International Marketing Management
IBO 02 Free Solved Assignment
IBO 02 Free Solved Assignment July 2021 & Jan 2022
Q. 1. “One of the critical decisions in international marketing is the mode of entering the foreign market”. Discuss
Ans. The internationalisation of business is a widely observed phenomenon today. More and more companies are seeking business outside their national boundaries.
In its effort to go international, it has to decide the type of presence it desires to maintain in every market, where they would like to operate.
Following are the various modes of entry to foreign markets:
(iv) Contrast Manufacturing
(vi) Joint Ventures
(vii) Strategic Alliance
(viii) Merger and Acquisitions.
(1) Exporting: Exporting is the simplest way to get involved in a foreign market. Occasional exporting is a passive level of involvement where the company exports surpluses from time to time and sells goods to resident buyers representing foreign companies.
Active exporting takes place when the company makes a commitment to expand exports to a particular market. Exporting may be of two types:
(a) Indirect Exporting: A company can hire independent international marketing middlemen. It is more common in companies just beginning their exporting because it involves less risk and less investment.IBO 02 Free Solved Assignment
(b) Direct Exporting: Direct exporting means that a company can handle its own exporting. In case of direct exporting, investment and risk are somewhat greater but so is the potential return.
(ii) Licensing: When a Company is unwilling to take any risk for the sake of international business, it sometimes opts for licensing as the mode of entry.
Licensing is, simply put, nothing but entering into a contract to allow another firm to u an intellectual property, such as, patent or a trade mark.
This definition clearly brings out the fact that as an entry mode, this option is not available to all firms. Only those which have saleable technology, know-how, can use the licensing route.
The attraction of licensing lies in the fact that it involves no investment and very little up-front expenditures. And 3 successful, it can generate a fairly high rate of return.
Under a licensing agreement, the holder of the knowledge technology or know-how) transfers the same to the buyer for his use against the payment of a fixed amount, which can either be a one time lump-sum payment or a percentage of sales, or a combination of the two.IBO 02 Free Solved Assignment
Licensing arrangements suffer from several disadvantages from the standpoint of the licensor.
First, the licensor does not have any management control over the licensee and is, therefore, unable to control either the quality or price.
An unscrupulous or inefficient licensee can therefore, cause damage to the long-term development of the market potential. IBO 02 Free Solved Assignment
Second, licensing is extremely limited in its scope. The licensor cannot have a share of the returns from the manufacturing and marketing operations of the licensee.
Third, the life of the successful licensing arrangements is normally short, as the licensee may develop his own manufacturing capability within a reasonable short period.
But the most dangerous aspect of the licensing arrangement is that sometimes the licensees, after they internalise the technology and also in some cases improve upon it, turn into competitors of the licensors.IBO 02 Free Solved Assignment
(iii) Franchising: A similar method of entry is franchising which is globally very common in the food, soft drinks and fast food business.
Franchising is a form of marketing, under which the parent company allows the franchisee to use its methods, symbols, trademarks and architecture.
The contract will specify the place of operation of the franchisee and the period for which the arrangement will remain valid. Several forms of franchising are in operation.
One form is hundred per cent franchisee ownership; the second form envisages a concept of area or master franchisee who in turn can appoint sub-franchisee(s).
The third is where the franchise is in fact owned by the parent firm itself. This happens essentially at the market-testing stage.
The principal wants initially to find out the market potential himself before deciding whether large scale franchising will be profitable.
The disadvantage lies in the fact that unless strict monitoring is done, franchisees may default on quality and delivery, thus affecting the reputation of the principal.
(iv) Contract Manufacturing: Under contract manufacturing a foreign firm enters into contract with manufacturing firms in the host country for production of its products according to its specifications but itself managers and controls marketing in the host market. IBO 02 Free Solved Assignment
This arrangement allows the firm an easy entry with low risk into the foreign market.
Under this arrangement profit on manufacturing cannot be reaped by the foreign company, Coca-Cola, Pepsi, Procter and Gamble, Reckit and Colman, Kellogg are some of the companies that have adopted this approach.
Contract manufacturing has the drawback of less control over the manufacturing process and loss of potential profits on manufacturing.IBO 02 Free Solved Assignment
(v) Assembly: Typical assembly is the last stage of manufacturing and depends on the ready supply of components or manufactured parts to be shipped from another country.
Under assembly, most of the components or ingredients are produced domestically and the finished product is assembled in the foreign country.
