INTRODUCTION

International marketing refers to marketing carried out by companies overseas or across national
borders. This strategy uses an extension of the techniques used in the home country of a firm.
International marketing is simply the application of marketing principles to more than one
country. However, there is a crossover between what is commonly expressed as international
marketing and global marketing, which are similar terms. The intersection is the result of the
process of internationalization. Many American and European authors see international
marketing as a simple extension of exporting, whereby the marketing mix 4Ps is simply adapted
in some way to take into account differences in consumers and segments. It, then, follows that
global marketing takes a more standardized approach to world markets and focuses upon
sameness, in other words the similarities in consumers and segments.
According to American Marketing Association (AMA), international marketing is the
multinational process of planning and executing the conception, pricing, promotion, and
distribution of ideal goods and services to create exchanges that satisfy individual and
organizational objectives.

CONCEPT OF INTERNATIONAL MARKETING

When a business crosses the borders of a nation, it becomes complex. International marketing
involves all the activities that form part of domestic marketing. An enterprise engaged in
international marketing has to correctly identify, assess and interpret the needs of the overseas
customers and carry out integrated marketing operations to satisfy those needs. In other words,
the basic functions are the same in international marketing as well as in domestic marketing. At
the same time, there are several characteristics that are unique to international marketing. When
the business crosses the national borders of a given country, it becomes enormously more
complex. The resulting problems and management situations transcend those of marketing,
finance and production. A wide range of legal, political, cultural and sociological dimensions
enter the picture, adding a lot of complexity to the task. And, the one factor that contributes
maximum to the complexity is the environmental and cultural dynamics of the global markets.
FUNCTIONS IN INTERNATIONAL MARKETING
The main functions involved in International marketing are:
 Choosing the basic route for global marketing
 Market selection and product selection
 Selection of distribution channels
 Developing pricing strategy
 International marketing communication
 Mastering the procedural complexities
 Organizational adaptations
 Handling business ethics

BENEFITS OF INTERNATIONAL MARKETING

The importance of international marketing is neither understood nor appreciated by the
consumers though they are carrying out international marketing daily. The Government officials
especially the bureaucrats seem always to point a negative aspect of international business. Many
of their charges on international marketing are imaginary than real. Hence, it is essential that the
benefits of international marketing be explicitly discussed.
These benefits are:
1. Endurance: Every country is not that fortunate as USA in terms of infrastructure, size,
resources and opportunities. Hence, they must trade with other countries to survive.
Similarly, every country is not fortunate as India, which has abundant natural resources
and treasure of biodiversity that it can survive within its resources even if there is a
resource crunch. Even then it has to carry out trading with other countries to get oil and
Armaments for its own survival. Hongkong cannot survive without food and water from
China. The countries of Europe have had similar experience since most of the European
nations are relatively small in size. Without foreign market, European firms would not
have sufficient economies of scale to allow them to be competitive with US firms.

2. Progress of overseas markets: Developing countries, inspite of poor economy having

serious marketing problems are considered as excellent markets. The US has found that
India is the biggest market in the world for consumer and engineering products.
 According to a report prepared by US Congress by the US Trade Representative, Latin
America and Asia are experiencing the worst economic recession though they have the
potential in the world market.

3. Sales promotion: Foreign markets constitute a large share of total business of many firms
that have cultivated market abroad. Many large US companies have done very well
because of their overseas customers. IBM and Compaq sell more computers abroad than
at home. The case of Coca-Cola clearly emphasizes the importance of overseas markets.
Coca-cola is coming up with milk based products as majority of the Indians and Asians
do not relish the taste of aerated drinks which are supposed to be having caffeine and is
addictive.

4. Diversification: In the international market cyclical factors as recession and such

seasonal factors as climate affect the demand for most of the product. Due to these
variables there are sales fluctuations, which frequently is substantial enough to cause, lay
off of personnel. One way of diversifying a company’s risk is to consider foreign markets
as a solution for variable demands.

5. Inflation and wholesale price index: The best way to control inflation is to earn foreign
exchange through exports. Imports can also be highly beneficial to a country because
they constitute reserve capacity of the local economy. Without imports, there is no
incentive for domestic firms to moderate their prices. The lack of imported product
alternatives forces consumers to pay more, resulting in inflation and excessive profits for
local firms. This development usually acts as a prelude to workers to demand higher
wages, further exacerbating the problem of inflation.

6. Employment and placements: Tariff barriers and trade restrictions in certain countries
contributed significantly to the great depression of 1930 and have the potential to cause
widespread unemployment again. Unrestricted trade on the other hand, improves the
world’s GNP and enhances employment generally for all nations. With the liberalization
of economic policy 1991, India has gained tremendously with the inflow of foreign direct
 investment as a result of which the employment in the country has tremendously
improved.

