flowchart LR E[Exporting<br/>Low commitment] --> L[Licensing /<br/>Franchising] L --> J[Joint Venture] J --> A[Strategic<br/>Alliance] A --> S[Wholly-owned<br/>Subsidiary] style E fill:#E3F2FD,stroke:#1565C0 style S fill:#FCE4EC,stroke:#AD1457
68 International Marketing
68.1 What is International Marketing?
International marketing is the application of marketing principles across national borders — designing, pricing, distributing and promoting offerings to satisfy consumers in multiple countries (kotlerkeller2022?; cateora2020?). It extends domestic marketing into the added complications of multiple currencies, languages, cultures, regulations, and trade barriers.
Philip Cateora’s standard textbook defines international marketing as “the performance of business activities designed to plan, price, promote and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit” (cateora2020?). Warren Keegan adds the strategic dimension — international marketing is “a discipline that integrates global marketing knowledge with worldwide environmental and competitive forces” (keegan2020?).
TipThree Working Definitions
| Author | Definition | What it foregrounds |
|---|---|---|
| Philip Cateora | “Business activities to plan, price, promote, and direct goods and services to consumers in more than one nation for profit.” | Cross-border activity |
| Warren Keegan | “Performance of marketing activities for goods and services that flow across nations.” | Marketing across borders |
| Czinkota & Ronkainen | “Marketing carried out by companies overseas or across national borderlines.” | Cross-border execution |
68.2 Domestic vs International Marketing
TipDomestic vs International Marketing
| Feature | Domestic | International |
|---|---|---|
| Customers | Single language, culture | Multiple |
| Currency | One | Multiple — FX risk |
| Regulation | Single legal regime | Multiple — tariffs, NTBs |
| Logistics | Domestic infrastructure | Cross-border, customs |
| Risk | Lower | Political, currency, payment risks |
| Marketing mix | Standardised | Standardised vs adapted (the central debate) |
68.3 EPRG Orientation
Already met in topic 35. Perlmutter’s EPRG:
TipEPRG Orientations Toward International Marketing
| Orientation | View | Marketing implication |
|---|---|---|
| Ethnocentric | Home country knows best | Standardise to home practice |
| Polycentric | Each country is unique | Localise per country |
| Regiocentric | Manage by regions | Regional adaptation |
| Geocentric | Best practice regardless of origin | Truly global, balanced standardisation and adaptation |
68.4 Modes of Entry into International Markets
Firms internationalise progressively, ascending the commitment ladder:
TipFive Modes of Entry into International Markets
| Mode | Commitment | Risk | Example |
|---|---|---|---|
| Exporting | Low | Low | Indirect / direct exporting |
| Licensing / Franchising | Low-Medium | Low | Patents, trademarks, McDonald’s franchises |
| Joint Venture | Medium | Medium | Hero Honda (legacy); Maruti Suzuki |
| Strategic Alliance | Medium | Medium | Star Alliance; co-marketing |
| Wholly-owned subsidiary (Greenfield / Acquisition) | High | High | Tata’s Jaguar Land Rover |
68.5 The Standardisation vs Adaptation Debate
Theodore Levitt’s 1983 HBR article “The Globalization of Markets” argued that converging tastes and technology push toward standardisation — sell the same product the same way everywhere. The realistic counter-position by Cateora et al.: full standardisation is rare; firms typically adapt selectively (levitt1983?; cateora2020?).
TipStandardisation vs Adaptation Trade-offs
| Standardisation favours | Adaptation favours |
|---|---|
| Economies of scale | Local taste, culture |
| Consistent global brand | Local language and norms |
| Easier coordination | Local regulation |
| Lower marketing cost | Local competition |
The textbook compromise — glocalisation — think global, act local. Examples: McDonald’s McAloo Tikki in India; Coca-Cola adapting flavour intensity by region.
