Here is a compilation of interview questions and answers on ‘International Marketing’ for management students.
1. How will you Identify a Product?
The same kinds of products are available in the market which are manufactured by different producers and having different names such as Hamain Soap, Rexona Soap, Lux Soap and Nirma etc. The intention of the producer in this situation is that the consumer must recognise the product easily. For this purpose, the manufacturers give their products brand names which may consist of word, letter, sign, design etc.
The other technique to identify the product is packaging and labelling. A different type of packaging may be used by the manufacturer to differentiate his product from the other manufacturers. Label gives us information about the product and the producer.
Thus from technical point of view, branding, packaging and labelling are the possible methods to identify the products.
2. Define Brand and Trademark?
Brand:
Each firm wants to identify its products through brand names. The basic purpose of branding is to fix identity of the producer of a given product. In this way a brand is a specific name given to a product or all the products of a producer. Such specific name creates individuality in the product and the product can easily be distinguished in the market from other products. For example, Godrej, LG, Tata Tea, Nirma Detergent, O General, Hitachi etc.
Generally ‘Brand’ and ‘Trademark’ have been used for the same purpose, but legally both are different. When a brand name or brand mark is registered and legalised, it becomes a trademark. So, registered brand is trademark. For example, ‘Dalda’ with palm tree, Asian Paints (Child with brush). Therefore, a registered letter, name, mark, design or picture or their mixture is called trademark. Trademark is registered in India under the Trade and Merchandise Marks Act, 1958.
According to American Marketing Association- “A brand, which is given legal protection because under the law it has been appropriated exclusively by one seller.”
According to Copeland- “Any sign, mark, symbol, word or words which indicate the origin or ownership of an article as distinguished from its quality and which others have not the equal right to employ for the same purpose.”
According to W.J. Stanton- “All trademarks are brands and thus include the words, letters or numbers which may be pronounced; they may also include pictorial design.”
3. Why Price of the Same Product Differ in International and Home Markets?
Pricing of a product is a difficult task and it is subject to market conditions. As the market conditions differ from market to market, the prices of the product cannot be the same in every market. The price of the product may be different in export markets from the prices quoted in the domestic markets.
They always differ because the pricing policies and pricing strategies in the two markets—exports and home differ to a great extent due to varying market conditions, economic and political conditions, rules and regulations, political interferences and the philosophy of the exporter.
The pricing problems in the international markets are different from those in the home markets. The main considerations in pricing the product in the home market are product cost, nature of demand, elasticity of demand, product characteristics, buying behaviour, Govt., regulations etc. These factors are, however, considered in export pricing but from an entirely different point of view. So there is always a difference in prices of the same product in international and home markets.
The main reasons for differences are:
i. Cost of the Product:
Cost of product differs in home markets and international markets. Besides cost of production, there is a great difference in expenses for exporting the goods and for marketing the product in domestic market. There are certain expenses such as freight, marine insurance, export duty, import duty, market development expenses in abroad, expenses on documentation etc., which have no place in pricing the product for home market. Thus the prices differ due to cost of production and expenses.
ii. Differences in Business Competition:
The level of competition also differs in domestic and international markets. In home market, a producer has to face competition only from the local producers producing different brands of the same product whereas in international market, exporters have to compete not only with the manufacturers of the home market but also with the manufacturers of the foreign countries and the manufacturers of importing country.
iii. Competition in Prices of the Product:
Competition at international level also affects the determination of prices. In fact, a significant impact on the process of price determination is made by the factor which producers of which country are selling their goods in international market. The exporters in developed countries pay more attention to overhead costs and fluctuating costs than fixed costs. This makes price competition very tough.
iv. Differences in Expenses:
While pricing in international markets, not only its cost, but different expenses regarding import-export also to be considered. There are certain expenses, which have no place in pricing the product for home market. Thus the prices differ due to expenses.
v. Role of Non-Price Factors:
While fixing whatever price for the international market, the exporter does not consider only the cost of the product. Many other non-price factors such as after sale service, prompt deliveries and continuity of supply etc., are also to be considered. These non-price factors play important role in pricing in international market.
vi. Quality Competition:
In foreign markets exporters have to face the competition of producers of various countries. The products of some countries are of a very high quality. Big and multinational companies in developed countries produce quality products in bulk with the help of their improved techniques and more resources and sell them in different markets. This is even more serious problem for Indian exporters.
vii. Differences in Consumer Behaviour:
In international markets tastes, customs and consumer behaviour may differ widely from those of the domestic consumers. So it is very necessary to adapt the product according to the special requirements of the foreign markets. Taking into account the above factors, prices in two markets vary to a great extent.
