SIDDANNA M BALAPGOL

1. A DETAILED OVERVIEW OF INTERNATIONALMARKETING
Defining International Marketing:
The term “International Marketing” refers to exchanges across national boundaries for the satisfaction of
human needs and wants. This strategy uses an extension of the techniques used in the home country of a
firm. It refers to the firm-level marketing practices across the border including market identification and
targeting, entry mode selection, marketing mix, and strategic decisions to compete in international
markets. The extent of a firm’s involvement abroad is a function of its commitment to the pursuit of
foreign markets.
Companies become involved in international markets for a variety of reasons. 1. Some firms simply
respond to orders from abroad without any organized efforts of their own. But most companies take a
more active role because they have determined that it is to their advantage to pursue foreign business
export volume on an incremental basis.
2. The profitability of a company can increase when fixed manufacturing costs are already committed and
additional economies of scale are achieved.
3.Companies move into foreign markets to get additional volume.
4.When a company's customers move overseas, many firms follow suit. Major U.S. banks have shifted to
serve their U.S. clients in key financial centers around the world by opening branches.
Companies also enter the international arena for purely defensive purposes.
Whether companies participate for the pursuit of new opportunities or for any other reason, most have
been able to enhance their overall competitiveness as a result of pursuing foreign ventures.
MAJOR ACTORS IN INTERNATIONAL MARKETING
Several types of companies are major participants in international marketing. Among the leaders are
multinational corporations (MNCs), exporters, importers, and service companies. These firms may be
engaged in manufacturing consumer or industrial goods, in trading, or in the performance of a full range
of services. What all participants have in common is a need to deal with the complexities of the
international marketplace.
Multinational Corporations
Multinational corporations (MNCS) are companies that manufacture and market products or services in
severalcountries. Typically an MNC operates a number of plants abroad and markets products through a
large network of fully owned subsidiaries.
Exporters
Exporters are firms that market products abroad but produce largely in their home country. Most large
exporters have evolved into multinational companies.

2. Importers
Importing is as much an international marketing decision as exporting. Companies that neither export nor
have multinational status may still participate in international marketing through their importing
operations.
THE SCOPE OF INTERNATIONAL MARKETING
It is generally understood that a company like Boeing, the world's largest commercial airline
manufacturer, engages in international marketing when it sells its aeroplanes to airlines across the globe.
Likewise, Ford Motor Company, which operates large manufacturing plants in several countries, engages
in international marketing even though a major part of its output is sold in the country where it is
manufactured.
Today, however, the scope of international marketing has broadened and includes many other business
activities.
The activities of large department store chains, include a substantial element of importing.
When these stores search for new products abroad, they practice another form of international marketing.
A whole range of service industries are involved in international marketing; many large advertising firms,
banks, investment bankers, public accounting firms, consulting companies, hotel chains, and airlines now
market their services worldwide.
Challenges in International Marketing
From an international marketing manager's point of view, the most cost-effective method to market
products or services worldwide is t use the same program in every country, provided environmental
conditions favour such an approach. However invariably local market characteristics exist that require
some form of adaptation to local realities. One of the challenges of international marketing is to
determine the extent of standardization for any given local market. To do this, the international marketing
manager must become aware of any factors that would limit standardization. Factors limiting
standardization can be categorized into five major groups: market characteristics,industry conditions,
marketing institutions, legal restrictions & Trade Barriers
Market Characteristics
Market characteristics can have a profound effect on international marketing strategy. The physical
environment of any country-determined by its climate, product use conditions, and population size often
forces marketers to adjust products to local conditions. Many cars in Canada come equipped with a built-
in heating system that is connected to an electrical outlet to keep the engine from freezing while turned
off. In warmer climates, cars are not equipped with such a heating unit but are more likely to require air
conditioning.
A country's population will affect the market size in terms of volume, allowing for lower prices in larger

