EPRG frame work
The foreign marketing involvement of a manufacturing company may widely vary from a state of
no direct involvement to a state of total involvement. Several types of involvement are generally
observed, even though they are not mutually exclusive nor sequentially progressive.
Depending on the kind and degree of its involvement in foreign marketing, a firm has to re-
orient and re-organize its activities to cope with different levels of operational responsibilities
inherent in such involvement. To throw some light on the issue, some guidelines are available
from what is called EPRG orientation. The EPRG framework attempts, four broad types of
orientation of a firm towards foreign marketing. They are:
1. ETHNOCENTRIC ORIENTATION :
The ethnocentric orientation of a firm considers that the products, marketing strategies and
techniques applicable in the home market are equally so in the overseas market as well. In such
a firm, all foreign marketing operations are planned and carried out from home base, with little
or no difference in product formulation and specifications, pricing strategy, distribution and
promotion measures between home and overseas markets. The firm generally depends on its
foreign agents and export-import merchants for its export sales.
2. REGIOCENTRIC ORIENTATION :
In regiocentric approach, the firm accepts a regional marketing policy covering a group of
countries which have comparable market characteristics. The operational strategies are
formulated on the basis of the entire region rather than individual countries. The production and
distribution facilities are created to serve the whole region with effective economy on operation,
close control and co-ordination.
3. GEOCENTRIC ORIENTATION :
In geocentric orientation, the firms accept a world wide approach to marketing and its
operations become global. In global enterprise, the management establishes manufacturing and
processing facilities around the world in order to serve the various regional and national markets
through a complicated but well co-ordinated system of distribution network. There are
similarities between geocentric and regiocentric approaches in the international market except
that the geocentric approach calls for a much greater scale of operation.
4. POLYCENTRIC OPERATION :
When a firm adopts polycentric approach to overseas markets, it attempts to organize its
international marketing activities on a country to country basis. Each country is treated as a
separate entity and individual strategies are worked out accordingly. Local assembly or
production facilities and marketing organisations are created for serving market needs in each
country. Polycentric orientation could be most suitable for firms seriously committed to
international marketing and have its resources for investing abroad for fuller and long-term
penetration into chosen markets. Polycentric approach works better among countries which have
significant economic, political and cultural differences and performance of these tasks are free
from the problems created primarily by the environmental factors.
The involvement decision is conditioned by a variety of internal and external factors such as
firms' export policy, resources and product range, volume of export business, regulatory and
procedural conditions to be fulfilled both from exporting and importing angle.
From the foregoing, it will be evident that the scope of international marketing for a firm will be
determined by its decisions regarding the means of entry into foreign markets as well as by the
kind of involvement the firm wishes to have in its international marketing operations. It cannot
be said that one kind of operation/orientation is better than the other, as each has its own
advantage and disadvantage depending on the operating environmental factors.
However, a firm can adopt a policy of common or differential approaches in respect of different
marketing decision areas.
In practice, planning the ethnocentric approach is found to be most common when overseas
volume is insignificant, compared to the total sales turnover, or if the firm does not want to go
for higher volume of overseas sales for some reason. Since little or no investment is needed,
ethnocentric oriented firms have the least risk.
An exporting company's international operation involves the following strategies.
1. Ethno centric Operational strategy : (with the help of overseas Agents) Product
formulation, Product specification, Pricing strategy, Distribution Promotional measures
2. Regio Centric Operational strategy : Catering to a group of Countries having similarity
in Marketing in market characteristic
3. Geo Centric Operational strategy : Creating globally through well Co-Ordinated Net
4. Poly centric operational strategy : Creating to Country to country basis
There are various modes of entry available to a firm to enter international markets. A firm may
have a production facility in its home country or locate it in a foreign country. It has to choose
the alternative most suited to its needs and requirements.
The removal or reduction of restrictions or barriers on the free exchange of goods between
nations. This includes the removal or reduction of both tariff (duties and surcharges) and
non-tariff obstacles (like licensing rules, quotas and other requirements). The easing or
eradication of these restrictions is often referred to as promoting "free trade."
Role of MNC’s
According to an ILO repot, ―the essential nature of multinational enterprises lies in the
fact that its managerial headquarters are located in one country (home country) while
enterprises carries out operations in number of other countries as well. (host countries).
Dominance of MNC’s
Through liberalization there has been expansion & growth of MNC‘s. The GDP has
increased from about 5% in beginning of 1980‘s to nearly 7% at end of 1990‘s. The
MNC‘s are estimated to employ directly, at home and abroad around 73 billion people.
For example, the US footwear company Nike currently employees 9000 people, while
nearly 75,000 people are employed by its independent sub-contractors located in
Merits of MNC’s
The important arguments in favour of MNC‘s are given below:-
MNC‘s help the host countries in following ways:-
1) MNC‘s help to increases the investment level & thereby the income & employment in
2) The transnational corporations have become vehicles for the transfer technology,
especially to developing countries.
3) They also kind a managerial revolution in host countries through professional
management and employment of highly sophisticated management techniques.
4) The MNCs enable that host countries to increases their exports & decreases their
5) They work to equalize cost of factors of production around the world.
6) MNC‘s provide and efficient means of integrating national economies.
7) The enormous resources of multinational enterprises enable them to have very
efficient research & development systems. Thus, they make a commendable contribution
to inventions & innovations.
8) MNC‘s also stimulate domestic enterprise because to support their own operations,
the MNC‘s may encourage & assist domestic suppliers.
9) MNC‘s help to increase competition & break domestic monopolies.
1) MNC‘s may destroy competition & acquire monopoly powers.
2) The transfer pricing enables MNC‘s to avoid taxes by manipulating prices on intra-
3) Through their power and flexibility , MNC‘s can evade national economic autonomy &
control, and their activities may be inimical to national income interests of particular
4) MNCs retard growth of employment in home country.
