Assignment Code: IBO-02/TMA/2023

Course Code: IBO-02

Assignment Name: International Marketing Management

Year: 2023

Verification Status: Verified by Professor

Attempt all the questions:

Q1) (a) Why do firms go international? Explain with the help of examples from Indian context.

Ans) Firms go international for a variety of reasons, including access to new markets, access to resources and inputs, diversification of risks, and achieving economies of scale. In the case of India, firms have increasingly been going international over the past few decades due to a variety of factors.

One reason why Indian firms go international is to access new markets. India has a large domestic market, but firms often find that there is limited room for growth within the country. By going international, firms can tap into new markets and reach new customers. For example, Tata Motors, one of the largest automobile manufacturers in India, has expanded into several international markets, including Europe, Africa, and Southeast Asia.

Another reason why Indian firms go international is to access resources and inputs. India has a large and growing economy, but certain resources and inputs are limited in supply. By going international, firms can access resources such as raw materials or technology that are not available in India. For example, Aditya Birla Group, a conglomerate that operates in a variety of industries, has acquired companies in Canada, the United States, and Australia to access resources such as coal, copper, and aluminium.

Diversification of risks is also a key driver for Indian firms to go international. By operating in multiple markets, firms can spread their risks and reduce their exposure to economic or political instability in any one market. For example, Infosys, one of India's largest IT companies, operates in several international markets, including the United States and Europe, to reduce its exposure to any one market.

Finally, Indian firms go international to achieve economies of scale. By expanding into new markets, firms can increase their production and sales volumes, which can lead to lower costs and higher profits. For example, Mahindra & Mahindra, a major manufacturer of tractors and other farm equipment, has expanded into several international markets, including the United States and Europe, to achieve economies of scale in its production and distribution.

Q1) (b) In what manner do political system and economic factors influence international marketing? Answer with suitable examples.

Ans) Political systems and economic factors can have a significant impact on international marketing. In this context, political systems refer to the political institutions, laws, and regulations of a country, while economic factors refer to the economic conditions and structures that affect international trade.

Some ways in which political systems and economic factors can influence international marketing, along with examples:

1. Trade Policies: The trade policies of a country can have a significant impact on international marketing. For example, if a country imposes high tariffs or trade barriers, it can make it difficult for foreign companies to sell their products in that country. Similarly, if a country has trade agreements with other countries, it can create opportunities for companies to expand their international marketing efforts. For instance, the Free Trade Agreement (FTA) between India and South Korea has helped companies from both countries to expand their international marketing efforts and increase trade volumes.

2. Legal Regulations: The legal regulations of a country can also affect international marketing. For example, if a country has strict laws regarding the labelling, packaging, or safety of products, it can require foreign companies to make changes to their products before they can be sold in that country. Additionally, laws regarding intellectual property rights can impact international marketing efforts, as companies need to ensure that they are not violating any copyright, patent, or trademark laws. For instance, in India, the Patents Act of 1970 has been amended several times to protect domestic industries and limit foreign competition.

3. Political Stability: Political stability can also impact international marketing efforts. If a country experiences political unrest, it can create uncertainty for companies and make it difficult to conduct business. On the other hand, if a country has a stable political environment, it can create a favourable environment for international marketing efforts. For example, Singapore's stable political environment has helped it to become a hub for international trade and a popular destination for foreign companies.

4. Exchange Rates: Exchange rates can also affect international marketing efforts, as they impact the cost of products and the competitiveness of companies in foreign markets. For example, if the exchange rate between two countries changes, it can make products from one country more expensive or less expensive in the other country. As a result, companies may need to adjust their pricing strategies to remain competitive in foreign markets.

Q2) Under which mode of entry the international business firm can start international marketing without any investments abroad? Explain it along with its merits and limitations.

Ans) The mode of entry that allows international business firms to start international marketing without any investments abroad is the Export mode. Under this mode of entry, firms produce their products in their home country and sell them in foreign markets. This mode of entry is commonly used by small and medium-sized enterprises that lack the resources or experience to invest in foreign markets.

