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IBO-02: International Marketing Management

IBO-02: International Marketing Management

IGNOU Solved Assignment Solution for 2021-22

If you are looking for IBO-02 IGNOU Solved Assignment solution for the subject International Marketing Management, you have come to the right place. IBO-02 solution on this page applies to 2021-22 session students studying in MCOM, PGDIBO, MCOMMAFS courses of IGNOU.

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Assignment Code: IBO-02 / TMA / 2021-2022

Course Code: IBO-02

Assignment Name: International Marketing Management

Year: 2021 - 2022

Verification Status: Verified by Professor

Attempt all the questions:

Q 1. Define International Marketing. Discuss in detail the various steps which the company has to undertake in order to be successful in international marketing. (20)

Ans) "International marketing is the transnational process of planning and executing the creation, pricing, promotion, and distribution of ideas, commodities, and services in order to generate exchanges that meet individual and organisational objectives," according to this definition.

As a result, worldwide marketing refers to a coordinated marketing effort that takes place across many nations.

Steps for Successful International Marketing:

In international marketing, a company's performance is determined by how well it determines the demands and desires of abroad target market groups and how well it offers the required satisfaction more efficiently than competitors.

Deciding to Internationalise

The company must assess the strengths, weaknesses, opportunities, and dangers that it faces on a global scale. If the firm's SWOT analysis is favourable, it may opt to enter the international market. The product line's features, as well as the buyer's behaviour and preferences, are carefully examined. To improve the product's acceptance, the appropriate modification approach may be chosen. Another key challenge facing the company is the examination of environmental variables. The company must assess the worldwide market's social, political, economic, legal, and technical disparities. The firm's capacity to manage these disparities would be beneficial in maintaining its position in the international market.

Market Selection:

A firm may choose its target markets based on their geographical closeness, since it will be able to swiftly deliver the product to a neighbouring nation and service the market more efficiently. A firm's second factor for market selection is the country's market potential, as demonstrated by its prosperity, the size and growth of its imports, and so on. Another criterion for market selection may be "market access." It is not enough for a country to be wealthy and have large and rising imports. It's very likely that import increase is restricted to specific product(s)/groups and/or nations. Another criterion a firm could consider in market selection is the country's market characteristics.

Product Selection

A company should conduct a product and market selection process at the same time. Elasticity of supply should be a significant factor when selecting products for export, i.e. the firm should not encounter any supply constraints in exporting the product, whether owing to natural resource endowment or acquired skills and assets (s). Another technique is to tackle the problem of product selection from the demand side, that is, to discover the items that are in demand in an overseas nation and are expected to continue to be in demand, and then to try to export these products to the identified country (s). A third option is to choose items with the fewest import restrictions in certain international markets, ensuring that market access is not an issue. Although the many product selection criteria have been explored one by one, they are by no means exhaustive.

Selection of Entry Mode

Another key managerial job is to choose the manner of entry into the target market (s). While deciding on the method of entrance, management may choose one or more of the many alternatives accessible to it. A corporation may join Ule selected overseas market(s) via indirect export, i.e. through merchant exporters, export houses/trading, houses/buying houses, or in collaboration with likeminded other enterprises, or it may execute export marketing operations directly. The nature of the firm, its corporate aims, the nature of the product, and the nature of the market must all be considered when choosing an entry technique. The selection of a particular entrance strategy is heavily influenced by corporate aims.

In general, firms who want to take the fewest risks, have the least participation, and have the least control over their export marketing activities prefer indirect export. Companies who seek a long-term participation in the export industry and are willing to take big risks in exchange for more control and experience, on the other hand, invest overseas.

Marketing Strategy Selection

  1. Product Strategy: It is extremely unusual for the same product approach to be successful in all markets. The product strategy may need to be tweaked for each market, taking into consideration the local context. To fit the foreign market, the product may need to be modified in terms of quality, size, form, colour, and the material it is constructed of, among other things.