5) MNCs technology is designed for world-wide Profit maximization, not the development
needs of poor countries. In general, it is asserted, the imported technologies are not
adopted to (a) Consumption needs (b) size of domestic markets (c) resource
availabilities (d) stage of development of many of developing countries.
Internal environment and External environment
Internal Environment of Marketing :
This refers to factors existing within a marketing firm. They are also called as controllable
factors, because the company has control over these factors : a) it can alter or modify factors as
its personnel, physical facilities, organization and function means, such as marketing mix, to suit
There are many internal factors that influence the marketing function, they are :
Top Management : The organizational structure, Board of Director, professionalization of
management..etcFactors like the amount of support the top management enjoys from different
levels of employees, shareholders and Board of Directors have important influence on the
marketing decisions and theirimplementation.
Finance and Accounting: Accounting refers to measure of revenue and costs to help the
marketing and to know how well it is achieving its objectives. Finance refers to funding and
using funds to carry out the marketing plan. Financial factors are financial polices, financial
position and capital structure.
Research and Development : Research and Development refers to designing the product safe
and attractive. They are technological capabilities, determine a company ability to innovate and
Manufacturing : It is responsible for producing the desired quality and quantity of products.
Factors which influence the competitiveness of a firm are production capacity technology and
efficiency of the productive apparatus, distribution logistics etc.,
Purchasing : Purchasing refers to procurement of goods and services from some external
agencies. It is the strategic activity of the business.
Company Image and Brand Equity : The image of the company refers in raising finance, forming
joint ventures or other alliances soliciting marketing intermediaries, entering purchase or sales
contract, launching new products etc.
In organization, the marketing resources like organization for marketing, quality of marketing,
brand equity and distribution network have direct bearing on marketing efficiency. They are
important for new product introduction and brand extension, etc..
External Environment of Marketing.
External factors are beyond the control of a firm, its success depends to a large extent on its
adaptability to the environment.
The external marketing environment consists of :
a) Macro environment, andb) Micro environment
a) Micro environment: The environmental factors that are in its proximity. The factors
influence the company‘s non-capacity to produce and serve the market. The factors are :
1) Suppliers: The suppliers to a firm can also alter its competitive position and marketing
capabilities. These are raw material suppliers, energy suppliers, suppliers of labor and capital.
According to michael Porter, the relationship between suppliers and the firm epitomizes a power
equation between them. This equation is based on the industry condition and the extent to
which each of them is dependent on the other.
The bargaining power of the supplier gets maximized in the following situations:
a) The seller firm is a monopoly or an oligopoly firm.
b) The supplier is not obliged to contend with other substitute products for sale to the buyer
c) The buyer is not an important customer.
d) The suppliers‘ product is an important input to the buyer‘s business and finished product.
e) The supplier poses a real threat of forward integration.
2) Market Intermediaries : Every producer has to have a number of intermediaries for
promoting, selling and distributing the goods and service to ultimate consumers. These
intermediaries may be individual or business firms. These intermediaries are middleman
(wholesalers, retailers, agent‘s etc. ), distributing agency market service agencies and financial
3) Customers : The customers may be classified as :
1) Ultimate customers: These customers may be individual and householders.
2) Industrial customers: These customers are organization which buy goods and services for
producing other goods and services for the purpose of other earning profits or fulfilling other
3) Resellers: They are the intermediaries who purchase goods with a view to resell them at a
profit. They can be wholesalers, retailers, distributors, etc.
4) Government and other non-profit customers: These customers purchase goods and services
to those for whom they are produced, for their consumption in most of the cases.
5) International customers: These customers are individual and organizations of other countries
who buy goods and services either for consumption or for industrial use. Such buyers may be
consumers, producers, resellers, and governments.
6 )Competitors: Competitors are those who sell the goods and services of the same and similar
description, in the same market. Apart from competition on price, there are like product
differentiation. Therefore, it is necessary to build an efficient system of marketing. This will bring
confidence and better results.
7) Public: It is duty of the company to satisfy the people at large along with its competitors and
the consumers. It is necessary for future growth. The action of the company do influence the
other groups forming the general public for the company. A public is defined as ‗any group that
has an actual or potential interest in or impact on a company‘s ability to achieve its objective.‘
Public relations are certainly a broad marketing operation which must be fully taken care of.
Macro environment factors act external to the company and are quite uncontrollable. These
factors do not affect the marketing ability of the concern directly but indirectly the influence
marketing decisions of the company.
These are the macro environmental factors that affect the company‘s marketing decisions :
a) Demographic Forces: Here, the marketer monitor the population because people forms
markets. Marketers are keenly interested in the size and growth rate of population in different
cities, regions, and nations ; age distribution and ethnic mix ; educational levels; households
patterns; and regional characteristics and movements.
b)Economic Factors: The economic environment consists of macro-level factors related to
means of production and distribution that have an impact on the business of an organization.
c) Physical Forces: Components of physical forces are earth‘s natural renewal and non-
renewal resources. Natural renewal forces are forest, food products from agriculture or sea etc.
Non- renewal natural resources are finite such as oil, coal, minerals, etc. Both of these
components quite often change the level and type of resources available to a marketer for his
d) Technological Factors: The technological environment consists of factors related to
knowledge applied, and the materials and machines used in the production of goods and
services that have an impact on the business of an organization.
e) Political and Legal Forces: Developments in political and legal field greatly affect the
marketing decisions. sound marketing decision cannot be taken without taking into account, the
government agencies, political party in power and in opposition their ideologies, pressure
groups, and laws of the land. These variables create tremendous pressures on marketing
management. Laws affect production capacity, capability, product design, pricing and promotion.
Government in almost all the country intervenes in marketing process irrespective of their
f) Social and Cultural Forces: This concept has crept into marketing literature as an
alternative to the marketing concept. The social forces attempt to make the marketing socially
responsible. It means that the business firms should take a lead in eliminating socially harmful
products and produce only what is beneficial to the society. These are numbers of pressure
groups in the society who impose restrictions on the marketing process.
