About International marketing vs domestic marketing, and about tariff and also opportunities and constraints in international marketing

1. 2nd year MSc. In Fashion Technology
Course name: International Business
Course code: FTec7072
Course manager: Assist. Prof. Seid Mohmmed
Presentation title: International Marketing
By: Adbaru Esubalew
January 2021 G.C
Bahir Dar
University
Ethiopian Institute of Textile and Fashion
Technology

2. Contents
 INTERNATIONAL MARKETING
 Introduction
 How to Enter the International Market?
 Comparison of International and Domestic Marketing
 Controllable and Uncontrollable Elements
 Opportunities and Constraints
 Trade Barriers
 REFERENCES

3. INTERNATIONAL MARKETING
Introduction
 Marketing is an organizational function and a set of processes for creating,
communicating, and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its
stakeholders (MARIADOSS, 2020).
 The word ‘International Marketing’ = exchange of goods and services across
national borders to meet the requirements of the customers.
 International marketing is the application of marketing principles to satisfy the
varied needs and wants of different people residing across the national borders.

4.  Multinational Corporations (MNCs) – is an organization that
ensures the production of goods and services in one or more
countries other than its home country.
 Exporters − are the overseas sellers who sell products, and
provide services across their home country.
 Importers − are the overseas buyers who buy products and
services from exporters by complying with the jurisdiction.
 Service companies − A service company generates revenue
by trading on services and not on physical commodities.
The major participants in international marketing are as follows:

5. How to Enter the International Market?
There are the following ways through which companies can globalize:
• Exports: they enter to the market through indirect or direct.
• Global web Strategy: Companies show their products in worldwide through
electronic media i.e. internet.
• Licensing and Franchising: foreign company to use the manufacturing process
trademark, patent, name of the domestic company while facilitating the sales.
• Joint Ventures: The companies can go international by joining hands with other
country-based companies to monetize their existing relationships with the local
customers.
• Direct Investment: the firms can establish their business facilities or own a part of
the local company to facilitate the sale of goods and services.

6. Comparison of International and Domestic Marketing
 Domestic Marketing refers to the marketing activities
employed on a national scale.
 The marketing strategies were undertaken to
customers of a small area, generally within the local
limits of a country.
• International marketing is the type of marketing that is stretched across
several countries in the world, i.e. the marketing of products and services is
done globally. (S, May 19, 2017).

7. Comparison between domestic and international marketing
Basis For Comparison Domestic Marketing International Marketing
Meaning It refers to marketing within
the geographical boundaries
of the nation.
It means the activities of production, promotion,
distribution, advertisement, and selling are
extended over the geographical limits of the
country.
Area served Small Large
Government interference Less Comparatively high
Business operation In a single country More than one country
Use of technology Limited Sharing and use of latest technology.
Risk factor Low Very high
Capital requirement Less Huge
Nature of customers Almost the same Variation in customer tastes and preferences.
Research Required but not to a very
high level.
Deep research of the market is required because
of less knowledge about foreign markets.

8. Controllable and Uncontrollable Elements
 Suppliers: Companies can either increase the number of suppliers or decrease it.

9. Uncontrollable Variables
 Uncontrollable factors- often called "Environmental Factors” which are
out of control,
 Variables that a marketer has little or no control over them.
 They affect a marketer’s activities either positively or negatively
These variables include:
 Demography: refers to the study of the human population as well as its structure.
 This can affect marketing activities in the following ways:
 A low rate of population growth implies a small potential market for goods and services, and
vice versa.
 The high mortality rate affects negatively the demand for goods and services.

10.  Technology: Changes in technology affect marketing activities either positively or
negatively.
 Political stability: When a country is stable politically, a marketer’s activities are
boosted.
 Legal Forces: The government makes laws that govern a given country.
 These rules and regulations may affect marketing activities either positively or negatively.
 Social and Cultural Forces: These include races, tribes, religion, class, or status.
 Due to these differences, the marketer has to produce what suits the market,
 e.g. Muslims do not eat pork, while Christians do not smoke and drink beer e.t.c.
 Economic Forces: When the economy of a country is booming, people’s
purchasing power becomes high (Leonard, 2018).

11. Adjusting the Uncontrollable Variables
This can be done through the following strategies:
Competition, Marketers need to understand their competition’s
marketing mix.
This involves looking at what they are doing and how they
go about doing it.
Economy, The current economy must also be taken into
consideration.
The marketing strategy will need to be adjusted to maintain or
increase your market position in challenging circumstances.
Regulations, Changes in current laws and regulations are also
key factors for companies to keep into consideration.

