on a single
market like the U.S. Market and Global marketplace is competitive. Thus, to enrich their market
presence such companies are always on a lookout for better opportunities worldwide.

TERMINOLOGIES

Domestic marketing: Marketing practices within the firm’s home country.

Comparative Advantage: The ability of a firm to produce a certain product at a lower opportunity cost
compared to another.

Competitive Advantage: A condition in which a company can operate in a more efficient manner
compared to companies it competes with.

LESSON NOTE

Markets around the world have disintegrated and reintegrated again. The United States of America
President Barack Obama talks of a likely dialogue with Cuba, a nation which until yesterday was a sworn
enemy of the United States, EU (European Union) enlargement and its implications, or the rising power
of China and India as global consumers. All this has implications in the global business environment and
significantly in the way international marketing is done. However, before the context of international
marketing is discussed, it is important to understand the reasons why firms go global. Sometimes it is for
better price realization outside the country, decline in domestic market opportunities and sometimes for
better market opportunities outside the home market. Brands like Nokia have small and limited markets
in their home country. It is the desire to venture beyond the geographic boundaries of their home
country that helps them get a larger share of the world market. Another important factor, which has
more of an international economics imperative, is the comparative and competitive advantages that
nations have. China’s growth as a manufacturing hub and India’s strength as a knowledge economy are
now well-known. Low cost is another advantage. Nations with lesser competency in related areas
therefore take advantage of such efficiency. The United States and Europe’s depleting and ageing
populations will mean that such initiatives will be further wrested by India and China. However, the
connectivity between nations has also gone up. It is a saying that “if the United States catches a cold
then the whole world sneezes.” Case in point is the current global slowdown and the impact of recession
which is being faced across the world. Chapter 1 provides the rationale and basis to international
marketing. The foundation of this discussion, however, remains the international theories and the
process of internationalization. How have firms managed to initiate the process of internationalization
even before their first exports start? What is the import process? How do firms outsource parts or
components or even services for the manufacturing or the delivery process? How a domestic bank may
acquire smart card technology from any company located outside the country is an example of how
firms initiate the process of internationalization.

READING ACTIVITY :You should now read Chapter 1 of the Keegan text (Global Marketing, 4th
edition). Note it!

In applying your understanding of this material, you should take note of the following:
 The concept of international marketing and its foundation is laid through the concept of
domestic marketing. The issues of marketing mix, consumer behavior and segmentation,
targeting and positioning will be as relevant in international marketing as in domestic marketing.
However, the aspects of the business environment, the operational issues and differential consumer
markets make the context of international marketing more dynamic. Today, as the context of
globalization and integration has become more pronounced, the process of international marketing has
become more integrative.
 Another aspect which is loosely and interchangeably used with international marketing is the term
Global Marketing. Are they different? Global Marketing has a larger scope compared to international
marketing. Global Marketing means widening business horizons to encompass the world in scanning for
opportunity and threat. As participants to the programmed, you must also understand the importance
of Global Marketing today both in the context of large multinational enterprises and the MSME (Micro,
Small and Medium Enterprises). The role and scope of Global Marketing for each of these enterprises is
different, based on the nature of markets and the products they produce. The last part will be the
concept of standardization and localization in the framework of international marketing.
 The third aspect to be understood is the management orientation process. The concept of EPRG
(Ethnocentric, Polycentric, Regio centric and Geocentric) framework explained the different approaches
to international marketing and affects the way marketers deploy differential strategies. The McDonalds
versus Gillette strategy of entering markets may be different. The form and substance of a company’s
response to global market opportunities depend greatly on management’s assumption or beliefs - both
conscious and unconscious - about the nature of the world.
 The last part in this module that you need to be aware is the forces that affect the global integration
and Global Marketing process. You should understand the driving forces and the restraining forces.

1. When Louis V. Gertsner, Jr was Vice-Chairman of American Express, he stated:

“The split between international and domestic is very artificial – and at times
dangerous.” Do you agree with the statement? Offer your rationale.
2. Do you feel that marketing is relevant to and should be used locally as well as internationally by:
a) International agencies (e.g., the United nations)
b) National, state, and/or city governments
c) Socially/communist countries
d) Developing countries, and
e) Priests, monks, churches, and/or evangelists?

