International Marketing Study Guide

International marketing

It is the performance of business activities designed to plan, quote, promote and direct the flow of goods and services of a company to consumers or users of more than one nation to obtain a benefit.

The difference between national and international marketing is given that marketing activities occur in more than one country ……., This explains the diversity and complexity of marketing operations …….., which implies a range of strategies that are necessary to face the different levels of market uncertainties (uncontrollable variables: competition, policies, laws, consumer behavior, technological development) ……. for which you must adjust …… product, price, promotion and place or distribution (controllable variables) …….., to achieve marketing objectives …………………..,. The concepts and principles of Marketing are universally applied, ……..but the environment in which its plans are developed can vary drastically from one country to another or from region to region.

The main concerns of the international marketing professional are the difficulties created by different environments.

(Philip R. Caetora-John L. Graham.-McGraw-Hill. 10th Edition).

I PART

INTERNATIONAL MARKETING:

Relationships that the countries have with each other in order to ensure the supply of the goods and services required for the elaboration of their products.

Countries need the dynamism of these trade relations complemented by political, economic, etc. Because we live in a world where we complement each other in order to reactivate, improve and develop their productive sectors, countries require the permanent entry of foreign currency that can be obtained in different ways but always based on international relations.

WAYS TO ACQUIRE CURRENCIES:

1. Allowing the entry of foreign investment (for it to be fulfilled there must be certain security conditions that investors are looking for: economic, political, social, labor stability, etc. etc.) Foreign indebtedness (eg with international organizations, with different governments or through the sale of bonds). Debt is not very positive due to interest rates and the difficulty that countries have in meeting debt services.Improving exports: This is the part we should focus on, for which we must know and know which are our export products and / or services, where, how and by whom they are produced. To export, it is also necessary to consider the flow of imports since international trade is two-way.

Exports serve to reactivate, energize, etc. The economy and by improving the economy, job sources are generated, the standard of living of society is raised, etc.

Exports may fall or decrease for different reasons:

• health problems (as is the case of foot-and-mouth disease in meat), the economic problems of neighboring countries on which we depend 40%.

Exports to the rest of the world have also been affected, especially with the countries of the North (USA, Canada), due to economic problems in general, price variations, levels of demands (that is, due to ignorance of cultural elements from consumers, those of us who link them directly to International Marketing.

Countries divide their product exports into:

1. Traditional products: products that for years have supported the development of the economies of the countries, generally products that are exported in their natural state and that enjoy comparative and competitive advantages. Compared to other markets. Eg meat, wool, leather (which constitute 21% of Uruguayan exports approximately). Non-traditional products: (they constitute 79% of Uruguayan exports, approximately) in their majority are industrialized products: dairy products, meat products, etc.

The Government, while taking care of traditional products, attaches great importance to non-traditional products because this trade increases and generates more jobs and improves the level of industrial development in the countries.

Throughout the world the demand for these non-traditional products is infinite (that is why the Government is concerned with promoting the exports of non-traditional products, for which it has created incentives for exports).

To export: 1) you have to know what our exportable offer is (products we produce, where they are located, etc.) so that with a knowledge of the product that we are going to promote, we can apply Traditional Marketing.

The productive sectors are divided into:

1) Primary Sector: we find agricultural products that have a high incidence within the gross domestic product (GDP). The most developed agricultural products in Uruguay are: rice (Artigas, Tacuarembó, Treinta y Tres), sugar cane (Artigas), and oleaginous products: sunflower, etc. (Mercedes, Fray Bentos). With less participation, horti and fruit products (Canelones, Paysandú, Salto, etc.). Forages that are used for a second group that are livestock farmers and diverse animal production: eg. bovines and sheep; with less participation pigs, poultry and beekeeping, fur cattle (eg chinchillas). Silviculture (afforestation) that constitutes a great income of export currencies for Uruguay.

Due to government planning, freshwater fishing and ocean-ocean fishing generates income for it, by the permits and patents that the State grants to the different vessels of other flags for fishing in territorial waters; Mining, metal, energy (Uruguay has many energy and water resources that are very little used).

2) Secondary Sector: sector that is already conformed with a certain industrial process generating heavy industry such as capital goods, intermediate industry (inputs of the product that serve as the basis for the development of other products) and final consumption or light industry.

3) Tertiary Sector: it is related to services (rail, river transport that serves as a link to take products by the river to ports; air, road, tourism, although participation in GDP is always viewed with greater expectation regarding the holiday tourism (summer), there is a city tourism that attracts the holding of seminars, congresses, conferences, etc. in winter and that mobilizes a large number of small businesses, thus generating a large participation in the GDP; the Insurance, the Banking, Finance, Health Service and Education Services.

To export you must select the type of product (because companies that are not producers but marketers can export). This product can be adapted depending on the type of market that is going to be directed; If we do not adapt it, we can make an extension of it, that is, export it under the same conditions in which it is produced.

The second step is to select the market to which we are going to direct the product, that is, we make an international market segmentation where we analyze who buys the product, why, how, when, etc. (because, for example, it can be counter-season products, which constitutes a market opportunity).

Market segmentation enables us to have weapons, elements to reach a better negotiation.

To know what, how, when, etc. I have to make a market profile that gives me a guideline, an idea of ​​what the market that I am selecting for my product is like.

This profile helps me determine whether or not it is convenient for me to export to that country to make the market profile. We extract data from the market to which we are going to export (we find out that data through secondary sources in order to reduce more costs.

MARKET PROFILE

1) Physical Factors -

Country of Origin and Destination

First I analyze the Physical Factors of the destination country as well as the country of origin, so I can make a comparison.

I analyze for example:

• Country Name Geographical location (transport, time, etc.) Climate Population (number of people to whom I direct the product, allows me to determine the size of my potential market) Type of Government, to know the policy it adopts.

