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S.Thiruchenduran
MSC FT
Post Graduate and Research Center
PJTSAU
Hyderabad
Questions?
 Why these differences in Trades?
 How many State Visits does Office
bearing PM of India HE Narendra Modi
had?
 9
 5of them are Asian countries.
“Neighborhood first and act
east policy”
 2015 Jan Sri Lanka
 Introduction
 International Marketing Environment
 Importance of IME in Business
Management
 WTO in IME
 Summary
Introduction
 “Global village“, “World economy“,
“Globalization” fashionable terms.
 These terms talk about a new market...
Understanding the IME
important in…
 Identify Customer Values
 Communicate Values
 Deliver Values
 Capture Values
Definition IME
 The international marketing environment
is a complex constellation of demands
and constraints which the f...
Elements of the IME
7
Political/legal
forces
Economic
forces
1
2
Environmental
uncontrollables
country market A
Competitiv...
Internal environment status
Corporate Culture
Staff Relationships
Resource Constraints
Internal
Environment
Behavior
in
de...
Internal Environment (5M)
 Management (Leadership)
 Man(Human Resource)
 Machine(Technological Advances)
 Material(Res...
External Environment
 Micro
 Customer, Competitor, Supplier,
Intermediaries, Public
 Macro
 PEST-LEED
Micro Environment
 Micro environment is much closer to the
marketer than the macro environment
 It directly deals with t...
Operational/ Micro Environment
Micro Environment
Intermediaries
Competitors
Suppliers
Customers
Publics
Macro (External)
Environment
 External environment is the elements in
the periphery of the business.
 These elements are...
External Environment (PEST-
LEED)
 Political Environment
 Economic Environment
 Socio-Cultural Environment
 Technologi...
Economic Environment
 Important element of all
 “With money everything is possible(well
most of the things)” – For the m...
Changes of International
Economic Environment
 Capital movements rather than trade have become
the driving force of the w...
Economic System
 Market Economy
 Consumers “write” the economic plan by
deciding what will be produced by whom. The
mark...
Economic System
 Command Economy
 The state has broad powers to serve the
public interest. These include deciding which
...
Economic System
 Mixed
 There are, in reality, no pure market or
command allocation systems among the
world’s economies....
Development stages of
Market
 GNP is used to categories markets in IME
 Low Income Countries
 less than $786 per capita...
Development stages of
Market
 Concentration in Africa, south of the Sahara
 Bangladesh, GNP per capita is $366 (Cheap
la...
Development stages of
Market
 Upper Middle Income Countries
 Industrializing countries
 Between $3,126 and $9,6$5
 Mos...
Development stages of
Market
 High Income Countries
 Advanced, industrialized, postindustrial,
 GNP per capita above $9...
Income and PPP in IME
 A market can be also defined as a group of people willing
and able to buy a particular product.
 ...
Economic Reality
 Wealth and income are concentrated
regionally, nationally, and within nations.
The implications of this...
Economic Reality
Location of Population With
high PPP
 The 10 most populous countries in the
world accounted for 59 percent of world
incom...
GDP
 A general quick indicator of Economic
Environment
 India 1870bn$ China 9181 bn$ (WTO, 2013)
 Can be misleading.
 ...
Answer
 Nigeria
 2014 GDP is 509bn $
 By shifting the base year from 1990 to
2010.
Results
 Africa’s Largest Economy
 World #26
 Inflow of Investments
 Nestle, Heiniken, Standard Bank, MTB
Ngozi Okonjo...
Other Economic environment
Indices
 Currency floating (Open/fixed) issue.
 Balance of Payment (BOP) status
 Economy bas...
International Trading
Environment – Barriers
 Tariffs
 Duties imposed when goods or services
cross the border
 Non-Tarr...
Quota
 Export Quota (Protect Local consumer),
Import Quota (Protect Local producer)
 Quotas are implemented through
lice...
Voluntary Export Restrains
 Exporting country voluntarily restricts its
export to a country to protect the interest
of th...
Levels of EI
 Free Trade Area/Agreement
 Customs Union
 Common Market
 Economic Union
 Economic and Monetary Union
FTA
 Free Trade Area is a group of countries
that have agreed to abolish all internal
barriers to trade among themselves....