Often the companies want to take advantage of lower wage costs by shifting the labour intensive operation to the foreign market which results in lower price of the final products.
Another advantage is that the investment to be made in the foreign country is very small. The political risks of foreign investment is, thus, not much.
(vi) Joint Venture: In this arrangement, foreign companies join with local companies or parties to establish a local business in which foreign company or government shares ownership, management and control of the joint venture business with local principals, i.e., party or government.
Generally, in this arrangement, foreign investor joins with local investor to build a new manufacturing facility or buys an interest in the local company or a local business.
Suzuki-Maruti, Modi Xerox, Hindustan Lever Limited, DCM Daewoo etc., are some of the joint ventures. IBO 02 Free Solved Assignment
The greatest advantage of establishing a joint venture is that the local party is well acquainted with local markets, competitors and the political and legal environment and the foreign investor has to invest less.
Again, local party will also have to spend less resources and it can have the advantage of the latest technology and managerial expertise of foreign company.
The disadvantage of joint venture is that there may be a clash of interest due to differences in their management philosophies, goals, global marketing policies and aspirations.
This may lead to management conflicts. Furthermore, joint ownership can hamper a mult national company from carrying out specific manufacturing and marketing policies on a worldwide basis. IBO 02 Free Solved Assignment
(vii) Strategic Alliance: Strategic alliance has been becoming more and more popular in international business.
Also known by such names as entente and coalition, this strategy seeks to enhance the long-term competitive advantage of the firm by forming alliance with its competitors, existing or potential in critical areas, instead of competing with each other.
“The goals are to leverage critical capabilities, increase the flow of innovation and increase flexibility in responding to market and technological changes.”
A strategic alliance is used as a market entry strategy. For example, a firm may enter a foreign market by forming an alliance with a firm in the foreign market for marketing or distributing the former’s products.
AUS pharmaceutical firm may use the sales promotion and distribution infrastructure of a Japanese pharmaceutical firm to sell its products in Japan.
In return, the Japanese firm can use the same strategy for the sale of its products in the U.S. market. Strategic alliance, more than an entry strategy, is a competitive strategy.
Several areas of business-from Rand D te distribution provides scope for alliance. Whether it is in Rand D, manufacturing or marketing, an important objective of the collaboration is to maximize marginal contribution to fixed cost.
(viii) Mergers and Acquisitions: Mergers and acquisitions is the strategy to enter foreign market for a company by investing directly, in the host country and creating a manufacturing or production facilities there.
In case of a merger, an international business firm absorbs one or more enterprises abroad by purchasing assets and taking over liabilities of those enterprises on payment of an agreed amount. IBO 02 Free Solved Assignment
In case of acquisition, an international business firm takes over the management of an existing company abroad by taking the controlling stake in the equity of that company at a predetermined price.
Mergers and acquisitions are preferred as entry mode for large enterprises.
The advantages of mergers are: Avoidance of conflict of interest, as may happen in the case of joint ventures, and fullest exploitation of the market potential in terms of both manufacturing and marketing.
But these advantages are to be evaluated against the large scale commitment of financial and managerial resources.
Some firms which are anxious to keep their competitive edge under the strictest control, normally favour this entry mode.
Examples are IBM and Coca-Cola. But the recent attempts of these funds to enter the Indian market reveal that such firms may opt for any other mode, such as, joint ventures, if that facilitates the process of entry.
Acquisitions can be considered as the entry mode if ‘greenfield’ projects are time consuming, especially when t 4 corporate strategy dictates an earlier entry in the market.
The success of acquisition mode is strictly dependent upon the pare. firm’s ability to integrate the acquisition in its organizational framework.
There are several instances where the present firm failed miserably and had to sell the acquired firm later at a considerable loss.
Q. 2. What is international marketing communication? Discuss its objectives and highlight the key issues in international marketing communication.
Ans. International Marketing Communication: Like domesting marketing communication international marketing communication has following components:
(i) Advertising IBO 02 Free Solved Assignment
(ii) Personal selling
(iv) Sales promotion
Objectives of international marketing communication may be listed as under:
(i) Introduction of new products
(ii) Inducing potential customers to buy.
(iii) Reminding users about an existing product/service.
(iv) To create an international brand image.
(v) To intimate international customers about new uses of a product.
(vi) To highlight brand character internationally.
(vii) Dealer support in all local markets in different countries.
(viii) Increasing retail trade through special promotional offers.