2) Macroeconomic Aspects -

Destination country

• GDP: it helps me to know the productive development of that country. Per capita income: it helps me to know if people are going to have a limited purchasing capacity. Balance of Payments Binational Trade Balance: relationship between import-export between the country of origin and the destination. When there is a deficit Trade Balance (eg Uruguay-Mexico) Uruguay imports more from Mexico than it exports. In this case, this deficit may favor our market opportunity and we can consider it as an element of negotiation; If it were the other way around, Surplus Trade Balance that limits the market opportunity therefore we have to rely on good negotiating skills. Global Trade Balance Currency Type: I look at the currency that generates the most confidence. A strong currency allows me to improve the price of the exported product.Monetary Policy: to find out how the payment will be made for my exported product. Marketing system Commercial provisions Economic Policy Production / marketing incentives.

Macroeconomic aspects help me determine my economic possibility in the market that I am going to export.

3) Tax and Technological Factors:

They will allow me to know what is the tariff law, the surcharge rates plus the taxes that my product will pay when entering that market, which also serves as an element of negotiation.

They also allow me to know what are the conditions that this market establishes for the import of that product (sanitary conditions, certificate of origin, type of container, type of packaging, content, etc. because, for example, the greater added value the product has, more fees you pay.

• Technical and Commercial Name of the Product Tariff Location Tariff Right paid by the product Surcharges and Fees Import Conditions: container, packaging, content, etc. Integration Negotiation

4) Industrial Factors

• National Production: it helps me to know who my product is going to compete with, that is, if there is and if there is an import of the same product but from another country. own price

5) Competitiveness Factors

• Analysis of Competition: how it is, how it behaves in the market, its strengths, its weaknesses. Strength of competition Power of negotiation of the competition Structure, organization and capital of the competition

6) Infrastructure and Services Factors

What transport do I have, if I have logistics frequency permanently (so I put together a “scheme” to be able to have the merchandise, paperwork, etc. soon; that is, I organize my production and export procedure). The sum of several means of transport in the same operation is called multimodal transport. The distance serves as an element of negotiation for the fixing of the price.

7) Cultural factors

• Tastes and preferences Consumers' way of buying Family nucleus

This requires market research because it is something more specific and I can do it by consulting the Embassy and / or bi-national Chambers of the destination country, generally this research cannot be done from the country of origin but it is preferable to hire a company consultant that is in the country of destination.

The third aspect is to know the tariff heading (I look at the Tariff Nomenclature book). All the products that the countries have are classified with a certain number or code which depends on the type of product that we are going to analyze. The sum of all the codes is known as the Tariff Nomenclature, the sum of all the products with those codes is known as the Tariff Universe.

The Nomenclature is divided into the 3 kingdoms: Animal, Vegetable and Mineral. These 3 kingdoms constitute 3 great sectors and within them we have sections and chapters.

Each product is located according to the Kingdom to which it belongs in each of the sections, which will determine what code is assigned to our product. That code will vary depending on the industrialization process or added value that the product has.

The code is known by the name of Partida Arancelaria.

If I look at the book I already know how much I have to pay as a tariff, which is regulated according to the rules established by the World Customs Organization, the monetary policies established by each country, the different integration processes with which the countries are linked, be these WTO Multilaterals, regional, bi-lateral, etc.

Tariff: it is a tax that products pay either when they are imported or when they are exported. The most used is the import tariff, but there are certain products (generally basic products) that pay tariffs when exported. These tariffs in daily jargon are called import duties.

Ways to apply the tariff:

It is divided into 3 types when it is carried out:

1. Ad-valorem which means the attached value. Eg US $ 1,000 Tariff: 20% is applied to the 1,000. Specific Tariff Rights a termination value is charged for each UVF. (unit of physical volume).Mixto: combination of 1 and 2.

If we talk about import tariffs are charged on the CIF and export tariffs are charged on the FOB.

A country according to its economic policy, depending on its policy of development and protection or expansion of its trade, in theory, can apply or classify its tariffs and / or apply exceptions (depending on the integrationist commercial commitment it has).

In theory we find different systems:

1) Tax Fee: this is when it is convenient for the Treasury. It is when the State wants to raise money for imports, so it applies low tariffs and with this it stimulates the importation of products.

This tariff has a counter: it can affect the national industry. The tariff favors trade but affects the production of national products. This tariff improves the collection of the fiscal ark but protects the national industry. It gives the consumer the opportunity to purchase international products at lower prices and with "quality" better than ours.

2) Prohibitive Tariff: here the State wants to protect its national production, for which it applies completely high tariffs or complementary rates; which makes the sale price of the product more expensive and therefore delays the marketing rotation of that product.

This tariff favors domestic production but has the disadvantage that it affects trade in the country (it disadvantages importers).

3) Optimal Tariff: it is the one that tends to an income balance that favors the State without affecting to a great extent the national production and the trade itself.

Not all exported products pay tariffs but are paid by basic products in order to regulate or approach what international prices are and it is also a strategy of the international organizations in which these raw materials are registered (eg oil, sugar, cocoa, etc.).

To export

The company must organize itself in what are the export procedures, it will be linked with the Banco República, with the Chambers: Industry, Commerce; Union of Exporters, institutions in charge of delivering the certificates of origin required by the importing country with which it shows that the product originates from the country and thus can enjoy the preferences of the different integration processes, is also registered in the LATU that It is the one that grants the certificate that the products that are being exported are fit for human consumption.

You also have to contact a customs broker to handle stationery or export documents through the document called DUA (Unique Customs Document) which is a form for imports or exports and where the characteristics of the product are declared..

Another aspect that must be addressed is the logistics aspect: shipping or air or land companies, their frequencies with which they arrive in the country, etc. You must also know the provisions or conditions established by that market at the entry of a certain product.

When a company ventures into what export is, it analyzes the different incentives that the government gives it and the facilities that the financial sector can offer, be it public or private.

