International Marketing

Tota

What is International Marketing ?

• International Marketing (IM) refers
to marketing carried out by companies overseas or
across national borderlines.
• According to the AMA "International Marketing is the
multinational process of planning and executing the
conception, pricing, promotion and distribution of
ideas, goods, and services to create exchanges that
satisfy individual and organizational objectives.“
• In simple words international marketing is the
application of marketing principles to across national
boundaries.
Sethi

Benefits of International Marketing

1) ENDURANCE
• Not every Country is fortunate as America in terms of
Infrastructure, size, resources & oppertunities. Hence,
they must trade with other countries to survive. Similarly,
every country is not as fortunate as India, which has
abundant natural resources & a treasure of bio-diversity
that it can survive within its resources even if there is a
resource crunch. Even then it had to carry out trading with
other countries to get oil & armaments for its own
survival. Hong-Kong can not survive without food
products from China. International Marketing helps
countries to unite.
2) PROGRESS OF OVERSEAS MARKETS
• Developing Countries, in spite of a poor economy
with serious marketing problems are excellent
markets. The US has found that India is one of the
biggest market in the world for consumer &
engineering products. According to a report prepared
U.S.T.R. US Congress, Latin America & Asia are
experiencing the worst economic recession though
they have potential in the world market.
• American Market can not ignore the vast potential of
the international market. The world market is four
times larger than US market.
• Example :- Amway Corporation
3) SALES PROMOTION
• Foreign markets constitute a large share of total
business of many firms that have cultivated markets
abroad. Many large US companies have done very
well because of their overseas customers.
• HP, IBM & COMPAQ sell more computers abroad
than in home country.
• Example :- Coca Cola Case
Sharma

4) DIVERSIFICATION
• In the international market, Cyclical factors such as
Recession and Seasonal factors such as Climate
affect the demand for most products. Due to these
variables, there are sales fluctuations, which
frequently be substantial enough to cause lay-off of
personnel.
• One way of diversifying a company’s risk is to
consider foreign markets as a solution of variable
demands.
• For Example :- Cold weather may depress demand
for cold drink consumption. All countries do not
enter the winter season at the same time & some
countries are warm round the year.
5) INFLATION AND WHOLESALE PRICE
INDEX
• The best way to control inflation is to earn foreign
exchange through exports. Imports can also be highly
beneficial to a country because they constitute reserve
capacity of the local economy. Without imports, there
is no incentive for domestic firms to moderate their
prices due to which consumers are forced to pay
more, resulting in inflation.
• Example :- Japan-US Automobiles
6) EMPLOYMENT AND PLACEMENTS
• Tariff barriers & trade restrictions in certain countries
had contributed significantly to the great depression
of 1930 and have the potential to cause widespread
unemployment again.
• Unrestricted trade, on the other hand, improves the
world’s GNP and enhances employment generally for
all nations.
• With the liberalisation of economic policy, 1991,
India has gained the inflow of FDI as a result of
which employment in the country had tremendously
improved.
7) STANDARD OF LIVING
• Without trade, product shortages force people to pay
more for less. Products taken for granted such as
coffee & bananas may become unavailable
overnight. Life in most of the countries will be more
difficult, were it not for many strategic metals that
must be imported. Trade also makes it easier for
industries to specialise and gain access to raw
materials, while at the same time fostering
competition and efficiency.
Pasrija

International vs. Domestic Marketing

1) SOVEREIGN POLITICAL ENTITIES
• Each country is a sovereign political entity and,
therefore, they impose several restrictions for import
and export of goods and services in order to
safeguard their national interests.
• The traders, in international marketing, have to
observe such restrictions.
• Example :- Tariffs & Customs
Quantitative Restrictions
Exchange Control
Local Taxes
2) DIFFERENT LEGAL SYSTEMS
• Different countries operate under different legal
systems. Most countries follow the English
Common Law as modified from time to time.
• Japan & Latin American are important exceptions to
this rule. The existence of different legal systems
makes the task of a company more difficult. This
difficulty does not arise in domestic trade, as laws
are well known by the whole country.
3) Different Monetary System
• Every country has its own monetary system and the
exchange rates of each country’s currency are fixed
under the rules framed by IMF, and therefore they
are more or less fixed.
• However in recent years, the exchange rates have
been fluctuating and are being determined by
demand supply forces. Some countries operate
multiple rates i.e. different rates are applicable to
different transactions.
Tota

4) LOWER MOBILITY OF FACTORS OF

PRODUCTION
• Mobility of different factors of production is less
between nations than in the country itself. However,
with the advent of air transport, the mobility of
labour has increased manifold. Similarly, The
development of international banking has increased
the mobility of capital & labour.
• In spite of these developments, the mobility of
labour & capital is not as much as it is within the
country itself.
5) DIFFERENCES IN MARKET
CHARACTERSTICS
• Market Characteristics in each segment are different, i.e.
demand pattern, channels of distribution, methods of
promotion etc, are quite different from market to market.
• If we treat each country as a separate market, we can
assume different market characteristics there. These
differences are accentuated due to the existence of
government controls & regulations.
• However, this is a difference of degree only. Even in one
single country, for example India and America, these
differences in market patterns may be found from state to
state.
6) DIFFERENCES IN PROCEDURE AND
DOCUMENTATION
• The laws of countries and customs of trade in each
country demand different procedures and
documentary requirements for the import and export
of the goods and services.
• Traders residing in the territory have to comply with
regulations and customs if they want to import and
export goods and services.
Thank You

By:-
Ankit Pasrija
Ankit Sharma
Antil Sethi
Anurag Chaudhary