1. Distinguish between:
a) Domestic marketing
b) Foreign marketing
c) Comparative marketing
d) International marketing
e) Multinational marketing
f) Global Marketing and
g) World marketing.
2. Are domestic and international marketing different only in scope and not in nature?
3. Distinguish between ethnocentrisms, geocentricism, and polycentricism. 4. Identify and briefly
describe some of the forces that have resulted in increased global integration and the growing
importance of Global Marketing.

Case Study: McDonald’s Expands Globally While Adjusting Its Local Recipe Read through
the case study entitled, McDonald’s Expands Globally While Adjusting Its Local Recipe on
pages 31-35 of the Keegan text and respond to the following questions:
1. Identify the key elements in McDonald’s Global Marketing strategy. In particular, how does
McDonald’s approach the issue of standardization?
2. Do you think government officials in developing countries such as Russia, China and India welcome
McDonald’s? Do consumers in these countries welcome McDonald’s? Why or why not?
3. At the end of 2003, McDonald’s announced it was selling the Donatos Pizza unit. In light of this
decision discuss McDonald’s prospects for success beyond the burger and fries model.
4. Is it realistic to expect that McDonald’s or any well-known company can expand globally without
occasionally making mistakes or generating controversy? Why do anti-globalization protestors around
the world frequently target McDonald’s? Submit your responses to the case study questions to your
instructor or tutor for evaluation.

MODULE 2: THE INTERNATIONAL MARKETING ENVIRONMENT

TOPIC NO. TOPIC TITLE TIME DURATION

TOPIC 1 Factors that affect International Marketing Environment 3 HRS.

LEARNING OBJECTIVES

At the end of this module, YOU should be able to:

1. Understand the factors constituting the international environment .

WHAT IS INTERNATIONAL MARKETING ENVIRONMENT?

International Marketing environment refers to the controllable and uncontrollable forces that
influence upon the marketing decision making of a firm globally.

International Marketing environment is comprised of those components which shape policies,

programmes and strategies of an international marketer.

An international firm must resort to systematic study of international marketing environment

to collect the inputs of marketing decision making. To serve the international markets
effectively, a firm is in need of understanding international marketing environment properly.
The needs, preferences and expectations of buyers in different overseas markets are not
necessarily similar. The environmental differences influence the international marketing
decisions of a firm

The international marketing environment surrounds and impacts upon the organization.
Marketers aim to deliver value to satisfied customers, so they need to assess and evaluate the
internal environment and the external environment which is subdivided into micro and macro.

International Marketing environment opportunities vary among the nations. Some economies
have enormous potentials of growth while other has not.
The knowledge of economic environment helps an international marketer to understand which
market to select for reaping lasting benefits.

FACTORS AFFECT THE INTERNATIONAL MARKETING

1. THE SOCIAL/CULTURAL ENVIRONMENT: The cultural environment consists of

the influence of religious, family, educational, and social systems in the
marketing system. Marketers who intend to market their products overseas may
be overly sensitive to foreign cultures. While the differences between our
cultural background in the United States and those of foreign nations may seem small,
marketers who ignore these differences risk failure in implementing marketing programs.
Failure to consider cultural differences is one of the primary reasons for marketing failures
overseas. Table 6 provides some illustrations of cultural difference around the world.
This task is not as easy as it sounds as various features of a culture can create an illusion of
similarity. Even a common language does not guarantee similarity of interpretation. For
example, in the US we purchase “cans” of various grocery products, but the British purchase
“tins”. A number of cultural differences can cause marketers problems in attempting to market
their products overseas. These include: (a) language, (b) color, (c) customs and taboos, (d)
values, (e) aesthetics, (f) time, (g) business norms, (h) religion, and (i) social structures. Each is
discussed in the following sections.