ISFTA
 1998 December
 4227 2802
 Quotas Zero Duty Tea 15mn Kg/yr , 8mn
pieces of garments , 2500 MT Pepper
Customs Union
 Countries group together and form a
single entity which has
 Same a Tariff rates with non members
 Comme...
Common Market
 Total elimination of Internal tarrifs
 Common external tariffs
 Goods as well as services
 It includes ...
Economic Union
 Is a type of trade bloc which is composed
of a common market with a customs union.
The participant countr...
Economic and Monetary Union
 Economic Union With single currency.
 E.g: East Caribbean Currency Union,
EU
Other Economic Integration
 Commodity Agreement – Food for Oil
Iraq USA
 Quota Agreement – Fixed price
commodity trading...
EI and IME
 Create conducive Marketing
Environment through
 Lifting barriers
 Freedom of movement
 Huge market access
...
Political Environment
 German law, “verpackungerordun”, has
forced manufacturers to eliminate
nonessential packaging mate...
Political Environment
 The German packaging law is one
example of the impact that political, legal,
and regulatory enviro...
Political Environment
 National Interests
 National Controls
 Political system
 Activities of political parties
 Labo...
National Interest
 Make in India
 Refreshingly Sri Lanka
 God’s Own Country
 Act East
 Eradicating Micro-Nutrient Def...
Foreign Relations
Hmmm
“There are no
permanent
friends, only
permanent
interests”
Elements to Consider
 Governing Parties Attitude towards
 Sovereignty
 Political Instability
 Threat of equity dilutio...
Sovereignty
 Supreme and Independent Political
authority.
 Developing countries exercise
Protectionism with extreme laws...
Risks under Sovereignty
 Taxes
 Dilution of Equity Control
 Expropriation
 Confiscation
Taxes
 Taxing policies will vary with the ruling
party’s monetary policies.
 Companies usually avoid taxes by
shifting i...
Dilution of Equity
 Host nation governments sometimes
attempt to control ownership of foreign
owned companies operating w...
 Expropriation
 Governmental action to dispossess a
company or investor.
 Confiscation
 Government’s taking ownership ...
Political Instability
 Social Unrest
 Social disorder is caused by such underlying conditions
as economic hardship, inte...
Three Groups
 Common Law
 Civil Law
 Theocratic Law
Legal Environment
 The international legal environment
 International Court of Justice
 International Criminal Court
 ...
Settlement of Disputes
 Some are settled by WTO.
 Judicial dispute settlement.
 Extra judicial Dispute settlement.
Culture
1. Atificial man-made environment - no human
society is without culture
2. Complex material, institutional and spi...
Cultural Characteristics
 The effects of culture are linked to the relevant
factors that may affect the marketing approac...
Cultural Characteristics
 Culture is shared. It is a common concern
groups and therefore consumer groups. The
similarity ...
Cultural Characteristics
 From a marketing perspective, it is essential
that manifests itself in different cultures,
diff...
Culture is Contagious
Culture spreads in verbal and nonverbal communication.
 Culture is adaptive - dynamic. Although a r...
Cultural Integrations
• Acculturation: constant intercourse of two or more
different cultures leads to changes in the orig...
Cultural Values Analysis
 Rokea set of Values
 Terminal values - a comfortable life - the
excitement
○ equality - pleasu...
Men and Women
 Who is the purchase decision maker
 Syria, Nigeria, Hyderabad, Sri Lanka
 Metro sexual – Men (sharing tr...
 High context cultures – Japanese, Indian
 Context is equally important as words
 Body language, a person's status, and...
The Elements of Culture
 Language – Verbal, Written, Multi Lingual,
Mono Lingual
 Religion – Secular, Dominant Religion,...
Language
 Mark Zuckerberg CEO of FB addressed
30 mins in Pure Mandarin to the
Chinese Students of Tsinghua Lab.
 Why?
 ...
Calculations
 One Click on Face Book advertisement
assume = 0.01 $
 One click per person per month.
 600 mn X 0.01$ = 6...
Ecological Environment
 Nature and All living beings
 Ecological diversity, Bio-diversity
 Natural resource management
...