Incentives provided by the Government

1) The first incentive for exports is the refund of VAT through credit notes that can be exchanged for purchases of inputs or raw materials in the domestic market or also serves to pay the UTE return (this may vary).

2) Another internal tax that is returned is the specific internal IMESI tax that is applied to certain products such as drink, tobacco, etc. etc. but since it is a specific tax, the State can decide that tomorrow it will be expanded or eliminated.

3) A third incentive is the one known as Temporary Admission. There are certain products that require imported raw materials or inputs to be incorporated into the export product. Under this system, I do not pay the respective customs duties because those products will be incorporated into an exported product and will not remain on the local market.

Temporary Admission works like this: the company must register with the LATU as an exporting company and as a company that imports certain raw materials or supplies. Registration that lasts for one year and is renewable every year. Every time I export a quantity x, I pay a rate of 0.6% on the CIF value (this data may vary) and with this payment the LATU gives me the certificate to proceed with the import and not pay the customs duties.

4) Another incentive is the Draw-Back: it is when the imported raw materials or inputs are part of an exported product and the corresponding tariff duty is paid. After the export, the businessman asks the State to return the amount corresponding to the tariff paid.

5) Others are pre-financing incentives; This incentive constitutes an agreement between the exporting company and the BCU and it operates like this: the exporting company ensures payment of its exported product through the document called Letter of Credit and gives it to your Bank to guarantee it.

6) Export Credit Insurance. It is an insurance that assures you that you will collect your money against any commercial risk, except when it occurs in case of non-compliance of merchandise by the exporter. This insurance is granted by the State Insurance Bank, BSE, but is participatory only to its insured (a rate between 1 or 3% of the export value is paid.

7) There is another incentive that the State provides but that does it in an ineffective way and that is called Administrative Incentive and it consists in that the diplomatic representatives accredited in the different states provide the exporter with information on international demands that may be of interest to Uruguayan entrepreneurs.

The Ministry of Economy and Finance has an office where there is a Department of Commercial Information that informs the different parties interested in reaching the international market.

This incentive had been operating efficiently until the 1990s, when the privatization of services was present in all commercial relationships. Along with the Ministry of Economy and Finance is the private Financial Sector and also the Uruguay Siglo XXI Office, which are in charge of promoting both Uruguay's international trade and foreign investment in Uruguay.

There are also export incentives

8) Post-Financing or post shipment

In the time it takes for the importer to pay the value corresponding to the exporter, the latter needs to continue operating, he can go to the Banco República or the Central Bank to grant him a Financial Resource while he is paid from abroad.

These are incentives that the State offers to exporters.

On the other hand, union associations defend exporters by lobbying to achieve competitiveness of products in the international market.

Facilities provided by private financial institutions:

They do this through the Foreign Trade Departments, permanently advising on both the knowledge of exports and the search for new markets, thus constituting new export opportunities.

Export Problems

1) When the exporter faces this activity, he finds himself unaware of what is the determination of his exportable offer (it means the quantity of that product that we can offer in the international market).

Small countries always seek to contact large markets, but in reality the correct thing would be to link up with markets that are at the same level, due to an Exportable Supply problem.

The Exportable Supply is determined as follows: each company has installed capacity to produce x quantity.

Example

Installed Capacity - Committed effective production = Supply

Exportable Potential.

500 tons - 200 Ton = 300 Ton.

2) Another problem is that they do not know the origin and characteristics of the International Demands, so they must go to the different organizations or Embassies or to the different Binational Chambers of Commerce or to the Internet.

3) Another problem is that they do not know what is related to logistical means.

4) Another problem is that they do not know the export procedures.

All this ignorance is called Business Myopia.

Export Promotion

Decade of the 80s: it was in the hands of the Government that stimulated exports by providing additional incentives for tax refunds, incentives that were granted to open new markets, to export new products; incentives than in what was participation in fairs, etc. The Government assumed everything. After "La Tablita" (1982) these incentives were eliminated by the Government 1) because the Governments could no longer sustain this disbursement, 2) because it began with the effects of the privatizations that affected the export promotion policy.

To promote exports:

1. Business rounds were set up in which the exporter and the importer (real or potential) face each other and discuss the conditions for negotiating the product. These business rounds were assumed by the State, favored the businessman because they paid for the transfers, etc. Trade missions: they are less specific than the business rounds. They accompany an authority to make contact with potential claimants. Fairs and exhibitions: Fairs can be coordinated by the Government but the exporter still pays a cost to participate in the Fair, they can also be promoted by the private sector.

A Fair is a meeting between an exporter and an importer.

The Fair calendar is handled with one or two years in advance in which the importer of a certain product already has knowledge of the Fair and goes to it to contact new customers, to find out about innovations and technological advances, etc.

In a Fair there may be 2 situations: 1) That the accompaniment of merchandise is allowed to be exhibited in the fairgrounds and to be delivered as a donation to people who visit the Fair. 2) They allow the sale of products at the fairgrounds and they are delivered at the same time (here the product must be previously nationalized, that is, pay the import customs duties).

The exhibitions are the show-rooms (permanent offices that can be in the Embassies or in specifically determined areas and paid for by an association of exporting producers).

Traveling exhibitions can also be given.

There are also other organizations that do this type of activity (eg the Binational Chamber of Commerce).

Ways to export

1) Direct exports:

They are made directly by the producer. This has a department integrated in his company that is in charge of searching markets for its products and contacting international applicants. It benefits you because it takes advantage of costs, improves its profits, helps you to know the destination of your products and to be in direct contact with the buyer to learn more about the product's trading conditions, consumption conditions, etc.

These direct exports can have a disadvantage: that the company requires a lot of personnel to specifically attend the external market, which can cause a high cost.

To save this problem what they do is to outsource and there we are in front of;

2) Indirect exports:

Both the company and the exporting merchant contact each other regarding the possibilities of International Supply and Demand. It has the advantage that markets are energized and diversified, which can allow better and better use of installed production capacity, etc.