2. THE POLITICAL/LEGAL ENVIRONMENT

The political/legal environment abroad is quite different from that of the US.
Most nations desire to become self-reliant and to raise their status in the eyes of
the rest of the world. This is the essence of nationalism. The nationalistic spirit that exists in
many nations has led them to engage in practices that have been very damaging to other
countries’ marketing organizations.
For example, foreign governments can intervene in marketing programs in the following ways:
• contracts for the supply and delivery of goods and services
• the registration and enforcement of trademarks, brand names, and labeling
• patents
• marketing communications
• pricing
• product safety, acceptability, and environmental issue
 3. THE TECHNOLOGICAL ENVIRONMENT
The level of technological development of a nation affects the attractiveness of
doing business there, as well as the type of operations that are possible.
Marketers in developed nations cannot take many technological advances for granted. They
may not be available in lesser developed nations. Consider some of the following
technologically related problems that firms may encounter in doing business overseas:

• Foreign workers must be trained to operate unfamiliar equipment.

• Poor transportation systems increase production and physical distribution costs.
• Maintenance standards vary from one nation to the next.
• Poor communication facilities hinder advertising through the mass media.
• Lack of data processing facilities makes the tasks of planning, implementing, and controlling
marketing strategy more difficult.

4. THE ECONOMIC ENVIRONMENT

A nation’s economic situation represents its current and potential capacity to
produce goods and services. The key to understanding market opportunities lies
in the evaluation of the stage of a nation’s economic growth.
A way of classifying the economic growth of countries is to divide them into three groups: (a)
industrialized, (b) developing, and (c) less-developed nations. The industrialized nations are
generally considered to be the United States, Japan, Canada, Russia, Australia and most of
Western Europe The economies of these nations are characterized by private enterprise and a
consumer orientation. They have high literacy, modem technology, and higher per capita
incomes.

Developing nations are those that are making the transition from economies based on
agricultural and raw materials production to industrial economies. Many Latin American nations
fit into this category, and they exhibit rising levels of education, technology, and per capita
incomes,

Finally, there are many less developed nations in today’s world. These nations have low
standards of living, literacy rates are low, and technology is very limited.

Usually, the most significant marketing opportunities exist among the industrialized nations, as
they have high levels of income, one of the necessary ingredients for the formation of markets.
However, most industrialized nations also have stable population bases, and market saturation
for many products already exists. The developing nations, on the other hand, have growing
population bases, and although they currently import limited goods and services, the long-run
potential for growth in these nations exists. Dependent societies seek products that satisfy
basic needs–food, clothing, housing, medical care, and education. Marketers in such nations
must be educators, emphasizing information in their market programs. As the degree of
economic development increases, so does the sophistication of the marketing effort focused on
the countries.

5.THE COMPETITIVE ENVIRONMENT

Entering an international market is similar to doing so in a domestic market, in
that a firm seeks to gain a differential advantage by investing resources in that
market. Often local firms will adopt imitation strategies, sometimes successfully.
When they are successful, their own nation’s economy receives a good boost. When they are
not successful, the multinational firm often buys them out.
Japanese marketers have developed an approach to managing product costs that has given
them a competitive advantage over US competitors. A typical American company will design a
new product, then calculate the cost. If the estimated cost is too high, the product will be taken
back to the drawing board. In Japan, a company typically starts with a target cost based on the
price that it estimates the market is most willing to accept. Product designers and engineers are
then directed to meet the cost target. This approach also encourages managers to worry less
about product costs and more about the role it should play in gaining market share. Briefly, at
Japanese companies like Nippon Electric Company (NEC), Nissan, Sharp, and Toyota, a team
charged with bringing a product idea to market estimates the price at which the product is
most likely to appeal to the market. From this first important judgement, all else follows. After
deducting the required profit margin from the selling price, planners develop estimates of each
element that make up the product’s cost: engineering, manufacturing sales, and marketing. US
firms tend to build products, figure how much it costs to build the product, and then ask
whether the product can be sold at a profitable price. US companies tend not to assess what
the market will be willing to pay.