(ix) To introduce a brand in foreign market.
Role of International Marketing Communication: The basic objective of international marketing communication is to make the overseas customer opt for the company’s offer as against those of competitors.
The role of international marketing communication is, therefore, to facilitate the accomplishment at internationl marketing objectives.
The purpose of international marketing communication is to inform, to persuade and to suggest to act as per the communication.
Marketers undertake international marketing communication activities to ultimately achieve the following objectives:
(i) To remind users about an existing product/service: Manufacturers continue to promote their products to maintain the buyers’ interest.
This is necessary to meet the challenges posed by the competitors who introduce new products in the market. Existing customers have to be communicated regularly in order to encourage repeat purchase. IBO 02 Free Solved Assignment
(ii) To create an international brand image: Business firms get into marketing communication exercises across national borders in order to establish an image for the brand and create customer loyalty.
When customers develop brand loyalty, they are not inclined to shift to other brands easily.
(iii) To intimate international customers about new uses of a product: Marketing communication is used to convey new uses of an existing product to the international customers or to draw their attention to some new features of the product.
This object of marketing communications is meant to convince the customers about the superiority of a product in comparison with competitors’ products in the same line.
This has a great strategic advantage during the positioning or repositioning of the brand.
(iv) To highlight brand character internationally: For certain products, consumers may feel that a particular characteristic is very important.
It may determine the buyer’s choice of a particular brand out of several competing brands. If the product has that feature, marketing communication is used to stress it and demonstrate its advantages.
Similarly, if the product has a special feature, which is linked with a desirable consumer benefit, marketing communication is used to emphasize it.
(v) To dealer support in local markets in different countries: Sometimes the aim of a marketing communication effort is to provide support to dealers and distributors in local markets of countries where the product has been introduced.
Thus, there are many advertisements in newspapers, in which the addresses and details of local dealers and distributors are mentioned along with the particulars of the product.
(vi) To increase retail trade through special promotional offers: The objective of marketing communication is also to increase retail sales through off-season or special festival discounts, gift schemes, clearance sales, etc.
The objecti 6 of such communication exercises is to draw the attention of customers towards the special offers. IBO 02 Free Solved Assignment
(vii) To introduce a brand in foreign markets: Marketers engage in communications exercises to introduce brands in foreign markets.
The foreign market may know about the company manufacturing the brand, but not the brand in question
(viii) To introduce a marketer in new international markets: Introducing a new company in a new market requires dissemination of information about the history of the company in the parent country, its product line, etc.
Hence, the pressing need for international marketing communication.
Thus, International marketing communication creates awareness about the new product.
Customers come to know about the features, quality, price and other characteristics of the new product. International marketing communication induces potential customers to buy.
KEY ISSUES IN INTERNATIONAL MARKETING COMMUNICATION
Following are the key issues in international marketing communication:
Straight Extension: Under this strategy, the same product as marketed domestically is extended to the foreign market without any significant modification.
The straight extension has been successful with cameras, consumer electronics, machine tools, etc. The straight extension involves no additional research and development expense manufacturing product or promotional modification.
Product Adaptation: Under product adaptation strategy, the product is properly modified to suit the environment of the foreign market.
The aim of this strategy is to meet local conditions and preferences. For example, a company can produce regional version of its product.
On the basis of above strategy, a company will adopt its promotion strategy. Companies can adopt the same promotion strategy they used in the domestic market or change it for each foreign market. IBO 02 Free Solved Assignment
Some companies follow the strategy of communication adaptation, i.e., fully adapting their advertising messages to local markets.
Media also need to be adapted internationally because media availability varies from country to country.
Global advertising is the transfer of appeals, messages art, copy, photographs stories and video and film segments from one country to another.
Global advertising is becoming popular as a result of global branding.
Q. 3. Write short notes on the following:
(a) International Sales People
Ans. International Sales People: Selling tasks of international sales people consist of the following:
Trade Selling: The primary task of a salesperson is to promote sales. Accordingly, the primary task of international salesperson is to increase the volume of exports to foreign distributors.
To achieve this target, an international salesperson motivates the foreign distributors and provides merchandising and promotional assistance.
Missionary Selling: One of the task of an international salesperson is to promote or educate or build goodwill for the product.
The missionary salesperson calls on potential customers and provides details about the product. IBO 02 Free Solved Assignment
This is commonly done in pharmaceutical marketing when the company salesperson details the doctors about the formulations and urges them to prescribe the product.
