International Marketing

International marketing is a part of total marketing process. International marketing which means marketing activities carried on across the national boundaries. Thus, international marketing includes activities that direct the flow of goods from one country to the uses of another country.

Definition and Nature

According to Hess and Cateora International is the performance of business activities that direct the flow of goods and services to consumers or users in more than one nation In this way marketing activities buying, selling, transportation, storage and warehousing, financing ,risk bearing, pricing, standardizing, adverting, and sales promotion..Etc when performed in foreign markets across the national border may be called International marketing. The vast domestic markets have provided the firms in opportunity for continued growth which finally reach a point where the possibility of continued expansion levels. These companies have been forced by the economic criterion to locate international markets to sell their surplus production and to gain cost advantage.

Difference between International Marketing and Marketing Base. or International marketing vs. Domestic Marketing
The internal or Domestic market refers to the exchange of goods and services within the resident of a country, while international marketing deal with the exchange of goods and services between the resident of a country and those of the rest of world. The striking difference international and domestic marketing lies in the environment in which the two takes place. 1. Sovereign Political entities:- Each country is a sovereign political entity and, therefore several restrictions are imposed by them for importing and exporting the goods and services in order to safe guard their national interest. a. Imposition of tariff and customs duties on import or export goods and services b. Quantitative Restrictions are also commodities imposed with an intention to restrict trade in some specific

c. Exchange Control is another restrictions imposed by almost every sovereign state. The government sometime does not ban the entry of goods in the country but the importer is not allowed the necessary foreign exchange to make the payment for the goods imported

d. Imposition of more local taxes on imported goods with an object to make the imported goods costly. 2. Different Legal system:- different legal system are operated by different countries and they differ from each other. In most common counties follow English Common Law as modified from time to time. Japan and Latin American counties are important exception of this rule. The existence of different legal systems makes the tasks of businessmen more difficult as they are not sure as to which particular system will apply for their transactions. 3. Different Monetary system:- Each county has its own monetary system and the exchange rates for each countrys currency are fixed under the rules framed by the IMF. However, in recent years the exchange rates are fluctuating and are being determined by demand and supply force. 4. Lower Mobility of Factors of Production:- mobility of different factors of production is less as between nations than in the country itself. However, with the advent of air transportation, the mobility of labour has increased. Similarly, the development of international banking has increased the mobility of capital and labour. 5. Difference in Market Characteristics: - market characteristic in each segment are different that is demand pattern, channels of distribution, method of promotionetc. are quite different from market to market. 6. Difference in Procedures and Documentation:- the laws of the country and the customs of trade in each country demand different procedures and documentary requirements for the import and export of goods and services. 7. Heterogeneous Markets:- International marketing involves heterogeneous markets while as domestic marketing involves homogeneous markets. 8. Difference in Decision Variables. Decision Variables Market Segment Market Research Product Mix Domestic Marketing Single market and sub-markets Awareness of the market in domestic International Marketing Multiple markets and multiple sub-markets Imperative are

The decision is taken solely on the grounds of The decision grounds providing better service of increase revenue stage identical market adaptability of PLC

Similarly Product design, Product development, Advertising, Product quality and Administration (explain) are different in Domestic and International marketing

Similarities in Domestic and International Markets

1. 2. 3. 4. In both markets- domestic as well as international, satisfying the basic needs of the customers Creation of goodwill is necessary in both the markets R&D with a view to product improvement and adaptation is necessary in both markets The techniques of marketing

Planning for International Marketing or Economic Reasons for Export

It is evident that international marketing is different in many ways from domestic trade- because higher risks and complexities are present in export trade. The decision of the trader, therefore must be based mainly on strong economic factors. It requires a total involvement and determination in order to get success in international trade. The factors which influence a non-exporting firms decision to go in export business can be classified as 1. Firms Characteristics :- these characteristics are Product characteristics attributes, colour, size, packaging, price, manufacturing prestige..etc Size and growth of domestic markets Firms production capacity..etc Export market potentialities

2. Insufficiency of Domestic Demand:- if a firm is manufacturing a product, the demand of which is not encouraging in the domestic market but there are bright prospects in foreign markets, the firm can plan for international marketing. Otherwise the firm may plan for export to utilize its installed capacity in full. 3. Perceived External Stimuli:- The managements recognition of the external market conditions. This will include; Rush orders from the foreign markets Market opportunities Government stimulations..etc

Under this situation a firm can plan for international marketing.