LEARNING ACTIVITY

1. Name the Factors that affect International Marketing Environment and Explain.
 SUMMARY

Most American firms have discovered that many opportunities exist in international marketing,
as evidenced by the vast amount of goods exported by US-based firms. There are many reasons
why US firms choose to engage in international marketing. Perhaps the most attractive reasons
are the market expansion and profit opportunities afforded by foreign markets.

Basic principles of domestic marketing apply to international marketing. However, there are
some differences, many of which are centered on environmental factors which affect
international marketing: (a) the economic environment, (b) the competitive environment, (c)
the cultural environment, (d) the political/legal environment, and (e) technological
environment and the ethical environment.

Once a firm has decided to enter a particular foreign market, it must decide upon the best way
to enter that market. A firm has five basic foreign market entry options, the selection of which
depends largely on the degree of control that the firms wishes to maintain over its marketing
program. When a firm chooses to market its products internationally, it must decide whether to
adjust its domestic marketing program. Some firms choose to customize their market programs,
adjusting their marketing mix to meet the needs of each target market. Others use a
standardized marketing mix. In making the decision to customize or standardize, there is a wide
range of possibilities for adapting a firm’s product, price, promotion, and distribution strategies.
 MODULE 3: INTERNATIONAL PRODUCT POLICY AND PLANNING

TOPIC NO. TOPIC TITLE TIME DURATION

TOPIC 1 International Product Life Cycle & International Product Policy 3 HRS.
TOPIC 2 Standardization vs. Adaptation
TOPIC 3 Planning the International Product Mix
TOPIC 4 Branding
TOPIC 5 Labelling, Packaging and Product Warranties and Services

LEARNING OBJECTIVES

At the end of this module, YOU should be able to:

 understand the basic concepts of the product and the importance of this concept in
international marketing
 • explain the importance of international product life cycle
 • explain the different product strategies used by international marketers and the
factors which shape the `standardization' versus `adaptation' decisions
 • explain the factors that influence branding, labeling, and packaging planning

INTRODUCTION

One of the fundamental decisions for successful international marketing relates to

product policy and planning. It can be argued that product. decisions are probably
the most crucial as the product is the very epitome of marketing planning. Errors in
product decisions can include the imposition of a global standardized product
where it is inapplicable and the attempt to sell products into a country without cognizance of cultural
adaptation needs. An international marketer has the option of exporting ‘, he home market product to
foreign markets, adapting the home market product to meet the needs of the foreign customers more
closely, or developing new products to meet the specific needs of the customers in foreign markets. The
selection process needs a careful analysis of the foreign market needs, appraisal of the market
opportunity and detailed product planning. Decisions regarding the product, price, promotion, and
distribution channels are decisions on the elements of the "marketing mix". Many product decisions lie
between the two extremes i.e. whether to sell globally standardized or adapted products.

WHAT IS PRODUCT?
 Put simply, a product is a bundle of utilities. To be more concise, a product can be defined
as a collection of physical, service and symbolic attributes which yield satisfaction or
benefits to a user or buyer. A product is a combination of physical attributes say, size and
shape, and subjective attributes say image or quality. A customer purchases on both
dimensions. It is increasingly important that the product fulfills the image which the producer is wishing
to project. This may involve organizations producing symbolic offerings represented by meaning laden
products that chase stimulation-loving consumers who seek experience producing situations. So, for
example, selling mineral water may not be enough. It may have to be "Gangetic" in source, and fortified.
This opens up a wealth of new marketing opportunities for producers. A product's physical properties
are characterised the same the world over. They can be convenience or shopping goods or durables and
non-durables; however; one can classify products according to their degree of potential for global
marketing: a. b. c. d. Local products - seen as only suitable in one single market. International products -
seen as having extension potential into other markets. Multinational products - products adapted to the
perceived unique characteristics of national markets. Global products - products designed to meet
global segments. As a prerequisite to export marketing, it is becoming increasingly important to
maintain quality products based on the ISO 9000 standard. Consumer beliefs or perceptions also affect
the "world brand" concept. World brands are based on the same strategic principles, same positioning
and same marketing mix but there may be changes in message or other image. The world brand names
are to be built up over the years with great investments in marketing and production. Few world brands,
however, have originated from developing countries like India. This is hardly surprising given the lack of
resources.

