International Marketing: Scope, Concepts, and Market Routes

This document provides an overview of international marketing, including its scope and key concepts. It discusses the rationale for companies to market internationally and explores various market routes. The document also covers the key criteria and selection process for entering international markets, as well as different market entry strategies. The case study focuses on Rio Tinto, an Englo-American multinational company in the metal and mining industry.

International Marketing

Table of Contents
International Marketing...................................................................................................................1
INTRODUCTION...........................................................................................................................4
LO 1.................................................................................................................................................4
Scope and Key Concepts of International Marketing..................................................................4
Rationale for International Marketing and various market routes...............................................6
LO 2.................................................................................................................................................8
Key criteria and selection process to use while considering international market to Enter........8
Different Market Entry Strategies.............................................................................................10
LO 3...............................................................................................................................................12
Overview of Key Arguments.....................................................................................................12
Marketing Mix...........................................................................................................................12
LO 4...............................................................................................................................................14
International Marketing Approaches.........................................................................................14
Comparison between home and international company and their ways to assess competitors.16
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................19

INTRODUCTION
Marketing refers to activities undertaken by the company on order to promote buying and
selling of the products offered by them. The course of marketing includes various activities
which are advertising and selling the product to customers. Through this business satisfy various
needs of their target market customers. When the target market of business grows and expands
out of national boundaries in such context business undertaker marketing activities which can
satisfy varied needs of customers in other countries which means in international market. This
includes that company design and develop its products in such manner that they are able to cater
needs to customers of other various countries in which business seeks to operate. This report
contextualize Rio Tinto Company, this is an Englo-American multinational company. This was
founded in 1873 and is headquartered at London, UK and Melbourne, Australia. The company
deals in metal and mining and operates worldwide and employs around 47000 employees. This
report is based on international marketing of Rio Tinto and for that purpose includes discussion
over concepts and scope of international marketing and rationale for company to market
internationally this has been followed by evaluation of entry to selection of international markets
and key success factors.
LO 1
Scope and Key Concepts of International Marketing
Scope of international marketing
International marketing can be defined as activities of business through which it can direct the
flow its products across the national boundary and in international markets.
Companies when decide to market internationally in such situations company is open 2
who many opportunities which are available in international market. Opportunities in
international market are related with growth and expansion, increasing profit, improved way to
utilisation of resources better availability of resources and Rio Tinto can utilise its capabilities in
international market which remain and used in national market (Eteokleous, Leonidou and
Katsikeas, 2016). Scope of international market includes-

Import
Input refers to practice in which companies bi goods and products from other countries and then
resell it to potential buyers. This works the same way countries import and fulfil the gape of
existing products and required products. Import is not only limited to buying goods and services
this also involves importing resources and material which company can employ for further
processing.Through import company can achieve its objectives of improving production and
which leads to increase in profitability.
Export
Meaning of export brand and products is just like it has meaning for countries in context of
exporting. Companies export their products in other countries to various suppliers this may
include the owned subsidiaries and franchises (Katsikeas, Leonidou and Zeriti, 2019). This is not
only final products which are exported by the company semi finalized products are also exported
by the company so that the country e in which the products are being exported can process it
further to make it it final products for the customers.
Contractual agreement
In this form of international marketing companies make agreement with other party which
resides in in other Nation. Licensing is very common form of contractual agreement that
companies can have in this companies can use name of the company in their home country to
operate and function their business activities. Contractual agreement also includes contracts
which are made for production and technical assistance and managerial assistance. In this one
company of a country e helps another company e in other country in context of technological
support and managerial assistance. Crop production includes that both companies will produce
products for single company and in this companies also sick to produce their products in the
companies in the countries where resources are available at reduced or low cost.
Joint ventures
Joint venture is one of the widely used forms of international marketing. In this to joint
companies who are from different countries together create a business venture which is known as
joint venture. There are various benefits because of that businesses form joint ventures (Ghauri

