IBO 02 International Marketing Management Solved Question Paper June 2026 for IGNOU M.Com and PGDIBO

Question 1

1. Why do firms go International ? Discuss with suitable examples. 20

Answer

Firms go international when the gains from serving customers abroad outweigh the extra cost and risk of crossing borders. International marketing means carrying out marketing activities across national boundaries, and the decision to internationalise is rarely driven by a single reason.

The reasons are usually grouped into proactive or pull motives, where a firm chases an opportunity abroad, and reactive or push motives, where it responds to pressure at home. A third set of environmental drivers, such as liberalisation and technology, makes the move easier.

A. Proactive motives (pull factors)

1. Profit and growth advantage: Foreign markets can offer higher margins or faster growth than a mature home market. Coca-Cola left India in 1977 and returned in 1993, after liberalisation opened a large, young and under-served market for soft drinks.
2. Unique product, skill or technology: A firm with an edge that rivals abroad lack can earn well from it. Indian IT services firms such as TCS and Infosys built global businesses on their ability to deliver software and process services at scale, and North America and Europe give them a large share of revenue.
3. Economies of scale: Selling in many countries spreads the fixed cost of research, plant and brand building over larger volumes. Bajaj Auto exports motorcycles to markets in Africa, Latin America and South and South-East Asia, which keeps its plants busier than home demand alone would.
4. Exclusive market information: Firms that know a foreign market better than local rivals tend to enter it first. Indian spice and ethnic food exporters often begin with the Indian diaspora in the Gulf, the UK and North America, where they already understand what buyers want.
5. Managerial urge and vision: Leadership ambition is a strong driver. The Tata Group's overseas acquisitions, Tata Steel buying Corus in 2007 and Tata Motors buying Jaguar Land Rover in 2008, reflected a deliberate choice by top management to build global scale.
6. Government incentives and tax benefits: Export support lowers the cost of selling abroad. India offers Special Economic Zones under the SEZ Act, 2005, and the RoDTEP scheme, in force since 1 January 2021, which refunds duties and taxes embedded in exported goods.
7. Access to resources and lower costs: Firms go where inputs, skills or production are cheaper or better. Apple has expanded iPhone assembly in India through contract manufacturers such as Foxconn, both to diversify its supply chain and to be closer to a fast-growing market.

B. Reactive motives (push factors)

1. Competitive pressure: A firm may go abroad to match rivals or to keep a key customer. Auto-component makers often follow vehicle manufacturers into new countries so that they do not lose large, long-term supply contracts.
2. Saturated or declining home market: When sales stop growing at home, firms look for growth elsewhere. Multinationals such as Unilever and Nestle earn a large part of their sales in emerging markets because demand in their mature home markets grows slowly.
3. Excess capacity: Spare capacity can be sold abroad at prices that cover variable cost and add to profit. Indian steel and cement producers, for example, raise exports when domestic demand slows.
4. Spreading risk across seasons and cycles: Selling in several markets smooths out swings in demand. A woollen garment maker in north India can sell in the southern hemisphere, where winter falls between June and August, and so keep its factory running all year.
5. Extending the product life cycle: A product that has matured at home may still be new in another country, so going abroad gives it a longer earning life.
6. Proximity and psychic closeness: Nearness to ports, borders or culturally similar markets lowers the cost of entry. Many Indian firms treat Nepal, Bangladesh and Sri Lanka as natural first export markets.

C. Environmental drivers that make going international easier

India's economic reforms of 1991 cut licensing and tariff barriers, and the creation of the World Trade Organization in 1995 lowered trade barriers worldwide. Cheaper container shipping, digital payments and cross-border e-commerce platforms now let even small exporters reach foreign buyers directly.

D. How the motives change as a firm grows abroad

Motives are not fixed. A firm often starts with a reactive motive, such as selling surplus output through an export agent. As foreign sales grow, it learns about buyers, rules and partners, and proactive motives take over: it opens its own sales office, licenses its brand or sets up a subsidiary.

This step-by-step growth means the reason a firm first went abroad can differ from the reason it stays. Commitment usually rises from occasional exporting to regular exporting, then to foreign marketing units and finally to production abroad, and each step needs a stronger, longer-term reason to justify the extra investment.

Learning is itself a benefit. Firms that compete abroad face stronger rivals and stricter buyers, and the product, quality and service improvements they make for foreign markets often lift their performance at home as well.

Conclusion: Firms rarely go international for one reason. Pull motives such as profit, scale and vision usually lead to deeper, planned commitment, while push motives such as surplus capacity often start with exports and grow over time. A good answer classifies the motives and backs each one with a real example.