INTERNATIONAL PRODUCT LIFE CYCLE

International product life cycle discusses the consumption pattern of the product in many
countries. This concept explains that the products pass through several stages of the
product life cycle. The product is innovated in country, usually a developed country, to
satisfy the needs of the consumers. The innovator country wants to exploit the
technological breakthrough and start marketing the products in foreign country. Gradually foreign
country also starts production and becomes efficient in producing those commodities. As a result, the
innovator country starts losing its export market and finds the import of that product advantageous. In
this way, the innovator country becomes the importer of the products. Terpstra and Sarathy have
identified four phases in. the international product life cycle.
1. Export strength is evident by innovator country: Products are normally innovated in the developed
countries because they possess the resources to do so. The firms have the technological know-how and
sufficient capital to invest on the research and development activities. The need of adaptation and
modification also forces the production activities to be located near the market to respond quickly to
the changes. The customers are affluent in the developed countries who may prefer to buy the new
products. Thus, the manufactures are attracted to produce the goods in the developed country. The
goods are marketed in the home country. After meeting the demand of the home country, the
manufacturers start exploring foreign markets and exporting goods to them. This phase exhibits the
introduction and growth stage of the product life cycle.
2. Foreign production starts: The importing firms in the middle income country realize the demand
potential of the product in the home market. The manufacturers also become familiar in producing the
goods. The growing demand of the products attracts the attention of many firms. They are tempted to
start production in their country and gradually start exporting to the low income countries. The large
production in the middle income country reduces the export from the innovating country. This shows
the maturity stage of product life cycle where the production activities' start shifting from innovating
country to other countries.
3. Foreign production becomes competitive in export market: The firms in low income country also
realise the demand potential in the domestic market. They start producing the products in their home
country by exploiting cheap labour. They gain expertise in manufacturing the commodity. They become
more efficient in producing the goods due to low cost of production. Gradually they start exporting the
goods to other countries. The export from this country replaces the export base of innovating country,
whose export has been already declining. This exhibits the ,declining stage of product life cycle for the
innovator country. In this stage, the product gets widely disseminated and other countries start
imitating the product. This is the third phase of product life cycle where the products start becoming
standardized.
4.Import Competition begins: The producers in the low income importing country gain sufficient
experience in producing and marketing the products. They attain the economies of scale and gradually
become more efficient than the innovator country. At this stage, the innovator country finds the import
from this country advantageous. Hence, the innovator country finally becomes the importer of that
product. In this fourth stage of product life cycle the product becomes completely standardized. Exhibit
9.1 shows the international product life cycle.

INTERNATIONAL PRODUCT POLICY

A firm's product policy reflects its marketing orientation. Following the framework of
IPLC, a firm may begin exporting the products it sells in the domestic market.
Alternatively, it may recognize the significant differences in customer needs, conditions of
product use, etc., and may plan for exporting different products or product versions to
meet the specific needs of each of its different global market segments. In the latter case,
the exporting firm would thus offer a large product mix. The other option available to exporting firms is
to develop a new product for the export markets. This new product may be the result of the firm's own
R&D acquisition or joint venture with a business partner in the host country. Interesting examples, here,
include Coca-Cola Corporation which having entered Japan in 1958 had added Fanta and Sprite by 1970
and still later introduced fruit drink products, carbonated orange fruit drinks and potato chips which
were not even sold by the company in its US market. Similarly, IBM developed EPABX within the U.K. An
international marketer may use one of the following five strategies:
i) Product communications extension This strategy is extremely low cost and merely takes the same
product and communication strategy into other markets. However, it can be risky if misjudgments are
made. For example, CPC International believed the US consumer would take to dry soups, which
dominate the European market. It did not work.
ii) Extended product- communications adaptation If the product basically fits the different needs or
segments of a market, it may need an adjustment in marketing communication only. Again, this is a low
cost strategy, but different product functions have to be identified and a suitable communications mix
developed.
iii) Product adaptation - communications extension the product is adapted to fit usage conditions but
the communication may stays the same. The assumption. is that the product will serve the same
function in foreign markets under different usage conditions.
iv. Product adaptation - communications adaptation Both product and communication strategies need
attention to fit the peculiar need of the market.
v. Product invention This need a totally new idea to fit the exclusive conditions of the market. This is
very much a strategy which could be ideal a Third World situation. This development. costs may be high,
but the advantages are also extremely high. This choice of strategy depends on the most appropriate
product/market analysis and is a function of the product itself defined in terms of the function or need it
serves, the market defined in terms of the conditions under which the product is used, the preferences
of the potential customers and the ability to buy the product in question, and the costs of adaptation
and manufacture to the company considering these product- communications approaches.