4. What is the Scope of Product Planning and Development?
The scope of product planning and product development is very wide. It includes everything relating to product such as size, shape, design, price, colour, brand, packing, labelling etc. It also includes all those factors, which affect the market of the product.
The following aspects are included in the scope of product planning and development:
i. Product Decision:
In product planning and development, the first activity to be included is the decision of starting the production of the product. In taking decision, the producer has to think whether it would be profitable or not to produce the product under consideration. This helps in getting together the necessary resources for the production.
ii. Design and Size of the Product:
The decision about the size and design of the product is also a part of the process of product planning and development, as certain items can only be sold in the market on the basis of design only. The size of a product may be small, medium or large. Design of the product includes the determination of form, structure and colour etc., of the product.
iii. Name of the Product:
The product planning and development also includes the decision regarding the name of the product. The name should be such that can be easily pronounced, remembered and related to the product. Therefore, name of the product must be simple, brief and easy to learn and keep in mind. It must have some resemblance with the characteristics of the product or utilities of the product or name of producer. For example, Philips Radio, Reliance India Mobile etc.
iv. Colour of the Product:
The colour of a product should be given special attention while adopting product planning from the angle of the customers. The colour combination should be decided keeping in view the target consumers. Before selection of a particular colour for the product, one should take into account age, the health, the social customs, and the faith on religion as also the psychological aspect of the consumers. Today’s buyer emphasizes on the colour of product coinciding price, size, design and durability etc.
In this era of continuous changing fashion, the colour concept is particularly important in the fields of textile, building construction, furniture and decoration etc. According to W.J. Stanton, the colours do not increase the profits of firm directly but when a firm selects a suitable colour, it earns definitely the benefit of colour. Hence, a help from the experts in colour should be taken while selecting a particular colour for the product.
v. Price of the Product:
Determination of price of the product is also included in product planning and development. Price determination is perhaps the most sensitive decision to be taken by an enterprise. The success or failure of all the marketing efforts of an enterprise depends upon its price determination. The price must be determined keeping in view the price of the products of competitors, purchasing power of consumers, demand and popularity of the product, government restrictions etc.
vi. Brand, Package and Label of the Product:
While planning the product, decision regarding product’s brand, package and label has also to be taken. Brand is a name, symbol or design, which distinguishes the product from those of the competitors and helps in easy recognition, for example, Pataka Biri, LG Television. Brand decision involves decision regarding such name, symbol or design. Packaging protects the product from spoilage, ensures freshness, prevents adulteration and provides easy transportation and storage. Product planning involves decision regarding package material, package size, design and shape. Packing must be changed according to time, for example, now-a-days pouch packaging is very popular.
Label is the information tag attached to the product, which gives details regarding quantity, ingredients, date of manufacture and expiry date etc. of the product.
vii. New Uses of the Product:
Development of the uses of product is also included in product planning and development. Development of new uses of a product means to discover the purposes for which the product can be used. Discovery of these new uses of the product helps in increasing the demand of the product.
viii. Guarantee and After Sale Service of the Product:
Guarantee and after sale service are also important parts of product planning and development. It has been the practice of business and industrial enterprises these days to give guarantee for the repair and maintenance of product for a certain period. During this period free after-sale services are provided to the consumers, if they feel any complaint regarding product. It is also necessary for an enterprise to arrange for such services.
5. Name Few Export Promotion Organisations Working to Promote Exports in India?
Export promotion organisations of each country tries to promote the export of their country. In India also Export Promotion Councils (EPC), Export Development Authorities, Commodity Boards, India Trade Promotion Organization (ITPO), Exim Bank and others offer great help in easing Indian product sales abroad. They provide information by advertisements, sale promotion programmes and public relations. They do not do this to help a particular firm. Their object is to promote Indian products abroad.
Main objects of export promotion bodies are—(i) To be aware of chances of Indian product export, (ii) To impress foreigners about Indian industrial development and technical capacities, (iii) To improve impressions about quality of Indian goods. For small-sized firms with limited funds these bodies have been of immense help. Export Promotion Councils, Trade Development Authority and Commodity Boards organize trade fairs.
For example, Marine Products Export Development Authority in collaboration with Sea-Food Exports Association organizes every second year a sea-food fair. Thus, by participation in foreign fairs export promotion bodies have made positive efforts for promotion of Indian exports.