7. Standard of living/style: Trade affords countries and their citizen’s higher standard of
living than otherwise possible. Without trade, product shortages force people to pay more
for less. Life in most of the countries would difficult to sustain. Trade also makes it easier
for industries to specialize and gain access to raw materials, while at the same time
fostering competition and efficiency.

8. Marketing process: International marketing should be considered a special case of

domestic marketing. Only thing is that the word multinational has been added in the
international marketing process. Otherwise, the marketing mix is the same for both. With
the improvement in information technology the access to international market has
become easy as the whole world has become a small global village.

DIFFERENCE BETWEEN INTERNATIONAL MARKETING AND DOMESTIC

MARKETING

Basis Domestic Marketing International Marketing

Definition It is concerned with the marketing It is the performance of business

practices within the researchers or activities designed to plan, price,
Marketers home Country (domestic promote and direct the flow of a
market). company’s goods and services to
consumers or users in more than one
nation for a profit.
Role of Politics Political factors are of minor Political factors play a vital role.
importance.
Languages & One language and culture. Many languages and difference in
Cultures Cultures.
Financial Uniform financial climate. Variety of financial climate.
Climate
Risk Involved Normal risk is involved. Higher risks of different nature are
involved.
Control of Control of marketing activities is Control of marketing activities is
Marketing easy as compared to international difficult because of different factors
Activities activities. like – regional, cultural, political etc.
Payment Minimum payment and credit risks. Considerable payment and credit
risks.

Familiarity Well familiarity with domestic Lack of Familiarity with foreign

market. markets, research becomes essential.

Product Mix Product mix is decided keeping in Product mix is decided according to
Product view the satisfaction and more sales. foreign market.

Product Product planning and development Product planning and development

Planning and according to domestic market. according to foreign market.
Development

INTERNATIONAL MARKETING ENVIRONMENT

Environment consists of forces. Environment is made of such controllable and uncontrollable
forces. It is the environment that determines favourable or unfavourable conditions, and hence,
provides either opportunities or threats and challenges. Degree of one’s success, to a large extent,
depends on effect of marketing environment and ability of the firm to respond effectively.
International marketing environment covers all the relevant global forces influencing
international marketing decisions.

These forces may be internal (such as resource ability and management attitudes), may be
domestic (such as government policy toward international business and facilities), and global
(such as overall international business environment of relevant part of the world). However,
discussion of global forces is more relevant as they are major considerations in international
marketing.
DEFINITIONS:
We can define the word ‘international marketing environment as under:
1. International marketing environment is a set of controllable (internal) and uncontrollable
(external) forces or factors that affect international marketing. International marketing
mix is prepared in light of this environment.
2. International marketing environment consists of global forces, such as economic, social,
cultural, legal, and geographical and ecological forces, that affect international marketing
decisions.
3. International marketing environment for any marketer consists of internal, domestic, and
global marketing forces affecting international marketing mix.

FACTORS OF INTERNATIONAL MARKETING ENVIRONMENT:

Factors or forces involved in the international marketing environment can be classified into three
categories as stated in the figure 1. A Manager dealing with international marketing has to
design his marketing mix and marketing (mix) strategies in accordance with these forces.

He has to keep in mind the expected impacts of such forces while taking international marketing
decisions. The environment determines the degree of favourableness for any marketer for
international marketing; determines level of opportunities and threats.
1. Global Factors:
Such factors are related to the world economy. Broader picture of global phenomenon affects
every decisions of international marketing.
Main global factors include:
i. Customer-related factors
ii. Political and legal factors
iii. Social factors
iv. Cultural factors
v. Competition
vi. Global relations among nations and degree of the worldwide peace.
vii. Geographic/ecological/climate-related factors
viii. Functioning of international organisations like UNO, World Bank, WTO, etc.
ix. Availability of marketing facilities and functioning of international agencies, etc.

2. Domestic Factors:
Domestic factors are related to the economy of the nation. Overall economic, social and cultural,
demographic, political and legal, and other domestic aspects constitute domestic environment for
international marketing. This environment affects international marketing mix in several ways.
Important domestic factors include:
i. Political climate/stability/philosophy
ii. Government approach and attitudes toward international trade
iii. Legal system and business ethics
iv. Availability and quality of infrastructural facilities
v. Availability and quality of raw-materials
vi. Functioning of institutions and availability of facilities
vii. Technological factors
viii. Ecological factors, etc.
3. Internal or Organisational Factors:
These are internal and controllable factors. They are related to internal situation of the company
dealing with international trade. International marketer needs to use, adjust, and organize these
factors to satisfy needs and wants of the (international) target markets.
These factors include:
i. Objectives of company
ii. Managerial philosophy of company
iii. Personal factors related to management
iv. Managerial attitudes toward other nations, customers, social welfare, etc.
v. Company’s policies and rules
vi. Resource ability of company and marketing mix
vii. Form of organisation and organisational structure.
viii. Nature and types of employees
ix. Internal relations with other departments
x. Company’s relations with other stakeholders and service providers.