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INTERNATIONAL MARKETING

DEFINITION OF INTERNATIONAL MARKETING


International Marketing can be defined as exchange of goods and services between different national markets involving buyers and sellers. According to the American Marketing Association, International Marketing is the multi-national process of planning and executing the conception, prices, promotion and distribution of ideal goods and services to create exchanges that satisfy the individual and organi ational ob!ectives."

CONCEPTS OF INTERNATIONAL MARKETING


I. Domestic Marketing# $omestic Marketing is concerned with marketing practices within the marketer%s home country. II. Foreign Marketing# It refers to domestic marketing within the foreign country. III. Comparative Marketing# when two or more marketing systems are studied, the sub!ect of study is known as comparative marketing. In such a study, both similarities and dis-similarities are identified. It involves an analytical comparison of marketing methods practiced in different countries. I&. Internationa Marketing# It is concerned with the micro aspects of a market and takes the company as a unit of analysis. 'he purpose is to find out as to why and how a product succeeds or fails in a foreign country and how marketing efforts influence the results of international marketing. &. Internationa Tra!e# International 'rade is concerned with flow of goods and services between the countries. 'he purpose is to study how monetary and commercial conditions influence balance of payments and resource transfer of countries involved. It provides a macro view of the market, national and international. &I. G o"a Marketing# (lobal Marketing consider the world as a whole as the theatre of operation. 'he purpose of global marketing is to learn to recogni e the extent to which marketing plans and programmes can be extended world wide and the extent to which they must be adopted.

DIFFERENCE #ET$EEN DOMESTIC MARKETING AND INTERNATIONAL MARKETING


Marketing is the process of focusing the resources and ob!ectives of an organisation on environmental opportunities and needs. It is a universal discipline. )owever, markets and customers are different and hence the practice of marketing should be fine tuned and ad!usted to the local conditions of a given country. 'he marketing man must understand that each person is different and so also each country which means that both experience and techni*ues obtained and successful in one country or countries. +very country has a different set of customers and even within a country there are different sub-sets of customers, distribution channels and media are different. If that is so, for each country there must be a uni*ue marketing plan. ,or instance, nestle tried to transfer its successful four - flavour coffee from +urope to the united states lost a ./ market share in the us. It is important in international marketing to recogni e the extent to which marketing plans and programmes can be extended to the world and the extent to which marketing plans must be adapted. 0rof.'heodore 1evitt thought that the global village or the world as a whole was a homogeneous entity from the marketing point of view. )e advocated organisation to develop standardi ed high *uality word products and market them around the world using standardi ed advertising, pricing and distribution. 'he companies who followed 0rof. 1evitt%s prescription had to fail and a notable failure amongst them was 0arker pen. 2arl 3piel &ogel, 2hairman and 2+4 of the 5acker 3piel &ogel 5ates worldwide advertising agency expressed his view that 1evitt%s idea of a homogeneous world is non - sensible and the global success of 2oca 2ola proved that 0rof. 1evitt was wrong. 'he success of 2oca 2ola was not based on total standardi ation of marketing mix. According to 6enichi

4hmae, 2oke succeeded in 7apan because the company spent a huge amount of time and money in 7apan to become an insider. 2oca 2ola build a complete local infrastructure with its sales force and vending machine operations. According to 4hmae, 2oke%s success in 7apan was due to the ability of the company to achieve global localisation or 8(localisation% i.e. the ability to be an insider or a local company and still reap the benefits of global operations. 'hink global and act local is the meaning of (localisation and to be successful in international marketing, companies must have the ability to think global and act local. International marketing re*uires managers to behave both globally and locally simultaneously by responding to similarities and dissimilarities in international markets. (localisation can be a source of competitive advantage. 5y adapting sales promotion, distribution and customer service to local needs, 2oke capture 9:/ of soft drink market share in 7apan. Apart from the flagship brand 2oca 2ola, the company produces ;<< other non- alcoholic beverages to suit local beverages. 'here are other companies who have created strong international brands through international marketing. ,or instance, 0hilip Morris has made Marlboro the number one cigarette brand in the world. In automobiles, $aimler 2hrysler gained global recognition for its Mercedes brand like his competitor 5ayerische. Mc $onald%s has designed a restaurant system that can be set up anywhere in the world. Mc $onald%s customi es its menu in accordance with local eating habits.

