IGNOU ASSIGNMENT SOLUTIONS
MASTER OF COMMERCE (MCOM - SEMESTER 3)
IBO-02 - International Marketing Management IBO-02/TMA/2025
Question No. 1
A company wants to enter into international markets. The company decided to involve another company in the foreign country. State the modes of entry where the scope for the involvement of a foreign company is possible. Explain those modes and critically evaluate and state in which situations each of them is suitable.
Answer:
Modes of Entry into International Markets Involving a Foreign Company
When a company decides to enter international markets with the involvement of a foreign company, the major entry modes are:
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Joint Ventures
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Strategic Alliances
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Franchising
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Licensing
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Contract Manufacturing
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Wholly Owned Subsidiaries (via acquisition or greenfield investment)
1. Joint Ventures
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Meaning: A partnership where a domestic firm and a foreign firm jointly establish a new business entity.
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Involvement: Both companies contribute capital, resources, technology, and share profits and risks.
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Suitability:
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When host country laws mandate local participation.
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When local market knowledge and distribution networks are needed.
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When risks are high and should be shared.
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Critical Evaluation:
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Advantages: Access to local expertise, shared risk, faster entry.
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Disadvantages: Conflict of interest, cultural clashes, divided control.
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Example: Maruti Suzuki (India–Japan JV).
2. Strategic Alliances
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Meaning: Cooperative agreements between two or more companies to pursue common objectives without forming a new legal entity.
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Involvement: Both companies remain independent but collaborate in R&D, technology, or distribution.
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Suitability:
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For short/medium-term projects (R&D, marketing).
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When firms want flexibility without large investments.
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Critical Evaluation:
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Advantages: Quick access to technology, markets, and distribution.
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Disadvantages: Weak commitment, risk of knowledge leakage to competitors.
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Example: Starbucks and Tata Global Beverages (India).
3. Franchising
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Meaning: A foreign company (franchisor) permits a local company (franchisee) to use its brand name, business model, and processes in return for fees and royalties.
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Involvement: The foreign company provides brand, training, and know-how; the local firm invests and operates outlets.
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Suitability:
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For service-based industries (hospitality, food chains, retail).
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When rapid expansion is required with low investment.
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Critical Evaluation:
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Advantages: Rapid growth, strong brand image, low financial risk to franchisor.
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Disadvantages: Loss of control over operations, risk of quality dilution.
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Example: McDonald’s, Domino’s in India.
4. Licensing
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Meaning: The domestic company (licensor) gives rights to a foreign company (licensee) to produce and sell its product in return for a fee/royalty.
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Involvement: The foreign company produces and markets the product locally.
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Suitability:
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When the firm lacks resources to invest abroad.
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When intellectual property (patent, brand) can be easily transferred.
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Critical Evaluation:
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Advantages: Low-cost entry, quick market access, royalty income.
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Disadvantages: Risk of losing technology, limited control over quality/marketing.
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Example: Disney licensing its characters for merchandise in different countries.
5. Contract Manufacturing
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Meaning: A foreign company is contracted to manufacture goods on behalf of the domestic firm.
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Involvement: The foreign firm manufactures, while the home company controls marketing and branding.
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Suitability:
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When cost advantages (cheap labor, raw materials) exist abroad.
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When firms want to focus only on branding and marketing.
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Critical Evaluation:
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Advantages: Cost savings, flexibility, faster production.
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Disadvantages: Quality concerns, dependency on contractors, risk of brand reputation damage.
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Example: Apple contracting Foxconn in China.
6. Wholly Owned Subsidiaries
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Meaning: The domestic company establishes or acquires 100% ownership of a foreign firm.
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Involvement: Complete involvement of the foreign company either through acquisition or greenfield investment.
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Suitability:
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When firm requires full control and can bear high risk/cost.
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For long-term commitment in strategically important markets.
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Critical Evaluation:
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Advantages: Full control, high profit retention, long-term presence.
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Disadvantages: High cost, high risk, vulnerable to host country political environment.
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Example: Hyundai’s wholly owned subsidiary in India.
Conclusion
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If the company seeks low risk and faster entry, licensing, franchising, and contract manufacturing are suitable.
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If it seeks long-term growth with shared risk, joint ventures and strategic alliances work best.
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If it seeks full control and strong brand establishment, wholly owned subsidiaries are the most appropriate.
👉 Choice of mode depends on: company objectives, resources, risk appetite, host country laws, and competitive environment.
Question No. 2
“Compared with products, marketing of services poses distinctive challenges to marketers”. Explain why it is so, and enumerate the marketing challenges.
Answer:
“Compared with products, marketing of services poses distinctive challenges to marketers”
1. Introduction
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Marketing of physical products is relatively easier because they are tangible, storable, and standardized.