Foreign market Selection
1. Determine Export Marketing Objectives: Before entry in overseas market, the exporter
must list out export marketing objectives. The export marketing objectives may be as follows:
• Increase in market share.
• Increase in profits.
• Building firm‘s goodwill, etc.
2. Collection of Information: The exporter must collect relevant information from the
overseas markets. The information may be in respect of the following:
• Demand for the product.
• Nature of consumers.
• Political situation.
• Import regulations.
• Infrastructure facilities, etc.
3. Analysis of Information: The exporter has to analyze the collected information in respect of
overseas markets. Such analysis is required to shortlist the overseas markets. For instance, the
exporter has to analyze the likes and dislikes of the buyers, the purchasing power, buying
4. Short Listing of Markets: After analysis of the overseas markets, the exporter must
shortlist the markets. The main objective of short listing is to arrive at a list of few markets/
countries, which promise good returns not only in the short term but also from the long term
point of view.
5. Detailed Investigation of Short Listed Markets: The exporter should undertake detailed
investigation of the short listed markets. The detailed investigation is in respect of competition,
demand, consumers, government policies, availability of intermediaries, etc. The exporter may
even visit the short listed overseas markets to conduct detailed investigation.
6. Selection of Markets: After detailed investigation of the short listed markets, the exporter
would then proceed to select the overseas markets. The exporter should eliminate such markets
which are subject to high rate of inflation, government instability, high trade barriers, and so on.
The exporter may select only those markets or countries, which would provide a good return
investment not only in the short run but also from the long term point of view.
7. Entry in Overseas Markets: The exporter then makes necessary arrangements to enter in
the overseas markets. He-may appoint the required sales people, and intermediaries. He should
complete all other formalities regarding the entry in overseas markets. He would then produce
the goods as per the requirements of overseas buyers.
8. Follow-up: The exporter should undertake a review of the performance in the overseas
markets. Such review would enable the exporter to know which markets are performing well,
and which ones are not. He would then find out the reasons for the same, and if there are
problems, he would try to resolve such problems, or exit from such markets that do not provide
International marketing Positioning
Positioning may refer the position a business has chosen to carry out their marketing and
business objectives. Positioning relates to strategy, in the specific or tactical development
phases of carrying out an objective to achieve a business' or organization's goals, such as
increasing sales volume, brand recognition, or reach in advertising. Its objective is to occupy a
clear, unique, and advantageous position in the consumer's mind.Example: Mercedes is
positioned for luxury segment, Volvo is positioned for safety.
The position of the brand has thus to be carefully maintained and managed.Example: when
Marlboro cut down its prices, its sales dropped immediately, as it began being associated with
the generic segment. Watches like Rolex arepositioned as luxury segment watches, thus they
being one of the most expensive have become a symbol for accomplishment in life. If Rolex
reduces its prices, it loses its perceived image and hence is in danger of losing its customers.
Different types of positioning planks /bases are used by the marketers are:-
Economy:- Product positioned toward a particular segment keeping in mind it economy.
Example-Maruti 800, Tata Nano, Nirma detergent powder etc are positioned for the economy
Gender:- Product positioned for a particular segment. Example- ScootyPept, Titan Raga.
Luxury and exclusiveness:- Product or services positioned toward luxury segment. Example-
Taj group of hotel, Mercedes Benz E-class etc.
Fashion for elite class:- Product positioned for fashionable elite class or member of the
society, who always want to stay ahead in term of fashion and demands exclusive products only.
Example Peter England, Van Heusen, Raymond etc.
Benefit:- Product positioned with beneficial features. Example- Colgate Total, clinic Plus etc.
Product Planning for Global Market
Product planning is the process of creating a product idea and following through on it until the
product is introduced to the market. Additionally, a small company must have an exit strategy
for its product in case the product does not sell. Product planning entails managing the product
throughout its life using various marketing strategies, including product extensions or
improvements, increased distribution, price changes and promotions.
Developing the Product Concept
The first phase of product planning is developing the product concept. Marketing managers
usually create ideas for new products by identifying certain problems that consumers must solve
or various customer needs. For example, a small computer retailer may see the need to create a
computer repair division for the products it sells. After the product idea is conceived, managers
will start planning the dimensions and features of the product. Some small companies will even
develop a product mock-up or model.
Studying the Market
The next step in the product planning process is studying the competition. Most small companies
will order secondary research information from vendors such as the NPD Group and Forrester
Research. Secondary research usually provides details on key competitors and their market
share, which is the percent of total sales that they hold in the marketplace. Some companies
may also do a SWOT analysis (strengths, weaknesses, opportunities and threats), according to
NetMBA.com, which will help them compare their strengths and weaknesses against those of key
competitors. The business can then determine places in which it has an advantage over the
competition to identify areas of opportunity. For example, a small company with a high-quality
image may be able to find additional markets for its products.
A small company should consider doing both qualitative and quantitative marketing research for
its new product. Focus groups are an example of qualitative information. Focus groups allow
companies to ask their consumers about their likes and dislike of a product in small groups. A
focus group allows the company to tweak the product concept before testing it through phone
surveys--a more quantitative marketing research function. Phone surveys enables a company to
test its product concept on a larger scale, the results of which are more predictable across the
If the survey results prove favorable, the company may decide to sell the new product on a
small scale or regional basis. During this time, the company will distribute the products in one or
more cities. The company will run advertisements and sales promotions for the product, tracking
sales results to determine the products potential success. If sales figures are favorable, the
company will then expand distribution even further. Eventually, the company may be able to sell
the product on a national basis.
Product Life Cycle
Product planning must also include managing the product through various stages of its product
life cycle. These stages include the introduction, growth, maturity and decline stages, according
to QuickMBA.com. Sales are usually strong during the growth phase, while competition is low.