STANDARDISATION Vs. ADAPTATION

Most product decisions fall in between the spectrum of "standardization" to
"adaptation" extremes. Changes in design are subject to cultural pressures. The more
culture-bound the product is, for example food, the more adaptation is necessary. In
India for example the multinationals like PizzaHut and Mcdonalds catering to Indian
tastebuds have launched Masala Tikka Burgers and Paneer Pizzas. Similarly, when
Indian companies cater to the foreign markets, they launch foods which are bland. However, the
advantages of economies of scale in production and marketing; savings on common costs of R&D,
product, and package design; consumer mobility; and universal image make a strong case for product
standardization across different export markets. Areas that typically require the greatest adaptation are
pricing, media selection, advertising, packaging, personal selling, distribution whereas areas that
typically require the least adaptation include product positioning, brand name, service standards etc. An
interesting term `Glocalization' has been coined in order to emphasize that the globalization of a
product is more likely to succeed when it is adapted specifically to each locality or culture it is marketed
in. The term combines the word globalization with localization. The term first appeared in the late 1980s
in articles by Japanese economists in the Harvard Business Review. At the 1997 conference on
"Globalization and Indigenous Culture", sociologist Roland Robertson observed "glocalization means the
simultaneity - the co-presence - of both universalizing and particularizing tendencies". 11 International
Product Policy and Planning A classical example of glocalization can be that of McDonalds, mentioned
earlier also in this section. The increasing presence of McDonalds restaurants worldwide is an example
of globalization, while the restaurant chain's menu changed to appeal to local palates are an example of
glocalization. For its promotion in France, the restaurant chain even chose to replace its familiar Ronald
McDonald mascot with Asterix the Gaul, a popular French Cartoon character.

BRANDING
The issues that need consideration in branding and trademark decision are:
• Whether to have one brand name worldwide (e.g., Coke); or modify the brand
name in each market (e.g., Nescafe Instant in India, Nescafe Gold in Germany, and
Nescafe Gold Blend in Great Britain); or to have different brand names in different
markets;
• Whether to use separate product names as brand names or make use of company name or a
combination of the two (e.g., Levi's, Phillips, ICI, Bata, Scotch); and

• Whether to seek legal protection (trademark) for the brand names and marks of the company? The
selection of a brand name that does neither lose its meaning nor image when translated into diverse
languages poses a serious challenge. Although the establishment of international brand names
facilitates the marketing of products globally, it also raises issues of brand piracy, imitation, and fake
brands. It may also be worth noting here that the world bodies are currently pushing hard for greater
protection of intellectual property rights on a global basis. Notwithstanding the above, brand and
trademark decisions are affected by the company's product policy on standardization vs. adaptation,
and the legal requirement of the host country.