and et.el., 2016). These are mostly for a limited period of time and after completion of the time is
the contract ends companies get apart resulting in end of joint venture. The new venture works
under banner of both the company’s.
Contract Manufacturing
This form of international marketing involves a contract between companies of two different
nations. In this one form give contract to another to manufacture the goods and services for the
principal company.
Rationale for International Marketing and various market routes
International marketing have various benefits and there are various reasons for Rio Tinto
to market internationally. Some of them are being explained here-
Large Market Size
This is one of the reasons that Rio Tinto can market internationally. In international
market size of the market is large this means that increased profit and better use of resources.
The products which are not accepted nationally can be used and sold in international market
(Asseraf and Shoham, 2019). Increased size of market means increased demand of the product
which increase productivity and reduce the cost of the product through economy of scale.
Profit Potential
International market increases the potential of profit for the Rio Tinto. This can also
diversify its pricing policies according to international markets and different nations. This may
depend on the quality of the product being delivered in the respected country. Other than pricing
policy increased sales in international market increase the potential of profit for the company.
Increasing profit and market share is objective of all the business organisations working with
profit motive.
Excess Capacity
International marketing allows companies to use its excessive capacity. The resources can
be utilized in the best possible manner of all kind. Through its manufacturing at countries where
operational cost is low and resources are available at less price company can increase its

capacities and which will increase profit of the company. This is only possible when Rio Tinto
markets it internationally.
Increasing Growth Rate
International marketing increase the growth rate (Pedada, Arunachalam and Dass, 2019). The
rate is not only in the form of growth in international market but along with that it can also
expand its operations this leads to growth in productivity, growth of market share and growth of
profit, collectively making positive impact on the competitive strength of the company.
Smoothing Business Cycle
International Marketing smoothens the business cycle of the Rio Tinto and it can increase
the business cycle and its timings. In this business can take time to think and how they can
manage business cycle in international scenario. Businesses also get time as operations are in
different countries.
Routes for International Marketing
There are various routes for international marketing that Rio Tinto through which it can enter
into international market. These are-
Merger- In this route two companies merge and share profit and risk in equal proportion.
Companies in context of international marketing are from two different nations. Opportunities
that Rio Tinto can utilize are that it can easily attract people and customers of that country and
establish itself in other country (Schellenberg, Harker and Jafari, 2018). Challenge in this route is
that it may create various cultural issues as the company are from two different cultures.
Managerial conflicts in this route of international marketing are also very normal that companies
face.
Acquisition- In this route Rio Tinto can acquire company of other country. In this whole power
of management and operation of the company which have been acquired remains with the Rio
Tinto. Opportunities in this are that Rio Tinto can use the resources of the company which have
been acquired by it. One of the challenge associated with this route is that it is very costly.

LO 2
Key criteria and selection process to use while considering international market to Enter
International Marketing is very important decision for a company and company cannot
enter any international market without considering constraints of the international market. Some
of the criteria that Rio Tinto needs to consider before entering into international markets are as
follows-
Market Size
This is one of the most important factors which have to be considered before entering into
international market. Size of the market is important as through this company can identify the
potential profit in that market (Lane, 2017). Market size refers to size of the customers who can
be potential customers of the product that company has to offer.
Market Growth
Rio Tinto has to consider that what is the growth rate of the international market company is
looking to enter in. Emerging markets provide various opportunities for the Rio Tinto to expand
its business operations. In this growth rate is high and resources and cost required for operations
is less and this is why for companies which are from developed nations it is very beneficial to
invest and operate in the emerging markets.
Government Regulations
This is also important to consider that what the government regulations in the country are. There
are countries which do not have strict rules and regulations but there are countries where
government rules and regulations are very strict. In this situation it will become very difficult for
companies to operate. Many countries ensure that foreign businesses can operate freely in their
countries but in some countries political ideologies try to take advantage from foreign companies
for increasing employment in their country for financial benefits that countries get from the
foreign companies.
Selection Process for the company to enter International Market

