Chapter 01- International Marketing

Chapter-01

Meaning of International Marketing:

‘International Marketing’ refers to specialized and broader aspects of Marketing which particularly give emphasis to the international perspectives.Before presenting an appropriate formal definition and view of International Marketing, we may consider to go through a basic definition of marketing which are noted below:

The U.K Institute of Marketing defines marketing as ‘’the management process responsible for identifying, anticipating and satisfying consumer requirements profitably’’.

It is generally accepted that true marketing requires, on the part of the supplying organisation:

A)    genuine attention to consumers/customers needs and wants

      (Usually a specific target segment is selected)

B)    Satisfaction of those needs and wants at a profit.

C)    Orientation of the whole organisation towards the customer-satisfaction process.

An appropriate formal definition of International Marketing, however, might be:

a)    The marketing of goods and services across national frontiers.

b)   The marketing operations of an organisation that sells and/or produces within a given country when that organisation is part of, or associated with, an enterprise which also operates in other countries.

c)    There is some degree of influence on or control of that organization’s marketing activities from outside the country in which it sells and/or produces.

Another view is that, the expression ‘International Marketing’ is simply an attitude of mind, the approach of a company, with a truly global outlook, seeking it’s profit impartially around the world, ‘home’ market included, on a planned and systematic basis.

Task of International Marketing:

Marketing includes business activities some of which are Controllable and Uncontrollable.

The four P’s often referred to as marketing mix such as product, price, place and promotion are controllable business activities which are under supplier’s control.

The marketer must also take into account of environmental factors over which has no control, i.e.uncontrollables, but which will significantly affect the degree of success he achieves.

These environmental factors include:

a)    Economic development.

b)   Technological development.

c)    Social and Cultural influences.

d)    Political and legal decisions.

e)    Business practices and institutions.

f)     Competitive activity.

The task of international marketing management is, similarly, to adapt the marketing mix to the environment, but in this case the environment is vastly changed. Although environmental differences may readily be discerned within any one nation, those differences between nations are, as a rule, far more marked.

International environmental differences, however, do require a change of emphasis. Certain aspects of marketing that are largely irrelevant in a purely national context, such as ‘barter trading’, achieve real importance. Other aspects of marketing require, in international trade, a far more detailed knowledge than might be necessary within any one nation, e.g. Licensing, Joint Ventures and the use of agents in the selling function.

The environmental differences, significant though they are, do not imply any fundamental change in marketing as a technique.

Importance of International Marketing:

The importance of International Marketing can be highlighted through the following points:

a)    It provides unique opportunity to a firm to achieve faster business growth by serving the prospective international markets.

b)   It provides unique opportunity to a firm for the strategic expansion of a firm’s operation by serving the prospective international markets with its existing business line.

c)    It may also help company to diversify its business to meet the target segment’s need and wants.

d)     International Marketing facilitates the economic growth of a country. The growth of export oriented business assists in :

1)    Reducing the unemployment problem of a country. The foreign exchange earned through export of goods or services can be used in meeting the financial needs for development of a country.

2)    To achieve favorable impact on the balance of trade which ultimately assists the country to enjoy better terms of trade.

3)    The per capita income of a country rises through increasing participation in international marketing.

e)    A country is benefited largely through international marketing by means of Technology transfer, Improvement in Management skill and qualitative improvement in products.

f)     International marketing operations enable a firm to enjoy the benefits of large scale production and marketing. The international firm is compelled to make gradual improvements in its product quality and service. This results in organizational development.

g)    A firm involved in international marketing may enjoy more financial and fiscal benefits for its operations than domestic marketing. That’s why many domestic firms become interested to participate in international marketing for gaining various economic benefits.

h)    It provides the opportunity to build up a bright image of a country by serving the world community.

Problems / Limitations to International Marketing:

1)    International Marketing involves a lot of risks and uncertainties. The marketer may involve a lot of his scarce resources to a target business segment of overseas which may cause to him an acute financial condition.

2)     International marketing largely depends on the access mechanism of the target country. If the mechanism is too much restrictive, then it’ll definitely a blow to the marketer by which he planned to achieve sustainable business growth.

3)    Continuation of Policy support of the Govt in respect of the operation of international marketing activities.

4)    A global company exploits a country through manipulative use of transfer pricing. This type of firm becomes involved in different exploitative practices to gratify its selfish needs.

5)    The international marketer has to experience more product obsolescence if ample stress is not given to R&D efforts. The changing environment affects the effectiveness of marketing plan’s and programmes and retards the achievement of an international firm’s long term marketing objectives.

6)    Export on a large scale increase the dependence of a country on other countries for the supply of raw materials, parts, machineries, technology, capital and management ideas. Thus the scope of exploitation increases by large scale involvement in international marketing operations.