Technical Selling: Technical selling is done by an international salespeople who require technical expertise.
Technical selling is used in the fields like engineering, chemicals, plastics, etc. Technical salesperson provides information to the end users.
Business Selling: Business selling is a creative selling through which an international salesperson has to identify potential customers and has to enter into a creative dialogue with them and then makes a final sale.
A salesperson visits potentially large new customers and indures them to give trial orders.
Management of Personal Selling
Management of personal selling involves several aspects like management of the ways of personal selling, management of the process of personal selling and management of the salespersonnel.
International salespersons may be of following types:
Company’s Travelling Salesmen: There may be company’s travelling salesmen attached to the headquarters.
In this case, the salesman operating from the home country base travel in the foreign markets for personal selling companies which do not have offices in foreign countries or which do not require full-time based salesmen to adopt this practice.
Company’s Salesmen: There may be the company’s salesmen attached to the company’s office in the foreign market.
Companies which have marketing offices abroad and which are in need of the services of full times sales personnel adopt this practice.
Generally, companies employ local personnel, i.e., persons from the respective foreign markets who may be in a better position to deal with the local market than the persons from the home country. IBO 02 Free Solved Assignment
Temporarily Hired Salesmen: Sometimes a company does not need salespersonnel permanently.
This is a common practice when a company needs salespersonnel during certain periods like product introduction, market entry or special marketing drive.
Management of local nationals as salespersons is not an easy job. It involves a number of issues given below:
(i) Availability of local nationals
(v) Performance evaluation
(b) Export agency agreement
Ans. Export Agency Agreement: Export agency agreement may be defined as the document which establishes the commercial relationship between the principal and the agent.
Export agency agreement contains the conditions agreed upon by the concerned parties for the conduct of business. Following are the contents of export agency agreement:
(i) Parties to the contract
(ii) Contractual products
(iii) Contracted territory
(iv) Duration of the contract
(v) International buying groups may like to contact the exporter directly.
Exporters should reserve the right to negotiate directly with international buying groups in their own countries for order which ultimately will be executed in the agents territory-whether the agent will be eligible to commission on such sales should be made explicit in the agreement.
(vi) When credit terms are involved and the principal is not sure of the credit worthiness of the buyer, he should have the right to reject the order.
(vii) Payment of commission IBO 02 Free Solved Assignment
(a) Rate at which commission is to be paid
(b) Calculated on percentage basis-the base for such calculation
(c) The time when commission becomes payable
(viii) Settlement of disputes
(ix) Renewal and termination of agency.
(c) Data sources
Ans. Sources of Data: There are two sources of data:
(i) Internal sources (ii) External sources.
When data are obtained from the internal reports or records of an organisation, it is known as internal source of data. For example, Hindustan Lever Ltd. publishes its annual report on total sales, profits, wages to employees, etc.
This report would constitute an internal source of data for marketing department of Hindustan unilever Ltd.
When data are collected from other organisations or through other sources, it is known as external source of data.
For example, in order to study the educational status of people in China, if we obtain information from China Government, it would be an external source of data.
TYPES OF SOURCES OF DATA
(i) Primary sources (ii) Secondary sources.
Data collected from primary sources are known as primary data. Data collected from secondary sources are known as secondary data.
Data collected by the investigator for his own purpose, for the first time from beginning to end, is called primary data. It is collected from the source of origin.
In the words of Wessel, Data originally collected in the process of investigation are known as primary data.” Primary data are original. IBO 02 Free Solved Assignment
The concerned investigator is the first person to collect this information. The primary data are, therefore, a first-hand information.
To illustrate, you may be interested in studying the socio-economic state of those students in your class who secured first division in their last examination.
You collect information regarding their pocket allowance, their family income, educational status, their family members and the like.
All this information would be termed as primary information or primary data, since you happen to be the first person to collect this information from the source of its origin.
If the data have been collected once and the same are being used now, these will be called secondary data. Data already collected may be available in a published or an unpublished form.
If a researcher wants to study the progress made by the country in the agricultural sector or the industrial sector, published information would be available in plenty.
The governme and several other institutions collect data regularly about the agricultural and industrial progress and the same may be us 8 again.
The data would be mostly in the form of published statements.
If the progress of results of a university is to be studied, the information will be available in the office records of the university and, hence, it will be unpublished information which can be utilised again, it will be secondary data.