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Services, on the other hand, are intangible, variable, perishable, and inseparable from providers.
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These unique features make services marketing more complex and challenging for marketers compared to product marketing.
2. Distinctive Characteristics of Services (Why Services Marketing is Different)
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Intangibility
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Services cannot be seen, touched, or tried before purchase.
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Customers depend on reputation, trust, brand image, and promises.
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Example: A student cannot “test” education before enrolling in a coaching institute.
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Inseparability
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Services are produced and consumed simultaneously.
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Customer and service provider interaction becomes crucial.
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Example: A doctor’s consultation requires the presence of both doctor and patient.
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Heterogeneity (Variability)
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Quality of services may differ depending on who provides them, when, and how.
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Example: Two different teachers in the same institute may teach differently.
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Perishability
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Services cannot be stored, saved, or inventoried.
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Unused service capacity is lost forever.
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Example: An empty airline seat cannot be sold once the flight departs.
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Ownership
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Services do not result in transfer of ownership.
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Customers only enjoy access or experience.
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Example: Netflix subscription gives access, not ownership.
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3. Marketing Challenges in Services
Because of the above characteristics, service marketers face unique challenges:
(A) Challenges due to Intangibility
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Difficulty in communicating service benefits.
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Need for brand building, testimonials, and physical evidence (office, staff, infrastructure) to reduce uncertainty.
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Example: Hospitals show advanced equipment to assure patients.
(B) Challenges due to Inseparability
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Service quality depends heavily on staff–customer interaction.
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Need for training employees in customer relationship management.
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Example: A rude hotel receptionist can spoil the entire service experience.
(C) Challenges due to Variability
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Ensuring standardization and consistency is difficult.
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Requires SOPs, automation, and quality control.
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Example: McDonald’s ensures uniform taste across countries through strict process controls.
(D) Challenges due to Perishability
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Matching demand with supply is a major challenge.
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Strategies like differential pricing, advance booking, promotions in off-seasons are used.
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Example: Airlines use dynamic pricing to fill seats.
(E) Challenges due to Lack of Ownership
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Customers may feel less attached to services compared to tangible goods.
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Requires loyalty programs, relationship marketing, and service guarantees.
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Example: Banks offer reward points to retain customers.
4. Conclusion
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Unlike goods, services are intangible, variable, inseparable, and perishable, making their marketing highly challenging.
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Service marketers must adopt special strategies like service differentiation, strong branding, customer relationship management, employee training, physical cues, and demand management.
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Thus, services marketing requires greater focus on people, process, and physical evidence (3Ps of Services Marketing) in addition to the traditional 4Ps of marketing.
Question No. 3
Write short notes on the following:
a) Advertising appeals and product characteristics
b) EPRG orientation of firm
c) Pricing methods and practices in international marketing
d) International marketing concepts
Answer:
a) Part
Advertising Appeals and Product Characteristics
1. Introduction
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Advertising Appeal refers to the theme, message, or approach used in an advertisement to attract consumer attention, influence their feelings, and motivate them to buy.
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The nature of the product largely determines what type of advertising appeal will be effective.
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Different product categories (convenience goods, luxury items, industrial goods, etc.) demand different appeals to match consumer psychology.
2. Types of Advertising Appeals
Advertising appeals are broadly classified as:
(A) Rational Appeals
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Focus on logic, facts, and functional benefits.
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Common for utilitarian products where performance, quality, and economy matter.
Examples of rational appeals:
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Price appeal (low cost, discounts)
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Quality appeal (durability, superior materials)
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Performance appeal (speed, effectiveness, efficiency)
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Safety/security appeal
(B) Emotional Appeals
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Connect with feelings, desires, or psychological needs.
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More effective for products linked with lifestyle, status, or personal image.
Examples of emotional appeals:
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Fear appeal (insurance, safety products)
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Love/affection appeal (greeting cards, gifts)
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Pride/status appeal (luxury cars, branded clothing)
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Joy/entertainment appeal (snacks, beverages)
3. Relationship between Product Characteristics and Appeals
| Product Characteristic | Suitable Advertising Appeal | Example |
|---|---|---|
| Convenience Goods (low-priced, frequently bought) | Price, availability, reminders | Colgate, Maggi – focus on daily use, affordability |
| Shopping Goods (durable, compared before purchase) | Quality, performance, rational appeal | Smartphones – ads highlight features, battery life |
| Specialty Goods (luxury/status products) | Prestige, pride, emotional appeal | Rolex, Mercedes – emphasize exclusivity & status |
| Industrial Goods (used by businesses) | Technical specifications, cost efficiency, rational appeal | Caterpillar machinery – stress durability, performance |
| New/Innovative Products | Curiosity, problem-solving appeal | Dyson vacuum – focus on unique technology |
| Health/Safety Products | Fear, security appeal | Insurance, sanitizers, medicines |
| Children’s Products | Fun, entertainment, affection | Kinder Joy, Disney merchandise |
| Green/Eco-friendly Products | Social responsibility, environmental appeal | Tesla, biodegradable packaging products |
4. Key Insights
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High-Involvement Products (cars, electronics) → Rational + Emotional mix (features + status).