4. Legal restrictions:- Government of almost every country impose certain restrictions on further growth and expansion of some firms or on production and distribution of certain types commodities. But such restrictions may not be for export or such restrictions may be relaxed for export marketing. Sometime, Government may compelled to impose certain export obligation on firms specially those in need of imported inputs. 5. Relative Profitability:- the profitability rate of export business is relatively higher than the domestic market. This may give persuasion the company to plan for international marketing The relative profitability of export trade is also effected by export assistance measures as may be instituted from time to time by the national government because, they reduce the cost of production or distribution. 6. Reducing Business Risk:- when a firm is selling its products in a number of markets, a downward trend in one market may be partially or fully counterbalanced by a rise in sales in other markets in the domestic countries or overseas countries. 7. Social Responsibility:- some businessmen feel a source of responsibility towards society and plan for International trade. Eg:- invention of AIDS medicine. 8. Technological Improvement:- It leads a company to introduce new products with least technological improvements that it may face the competition in the domestic and foreign markets. Thus plan for export markets many enable a firm: Pick up new product ideas Improve product Cut its production costs Discover new application for the product and Utilize its production capacity to the maximum extent.

9. Competition in Domestic Markets:- There may be cut throat completion in domestic marketing. This situation may lead a plan by the company to enter overseas market. The completion is also exists in the foreign markets, but there is difference in the form and level of competition there. In foreign markets there may be competition on quality and standards of products. Normally, Price competition poses not a big problem in foreign market. Eg;- The Indian Engineering goods entered in foreign markets due to intense competition in domestic market 10. Product Obsolescence:-Every product has its own life cycle and is to die as soon as the cycle is over. There are so many products which have reached a stage of obsolescence in developing countries yet they can be sold easily in underdeveloped or developing countries. In addition to the growth objective of a firm influence the company to plan for International marketing. The planning can be guided by the International Marketing Research and Information System, Market Analysis and the Foreign Market Entry Strategies.

International Marketing Research (Overseas Marketing Research) and Information System

Marketing research is the systematic gathering, recording, processing and analyzing of marketing data, which will help the marketing executives to uncover opportunities and reduce the risk in decision making. International marketing research is essential due to : Need for International Marketing Research To identify which market should be selected as the target Identification of suitable products Research can help to prevent the use of inappropriate market entry Research also helps in taking appropriate packaging decision For Pricing decision Research can help determine the positioning of the product To decide promotional campaign In the field of export trade where competition is not limited only to domestic manufacturers Market of today are dynamic and undergo sudden changes so international marketing research is required to forecast and ascertain the changes o The exporter is away from the market place - the distance between an exporter and his customers is usually much wider than at home markets.-So, there may be information gap that gap has to be closed by using or implementing a suitable MIS o o o o o o o o o

International Marketing research should be able to answer: The market potentials The companys sales potentials in that market To choose the specific segment The Market Segments o Identifying segment or segments within the total market which are more likely to buy the product o Selecting the target segments and understanding their characteristics

International Marketing research also should provide a clear picture of : The exporting countys trade regulations Tariff and quotas :- there are three major reasons why a market researcher should check countrys import tariff o Tariff can affect the competitiveness of product against products made within the market o Tariff can affect the competitiveness of product against those of suppliers from third countries o Tariff must be taken into account for in calculating possible selling price.

