MNM3711
International Marketing
Study Unit One
Introduction to International Marketing
1.1. Introduction to International Marketing
- Exporting is important, especially to a small country like South Africa, which participates in a free-market
economy
- Not only does exporting create growth opportunities for South African businesses (like Tiger Brands,
SABMiller and De Beers)
- Local companies also should contend with competition from imported goods and services even if they do
not export goods
- Export businesses are influenced by the product sectors they operate in, the trade relations between the
home country and the country they are exporting to, as well as the global and local economies and the many
environments they have to deal with
- In so doing export companies should reflect on their strengths and weaknesses that enable or hinder them
to take advantage of the growth available in foreign markets
- The latter refers to the fact that these companies should ensure that their activities are in harmony with the
regulatory or other parameters required by the host country/countries
- South Africa pursues international relations with a few countries
- These include countries such as Lesotho, Swaziland, Namibia and Botswana, which are all members of the
Southern African Customs Union
1.1.1. Benefits of International Trade
- International trade and exports are important for economic development of all countries and to improve the
general standard of living
- Advantages of exporting at national level
- Better utilisation of national resources
- Increased overall level of technology and economic development
- Increased global competitiveness
- Expansion and development opportunities beyond the local market
- Increased job opportunities and reduced unemployment
- Better paying jobs
- Earning foreign currency required to pay for essential imports and services
- Benefits of international trade for individual firms
- Increasing sales: selling abroad generates additional sales not possible before
- Increasing profits: increased sales generally translate into increased profits
- Reducing risk: by selling abroad companies can reduce the effect of an economic downturn in the
local market
- Achieving economies of scale: increased sales because of exports means that firms can produce
more with their existing capital
- Lowering unit cost: greater throughout existing infrastructure translates into lower cost per unit of
output
- Overcoming seasonal limitations: companies that sell seasonal products can often export these
goods to markets with seasons opposite to SA
- Extending PLC: product that reaches the end of the lifecycle in SA, may have life internationally
- Accessing untapped markets: company may have a unique product that is not yet available
elsewhere in the world, resulting in sales abroad
- Achieving higher levels of quality: when a company starts competing in foreign markets, it should
become efficient in all activates
1.1.2. Globalisation debate
- Globalisation refers to the process of going global
- View of some is that globalisation creates inequalities mainly between the developed and developing
nations of the world
1.1.3. Welcome to the world of international marketing
- Helps to make business and marketing decision
- Have to learn different languages, new cultures, and complex legal issues
Page 1 of 69
, 1.2. What is international marketing
1.2.1. Defining marketing
- American marketing association defines as marketing is the process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfy
individual and organistion goals
- Definition was adapted in 2007: marketing is the activity and process for creating, communicating,
delivering and exchanging offerings that have value for customer, clients, partners and society
- Exchange occurs when at least two parties that each have something of value, and who wish to transact
with other person, communicate with each other and either accept or reject the others offer
- Satisfying individual needs and organisational goals, focus of any marketer is the customer
- Marketer must identify the customer and what their needs are, using market research
- The company selects a target market from a wider group
- Process of planning and executing certain activities suggest that the firm must bring together all its
resources to satisfy customer needs
- Total systems approach is another element
- There are four key elements that combine to support the marketing concept
- Customer satisfaction
- Systems approach
- Goal orientation
- Societal approach
- Definition identifies four main activities known as the 4P’s
- Conceptualising and developing products
- Establishing prices that offer value to customers and a profit to the supplier
- Promoting products and services through personal selling, advertising, direct mail, Internet
- Distribution or place to reach the customer through appropriate channels
1.2.2. Defining international marketing
- International marketing is marketing across international boarders
- Includes customer and the exchange process, individual needs and organisational goals, systems
approach, value-added approach, societal approach, marketing mix and external environment
- Entering international markets means dealing with foreign environment with customs, laws, technologies,
regulations and may differ hugely from domestic markets
- Differences when trading across boarder
- Customer profile in the foreign market is very different from that of the customer in domestic
market, due to language, religion, fashion
- Different legal, political, social and economic systems
- Greater complexities associated with payment, distribution, transport and insurance
- Role of documentation assumes added importance to prevent misunderstanding and costly
litigation
- Goods are subject to customs control and the payment of import duty
- Number of additional technical and administrative regulations may apply to exports
- Exchange rates are control regulations
- More extensive to use fax and email due to different time zones
- Operating in foreign markets exposes the exporter to wider more intense competition
1.3. Process of internationalisation
- Process has clearly defined stages
1.3.1. Domestic Marketer
- Rarely does a firm enter an international marketing without competing domestically
- More often they develop from local firms to competing in one province to become national companies –
domestic marketer
- They focus on needs and wants of the customer, industry trends and environment that are to be found at
home are generally non-exporter
Page 2 of 69