Technological Environment
 Technology is changing always
 Marketers have to be vigilant about it
and adapt to change
 I...
Elements of Technological
Environment
 Internet Penetration
 9.7bn $ budget for broadband in India
 Demography of Inter...
Obsoletion
 What happened to typewriters,
records, audio and video cassettes,
analogue phones
 What happened to standard...
Internet Usage Infographics
The Challenge
 A Key Challenge For International
Marketers Is To Develop A Good
Understanding Of The International
Busine...
International Marketing
Today
 For US-based companies, 75% of sales
potential is outside the US.
 About 90% of Coca-Cola...
Quote…
 In his famous book “Rich Dad, poor
Dad” Guy Kawashaki quotes The
Founder of McDonald’s as
 “They think I do Hamb...
Conclusion
 Understanding, Adapting and
Manipulating the Environmental Factors
are the basis of a Successful Marketing
in...
Composition and Direction
 Increasing Share of Gross National
Income
 Less percentage of World Trade
 Oceanic Trade
 I...
Increasing Share of Gross
National Income
 In 1990-91, share of India’s foreign trade
(import export) in net national inc...
Less Percentage of World
Trade:
 Share of India’s foreign trade in world
trade has been declining. In 1950-51,
India’s sh...
Oceanic Trade:
 Most of India’s trade is by sea, India has
very little trade relations with its
neighboring countries lik...
Increase in Volume and Value
of Trade:
 Since 1990-91, volume and value of
India’s foreign trade has gone up. India
now e...
Change in the Composition
of Exports:
 Since independence, composition of export
trade of India has undergone a change. P...
Change in the Composition
of Imports:
 Since Independence, composition of
India’s import trade has also witnessed a
sea c...
Attracting FDI
Rank Country
Inflows
(million USD)
Inflows (%)
1 Mauritius 50,164 42.00
2 Singapore 11,275 9.00
3 USA 8,914...
Conclusion
 India has been dramatically increased
its global Marketing share since trade
liberalization
 Service sector ...
References
 Philip Kotler., Marketing Management,
12th Edition.,
 http://www.yourarticlelibrary.com/foreign-
trade
 htt...
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International Marketing Environment

  1. 1. S.Thiruchenduran MSC FT Post Graduate and Research Center PJTSAU Hyderabad
  2. 2. Questions?  Why these differences in Trades?  How many State Visits does Office bearing PM of India HE Narendra Modi had?
  3. 3.  9  5of them are Asian countries. “Neighborhood first and act east policy”  2015 Jan Sri Lanka
  4. 4.  Introduction  International Marketing Environment  Importance of IME in Business Management  WTO in IME  Summary
  5. 5. Introduction  “Global village“, “World economy“, “Globalization” fashionable terms.  These terms talk about a new market place  World Economic growth renders every corner of the earth as a potential market  Goods and service 4 trillion $ (WTO,2013)  Marketing goods and services on a global scale can happen in an "engineered" way.  Fruit Pulp from Denmark, Processed and Packed in Sri Lanka , Exported to India under ISFTA by an Indian company.