 Internal Taxes:- internal taxes are imposed in such a way that discriminate against foreign goods Currency restrictions :- many government impose controls and restrictions on the expenditure of foreign exchange Health and Safety regulations Political factors. Studying any other official trade barriers Market size and pattern of Growth o Imports :- the researcher has to find out: How much of the product presently being imported From where the important have been coming How the market share of various foreign suppliers The prices export from various sources o Consumption:- besides imports, it is also necessary to know how much of the product the market is actually consumes and is likely to consume in the future Research Process The Research process consists of a series of stages or steps that serve to guide the research project from its conception through to the final recommendation. Problem Formulation Research Design Design Data collection method and forms Sample design and data collection Analysis and interpretation of data Research Report (Explain above heads with sub-heads)

Information System
Global marketer is faced with a problem in acquiring the information needed for decision making. The global marketer is also faced with the problem of information abundance and information scarcity. The purpose if a Marketing Information System (MIS) is to provide managers and other decision makers with a continuous flow of information about markets, customers, competitors and the company operations. A MIS should provide a means for gathering, analyzing, classifying, storing, retrieving and reporting

relevant data for the research areas. A companys MIS should also cover important aspects of a companys external environment. Eg: Toyota. A starting point for a global MIS is a list of subject about which information is desired. The resulting subject agenda should be tailored to specific needs and objectives of the company Once the subject agenda has been determined, the next step is the actual collection of information. This can be accomplished using surveillance and search. o In Surveillance mode, the marketers engages in informal information gathering o The Search mode is characterized by more formal activities. Search often involves investigation.

Sources of Market Information Human Resources:- Research has shown that executives of global companies obtain as much as two thirds of the information they need from personal source. A great deal of information comes from executives because these executives have established communication with distributers, consumers, customers, suppliers and governmental officials. In India, can collect information form: Ministry of Commerce o Export and Import policy o Handbook of procedures o Commercial reports Department of Commercial Intelligence o Monthly statistics of Foreign Trade of Indiaetc Chambers of Commerce o FICCI o All India Manufactures Association (AIMO)etc Industry and Trade Association Cabinet Secretariat Department of Statistics Ministry of Information and Broadcasting Ministry of Finance RBI Export Promotion Council (EPCs) etc

Market Analysis
International Marketing relies on research in setting marketing polices. information collected are analyzing for: Which includes analysis of

Market potential analysis: to assess the sales potentials of for each of the geographic markets Competitive structure analysis:- the firm needs to augment its potential data with information about competitive structure. Like Number of brands in the market and the brand share of each Tend of each major brands market share over the past several years Amount of money spent by the major brands in advertising Price structure Distribution structure..etc

Market opportunity analysis:- to analyze the marketing opportunities of the companys product in foreign market. It is being connected with Market Environmental analysis Company strength to tap the opportunities Analyze Market segments:Analyze the comparative cost advantage:- the concept of absolute cost advantage states that when goods can be produced more cheaply in one country than another.

Foreign Market Entry Strategies or Methods of Entering Foreign Markets

Once a firm has decided to go international it has several alternative methods to choose. The choice depends very much on the resources of the firm and the market potentials for its products in the importing country. The methods of entering foreign market are: 1. Exporting:-A firm may choose to enter the international market for the first time by exporting its surplus production through any of the following forms; Approaching the consumers directly in overseas markets By selling the production to an import house or Buying agent in India By selling the product to an export house in India for export purpose 2. Licensing:- The another easy method of entering international market is to grant a license to a foreign firm to manufacture the product by using the firms name, patent trade mark and technology under the terms of agreement. Licensing with or without financial involvement 3. Joint Venture:- When the company does not possess the capacity to analyze and handle a particular market, it enters into a joint venture. The primary reason for sharing the control of the market The other reasons are