Rio Tinto needs to follow a proper process when it market internationally (Blackburne and
Buckley, 2019). The process for selection of international market includes steps which are-
Identifying Foreign Markets
This is the first step of the process and companies need to identify those markets in which it can
enter. This requires to analyse potential of various markets and impact of various marketing
factors in that marketing environment. In this Rio Tinto have to consider its resources as in many
situations these does not allow company to operate in certain market.
Hence it is very important to analyse various affecting factors in order to enter in a
international market. All the markets differ from one another and company can also segment
various markets and most important thing in all these is that firm is making products which are
suitable for the market in which it intends to operate.
Proper selection of international market
Once company have identified countries and markets in which it can market in context of
international marketing. From identification of market company can avoid markets which are
impossible or less likely to be entered in this step of the process company have to assure and
ensure those markets in which it can enter and which are able to provide success to the Rio Tinto
(Luk, Choy and Lam, 2019). This also includes short listing markets which company can enter
into.
Evaluation and Selection
In this markets which has been shortlisted company requires to analyse those markets to
ensure its suitability in various terms to ensure and determine that company can achieve its
objectives of international marketing. After evaluation company select one international market.
Test Marketing
Selection of the international market leads to test market to determine validity of the
selection of the market.
Operation

Successful test marketing leads to the next stage in this company starts its operation in
international market.
Different Market Entry Strategies
Entering international market is a complex practice and includes various action in the
course. Companies once done with determination of the market in international context to enter
the next phase in this is to determine strategy for entering the international market (Wu and
Naidoo, 2016). Strategies are not limited and company to ensure the right strategy for the
marketing needs to analyse limitations and advantage of the strategy.
Exporting
Exporting is simply selling the products to the customers and clients of other country. This may
also include that the company export goods and services to the clients for the purpose of
reselling. For a company like Rio Tinto this strategy is quite apt to enter international market.
Advantages of this strategy are-
 This is very simple strategy to enter in international marketing.
 This requires less time to increase the reach and presence in international market.
 Company can operate in many countries with this strategy.
Disadvantages of this strategy are-
 Increased cost of the product because of export charges
Buying company
This is the strategy to enter in international market throbbing the company e which already exist
in international in domestic market (Morgan, Feng and Whitler, 2018). Rio Tinto in this strategy
have to buy the company of domestic market through which it can enter in international market.
Buying this company give all power II II Rio Tinto two functions for the functioning and
operation of the company.
Advantages of this strategy are

 Through the strategy Rio Tinto can easily established itself in in the international market
using the goodwill and name of the domestic company.
 This also allows to use the resources and material of the domestic company.
Disadvantages of this strategy are
 This strategy of entering international market is very costly. It is not necessary that the
resources available to the form are of good quality and suitable for the Rio Tinto.
 Another disadvantage of this strategy is that in establishing International form domestic
form plays a significant role and in case the firm’s reputation and goodwill get negatively
affected in such cases this can also affect operations of Rio Tinto.
Partnering
This is very commonly used strategy for entering into international market. Through this strategy
Rio Tinto can easily and into international market and this also gives basis for strategic alliances.
Along with strategic alliances parting can be simple co-marketing agreement (Boso, Debrah and
Amankwah-Amoah, 2018). This is very beneficial in case two markets are culturally very
different. In this form Rio Tinto can take assistance from the company e working in local market
of that country this assistance can be in form of cultural knowledge and various related factors of
the market.
Advantage of the of this strategy are as follows-
 Companies are able to take assistance from each other when they are having very less
knowledge of the factors affecting the operation in international market.
 In this strategy of entering international market both the forms share resources and above
all that profit and loss. This reduces the risk to enter in international market.
Disadvantage of this strategy are as follows
 This strategy may create cultural clash between people and management of the company.
 Implementation of the processes in such companies open take much time then it is
actually required.
 This strategy for entering into international market open creates conflicts in claim of
ownership.