  6. 6. Understanding the IME important in…  Identify Customer Values  Communicate Values  Deliver Values  Capture Values
  7. 7. Definition IME  The international marketing environment is a complex constellation of demands and constraints which the firm faces as it attempts to compete and grow in an international arena. (Matino Gogolova, 2008)  All the Factors effecting the International Business in an International Market Place are called International Marketing Environment
  8. 8. Elements of the IME 7 Political/legal forces Economic forces 1 2 Environmental uncontrollables country market A Competitive structure Competitive Forces Level of Technology Price Product Promotion Channels of distribution Geography and Infrastructure Foreign environment (uncontrollable) Structure of distribution Economic climate Cultural forces 3 4 5 6 7 Political/ legal forces Domestic environment (uncontrollable) (controllable)
  9. 9. Internal environment status Corporate Culture Staff Relationships Resource Constraints Internal Environment Behavior in dealing with the environm ent
  10. 10. Internal Environment (5M)  Management (Leadership)  Man(Human Resource)  Machine(Technological Advances)  Material(Resources)  Money(Financial Resources)
  11. 11. External Environment  Micro  Customer, Competitor, Supplier, Intermediaries, Public  Macro  PEST-LEED
  12. 12. Micro Environment  Micro environment is much closer to the marketer than the macro environment  It directly deals with the operational environment  It comprises of ○ Suppliers ○ Intermediaries ○ Competitors- Direct and Indirect ○ Customers of a business/marketer ○ Publics
  13. 13. Operational/ Micro Environment Micro Environment Intermediaries Competitors Suppliers Customers Publics
  14. 14. Macro (External) Environment  External environment is the elements in the periphery of the business.  These elements are in the larger picture and the marketer has no control over them
  15. 15. External Environment (PEST- LEED)  Political Environment  Economic Environment  Socio-Cultural Environment  Technological Environment  Legal Environment  Ecological Environment  Ethical Environment  Demographic Environment
  16. 16. Economic Environment  Important element of all  “With money everything is possible(well most of the things)” – For the marketer  World Economic growth renders every corner of the earth as a potential market
  17. 17. Changes of International Economic Environment  Capital movements rather than trade have become the driving force of the world economy. ○ Goods and service 4 trillion $ (WTO,2013) ○ but London FOREX EUR/USD 400 billion$ each day world wide 250 trillion $ per year  The world economy dominates the scene. The macroeconomics of individual countries no longer control economic outcomes.  The real secret of the economic success of Germany and Japan is the fact that business leaders and policy makers focus on the world economy and world markets; a top priority for government and business in both Japan and Germany has been their competitive position in the world  The growth of commerce via the Internet diminishes the importance of national
  18. 18. Economic System  Market Economy  Consumers “write” the economic plan by deciding what will be produced by whom. The market system is an economic democracy— citizens have the right to vote with their vallets for the goods of their choice.  The role of the state in a market economy is to promote competition and ensure consumer protection.  The United States, most Western European countries, and Japan-the triad countries that account for three quarters of gross world product-are examples of predominantly market economies.
  19. 19. Economic System  Command Economy  The state has broad powers to serve the public interest. These include deciding which products to make and how to make them. Consumers are free to spend their money on what is available, but decisions about what is produced and, therefore, what is available are made’ by state planners. Because demand exceeds supply, the elements of the marketing mix are not used as strategic variables. Earlier USSR India and China. Cuba
  20. 20. Economic System  Mixed  There are, in reality, no pure market or command allocation systems among the world’s economies. All market systems have a command sector, ‘and all command systems have a market sector; in other words, they are “mixed.”  32% of GDP in the United States Planned Allocation  64% in Sweden
  21. 21. Development stages of Market  GNP is used to categories markets in IME  Low Income Countries  less than $786 per capita  37 percent of the world population but less than 3 percent of world GNP (Rich get Richer, Poor gets Poor)  Limited industrialization and a high percentage of the population engaged in agriculture and subsistence farming  High birthrates  Low literacy rates  Heavy reliance on foreign aid  Political instability and unrest
  22. 22. Development stages of Market  Concentration in Africa, south of the Sahara  Bangladesh, GNP per capita is $366 (Cheap labour)  LIRNEasia – Learning Initiative (2007), Pro Poor (2014)  Lower Middle Income Countries  More than $786 and less than’ $3,125, 39percent of the world population but only 11 percent of world GNP.  These countries are at the early stages of industrialization.  Indonesia, Sri Lanka
  23. 23. Development stages of Market  Upper Middle Income Countries  Industrializing countries  Between $3,126 and $9,6$5  Most of the Countries  Malaysia – “Truly Asia”
  24. 24. Development stages of Market  High Income Countries  Advanced, industrialized, postindustrial,  GNP per capita above $9,655  16 percent of world population but 82 percent of world GNP.  Basket cases  A basket case is a country with economic, social, and political problems that are so serious they make the country unattractive for investment and operations.  Ethiopia, Mozambique  Civil struggles, Terrorist prone,  What you will market to Basket Countries?
  25. 25. Income and PPP in IME  A market can be also defined as a group of people willing and able to buy a particular product.  For some products, particularly those that have a very low unit cost - cigarettes, for example population is a more valuable predictor of market potential than income.  For the vast range of industrial and consumer products in international markets today, the single most valuable and important indicator of potential is income.  The per capita GNP for Brazil and Chile are similar, $4,986 and $5,822, respectively. However, the PPP per capita GNP is quite different, $5,536 and $12,035, respectively. The typical” consumer in Chile has more than twice the purchasing power than the Brazilian consumer.