As disadvantages we find that the entrepreneur's profits are diminished; the exporter does not know the destination of his product, so he loses contact and the opportunity to know the requirements of its consumption. This indirect export system favors small producers who do not have sufficient production or sufficient knowledge to reach international trade, and in turn offers them the opportunity to advise on different trade situations.

3) Specific Exports

These exports in some situations can be direct or indirect can be done through:

1) The Trading Companies streamline international trade either by buying products and exporting them on their own account or exporting them on behalf of the producer himself.

Trading is characterized by mastery of knowledge about international trade, which is why they have specific departments (Customs Department, Logistics Department, Quality Department, etc.) to provide the producer with the necessary advice so that the product arrives in good quality and condition to the target market.

2) Joint Ventures (indirect export - associative forms of export) share risks and benefits (co-investment). It is given by the association of foreign capitals with national capitals (whether they are private capitals among themselves, private capitals with state capitals or whether they are state capitals among themselves).

The Joint Venture is considered as a form of market penetration and as a form of export because one of the two parties imposes its product or its technology on that investment-receiving market.

A Joint Venture can be formed by: a) The foreign company that wants to reach the local market wants to avoid certain difficulties such as sourcing raw materials, knowledge of the market; b) by obligation; there are certain national products that are considered strategic and the Government determines that the foreign investment that reaches the market to elaborate strategic products can only do so when it is associated with a national one.

To negotiate the Joint Venture, you must take into account the markets to which this merger will export and who will have the management and responsibility for the technical development of that company.

3) Franchises: in them there is the use of a brand established internationally or nationally and which is about installing in a new market. The Franchisee pays a certain value depending on the product, the area used, the advice it provides, etc. which is called Royalty, but also a percentage is paid on the annual sales that are obtained from it.

The Franchisee's obligation is that he becomes a mere administrator of a business because he must respect the conditions of marketing, decoration, establishment, etc. that the Central House or the Franchisor impart.

4) Counter Trade (compensated exchange): this is a modality that currently handles between 20 and 30% of world trade, a modality in which it is a matter of largely avoiding the outflow of foreign currency, therefore the Payment of exported merchandise is made partly in foreign currency and partly in merchandise.

This system is promoted more especially to settle deficit trade balances between countries and is applied more to high-tech products with little commercial outlet.

This form is applied to a large extent by countries with a planned economy, the same ones that do not have strong currencies.

Within what is the Counter Trade, we find:

a) Compensated Purchase: in which the importing country forces the exporting country to buy something in domestic product. Not as many currencies come out and it is an opportunity to place products abroad.

Additional feature of the system: there may be a variation in the agreed price for the payment of plus or minus 10%.

b) Repurchase agreement: it is given for the sale of technology that implies productive development, with the result of which the payment of this sale is made in time and term ranging from 5 to 10 years depending on the project. The benefit is that technology is exported and in turn it secures products for being marketed in its market. The other country benefits because it imported the merchandise without the outflow of foreign currency and also a market is assured.

c) Switch: it consists of a deviation of the trade cutting the flow between import and export for the payment of that operation. Cut the flow because the switcher searches for other markets. The switcher earns a commission.

d) Off-set: it is a system that is applied especially when it comes to government purchases.

It has 2 purposes: 1) to avoid the total payment of the purchase in foreign currency; 2) incorporate and promote the "Uruguayan" products in the good that you are buying.

e) Swap: constitutes a geographical relocation of 2 products that want to export to 2 countries that want to import and that are geographically very distant.

Who makes this relocation possible is the Figure of the Switcher that detects the negotiation and tries to convince those countries that it is better for them to import from the nearest country although there are small variations in technical conditions, thus saving transportation and customs duties.

All the operations of the compensated system have the particularity that their operations can fluctuate 10% more or less than what is traded.

5) Barter: it is the oldest of all; It differs from the compensated system in that it is rigid in its negotiation and its ratio is 1 to 1 (product x product).

6) Clearing Agreements: countries open an account and exports and imports are recorded that are settled, paid or may move to a new period.

7) Cooperatives: Its purpose is to bring together individual producers, thus constituting an adequate volume called exportable supply to reach foreign markets.

A cooperative can be an export cooperative (eg Manos del Uruguay) but it can also be an import cooperative whose purpose is to distribute the costs that it causes, minimizing them in each member.

They can also function as collection centers in the internal market. The Cooperatives have an administration that is the one that by resolution of the Assembly dictates the guidelines and the ways of operating, as well as also establishes what is the Marketing of the same.

Cooperatives have the disadvantage for their members that they lose their identity within the business.

8) Consortia: It is the group of entrepreneurs who produce to meet exportable supply. The objective is to bring together production.

Consortia can be formed by small, medium or large companies. This separation facilitates its performance.

In Uruguay, there is no law on Consortia in commerce, but it is managed as an Economic Interest Group.

The sum of these entrepreneurs constitutes a new company with a new brand in which these entrepreneurs contribute part of their production to meet market requirements, that is to say that commercially the company continues to function as such and does not lose its identity in the market (ex. Cuban Master, Optimum Oil, etc.)

In Consortia, decisions are made by the Board of Directors.

Types of Consortium: 1) Guarantee or Guarantee: they support the company's participation in an International Tender. 2) Promotions: they guide the International Marketing of all the companies that make it up, that is, they do not negotiate or carry out international trade activities. 3) Origin: they operate in the country of their nationality. 4) Destination: they operate in the country receiving the export (importing country). The Consortiums have their beginning in Italy and Spain, whose law establishes that for the existence of the same, at least 4 companies must join. In Uruguay there is no law that establishes the legal aspect of the Consortia and they are managed as economic interest groups (GIE).

Consortia can be: 1) specialized: they refer to a single product line, eg. Oil producers come together and market only oil. 2) general: products from different production lines are combined or different products are combined whether or not they are complementary.

Consortia are more well known in Europe and Latin America.