Merits of the Export Mode

1. Low Risk and Low Investment: One of the major advantages of the Export mode is that it requires low investment and involves low risk. Companies can start exporting their products to foreign markets without having to invest in setting up a manufacturing plant or acquiring local resources. This allows companies to test the waters in foreign markets before making larger investments.

2. Access to New Markets: By exporting their products, companies can access new markets without having to physically enter them. This allows companies to sell their products to customers in foreign markets without having to establish a physical presence there. This can be particularly advantageous for companies that have limited resources or are unsure about the potential of foreign markets.

3. Economies of Scale: Exporting allows companies to achieve economies of scale by increasing their production and selling larger volumes of their products. This can lead to lower costs and higher profits. Additionally, exporting can help companies to reduce their dependence on domestic markets and diversify their customer base.

Limitations of the Export Mode

1. Limited Control Over Distribution: When exporting, companies often have limited control over the distribution of their products in foreign markets. They must rely on intermediaries such as distributors or agents to market and distribute their products. This can result in lower profit margins and limited control over the marketing and branding of their products.

2. Transportation and Logistics: Exporting can be challenging due to transportation and logistics issues. Companies must ensure that their products are shipped safely and on time, which can be difficult when dealing with foreign customs and regulations. Additionally, companies may need to invest in packaging and labelling that meets the standards of foreign markets.

3. Exchange Rate Fluctuations: Exporting involves currency exchange, which can expose companies to exchange rate fluctuations. This can impact the profitability of exporting and create uncertainty for companies.

In conclusion, the Export mode is a low-risk and low-investment way for international business firms to start international marketing without investing abroad. By exporting their products, firms can access new markets, achieve economies of scale, and diversify their customer base. However, exporting also has limitations, such as limited control over distribution, transportation and logistics issues, and exposure to exchange rate fluctuations. As a result, firms need to carefully consider their resources and capabilities before choosing the Export mode as their mode of entry. Additionally, firms need to carefully manage their exports to ensure that they are competitive in foreign markets and can maintain profitability over the long-term.

Q3) Write short notes on the following:

(a) Telemarketing

Ans) Telemarketing is a marketing technique that involves contacting potential customers over the telephone to promote products or services. This can be done by either using a live operator or through an automated system that plays recorded messages. Telemarketing can be used for both business-to-business and business-to-consumer marketing. Telemarketing campaigns typically involve a script that the telemarketer follows when speaking with potential customers. The script is designed to highlight the benefits of the product or service being promoted and to overcome objections that potential customers may have.

Telemarketers may also be trained to use various persuasion techniques, such as building rapport with potential customers, asking leading questions, and creating a sense of urgency. Telemarketing can be an effective marketing technique for a variety of reasons. First, it allows companies to reach many potential customers quickly and efficiently. Second, telemarketing can be used to generate immediate responses from potential customers, such as making a purchase or scheduling a sales appointment. Third, telemarketing can be used to collect valuable feedback from potential customers, such as their level of interest in a product or service and their opinions on pricing and features.

(b) GATS

Ans) GATS, or the General Agreement on Trade in Services, is a multilateral agreement that was created to regulate and promote international trade in services. GATS was signed by members of the World Trade Organization in 1994, and it went into effect in 1995. The purpose of GATS is to ensure that trade in services is conducted in a fair, predictable, and transparent manner.

Under GATS, services are defined as any activity that is not related to the production of goods. This includes a wide range of activities, such as banking, telecommunications, education, healthcare, and transportation. GATS establishes rules and principles that apply to all WTO members, including the Most-Favoured Nation principle, which requires that each member treat all other members equally in terms of trade in services.

GATS is divided into four main parts or modes, each of which describes a different way in which services can be provided across borders:

1. Mode 1: Cross-border supply of services. This mode involves the supply of services from one country to another using electronic or other means of communication.