(d) Transfer Pricing
Ans. The pricing of exchanges of goods among different units of the same corporate body is known as transfer pricing. IBO 02 Free Solved Assignment 2022
The main objective of adopting transfer pricing is to facilitate exchange of goods and services between a company and its foreign subsidiary or affiliate.
Transfer price may be defined as the price charged for goods for services supplied by the parent corporation to the subsidiary or vice-versa or by one subsidiary to another.
The basic objective of a TNC is to maximize group profits. This may necessitate showing, on paper, more or less profit being earned by one unit than what has been actually realized.
This brings us to the manipulation of transfer prices as a deliberate policy of a TNC. A TNC can use transfer pricing for following purposes:
(i) Transfer pricing is used to reduce tax incidence. Through appropriate transfer pricing TNCs reduce high direct and indirect taxation not only in host countries but also in home country.
(ii) Transfer pricing is used as a marketing technique. Transfer pricing may support a market position of a product or enhance its market share.
(iii) Transfer pricing may be used by a TNC to reduce the profit sharing by the collaborator with it.
(iv) Transfer pricing is also used to insulate the adverse impact of volatile exchange rate. Following are the alternative methods applied in transfer pricing:
Transfer at Cost Method: The first alternative methods is to exchange goods and services at cost. This method is based on the assumption that lower costs lead to better performance by the affiliate. This keeps duties at the receiving end to the minimum. Manufacturing unit does not make any profit on the transfer sale. However, the receiving unit is expected to make profit, because its cost is minimum. This policy is rarely used now a days.
Transfer at Cost Plus Method: Cost plus method attempts to add some amount or percentage to the cost of the product. IBO 02 Free Solved Assignment
This method recognises the principle that profit must be shown for every product or service at every stage of movement. This method is acceptable to both-transferor and transferee-divisions.
Transfer at Market Price Method: Under this method, transfer is made on foreign market price. It may, therefore, be too low for the selling subsidiary and the production cost may not be covered.
This method enables a company to establish its name or franchise in the new market without undertaking production there.
Transfer at Arm’s Length Price: The other extreme in transfer pricing is to charge the international division the same price any buyer outside the firm pays.
This price favours the producing division because it does as well on internal as on external sales. Arm’s length price method uses the same prices as quoted to independent customers.
This method creates problem when the product has no external buyers or is sold at different prices in different markets.
Q. 4. Differentiate between the following:
(a) Probability and Non-probability Sampling Methods
Ans. Probability Sampling Methods: Here, each and every item in the population has an equal probability (chance) being included in sample. There are five methods of probability sampling methods, as detailed hereunder:
Simple Random Sampling: This method is also known as lottery sampling where each and every item of the population has an equal chance of being included in the sample. This method is commonly used in case of a homogenous group by
using random numbers. IBO 02 Free Solved Assignment 2021-22
Systematic Sampling: Here, the entire population is arranged alphabetically, serially ordered etc., and samples appearing at a fixed interval are selected, like every 25th number from the list may be included in the sample.
Randomness is incorporated in picking the first number randomly to start with.
Stratified Sampling: When the population does not comprise of a homogenous group, this method is used by dividing the population into homogenous sub population, ensuring to avoid any overlapping.
Thereafter, random items are selected from each starta, proportionally or equally.
Cluster Sampling: In this method, the population is divided into heterogeneous groups, called clusters. Thereafter, few samples are selected using simple random sampling method.
Multi-stage Sampling: In cases, where big surveys are to be conducted which extend to a large geographic area with heterogeneous population, this method is used.
This is a multi stage method where in the first stage, few random selections are made.
For example, if we have to select a few families from across the country, first, some states are selected randomly and then, from each selected state, few districts are selected on random basis.
In the third stage, towns are selected from the selected districts and in the final stage, some families are selected from the chosen tower
Non-Probability Sampling Methods: Under these methods, deliberate selections are made of particular items constituting a sample.
If the investigator considers that some units are not representative, these may not get equal chance of being included in the sample. There are the following methods under this category: IBO 02 Free Solved Assignment
• Convenience Sampling: Under this method, samples are chosen from the population based on the ease of access.
For collecting data about cinemagoers in a city, a few cinema halls may be selected and by going there, interviews of few persons may be taken for collecting relevant data.
• Judgement Sampling: Here, judgement of the investigator is used to select sample items for making a representative sample.
This method is used in case of qualitative research surveys which intend to develop hypothesis.
Quota Sampling: Under this non-probability method of sampling, the whole population is divided into homogenous groups and the interviewers are allotted quotas to be filled from each group.