In Japan they have their beginning in the Zaibatsu era, which were the great economic conglomerates that existed in Japan until the 1940s and with which they broke into the North American market, affecting what was the consumption of national production, which motivated a lobby from the United States to eliminate the Zaibatsu (which were monopolistic) and the figure was changed under the name of Keiretsu, which also constitute alliances of business groups whose objective is to achieve greater market share.

It differs from the Consortiums in these areas 1) in that they are vertical production and horizontal marketing consortia insofar as they are commercialized at the same level (they are all distributors). 2) At the center of these business or business groups, there is a financial capital or a banking institution that is supporting the development of Keiretsu.

The Keiretsu still constitute production monopolies, which means that their products remain more competitive in terms of price than those of the other markets.

Export Payment

1. Letter of Credit: it is the most common and secure; It can be on demand, which implies that the export must be paid once the importer has received the merchandise or it can be irrevocable in which all the negotiations or conditions established in it must be fulfilled, a condition of the negotiation is the time in which the merchandise is going to be paid, that is to say that a Letter of Credit does not admit non-compliance or changes..Pre-deposit or advance payment: its name explains it and constitutes an outflow of foreign currency in cash, making it the importing country. This condition occurs when the importing country lacks reliability or liquidity to meet its international commitments.Credit sales: when there is an excellent relationship and thorough knowledge of the conduct and behavior between importer and exporter. Consignments: there is no payment, merchandise is sent and as it is sold, it is paid.

Reasons why a Company decides to internationalize

For the company's own interest (to be able to diversify its market, increase its market share, take advantage of the opportunities offered by the international market, to take advantage of its idle capacity, to improve its profits, because the national market is saturated, to avoid domestic competition, to improve the country's economic situation, to take advantage of different technological factors, to get advice from the different groups to which I belong, etc.)

When you decide to internationalize, you analyze the strengths and weaknesses you have; It begins by analyzing its internal policy, because depending on the mission and vision it has, determines its policy of what to do in international trade. The company that only serves the internal market is called ethnocentric (it feels comfortable in this way) but there are other companies whose mission is to conquer other markets, etc. and that is why they export, so we are faced with a company with an expansive international trade policy.

This can be a polycentric company when from its country of origin it serves what exports are. The 1st phase of a polycentric company is one that makes exports of the product it is currently manufacturing (when no modification is made to the product, an extension of the product is made). There are also circumstances in which the product is adapted to the tastes, circumstances, etc.

The 2nd phase is that when the company decides to settle in the destination country through an agency, to take advantage of the advantages and incentives (Fiscal, Financial, etc.) that this market offers.

Regiocentric company: when in its internationalization it considers a market group part of a region as a single market and is willing to serve that group considering it a single market. But it does not mean that this company can become a polycentric (in addition to exporting to one region, it exports to different countries).

Globalized company: o geocentric: when it measures the world as a single market where its base production is generic and tries to adapt that product to each individual market or region characteristic.

A geocentric company can be royal or polycentric at the same time.

When the policy is determined, it has to consider the characteristics of management or the Marketing Manager, who can be active in his attitude of international trade, to the extent that he prepares for what is the internationalization of the company considering 3 important steps, in a first step (Initiation Process), the exporter or businessman looks for the international demand or arrives because his concern was to look for it.

When it arrives, it reacts to International Demand (it analyzes its installed capacity and with this it analyzes its exportable supply, idle capacity, the situation of the internal market, the incentives that the Government gives me). All this is called Main Stimuli and with this I can continue analyzing the other steps.

Secondary stimulus is the breakdown of the above.

Given this breakdown, you can decide whether to export or not, whether to attend to it or not. If you decide to continue, you go to a second phase, which are the Evaluation Processes: how will I make the market profile, participation in International Fairs, product to be exported, packaging, logistics, if the export is done with personnel own or contract to third parties (I compare costs).

Third stage: Decision: I decide to export and I contact the other party to finalize details, I register at Banco República, contact the customs broker, etc.

I try to negotiate (the above procedures serve to enrich my negotiating power).

Passive Exporter: He does not look for the International Demand, but it can reach him and then he analyzes the idle capacity, the government stimuli and with this he performs or fulfills the 1st stage and from there decides or not to export (that is to say, he does not do the 2nd stage).

Take advantage of an opportunity that the market has given you and that at that moment you have the strength to only attend to that opportunity.

When the company goes international, it faces what negotiations are, which are based on international economic relations and which tend to favor or protect global or sectoral interests of the different countries, a negotiation that should focus on the long term, synchronizing with the political, cultural and social effects of each market.

Within a negotiation we find 2 basic concepts: 1) the efficiency of the negotiation 2) the power of the negotiation.

International negotiation:

Relationship between natural or legal persons from 2 or more countries to reach an agreement making an effort that aims to obtain an economic benefit for both parties, measuring the effectiveness and bargaining power of these parties.

The efficiency or effectiveness of a negotiation is based on what is the use of material, productive, economic, human resources, etc. of the company.

Bargaining power is measured in the effective capacity of influence that can be exercised over the other company or negotiating party.

International negotiation can be at the private level when it is carried out between different types of businessmen, at the public or governmental level, when it is exercised between the government and a (mixed) combination when we face negotiations between the State and the Private.

All negotiations involve a process carried out by 2 or more parties (relationship of a bidder plus a plaintiff or 2 bidders + 2 claimants or combinations of these). The negotiation process involves successive approaches to the point of converging on the desired result in which there is full satisfaction of those limits or those negotiated spaces and that the actors are willing to agree.

In a negotiation process, both the bidder and the plaintiff seek to approach the maximum limit (plaintiff buys) and the minimum limit (bidder sells).

Negotiation is the one we associate with different payrolls of spaces or nominated spaces.

"Incoterm" are the terms of international trade, there are different large groups: Ex Work, FOB, CIF, FAS, etc.