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Low-Involvement Products (soft drinks, snacks) → Emotional appeal (fun, refreshment).
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Luxury Goods → Emotional/status appeal dominates.
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Necessities/Commodities → Rational appeals like price, economy, and availability.
5. Conclusion
Advertising appeals must be aligned with product characteristics and the consumer’s buying motive.
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Functional products → rational appeal.
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Lifestyle and luxury products → emotional appeal.
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In practice, many successful campaigns combine both rational and emotional appeals to create a stronger impact.
b) Part
EPRG Orientation of a Firm
Introduction
The EPRG framework was developed by Howard V. Perlmutter to explain how multinational companies (MNCs) perceive and manage their international operations.
It identifies four types of orientations that a firm can adopt while going global: Ethnocentric, Polycentric, Regiocentric, and Geocentric.
These orientations reflect the firm’s attitude towards international business and determine how strategies (marketing, HR, finance, etc.) are formulated across countries.
1. Ethnocentric Orientation
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The home country’s practices and values dominate.
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Products, policies, and strategies developed in the domestic market are extended to foreign markets with little or no change.
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Headquarters controls decision-making; subsidiaries have limited autonomy.
🔹 Advantages:
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Simplicity and cost savings due to standardization.
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Strong control by headquarters.
🔹 Disadvantages:
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May fail if foreign consumers have different preferences.
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Risk of cultural insensitivity.
🔹 Example:
Early Ford cars sold globally without modification (same left-hand drive model everywhere).
2. Polycentric Orientation
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Each host country is considered unique and requires a tailored approach.
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Local subsidiaries are given autonomy to design marketing strategies that suit local conditions.
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“When in Rome, do as the Romans do.”
🔹 Advantages:
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Better adaptation to local culture, tastes, and laws.
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Higher customer satisfaction in each country.
🔹 Disadvantages:
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Duplication of efforts; costly.
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Lack of global brand consistency.
🔹 Example:
McDonald’s adapting menus in India (McAloo Tikki, vegetarian offerings) while serving beef in the U.S.
3. Regiocentric Orientation
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Focus is on a region (a group of neighboring countries) rather than each country individually.
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Strategies are developed for regional clusters (e.g., Europe, ASEAN, Latin America).
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Middle ground between polycentric and geocentric approaches.
🔹 Advantages:
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Achieves regional efficiency while allowing some adaptation.
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Easier management compared to treating each country separately.
🔹 Disadvantages:
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May ignore differences within the region.
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Limited global integration.
🔹 Example:
Unilever adopting a common strategy for European Union markets, with slight adjustments within the region.
4. Geocentric Orientation
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The firm views the entire world as a single market.
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Seeks to integrate global operations with a global brand strategy while allowing minor local adjustments.
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Emphasis on “Think global, act local.”
🔹 Advantages:
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Strong global brand identity.
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Economies of scale.
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Balanced global efficiency and local responsiveness.
🔹 Disadvantages:
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Requires high coordination and investment.
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Complex management structure.
🔹 Example:
Apple, Nike, Coca-Cola – maintain global positioning while making small cultural adaptations (packaging, advertising language).
Conclusion
The EPRG framework highlights the evolution of a firm’s international outlook – from ethnocentric (domestic-oriented) to geocentric (globally integrated).
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Firms that start with ethnocentrism often move towards polycentric and regiocentric approaches as they expand, ultimately aiming for a geocentric orientation to compete successfully in today’s globalized world.
c) Part
Pricing Methods and Practices in International Marketing
Introduction
Pricing in international marketing is more complex than in domestic markets because it involves multiple influencing factors such as exchange rate fluctuations, tariffs and duties, government controls, competition, cultural perceptions of value, and differences in consumer purchasing power. A well-designed international pricing strategy ensures competitiveness abroad while maintaining profitability.
1. Factors Influencing International Pricing
Before choosing a pricing method, companies must consider:
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Cost factors (production, transportation, tariffs, duties).
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Market demand (consumer income levels, elasticity of demand).
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Competition (local and global rivals).
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Currency fluctuations and inflation.
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Government regulations (price controls, anti-dumping laws).
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Cultural perceptions of price and value (luxury vs. affordability).
2. Pricing Methods in International Marketing
(A) Cost-Based Pricing Methods
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Cost-Plus Pricing
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Price = Production cost + Export costs (packing, insurance, freight, tariffs, margin).