  26. 26. Economic Reality  Wealth and income are concentrated regionally, nationally, and within nations. The implications of this reality. Are crucial for the global marketer. A company that decides to diversify geographically can accomplish this objective by establishing operations in a handful of national markets.
  27. 27. Economic Reality
  28. 28. Location of Population With high PPP  The 10 most populous countries in the world accounted for 59 percent of world income, and the 5 largest accounted for 48 percent.  US, Japan, Russian Federation, China, India.
  29. 29. GDP  A general quick indicator of Economic Environment  India 1870bn$ China 9181 bn$ (WTO, 2013)  Can be misleading.  What is the nation which almost doubled it’s GDP in one night?  How?
  30. 30. Answer  Nigeria  2014 GDP is 509bn $  By shifting the base year from 1990 to 2010.
  31. 31. Results  Africa’s Largest Economy  World #26  Inflow of Investments  Nestle, Heiniken, Standard Bank, MTB Ngozi Okonjo-Iweala
  32. 32. Other Economic environment Indices  Currency floating (Open/fixed) issue.  Balance of Payment (BOP) status  Economy base (Import/Export).  Rate of Economic Growth.  Occupational Pattern.  State of Inflation.  Trade Patterns
  33. 33. International Trading Environment – Barriers  Tariffs  Duties imposed when goods or services cross the border  Non-Tarrifs  Developing Countries - Licensing, Quotas  Developed Countries – Voluntary export restrains
  34. 34. Quota  Export Quota (Protect Local consumer), Import Quota (Protect Local producer)  Quotas are implemented through licensing. (limited number of licenses issued for Importers and exporters)
  35. 35. Voluntary Export Restrains  Exporting country voluntarily restricts its export to a country to protect the interest of the importing country.  To reduce trade deficits
  36. 36. Levels of EI  Free Trade Area/Agreement  Customs Union  Common Market  Economic Union  Economic and Monetary Union
  37. 37. FTA  Free Trade Area is a group of countries that have agreed to abolish all internal barriers to trade among themselves.  ASEAN, NAFTA, EU-EFTA, GCC (Oman-UAE)  Free Trade Agreement is a bilateral or multi lateral agreement which the signatories agrees to trade certain goods and services without barriers.  FTA for Professional Services in ISLFTA  PSLFTA, CSLFTA
  38. 38. ISFTA  1998 December  4227 2802  Quotas Zero Duty Tea 15mn Kg/yr , 8mn pieces of garments , 2500 MT Pepper
  39. 39. Customs Union  Countries group together and form a single entity which has  Same a Tariff rates with non members  Commercial Sovereignty is lost for Individual country  It also includes Free Trade Area among members  South African Customs Union (SACU)
  40. 40. Common Market  Total elimination of Internal tarrifs  Common external tariffs  Goods as well as services  It includes Customs Union  E.g: European Economic Area, EFTA, Common Economic Space(CEA)
  41. 41. Economic Union  Is a type of trade bloc which is composed of a common market with a customs union. The participant countries have both common policies on product regulation, freedom of movement of goods,services and the factors of production (capital andlabour) and a common external trade policy.  E.g. Russia-Belarus, Monaco-EU, CARICOM
  42. 42. Economic and Monetary Union  Economic Union With single currency.  E.g: East Caribbean Currency Union, EU
  43. 43. Other Economic Integration  Commodity Agreement – Food for Oil Iraq USA  Quota Agreement – Fixed price commodity trading.  Buffer Stock Agreement – Stabilizing commodity prices  Cartels – OPEC, IATA  Trade blocks and Intra Regional Trade – ASEAN, SAARC
  44. 44. EI and IME  Create conducive Marketing Environment through  Lifting barriers  Freedom of movement  Huge market access  Single trade negotiations  Single rules and tariffs  Single Currency
  45. 45. Political Environment  German law, “verpackungerordun”, has forced manufacturers to eliminate nonessential packaging materials that cannot be recycled and to adopt other innovative approaches to producing and packaging products.  Companies are developing new packaging that uses less material and includes more recycled content. More than 1,900 non- German companies are currently participating in the program.
