Unit 2: International policy and distribution
International and Social Media Marketing notes · PTU syllabus (MBA 925-18)
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Unit summary
Exporting requires policy support, documents and a marketing mix suited to foreign markets. This unit covers India's EXIM policy, export promotion organisations and incentives, export documents, international product standardisation and adaptation, international pricing strategies, and international distribution channels and communication policy.
After this unit you can
- Explain India's EXIM policy and export promotion organisations and incentives
- Explain the main export documents
- Explain product standardisation vs adaptation and international pricing
- Explain international distribution and communication policies
PTU syllabus topics
- India's EXIM policy
- export promotion organizations and incentives
- export documents
- international product standardization and adaptation
- international pricing strategies
- international distribution channels and communication policy
Approach
Same product and message worldwide
Tailored to each market
Benefit
Lower cost, consistent brand
Better local fit
Example
Apple iPhone
McDonald's local menus
Topic 1
India's EXIM policy
- Framed under the Foreign Trade (Development and Regulation) Act, 1992 by the Ministry of Commerce (DGFT).
- Foreign Trade Policy 2023: open-ended (no fixed five-year term), shift from incentives to remission (RoDTEP, RoSCTL), export target US$ 2 trillion by 2030, Districts as Export Hubs, e-commerce exports, amnesty for EPCG/AA defaults, rupee trade settlement.
- Schemes: Advance Authorisation, EPCG, EOUs, SEZs, Towns of Export Excellence, status holders.
Topic 2
Export promotion organisations
Ministry of Commerce and DGFT
Policy, licences, IEC codes
Export Promotion Councils
Product-specific councils — EEPC, Pharmexcil, AEPC
Commodity Boards
Tea, Coffee, Spices, Rubber Boards
APEDA and MPEDA
Agricultural and marine exports
ITPO and IIFT
Trade fairs; training and research
ECGC
Export credit insurance
EXIM Bank
Export finance and lines of credit
FIEO
Apex body of exporters
Topic 3
Export incentives
- Duty remission: RoDTEP (remission of duties and taxes on exported products), RoSCTL (apparel and made-ups), duty drawback.
- Duty-free inputs: Advance Authorisation, EPCG (capital goods at zero duty against export obligation).
- Zones and units: SEZs, EOUs; Districts as Export Hubs.
- GST: zero-rated exports — export under LUT without tax or claim refund of IGST.
- Finance: pre- and post-shipment credit, interest equalisation scheme, ECGC cover; status holder recognition.
Topic 4
Export documents
Commercial
Commercial invoice, packing list, certificate of origin
Transport
Bill of lading (sea), airway bill (air), lorry receipt
Regulatory
Shipping bill, export declaration, IEC, inspection and phytosanitary certificates
Financial
Letter of credit, bill of exchange, insurance certificate
- Bill of lading: document of title to goods, receipt for goods and evidence of the contract of carriage.
- Letter of credit: bank's undertaking to pay the exporter on presentation of compliant documents — governed by UCP 600.
- Incoterms 2020: define buyer–seller responsibilities — EXW, FCA, FOB, CFR, CIF, DAP, DDP and others.
Topic 5
International product decisions
Logic
Global customers have similar needs
Markets differ in culture, income and regulation
Benefits
Economies of scale, consistent brand, lower cost
Better fit and acceptance
Examples
iPhone, Coca-Cola concentrate
McDonald's menus, Maggi masala flavours abroad
- Keegan's strategies: straight extension, product adaptation, communication adaptation, dual adaptation, product invention.
- Mandatory adaptation: voltage, labelling language, safety standards, halal certification.
Topic 6
International pricing strategies
- Factors: costs (production, freight, duties, intermediaries), demand and income, competition, currency fluctuations, government controls, company objectives.
- Price escalation: the final foreign price rises far above the home price as freight, insurance, duties, taxes and multiple intermediary margins accumulate.
Standard worldwide price
Same price everywhere
Dual pricing
Different domestic and export prices — cost-plus or marginal cost
Market-differentiated pricing
Price set for each market
Skimming and penetration
By market conditions
Transfer pricing
Prices between subsidiaries — subject to arm's-length rules
- Dumping: selling abroad below the home price or cost — may attract anti-dumping duties.
- Countertrade: barter, counter-purchase, buy-back arrangements.
Topic 7
International distribution channels and communication policy
- Channels: home-country intermediaries (merchant exporters, export houses, buying agents) and foreign intermediaries (importers, distributors, agents, retailers, e-commerce marketplaces); direct exporting through own subsidiaries.
- Channel decisions: coverage, control, cost, continuity, character, capital (the 6 Cs).
- Communication policy: standardise or adapt messages and media; language and cultural sensitivity; regulation of advertising; trade fairs, personal selling, digital marketing, PR in foreign markets.
Key terms
- RoDTEP
- Scheme remitting embedded taxes on exports
- Bill of lading
- Document of title for sea shipment
- Incoterms
- International rules on delivery responsibilities
- Price escalation
- Rise in foreign price due to added costs
- Dual adaptation
- Changing both product and communication
Quick revision
- Foreign Trade Policy 2023; export promotion organisations.
- Incentives: RoDTEP, RoSCTL, Advance Authorisation, EPCG, SEZ, GST zero-rating.
- Documents: invoice, packing list, certificate of origin, bill of lading, shipping bill, LC; Incoterms.
- Standardisation vs adaptation; Keegan's five strategies.
- Pricing: escalation, dual and differentiated pricing, dumping, countertrade; channels and communication.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.What is the role of ECGC?
- Q2.What is RoDTEP?
- Q3.What is a bill of lading?
- Q4.Name four Incoterms.
- Q5.What is price escalation?
- Q6.State Keegan's five product–communication strategies.
Long-answer questions
- Q1.Explain India's EXIM policy and export promotion measures.
- Q2.Explain the major export documents and their purpose.
- Q3.Discuss product standardisation vs adaptation in international markets.
- Q4.Explain international pricing strategies and distribution channels.
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