12. • Technology, improve the quality of your product, and make marketing more effective. T
• This can allow you to better target your customer, produce more efficiently and create innovative
products.
• Social, Marketing can be improved by paying attention to current social trends, such as concern for
the environment and going “green” (Ng, 2014).
Opportunities and Constraints
Some opportunities and constraints of the international and domestic market are
Opportunities for the international and domestics market
Some opportunities of the international and domestic market are,

13. Importing and Exporting, commonly opportunities for marketing.
Licensing and Franchising, An international licensing
agreement allows a foreign company (the licensee) to sell the
products of a producer (the licensor) or to use its intellectual
property in exchange for royalty fees.
Contract Manufacturing and Outsourcing, Because of high
domestic labor costs, many companies manufacture their products
where labor costs are lower.
Strategic Alliances and Joint Ventures, A strategic alliance is
an agreement between two companies (or a company and a
nation) to pool resources to achieve business goals that benefit
both partners.
Opportunities
for the
international and
domestics
market

14. • Multinational Corporations (MNC). , A company that operates in many countries
• MNCs often adopt the approach encapsulated in the motto “Think globally, act
locally.”
 Criticism of MNC Culture, The global reach of MNCs is a source of criticism, as
well as praise.
 In Defense of MNC Culture, supporters of MNCs respond that huge corporations
deliver better, cheaper products for customers everywhere; create jobs, and raise
the standard of living in developing countries.

15. Challenge or constraints of the international and domestics market
Some challenges or constraints of international and domestics markets are (Trivikram, 2020);
• Tariff Barriers: indicate taxes and duties imposed on imports.
• Sometimes, to prevent foreign products and/or promote domestic products, strategic tariff
policies are formulated that restrict international marketing activities.
• Administrative Policies: Bureaucratic rules or administrative procedures make international
(export and/or import) marketing harder.
• Considerable Diversities: Global customers exhibit considerable cultural and social diversities in
terms of needs, preferences, habits, languages, expectations, buying capacities, buying and
consumption patterns, and so forth.
• Political Instability or Environment: Different political systems, different economic systems,
and political instability are some of the real challenges that international markers have to face.

16. Place Constraints (Diverse Geography): Trade in foreign countries of far distance itself practically
difficult. In the case of perishable products, it is a real challenge.
Variations in Exchange Rates: Every nation has its currency that is to be exchanged with currencies of
other nations.
Currencies are traded every day and rates are subject to change.
Norms and Ethics Challenges: Ethics refers to moral principles, standards, and norms of conduct
governing individual and firm’s behavior.
They are deeply reflected in informal laws and regulations.
Corruption is another issue relating to business ethics.
Terrorism and Racism: Terrorism is a global issue, a worldwide problem.
To trade internationally is not economically risky, but there is a threat to life.
Racism also restricts international trade activities.

17. Trade Barriers
 Trade barriers are actions that are taken by the government to increase the
net export by restricting imports of certain products or services,
increasing domestic production, domestic income, and employment
(Kavas, 2013)
Following are the main reasons for trade barriers,
 Infant Industries: trade barriers and restrictions tend to protect young and
undeveloped industries that are not large enough to completive with more
mature foreign markets and products.
 Domestic Employment: By putting the trade barriers in front of the imported
products governments are promoting domestic produced products or services.

18. • Unfair Trade, This practice of dumping foreign products
may take over the domestic market and give less change to
domestic products compete.
• That will allow an increase of foreign products in the
domestic market.
• National Security: trade barriers are also needed for the
protection of industries and companies that produce
important products for the defense and security of the
nations.

19. Types of Trade Barriers
There are six types of trade barriers that can be implemented by countries,
1. Voluntary Export Restraints (VERs), They are agreements between an exporting and an
importing country that limits the quantity businesses can export during a period
2. Regulatory Barriers, Any “legal” barriers that try to restrict imports, include things like safety
standards, pollution standards, product standards that specify that the product should meet or
exceed standards set by the local government.
3. Anti-Dumping Duties, Dumping happens when the exporting producer sells goods below
cost.
4. Subsidies, Governments offer subsidies to help make firms more competitive by lowering
their costs.
5. Tariffs, that acts as a tax on imports. Tariffs raise the price of the imported good to lowers
their consumption.
6. Quotas, A quota, a type of trade barrier, is a restriction on the quantity that can import into a
country and increases the firm’s export revenues.

20. Examples of Trade Barriers
 Tariff Barriers, These are taxes on certain imports.
 Non-Tariff Barriers, These involve rules and regulations which make trade more difficult.
 Quotas, A limit placed on the number of imports.
 Voluntary Export Restraint (VER), Similar to quotas, this is where countries agree to limit
the number of imports.
 Subsidies, A domestic subsidy from the government can give the local firm a competitive
advantage.
 Embargo, A complete ban on imports from a certain country.
 E.g. US embargo with Cuba. (Pettinger, 2019)

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