  46. 46. Political Environment  The German packaging law is one example of the impact that political, legal, and regulatory environments can have on marketing activities
  47. 47. Political Environment  National Interests  National Controls  Political system  Activities of political parties  Labor movement  Foreign Relations
  48. 48. National Interest  Make in India  Refreshingly Sri Lanka  God’s Own Country  Act East  Eradicating Micro-Nutrient Deficiency  Mangalyan  Economic, Technological, IT, Business, Agriculture
  49. 49. Foreign Relations Hmmm “There are no permanent friends, only permanent interests”
  50. 50. Elements to Consider  Governing Parties Attitude towards  Sovereignty  Political Instability  Threat of equity dilution  Expropriation
  51. 51. Sovereignty  Supreme and Independent Political authority.  Developing countries exercise Protectionism with extreme laws and regulations to encourage domestic economic development  Changes in policies are frequent and risk for investment  Developed countries consider any practice against free trade is illegal.  Changes in policies are less frequent and considered less risky
  52. 52. Risks under Sovereignty  Taxes  Dilution of Equity Control  Expropriation  Confiscation
  53. 53. Taxes  Taxing policies will vary with the ruling party’s monetary policies.  Companies usually avoid taxes by shifting its operation base to suitable countries.  Bangladesh, Sri Lanka
  54. 54. Dilution of Equity  Host nation governments sometimes attempt to control ownership of foreign owned companies operating within their borders. In underdeveloped countries, political pressures frequently cause companies to take in local partners.
  55. 55.  Expropriation  Governmental action to dispossess a company or investor.  Confiscation  Government’s taking ownership of a property without compensation
  56. 56. Political Instability  Social Unrest  Social disorder is caused by such underlying conditions as economic hardship, internal dissension and insurgency, and ideological, religious, racial, and cultural differences.  Lebanon, Greece, Sri Lanka, Telangana  Attitudes of Nationals  Negative attitudes towards the firms home country.  Anti US, Anti China, Anti Pakistan, Anti NGOs  Labour movements  Student movements  For the best long-term interests of the company, it is wise not to become involved in political disputes among local groups or between countries.
  57. 57. Three Groups  Common Law  Civil Law  Theocratic Law
  58. 58. Legal Environment  The international legal environment  International Court of Justice  International Criminal Court  How these laws and conventions are Rectified in Constitutions  Export controls  WTO, Agreements  Investment Controls  Legal systems  New Sharia Laws – Women selling to women in KSA  Consumer Protection Laws  Environmental Laws  Anti Dumping acts  National Treatment by Law
  59. 59. Settlement of Disputes  Some are settled by WTO.  Judicial dispute settlement.  Extra judicial Dispute settlement.
  60. 60. Culture 1. Atificial man-made environment - no human society is without culture 2. Complex material, institutional and spiritual creations used to satisfy human need 3. Personality of the group  As the second definition suggests, culture is characterized by human creations of cultural elements. From a marketing perspective we are trying to capture a unifying or differentiating power of cultural elements on the purchasing behaviour of consumers.
  61. 61. Cultural Characteristics  The effects of culture are linked to the relevant factors that may affect the marketing approaches to customers.¨  Culture is learned.  Culture is not inherited issues - genetic, not innate.  Culture must be learned. The process of acquiring culture is called enculturation. It can be consciously and subconsciously. (nationality, religion)  Culture is transmitted from generation to generation. Cultural factors have a great momentum in its effect on consumer behavior. A clear manifestation of a cultural tradition. Another important feature is the maintenance of cultural continuity, which makes signs and returns the response in retromarketin
  62. 62. Cultural Characteristics  Culture is shared. It is a common concern groups and therefore consumer groups. The similarity in consumer culture leads to the application of the same marketing approach in a given cultural environment. Considering the cultural similarities is to decide what size, what criteria used for evaluationof cultural homogeneity.  Culture is different. The content varies with the culture of the area. Cultural environment is different in content, there are differentiated culture. At the same time, there are distinctive in parallel cultures.