  2. Pricing Strategy: A firm must determine whether to charge the same net price for a product in all of its markets or to charge various prices in different markets for the same product. Often, a company's export pricing options are limited to a point because it must match a competitor's price. Credit extension is an element of the pricing strategy. Credit may be required in order for a firm to capture a market for high-unit-value products and/or to compete.

  3. Distribution Strategy: In general, product-specific distribution channels are well-established in all countries and have changed through time. Agency arrangements in other countries are a component of the distribution strategy. There are several guidelines for appointing agents and paying them agency commissions.

  4. Promotion Strategy: Promotion is arguably the characteristic that is most influenced by the environment. The firm should decide on the best marketing mix for a product in a11 foreign market, which includes sub-areas such as advertisement medium, the number of spots, the length, trade fairs, and the sort of sales promotion, among other things.

International Organisation Decision

The amount of export business, the nature of the foreign market, the type of the product, the firm's resources, and other factors all factor into the choice. The formation of an export department is a basic type of worldwide marketing organisation. The export department is responsible for all of the company's foreign activities.

2. Briefly describe the factors to be considered in pricing for international marketing and also explain the main methods of pricing in international marketing. (10+10)

Ans) The factors to be considered in Pricing for International Marketing:

The three basic factors which determine Price decisions in international marketing are:

  1. Cost of the product.

  2. Competition in the foreign market.

  3. Demand for the product in the foreign market.

Furthermore, certain additional special variables, as listed below, must be taken into account when pricing for foreign marketing:

  1. Changes in the exchange rate relative to the target market

  2. International transportation costs — taking into account the form of transportation employed international distribution expenses for the goods in question

  3. At both the micro and macro levels, the nature of the international market in terms of trade practises and marketing environment

  4. Managing trade policy and pricing controls, such as anti-dumping laws

  5. Varying countries have different inflation and interest rates.

  6. Global marketing considerations may necessitate charging the same price in all international areas.

Methods of Pricing in International Marketing:

The importance of price in the marketing mix cannot be overstated. The following are the most common price techniques used in foreign marketing:

Cost Plus Method: This method entails charging for all costs plus profit. Costs include all special costs incurred in international trade, such as special packing, marking, and labelling to meet foreign market requirements, transportation, insurance, handling, duties, taxes, and levies at various stages from the exporting country's place of origin to the foreign market's destination, depending on the terms of sale. Exporters use this pricing technique to try to recoup all costs as well as profit from foreign clients. As a result, end customers may face higher pricing. It is important to remember that market conditions and competition differ from nation to country, thus this technique may not always be applicable.

Marginal Cost Pricing: In some foreign transactions, charging full costs plus profit may not be possible. As a result, depending on the nature and amount of competition, less than full cost, sometimes simply variable expenses, or even less may be required. In a tight scenario, the exporter may offer a price that just covers prime expenses or only material prices plus packaging and other direct export marketing expenditures. The Marginal Cost Pricing Method is what it's called. This pricing approach is used to break into international markets and sustain the firm's market share.

Differential Pricing: In worldwide marketing, this is the most frequent price strategy. Because the nature and amount of competition and the business climate change from nation to country, as well as from segment to segment, differential pricing for the same product in different markets may be implemented using the principle of 'what the traffic can hear.' In reality, pricing, along with other aspects of the marketing mix, must be adjusted based on market conditions for effective and profitable international marketing.

Probe Pricing: A new entrant to a foreign market who may not have a complete understanding of the market, as well as the nature and level of competitors, attempts to explore the potential market by giving price approximations based on sales volume and value. To entice the consumer, discounts on the invoice price may be provided. The factors of probe pricing are generally cost plus profit and competitor's prices.

Penetration Pricing: In order to penetrate into a new market lower than the ruling market Price may be charged. This penetration price may yield marginal surplus over the total cost, or just cover the full cost or in some cases even the total cost may not be realised. This method is considered feasible only when more gainful prices may be possible to be 'realised in future.