68.6 International Marketing Mix — the 4 Ps Adapted
TipThe 4 Ps in International Marketing
| P | Issues |
|---|---|
| Product | Standardised vs adapted; product compulsions of local regulation, culture, climate |
| Price | Currency, dumping, transfer pricing, parallel imports / grey market, price escalation |
| Place | Channel structure varies by country; logistics complexity |
| Promotion | Language, cultural symbols, media availability; global vs local creative |
68.6.1 Keegan’s five product-promotion strategies
Warren Keegan (1969) suggested five international product-promotion strategies based on whether each is standardised or adapted (keegan2020?):
TipKeegan’s Five Strategies
| # | Product | Promotion | Strategy |
|---|---|---|---|
| 1 | Same | Same | Straight extension |
| 2 | Same | Different | Product communications adaptation |
| 3 | Different | Same | Product adaptation |
| 4 | Different | Different | Dual adaptation |
| 5 | New | New | Product invention |
68.7 International Pricing — Special Issues
TipInternational Pricing Issues
| Issue | What it captures |
|---|---|
| Price escalation | Cumulative tariffs, transport, distribution costs raise foreign price beyond home price |
| Transfer pricing | Pricing of goods transferred between subsidiaries — taxation focus |
| Dumping | Selling abroad below domestic price or below cost — antidumping duties |
| Grey market / Parallel imports | Authentic goods imported through unauthorised channels |
| Counter-trade | Barter, buy-back, offset — when currency unavailable |
| Currency choice | Pricing in seller’s, buyer’s, or third currency |
68.8 Cultural Adaptation — Hofstede and Hall
Already met in topic 20. The two reference frameworks:
TipCultural Frameworks for International Marketing
| Framework | What it captures |
|---|---|
| Hofstede’s six dimensions | PDI · IDV · MAS · UAI · LTO · IND — affect advertising appeal, packaging, distribution |
| Hall’s high-low context | High-context cultures (Japan, India) rely on relationships; low-context (US, Germany) on explicit messages |
| Trompenaars’s seven | Universalism vs particularism, etc. |
68.9 Indian Export-Import Framework
TipIndian Export-Import Framework
| Body / Statute | Concerned with |
|---|---|
| DGFT (Directorate General of Foreign Trade) | Issues licences, IEC code, EXIM policy implementation |
| Foreign Trade Policy 2023 | Continuous policy with no end date; emphasises remission of duties (RoDTEP) |
| Customs Act, 1962 | Import-export duties, valuation |
| FEMA, 1999 | Forex management |
| Export Credit Guarantee Corporation (ECGC) | Insurance for export credit risk |
| Export Promotion Councils (EPCs) | Sector-specific bodies (FIEO, EEPC, AEPC) |
| Special Economic Zones Act, 2005 | SEZs as tax-free export hubs |
| GST | Exports zero-rated; deemed exports specified |
68.10 Practice Questions
Q 01
Levitt
Medium
Theodore Levitt's "Globalization of Markets" (1983) argued that:
View solution
Correct Option: B
Levitt argued for standardisation — converging tastes mean firms can sell similar products globally. The reality has been a more selective glocalisation.
Q 02
Keegan
Medium
In Keegan's strategies, "same product, different promotion" is called:
View solution
Correct Option: B
Same product, different promotion → product communications adaptation. Same–same = straight extension; different–different = dual adaptation.
Q 03
EPRG
Medium
A global firm hiring the best talent globally regardless of nationality is following:
View solution
Correct Option: D
Geocentric = best person, anywhere. The textbook ideal of true globalisation.
Q 04
Entry Mode
Medium
Among entry modes, the highest-commitment, highest-risk option is:
View solution
Correct Option: D
Wholly-owned subsidiary — full equity, full control, full risk.
Q 05
Glocalisation
Easy
McDonald's introducing the McAloo Tikki in India is an example of:
View solution
Correct Option: B
Glocalisation — global brand adapted to local taste. The textbook compromise between standardisation and full adaptation.
Q 06
Dumping
Medium
"Dumping" in international trade refers to:
View solution
Correct Option: B
Dumping = selling abroad at lower than domestic price or below cost. Triggers antidumping duties under WTO rules.
Q 07
Price Escalation
Medium
"Price escalation" in international marketing refers to:
View solution
Correct Option: B
Price escalation — cumulative international costs (transport, customs, agents, importer margin, retailer margin) raise the foreign price well above the home-market price.
Q 08
DGFT
Medium
India's nodal body for foreign trade — issuing the Importer-Exporter Code (IEC) — is:
View solution
Correct Option: B
DGFT under the Ministry of Commerce & Industry implements the Foreign Trade Policy and issues the IEC.
ImportantQuick recall
- International marketing = marketing across borders. Standard texts: Cateora, Keegan.
- Three added complications: multiple currencies, political/legal systems, market imperfections.
- Perlmutter’s EPRG orientation. Modes of entry: Exporting → Licensing → JV → Alliance → WOS in increasing commitment.
- Levitt 1983 — globalisation/standardisation. Counter-position: glocalisation.
- Keegan’s five strategies: straight extension · communications adaptation · product adaptation · dual adaptation · product invention.
- Pricing issues: price escalation, transfer pricing, dumping, grey market, counter-trade.
- Cultural frameworks: Hofstede, Hall, Trompenaars.
- India: DGFT, Foreign Trade Policy 2023, Customs Act 1962, FEMA, ECGC, SEZ Act 2005, RoDTEP, EPCs.