However, continued success of the product will pique the interest of competitors, which will
develop products of their own. The introduction of these competitive products may force a small
company to lower its price. This low pricing strategy may help prevent the small company from
losing market share. The company may also decide to better differentiate its product to keep its
prices steady. For example, a small cell phone company may develop new, useful features on its
cell phones that competitors do not have.
Standardization v/s Adaption
Basis of Difference Adaptation Standardization
1) Application in Marketing Means It is supported by strong market
variety especially by market
individualism and market
Companies should apply the four
basic marketing instruments (4P5)
in the same way world wide and
ignorenational specialties in
2) Reason for Application Almost every international
company takes into account (in
higher or lower level), regional or
local conditions which are typical
to the differentiation.
MNC should think globally and
apply integration access world
3) Product Offered Altering relevant feature of the
product in significant ways for each
and every individual geographical
market in the product is sold.
Complete standardization would
involve designing a product that is
identical in every relevant way for
geographical market in which the
product will be sold.
4) Characteristics A product is differential from
competitor’s product and further
the products produced by
A standard product does not need
to have all the characteristics of the
other products buyer requires.
5) Approach Adaptation is an approach of
detailing the differentiation that
exists between products and
Standardization of product is the
approach for increasing
commonality of product in the
supply chain management.
6) Economics of Scale Unique aspects in product result in
different in quality thus increasing
cost of production and lower
economies of scale.
Commonality in products results in
higher productivity due to higher
demand, having an impact on
economies of scales which lowers
the total cost.
7) Need Satisfy a particular need of buyer.
8) End Result Show sense of value to the buyer
but they have to pay more for such
Benefits buyer by lowering price.
Marketing Mix Standardization Adaptation
Product No changes are made to
Specific changes are made to
the product/service to fit
Fixed pricing in all
Prices are determined by local
Place Uniform channel structures Adjusting distribution
Same promotion is used in all
international markets, and no
changes are made
Specific changes are made to
promotions to fit cultural
New Product Development
When teams collaborate in developing new innovations, having the following eight ingredients
mixed into your team's new product developmental repertoire will ensure that it's overall
marketability will happen relatively quick, and accurately -- making everyone productive across
Step 1: Generating
Utilizing basic internal and external SWOT analyses, as well as current marketing trends, one
can distance themselves from the competition by generating ideologies which take affordability,
ROI and widespread distribution costs into account.Lean, mean and scalable are the key points
to keep in mind. During the NPD process, keep the system nimble and use flexible discretion
over which activities are executed. You may want to develop multiple versions of your road map
scaled to suit different types and risk levels of projects.
Step 2: Screening the Idea
Wichita, possessing more aviation industry than most other states, is seeing many new
innovations stop with Step two screening. Do you go/no go? Set specific criteria for ideas that
should be continued or dropped. Stick to the agreed upon criteria so poor projects can be sent
back to the idea-hopper early on.Because product development costs are being cut in areas like
Wichita, "prescreening product ideas," means taking your top three competitors' new
innovations into account, how much market share they're chomping up, what benefits end
consumers could expect etc. An interesting industry fact: Aviation industrialists will often
compare growth with metals markets; therefore, when Boeing is idle, never assume that all
airplanes are grounded, per se.
Step 3: Testing the Concept
As GauravAkrani has said, "Concept testing is done after idea screening." And it is important to
note, it is different from test marketing.Aside from patent research, design due diligence, and
other legalities involved with new product development, knowing where the marketing messages
will work best is often the biggest part of testing the concept. Does the consumer understand,
need or want the product or service?
Step 4: Business Analytics
During the New Product Development process, build a system of metrics to monitor progress.
Include input metrics, such as average time in each stage, as well as output metrics that
measure the value of launched products, percentage of new product sales and other figures that
provide valuable feedback. It is important for an organization to be in agreement for these
criteria and metrics.Even if an idea doesn't turn into product, keep it in the hopper because it
can prove to be a valuable asset for future products and a basis for learning and growth.
Step 5: Beta/Marketability Tests
Arranging private tests groups, launching beta versions, and then forming test panels after the
product or products have been tested will provide you with valuable information allowing last
minute improvements and tweaks. Not to mention helping to generate a small amount of buzz.
Wordpress is becoming synonymous with beta testing, and it's effective. Thousands of
programmers contribute code, millions test it, and finally even more download the completed
Step 6: Technicalities and Product Development
Provided the technical aspects can be perfected without alterations to post-beta products,
heading towards a smooth Step seven is imminent.According to Akrani, in this step, "The
production department will make plans to produce the product. The marketing department will
make plans to distribute the product. The finance department will provide the finance for
introducing the new product".As an example, in manufacturing, the process before sending
technical specs to machinery involves printing MSDS sheets, a requirement for retaining an ISO
9001 certification (the organizational structure, procedures, processes and resources needed to
implement quality management).In internet jargon, honing the technicalities after beta testing
involves final database preparations, estimation of server resources, and planning automated
logistics. Be sure to have your technicalities in line when moving forward.
Step 7: Commercialize
At this stage, your new product developments have gone mainstream, consumers are
purchasing your good or service, and technical support is consistently monitoring progress.
Keeping your distribution pipelines loaded with products is an integral part of this process too, as
one prefers not to give physical (or perpetual) shelf space to competition. Refreshing
advertisements during this stage will keep your product's name firmly supplanted into the minds
of those in the contemplation stages of purchase.
Step 8: Post Launch Review and Perfect Pricing
Review the NPD process efficiency and look for continues improvements. Most new products are
introduced with introductory pricing, in which final prices are nailed down after consumers have
"gotten in." In this final stage, you'll gauge overall value relevant to COGS (cost of goods sold),
making sure internal costs aren't overshadowing new product profits. You continuously
differentiate consumer needs as your products age, forecast profits and improve delivery process
whether physical, or digital, products are being perpetuated.
