Page 11 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes Self Assessment

State whether the following statements are true or false:
6. The main objective of imposing quantitative restrictions on imports is to increase the
demand for home made items.

7. The mobility of labour and capital in the international market is smoother than in the
domestic market.

Task Trace the journey of Unilever and P&G, right from their inception till date covering
how they became global giants and what major marketing initiatives they took that
helped them to be major players in India.

1.3 Principles of International Marketing

The essence of international marketing can be summarized in three great principles. The first
identifies the purpose and task of marketing; the second refer to the competitive reality of
marketing and the third the principle means for achieving the first two.

1.3.1 Customer Value and the Value Equation

The task of marketing is to create customer value that is greater than the value created by
competitors. The value equation is a guide to this task. As suggested in the equation, value for
the customer can be increased by expanding or improving product and/or service benefits, by
reducing the price, or by a combination of these elements. Companies with a cost advantage can
use price as a competitive weapon. Knowledge of the customer combined with innovation and
creativity can lead to a total offering that offers superior customer value. If the benefits are
strong enough and valued enough by customers, a company does not need to be the low-price
competitor to win customers.

1.3.2 Competitive or Differential Advantage

The second great principle of international marketing is competitive advantage. A competitive
advantage is a total offer, vis-à-vis relevant competition that is more attractive to customers.
The advantage can exist in any element of the company’s offer: the product, the price, the
advertising and point-of-sale promotion, or the distribution of the product. One of the most
powerful strategies for penetrating a new national market is to offer a superior product at a
lower price. The price advantage will get immediate customer attention, and, for those customers
who purchase the product, the superior quality will make an impression.
V = B/P

Where,
V = Value
B = perceived benefits – perceived costs

Example: switching costs
P = price

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