3. markets. Market size or expected sales volume greatly affect channel strategy. Company-owned
manufacturing and distribution are often possible in larger markets, whereas independent distributors are
often used in smaller countries.
Macroeconomic factors also greatly affect international marketing strategy. The income level, or gross
national product (GNP) per capita, varies widely among nations. As can be expected, marketing
environments will differ considerably according to income level. If the population's level of technical skill
is low, a marketer might be forced to simplify product design to suit the local market. Since the
motivation to purchase some products depends on a country's income level, advertising and promotion
strategy may have to be adjusted for such changes.
Pricing may be affected to the extent that countries with lower income levels show higher price
elasticities for many products compared to developed countries. Furthermore, convenient access to credit
is often restricted to buyers in developing countries, impacting negatively on the sale of capital goods and
consumer durables. Exchange rate fluctuations distort prices among countries for many products that
otherwise might sell at similar prices. This leads to the problem of cross shipping products to take
advantage of price gaps. Wage levels and the availability of manpower may influence a company to
choose a different approach for its sales force.
Cultural and social factors
Customs and traditions have the greatest effect on product categories when a country's population has had
prior experience with a give product category.
There are a number of key cultural elements that international marketers need to take into consideration
when designing products, developing promotions and implementing distribution systems in foreign
markets. These elements include values, beliefs, thought processes, symbols, traditions, religion and
language. You need to make yourself aware of the local culture to ensure that you don't accidently or
carelessly offend people. It is important that you remain sensitive and tolerant to different points of view
and ensure that your brand doesn't contain any symbolism that could be offensive in the local culture.
Political Conditions
International marketing operations are affected by the varying political environments that exist around the
world. An effective manager needs to be fully aware of the circumstances they are getting themselves and
their organisation into when approaching foreign markets.
Before attempting to enter into a new market, managers should take the time to carefully observe the
political environment from a distance. Political environments can be highly volatile and can change
significantly in a short period of time, so it is vital that you commit a reasonable amount of time to
ensuring that know what to expect from the market.
Often emerging markets that present significant business opportunities feature governments that are far

4. from stable. You need to carefully weigh up the potential for problems that could adversely affect your
business with the opportunities that the market presents before implementing any sort of marketing plan.
The biggest contributor to political risk is the potential for nationwide conflict, war or violent change. If
conflict broke out in country you were operating in, you would need to be prepared to deal with violence
directed at your property and employee's. Conflict is also likely to have a significant negative impact on
your customer base and sales potential.
A commonly overlooked issue that relates to the political environment is nationalism. This has become an
increasingly relevant issue as many countries attempt to preserve their local culture and industries.
Nationalism is the level of pride that people hold for their country and exists to some extent in all
countries. It becomes a problem for international marketers when governments or local groups of people
discourage the use of products and services originating from overseas.
The level of nationalism can change dramatically over time as conditions and attitudes change.
Industry Conditions
Industry conditions often vary by country since products frequently are in varying stages of the product
life cycle. New product introduction in a country without prior experience might affect the extent of
product differentiation since only one or two versions of the product might be introduced initially. Also, a
company might find itself in a situation where limited awareness or prior experience of a country will
require a considerable missionary sales effort and primary demand stimulation, whereas in more mature
markets the promotional strategy is likely to concentrate on brand differentiation. The level of local
competition can be expected to vary substantially by country. The higher the technological level of
the competition, the more an international company must improve the quality level of its products. The
varying prices of local substitutes or low local production costs can be expected to influence pricing
policy. In countries where competitors control channels and maintain a strong sales force,the strategy of a
multinational company might differ significantly from that in a country where the company holds a
competitive advantage.
Marketing Institutions
For historic and economic reasons, marketing institutions have assumed different forms in different
countries. Practices in distribution systems often entail different margins for the same product, requiring
a change in company pricing strategy. Availability of outlets is also likely to vary by country. Mass
merchandisers such as supermarkets, discount stores,and department stores are widely available in the
United States and other industrialised countries but are largely absent in less developed nations in
Southern Europe, Latin America, and other parts of the world. Such variations may lead to considerably
different distribution strategies. Likewise, advertising agencies and media are not equally accessible in all
countries; and the absence of mass media channels in some countries makes a "pull" strategy less