The actual sample is left to the judgement of the interviewer. The quote allocated is generally proportionate to the size of the group in the population.
Any of the above-mentioned methods may be used whichever is suitable for the purpose of the research. But in case of random sampling, errors on account of personal judgement may be eliminated. IBO 02 Free Solved Assignment
In all cases, the sampling method used should be decided by considering the nature and scope of the enquiry, time available, cost, staff available etc.
(b) Adaptation and Standardization International Advertising.
Ans. Adaptation: According to adaptation strategy, advertising message and media strategy must be changed from region to region or country to country because of environmental requirements.
Adaptation strategy is based on the assumption of localisation. This strategy do not recognise the argument of global village.
According to this strategy, consumers differ from country to country and must be reached by advertising tailored to their specific countries.
The main advantage of adaptatio that adaptation strategy recognises the cultural differences and differences in media availability and distribution arrangement
Standardization: According to standardization strategy, advertising message and media strategy is not changed from region to region or country to country.
According to this approach, people everywhere want the same products for the same reasons and, hence, companies adopt an uniform advertising campaign around the world.
Standardization treats the entire market as its target by competing successfully using the same marketing mix. Such advertising is resorted to when the products have a broad based appeal. IBO 02 Free Solved Assignment
Standardization is tempting because it involves no additional expenditure. Economies of scale in advertising, as well as improved access to distribution channels, are advantages of standardization.
But the disadvantage of standardization is that it may end up not appealing to any particular market.
In the context of international advertising “planning globally but acting locally” means that a company should mo products just enough in local markets to make them strong competitors in those local markets and at the same time should maintain whatever uniformity is possible across multiple markets to realize potential economies of scale.
In short “planning globally but acting locally” is a strategy combining both the strategies-standardization and adaptation (localised) advertising.
Adaptation strategy of international advertising means developing and implementing advertising mix which is tailor made to suit the audience, culture and market characteristics of a particular country or market segment.
On the other hand standardisation strategy of international advertising means developing and implementing same advertising mix in all markets across the world.
Adaptation is based on localisation, i.e., consumers differ from country to country. While standardisation is based on global village” i.e., people all over the world want the same products for same reasons.
(c) Domestic agent and Domestic merchants.
Ans. Domestic Agents: Domestic agents handle the marketing of products produced by manufacturers. Domestic agents do not take title to the goods they sell and usually earn commission. IBO 02 Free Solved Assignment
Domestic agents perform a number of marketing functions that facilitate international business. Following are domestic agents:
(i) Export Management Companies
(ii) Export Broker
(iii) Manufacturer’s Export Agent
(iv) Purchasing Agent
(v) Country Controlled Buying Agent
(vi) Resident Buyer.
Domestic Merchants or Merchant International
Domestic merchants are the intermediaries who actually acquire and transfer the title to the products in their own right and who work for profit. Following are the domestic merchants:
(i) Export Merchant
(ii) Export Houses
(iii) Trading Companies
(iv) Piggy backings.
(d) Ethnocentric orientation and Polycentric orientation
Ans. The term ethnocentric orientation” means that a company does not differentiate between domestic and foreign markets and applies same techniques in foreign markets which are applied in domestic marketing.
Polycentric orientation is opposite of ethnocentric orientation. The term polycentric orientation means each overseas market is different from other and local techniques and personnel are best suited to deal with local conditions.
On the basis of above, following points of distinction emerge:
(i) According to ethnocentric orientation foreign operations are secondary to domestic operations while according polycentric orientation foreign operations are equally significant.
(ii) Under ethnocentric orientation, international marketing activities are controlled from the home country while under polycentric orientation subsidiaries are established in all overseas markets. Subsidiaries are given free hand in framing and implementing policies.
(iii) Ethnocentric orientation is appropriate when overseas sales volume is insignificant compared to total sales of the firm. Poly centric orientation is appropriate when firm is committed to international marketing.IBO 02 Free Solved Assignment
Comment briefly on the following statement:
(a) In addition to the general considerations in packaging, there are certain special factors to be considered in export packaging.
Ans. Special Considerations in International Marketing: In addition to the general considerations in packaging, there are some special considerations in international marketing which are listed below:
(i) Regulations in the Foreign Countries: Packaging and labelling may be subject to government regulations in the foreign countries. Some countries have specified packaging standards for certain commodities.