Following Export Promotion Councils are working to promote exports in India:
1. Engineering Export Promotion Council, Kolkata.
2. Overseas Construction Council of India, New Delhi.
3. Basic Chemical Pharmaceuticals and Cosmetics Export Promotion Council, Mumbai.
4. Chemicals and Allied Product Export Promotion Council, Kolkata.
5. Council for Leather Exports, Chennai.
6. Sports Goods Export Promotion Council, New Delhi.
7. Gem and Jewellery Export Promotion Council, Mumbai.
8. Shellac Export Promotion Council, Kolkata.
9. Cashew Export Promotion Council, Cochin.
10. Plastic Export Promotion Council, Mumbai.
11. Apparel Export Promotion Council, New Delhi.
12. Carpet Export Promotion Council, New Delhi.
13. Cotton Textile Export Promotion Council, Mumbai.
14. Export Promotion Council for Handicrafts, New Delhi.
15. Handloom Export Promotion Council, Chennai.
16. The Indian Silk Export Promotion Council, Mumbai.
17. Synthetic and Rayon Textile Export Promotion Council, Mumbai.
18. Wool and Woollens Export Promotion Council, New Delhi.
19. Power-loom Development and Export Promotion Council, Mumbai.
20. Electronics and Computer Software Export Promotion Council, New Delhi.
There are 9 commodity boards working in India to promote export. They are for Rubber, Coffee, Tea, Tobacco, Spices, Coir, Silk, Handloom, Handicrafts and Cardamom.
The five year Foreign Trade Policy announced by Union Minister of Commerce and Industry of new UPA (United Progressive Alliance) for the period 2009-2014 on 27th August 2009, focuses on agricultural exports, with an emphasis on generations employment. In this policy, several new measures were announced by the Govt., for the promotion of exports and to increase India’s share in the international trade.
Sectors identified for employment-generation and export promotion, include handlooms, handicrafts, gems and jewellery, and leather and footwear, apart from services, Non-IT service sectors on which the policy focuses are tourism, health care and education. In this policy, several new measures were announced by the Government for the promotion of exports and to increase India’s share in the world trade.
Besides, the earlier promotional measure, this new policy of the foreign trade provides additional support to recession-hit sectors of the economy. To make Indian export globally competitive, several new Promotional schemes have been announced and steps are initiated to rationalize the existing incentive schemes, so that an annual export growth of 15 per cent by March 2011 and 25 per cent by 2014 can be achieved.
Due to these promotional schemes, trade policy seeks to achieve the following objectives:
(i) To arrest and reverse the declining trend of exports and to provide additional support to these sectors which have been hit badly by the recent global financial crisis.
(ii) To double India’s exports of goods and services by 2014.
(iii) To double India’s share in global trade by 2020.
(iv) To achieve export by the end of 2013 Rs 56000 crore.
6. What are the Factors that Influence Packaging Decision in International Marketing?
There are a number of factors in international marketing that influence packaging decision.
The major factors are as follows:
i. Physical Characteristics of the Product:
Certain physical characteristics of the product such as shape, weight, stability, fragility etc. influence packaging decision.
ii. Chemical Characteristics of the Product:
Physio-chemical factors of the product such as oxygen, light, flame, bacteria, moisture etc. must be considered while making packaging decisions.
iii. Convenience:
Convenience from the point of view of consumers, distributors and producers influences packaging decision. Good package must possess certain features, like, easy to open and close, easy to identify, easy to handle, convenient to pack, handle and stock.
iv. Regulations in Foreign Countries:
Packaging must be as per government regulation in the foreign countries. Some countries have specified packaging standards for certain commodities. For example, some countries insist on bio-degradable and environment friendly packages.
v. Social-Cultural Factors:
Social-cultural factors of the importing country such as customs, religion, traditions, etc. also influence the packaging decisions.
vi. Environmental Factors:
Packaging decisions are also influenced by environmental factors such as weather and climate. The effect of such factors in the place where the product originates, while in transit, while in the market, must be considered.
vii. Disposability:
Another main element to be considered for a good package is that it should facilitate easy disposal or recycling. In some of the developing countries like India, many packaging materials are used for some other purpose or recycled. But in developed countries the situation is different and disposal of packaging materials is causing environmental problem.
viii. Cost:
Packaging decisions are influenced by cost also. The rising cost of packaging has become a matter of serious concern. Therefore cost must be considered.
7. Why is Packaging Important in International Market?
Packaging in international market has more specialities in comparison to national market. Distance between places of production and disposal is the main reason for it. Natural factors in all countries are different. Exporter has to take special care of them. He has also to keep in mind laws of the importing country. Hence, certain technical matters about packaging are kept in view.