  63. 63. Cultural Characteristics  From a marketing perspective, it is essential that manifests itself in different cultures, different consumer behavior. As an example for the relationship to cosmetics - French women acceding to more coherent than Scandinavian women.  Levi Strauss. Jeans in  France - sexy direction,  UK - Theme of cowboys and the Wild West  Japan - Topic Heroes.  Fox Brand – Fox And Deer Story
  64. 64. Culture is Contagious Culture spreads in verbal and nonverbal communication.  Culture is adaptive - dynamic. Although a relatively inertial effect that does not mean that it does not change.  Early understanding of cultural change brings:  The potential competitive advantage  Decrease the potential weaknesses of the company ("green behaviour"), India follows US in style. India is not sensitive to Gluten. Marketers are pro active and market with the name gluten free  The cultural change can be understood as a change in some cultural elements with subsequent changes in social behavior.  Endogenous or internal changes - cultural innovation is based on the invention. (I-phone Proposal)  Exogenous or external cultural changes.
  65. 65. Cultural Integrations • Acculturation: constant intercourse of two or more different cultures leads to changes in the original cultural patterns. Sri Lankan Tamils, Sri Lankan Muslims  Cultural diffusion: the dispersion from the original culture center  Arabian culture diffused to all other regions  Bhudism from India to Easter par of the world  Social networking culture – US to Everywhere  Direct migration Aggression - forcing the cultural elements  Forcing to wear certain dress code as a rule Stimulation - In culture, there is a need of reception - cultural elements that are part of other cultures
  66. 66. Cultural Values Analysis  Rokea set of Values  Terminal values - a comfortable life - the excitement ○ equality - pleasure -safety - freedom - happiness  Instrumental values: ambition - thoughtfulness - cleanliness - honesty – obedience  Hofstede's value  Distribution of power  Individuality  Masculinity  Uncertainty avoidance  Long-term orientation
  67. 67. Men and Women  Who is the purchase decision maker  Syria, Nigeria, Hyderabad, Sri Lanka  Metro sexual – Men (sharing traditional house chores)  Working Women  Fundamentalism  New Traditionalism – MBA/MSC/PhD House wives   How many of you?
  68. 68.  High context cultures – Japanese, Indian  Context is equally important as words  Body language, a person's status, and tone of voice  Low context cultures – US  Words is the major means of communication (Hall, 1976)
  69. 69. The Elements of Culture  Language – Verbal, Written, Multi Lingual, Mono Lingual  Religion – Secular, Dominant Religion, Mono Religious society.  Aesthetics  Manners and Customs  Education  Attitudes and values  Social organization  Demographic
  70. 70. Language  Mark Zuckerberg CEO of FB addressed 30 mins in Pure Mandarin to the Chinese Students of Tsinghua Lab.  Why?  Does he loves Mandarin?  Every internet user is his potential customer.  One third of them are from China. 0.6bn.
  71. 71. Calculations  One Click on Face Book advertisement assume = 0.01 $  One click per person per month.  600 mn X 0.01$ = 6mn$ per Month  Not Amazing Isn’t it???  Talk Mandarin walk Mandarin even sleep Mandarin…. To tell it in slang English 
  72. 72. Ecological Environment  Nature and All living beings  Ecological diversity, Bio-diversity  Natural resource management (Sustainable)  Pollution  Health effects  Waste management  Environmental Impact Assessment  Environmental Friendly Attitude
  73. 73. Technological Environment  Technology is changing always  Marketers have to be vigilant about it and adapt to change  Innovations are faster than implementations.  Some innovations make products and processors improve dynamically and some times they even replaces the old products and make them obsolete
  74. 74. Elements of Technological Environment  Internet Penetration  9.7bn $ budget for broadband in India  Demography of Internet Usage  Electricity Usage  Infrastructure  2G, 3G, 4G  Satellite subscriptions (One communication satellite for South Asia)  Electronic Payments  E-banking
  75. 75. Obsoletion  What happened to typewriters, records, audio and video cassettes, analogue phones  What happened to standard post with email and SMS  What will happened to CDs  Nano technology  Genetic engineering  Robots doing dangerous factory processors
  76. 76. Internet Usage Infographics
  77. 77. The Challenge  A Key Challenge For International Marketers Is To Develop A Good Understanding Of The International Business Environment.  EPG model is one way  Ethnocentric (Based on Ethnicity)  Polycentric (political orientations and alliances India-Fiji)  Geo-centric (Based on Geography)
  78. 78. International Marketing Today  For US-based companies, 75% of sales potential is outside the US.  About 90% of Coca-Cola’s operating income is generated outside the US.  For Japanese companies, 85% of potential is outside Japan. (Toyota)  For German and EU companies, 94% of potential is outside Germany.