Question 2

2. Describe the relationship among market segmentation, market targeting and product positioning. 20

Answer

Market segmentation, market targeting and product positioning form a three-step chain known as STP. Segmentation splits a market into groups of buyers with similar needs, targeting chooses the groups the firm will serve, and positioning decides how the firm wants those chosen buyers to see its offer against competitors.

In international marketing the chain works at two levels: first across countries, to decide which national or regional markets to enter, and then within each country, to decide which customers to serve and with what image.

1. Market segmentation

Segmentation is the process of dividing a heterogeneous market into smaller, fairly similar groups that respond in a similar way to a marketing mix. International firms segment at two levels.

• Country level (macro segmentation): countries are grouped by economic, geographic, political-legal and cultural variables. The World Bank's grouping of economies into low, lower-middle, upper-middle and high income is often used as a starting point.
• Consumer level (micro segmentation): buyers within or across countries are grouped by demographic, psychographic and behavioural variables such as age, lifestyle, usage rate and benefits sought.
• Intermarket or universal segments: some groups cut across borders, such as global teenagers or frequent business travellers, who share needs whatever their nationality.

A segment is useful only if it is measurable, substantial enough to be profitable, accessible through media and channels, clearly different from other segments and actionable with the firm's resources.

2. Market targeting

Targeting means evaluating each segment and selecting one or more to serve. Firms judge segment size and growth, structural attractiveness such as competition and buyer power, and the fit with their own objectives and resources. The main targeting strategies are listed below.

• Undifferentiated (mass) marketing: one offer for the whole market. Coca-Cola sells its core cola with largely the same brand promise across the world.
• Differentiated marketing: separate offers for separate segments. Hindustan Unilever sells shampoo in low-priced sachets for price-sensitive rural buyers and in larger bottles for urban households.
• Concentrated (niche) marketing: one segment served in depth. Rolex focuses on the luxury watch buyer rather than the mass market.
• Local or micro marketing: the offer is tailored to local tastes. McDonald's in India serves no beef and built its menu around items such as the McAloo Tikki.

3. Product positioning

Positioning is the act of designing the offer and image so that it holds a clear and valued place in the target customer's mind. The idea was popularised by Al Ries and Jack Trout. Firms position on attributes, benefits, price and quality, use occasion, type of user or against a named competitor. Volvo, for instance, has long positioned its cars on safety.

For global brands, Warren Keegan's idea of high-tech and high-touch positioning is useful. High-tech products such as computers and cameras are bought on specification, while high-touch products such as perfume, fashion and jewellery are bought on emotion. Products at either end of this range travel well across borders with one global position.

4. Relationship among segmentation, targeting and positioning

1. Sequential link: segmentation produces the map of possible customers, targeting picks the destinations on that map, and positioning decides how to win the chosen customers. Positioning without a defined target becomes vague.
2. Shared customer insight: the needs found during segmentation become the selection criteria in targeting and the promise used in positioning, so one piece of research feeds all three steps.
3. Positioning drives the marketing mix: once a position is chosen, product features, price, channels and promotion must all support it. A luxury position cannot sit beside discount pricing.
4. Feedback loop: weak results can force a firm back to segmentation. Tata Motors launched the Nano in 2008 and promoted it as the cheapest car; Ratan Tata later said the cheap tag was a mistake, as many buyers in the target segment saw a car as a status purchase.
5. Standardise or adapt: where a universal segment exists, one global position works; where segments differ by country, positioning is adapted market by market.

The chain can be shown as a simple flow: Segmentation (who could buy?) leads to Targeting (whom shall we serve?), which leads to Positioning (how should they see us?), which finally shapes the Marketing mix (how do we deliver that promise?).

5. The chain at work: an illustration

Consider an Indian packaged-tea brand planning to sell abroad. Segmentation first groups countries by tea-drinking habits, income and the size of the South Asian community, and then groups buyers within them, for example diaspora households, health-minded young adults and cafes.

Targeting then picks the segments that are large enough and reachable, perhaps diaspora households in the UK and the Gulf first. Positioning follows from that choice: the brand presents itself as the authentic taste of home, and the pack, price, retail outlets and advertising are built to support that single message.

If the brand later targets health-minded young adults, the earlier position will not carry over. It must reposition, perhaps around natural ingredients, which shows again that each positioning decision is tied to the segment it serves.

Conclusion: Segmentation, targeting and positioning are not separate tasks but linked stages of one strategy. Each step depends on the one before it, and a mistake at any stage, as the Nano case shows, weakens the whole international marketing effort.