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Simple and ensures cost recovery, but may ignore market demand and competition.
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Example: Industrial machinery exports.
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Marginal Cost Pricing
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Price based only on variable costs (ignores fixed costs).
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Helps penetrate competitive foreign markets.
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Risk: may lead to dumping accusations if price is too low.
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(B) Market-Oriented Pricing Methods
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Demand-Based Pricing
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Price determined by willingness and ability of consumers to pay.
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Suitable for luxury and premium products (Rolex, Apple).
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Competition-Based Pricing
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Price set in line with competitor prices in the foreign market.
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Ensures competitiveness but may reduce profit margins.
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Penetration Pricing
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Low initial price to enter foreign markets and build market share.
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Risk: may set low-value perception of the brand.
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Example: Xiaomi smartphones entering Indian market.
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Skimming Pricing
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High initial price to target wealthy/innovative customers, later reduced to attract mass market.
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Example: Apple iPhone, Sony PlayStation.
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(C) International Practices / Specialized Pricing Methods
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Transfer Pricing
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Price at which goods/services are transferred between parent company and its foreign subsidiaries.
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Often used for tax minimization.
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Subject to government scrutiny.
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Dual Pricing
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Different pricing for domestic and export markets.
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Example: Oil & natural gas sold cheaper in home market, higher in foreign markets.
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Grey Market Pricing
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Unofficial distribution channels may emerge if price differences between countries are large.
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Companies must adopt uniformity to reduce grey markets.
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Dumping
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Selling goods in foreign markets at a price lower than home market or production cost.
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Often used to capture market share but is illegal under WTO anti-dumping rules.
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Price Discrimination
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Charging different prices for the same product in different countries depending on purchasing power and demand.
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Example: Software subscriptions (Netflix, MS Office) have different rates across countries.
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3. Pricing Practices in International Marketing
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Incoterms Pricing (FOB, CIF, Ex-works):
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Price is quoted depending on responsibility for freight, insurance, and delivery.
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Example: CIF (Cost, Insurance, Freight) includes shipping cost, while FOB (Free on Board) does not.
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Countertrade Pricing:
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Payment partly or wholly made in goods/services rather than cash.
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Used in markets with foreign exchange restrictions.
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Example: India importing oil from Russia with part payment in INR.
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Psychological Pricing:
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Adjusting prices to consumer psychology (e.g., $999 instead of $1000).
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Effective in luxury and consumer goods markets.
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Price Standardization vs. Adaptation:
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Standardization: Same global price (e.g., Coca-Cola maintaining similar positioning).
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Adaptation: Different prices in each country based on local conditions. Most companies adopt a “glocal” approach.
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4. Examples of International Pricing Strategies
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Apple: Uses price skimming globally, launching new models at premium prices.
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IKEA: Adapts pricing to local markets; lower prices in India than in Europe to suit affordability.
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Pharmaceuticals: Companies often face accusations of price discrimination, as drugs are priced higher in the U.S. but lower in developing countries.
Conclusion
International pricing is a strategic decision that balances cost, demand, competition, and government regulations across diverse markets. Firms may use cost-based, demand-based, or competition-oriented methods, along with specialized practices such as transfer pricing, countertrade, or dual pricing. The ultimate aim is to maintain profitability while ensuring competitiveness in global markets.
A successful international pricing strategy requires a careful blend of standardization for global brand image and adaptation to local affordability and regulations.
d) Part
International Marketing Concepts
Introduction
International marketing refers to the process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas across national borders to satisfy the needs of global customers and achieve organizational objectives. It is broader and more complex than domestic marketing, as it involves different cultures, economies, political systems, and legal frameworks.
To understand international marketing better, various concepts or orientations have been developed which guide how firms approach foreign markets.
1. Ethnocentric Concept
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The company views foreign markets as secondary to its domestic market.
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Products, strategies, and policies developed for the home market are extended to international markets with little or no change.
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Assumes what works at home will work abroad.
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Advantage: Cost saving due to standardization.
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Limitation: May fail if foreign consumers have different tastes or preferences.
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Example: Early U.S. car companies exporting left-hand drive cars to right-hand driving countries without modification.
2. Polycentric Concept
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Each host country is treated as a unique market requiring a different marketing strategy.
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Decisions are decentralized, giving significant autonomy to subsidiaries.
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Focus is on local responsiveness.
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Advantage: Products and strategies are better suited to local culture and needs.
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Limitation: High cost due to duplication of efforts; no global brand consistency.
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Example: McDonald’s adapting menus in India (McAloo Tikki, no beef or pork).
3. Regiocentric Concept
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Focus is on regional grouping of countries rather than individual countries or the whole world.
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Strategies are developed for a group of similar markets (e.g., EU, ASEAN, Middle East).
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Advantage: Balance between global efficiency and local adaptation.