5. effective.
Legal Restrictions
Legal restrictions also require consideration for the development of an international marketing strategy.
Product standards issued by local governments must be observed. To the extent that they differ from one
country to another, unified product design often becomes an impossibility. Tariffs and taxes may require
adjustments in pricing to the extent that a product can no longer be sold on a high volume
basis. Specific restrictions may also be problematic. Countries differ in their laws as well as in their
interpretation of their laws. Some countries place a greater emphasis on the role of the court and
litigation system, whereas others encourage alternate dispute resolution wherever possible. It is crucial
that you have an understanding of international and local legal issues prior to entering into a new market.
When engaging in international marketing, it is vital that you ensure you understand the local laws that
apply. If a legal dispute involving your organisation arises in a foreign country, it can place a significant
burden on you and your business.
You may need to stay within the country until the issue is resolved and pay numerous legal expenses.
Dispute resolution processes vary, with many countries encouraging out of court settlements for disputes
between organisations.
Intellectual property protection is another issue that needs to be considered when entering new markets.
Products, designs and trademarks that you have registered in one country may not apply internationally,
leaving your organisation open to exploitation from other businesses.
It is important that you seek legal advice and ensure you have the necessary protection prior to entering a
new market. Ensure that you have a thorough understanding of not only international laws, but the
ramifications for breaking them as well.
Conducting a thorough legal analysis will help you to develop your understanding of potential
international markets. You can combine your analysis with your research on the political and economic
climates and make an informed decision about entering a foreign market.
Protectionism & Trade Barriers
Organisations face many government-imposed barriers when trying to conduct business internationally.
Protectionism is still a significant problem despite the efforts of many to encourage free trade between
different countries.
Protectionism is the term given to government policies that are implemented to protect local industries
from foreign organisations. Governments resort to protectionist policies to protect their local market, keep
investment within the country, maintain the standard of living, maintain national security and in some
cases to protect nation culture. Policies can also be the result of ethical issues, retaliation or bargaining.
There are a number of common trade barriers utilised by governments all around the world. Import quotas

6. limit the import of products based on their monetary value or total number of units. They are enforced by
either banning imports that exceed the quota limit or by charging fees for any imports that are above the
quota limit. By limiting the import of products, local industry is able to secure the rest of the markets
demand without foreign competition.
Tariffs are popular as they are a tax on imports that generate income for governments whilst also
protecting local industry from foreign competition. Tariffs increase the cost of importing, either making it
not worthwhile or causing the price of the products to increase to a level close to the locally established
price.
Trade embargoes and boycotts effectively ban trade between certain countries or organisations. Subsidies
are still used in many countries to assist local industry compete with international organisations. Subsidies
are financial assistance or tax breaks provided to local businesses by the government so that they can
either lower their prices to compete or use the funds to remain operational and financially viable.
Increasing the amount of paperwork and slowing bureaucratic procedures has also been used as an
effective non-tariff trade barrier.
International Marketing Environment
Modern marketers have to deal with customers who are changing;
– With channels of distribution that are changing
– And with the technological advances that are changing the nature of their products & services and
requiring them to operate imaginatively & effectively in the emerging markets.
The basic nature of Marketing does not change from domestic to international marketing, but marketing
outside national boundaries poses special problems, such as dealing with multiple environments,
managing operations in distant markets, optimizing businesses in more than one countries, dealing with
foreign nationals etc.
International marketing therefore,unlike domestic marketing, requires operating simultaneously in more
than one kind of environment, coordinating these operations, and using the experience gained in one
country for making decisions in another country.
The demands are tough and the stakes are high. International marketers not only must be sensitive to
different marketing environments internationally, but also must be able to balance marketing moves
worldwide to seek optimum results for the company.
Consequences Of International marketing
It is widely asserted that we are living in an era in which the greater part of social life is determined by
global processes,in which national cultures, national economies and national borders are dissolving.
Central to this perception is the notion of a rapid and recent economic globalization.

7. The common themes that run through the discourse of globalization are:
a) Ecological interdependence: The recognition that most places on the earth are linked to all others by
air, water,and overland links. Rapidly increasing interdependence of world is rendering national
boundaries meaningless.
b) Dominance and dependency: Falling barriers to international trade and world’s markets expose
everyone to domination by most powerful players and role of nations in weakening into service structures
for corporate interest.
Hologramatic diversity: The argument that each place reflects the same ‘diversity’ as each other. What is
perceived as human, social or cultural diversity is essentially all the same.
d) Homogenization of cultures: The view that both material and non-material cultures are becoming more
the same wherever one goes and the argument that a single ‘socioculturalpolitical’ system is the only
viable solution for th problems of interdependency.
e) Ubiquitous communication: The belief that communication is now becoming more and more
universal in all places at all times in all directions.
The above can probably be split into just two concerns:
i) The awareness of (and probably inevitability of) a global ecosocial dynamics of interdependency.
ii) Standardization in social, political, cultural, and material life in order to limit or control the chaos (or
to maximize economic gain).
To conclude the discussion:
• A commitment to international market place is important for sustained growth and superior
profitability.
• Doing business is a creative enterprise. Doing business outside one’s own country is a much more
demanding and complicated enterprise.
• Business environments of countries are different.
• International business necessitates an awareness of the clash of cultural standards among countries.
• In 1950’s and 60’s international business was a means of capitalizing on new opportunity, today’s
changing economic environment has made international business dealings vital for survival.
• Basic nature of marketing does not change from domestic to international marketing but marketing
outside national boundaries poses special problems.