Skimming pricing: An exporter that has established a firm footing in a foreign market and established a highly competitive position with the image as a trustworthy supplier of high-quality products would use this price strategy. Higher prices may be paid to maximise profit with the support of a well-thought-out advertising scheme emphasising the value derived from the product.

Competitive Pricing: In international marketing, a keen and experienced marketer maintains track of rivals' pricing quotes at all times. To stay in the market, he attempts to change and adapt his rates. Competitive pricing is the term for this sort of pricing. Other price strategies used in worldwide marketing include alternate pricing and motivational pricing. Beginners often use the cost-plus approach or probe pricing and follow the strategies used by the market's leading businesses, but seasoned marketers who have a thorough grasp of market behaviour and customer responses to price fluctuations use the other ways. In international marketing, a keen and experienced marketer maintains track of rivals' pricing quotes at all times. To stay in the market, he attempts to change and adapt his rates. Competitive pricing is the term for this sort of pricing. Other price strategies used in worldwide marketing include alternate pricing and motivational pricing. Beginners often use the cost-plus approach or probe pricing and follow the strategies used by the market's leading businesses, but seasoned marketers who have a thorough grasp of market behaviour and customer responses to price fluctuations use the other ways.

3. Distinguish between the following: (4X5)

Q 3. a) Ethnocentric and polycentric orientation

Ans) Ethnocentric Orientation: At this stage of the firm's activities, foreign operations are largely used to dispose of domestic surplus output and are considered secondary to domestic operations. International marketing efforts are often handled from the home country office, and strategies for foreign operations are established in the home office in such a circumstance. A company's export department is usually in charge of overseas marketing. The majority of the marketing staff would be from the native country. All foreign marketing rules and processes would be nearly identical to those used in the home market, and virtually little overseas marketing research would be conducted. Between the domestic and international markets, there would be little variation in product, pricing, distribution, and promotion tactics. Such businesses are known to rely significantly on export agents, and their salespeople are typically employed and educated in the nation of origin.

Polycentric Approach: Companies with this orientation organise their worldwide marketing operations country by country. Each country is considered as if it were a distinct entity. In all international markets, subsidiaries are created, each functioning independently of the others and with its own goals and plans. Strategies are developed uniquely for each country, whether in the areas of product, pricing, distribution, or promotion. Each country does its own marketing research. Local nationals would make up the majority of the sales staff..

Q 3. b) Domestic agents and domestic merchants

Ans) The basic difference between the two arises on account of ownership(tit1e) and not the physical possession of the merchandise. Domestic agents never take title to the goods, regardless of whether they take possession of the goods or not. While domestic merchants, on the other hand, own the merchandise, regardless of whether they take possession of the goods or not. Let us discuss them in detail.

Domestic Agents

Agents are divided into groups based on the principals they represent. Some agent middlemen represent the customer, while others serve the manufacturer's interests. Export brokers, manufacturer's export agents, export management firms, and cooperative exports are among those who work for the company. Purchasing agents and country-controlled buying agents are two types of agents who care after the buyer's interests.

Domestic Merchant

A domestic export merchant purchases a product from a producer and sells it overseas on his own. When this sort of middleman is utilised for international marketing, the manufacturer's role is effectively restricted to manufacturing and, at most, domestic marketing. Except for production-related functions such as product and product mix adjustments that may be necessary to fit the export market, all other foreign marketing duties are handled by the export merchant in such instances.

Q 3. c) Marketing of products and services

Ans) There are four basic characteristics of services, that differentiate them from products:


Intangibility is the most fundamental distinction between commodities and services. Rather than being objects, services are acts or performances. As a result, they can't be seen, felt, tasted, or touched in the same way that actual items can. Because there are no tangible qualities, it is difficult for sellers to exhibit or display services, and for customers to sample, test, or evaluate them thoroughly before purchasing them.