2. Mode 2: Consumption abroad. This mode involves the supply of services to consumers who are in a different country, such as tourism or education services.

3. Mode 3: Commercial presence. This mode involves the establishment of a foreign-owned company in another country to provide services, such as a foreign bank setting up a branch in a foreign country.

4. Mode 4: Presence of natural persons. This mode involves the temporary entry of individuals into another country to provide services, such as a foreign consultant providing advice to a company in another country.

(c) Personal selling

Ans) Personal selling is a marketing technique that involves direct communication between a salesperson and a potential customer. The goal of personal selling is to persuade the customer to make a purchase or take some other desired action, such as signing up for a service or attending an event. Personal selling can be conducted in person, over the phone, or through video conferencing, among other methods.

Personal selling is often used in B2B marketing, where relationships between companies and their customers are important. It is also used in B2C marketing for high-value or complex products or services, where customers may need more information or support before making a purchase decision. Personal selling involves building rapport and trust with the customer, understanding their needs and preferences, and tailoring the sales pitch to address their concerns and interests.

One of the key advantages of personal selling is the ability to provide customized solutions and individual attention to each customer. This can result in higher conversion rates and stronger customer relationships. Personal selling also allows for immediate feedback from customers, which can be used to improve products or services or to refine sales strategies.

(d) Packaging for international markets

Ans) Packaging is an essential component of a product's marketing mix, and it plays a critical role in attracting and retaining customers. In international markets, packaging takes on added importance, as it can impact a product's success in a foreign market. Some key considerations for packaging for international markets:

1. Cultural Differences: Packaging should be designed to reflect the culture and preferences of the target market. This includes considerations such as colour, language, and symbolism.

2. Regulatory Requirements: Packaging should comply with the regulations and standards of the target market. This can include requirements for labelling, warnings, and product information.

3. Transportation and Distribution: Packaging should be designed to withstand the rigors of transportation and distribution, including factors such as temperature, humidity, and handling.

4. Brand Consistency: Packaging should maintain consistency with the brand image and messaging in other marketing materials.

5. Environmental Considerations: Packaging should be designed to minimize environmental impact and meet the regulations and standards of the target market.

6. Cost and Efficiency: Packaging should be designed to be cost-effective and efficient, while still meeting the needs of the target market.

Q4) Differentiate between the following:

(a) Direct and indirect selling channel

Ans) Direct selling and indirect selling are two different methods of selling products or services to customers.

Direct selling refers to the process of selling products or services directly to the end-users without any intermediaries. In this method, the seller interacts with the customers directly and promotes the products, takes orders, and delivers them. Examples of direct selling channels include door-to-door sales, telemarketing, and selling through company-owned stores.

Indirect selling, on the other hand, involves using intermediaries to sell products or services to customers. The intermediaries may include wholesalers, distributors, agents, or retailers, who take the products from the manufacturer and sell them to end-users. The manufacturer does not directly interact with the customers in this case. Examples of indirect selling channels include selling through retailers, online marketplaces, or through distributors.

(b) Domestic agents and domestic merchants.

Ans) Domestic agents and domestic merchants are two distinct types of intermediaries involved in the distribution of goods and services within a country. Here is how they differ:

1. Definition: A domestic agent is an individual or firm that acts as an intermediary between the manufacturer and the customer, providing services such as sales promotion, marketing, order processing, and after-sales service. A domestic merchant, on the other hand, is a trader who buys goods from producers and sells them to customers for a profit.

2. Ownership of Goods: Domestic agents do not own the goods they sell; they act as representatives of the manufacturer and receive a commission for their services. Domestic merchants, on the other hand, own the goods they trade and are responsible for buying and selling them at a profit.

3. Risk: Domestic merchants bear the risk of loss or damage to the goods they trade, as well as the risk of market fluctuations affecting their selling prices. Domestic agents, on the other hand, do not bear any risk since they do not own the goods.