The trend toward requiring labelling in a country’s native language is growing. If such regulations are not strictly followed, the goods may be confiscated or may attract some other punitive action.
(ii) Buyer’s Specifications: In some cases, buyers, like the importers, may give packaging specifications. While incorporating such specifications, it should also be ensured that packaging satisfied other requirements like the statutory requirements.
(iii) Socio-Cultural Factors: While designing the packaging for a product, socio-cultural factors relating to the importing country like customs, traditions, beliefs, etc., should also be considered.
(iv) Retailing Characteristics: The nature of retail outlets is a very important consideration in packaging decision.
For instance, as pointed out earlier, in some of the foreign markets, as a result of the spread of super-markets and discount houses, a large number of products are sold on a self-service basis. IBO 02 Free Solved Assignment
The package has, therefore, to perform many of the sales tasks and, hence, it must attract attention, describe the product’s features, give the consumer confidence and make a favourable overall impression.
(v) Environmental Factors: Packaging decisions are also influenced by certain environmental factors like weather and climatic factors.
The impact of such factors in the place where the product originates, while the product is in transit and while in the market, etc., should be considered.
The package should be capable of withstanding the stresses and hazards of handling and transporting, stacking, storing, etc., under diverse conditions.
(vi) Disposability: Attention should also be paid to the aspects relating to the disposal of the packaging. One of the qualities required for good package is that it could be easily disposed of or recycled.
In some of the developing countries like India many packaging materials easily find some other use or are recycled.
But the situation is different in other countries. Indeed, the disposal of packaging materials is causing the environmental problem in a number of countries. Reusable packages earry the risk of misusing it for selling bogus products.
(b) International marketing displays an interesting paradox with respect to control situation.
Ans. International marketing displays an interesting paradox with respect to control situations.
While control of multinational operations is far more formidable and poses additional challenges, not many business firms exercise control over international operations as thoroughly as they should. IBO 02 Free Solved Assignment
Controlling international operations is more complex than controlling domestic marketing activities because former has a number of unknown and uncontrollable variables and such variables cannot be forecasted with accuracy.
As a result, planning and controlling of international operations becomes difficult. Following are some important barriers which make controlling international operations more complex:
(i) The speed and width of environmental change in an international company is a factor dependent on each of the markets in which the company operates.
Environment prevailing in one country would be different from other countries in terms of economic status, literacy, culture and climatic conditions.
(ii) The rate of exchange is highly variable.
(iii) The heterogeneity of environmental challenges make the task of controlling difficult.
(iv) If the company is a large sized company, its size of international operations will be large. The large size of international operations requires formation of intermediate headquarter, creating an additional organizational level for the control mechanism.
(v) International marketing operations present unique communication problems. These communication problems emanate from the large distance of the two countries and variations in languages, cultures and business practices across the markets.
(c) The revolutionary changes in the information technology is sweeping across global business.
Ans. International Marketing and Information Technology: Information technology has been revolutionalising market operations. Technology is a powerful driving force of globalisation.
several barriers to globalisation have been removed or significantly reduced by technology advances. The Information technology revolution has made an enormous contribution to the emergence of the global village. IBO 02 Free Solved Assignment
The information technology revolution has brought about following significant changes in the business environmental
(i) It provides new ways to design organizations that can lead to structure.
(ii) It creates new relationships between customers and suppliers who electronically link themselves together.
(iii) It enables tremendous efficiencies in production and service industries through EDI.
(iv) It changes the basis of competition and industry structure.
(v) It provides face to face communication and supervision.
Thus, effective use of information technology helps a company to identify customers, reach out to customers quickly and make distribution system more efficient.
(d) A market researchreport must use the format that best fits the needs and desires of its readers.
Ans. Format Of The Research Report: There is no ideal format for all reports. The format of the report should be such that it should fit the needs and desires of the readers. The format of a report may have following parts:
(1) The preamble
(2) The summary of findings and conclusions
(3) Main body
(4) The Appendices. IBO 02 Free Solved Assignment
(1) The Preamble: The Preamble of the report simply presents basic introductory information about the research project. It consists of four parts:
(i) Letter of Transmission: Letter of transmission indicates to whom the report is directed. It specifies the reasons of doing research work.
(ii) Title Page: The title page is a single sheet of paper containing following information:
(a) Tile of the research study (b) Name of the researcher
(c) The data of report’s presentation.
(iii) Table of Contents or Index: Table of contents shows the main sections and chapters into which the report has been broken down.