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Limitation: May ignore differences within the region.
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Example: A company using a single strategy for European Union markets.
4. Geocentric Concept
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The company views the entire world as a potential market and tries to integrate global operations.
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Emphasizes global standardization with minor local adaptations.
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Encourages global brand image and synergies.
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Advantage: Achieves economies of scale, consistency in branding.
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Limitation: Requires high coordination and investment.
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Example: Apple, Coca-Cola, Nike — maintain global positioning with small local adjustments.
5. Standardization vs. Adaptation
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A central dilemma in international marketing.
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Standardization: Same product and marketing strategy across all countries (e.g., Coca-Cola’s “happiness” theme).
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Adaptation: Modifying products and strategies to meet local tastes, laws, or cultural needs (e.g., KFC offering vegetarian options in India).
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Reality: Most firms adopt a “glocalization” approach — global brand with local tweaks.
6. E-Marketing / Digital International Marketing
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With globalization and technology, digital platforms (social media, e-commerce, SEO, influencers) have become critical for international marketing.
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Helps firms reach global consumers with lower cost, wider reach, and customized targeting.
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Example: Amazon, Alibaba, Netflix.
Conclusion
International marketing concepts show the evolution from domestic-oriented (ethnocentric) approaches to truly global (geocentric) orientations. In today’s world, successful companies adopt a balanced approach, combining global standardization for efficiency and local adaptation for responsiveness. As markets become increasingly interconnected, international marketing concepts are crucial for firms to remain competitive and relevant.
Question No. 4
Differentiate between the following:
a) Warranty and Guarantee
b) Primary data and Secondary data
c) Direct and Indirect selling channels
d) Domestic and International marketing planning
Answer:
a) Part
Difference between Warranty and Guarantee
| Basis of Difference | Warranty | Guarantee |
|---|---|---|
| Meaning | A written assurance given by the seller/manufacturer to repair or replace the product if it is defective, usually for a specified period. | A promise or assurance about the quality, durability, or performance of a product, failing which the product will be replaced or money refunded. |
| Nature | Generally written and legally enforceable. | Can be written or oral. Not always legally binding. |
| Scope | Covers specific parts or functions of a product (e.g., warranty on motor of a washing machine). | Covers the overall quality or performance of the product (e.g., a guarantee that the product will work satisfactorily). |
| Remedy Available | Usually limited to repair or replacement of defective parts. Refund is rarely included. | May include repair, replacement, or full refund if the product fails to meet expectations. |
| Time Period | Generally for a longer duration (e.g., 1 year, 2 years, etc.). | Usually for a shorter duration (immediate satisfaction guarantee, 7 days, 30 days, etc.). |
| Legal Protection | Being a written document, it is easier to enforce legally. | Harder to enforce if only oral; depends on trust and brand reputation. |
| Example | Laptop comes with a 1-year warranty covering hardware defects. | A clothing brand offers a 30-day money-back guarantee if the customer is not satisfied. |
Summary
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Warranty → Written assurance, legal, usually covers specific parts, focuses on repair/replacement.
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Guarantee → Promise of overall performance/quality, may be oral/written, often includes refund/replacement.
b) Part
Difference between Primary Data and Secondary Data
| Basis of Difference | Primary Data | Secondary Data |
|---|---|---|
| Meaning | Data collected first-hand by the researcher for a specific purpose or study. | Data that has already been collected, compiled, and published by others for general use. |
| Source | Collected directly from respondents through methods like surveys, interviews, observation, experiments. | Obtained from books, journals, government publications, company reports, websites, databases, etc. |
| Originality | Always original and specific to the research problem. | Already existing; not original, may or may not suit the researcher’s purpose. |
| Cost | Relatively expensive (requires manpower, time, money). | Relatively cheap and economical (already available). |
| Time Taken | Collection is time-consuming. | Collection is quick and easy. |
| Reliability & Accuracy | Usually more reliable and accurate, since it is collected for the specific research problem. | May be less reliable, as the data was collected for another purpose. |
| Flexibility | Researcher can decide what, how, when, and from whom to collect data. | Researcher has no control over how the data was originally collected. |
| Example | Data collected through a questionnaire survey about customer satisfaction in a city. | Census of India reports, RBI bulletins, UN data, online databases like World Bank statistics. |
Summary
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Primary Data → First-hand, specific, original, costly, time-consuming, but accurate.