4. Function: Domestic agents are primarily responsible for promoting and selling goods on behalf of the manufacturer, whereas domestic merchants are responsible for sourcing, buying, and selling goods in the market.

5. Commission: Domestic agents receive a commission for their services, which is usually a percentage of the value of the goods sold. Domestic merchants, on the other hand, earn a profit margin on the goods they buy and sell.

(c) Domestic and international marketing communications.

Ans) Domestic marketing communications and international marketing communications differ in terms of the audience, cultural considerations, and communication strategies. Here are some of the key differences:

Audience

1. Domestic marketing communications are aimed at consumers in a single country or market, with a shared language, culture, and set of values.

2. International marketing communications are aimed at consumers in multiple countries or markets, with different languages, cultures, and values.

Cultural Considerations

1. Domestic marketing communications can assume a level of cultural familiarity with the audience, using language, humour, and imagery that is specific to that country or market.

2. International marketing communications must be culturally sensitive and adaptable, considering the different beliefs, customs, and norms of each target market. This may involve making changes to the product, packaging, or promotional materials to better resonate with local cultures.

Communication Strategies

1. Domestic marketing communications can rely on standardized communication strategies that have proven effective in the home market, without significant modifications.

2. International marketing communications require more customized and targeted communication strategies that consider the different media channels, regulatory requirements, and cultural sensitivities of each target market.

Legal and Regulatory Considerations

1. Domestic marketing communications are governed by the laws and regulations of a single country or market, which can make it easier to ensure compliance with advertising standards and avoid legal issues.

2. International marketing communications are subject to a complex set of laws and regulations that vary by country and market, which can make it more difficult to ensure compliance and avoid legal challenges.

(d) Primary and Secondary data

Ans) Primary data and secondary data are two types of data used in research. Here's how they differ:

Definition

1. Primary data is data collected first-hand by the researcher for a specific purpose or research question.

2. Secondary data, on the other hand, is data that has already been collected by someone else for a different purpose or research question.

Collection

1. Primary data is collected through methods such as surveys, experiments, observations, and interviews.

2. Secondary data is obtained through sources such as published articles, government reports, company records, and online databases.

Reliability

1. Primary data is generally considered to be more reliable than secondary data because it is collected by the researcher specifically for their research purpose, and there is no possibility of errors or biases introduced by previous research.

2. Secondary data, on the other hand, may be less reliable due to potential errors or biases in the original research, or because it may not be specifically tailored to the current research question.

Cost and Time

1. Collecting primary data can be more time-consuming and costly than obtaining secondary data, particularly if extensive surveys or experiments are required.

2. Secondary data can often be obtained relatively quickly and inexpensively, especially if it is readily available in existing databases or records.

Use

1. Primary data is useful when specific information is required that is not available through secondary sources or when the research question requires a more in-depth understanding of the data.

2. Secondary data can be useful for providing background information, generating hypotheses, or comparing results with previous studies.

Q5) Comment on the following statement:

(a) International marketing research is full of complexities.

Ans) International marketing research is a complex process that involves collecting, analysing, and interpreting data about customers, competitors, and market conditions in foreign countries. The complexities of international marketing research arise from a variety of factors, including differences in cultural, social, economic, and political environments, language barriers, and varying legal and regulatory frameworks.

Cultural differences can make it challenging to gather accurate and meaningful data, as certain concepts and values may be interpreted differently in different countries. For example, the meaning of a certain colour or symbol may vary widely across cultures, and this can affect the way consumers respond to marketing messages. Moreover, language barriers can make it difficult to conduct surveys, interviews, or focus groups on foreign countries, which can affect the quality and accuracy of data collected.

Economic and political conditions can also create challenges in international marketing research. Economic factors such as exchange rates, inflation, and economic stability can affect consumer behaviour and market conditions, making it important to monitor economic trends and their impact on the market. Political instability, changes in government policies, and trade restrictions can also impact market conditions and create uncertainties for marketers.

(b) Price is an important element of marketing mix.