LO 3
Overview of Key Arguments
Key arguments in local and global marketing are considerations of the factors affecting
(Watson IV and et.al., 2018). In global marketing the factors which are required to be considered
are various and requires considering factors such as culture of various countries and what are the
taste and choices of people of various countries. In contrast in case of local marketing there are
limited factors which require consideration for the marketing. These are consideration of single
culture and choices of people are also similar.
Another argument in this is scale of planning, in global marketing planning is done at high scale
planning for various markets in various countries on the other hand in relation with local
marketing this is scale of planning is limited and same practices are applied in the whole market
and plans does not require any type of change and they can be executed at the same time.
Required Expertise, in global marketing expertise is required for various markets and in local
limited expertise about one single market.
Marketing Mix
Marketing mix of the company includes four elements which are product, price, place
and promotion. These are being explained here and how Rio Tinto can adapt its marketing mix in
international market.
Product
Rio Tinto is a metal and mining company and as a result its products are various types of metals.
In this context Rio Tinto sells its products under five broad category (Rao-Nicholson and Khan,
2017). All these categories of Rio Tinto serve different product line. All the products are sold
under the name of Rio Tinto and this way company can get benefit of its image and reputation.
Products of Rio Tinto are available in various varieties and because of this customers can select
the product which is most suitable to them.
Products have variety but along with that product also are highly differentiated
and Rio Tinto offers features in its products which are not offered by the competitors of Rio
Tinto. Products of Rio Tinto are also considered of high quality and this is why Rio

Tinto is one of the best companies in its industry. Products of Rio Tinto are famous for their
traditional design and customers can practically use its products.
The product mix and variety of the products that also under different
product line is very effective in international marketing context and also able to cater various
needs of people in international market.
Price
In relation with price and pricing strategy of the Rio Tinto its pricing strategy is competitive
pricing strategy (Wu and Li, 2018). Competitors of the Rio Tinto are in large number and this is
why it is easy to get competitors pricing strategy.
Its pricing strategy is also based on cost of the products this is used for the
products on which information related to competitors is not available or products which are
costlier to make. In this like other companies which set their pricing which is less than
competitors but in case of Rio Tinto it sets its price higher than its competitors. This is also a
indicator of high quality of the products of Rio Tinto.
This pricing strategy of the Rio Tinto is very apt in context
of international marketing. This is because this considers both important factors for pricing
which is price of the competitors and cost of the product. High price is important to
communicate high quality of the product.
Promotion
Rio Tinto uses multiple media channels for promotion of the product. This includes
traditional and modern media channels, traditional media channels includes newspaper, TV
advertisement on the other hand modern channels of promotion includes internet marketing,
social media and digital marketing channels.
It advertises on various social media platforms and also includes promotion on
You Tube for the purpose of increasing the visibility of the brand and company products. Along
with this Rio Tinto also employs various sales promotions which includes discounts and various
customers benefits to increase customer loyalty.
This promotion strategy of the Rio Tinto is important for a multinational company

and its products (Massingham and Pomering, 2017). This is because different type of
promotional strategies is useful for different international markets in which company operates.
Place
Place which are used by Rio Tinto are of two types which are its marketing channels. In
first channel of Rio Tinto it sells its products directly to the buyer. Another place which is used
by the company is online platforms.
In this context it is important that company uses such channels which are
important but as an international company it can also use place and channels like market
mediators and dealer to sell the products. They can employ dealers in different international
markets, through which it can increase its visibility and existence in various international
markets. This also does not require much cost and investment.
LO 4
International Marketing Approaches
Marketing definitely changes when companies are international and they operate out of
national boundaries (Torres and Kunc, 2016). There are two approaches in international
marketing these are centralized and decentralized.
Centralized Marketing Approach
In a centralized marketing program marketing team at headquarters makes most of the
decisions related to marketing in international scenario. All the plans are designed by them and
followed by execution is also done by them. There are some of the conditions in which this
approach is most suitable for the companies. These are-
 In condition of centralized marketing approach the marketing team of the company needs
to be very competent that they are able to make suitable policies and planning for the
marketing in various international scenarios.
 Another condition for this is that company is able to find country experts and those who
can tell and are experts in marketing in their own country and they can provide localize
material for the marketing.