LABELLING, PACKAGING AND PRODUCT WARRANTIES AND SERVICES

LABELLING
Like in the branding decision, the informational and promotional contents of the
product label are influenced as well by the legal requirements as by the exporting firm's
product and promotion policy. Labelling not only serves to express the contents of the
product, but maybe promotional. For example, the EU is now putting very stringent
regulations in force on labelling, even to the degree that the pesticides and insecticides used in
horticultural produce have to be listed. This could be very demanding for producers, especially small-
scale ones, where production techniques may not be standardized. Government labelling regulations
vary from country to country. Labels may have to be multilingual, especially if the product is a world
brand. Translation could be a problem with many words being translated with difficulty. Again, labelling
is expensive, and in promotion terms non-standard labels are more expensive than standard ones. While
the aspects concerning name of manufacturer, date of manufacture, shelf-life. weight, contents,
ingredients, price, and handling instructions vary with the legal requirements and the international
marketing policy of the firm, the languages) of the host country, and the level of literacy of its people
determine the graphics and visuals to be used on the product label.
 PACKAGING
A package as simple as it may look, is influenced in its design, material, shape, and
weight by many factors. Packaging serves many purposes. It protects the product
from damage, which could be incurred in handling and transportation and has a
promotional aspect. It can be expensive. 'Size, unit type, weight and volume are
important in packaging. For aircraft cargo the, package needs to be light but strong, for sea cargo
containers are often the best form. The customer may also decide the best form of packaging. Costs of
packaging have always to be weighed against the advantage gained by it. Increasingly, environmental
aspects are coming into play. Packaging which is nondegradable - plastic, for example - is less in
demand. Bio-degradable, recyclable, reusable packaging is now the order of the day. This can be both
expensive and demanding for many developing countries.

The important factors of packaging are: 14 International Marketing Mix

• safety and security of the product within the package in terms of temperature limits, barometric
pressure, corrodibility, color retention, vibrations, and even the ecological effect of the package in itself;
• transportation hazards, weight and package construction in case of air shipment, and the handling and
warehousing needs of the package.
• customer perceptions in terms of shape, size, color, storage life, reusability and aesthetics.
• product promotion in terms of display value of the package, shelf-life, package attractiveness as a
silent salesperson, brand and label information and sales promotion aids like coupons, stickers, etc; and
• compliance with legal requirements, and how much does the package cost in the light of the role it
performs.
These factors force the exporting firm to keep in touch with innovative packaging materials and be on
the look out to make their packaging cost effective.

PRODUCT WARRANTY AND SERVICES

A warranty is a guarantee on the product performance as stipulated by the
manufacturer. In other words, it defines the manufacturer's liability in the case of non-
performance, or under-performance of the product. Other than compliance with the
legal requirements of the host country, product warranties and service constitute an
integral part of the added value of the product offered in international markets. As such, it must be one-
upped on the competitors. A warranty without the backup of service facilities is counterproductive.
Consumer durables and industrial goods require servicing that is both convenient and reliable. Since
customer service means enhancing efficiency of the product as well as that of the customer, the
formulation of the service policy requires an assessment of customer expectations and needs,
competitive practices, and the quality of servicing infrastructure and network in existence in the host
country. Where the host country's service infrastructure has been found to be of satisfactory level,
international marketers (such as General Motors and TELCO) have preferred to have tie-ups with local
services for provision of services and have supported them with regular supply of spares, manuals,
drawings, and the training of their personnel. This is one area in which Indian exporters must improve a
lot.
 ACTIVITY NO. 1

1. Why do you think a company should or should not market the same product in the same way around
the world? Explain with the help of suitable examples.
2. Give two examples of product that should be adapted for foreign markets and two that should be
standardized. Explain your reasoning.
3. Briefly explain various combinations of product /communication strategies available to global
marketers?
4. What considerations are involved in the branding and packaging of food products or garments, for the
developed country market, and for less-developed country market Name the countries selected.
 SUMMARY

International product policy and planning plays a crucial role in the

successful management of international marketing operations. Aimed at
seizing the market opportunity, it focuses on the basic decision of whether
to export the domestic standardized product or to adapt or even develop a new product for the global
markets. Although global marketing of the standardized product is more convenient and profitable, yet
customer needs, competitive pressures and legal considerations require the product to be adapted-to
even the newly developed needs. Implementation of the product policy requires planning of the width
and depth of the product-mix. Branding, labeling, packaging and organization of product warranties and
service are the other integral parts of international product policy and planning.