In international market following technical and special considerations regarding packaging are specially kept in view:
i. For Breakable Goods:
For breakable and delicate products the packaging must be very soft and smooth. In developed countries thermocol or glasswool is used for this purpose. Such packaging are also light weight. In India grass or paper cuttings are used.
ii. For Parcel Post:
In all parcels sent by a ship the packaging must be of waterproof paper. It must be so tied that the custom office can easily open it for checking. To reduce breakage it should be properly tied.
iii. For the Goods Liable to Rust:
The sea air is full of moisture. So for rust catching products airtight boxes are used. Oil or grease should be applied on the product for further safety. Such goods should be placed in double plastic bag.
iv. For Food Articles:
Food products should be in hygienic containers. Health officers in many countries insist on ‘health certificates’ for bacteria free products.
v. For Dangerous Goods:
Foreign merchant chambers have specified containers of special variety for dangerous and explosive goods. Such things are transported only by special steamers. They are packed in strong proper containers and placed on or below decks. When placed on a deck the rate of marine insurance is high but it is lower for goods that are placed below the deck.
A label with description of goods is imperative on its packing. For combustible products a red, diamond shaped label is required. For acids and violent liquids a white diamond shaped label is necessary. A square label denotes fire-crackers.
vi. For Quality and Flavour:
When quality, taste, fragrance of the product are to be maintained, it is packed in moisture proof plastic bags or such containers. In such cases airtight bottles are also used.
vii. For Non-Fragile Goods:
For such goods a corrugated sheet packaging is ideal. But the product and packaging must not weigh more than 25 kg. Water-proof and plastic coated boxes are also used now.
viii. Shape of the Packaging Case:
For preservation of a product the shape of the packaging box is considered important. A box of four equal sides is considered strong. In a rectangular box wooden strips have to be fixed on sides. Each box is strapped with iron or plastic strips, where two strips cross the point is sealed. Coloured nylon strips are attached for beauty and strength.
ix. Package Size Decision:
Another important decision in respect of packaging is to decide the size of packaging. The size of packaging differs from product to product, producer to producer and time to time. In addition to it, a single product is offered by a single producer to the consumer at one time in different sizes of packaging.
The size of package depends upon the nature of product and the quantity generally purchased by consumers. As different consumers buy a product in different sizes, it is advisable that the product must be packed in the packages of different sizes. Nowadays pouch packaging is very popular. Pouches vary from very small quantity, for example, 1 gm to large quantity i.e., upto 10 kg.
x. Package Cost Decision:
While taking decision on packaging, its cost which is to be added to the cost of the product should also be considered. For such purposes, its protection value and convenience should be the prime considerations. The cost of the package should be minimum but such decision should not bring down the usefulness of the package.
The package cost gets compensated by reduction in transport, warehousing and handling expenses. Moreover, a new package helps in extending the product life and thus the increased sales reduce the per unit distribution cost. Costly package is often necessary for fragile and valuable products.
xi. Package Test:
After having decided the above things regarding package, package test is made to see if proper decision is made.
Four kinds of test are made for it:
(i) Engineering Test:
It helps to know whether the design selected is actually feasible or not.
(ii) Visual Test:
It tells whether the colours, pictures, printed matter etc. used on package are readable or not and whether they give an attractive look or needs to be changed.
(iii) Dealer Test:
Whether package is right in the opinion or outlook of the dealers/middlemen.
(iv) Consumer Test:
It specifies whether the package is accepted and liked by the consumer or not.
If the package design passes all the above tests it gets selected otherwise the necessary changes are required to be made.
xii. Packaging Criteria:
The basic purpose of packaging is to provide protection to the goods and to facilitate their easy handling and storage. But in the modern age of competitive marketing, packaging has assumed certain other objectives also. Packaging is used as a medium of publicity and as a silent salesman. It helps in preventing adulteration of goods and ensures their safety.
Therefore the package should represent properly the product for which it has been prepared.
Packaging should be in the nature that the prospective buyer could feel proud instead of shame before other customers present in the shop or store in course of examining the product. It is further necessary that the package should not only be convenient for use and handling for customers but also easy to store and exhibit for retailers.
If the product is for use as kitchen item, its size should be proper and matching with the standard size of kitchen almirah. If it is eatable or foodstuff, it could be kept in refrigerator. The customer should be confident of quality product when he just sees at the package. Owing to spread of education and increase in income as also rise in standard of living, special stress on beautiful packaging should be given as it has become necessary for consumer satisfaction.
Durability of package is also an important consideration. If a package is durable it will be reusable. With the introduction of pouch packing all criteria of packaging have changed.