Cost -Conducting a market research for a new product can be costly. For instance, you may
have to hire a research company to conduct the research for you. According to market research
firm B2B International, research costs about $20,000 for a small target market, as of 2013. For
a small business, this can be a high cost to incur.
Inaccurate Information - A biased population or a poorly formulated research can
result in false or inaccurate feedback. Plus, market research on new products developments may
only reveal customer attitudes about your new product such as the intentions to buy it.
However, these intentions may not translate to actual sales in future. Market research also
affords you a small focus group, which may give you inconclusive data about your new product.
Time Constraint -Market research involves a detailed process of collecting and analyzing
data, which is time-consuming. Also, for you to have a relevant market survey, you have to
collect and analyze the data within a given time frame; otherwise it might easily become
outdated. You also need to make quick decisions regarding the product to gain a competitive
edge over others before you lose the available market opportunity. Allocating all the market
research processes in your constrained timetable can be difficult.
Constantly Changing Markets - The period over which a market research data is
relevant may be limited because market parameters keep changing. Data collected for the
purpose of launching a new product may be outdated by the time the product is ready for a
market launch. To ensure that your research stays relevant, you need to constantly monitor
changing market conditions and update your data accordingly. If you fail to update your data,
the survey might not give a true reflection of the reality on the ground.
Management of International Brand
Brand management is a communication function that includes analysis and planning on how
that brand is positioned in the market, which target public the brand is targeted at, and
maintaining a desired reputation of the brand. Developing a good relationship with target publics
is essential for brand management. Tangible elements of brand management include the product
itself; look, price, the packaging, etc. The intangible elements are the experience that the
consumer takes away from the brand, and also the relationship that they have with that brand.
A brand manager would oversee all of these things. Branding is defined as "the process of
creating a relationship or a connection between a company's product and emotional perception
of the customer for the purpose of generating segregation among competition and building
loyalty among customers."
Packaging is more than just your product's pretty face. Packaging is the technology of enclosing
or protecting products for distribution, storage, sale, and use. Package reduces the risk of
wastage, spoilage, leakage, metage and evaporation etc. in the process of transportation and
storage. Packaging is defined in the regulations as "all products made of any materials of any
nature to be used for the containment, protection, handling, delivery and preservation of goods
from the producer to the user or consumer." Packaging can be described as a coordinated
system of preparing goods for transport, warehousing, logistics, sale, and end use.
The objective of foodstuff labeling is to guarantee that consumers have access to complete
information on the content and composition of products, in order to protect their health and their
interests. Other information may provide details on a particular aspect of the product, such as its
origin or production method. Some foodstuffs, such as genetically modified organisms, allergenic
foods, foods intended for infants or even various beverages, are also subject to specific
regulations. Labeling of certain non-food products must also contain particular information, in
order to guarantee their safe use and allow consumers to exercise real choice. In addition, the
packaging of foodstuffs must adhere to production criteria in order to avoid contaminating food
Promotional tools. Numerous tools can be used to influence consumer purchases:
Advertising—in or on newspapers, radio, television, billboards, busses, taxis, or the
Price promotions—products are being made available temporarily as at a lower price, or
some premium (e.g., toothbrush with a package of toothpaste) is being offered for free.
Point-of-purchase—the manufacturer pays for extra display space in the store or puts a
coupon right by the product
Other method of getting the consumer‘s attention—all the Gap stores in France may
benefit from the prominence of the new store located on the Champs-Elysees
Issues / Constraints on Global Communications Strategies. Although firms that seek
standardized positions may seek globally unified campaigns, there are several constraints:
Language barriers: The advertising will have to be translated, not just into the generic
language category (e.g., Portuguese) but also into the specific version spoken in the
region (e.g., Brazilian Portuguese). (Occasionally, foreign language ads are deliberately
run to add mystique to a product, but this is the exception rather than the rule).
Cultural barriers. Subtle cultural differences may make an ad that tested well in one
country unsuitable in another—e.g., an ad that featured a man walking in to join his wife
in the bathroom was considered an inappropriate invasion in Japan. Symbolism often
differs between cultures, and humor, which is based on the contrast to people‘s
experiences, tends not to travel well. Values also tend to differ between cultures—in the
U.S. and Australia, excelling above the group is often desirable, while in Japan, ―The nail
that sticks out gets hammered down.‖ In the U.S., ―The early bird gets the worm‖ while
in China ―The first bird in the flock gets shot down.‖
Local attitudes toward advertising. People in some countries are more receptive to
advertising than others. While advertising is accepted as a fact of life in the U.S., some
Europeans find it too crass and commercial.
Media infrastructure. Cable TV is not well developed in some countries and regions,
and not all media in all countries accept advertising. Consumer media habits also differ
dramatically; newspapers appear to have a higher reach than television and radio in parts
of Latin America.
Advertising regulations. Countries often have arbitrary rules on what can be
advertised and what can be claimed. Comparative advertising is banned almost
everywhere outside the U.S. Holland requires that a toothbrush be displayed in
advertisements for sweets, and some countries require that advertising to be shown there
be produced in the country.
Global advertising is generally cross cultural marketing communications planned and executed to
engage people in advertising. It entails the dissemination of a message to target audiences from
more than one country. International advertising can also be viewed as a business activity
through which a firm attempts to inform target audiences in multiple countries about itself and
its product or service offerings. In some cases the advertising message relates to the firm and
its activities, i.e. its corporate image. In other cases, the message relates to a specific product or
service marketed by the firm. In either case, the firm will use the services of an advertising
agency to determine the appropriate message, advertising copy and make the media
placement. A global campaign offers a number of advantages. In the first place, it can be an
important means of building a strong and coherent global image for the firm and/or its products
worldwide. Use of the same image in different countries builds familiarity and generates
synergies across world markets. It allows utilization of good ideas and creative talent (both of
which are scarce commodities) on a worldwide basis. In addition, use of a single campaign
provides substantial cost savings in copy development and production costs. Conversely,
development of multiple local campaigns can lead to duplication of effort, result in inconsistent
brand images across countries and confusion in consumers' minds with regard to the benefits
offered by the brand and corporate image.