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Secondary Data → Already existing, general, economical, quick, but may not perfectly suit research needs.
c) Part
Difference between Direct Selling Channel and Indirect Selling Channel
| Basis of Difference | Direct Selling Channel | Indirect Selling Channel |
|---|---|---|
| Meaning | A channel where the manufacturer or producer sells directly to the consumer without involving intermediaries. | A channel where the manufacturer sells products to consumers through intermediaries like wholesalers, retailers, or agents. |
| Intermediaries | No middlemen; direct contact between producer and consumer. | Involves one or more intermediaries such as wholesalers, distributors, retailers, agents. |
| Cost | Saves middlemen’s margin; may reduce cost if managed efficiently, but direct distribution infrastructure is expensive. | Middlemen’s margin increases cost to consumers, but reduces burden on manufacturer for distribution. |
| Control | Manufacturer has greater control over pricing, brand image, and customer relationships. | Manufacturer has less control since intermediaries influence price, display, and promotion. |
| Reach | Limited reach, as producer must manage sales directly. Works well for customized, high-value, or niche products. | Wider reach, as intermediaries distribute products across different markets and locations. |
| Examples | - Company-owned outlets (e.g., Bata, Nike stores) |
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Online company website (e.g., Dell.com, Apple online store)
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Door-to-door selling (Amway, Tupperware). | - FMCG products (Nestlé, HUL, ITC) sold through wholesalers and retailers
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Electronics sold via distributors and retailers (e.g., Samsung, LG). |
Summary
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Direct Channel → Producer → Consumer (no middlemen, high control, limited reach).
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Indirect Channel → Producer → Wholesaler → Retailer → Consumer (with middlemen, less control, wider reach).
d) Part
Difference between Domestic and International Marketing Planning
| Basis of Difference | Domestic Marketing Planning | International Marketing Planning |
|---|---|---|
| Meaning | Planning of marketing activities restricted to operations within the home country. | Planning of marketing activities that extend beyond national boundaries, across multiple countries. |
| Scope | Limited to one country’s customers, competitors, and environment. | Broader scope, covering diverse countries, cultures, and markets. |
| Environmental Factors | Homogeneous environment: same language, culture, laws, currency, and customer preferences. | Heterogeneous environment: differences in culture, languages, political systems, economic conditions, and currencies. |
| Market Research | Easier, since data availability and consumer behavior are familiar. | Complex, due to cultural diversity, language barriers, and unreliable secondary data. |
| Legal Framework | One set of rules and regulations (domestic laws only). | Multiple legal systems and trade regulations (tariffs, quotas, WTO rules, trade agreements). |
| Risks and Uncertainties | Fewer risks, as the market environment is predictable. | Higher risks due to political instability, exchange rate fluctuations, and cultural misunderstandings. |
| Competition | Competition is mainly from domestic firms. | Competition from both domestic firms in host country and other global players. |
| Cost of Planning & Execution | Relatively lower cost. | High cost due to international logistics, adaptation, tariffs, and promotional efforts. |
| Adaptation Needs | Less need for adaptation; standard strategies often work nationwide. | Requires adaptation of product, price, place, and promotion (4Ps) to suit local preferences. |
| Example | A company like Haldiram’s planning its distribution within India. | Haldiram’s expanding into U.S. or U.K. markets with product modifications (e.g., packaging, flavor, labeling). |
Summary
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Domestic Marketing Planning → Simple, low risk, uniform environment, focuses only on the home market.
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International Marketing Planning → Complex, high risk, diverse environments, requires adaptation to multiple markets.
Question No. 5
Comment on the following statement:
a) “A marketing research report should merely present the findings. It must not comment on the possible course of action(s) to be taken on the basis of the study results."
b) “International marketing research is full of complexities”.
c) "Global positioning is most effective for product categories that approach
either end of 'high-touch/high-tech' continuum"
d) “Analysis of legal conditions are a very critical component in selecting
foreign markets”.
Answer:
a) Part
“A marketing research report should merely present the findings. It must not comment on the possible course of action(s) to be taken on the basis of the study results.” – Comment
Introduction
A marketing research report is the formal presentation of information collected through systematic investigation of a market situation. Its primary purpose is to provide objective, unbiased, and reliable data to aid managerial decision-making. However, there is a debate: should the researcher only present findings, or should they also recommend actions?
1. Argument Supporting the Statement (Restrict to Findings Only)
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Objectivity and Neutrality
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The role of a researcher is to present facts without personal bias.
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Making recommendations may introduce subjectivity or favoritism, reducing credibility.
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Decision-Making is a Managerial Function
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Managers, not researchers, are responsible for taking business decisions.
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Research reports provide the “what is,” while managers decide the “what to do.”
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Different Perspectives
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Researchers analyze data scientifically, but managers must also consider other dimensions: financial resources, company strategy, politics, and organizational culture.
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Recommendations by researchers may not align with organizational realities.
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Avoiding Accountability Issues
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If recommendations fail, managers may blame researchers. By sticking to findings, researchers avoid being held responsible for wrong business decisions.
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2. Argument Against the Statement (Include Suggested Actions)
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Practical Utility of Research
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Managers often lack the technical expertise to interpret statistical data.
