Imm - Nature & Scope

INTERNATIONAL MARKETING MANAGEMENT: NATURE & SCOPE
By Elisante Ole Gabriel (Tanzania) Chartered Marketer egabriel@edenconsult.net, www.olegabriel.com +255-784-455-499
KEY AREAS TO BE COVERED

Nature and Scope of International Business International Business Environment International Markets entry strategies The Role of World Trade Organisation Management Tools for International Business International Payment systems & Risks
elisante_gabriel@yahoo.com, 0784-455-499 2
NATURE & SCOPE OF IMM

Deriving from the word International it suggests that IBM is about managing business between nations. These nations could be separated by geographical or Political boundaries. Think of Tanzania & Malawi Vs Tanzania & Kenya at the scenario when we shall have the EACM (East African Common Market)
Globalization
This is a concept considering the whole world as one
huge homogeneous market. Globalisation is hinged

on a number of assumptions. It is however on two major dimensions: Globalization of production Globalization of markets
elisante_gabriel@yahoo.com, 0784-455-499
Domestic marketing and international marketing decisions

Overseas Environmental Challenges (Uncontrollables) Domestic Environmental Challenges (Uncontrollables) Economic Economic (Controllables) Product Political
Marketing Challenges in country Y
Legal
Competition
Marketing Challenges in country X Place Political Marketing Challenges in country Z
Consumer
Price Socio Cultural
Promotion Competition Infrastructure Logistics
Legal
Geography elisante_gabriel@yahoo.com, 0784-455-499
Reasons for entering international markets

growth profitability achieving economies of scale Achieving economies of scope (re-usability) risk spread access to imported inputs uniqueness of product or services
marketing opportunities due to life cycle

spreading R&D cost
Key issues in export growth

Developing a proactive approach to international trade
Promoting Foreign Direct Investments

Promoting Competitiveness Simplification of procedures
Encouraging large-scale manufacturers

Reducing transaction costs Infrastructure development
Identifying opportunities in international markets

Extreme focus product strategy Products-country matrix strategy Growth-share matrix of exports
Market focus strategies
MODES OF ENTREING INTERNATIONAL MARKETS

This is an institutional mechanism by which a firm makes its products or services available for consumers in international markets. Mode of entry is determined by: - the ability and willingness of the firm to commit
resources
- the firms desire to have a level of control over international operations
- the level of risk the firm is willing to take

Modes of international market entry

Production in home country
Exports: production is carried out in home country and finished goods are shipped to the overseas markets for sale indirect exports: process of selling products to an export intermediary in the companys home country who in turn sells the products in the overseas markets direct exports: process of selling the firms products directly to an importer in the overseas market
10
Modes (contd)
complementary exporting: use of distribution channels of an overseas firm to make the product available in the overseas market
provide offshore services: This is to support the overseas clients with the help of information and communication technology
11
Modes (contd)
Production in a foreign country
contractual entry modes
international licensing: process by which a domestic company allows a foreign company to use its intellectual property and specific business skills for a compensation (royalty) international franchising: transfer of intellectual property and other assistance over an extended period of time with greater control compared to licensing
12
Modes (contd)
overseas turnkey projects: conceptualize, design, install, construct, and carry out primary testing of manufacturing facilities or engineering structures for an overseas client organisation types : built and transfer (BT), built, operate, and transfer (BOT), built, operate, own (BOO) international management contracts: a company provides its technical and managerial expertise for a specific duration to an overseas firm
13
Modes (contd)
international strategic alliance: the relationship between two or more firms that cooperate with each other t o achieve common strategic goals but do not form a separate company international contract manufacturing: a contractual arrangement under which a firms manufacturing operations are carried out in a foreign countries
14
Modes (contd)
Investment entry modes
assembly in overseas markets: refers to exporting various
components of the product in completely knocked down
(CKD) condition and assembles them overseas
international joint ventures: equity participation of two or

more firms resulting into formation of a new entity
15
Factors for selecting partners for cooperation

The alliance partner should have some strength which
can be translated into business values for the alliance

The alliance partners should be committed to
cooperative goals
It is preferable that the alliance partner should have
multi-cultural business environment
16
Factors
(contd)
Wholly owned foreign subsidiaries

To have complete control and ownership of international operations a firm opts for foreign direct investment through: 1. acquiring a foreign company and all its resources in a foreign market (acquisition) 2. the establishment of production and marketing
facilities by a firm on its own from scratch (green field)
17
Factors affecting the selection of entry mode

External factors
Market size
Market growth Government regulations Level of competition Level of risk
political economic
operational
Production and shipping costs

Factors affecting the selection of entry mode (contd)

Internal factors
Companys objectives availability of company resources
level of commitment
international experience flexibility
19
Finally
Benefits of IMM
More opportunities Avenue for learning new concepts and challenges Possibility of developing a global brand A room to benefit from economies of scale & scope Spread of risks AND Wider scope for innovation and creativity.

Imm - Nature &amp; Scope

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INTERNATIONAL MARKETING MANAGEMENT: NATURE & SCOPE

By Elisante Ole Gabriel (Tanzania) Chartered Marketer egabriel@edenconsult.net, www.olegabriel.com +255-784-455-499

KEY AREAS TO BE COVERED

NATURE & SCOPE OF IMM

huge homogeneous market. Globalisation is hinged

Domestic marketing and international marketing decisions

Marketing Challenges in country Y

Marketing Challenges in country X Place Political Marketing Challenges in country Z

Price Socio Cultural

Promotion Competition Infrastructure Logistics

Geography elisante_gabriel@yahoo.com, 0784-455-499

Reasons for entering international markets

marketing opportunities due to life cycle

Key issues in export growth

Promoting Foreign Direct Investments

Encouraging large-scale manufacturers

Identifying opportunities in international markets

Market focus strategies

MODES OF ENTREING INTERNATIONAL MARKETS

- the level of risk the firm is willing to take

Modes of international market entry

(CKD) condition and assembles them overseas

international joint ventures: equity participation of two or

Factors for selecting partners for cooperation

can be translated into business values for the alliance

multi-cultural business environment

Wholly owned foreign subsidiaries

facilities by a firm on its own from scratch (green field)

Factors affecting the selection of entry mode

Production and shipping costs

Factors affecting the selection of entry mode (contd)

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Imm - Nature & Scope

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