The bargaining function is used in negotiations.

Within a negotiation we find 2 very important concepts that are duly combined through techniques and strategies in all negotiations:

1) efficiency (we measure it with what is productivity, which is the result of a management in which we have known how to combine the different resources that the company has: financial resources, technological resources, human resources and within these we find the of marketing).

In turn, these resources that generate efficiency can be said to be also subject to what is a bargaining power.

2) the negotiating power, which is the influence that is exerted on another actor, this power is more framed with what is the size of the company.

If we add efficiency + power we achieve what is called negotiating capacity.

To analyze the negotiation capacity, it must be related to the power of negotiation, the negotiating ability, with the information that I have from inside and outside the company, the Marketing Mix (the 4 P's).

The negotiating ability, in addition to being an implicit element in every human being, has to be supported by other aspects, such as eg. The training must have the support of what is the administrative group, etc. of the company to provide you with the information you need and must have some negotiating experience that may be in the private or government sphere.

The power to negotiate is based on the domain that you have over all the operational parts of the company, on the knowledge of the benefits, of the attributes of the product.

Regarding Commercial Information: I have to know what is the classification of the negotiation that I am going to carry out, that is to say in what circumstances do I carry out the export, the referential prices, the micro and macro analysis of the country to which I export, the decision-making application (that is, the costs and conditions that I manage as a strategy and that influence the buyer's decision-making capacity).

Marketing Mix: it is given in the 4 P. To these are found important data such as eg. The Financing (what I am willing to assign to attend the Payment Method), the quality and guarantees, the promotional compound, the functional product, the after-sales service, the commercial channel, the date and the security of delivery.

Types of negotiation

1) Private trade negotiation (between 2 private companies)

2) Official trade negotiation (between state companies)

• commercial order

3) Mixed Negotiation

Negotiations are carried out in compliance with certain stages, that is, every negotiation has a process to comply with. These stages are given by: 1) Pre-negotiation or also pre-conference call that includes the first approach or relationship between the parties; stage in which the basic rules of the negotiation will be known, such as knowledge of the product or knowledge of the subject to be negotiated, product components, product quality, demands for product internalization, market references and preferences, establishment of established dates to follow up on this negotiation. 2) Negotiation itself or conference that includes the solution of the problems or the divergent points of the negotiation,that is, he understands the application of strategies and persuasion that allow me to achieve my objective.

4) Post-conference or post-negotiation is the moment in which we follow up on compliance with what has been negotiated.

For a negotiation strategies, tactics, etc. are used. that allow me to achieve the proposed goals: these strategies are: the delivery time, the quantity offered, the quantity demanded, the price offered and the agreed price, the use of the integration processes, the guarantee that I am granting you, the seriousness and the recognition of my company, the use of the brand, etc.

When we are going to negotiate, if we are in front of the person: we use the appropriate manners without exaggerating gestures, we must know the idiosyncrasy of the person with whom we are going to negotiate.

Empathy with the buyer must also be managed.

We do international negotiations to cover other horizons, companies want to expand, etc.

Strategies and Competitive Analysis

When a company goes international it faces certain barriers to entry; If the company goes international through foreign direct investment or through its product, it finds 5 components that make it difficult for it to access the market and that make the company organize certain competitive strategies to overcome these difficulties.

There are 5 forces that influence competition:

1. Threat of new competitors Threat of new or substitute products Bargaining power of buyers Bargaining power of suppliers Competitive rivalry that exists between companies.

1) They bring to the market a desire to participate, to establish new strategies to cover as many clients as possible.

The decision to enter the market is accompanied by an investment, resources, etc.

This entry of new competitors causes prices to drop and therefore profit margins decrease.

In order to eliminate the threat of new competitors, Porter describes 8 obstacles that can be presented to the incursion of new competitors:

1. Economy of scale: the unit cost of the product decreases when the total volume of production increases. It is a barrier because we enter to compete with costs. Product differentiation: whether it is a general or particular product, brand loyalty, etc. Capital requirements: capital is required to finance facilities, research methods, advertising. Financing inventories, etc. Costs caused by the change: costs caused by the products and the suppliers by the changes Distribution channels: their access, etc. (These are finite and may not be available.) Government Policy: generally interferes with other industries entering the market (eg subsidies). Expected response from competitors Advantage enjoyed by companies for costs of economy of scale:Established companies have cost advantages.

2) The availability of substitute products makes leading companies have to change their strategies, take precautions.

3) The final goal of a client is to pay the lowest possible price for the products that he uses as inputs; if he achieves this, the supplier's profits are reduced.

Ways to have those benefits: buy in large quantities (so that the company needs it to survive).

Buyers try to negotiate lower prices when there are many suppliers.

4) The opposite of the above: suppliers exercise power to raise prices and this influences the utility of their customers. Suppliers are important when they are large and few, when their products are a significant input for the buyer, when they have no competition or alternative products that can compete with them, a willingness to develop their own products.

5) Rivalry: which aims to improve the position and obtain an advantage over others (price competition, advertising battles, product differentiation, etc.)

The rivalry forces companies to rationalize costs.

Factors affecting rivalry: a) lack of differentiation b) high fixed costs for advertising, etc.

There is a competitive advantage when there is a distinctive factor among the competitors that determines the success of the company. There are 2 basic ways to achieve competitive advantages: 1) implement low-cost strategies (allows the company to sell at lower prices than the competitors). 2) differentiation of products so that customers perceive that it gives them a benefit that others do not.

Competitive advantage is achieved by creating greater value than the competition and this is obtained from the customer's perception.

To create competitive advantages, there are strategies determined by low costs and product difference, and they will depend on whether we refer to broad markets: cost leadership and differentiation. Cost leadership is based on the position of a company with the lowest costs in the widest markets. For this they have to make important investments in technology, logistics, economy of scale, etc. The important thing is that they offer lower prices in the competitive stages of the product cycle. This cost leadership is an important advantage only if there are barriers to the competition not achieving the same costs.