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Action-oriented insights make research more useful and actionable.
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Bridging the Gap between Data and Decisions
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A mere presentation of numbers, charts, or consumer opinions may confuse managers.
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Researchers can provide evidence-based implications to guide decision-making.
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Time and Resource Efficiency
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In fast-changing markets, managers require quick solutions.
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Recommendations save time by narrowing down possible strategies.
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Best Practices
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Many global research agencies (e.g., Nielsen, Kantar) not only provide findings but also give actionable insights that help firms implement effective strategies.
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3. Balanced View
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The ideal approach is a balanced one:
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The core of the report must present objective findings (facts, trends, data analysis).
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At the end, the researcher may provide possible implications or alternative courses of action, but final decisions should remain with management.
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This ensures neutrality while also enhancing the practical value of the report.
Conclusion
While the statement emphasizes the need for objectivity in marketing research, in reality, a research report that only presents findings without offering any implications may have limited usefulness for decision-makers. A balanced approach is preferable: researchers should focus on factual findings but may also suggest broad, evidence-based courses of action—leaving the final decision to management.
Thus, a marketing research report should be both factual and insight-driven, combining accuracy with practical utility.
b) Part
“International marketing research is full of complexities.” – Comment
Introduction
Marketing research refers to the systematic collection, analysis, and interpretation of data to support marketing decisions. When businesses expand globally, this process becomes far more complicated due to differences in economic, cultural, political, legal, and technological environments. Thus, international marketing research is inherently complex compared to domestic marketing research.
1. Sources of Complexity in International Marketing Research
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Cultural Differences
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Consumer behavior, values, beliefs, and perceptions vary widely across countries.
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Words, colors, or symbols may carry different meanings, making it difficult to design universally effective questionnaires.
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Example: A thumbs-up gesture is positive in the U.S. but offensive in some Middle Eastern cultures.
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Language and Communication Barriers
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Translation issues may distort survey questions or responses.
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Back-translation is often necessary to ensure accuracy, increasing cost and time.
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Sampling Challenges
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Identifying a truly representative sample is harder across borders.
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Population data may be outdated, incomplete, or unreliable in some countries.
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Availability and Reliability of Secondary Data
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In developed countries, data is widely available and reliable.
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In developing countries, secondary data may be scarce, outdated, or inconsistent, making cross-country comparisons difficult.
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Differences in Market Infrastructure
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Levels of distribution, media penetration, internet access, and retail formats vary, affecting how research can be conducted.
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Example: Online surveys may work in the U.S. but are less effective in rural India or Africa.
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Legal and Political Restrictions
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Some governments restrict data collection, consumer interviews, or use of foreign agencies.
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Privacy laws (e.g., GDPR in Europe) impose strict rules on data collection and storage.
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Cost and Time Factors
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Conducting research across multiple countries involves high expenses (travel, hiring local agencies, translation, adaptation).
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The process is also time-consuming, delaying decision-making.
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Comparability of Data
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Different countries have varying standards for income, education, or occupational classifications.
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Data from one country may not be directly comparable to another, making global analysis challenging.
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2. Examples Illustrating Complexities
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Cultural Research: McDonald’s must research local food habits before launching products (vegetarian burgers in India, pork-free menus in Muslim countries).
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Legal Restrictions: In China, foreign research agencies often need government approval for large-scale surveys.
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Data Comparability: Per capita income figures differ due to variations in currency valuation and purchasing power.
3. Ways to Overcome Complexities
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Employ local research agencies with cultural expertise.
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Use multi-method approaches (surveys, focus groups, observation) for accuracy.
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Apply back-translation to ensure language accuracy.
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Rely on international organizations’ data (World Bank, IMF, UN) for consistency.
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Leverage digital tools and big data to reduce cost and time in data collection.
Conclusion
International marketing research is undoubtedly complex, as it involves navigating cultural diversity, language barriers, inconsistent data, legal restrictions, and infrastructural differences. Yet, despite these challenges, it remains indispensable for global firms. Accurate research enables businesses to adapt products, positioning, and strategies effectively to diverse markets. Companies that invest in overcoming these complexities gain a significant competitive edge in the international marketplace.
c) Part
“Global positioning is most effective for product categories that approach either end of ‘high-touch/high-tech’ continuum.” – Comment
Introduction
Global positioning refers to developing a standardized image, message, and identity for a product or brand across international markets. It is based on the idea that certain consumer needs, emotions, or product benefits are universal, thus enabling companies to market the same way globally. However, global positioning is not equally effective for all products. Research suggests that it works best at the extremes of the “high-touch / high-tech continuum.”
1. Understanding the High-Touch / High-Tech Continuum
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High-Tech Products
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Products with advanced technology, superior functionality, and strong performance orientation.
