International Marketing is defined as 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. The only difference between the definitions of domestic marketing and international marketing is that in the latter case, marketing activities take place in more than one country. No matter domestic or international the Marketing objective remains the same for marketers. The objective is to make profit by selling products or services in geographies which have a demand for them.
Nature of International Marketing
- Broader market is available
A wide platform is available for marketing and advertising products and services. The market is not limited to some precise local market or for people residing in a particular place, region or country but is free for all. People from different nations sharing different cultures and traditions can actively participate in it.
- Involves at least two set of uncontrollable variables
By uncontrollable variables, we mean the geographical factors, political factors prevailing in different countries. At the global level, all the companies have to face uncontrollable variables from different countries. While establishing business globally, a company has to learn to deal with these variables.
- Requires broader competence
International market requires more expertise and special management skills and wider competence to deal with various circumstances and handle different situations like changes in the strategies of the government, the mindset of the people and many other such factors.
- Competition is intense
Competition is very tough in international market, as the organizations at the global level have to compete with both competitors in their home countries and also in the foreign lands. Competition is high because the clash is between developed & developing countries and both have different standards and are unequal partners.
- Involves high risk and challenges
International marketing with its own advantages is also prone to different and tangible risks and challenges. These challenges come in the form of political factors, regional and cultural differences, changing fashion trends, sudden war situation, revision in government rules and regulations and communication barriers
The nature of international marketing is dependent on various factors and conditions and above all, it is dependent on the policies framed by different countries which are active participants in international marketing. International marketing tends to ensure balanced import and export to all countries big or small, rich or poor, developed or developing.
Management of international market is tough and requires thorough market research. It is a predefined process which is directed towards designing and delivering products based on the demands from the overseas customers. Proper management also helps the company attain its objectives.
- Large-scale operation
Large-scale operations involve relative amount of labor and capital to cater to the needs such as transportation, and warehousing.
- Domination of multinationals and developed countries
International marketing is highly dominated by multinational corporations due to their worldwide reach. These organizations apply efficient and effective business practices to all their business operations. They have a stable position and with their global approach find themselves fitting into the arena of international marketing.
- International restrictions
The international market needs to abide by different tariff and non-tariff constraints. These constraints are regulated because different countries follow different regulations. All nations tend to rationally abide by tariff barriers. All the imports and exports between the nations participating in international marketing follow some restrictions in foreign exchange.
- Sensitive character
International marketing is highly sensitive and flexible. The demand for a product in a market is highly influenced by political and economic factors. These factors can create as well as decrease the demand for a product. In fact, use of advanced technology by a competitor or the launch of a new product by another competitor may affect the sale of a particular firm’s product worldwide.
- Importance of Advanced Technology
International market is dominated by developed countries like the USA, Japan, and Germany as they use highly advanced technology in production, marketing, advertising and establishing a brand name. They provide admirable quality of products at reasonable prices. Presently, Japanese products have got substantial existence in markets around the world. The Japanese could achieve this only because of automation and effective use of advanced computer technology.
Scope of International Marketing
This is the easiest form of International Marketing a company can get into – Importing from one country and selling in the domestic market. This is possible only in a scenario where there is demand in the domestic market for the imported goods or services. Companies also localise the imported product depending on the needs of the market.
Opposite of Importing and selling, companies export their finalized products to international markets or on to their other franchises in far off markets where they can sell the products to their localities for generating huge revenues.
- Contractual Agreements
Whenever, business moves beyond their domestic boundaries, its scope of international marketing exposes it to greater chances of doing a lot more business. The market expands, the consumer base expands and even volumes and profits expand. Companies grow exponentially by getting into contractual agreements with several other partners overseas.
- Joint Venturing
Two brands can come together and enter a potential market. The investments, profit or losses are pre decided in terms of both value and time period. At time it is beneficial for companies to enter into a JV for raise the scope of international marketing as a result of barrier to new entrants in foreign markets. A local partner can prove to be immensely useful for doing business not only operationally but also from a domestic understanding of the market dynamics.
- Fully Owned Manufacturing
Relatively a higher level of engagement in the foreign soils, companies can own a fully owned manufacturing in a country. The company can use this facility to sell products within the country or export to nearby nations. Owning a fully owned manufacturing helps companies control quality.