Ans) Price is a critical element of the marketing mix that plays a crucial role in determining the success of a product or service. It refers to the amount of money that customers are willing to pay for a particular product or service, and it has a significant impact on the perceived value of the offering. Here are some reasons why price is such an important element of the marketing mix:

1. Revenue Generation: The price that a company sets for its products or services determines its revenue generation potential. Setting the right price can help a company maximize its profits while ensuring that its products remain affordable and accessible to its target customers.

2. Competitiveness: Price is a key factor in determining the competitiveness of a product or service in the market. Setting a price that is too high can make a product less competitive, while setting a price that is too low can reduce the perceived value of the product and make it less attractive to customers.

3. Positioning: The price of a product or service can be used as a tool for positioning it in the market. A high price can be used to position a product as a premium offering, while a lower price can position it as a more accessible or budget-friendly option.

4. Brand Perception: The price of a product can also impact the way customers perceive the brand. A higher price can create the perception of quality, while a lower price can suggest lower quality or value.

5. Sales Promotions: Price can be used as a tool for sales promotions, such as discounts or special offers, which can help to drive sales and increase revenue.

(c) Analysis of legal conditions is a very critical component in selecting foreign markets.

Ans) Analysis of legal conditions is an essential component of selecting foreign markets for companies. Understanding the legal environment in a foreign country is crucial for businesses to navigate the regulatory framework, comply with local laws and regulations, and avoid legal risks and liabilities that could harm their operations and reputation. Here are some reasons why legal analysis is critical in selecting foreign markets:

1. Compliance with Local Laws: Different countries have different legal frameworks that regulate various aspects of business operations such as labour laws, intellectual property laws, tax laws, and competition laws. A detailed analysis of legal conditions in a foreign market can help companies understand the requirements and ensure compliance with local laws.

2. Managing Legal Risks: Entering a foreign market involves legal risks such as corruption, intellectual property theft, and violation of local laws. Analysis of the legal environment in the foreign market helps companies to identify potential risks, understand their legal obligations, and develop strategies to mitigate risks.

3. Protecting Intellectual Property: Intellectual property protection is essential for businesses that operate in foreign markets. A detailed analysis of the legal conditions can help companies identify and protect their intellectual property rights such as trademarks, patents, and copyrights.

4. Business Viability: The legal environment can also impact the overall business viability of a foreign market. Understanding the legal and regulatory framework of a foreign market can help companies evaluate the feasibility of their business operations, assess market entry barriers, and make informed decisions about market entry.

5. Competitive Advantage: Understanding the legal environment can also provide companies with a competitive advantage in a foreign market. Compliance with local laws and regulations can help businesses build trust and credibility with local customers, partners, and regulators, and differentiate themselves from competitors who may not be complying with the legal requirements.

(d) Poor presentation will undo the entire market research exercise.

Ans) A well-designed and well-executed market research study can generate valuable insights that can drive informed decision-making for businesses, governments, and other organizations. However, if the results are presented poorly, they may not be understood or acted upon, and the research effort may go to waste.

There are several reasons why poor presentation can undermine the effectiveness of market research. First, the audience may struggle to understand the findings if they are presented in a confusing or disorganized manner. This can lead to misinterpretation of the results, and the audience may fail to appreciate the significance of the insights generated by the research.

Second, a poorly presented report can also lead to skepticism and mistrust among the audience. If the presentation is not backed up by clear data and evidence, or if the conclusions are not well-supported, the audience may question the validity of the research and dismiss the findings altogether.

To avoid these problems, it is essential to invest time and effort into the presentation of market research findings. The presentation should be tailored to the audience, with clear and concise messaging that emphasizes the most important insights generated by the research. The use of data visualization techniques, such as charts, graphs, and diagrams, can help to make the findings more accessible and engaging for the audience.

It is also important to ensure that the presentation is well-structured, with a clear narrative that builds towards the key findings and recommendations. A clear and concise summary of the research should be provided at the beginning of the presentation, followed by a detailed explanation of the methodology and results.