IBT Prelims

• Marketing


  The total system of business activities designed to plan, price, promote and distribute want-satisfying products to target markets to achieve organizational objectives
• Majority would say marketing is just selling products and/or services. This is not true. Marketing encompasses different aspects such as the product, its price, how it will be promoted and where will it be distributed
• All these should be carefully planned to realize a company's objectives, which is profit
• Why is the introduction of marketing important to this course (international business and trade)

  • Many businesspeople recognize that marketing is vital to the success of their organizations
  • Marketing plays a major role in the global economy
• The four P's of marketing

  • Product
  • Price
  • Promotion
  • Place (Distribution Channel)
• Product


  • Set of tangible and intangible attributes that satisfies needs and wants
  • Refers to goods, services, places, persons and ideas
  • Includes packaging, color, price, quality, brand, seller's services and reputation
• Price


  • The amount of money and/or other items with utility needed to acquire a product
  • What you pay for what you get
  • Consists of the good/service itself, supplementary services of seller and want-satisfying benefits provided by the product
• Promotion


  An element in an organization's marketing mix that serves to inform, persuade, and remind the market of a product and/or the organization selling it, in the hopes of influencing the recipients' feelings, beliefs and behavior
• Place (Distribution Channel)


  • A distribution channel consists of the set of people and firms involved in the transfer of title to a product as the product moves from the producer to the ultimate consumer or business user
  • It answers the question on how and where the company will sell the product
• Distribution channel examples


  • Wholesalers
  • Retailers
• International marketing


  The performance of business activities designed plan, price, promote and direct the flow of a company's goods and services to consumers or users in more than one nation for a profit
• The only difference between the definition of domestic marketing and international marketing is that in the latter case, marketing takes place in more than one country
• This apparently minor difference, "in more than one country," accounts for the complexity and diversity found in international marketing operations
• Marketing concepts, processes, and principles are universally applicable, and the marketer's task is the same, whether doing business in Manila, Philippines or in Helsinki, Finland
• Business's goal is to make a profit by promoting, pricing, and distributing products for which there is a market
• Difference between domestic and international marketing

  The environment within which marketing plans must be implemented
• The uniqueness of foreign marketing comes from the range of unfamiliar problems and the variety of strategies necessary to cope with different levels of uncertainty encountered in foreign markets
• Uncontrollable elements that can affect the profitable outcome of a marketing plan

  • Competition
  • Legal restraints
  • Government controls
  • Weather
  • Fickle consumers
  • Any number of other uncontrollable elements
• The marketer cannot control or influence these uncontrollable elements but instead must adjust or adapt to them in a manner consistent with a successful outcome
• What makes marketing interesting is the challenge of molding the controllable elements of marketing decisions (product, price, promotion, distribution and research) within the framework of the uncontrollable elements of the marketplace (competition, politics, laws, consumer behavior, level of technology, and so forth) in such a way that marketing objectives are achieved
• Even though marketing principles and concepts are universally applicable, the environment within which the marketer must implement marketing plans can change dramatically from country to country or region to region
• International marketing


  The process of adapting to the marketing of goods and services in different nations consistently and effectively
• Reasons a firm moves beyond domestic markets into international trade

  • Potential demand in foreign markets
  • Saturation of domestic markets
  • Comparative advantage
• Potential demand in foreign markets


  • Jollibee has a strong international presence overseas because of the demand for its chicken
  • There is a demand for business products such as machine tools, construction equipment and computers in developing and developed nations
• Saturation of domestic markets


  • The market for softdrinks is saturated because there are a lot of competitors offering this product
• Comparative advantage


  • Samsung and Japan has major technological advances when producing gadgets
  • Germany is on the forefront of technology when it comes to manufacturing cars and consumer products
  • 3D printing technology
• The International Marketing Task


  • Controllable elements
  • Uncontrollable elements (domestic)
  • Uncontrollable elements (foreign)
• Controllable elements


  • Firm characteristics
  • Price
  • Product
  • Promotion
  • Channels of distribution
• Uncontrollable elements (domestic)


  • Political/legal forces
  • Competitive structure
  • Economic climate
• Uncontrollable elements (domestic)


  • A political decision involving domestic foreign policy can have a direct effect on a firm's international marketing success
  • Lucrative domestic operations can support and provide more capital needed for overseas operations
  • Disruption can occur once a competitor comes in
  • The domestic economy, when in favorable conditions, can help the company boost its resources in order to sustain international operations
• Uncontrollable elements (foreign)


  • Political/legal forces
  • Economic forces
  • Competitive forces
  • Level of technology
  • Structure of distribution
  • Geography and infrastructure
  • Cultural forces
• Uncontrollable elements (foreign)


  • Chinese companies were readily accepted to do business in the Philippines after President Duterte showed favorable stance towards Chinese-Philippines relationship
  • Foreign investors always seek better opportunities, and they usually find this in a well-established economy
  • The prospective country may have their own company who produces the same product as the one you are offering
  • Expedited by the pandemic, the market for online shopping applications has grown massively and malls now compete against them by also providing delivery services
  • A careful distribution and advertising strategy must be employed when reaching Philippines nationwide, given the number of islands
  • Internet services in the Philippines is one of the slowest compared to its Asian neighbors
  • The selling of Charcoal Donut in Thailand failed because human rights group called it "racist and bizarre"
  • Pepsi's slogan "Come alive with the Pepsi generation" was translated in China as "Pepsi will bring your ancestors back from the dead"
• Once the international marketer has identified all the uncontrollable factors within the country in which they intend to operate, the next thing to do is to actively evaluate and adapt the marketing plans accordingly
• The Stages of Marketing Involvement

  • No Direct Foreign Marketing
  • Infrequent Foreign Marketing
  • Regular Foreign Marketing
  • International Marketing
  • Global Marketing
• No Direct Foreign Marketing


  • Many Filipino products are being sold overseas in Filipino stores because OFWs bring them once they go back to the country where they work
• Infrequent Foreign Marketing


  • Some producers of seasonal agricultural products (mangoes, bananas)
• Regular Foreign Marketing


  • Axelum Resources Corporation is a coconut producer. Aside from servicing local markets in Manila and some parts of Luzon, they also have large business customers around the world
• International Marketing


  • Emperador Brandy has its own vineyard in Spain. It sells its brandy worldwide
• Global Marketing


  • Coca-Cola, Apple, Samsung
• Protectionism


  • Government policies that restrict international trade to help domestic industries
  • Usually implemented with the goal to improve economic activity within a domestic economy but can also be implemented for safety or quality concerns