Differentiation is the customer's perception of a real advantage. It is used to defend a position in the market (eg Coca-Cola).

PART II

MARKETING AS A UNIVERSAL DISCIPLINE

Work philosophy. In order to meet the needs of consumers based on the exchange of products, goods and services, we have to focus all the resources that the company has on a process of thinking and acting to achieve the objectives of the organization on the opportunities and threats it offers us. the market; the same that are reflected in the needs of consumers.

• Marketing is Universal because it is applied in the same way (speaking generically) in all markets, from the US to Japan and from Uruguay to Australia, with the same objective: to satisfy the needs of the consumer. knowledge that implies the mastery of knowing how to face market situations and needs.

Three Basic Principles of International Marketing:

1. Value equation: it becomes stronger than if we were referring to a national market, since we are not facing a direct relationship with the consumer, V = B / P, we try to maximize all the benefits that the product has to decrease the pressure of the price, as profits increase, the value of the product increases and the price falls, Competitive / comparative advantage. o Product Differential: when an additional value is added to the product (also taking advantage of what the work specialization is) this makes me differentiate myself from the competition, thereby also giving the consumer an opportunity to compare. This competitive / comparative advantage can be given in the sum of the benefits or in the price. Currently and according to the life cycles of the product,it is about finding competitive / comparative advantages in what is the price element and this advantage is what has made investment capital for production move from the center to the periphery, that is to say that developed countries are moving towards countries less developed to take advantage of all the advantages of cheap labor and social costs. The focus or concentration is the way to meet the needs and desires of consumers by combining the 2 previous principles, creating a value or value added equation and creating competitive advantages to be able to differentiate myself from the competition.

According to Economic Theories, international Marketing can be analyzed through what is the comparative advantage that the market offers me, which is given in what is the specialization of work and

1. Sometimes we must consider that despite the market having production of raw materials and inputs, a given company finds it cheaper to import a product than to manufacture it itself. The life cycle of the product that makes this product on the international market and depending on the characteristics of the market, its permanence is adjustable, I adjust the times for each stage. Related to the provision that the company has put for the combination of the previous two.

In the Colonization Stage, the consumer did not feel the need to have a deep knowledge about the product, therefore a passive Marketing was lived, dedicated only to the offer and with a small integration of the products.

• 1960 - The Marketing Philosophy begins to be energized and applied. It is given a facet in the logistical aspect (chain) that makes it possible for the product to reach the final consumer. 1980 - Marketing is more …… of the consumer, …… in the international sphere the company what it does is an adaptation of the product According to the tastes and preferences of the consumer, previously there was an extension of the product. 1990 - In addition to adapting the product, International Marketing considers what the services of the product are (packaging, preservation of the product during logistics, financing of The negotiation. Marketing that the company adopts is based on what its mission is, this can only be to serve the national market without ruling out that at any given moment there is international negotiation.

A second mission is to serve international markets, for which you must decide:

1. Selling your product from the country of origin but adapting its production to the needs or preferences of those consumers, consider the socio-cultural elements. The company decides to settle in the destination country to take advantage of all the advantages provided by the policies …… e market integration and its common element is adaptation.

In a geocentric company, Marketing Managers generally seek a global strategy that responds to the needs and culture of those markets.

A global strategy that has a generic root for all markets but with a termination adapted to each of the markets.

This company to expand in the international market in any way, meets some forces that can help it in its development or restrict that development. The company analyzes these forces (see loose leaf that it gave).

1) Driving or driving forces: they help you grow, develop and internalize yourself in the international market.

With these forces, the company develops its own Marketing and eliminates threats and takes advantage of opportunities.

Within these forces we find: a) Technological development: technology has facilitated the expansion of different product markets; b) Product costs: by producing more and achieving better results, the cost of the product decreases; c) Development of communication and transportation: the Marketing managers of these companies through communications and the ease of transportation constitute a force for the development of the company because in this way it can be informed, for example. Of technological advances and thus make proposals in the company. d) Needs of the markets: the need of the markets makes Marketing strategies expand in the international market taking advantage of opportunities. e) The socio-cultural element: If I know the idiosyncrasy of a market,then I generate specific products for them.

2) Forces that restrict or contain trade:

National controls or barriers to entry into the destination country. The National Controls are given by the requirement of compliance with documents, certificates, previous payments that for a certain reason (economic, social, health, etc.) that country requires. The requirement of so many requirements makes the Marketing Manager lose interest in entering that market.

The passivity or activity of the company against market opportunities: the myopia of what Corporate Marketing is means the lack of vision that Marketing has in the company to be able to take advantage of the opportunities that the market is offering.

Tastes-Preferences Market Difference: differences between the origin and destination markets, especially when it comes to products that require further research and development in their adaptation.

3) Regulatory forces in International Trade: determine how this trade should be developed and its Marketing techniques.

Financial Aspects: International Finance: they are related to the international means of payment.

Monetary Aspects: Foreign Exchange: IMF (exchange rates, regulated by the IMF through the participation of foreign currencies in International Trade)

Regional Integration Processes.

Information System: all companies must know where to go to obtain the information that allows them to act in the market. That information must be useful, accurate, efficient, etc.

The process of obtaining the information is called Exploration.

Ways to carry out the exploration: 1) Follow-up: here the person seeking the information is oriented towards those relevant aspects of the messages that cross their field of activity.

2) Search: here the individual deliberately searches for information, carries out a project, or specifically searches for what he is looking for.

Determining the mode of exploration is important because: a) it lies in the degree to which the explorer searches for the information; b) the state of attention that the person has at the time of acquiring the information.

Information sources:

1) Of personal origin: when people are the most important source that executives have in the different headquarters of the company.

There are personal sources inside and outside the company:

Internal: people who work in the company

External: distributors, consumers, advisors, authorities, etc. They can provide information but do not work in the company.