 When the company does not possess competent personals to handle foreign market or when it is short of capital Can utilize the skills of a partner in importing country Companys desire to take advantage of the local firms distribution system. 4. Manufacturing in a Foreign Country:- When the company moves along its life cycle, it develops an international orientation. This motivates it to invest in the foreign market and develop its own manufacturing and marketing systems within that market. When a firm finds that it is not possible or profitable to export goods to foreign country due to: High cost of exporting The lower cost of materials and labour in foreign country and hence lower cost of production Tariff and non-tariff barriers. The decision to manufacture and market the goods locally is very risky because the success depends very much in the fair assessment of the market potentials. 5. Management Contracts:- A country may not possess the required managerial or technical talent . In such situation, a company may sign a management contract. Eg: Foreign companies managing refiners or Oberois of India taking management contracts for managing hotels in Egypt, Australia..etc Under this arrangement the firm gets specific fees to manage for a specific time period. Offering Consultancy Services:- offering consultancy services and undertaking turnkey projects under this agreement Trunkey Projects:- that is projects which involve the rendering of service like design, civil construction, erection and commissioning of plant or supervision, along with the supply of equipments Supply of engineering services --

International Marketing vs Export Marketing

Generally two terms International Marketing and Export Marketing are taken synonymously and are used inter-changeably. Even though the difference between them are International Marketing includes : Setting up a branch abroad Entering into licensing arrangement Setting up joint venture Offering turn key projects and consultancy

 Furthermore international marketing involves research into the needs of the foreign markets and evolving suitable marketing strategies and exports Export marketing :- exporting goods and service to foreign country A manufacturer may tries to sell his surplus production in foreign markets Export when demand arises either directly or through some agency He does not intend to conduct research nor attempt to differentiate his marketing mix to match such needs --

Factors Influencing International Marketing

International marketing is very much influenced by Foreign exchange rate, the commercial and economic policies, available logistics, cost of transportation, political risks, financial set up and social psychology of concerned country. External factors which influence the International marketing: Economic environment :Political environment :Demographic environment :Social environment :---

Importance of International Marketing

International marketing play a significant role in the economic development of the concerned country. In the present world no county can live in isolation. The is firstly because uneven distribution of natural resources. Eg: GCC countries for petroleum products. The importance: 1. To meet import of Industrial needs :- the developing country need import of capital equipments raw materials from the other countries. Moreover, if a country fails in meeting the import bill by exporting goods and services from the other country, the difference is trade deficit. So, export and import are essential. 2. Debit Servicing:- almost all underdeveloped countries have been receiving external aid over the years for their industrial development. Hence, it is necessary to aim at sufficient export earning to cover both import and debt servicing. 3.Rapid economic Growth:- An expanding export trade can be a dynamic factor in a countrys development process.

Increasing production and exportable surplus Utilize economic resources To provide technological development Improved production at lower cost Earning more valuable foreign exchange Mitigate unemployment in labour-intensive industries

4. Profitable use of Natural Resources:- natural resources are valuable assts of a country which should be exploited ideally and keeping the interest of the country in mind. 5.Facing Competition Successfully:- in a thrust of export more, the Government of the country, announces several concessions and inventive plan. Domestic producer- in order to avail these concessions, must concentrate of quality of goods produced and reducing cost of production so as to face the competitive situation in the foreign markets by making intensive use of latest technology. 6. Increase in Employment opportunities:7. Role of exports in National Income:- export play as important role in the national income of the country and it can be increased to sizable extent through organized export marketing. 8. Increase in the standard of living:- IM improves the standard of living. The import of necessary items for consumptions Export increase the employment opportunities which in turn, increase the purchasing power of the people Export assists the rapid industrialization Available of quality products. Importance of Export Marketing from the point or View of individual Firm 1. Insufficiency of domestic demand:2. To utilize installed capacity:3.Legal restrictions:4.Relative profitability:5. Less business risk:6.. Increased productivity:7.Social responsibility:8.Technological improvement:9.Product obsolescence:-