International Marketing
Study Unit One
Introduction to International Marketing
1.1. Introduction to International Marketing
- Exporting is important, especially to a small country like South Africa, which participates in a free-market
economy
- Not only does exporting create growth opportunities for South African businesses (like Tiger Brands,
SABMiller and De Beers)
- Local companies also should contend with competition from imported goods and services even if they do
not export goods
- Export businesses are influenced by the product sectors they operate in, the trade relations between the
home country and the country they are exporting to, as well as the global and local economies and the many
environments they have to deal with
- In so doing export companies should reflect on their strengths and weaknesses that enable or hinder them
to take advantage of the growth available in foreign markets
- The latter refers to the fact that these companies should ensure that their activities are in harmony with the
regulatory or other parameters required by the host country/countries
- South Africa pursues international relations with a few countries
- These include countries such as Lesotho, Swaziland, Namibia and Botswana, which are all members of the
Southern African Customs Union
1.1.1. Benefits of International Trade
- International trade and exports are important for economic development of all countries and to improve the
general standard of living
- Advantages of exporting at national level
- Better utilisation of national resources
- Increased overall level of technology and economic development
- Increased global competitiveness
- Expansion and development opportunities beyond the local market
- Increased job opportunities and reduced unemployment
- Better paying jobs
- Earning foreign currency required to pay for essential imports and services
- Benefits of international trade for individual firms
- Increasing sales: selling abroad generates additional sales not possible before
- Increasing profits: increased sales generally translate into increased profits
- Reducing risk: by selling abroad companies can reduce the effect of an economic downturn in the
local market
- Achieving economies of scale: increased sales because of exports means that firms can produce
more with their existing capital
- Lowering unit cost: greater throughout existing infrastructure translates into lower cost per unit of
output
- Overcoming seasonal limitations: companies that sell seasonal products can often export these
goods to markets with seasons opposite to SA
- Extending PLC: product that reaches the end of the lifecycle in SA, may have life internationally
- Accessing untapped markets: company may have a unique product that is not yet available
elsewhere in the world, resulting in sales abroad
- Achieving higher levels of quality: when a company starts competing in foreign markets, it should
become efficient in all activates
1.1.2. Globalisation debate
- Globalisation refers to the process of going global
- View of some is that globalisation creates inequalities mainly between the developed and developing
nations of the world
1.1.3. Welcome to the world of international marketing
- Helps to make business and marketing decision
- Have to learn different languages, new cultures, and complex legal issues
Page 1 of 69
, 1.2. What is international marketing
1.2.1. Defining marketing
- American marketing association defines as marketing is the process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfy
individual and organistion goals
- Definition was adapted in 2007: marketing is the activity and process for creating, communicating,
delivering and exchanging offerings that have value for customer, clients, partners and society
- Exchange occurs when at least two parties that each have something of value, and who wish to transact
with other person, communicate with each other and either accept or reject the others offer
- Satisfying individual needs and organisational goals, focus of any marketer is the customer
- Marketer must identify the customer and what their needs are, using market research
- The company selects a target market from a wider group
- Process of planning and executing certain activities suggest that the firm must bring together all its
resources to satisfy customer needs
- Total systems approach is another element
- There are four key elements that combine to support the marketing concept
- Customer satisfaction
- Systems approach
- Goal orientation
- Societal approach
- Definition identifies four main activities known as the 4P’s
- Conceptualising and developing products
- Establishing prices that offer value to customers and a profit to the supplier
- Promoting products and services through personal selling, advertising, direct mail, Internet
- Distribution or place to reach the customer through appropriate channels
1.2.2. Defining international marketing
- International marketing is marketing across international boarders
- Includes customer and the exchange process, individual needs and organisational goals, systems
approach, value-added approach, societal approach, marketing mix and external environment
- Entering international markets means dealing with foreign environment with customs, laws, technologies,
regulations and may differ hugely from domestic markets
- Differences when trading across boarder
- Customer profile in the foreign market is very different from that of the customer in domestic
market, due to language, religion, fashion
- Different legal, political, social and economic systems
- Greater complexities associated with payment, distribution, transport and insurance
- Role of documentation assumes added importance to prevent misunderstanding and costly
litigation
- Goods are subject to customs control and the payment of import duty
- Number of additional technical and administrative regulations may apply to exports
- Exchange rates are control regulations
- More extensive to use fax and email due to different time zones
- Operating in foreign markets exposes the exporter to wider more intense competition
1.3. Process of internationalisation
- Process has clearly defined stages
1.3.1. Domestic Marketer
- Rarely does a firm enter an international marketing without competing domestically
- More often they develop from local firms to competing in one province to become national companies –
domestic marketer
- They focus on needs and wants of the customer, industry trends and environment that are to be found at
home are generally non-exporter
Page 2 of 69