  79. 79. Quote…  In his famous book “Rich Dad, poor Dad” Guy Kawashaki quotes The Founder of McDonald’s as  “They think I do Hamburger Business but what I really do is Real Estate Business”  Correct Environment is Half The Success.  My Case
  80. 80. Conclusion  Understanding, Adapting and Manipulating the Environmental Factors are the basis of a Successful Marketing in Business  Internal Factors as well as the External Factors are too Important  The difference between Domestic and International Marketing is the Extent of Variation in External Factors.
  81. 81. Composition and Direction  Increasing Share of Gross National Income  Less percentage of World Trade  Oceanic Trade  Increase in Volume and Value of Trade  Change in the Composition of Export  Change in the Composition of Imports
  82. 82. Increasing Share of Gross National Income  In 1990-91, share of India’s foreign trade (import export) in net national income was 17 per cent  In 2006-07 rose to 25 per cent. Exports and imports as percentage of GDP were 14.0 per cent and 21 per cent respectively.  21% growth in Exports from 2005-2014  16% growth in Imports
  83. 83. Less Percentage of World Trade:  Share of India’s foreign trade in world trade has been declining. In 1950-51, India’s share in total import trade of the world was 1.8 per cent and in export trade it was 2 per cent.  According to World Trade Statistics, India’s share in world trade has gone-up from 1.4 per cent in 2004 to 1.5 per cent in 2006. 1.7 in 2013
  84. 84. Oceanic Trade:  Most of India’s trade is by sea, India has very little trade relations with its neighboring countries like Nepal, Afghanistan, Myanmar, Sri Lanka, etc.  68 % of India’s trade is oceanic trade  Share of these neighboring countries in India’s export trade was 21.8 per cent and in import trade 19.1 per cent. 2014
  85. 85. Increase in Volume and Value of Trade:  Since 1990-91, volume and value of India’s foreign trade has gone up. India now exports and imports goods which are several times more in value and volume.  In 1990-91, total value of India’s foreign trade was Rs 75,751 and in 2008-09, it rose to Rs 22, 15,191 crore. Of it, value of exports was Rs 8, 40,755 crore and that of imports was Rs 13, 74,436 crore
  86. 86. Change in the Composition of Exports:  Since independence, composition of export trade of India has undergone a change. Prior to independence, India used to export agricultural products and raw materials, like , cotton, tea, oil seeds, leather, food grains, cashew nuts, and mineral products. It also exported manufactured goods.  But now in its export included mostly manufactured items like, machines, ready- made garments, gems and jewellery, tea, jute manufactures, Cashew Kernels, electronic goods, especially hardware’s and software’s which occupy prime place in exports.
  87. 87. Change in the Composition of Imports:  Since Independence, composition of India’s import trade has also witnessed a sea change.  Prior to Independence, India used to import mostly consumption goods like medicines, cloth, motor vehicles, electrical goods, iron, steel, etc.  Now it has been importing mostly petrol and petroleum products, machines, chemicals-, fertilizers, oil seeds, raw materials, steel, edible oils, etc.
  88. 88. Attracting FDI Rank Country Inflows (million USD) Inflows (%) 1 Mauritius 50,164 42.00 2 Singapore 11,275 9.00 3 USA 8,914 7.00 4 UK 6,158 5.00 5 Netherlands 4,968 4.00
  89. 89. Conclusion  India has been dramatically increased its global Marketing share since trade liberalization  Service sector is rapidly increasing its share in International Marketing of India  Current government policy indicates that India will be a global manufacturing powerhouse in future.
  90. 90. References  Philip Kotler., Marketing Management, 12th Edition.,  http://www.yourarticlelibrary.com/foreign- trade  http://stat.wto.org/CountryProfile

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