INTERNATIONAL MARKETING

INTRODUCTION
TO
INTERNATIONAL MARKETING
Pankaj Bhatt
SIMT, Kashipur
 “International marketing is multinational process
of planning and executing the conception,
pricing, promotion, and distribution of ideas,
goods, and services to create exchange that
satisfy individual and organizational objectives.”

According to Kotler, "Global marketing is

concerned with integrating and standardizing
marketing actions across a number of geographic
markets."

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It means working with
markets. It means
attempting to actualize
potential exchange for
the purpose of satisfying
human needs and
wants. It includes
analyzing the markets
for their potentials in
order to assess the
needs of the customers.
International marketing
is a part of total
marketing process.

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 The International marketing is different from
domestic marketing both in the way of exchange
and needs and requirements of international
buyers. Therefore the knowledge of and the
ability to perceive basic pattern in consumer
behaviour in different environments is a
particularly vital element in the makeup of the
international marketing.

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 There must be at least three major dimensions
to the spills of international marketing:

1. Competence in marketing, with a sound grasp

of marketing concepts, tools and techniques.
2. Ability to perceive patterns of consumer
behaviour in different countries and the ability
to evaluate the essential differences and
similarities between markets.
3. 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.
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 International Marketing – Scope
The scope of international marketing essentially includes
exporting of goods and services in foreign markets. The
exporter performs various activities, other than exporting
the goods and services.

1. Establishing:
A branch in foreign market for processing, packaging or
assembling the goods according to the needs of the
markets. Sometimes complete manufacturing is carried
out by the branch through direct investments.

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 2. Joint Ventures and Collaborations:
International marketing includes establishing joint
ventures and collaboration in foreign countries with
some foreign firms for manufacturing and/or
marketing the product. Under these arrangements,
the company works in collaboration with the foreign
firm in order to exploit the foreign markets.

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 3. Licensing Arrangements:

The company, under the system, establishes

licensing arrangements with the foreign term
whereby foreign enterprises are granted the
right to use the exporting company’s know-
how, viz., patents, processes or trademarks
according to the terms of agreement with or
without financial investment.

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 4. Consultancy Services
Offering consultancy services are also covered in
international marketing scope. The exporting
company offers consultancy services by
undertaking turnkey projects in foreign
countries. For this purpose, the exporting
company sends its consultants and experts in
foreign countries who guide and direct the
manufacturing activities on the spot.

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 5. Technical and Managerial Know-How:
The scope of international marketing also includes
the technical and managerial know-how provided
by the exporting company to the importing
company. The technicians and managerial
personnel of the exporting company guide and
train the technicians and managers of the
importing company.

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Pankaj Bhatt Asst Prof, SIMT Kashipur 5 October 2021

International Marketing – Characteristics

1. 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.

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 2. 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.

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 3. 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.

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4. 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.

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International Marketing
–Significance

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Survival
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.

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 Survival
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 pharmacy-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.”

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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.

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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 coca-
cola 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.

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 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
fluctuate 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.

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 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.

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 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 make easy for industries to
get specialization and gain access to raw materials.
And at the same time it foster competition and
efficiency. In overall it leads to the conclusion that
international trade is helpful to provide their citizen
higher standard of living.

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 Thank You..

Pankaj Bhatt
5 October 2021

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