What is International Marketing?
International Marketing is concerned with ascertaining the needs and wants of the international market, i.e. overseas customers, and then providing such products to satisfy them. It is a multinational process which involves systematic planning and execution of marketing activities such as introduction, designing, pricing, promotion and distribution of goods and services to customers of other countries.
It encompasses all the activities which are part of domestic marketing. All we want to say here is that the basic functions are the same in both domestic and international marketing. Hence, marketing principles are common be the company sells in its home country or abroad.
In the simplest sense, international marketing means implies the marketing activities are undertaken by the marketer in one or more countries.
But here one must take note that when the business crosses the national borders of a particular country, it becomes very complex. This happens because all the legal, cultural, sociological and political rules come into the picture. Further, there are also differences in consumer tastes, needs, market structures, preferences and ways of doing business.
Hence, dealing with such differences needs a thoughtful and careful approach, to entering the market successfully and expanding business.
It is a pervasive term that includes the export of products and services. That means export management is a part of international marketing.
Table of Contents
Decisions for International Marketing
- The company has to take three important decisions regarding international marketing. These are:
- Whether to indulge in international marketing activities.
- If the company makes a decision that it wants to enter into the international market and do business, then it has to decide which specific market it wants to cater to.
- Lastly, the company must ascertain how the company will be serving these markets, i.e. the method to be used to offer the products into the hands of international consumers.
Characteristics of International Marketing
- Ascertaining the needs and wants of customers in international markets.
- It involves carrying out marketing activities across borders.
- Facilitates exchange among the company and customers from foreign nations.
- Producing and delivering products for satisfying the needs of international customers.
- Marketing decisions are taken keeping in mind the dynamic global business environment. The environmental changes are not within the control of the marketer. Hence, its success depends upon responding competitively by implementing an effective marketing strategy.
- The marketing mix is customized for each nation the company deals with.
- International trade agencies play a crucial role in marketing products in other countries.
- Penetrating into international markets through different entry modes.
Challenges in International Marketing
- Problems of trading blocs: When it comes to international trade, trading blocs like NAAFA, EU, ASEAN and SAARC come into the picture. The non-member countries have to cope challenges with from members of the trading bloc concerning the reduction of trade barriers from the member countries.
- Multiple Taxation System: Taxes are levied at multiple levels in the import and export transactions, which results in the reduction of profits of the marketer.
- Payment Difficulties: There is also a risk of foreign exchange because of fluctuation in exchange rates in international marketing. Not all the countries use same currencies and the marketer of the goods would like to be paid in the currency of his home country.
- Political Environment: The marketer needs to analyse political stability, peace with the trading nation, investment ratings, and the risk of expropriation. This will pose a threat to the marketer in future.
- Diverse language, and culture: The marketer must possess knowledge of the language, culture and traditions of the countries it is dealing with. This is because it has a great influence on their buying habits, patterns and decisions.
- Documentation Formalities: International marketing invoices clearance of various documents like foreign exchange bills, bills of lading, and clearance of cargo takes place at different levels. These documents have to be cleared for customs formalities.
- Distance: Distance has a great role to play in determining the cost to the marketer. This is because it increases the transport cost. It also decides the time taken for the supply of goods.
- Three-faced Competition: International marketers have to face cut-throat competition from three dimensions i.e. Marketers from the home country, Marketers from other countries, and Local suppliers in the importing country.
- Trade barriers: These are restrictions on the free movement of goods and services across the countries. International marketing faces these trade barriers. This can be either tariff barriers or non-tariff barriers. While tariff barriers are in the form of taxes and duties. Non-tariff barriers take the form of quotas.
Objectives of International Marketing
International marketing aims at:
- Bringing the nations closer for the purpose of trading as well as promoting free trade on a mass level among nations.
- Developing and strengthening trade relations between nations and maintaining harmony among nations.
- Promoting social and cultural exchange among various nations.
- Improving the standard of living and welfare of people from various countries.
- Offering assistance to developing nations through economic and industrial growth to cover the gap between the two countries.
- Making the best use of resources at the international level.
- Promoting export of goods and services at a global level and providing benefits to all the nations.
- Removing trade barriers between nations.
Wrap Up
International Marketing encompasses operations across numerous overseas markets in which both controllable and uncontrollable variables differ significantly between different markets. These differences result in the challenges and difficulties of international marketing.