In the language of sales and marketing, "personal selling" singles out those situations in which a
real human being is trying to sell something to another face-to-face. Personal selling is where
businesses use people (the ―sales force‖) to sell the product after meeting face-to-face with the
customer. The sellers promote the product through their attitude, appearance and specialist
product knowledge. They aim to inform and encourage the customer to buy, or at least trial the
product.A good example of personal selling is found in department stores on the perfume and
cosmetic counters. A customer can get advice on how to apply the product and can try different
products. Products with relatively high prices, or with complex features, are often sold using
personal selling. Great examples include cars, office equipment (e.g. photocopiers) and many
products that are sold by businesses to other industrial customers.Because selling involves
personal contact, this promotional method often occurs through face-to-face meetings or via a
telephone conversation, though newer technologies allow contact to take place over the Internet
including using video conferencing or text messaging (e.g., online chat).
Importance of personal Selling
Personal selling is an important element of promotion mix and an effective promotional tool.
Personal Selling offers the following compensation.
(i) It is a flexible tool: Personal selling involves individual and personal communication as
compared to the mass and impersonal communication of advertising and sales promotion.
Therefore, personal selling is most flexible in operation. A salesman can tailor his sales
presentation to fit the needs, motives and attitudes of individual customers can observe the
customer's reaction to a particular sales approach and thus make necessary adjustments right
on the spot. Face-to-face contact with customers is the most effective means of communication
(ii) It involves minimum wasted effort: In personal selling, a salesman can select the target
market and concentrate on the prospective customers. He need not communicate with the
people who are not the real prospects. Therefore, personal selling involves minimum wastage of
(iii) It results in actual sale : Advertising and sales promotion techniques can only attract
attention and arouse desire. By themselves they cannot create actual sale. Personal selling in
most cases leads to actual sale. A salesman can find prospective buyers, demonstrate the
product, explain its operation, and convince customers to buy it, install it at the customer's place
and provide after-sale service. No other method of promotion can perform all these functions.
Therefore, personal selling does the entire job of selling. Personal Selling is a complete
promotional technique of keeping customers satisfied.
(iv) It provides feedback: Personal selling involves two-way flow of communication between
the buyer and the seller. It is a useful method of understanding the needs and behavior
customers. It provides knowledge about the tastes, habits and attitudes of the prospective
(v) It complements advertising : In most situations, there is a need for explaining the quality
uses and price of the product. Salesmen can persuade the prospective customers to buy a
product. Advertising attracts customers but their doubts and questions about the product are
answered by salesmen. In this way personal selling supports advertising. Salesmen educational
the consumers about new products and about new uses of existing products.
(vi) It educates customers : Salesmanship is not simply a tool of convincing people to buy
certain products. It assists customers in satisfying their wants. A salesman provides:
information, education and guidance to customers. He handles their complaints and assists them
in getting value for their money. He can clear their doubts on the spot.
(vii) It assists the society: Salesmen help to increase aggregate sales and production in the
country thereby increasing employment opportunities. They help to maintain equilibrium
between demand and supply.Despite the above advantages, personal selling suffers from several
disadvantages. Firstly personal selling is the costliest method of promotion. Secondly, it can
cover only limited number customers at a time. Thirdly, it is not very effective for creating
consumer awareness about a product or service. Fourthly, many consumers are suspicious of
personal selling at the retail level and they criticize salesmen for lack of honesty, poor
knowledge, strong pressure, etc. Lastly, it is difficult to recruit, train and motivate competent
Sales promotion is one level or type of marketing aimed either at the consumer or at the
distribution channel (in the form of sales-incentives). It is used to introduce new product, clear
out inventories, attract traffic, and to lift sales temporarily. It is more closely associated with the
marketing of products than of services. The American Marketing Association (AMA), in its Web-
based "Dictionary of Marketing Terms," defines sales promotion as "media and non-media
marketing pressure applied for a predetermined, limited period of time in order to stimulate trial,
increase consumer demand, or improve product availability." Business pundits and academic
students of business have developed almost fancifully sophisticated views of sales promotion. In
down-to-earth terms it is a way of lifting sales temporarily by appealing to economic motives
and impulse-buying behavior. The chief tools of sales promotion are discounts ("sales"),
distribution of samples and coupons, the holding of sweepstakes and contests, special store
displays, and offering premiums and rebates. All of these techniques require some kind of
communication. Thus sales promotion and advertising are difficult to distinguish.
International Logistic Decision
According to Council of logistics management:
“Logistics is the process of planning, implementing and controlling the efficient,
effective flow and storage of goods, services and related information from point of
origin to point of consumption for the purpose of conforming the customer
This definition clearly points out the inherent nature of logistics and it conveys that Logistics is
concerned with getting products and services where they are needed whenever they
are desired. In trade Logistics has been performed since the beginning of civilization: it‘s hardly
new. However implementing best practice of logistics has become one of the most exciting and
challenging operational areas of business and public sector management. Logistics is unique, it
never stops!Logistics is happening around the globe 24 hours a days Seven days a week
duringfifty-two weeks a year. Few areas of business involve the complexity or span
thegeography typical of logistics.From the point of view of management, marketing logistics or
physical distribution has been described as ‗planning, implementing and controlling the process
of physical flows of materials and final products from the point of origin to the point of use in
order to meet customer‘s needs at a profit. As a concept it means the art of managing the flow
of raw materials and finished goods from the source of supply to their users. In other words,
primarily it involves efficient management of goods from the end of product line to the
consumers and in some cases, include the 4 movement of raw materials from the source of
supply to the beginning of the production line. These activities include transportation
control, order processing and information monitoring. These activities are considered primary to
the effective management of logistics because they either contribute most to the total cost of
logistics or they are essential to effective completion of the logistics task. However, the firms
must carry out these activities as essential part of providing customer with the goods and
services they desire.