SCOPE OF INTERNATIONAL MARKETING


International Marketing constitutes the following areas of business# E%ports an! Imports# International trade can be a good beginning to venture into international marketing. 5y developing international markets for domestically produced goods and services a company can reduce the risk of operating internationally, gain ade*uate experience and then go on to set up manufacturing and marketing facilities abroad. Contract&a Agreements# 0atent licensing, turn key operations, co - production, technical and managerial know - how and licensing agreements are all a part of international marketing. 1icensing includes a number of contractual agreements whereby intangible assets such as patents, trade secrets, know - how, trade marks and brand names are made available to foreign firms in return for a fee. 'oint (ent&res# A form of collaborative association for a considerable period is known as !oint venture. A !oint venture comes into existence when a foreign investor ac*uires interest in a local company and vice versa or when overseas and local firms !ointly form a new firm. In countries where fully owned firms are not allowed to operate, !oint venture is the alternative. $)o * o+ne! man&,act&ring# A company with long term interest in a foreign market may establish fully owned manufacturing facilities. ,actors like trade barriers, cost differences, government policies etc. encourage the setting up of production facilities in foreign markets. Manufacturing abroad provides the firm with total control over *uality and production. Contract man&,act&ring# =hen a firm enters into a contract with other firm in foreign country to manufacture assembles the products and retains product marketing with itself, it is known as contract manufacturing. 2ontract manufacturing has important advantages such as low risk, low cost and easy exit. Management contracting# >nder a management contract the supplier brings a package of skills that will provide an integrated service to the client without incurring the risk and benefit of ownership. T)ir! co&ntr* ocation# =hen there is no commercial transactions between two countries due to various reasons, firm which wants to enter into the market of another nation, will have to operate from a third country base. ,or instance, 'aiwan%s entry into china through bases in )ong 6ong.

Mergers an! Ac-&isitions# Mergers and Ac*uisitions provide access to markets, distribution network, new technology and patent rights. It also reduces the level of competition for firms which either merge or ac*uires. Strategic a iances# A firm is able to improve the long term competitive advantage by forming a strategic alliance with its competitors. 'he ob!ective of a strategic alliance is to leverage critical capabilities, increase the flow of innovation and increase flexibility in responding to market and technological changes. 3trategic alliance differs according to purpose and structure. 4n the basis of purpose, strategic alliance can be classified as follows# i. 'echnology developed alliances like research consortia, simultaneous engineering agreements, licensing or !oint development agreements. ii. Marketing, sales and services alliances in which a company makes use of the marketing infrastructure of another company in the foreign market for its products. iii. Multiple activity alliance involves the combining of two or more types of alliances. ,or instance technology development and operations alliances are generally multi- country alliances. 4n the basis of structure, strategic alliance can be e*uity based or non e*uity based. 'echnology transfer agreements, licensing agreements, marketing agreements are non e*uity based strategic alliances. Co&nter tra!e# 2ounter trade is a form of international trade in which export and import transactions are directly interlinked i.e. import of goods are paid by export of goods. It is therefore a form of barter between countries. 2ounter trade strategy is generally used by >$2s to increase their exports. )owever, it is also used by M?2s to enter foreign markets. ,or instance, 0epsi2o%s entry in the former >33@. 'here are different forms of counter trade such as barter, buy back, compensation deal and counter purchase. In case of barter, goods of e*ual value are directly exchanged without the involvement of monetary exchange. >nder a buy back agreement, the supplier of a plant, e*uipment or technology. 0ayments may be partly made in kind and partly in cash. In a compensation deal the seller receives a part of the payment in cash and the rest in kind. In case of a counter purchase agreement the seller receives the full payment in cash but agrees to spend an e*ual amount of money in that country in a given period.

PREPARED #. S/./#/M/S/ 0 II Pratik Ma !e Anoop Damo!aran Kr&na P&n1ani Gitan1a i Sac)!ev (ipin (en&gopa (iren (ira