Meaning, Features of International Marketing, Need and Drivers of International Marketing21st November 2021 1 By indiafreenotes
International marketing though it has certain distinct characteristics, is similar to domestic marketing in terms of certain technical attributes. Marketing can be concerned as an internal part of two processes, viz. technical and social. International marketing and Domestic marketing are identic.al, so far as technical process is concerned.
It includes non-human factors such as product, price, cost, brands etc. The basic principles regarding these variables are of universal applicability. But the social aspects of marketing are unique in any given stratum, because it involves human elements, namely, the behaviour pattern of customers and the given characteristics of a society, such as consumers attitude, values etc. It is obvious that marketing, to the extent it is visualized as a social process, will be different from domestic marketing.
Kotler has defined marketing as, “Marketing is the analysis, planning, implementation and control of programmes designed to bring about desired exchanges with target audiences for the purpose of mutual or personal gain. It relies heavily on the adoption and coordination of product, price, promotion and place for achieving effective response.”
There are two sets of variables in this definition. One is markets and other one is human needs and wants and a process or techniques to convert potential exchanges into realized exchanges. The techniques involved are more or less similar in both domestic and international marketing. But the variables involved are totally different in case of International Marketing.
Major dimensions to the spills of international marketing:
- Competence in marketing, with a sound grasp of marketing concepts, tools and techniques.
- Ability to perceive patterns of consumer behaviour in different countries and the ability to evaluate the essential differences and similarities between markets.
- Management skill to organise, plan, co-ordinate and control an operation of considerably greater complexity particularly in its human relationships than that involved in the home market.
Features of International Marketing
- Different Legal System:
Every Country has its own legal system. Some of the countries follow English Common Law while others follow the civil law. Some of the European countries are having their own legal system. This difference in the legal system among different countries increases the difficulties of businessmen.
It is not sure for the businessmen that which legal system will be applicable to their business transactions. There must be uniform legal system. However some of the agencies are trying to make it uniform for all countries. The United Nations Commission on International Trade Law is also supporting the opinion of uniformity and is doing, its efforts to bring uniformity in International trade Law.
- Market Characteristics:
The Market Characteristics of every Country is different due to the environmental factors, demand patterns, Government Controls etc. In some countries like India and USA the market characteristics are found different from state to state. It is because of all above factors responsible for the market characteristics.
- Monetary System:
The monetary system of each country is decided by the government of that country and the exchange value of country’s currency is being determined by the forces of supply and demand.
- Procedure and Documentation:
Every country has its own procedure of documentation requirements for the purpose of experts. Every business house has to comply with these rules and regulation for the purposes of export and imports.
Need and Drivers of International Marketing
Most of the countries in the world are lacking of market size, resources and opportunities. Therefore, it is their compulsion to trade with other countries for their survival. Since the European Countries are small in size therefore without overseas markets their firms would not have sufficient economies of scale to be competitive with U.S. based firms. It is pertinent to mention here that international competition may not be a matter of choice when the survival is at stake.
Will Mitchell, J. Myles Shaver and Yeung Bernard conducted a study on “Performance following changes in International Presence in Domestic and Transition Industries. In a study of five pharma-sector industries, he found that international expansion is necessary when overseas firms enter a domestic market. He revealed that the firms having substantial market share and international experience expanded their business activities successfully. And all those firms disappeared that retrenched after an international expansion.”
- Growth of International Market:
Despite having numerous problems like economic and marketing problems, the developing nations are considered be an excellent market to do business. The vast potential of international markets can never be ignored. According to one survey total world market is four time longer in comparison to U.S. Market.
A slow growth of U.S. population and changing life style viewed the growth of other markets with a critical eye. It is evident that Russian smokers show no concern about the health risks. And International giants Philip Moris Co, R.J. Reynolds, Tobacco International SA and British-American Tobacco Co. have entered the market very aggressively.
- Sales and Profits:
It is clear that there is a large potential to sell the products in the international market. The International Market constitutes a large amount of share of the total business of many firms. Further it is evident that many large U.S. based companies have performed very well in the overseas market. IBM and Compaq are the best examples in this regard.
Both of them have maximized their sales in abroad in comparison to their domestic market. In case of Cocacola it is important to mention here that 80 percent of the total operating profit is contributed by the international sales account of the company. Thus, market is on saturation level, where as there is still a great potential for its future growth in other countries. Thus, it can be concluded that international market provides huge potential to increase sales value and profits of the firms.
- Benefit from Diversification:
The investors can be benefited from global diversification. It is evident that the demand of certain products is affected by cyclical factors like recession and seasonal factors like climatic change. The sale of such products fluctuates adversely due to all these variables. It is the only solution for such kind of risks, to diversify a company’s risk and to consider foreign market as only solution to overcome with variable demand.
Such markets can provide outlets for excess production capacity and can easily counter such fluctuations. Seasonal factors, for instance, may affect consumption level of soft drinks. And keeping in mind such limitation, the soft drink industries are spreading their marketing activities throughout the global market. It has been observed that global selling has enabled the company to carry on with production throughout the year and help the companies to stabilize their business.
- Inflation and Price Modernization:
The benefits of international trade are readily self-evident. Exports are always considered beneficial to a country. On the other hand, imports can also be highly beneficial to a country. Because there is not any incentive for domestic firms to moderate these prices. The lack of alternatives in imported products may compel consumers to pay more for the products to local firms, resulting in inflation and excess profits for local firms.
It is evident that in Europe, when the prices of orange Juice were jumped up, their customers switched over to other alternative drinks. Finally, it took ten years for citrus industry to win back these consumers. The U.S. orange growers finally compromised to live with import as they found that alternative juice is able to keep consumers by minimizing the price increases.
- International Marketing and Standard of Living:
International marketing helps the countries and their citizens to increase their standard of living. On the other hand, without trade, there may be product shortage and which may force people to pay more or less. International trade makes easy for industries to get specialization and gain access to raw materials.
And at the same time, it fosters competition and efficiency. In overall it leads to the conclusion that international trade is helpful to provide their citizen higher standard of living.