Organizing and Controlling
Marketing activities are not carried out haphazardly. Due to intensive competition in the
marketplace and the need for firms to build strongholds, it becomes imperative for them to plan.
The organizational structure adopted by firms also influences their efficacy. Planning cannot be
effective and result oriented if there is no instituted control system that would measure actual
performance with necessary. (organizing-pg39com-2)
The control process is always seen as the final, but often neglected stage of international
market planning. However, these activities not only are important for the performance
evaluation, but provide the feedback necessary for the start of the next planning cycle.And
nowadays the evaluation and control probably represents one of the weakest areas of the
marketing activities in many international companies.
it is necessary to define what ‗control‘ actually means. In the managerial literature, control is
defined as the process by which managers ensure that resources are used effectively and
efficiently in the accomplishment of the organizational objectives. Control activities are directed
towards marketing programs and other projects initiated by planning process. Data measures
and evaluations generated by the control process in the form of a global audit are also input to
the planning process. Thus, there is no planning without control. And nowadays it becomes an
even more important part of the cycle. The environment in which businesses operate is
constantly changing. So it is obvious that business must adapt to reflect changes in the
environment and make decisions about how to change the marketing mix in order to succeed.
Sometimes this is quite a straightforward task.For example, in many small businesses there is
only one geographical market and a limited number of products. However, there is another
situation, the challenge faced by marketing management in a multinational business, with
hundreds of business units located around the globe, producing a wide range of products. In this
case well-organized marketing planning was usuallyconsidered as a vital activity to keep control
of marketing decision-making. While control processes were undervalued.
Information And Technology In International Marketing
The accessing speed, volume and availability of information through the internet as well
technologically advanced data transferring and data management systems have resulted in
quicker, cheaper and increasingly globalized business transactions. This has enabled the process
of branding, marketing and transacting of products, services and information through the
internet and electronic mediums such as e-mails and short message service (SMS). Electronic
transfer of information has enabled a revolution in business through outsourcing business
processes to leverage on cost and quality of a specialized service provider. This has resulted in
non-core transactional processes as well as certain value added functions of organizations in the
west being outsourced to Asian countries such as India, Sri Lanka and the Philippines.
Haeckal et.al (1999) identify that successful firms which focus on sensing and satisfying
dramatically changing customer needs effectively use I.T to reduce time and space constraints
relevant to acquiring, interpreting and acting on information.
Porter‘s Diamond theory addresses factors that drive competitive advantage of nations. It can be
argued that IT is a catalyst in identifying and developing these factors through provision of
timely, organized and detailed information for this purpose. For example, firms may use IT to
develop their competitive position and customer demand in certain industries such as banking,
retail trade and telecommunication by providing clients the ability to perform an increasing
number of transactions online.
Impact of Globalization on International marketing
In the past two decades, the world has gone through the process of globalization, one that
causes increasing economic, financial, social, cultural, political, market, and environmental
interdependence among nations. Business, as well, is inevitably affected by this process of
change towards more interdependence. Globalization is defined as the process of increasing
social and cultural inter-connectedness, political interdependence, and economic, financial and
market integrations. Globalization refers to the reduction and removal of barriers between
national borders in order to facilitate the flow of goods, capital, services and labor.
Globalization has various aspects which affect the world in several different
ways such as: Industrial - emergence of worldwide production markets and broader access
to a range of foreign products for consumers and companies. Particularly movement of material
and goods between and within national boundaries.
Financial - emergence of worldwide financial markets and better access to external financing
Economic - realization of a global common market, based on the freedom of exchange of
goods and capital.
Health Policy - On the global scale, health becomes a commodity. Global priorities, in this
situation, are sometimes at odds with national priorities where increased health infrastructure
and basic primary care are of more value to the public than privatized care for the wealthy.
Political - some use "globalization" to mean the creation of a world government which
regulates the relationships among governments and guarantees the rights arising from social
and economic globalization.
Informational - increase in information flows between geographically remote locations.
Language - the most popular language is Mandarin (845 million speakers) followed by
Spanish (329 million speakers) and English (328 million speakers).
Competition - Survival in the new global business market calls for improved productivity and
increased competition. Due to the market becoming worldwide, companies in various industries
have to upgrade their products and use technology skillfully in order to face increased
Ecological - the advent of global environmental challenges that might be solved with
international cooperation, such as climate change, cross boundary water and air pollution, over-
fishing of the ocean, and the spread of invasive species. Since many factories are built in
developing countries with less environmental regulation, globalism and free trade may increase
Cultural - growth of cross-cultural contacts.
Spreading of multiculturalism and better individual access to cultural diversity.
Greater international travel and tourism.
Spread of local consumer products (e.g., food) to other countries
Worldwide fads and pop culture
Worldwide sporting events such as the Olympic Games.
Social - development of the system of non-governmental organizations including
humanitarian aid and developmental efforts.
Development of a global telecommunications infrastructure and greater trans-
border data flow, using such technologies as the Internet, communication
satellites, and wireless telephones.
Increase in the number of standards applied globally; e.g., copyright laws,
patents and world trade agreements.
Globalization has generated significant international opposition over concerns that it has
increased inequality and environmental degradation.
EFFECT ON DISEASE
Globalization, the flow of information, goods, capital and people across political and geographic
boundaries, has also helped to spread some of the deadliest infectious diseases.
The gradual change in diet among newly prosperous populations is the most important factor
underpinning the rise in global food prices.
