IM/U1 Topic 1 Nature, Importance and Scope of International Marketing
According to Kotler, “Global marketing is concerned with integrating and standardizing marketing actions across a number of geographic markets.”
According to Cateora, “International marketing is the performance of business activities that direct the flow of goods and services to consumers and users in more than one nation.”
According to Cateora and Graham, “International marketing is the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.”
According to Terpstra and Sorathy, “international marketing consists of finding and satisfying global customer needs better than the competition, both domestic and international and of coordinating marketing activities with in the constraints of the global environment.”
International marketing is different from domestic marketing not only in scope but also in nature. Following are the nature and scope of international marketing.
Nature of International Marketing
- Broader market is available
Unlike domestic marketing the market is not restricted to national population. Population of other countries can also be targeted in international marketing.
- Involves at least two set of uncontrollable variables
In domestic marketing the marketers have to interact with only one set of uncontrollable variables. In international marketing at least two set of uncontrollable variables are involved or more if the marketing organization deals in more countries.
- Requires broader competence
Special management skills and broader competence is required in international marketing/business.
- Competition is intense
An international marketing organization has to compete with both the domestic competitors and the international competitors. Hence, the competition is intense in international marketing.
- Involve high risk and challenges
International marketing is prove to various kinds of risk and challenge like – political risk, cultural differences, changes in fashion and style of foreign customers, sudden war, changes in government rules and regulations, communication challenges due to language and cultural barriers, etc.
Importance of International Marketing
- Important to expand target market
Target market of a marketing organization will be limited if it just concentrate on domestic market. When an organization thinks globally, it looks for overseas opportunities to increase its market share and customer base.
- Important to boost brand reputation
International marketing may give boost to a brand’s reputation. Brand that sold internationally is perceived to be better than the brand that sold locally. People like to purchase products that are widely available. Hence, international marketing is important to boost brand reputation.
- Important to connect business with the world
Expanding business into an international market gives a business an advantage to connect with new customers and new business partners. Apple – the tech giant designs its iPhone in California; outsources its manufacturing jobs to different countries like – Mongolia, China, Korea, and Taiwan; and markets them across the world. Apple have not restricted its business to a nation, rather expanded it to throughout the world. The opportunities for networking internationally are limitless. The more “places” a business is, the more connections it can make with the world.
- Important to open door for future opportunities
International marketing can also open door for future business opportunities. International marketing not only increases market share and customer base, it also helps the business to connect to new vendors, a larger workforce and new technologies and ways of doing business. For example – American organisations investing in Japan have found programs like – Six Sigma and Theory Z which are helpful in shaping their business strategies.
Scope of International Marketing
It is a function of international business whereby goods produced in one country are shipped to another country for further sale or trade.
Goods or services brought into one country from another for use or sale.
Import of semi-finished goods, further processing, and export of finished goods.
- Management of international operations
- Operating marketing and sales facilities abroad,
- Establishing production or assembly facilities in foreign countries, and
- Monitoring the operations and practices of other MNCs and agencies.