(iv) Preface or Introduction: Preface or introduction is a brief statement highlighting the purpose of research study and terms of reference.
The preface should also have the acknowledgments expressing gratitude to those who helped in the conduct, completion and presentation of the report.
(2) Summary of Findings and Conclusions or Executive Summary: In this section the main findings of the research investigation are presented and broader conclusions are drawn there from.
Based on these conclusions, the researcher might endeavour at making some suggestions accordingly. The summary of findings should not take up more than two or three pages. The summary should be brief and concise.
(3) Main Body of the Report: The main body of the report may have four sections:
(i) Description of research methods.
(ii) General background information about the market.
(iii) Nature of the market.
(iv) Conclusions and recommendations. IBO 02 Free Solved Assignment
(i) Description of Research Methods: This section is very important to establish the creditability of the research findings. Generally, following details are given in this section:
(a) Sources of data, their justification and their reliability.
(b) Establishment of sampling frame.
(c) Sample design, size of a sample and methods of selecting sample.
(d) Methods used to obtain information e.g., observation, interviewing etc.
(e) Depth of the research.
(f) Methods used to quantify the data obtained.
(g) Methodology adopted in the study.
(ii) General Background Information: This section should cover some basic information about the market so as to help the people for whom the report is prepared. This section may contain following information relevant to the project:
(c) Economic trends
(d) Industrial trends
(e) Political trends
(f) social and cultural trend
(g) Laws and regulations.
(iii) Nature of the Market: This section should cover the detailed information about the market features which may include the followingh of Online Study and E-Learning
(a) Market size
(b) Market trends and forecast
(c) Market Structure and segmentation
(d) Marketing channels and distribution methods and structure
(e) Existing competitors and their market shares, the nature and extent of competition
(f) Competing products and how these compare with the exporter’s product
(g) Market access factors such as import restrictions, trade arrangements, exchange restrictions, membership of trade blocs etc.
(h) Tested reactions to the exporter’s product
(i) Information on potential customers’ tastes, habits and attitudes
(j) Prices and pricing policy and the factors governing pricing such as freight cost, distribution costs, duties, IBO 02 Free Solved Assignment
(k) Advertising and sales promotion efforts currently in use and recommended
(L) Market characteristics such as trade practices
(m) Packaging and labeling requirements and practices.
(iv) Suggestions and Conclusions: In this section, the main findings of the research investigation are presented and broader conclusions drawn therefrom. Based on these conclusions, the researcher might endeavour at making some suggestions accordingly.
The exact nature of the recommendations suggested will depend on the terms of reference, the product and the market situation. Usually, they will cover such things as:
(a) The type of ideal agency arrangement
(b) The product packaging and branding strategy type of promotion
(c) Optimum distribution strategy
(d) The pricing strategy
(e) The best means for combating competition
(F) The technique of market entry to be adopted
(g) In general, strategy to take maximum advantage of the positive factors in environment and reduce to the minimum the influence of negative factors.
Most of the recommendations, should be positive-they should state specific steps that should be taken to achieve success or otherwise deal with the problems that have been identified; reduce prices, hold local stocks, promote the product at the distributor level, etc.
Usually, it is also useful to state specifically what should not be done. Such negative recommendations should be stated briefly, probably in a single paragraph.
An example of such a negative recommendation: It would be advisable, under the circumstances, not to waste resources in competing with the major brands, but to concentrate on different segments and penetrate them.
(4) Appendices: The purpose of the appendices is, essentially, to include as much relevant data and information as possible to support, illustrate, or further elaborate on the information already contained in the report’s main body.
Each appendix should be numbered. The kind of data that would usually appear in the appendices include: IBO 02 Free Solved Assignment
(i) Statistical tables and tabulations which have been summarized in the main body of the report.
(ii) A list of the names and addresses of sources and contacts used in the course of desk and field research.
(iii) Copies of any questionnaires used during field researcht prefaced by a note of the survey objectives they were meant to satisfy.
(iv) Relevant details about the sample selected for the survey
(V) A copy of the interviewer’s appointments schedule or diary for future reference, should any interviewee need to be contacted again.
(vi) Interview write-ups.
(vii) A list of possible future contacts, such as sales agents or advertising agents in the marketing country.
(viii) A note of relevant documents on file such as import policy, exchange manual, etc., obtained during the course of the research, and a brief description of their contents.
IBO 01 FREE SOLVED ASSIGNMENT
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