Because services are human acts, it is frequently hard to guarantee homogeneity and consistency in the service offered by a vendor. As a result, no two services will be identical. Heterogeneity arises as a result of the fact that no two clients are exactly identical; everyone will have their own set of needs or experiences and will require the service in their own way. As a result, service heterogeneity is primarily the product of human contact between staff and consumers, as well as all of the complexities that come with it.

Simultaneous Production and Consumption

The majority of commodities are manufactured first, then sold and consumed, whereas the majority of services are sold first, then manufactured and consumed concurrently. An vehicle, for example, may be built in Mumbai, delivered to Delhi, sold two months later, and used for years. Restaurant services, on the other hand, cannot be given until they have been sold, thus the dining experience is effectively created and consumed simultaneously.


Perishability refers to the inability to save, store, resell, or return services. A unused seat on a plane or at a restaurant, an hour of a lawyer's time, or telephone line capacity cannot be retrieved and resold at a later date. This contrasts with items that may be held, resold, or even returned if the customer is dissatisfied. Because most services are perishable, this is an uncommon scenario.

Q 3. d) Undifferentiated and differentiated international market targeting strategies

Ans) The basic difference of target marketing strategies is:

Undifferentiated international market targeting

It's comparable to single-country mass marketing. The company overlooks market segment distinctions and makes a single offer to the whole market. Rather of focusing on distinctions among customers, this method focuses on core buyer needs. Standardization and mass production in manufacturing are the marketing counterparts of undifferentiated marketing. The limited product range reduces the expenses of R&D, production, inventory, marketing research, advertising, and product management. To win the price-sensitive portion of the market, the firm is able to transfer its lower expenses into lower pricing. Coca-Cola, for example, sells the identical soft drinks all over the world.

Differentiated International market targeting

The company works in numerous market categories and creates various marketing programmes to fit each area. As a result, it necessitates the creation of distinct goods and marketing strategies for each category. The cost of doing business rises as a result of differentiated marketing. Product change, production administration, inventory, and promotion costs are all increasing. As a result, companies should be wary about over-segmenting their markets. They may use counter-segmentation to widen their client base on occasion.

4. Write short notes on the following: (4X5)

Q 4. a) Global Marketing

Ans) Despite the fact that the world is not a homogenous market, the ability to identify groups of customers (segments) with similar values, wants, and behaviour patterns who can be satisfied with a single standardised product and marketing mix exists throughout the world. This is an example of a worldwide marketing plan. The world as a whole is seen as the market under this approach, and the corporation tries to standardise as much of its work as possible on a global scale.


As a result, global marketing considers a complete collection of country markets as a unit, identifying groups of prospective customers with similar demands as a global market segment and designing a marketing strategy that aims for standardisation wherever it is cost and culturally feasible. This could mean, for example, that a company's global marketing plan has a standard product but country-specific advertising; or that a company's global marketing plan has a standard theme in all countries but country-specific appeals to a unique market characteristic but adapted products to meet specific country needs; and so on. We may infer that global marketing entails treating all of a company's foreign marketplaces (including the home market) as if they were a single global market and standardising the marketing mix whenever culturally viable and cost-effective.

Q 4. b) Counter Trade

Ans) Countertrade is a kind of reciprocal international trade in which products and services are traded for other commodities and services rather than hard cash. Countertrade is a component of a larger import and export strategy that guarantees a nation with limited local resources has access to essential goods and raw materials. Furthermore, it allows the exporting country to sell its goods and services on a broader worldwide market, supporting growth in its sectors.


Bartering is the earliest form of countertrade. It is the direct exchange of products and services of equal value without the need for a financial settlement. A trade is the term for a bartering transaction. A bag of nuts, for example, may be swapped for coffee beans or beef.