67% of the information is of personal origin.

2) Of documentary origin: 27% of the information is of documentary origin. It is very wide but it is not the most important.

The documentary sources can be: of internal origin: they are those emanating from the company; or external: they are those emanating from the market.

It is convenient to do an audit of the information, so that it is not duplicated.

3) Sources of direct perception: are those obtained through the perception of the person receiving the information (eg, when a manager finds out that another company is building a plant in a location x, then he perceives that they are going to do a product that will compete with theirs).

There is also historical perception (eg, when the manager receives the information and compares it with what happened historically).

The means of communication to transmit information are:

1. Human voice Printed words and numbers Direct perception through the senses

Others: ex. Internet, radio, TV, memos, letters, newspapers, magazines, books, etc.

When we analyze the market information we see that there are opportunities that translate into demands.

Information systems allow classifying these demands into:

1. Existing Demand: consumer needs are met with existing products / suppliers. It can be measured or calculated accurately (eg Coca-Cola demand). Latent Demand: consumer needs are not met with existing products / suppliers. It cannot be accurately measured or estimated. It will be met if a Marketing Mix is ​​offered that meets the needs. Incipient Demand: consumer needs do not exist now but will exist in the future if the current trend continues. If the trend continues it will become a latent market. It is not an existing market: there would be no answer if the product were offered.

A marketing information system is a strategic asset of the company because at the moment it is very difficult to see the limit that exists between Marketing and other departments and between Marketing and other markets.

Companies are experiencing flatter, less vertical organizations, and the intensity of the information circulating in company structures is higher.

Organizing information is collecting, disseminating, analyzing and distributing it to managers to facilitate decision-making.

The information that allows us to compete in the market is information from Senior Management and the information system must try to apply that information to decision-making. A company needs organized information when:

1. It is in a competitive stage or position in the market. When Directors must know how the different departments work. When proposals are produced that will allow modifying the company's strategies. When competitive pressure increases in the market. When changes of the market are more and more frequent when there is data overload.

Market segmentation

When a company sets out to conquer a market, it must analyze the global context.

Segmentation is the process by which we try to identify groups or sets of potential clients at the national or international level that have similar behavior.

Once these segments have been identified, we must evaluate them and study the Marketing Mix that we are going to apply.

By defining the Marketing Mix we can identify the consumers that we want to reach effectively and efficiently.

Once the market is determined, we look for the best positioning of our products, which means how we can fix our product in the minds of potential buyers through an appropriate Marketing Mix.

Currently we find the pluralization of consumption (eg demand and consumption of typical food from one country in another country).

Segmentation can be grouped according to several criteria:

1. Psychographic Segmentation: values ​​attitudes, lifestyles, behavioral characteristics. Group the segments of potential customers by attitudes, values, lifestyles, etc. Demographic Segmentation: includes Per Capita Income, Population Size, etc. It is based on the characteristics of the population: age, sex, income, education, etc. There are demographic trends that indicate the appearance of new segments (decrease in the number of people getting married, per capita income, the new role of women in society, etc.) Segmentation according to aspects such as Government Regulation (they segment the market generally according to the income of the population). Segmentation according to behavior: consumers are classified as regular, occasional, average, non-users.

Target audiences

The Target Audience is the selection of people with the greatest potential for the placement of our products.

Criteria for determining Target Audience

1. See the size of the current segment and the growth potential it has. Potential competition that we have (avoid segments in which there are many competitors to avoid difficulties).

Compatibility and Possibility: Compatibility means that the segment is compatible with the objectives of our company. Possibility: that the competitive advantages offered by that market make it possible to identify the segment.

Once the Target Audience is established, the strategy for that market is selected and within those strategies we find 3 categories of strategy for a target market:

1. Global Concentrated Marketing: it is a Marketing strategy or a Marketing design to capture a single market segment.Non-Differentiated Global Marketing: which involves creating the same Marketing Mix for a large mass of consumers.Differentiated Global Marketing: it is the fixation of objectives of 2 or more market segments with multiple Marketing mix offers (the organization has greater coverage).

Once the global market was segmented, we should seek to position the product.

For the positioning to be effective we classify the products in:

1) High Technology Products: they are those where the positioning that refers to technology must be important, the products are purchased according to specific technical characteristics and are classified into 3:

1. The Technicians: are the products in which the buyers have specific needs and that require a lot of information regarding the product (eg financial services, tires, computers, etc.) Those of Special Interest: they are the least technical than the technicians and are oriented towards leisure, entertainment (eg nike, adidas, photo cameras, etc.) Self-demonstrations: they are those that are said to speak for themselves, the publication emphasizes that the product by itself is efficient (eg a Ferrari, etc.)

2) High Status Products: they are those that require less emphasis on the information part and more emphasis on the image part, they are products that are related to symbols, such as. materialism, wealth, feelings.

There are different types: a) those that solve a common problem: they are those that have a benefit in relation to a certain moment (a coffee, a soft drink on the beach). Communicate what is beneficial and everyone understands it. b) global village: these products are those that are increasing in quantity, that are highly visible and that their high price gives an image of improving social status (eg Sony, Mercedes Benz) c) Products that use Universal Themes: they are those who use advertising themes that are simple and can be understood by everyone.

COMPILED BIBLIOGRAPHIC MATERIAL:

Daniels, JD radebaugh, International Business, 8th ed. Prentice Hill, Mexico, 2000

García Cruz Rosario Markting Internacional, 3rd edition. ESIC, Madrid, 2000

Keegan Warren J. Fundamentals of International Marketing Prentice Hill, Spain 1996

Porter, Michael E. Competitive Strategy, 23rd Reprint, Compañía Editorial Continental SA, México 1997.

Stanton.Etzel.Walker Marketing Fundamentals, 11th ed., Mc-Graw Hill.

Prhilip R. Cateora John L. Graham Marketing International, 10th Edition. MC-Graw Hill.

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