Test Papers / Previous Question Papers of IGNOU MS64 International Marketing June 2005

MANAGEMENT PROGRAMME

Term-End Examination

June, 2005

MS-64 : INTERNATIONAL MARKETING

Time : 3 hours
Maximum Marks : 100
(Weightage 70%)

SECTION A

1. (a) Explain the concept of EPRG model in the evolution of global marketing with the help of suitable examples.

(b) Identify the major constirains in India's exports growth. Suggest suitable measures which can be integrated in strategy to promote exports.

2. (a) One of your friends is willing to export ready made garments. Explain to him in detail about the activities of organisations he should get in touch with.

(b) Explain various elements of cost used in preparing an export pricing quotation.

3. (a) Discuss the product/market conditions where product standardisation is a more effective strategy than product adoption, illustrating your answer with suitable examples.

(b) Explain the modus operandi of a letter of credit in international transaction.

4. Write short notes on any two of the following :

(a) Mehtods of indirect exports to foreign markets
(b) International Bank for Reconstruction and Development (IBRD)
(c) Procedure for conducting intenational marketing research

SECTION B

5. Read the following case and answer the questions given at the end :

Indian Oil Corporation's Internationalisation Strategy

Indian Oil Corporation (IOC) is the largest commercial undertaking in India and the only Indian company in Fortune's "Global 500 Listing". As a part of the internationalization strategy of IOC, it has entered into the foreign market using the following entry methods :

1. Exporting :

IOC has already been exponing its products such as Servo Lubricant and other petroleum products to a number of overseas markets including Bangladesh and Sri Lanka.

2. Turnkey Projects:

For constructing port oil terminal on turnkey basis at Mer Rouge, since October 2002, IOC has got a wholly owned subsidiary - M/s Indian Oil Tanking Ltd., Mauritius.

3. Strategic Alliance :

For providing aviation fuel and refuelling facility at SSR infemational airport in Mauritius, Indian Oil Mauritius Ltd. (IOML) has formed a strategic alliance with existing players such as Shell, Caltex and ESSO.

4. Joint Venture :

IOC is also negotiating with Caltex to put up a joint venture for installing a bottling plant and marketing LPG under a common brand name "Mauri Gas" in Mauritius.

5. Wholly Owned Subsidiaries :

IOC has formed a wholly owned subsidiary in Mauritius - Indian Oil Mauritius Ltd. (IOML) with a huge projected investment. The company is setting up a state -of-the-art bulk storage terminal at Mer Rouge to stock 24 thousand Metric tonnes of vital petroleum products, auxiliary and bunkering facility and 25 modern petrol (and Gas) stations. IOML is also in the process of building infrasiructure for storage, bottling and distribution of Indane, LPG and market servo lubricants In Mauritius.

Besides, IOC has also formed a wholly-owned subsidiary in Sri Lanka - known as Lanka IOC Pvt. Ltd. (LIOC). LIOC took over 100 retail outlets owned by Ceylon Petroleum Corporation in February 2003. It is the only private-owned company besides the State-owned Ceylon Petroleum Corporation (CPC) that operates retail petrol stations in Sri Lanka. Building and operating storage facilities at Trincomalee tank farm, LIOC is involved in bulk supply to industrial consumers.

In order to facilitate operations of Lanka Indian Oil Corporation Pvt. Ltd. (LIOC), the Government of Sri Lanka has extended the following concessions :

a. A tripartite agreement signed between the Sri Lankan Government, CPC and LIOC guarantees that only three retail players (including CPC and LIOC) will operate in the Sri Lankan market for the next live years.

b. LIOC has also been allowed income tax exemption for 10 years from the date of commencement of operations and a concessional tax of 15% thereafter against the prevailing rate of 35%.

c. The Indian Oil subsidiary has also been granted customs duty exemption for import of project-related plant, machinery and equipment during project implementation period of 5 years, besides free transfer of dividend/income to India.

As a strategic perspective, Indian Oil Corporation is moving towards globalizing its markets.

Questions :

(a) IOC has adopted a mix of entry modes for approaching international markets. Critically evaluate the factors affecting IOC'S selection of these entry modes.

(b) In view of the emerging economic political scenario, evaluate IOC'S entry into Sri Lanka as a Wholly Owned Subsidiary.