Counter purchase

In a counter purchase agreement, an exporter sells products or services to an importer in exchange for a commitment to buy additional items from the importer within a certain time frame. Unlike bartering, exporters who participate into a counter buy agreement must sell the products they purchase through a trading business and will not utilise the commodities themselves.


In an offset agreement, the seller helps advertise items made in the purchasing nation or permits some of the assembly of the exported product to be done by manufacturers in the buying country. This is a widespread technique in the aerospace, defence, and infrastructure industries. For larger, more expensive products, offsetting is also more prevalent. An offset agreement is also known as an industrial participation or industrial cooperation agreement.

Compensation Trade

In a compensation trade, also known as a buy back deal, a business offers machinery, a factory, or technology to a company in another nation in exchange for an agreement to purchase back items created from the machinery, facility, or technology provided over a certain period of time. In both sets of transactions, the standard pricing concept is used.

Switch Trading

This type of countertrade involves a triangular rather than bilateral trade agreement. When goods, all or part, from the buying country to be received in the selling country and may not easily usable or saleable in that country, a third party may be located in their country and may be brought in to dispose of such merchandise.

Q 4. c) Straight Extension

Ans) The term "straight extension" refers to the process of launching a product into a foreign market without making any changes. "Find consumers for the product as it is," top management tells salesmen. The first step, however, is to ascertain whether that product is used by international consumers. Straight extension has proven successful in certain situations, such as cameras, consumer electronics, and numerous machine equipment, but has been disastrous in others. General Foods entered the British market with its normal powdered Jell-0, only to discover that British customers prefer the solid wafer or cake version. Campbell Soup lost an estimated $30 million when it introduced its condensed soups in England, where consumers were put off by the small cans and didn't realise they needed to be filled with water to make soup. Straight extension is appealing since it does not need extra R&D, production retooling, or product or promotional changes. However, it may prove to be expensive in the long term.

Q 4. d) Complexities in International Marketing Research

Ans) International marketing research is one of those commercial tasks that is thought to be highly complicated since it covers such a large area. Because of the variations in the political, social, economic, and cultural settings of many nations, international marketing research is complicated. These variations prevent a standardised approach to international marketing research, and the lack of standardisation makes research extremely challenging.


Political and Economic Factors

Differences in a country's economic conditions complicate the evaluation of product demand. The economic climate differs from nation to country. The monetary unit, for example, differs from country to country. Along with the difficulties of exchange rate swings, this presents problems with currency convertibility. Different countries have different monetary systems and rules. Foreign markets have a distinct political climate than local markets. The complexity of a company's operations increases as the number of countries in which it operates grows. The political climate in each country is different. The approaches to various sectors in different nations reflect the differences in political regimes.

Social and Cultural Factors

Consumer behaviour is heavily influenced by social and cultural variables. Because cultures change, so do societies, and so does consumer behaviour in different nations. Any genuine foreign marketing research study must take these variations into consideration. Diverse civilizations may have different reactions to the same product. Some societies in a few nations may be opposed to the concept of beer and wine being socially acceptable. Any product's social response is influenced by the region's cultural background. In the same nation, various societies have diverse social responses to the same items.


Any significant international marketing research study must include not just cross-national variances, but also intra-country disparities. Intra-country variations make international marketing research exceedingly difficult in nations like India.


Q 5. Comment on the following: (4X5)

Q 5. a) The global managers must think in international terms and not in terms of their native culture.

Ans) Information regarding the product should be compared to existing beliefs before it is assessed. Additional information can be obtained from any of the input sources or from market thought leaders if there are distortions owing to selective attention, exposure, and retention. The chance of a product or method being accepted is referred to as adoption propensity. If an invention overcomes this stumbling block, it may be embraced and gradually introduced throughout the market.

This approach can aid strategy development by ensuring that all factors and connections are taken into account; however, the analysis is inadequate without a fundamental understanding of cultural differences. To adjust to differences, one must set aside one's own cultural beliefs. The Self Reference Criterion is an unconscious reference to one's own cultural ideals (SRC).