It can be said that globalization is the door that opens up an otherwise resource-poor country to
the international market. The majority of the earliest occurrences of economic globalization are
recorded as being the expansion of businesses and corporate growth, in many poorer nations
globalization is actually the result of the foreign businesses investing in the country to take
advantage of the lower wage rate. One example used by anti-globalization protestors is the use
of sweatshops by manufacturers. There are factories set up in the poor countries where
employees agree to work for low wages. Then if labor laws alter in those countries and stricter
rules govern the manufacturing process the factories are closed down and relocated to other
nations with more conservative policies
Unfair Marketing Practices
Using various deceptive, fraudulent or unethical methods to obtain business. Unfair trade
practices include misrepresentation, false advertising, tied selling and other acts that are
declared unlawful by statute. It can also be referred to as deceptive trade practices.There are
certain agent or insurer practices that are considered unfair, unethical, or deceptive. These
include the following activities.
A misrepresentation is simply a false statement of fact; that is a lie. It is illegal an unethical
for any agent to misrepresent the benefits, advantages, or provisions of any insurance policy.
For example, dividends are never guaranteed and to imply or state that a policy dividend is
guaranteed is a lie and naturally an unethical sales practice. It is misleading and deceptive for
an agent or an insurer to purposely mislead or attempt to deceive an applicant by
misrepresenting any aspect, condition, or provision of the policy.
Generally there are two reasons for misrepresentations by agents. One is simply pressure to
make the sale. Since insurance is a commission-paid business, an agent might feel desperate
to make a sale due to his own personal financial situation. In order to convince an unsure
prospect to buy, he may answer that person‘s questions with misleading information.
The other reason for misrepresentations is lack of knowledge or ignorance of the product being
sold. For example, the consumer may ask the agent a question regarding whether something is
covered. Instead of saying, "I don‘t know, but I will find out", the agent might say, "Yes, that is
covered" thinking that he remembers reading something about that, and believing coverage
False advertising is related to the concept of misrepresentation and is considered an
unethical method of competition. To mislead the buyer of insurance by using misleading or
incorrect sales literature, sales proposals, or similar forms of advertising is a violation. To
illustrate, a whole life policy, which depicts the contracts, guaranteed cash value and non-
guaranteed dividends as a single guaranteed sum is false advertising.
Defamation is the deliberate attempt to discredit the good name and reputation of another
insurer (or agent) by means of false, malicious or derogatory statements. It should be noted
that proving defamation requires that someone has communicated the derogatory information
to another – verbally or in writing. Without the element of communication there can be no
Boycott, coercion and intimidation are unethical trade practices that attempt to limit or
restrain trade in the transaction of insurance. For example, a bank may indicate that a
customer must have adequate amounts of life insurance to provide security for a business pr
personal loan. The bank may even determine whether specific insurance is adequate to satisfy
their lending requirements. However, the bank (or any lending institution) may not force or
coerce a person into purchasing insurance from a specific agent or company. To intimidate a
person by indicating that a loan will not be granted unless the person purchases specific
insurance from a particular company or agent is considered an unethical business practice.
False financial statements made by an insurer/agent are considered illegal and unethical
business conduct. All states have reserve requirements whereby insurers must set aside a
certain amount of their premium income in a reserve against future policy claims. To falsify
such information is a violation. Insurers are also audited and the Insurance department reviews
financial records. To provide incorrect financial information is both unethical and a civil
Twisting is inducing a person to lapse, surrender, or terminate insurance for the purpose of
purchasing a similar policy with another agent or insurer. Twisting should not be confused with
replacement, which is legal if done in accordance with specific state laws. Twisting could be
thought of as "illegal replacement".
The key word in the definition of twisting is "inducement". Inducements could include an
incomplete policy comparison, a misrepresentation, or some other unethical act.
Discrimination is both illegal and unethical in accordance with state and federal laws. From an
insurer‘s perspective, it is unlawful to permit discrimination between individuals of the same
class and life expectancy regarding life insurance rates, dividends or other policy benefits. It is
unlawful to discriminate because of age in the issuance of and rates for automobile insurance.
It is unethical and illegal to permit or cause discrimination due to race, creed, color or national
origin regarding the issuance of insurance or the rates charged for insurance.
Rebating is generally considered to be an unethical marketing practice although in a few
states, including California, rebating is not contrary to state law. By definition, rebating is any
inducement, particularly commission, in the sale of insurance that is not specified in the
insurance contract. Rebating is not limited to monetary inducements and may also include
services. For example, an offer to tune up a car for a prospect or to repair an appliance could
be inducements in the sale of insurance and accordingly, rebates.
Solutions to prevent unfair Practices
The Federal Trade Commission Act (FTC Act) of 1914 is a federal law designed to protect
consumers from unfair and deceptive practices in the marketplace, as well as to prevent
businesses from engaging in monopolizing practices. It created the Federal Trade Commission
(FTC), an independent government agency responsible for enforcing the act‘s provisions.
The FTC is headed by five commissioners and split up into several offices, with the main ones
being the Bureau of Consumer Protection and the Bureau of Competition. All 13 offices, which
cover everything from policy planning to international affairs, act together as a single unit with
specific goals in mind.
The first part of the FTC Act bans businesses from using unfair practices, which are any
practices that cause substantial and unavoidable injury to the consumer.
In determining whether a practice is unfair, the FTC considers the S&H criteria, a set of criteria
based on the 1972 Supreme Court ruling in the case of Sperry and Hutchinson. Although these
criteria help the FTC make decisions, they leave room for variances in judgment and are not set
The FTC utilizes a similar set of criteria in determining whether a company‘s action is deceptive,
which is also outlawed by the FTC Act. These criteria are slightly more rigid. Although the
criteria still leave room for interpretation, deceptive practices must fit all three benchmarks.
The FTC Act works in conjunction with numerous other laws to protect consumers and their
financial information. Because of the act‘s close connections with other laws, the FTC oversees
and helps enforce laws related to the FTC Act.