 This is also suitable when company sell most of its products through direct export rather
than any other channel or place of sell (Sinkovics, Jean and Kim, 2016). Along with this
in-country subsidiary is also a suitable form and condition in centralized approach.
 This is also appropriate in condition when marketing material of the company requires
little or no localization. These happens when markets are highly globalized such as for
scientific and software products.
 It is also useful in case company carries a positive effect of country of origin. Some
products are considered of high quality because they have been made in certain country
(Schmid, Grosche and Mayrhofer, 2016). This refers to positive effect of country of
origin.
In centralized marketing, companies have to focus on developing in-house marketing capabilities
and scalable processes of the company. Through centralized marketing companies can have
much control over its marketing strategies and execution of the plans on international context.
Decentralized Marketing Approach
Decentralized approach of international marketing involves that planning and execution
of marketing programs is done at the field of marketing. In this it can be said at the country level
in the market where they are operating. In this company can have small team of independent
distributors or representatives and sales offices at local level can also be rely in this approach of
marketing (Jain, 2019). This approach of marketing is suitable in conditions when-
 Products of the companies are in heavily regulated industries.
 Products of the company are required to be significantly localized in order to sell them in
various international markets.
 There is strong biasness towards local language and culture and local sales connections.
This means that international products are not able to sale themselves and they are
required to be as per the local taste of the people so that they can be sold by the company.
 There is strong negative effect of country of origin. In this there are some countries
whose products are considered to be of low quality and customers do not like to buy
them. This is known as negative effect of country of origin.

Through this companies support and motivate local marketing staff. This is also used when
companies have their subsidiaries in other country market and companies what to make local
effect.
Comparison between home and international company and their ways to assess competitors
Internal business and domestic business has their own level and opportunities for the
business. Many firms do their business on the internal level and some of the firm in same
industry working on the domestic market. Competition on the internal market is higher than the
domestic market. Here are two manufacturing companies Rio Tinto which is international
company and doing their business on the international level and Acacia Mining plc which is
Domestic level company in United Kingdom.
Rio Tinto Acacia Mining plc
Rio Tinto is an Anglo Australian
Multinational and one of the largest metal
mining companies. This company is working
on a international level (D’Amato, Wan, Li,
Rekola and Toppinen., 2018). The company
has grown through a long series of mergers
and acquisitions to place itself among the
world leaders in the production of many
commodities, including aluminium, iron ore,
copper, uranium, and diamonds.[4] Although
primarily focused on extraction of minerals,
Rio Tinto also has significant operations in
refining, particularly for refining bauxite and
iron ore. This company has operation on the
six continents . competitors on the
international level is high so they have to
face high pressure from their competitors
but the advantages of the international market
is that the profit margin is more than
Acacia mining is the gold mining business
which is operating their business in the
Tanzania. This company is working on the
domestic level and they are having huge
reputation in the market. They have strong
hold in the UK. Competitors in the UK
market are lower than the international
market so they do not have felt any pressure
on the domestic market. Capital requirement
at the domestic market is lower than the
international market and financial resources
of the Acacia Mining plc is strong so they are
not facing any problem related to the finance.
They have good hold in this market but in the
domestic market opportunities for the Acacia
Mining plc is limited as compare to the
international market. Profit is also limited
and they need to find the contractor but most
of the contractors deal with the companies

domestic level. They are having huge respect
on the international level and earning
opportunities in the international level is
higher than the domestic level and there are
many contractors always search for the
companies who can do mining for them. it is
important for the Rio Tinto company to
expand their business more in the
international level because opportunities at
the international level is increasing. And they
take competitive advantages from those
opportunities and increase their profitability.
who are doing their operations at the
international level. They can also earn profit
at the domestic level but it is, limited and it’s
hard to find contractor who can give work to
the Acacia Mining plc company (García-
Vega and Huergo., 2019). They can also
work on the international level where they
can have more opportunities.
CONCLUSION
On the basis of above analysis it can be concluded that international marketing is much
bigger and complex than local and national marketing. In this factors included are various and
companies are required to consider all the aspects which are related with different national
markets. In national marketing these are limited to one country only. This report included scope
of international marketing and companies can enter into the international markets by various
means. This report also included rationale for the company to enter in international markets.
There are various international market strategies which were discussed in this report and these
are merger, partnership and joint ventures and many more. Along with this its advantages and
disadvantages were also discussed. These help in understanding which strategy company should
use and they can decide impact and what advantages and disadvantages can affect them. In this
marketing mix of the company was also discussed. Marketing mix of a company includes
product, price, promotion and place of the company.

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