According to James Lee, a multi-step approach has to be followed to remove the undue influence of the SRC.

  1. Define the issue or objective in terms of cultural features, habits, or standards in the home.

  2. Define the problem or objective in terms of foreign characteristics, habits, or standards, without making any assumptions.

  3. Any difference between the composites shows the presence of the SRC, requiring a re-evaluation of the problem with the SRC eliminated.

As a result, the global manager should think in worldwide terms rather than in terms of his or her own culture. As a result, the manager may focus more on the consumer, and the marketing plan established will represent actual market demands.

Q 5. b) Strategy alliance more than an entry strategy is a competitive strategy.

Ans) Alliances typically entail distribution access, technological transfers, or manufacturing technologies, with each partner bringing a unique component to the endeavour. Instead of fighting with one another, this approach aims to improve the firm's long-term competitive advantage by creating alliances with competitors (current or potential in important sectors).

A strategic partnership can also be utilised as a way to break into a new market. For example, a company might enter a foreign market by creating a marketing or distribution partnership with a company in that market.

More than an entry strategy, a strategic partnership is a competitive strategy. Strategic partnerships allow businesses to enhance resource productivity and profitability by avoiding needless resource fragmentation and investment and effort duplication. Alliances are becoming increasingly common and visible in industries such as medicines, computers, nuclear power, telematics, and others that are typified by high fixed costs in R&D and manufacturing, as well as high technology and rapidly changing technology.

Q 5. c) In addition to general considerations for size, shape, materials, surface graphics of products, export packaging requires certain special considerations.

Ans) In, addition to the general considerations in packaging mentioned there are certain special factors to be considered in export packaging. They are:

  1. Regulations in the Foreign Countries: Government laws in other nations may apply to packaging and labelling. Some nations have set packaging requirements for certain commodities, as well as labelling regulations for label size and the size of each letter on the label.

  2. Buyer's Specifications: Buyers, such as importers, may specify packing requirements in some circumstances. It should also be assured that packaging fulfils other criteria, such as regulatory requirements, while including such standards.

  3. Socio-Cultural Factors: When creating a product's packaging, socio-cultural variables such as conventions, traditions, and beliefs in the importing nation should be taken into account.

  4. Retailing Characteristics: The type of retail locations is an essential factor to consider when choosing packaging. As a result, the packaging must accomplish several of the sales responsibilities, including attracting attention, describing the product's qualities, instilling customer confidence, and creating a positive overall impression.

  5. Environmental Factors: Certain environmental elements, such as weather and climatic considerations, have an impact on packaging selections. Such variables should be addressed in the place where the product originates, while it is in transit, and when it is on the market, for example. Under various situations, the package should be able to endure the pressures and dangers of handling and transportation, stacking, storage, and so on.

  6. Disposability: Aspects pertaining to the packaging's disposal should also be taken into consideration. One of the qualities that a good packaging must possess is the ability to be readily discarded or recycled. Indeed, in a number of nations, the disposal of packaging materials is generating environmental issues.

  7. Political Factors: Though it may not always be a major consideration, there have been instances where governments in certain countries have blocked imports of certain products on the grounds that the package's colour or shape reminded citizens of the country's main opposition party, particularly during an election year.

Q 5. d) Marketing Research Report is the cumulation of all that has gone before.

Ans) The final step in the marketing research process is report authoring. It is the function that allows research findings to be communicated to decision-makers. As a result, the research report represents the pinnacle of all that has come before it. Regardless of how good a project's research is, how it is presented determines how well the results are received.


The research director's criteria are unlikely to be the same as those of the executive to whom the report is delivered. As a result, the research director must not only guarantee that the report is technically correct, but also that it effectively sells the findings. As a result, it is critical for the marketing researcher to investigate the reporting requirements as well as the fact-gathering process itself, and to create methods for producing high-quality reports, despite a variety of constraints.

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