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These appeal to rational decision-making and universal technical standards.
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Examples: laptops, smartphones, microprocessors, electric vehicles, software solutions.
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High-Touch Products
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Products associated with emotions, lifestyle, prestige, and cultural symbolism.
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These appeal to universal human feelings (love, beauty, luxury, self-esteem).
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Examples: luxury watches (Rolex), perfumes (Chanel), designer clothing (Gucci), premium beverages (Coca-Cola).
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2. Why Global Positioning Works at These Extremes
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For High-Tech Products:
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Customers worldwide look for the same features, reliability, performance, and innovation.
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Technical specifications and product quality have universal appeal (e.g., Apple iPhone, Intel chips).
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Communication can be standardized, focusing on technology and innovation.
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For High-Touch Products:
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Human emotions like love, beauty, prestige, youth, or friendship are universal.
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Brands can leverage global lifestyle appeal and create aspirational positioning (e.g., Nike’s “Just Do It,” Coca-Cola’s happiness theme).
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Symbolic value and emotional resonance cut across borders.
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3. Middle-Ground Products: The Challenge
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Products that are neither highly technical nor highly emotional (e.g., household cleaners, packaged foods, personal care basics) are more influenced by local tastes, traditions, and cultural norms.
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These require more local adaptation rather than global positioning.
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Example: McDonald’s adapts menus for local preferences (McAloo Tikki in India, Teriyaki Burger in Japan).
4. Examples of Successful Global Positioning
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High-Tech:
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Apple: Global message of innovation and premium technology.
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Tesla: Positioned globally as a pioneer in sustainable, high-tech automobiles.
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High-Touch:
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Rolex: Symbol of luxury and timeless prestige across countries.
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Coca-Cola: Universal message of joy, friendship, and togetherness.
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Conclusion
Global positioning is most effective when products fall at either end of the high-touch/high-tech continuum. High-tech products benefit from universal technical appeal, while high-touch products benefit from universal emotional appeal. In contrast, products in the middle of the continuum often need local customization to match cultural, social, and consumption patterns. Hence, marketers must carefully assess where their product lies on this continuum before choosing a global positioning strategy.
d) Part
“Analysis of legal conditions are a very critical component in selecting foreign markets”. Comment.
International business involves operating across borders, which means that firms are exposed to diverse legal environments that differ from one country to another. The legal system of a host country significantly influences the ease of doing business, the security of investments, and the long-term viability of operations. Therefore, analyzing the legal conditions is a critical step in selecting foreign markets.
Importance of Legal Environment in Foreign Market Selection
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Compliance and Risk Avoidance
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Every country has its own set of laws relating to business incorporation, taxation, employment, consumer protection, and corporate governance.
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Failure to comply with these legal requirements may result in fines, penalties, or even closure of business operations.
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Hence, understanding legal conditions helps companies minimize risks.
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Protection of Intellectual Property (IPR)
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For firms relying on innovation, trademarks, patents, and copyrights, host-country legal frameworks are crucial.
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Weak IPR protection may result in imitation, piracy, or loss of competitive advantage.
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Foreign Investment Laws
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Many countries impose restrictions on foreign direct investment (FDI). For example, some sectors may be reserved for domestic firms, while others may require joint ventures with local partners.
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Liberal and transparent investment laws encourage foreign businesses, whereas restrictive laws discourage entry.
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Taxation Policies
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Corporate tax rates, double taxation treaties, and transfer pricing regulations directly affect profitability.
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Countries with high and complex tax regimes may deter foreign investors, while tax-friendly jurisdictions attract them.
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Contract Enforcement and Judicial Efficiency
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The ease of enforcing contracts, resolving disputes, and obtaining legal remedies affects business confidence.
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Countries with slow, corrupt, or unpredictable legal systems may pose challenges for smooth operations.
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Labour and Employment Laws
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Regulations concerning minimum wages, employee benefits, union rights, and working conditions must be considered.
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Strict or inflexible labour laws increase operational costs and reduce flexibility.
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Trade and Competition Laws
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Antitrust regulations, anti-dumping policies, and import-export controls affect the ability to operate competitively.
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Compliance ensures that firms are not penalized for monopolistic or unfair trade practices.
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Environmental and Consumer Protection Laws
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Increasingly, nations are enforcing strict sustainability and consumer protection laws.
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Non-compliance can damage both legal standing and brand reputation.
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Conclusion
The legal environment of a host country is not just a background condition but a determinant factor in foreign market selection. A favorable legal framework ensures protection, reduces risks, and facilitates smooth operations. Conversely, adverse or uncertain legal conditions may make even an economically attractive market unsuitable for entry.
Thus, analysis of legal conditions is indispensable in making informed decisions about international expansion, ensuring compliance, profitability, and sustainability in foreign markets.
