International Marketing Defined

International marketing: the performance of business activities that direct the flow of a companys goods and services to consumers or users in more than one nation for a profit.

DEFINITION OF I.M.
DEFINITION of International Marketing

( as per American Marketing Association (AMA): International Marketing is the Multinational process of planning & executing the conception, pricing, promotion & distribution of ideas, goods & services to create exchanges that satisfy individual (consumers) & organizational (sellers)objectives.
International marketing is the performance of business activities designed to plan, price, promote, and direct the flow of a companys goods and services to consumers or users in more than one nation for a profit
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DOMESTIC MKTG. V/s. INTL.MKTG.

DOMESTIC MKTG. Relatively simpleProcess Mkt.CharactristicKnown Cultural pref. Known Legal system is known Political system-Trusted Known Monetary system Single strategy works
INTL. MARKETING Complex Mktg. Processes Many uncontrollable Diverse cultural issues Different legal system Political System Unknown Diff. Monetary Systems Multiple Strategy needed since diverse markets catered
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Transition from Domestic to International Business

The Decision to enter foreign markets must be based on strong economic factors. Temperamental decision to export is passing in character and totally unsuitable for export marketing. Success in exporting requires total involvement and determination, which can come only out of basic economic necessity as perceived by the corporate unit. They grouped as Pre-export behaviour and Motivation to Export.

Transition from Domestic to International Business

1. Pre-Export Behaviour: Every firm at some point of time starts as a non-exporter. The point to be studied is what made some o f these firms get involved in export business. This must give a clue to the question as to whether a p resent non-exporter will become an exporter and if so why and when. The factors, which influence a non-exporting firm's decision to go in for export business, can be classified under the following categories:

Firm characteristics: Firm characteristics include product characteristics; size and growth of the domestic market, optimum scale of production, and potential export markets. If the firm is manufacturing a product, which is internationally marketable, and the present and future market prospects in the domestic market are not much encouraging, the motivation o f the firm to get involved in export business will be considerable.

Transition from Domestic to International Business

(b)Perceived External Export Stimuli: This will include fortuitous order, market opportunity and government's stimulation in the form of incentives and assistance. (c) Perceived Internal Export Stimuli: This refer to the management's expectations about the effects of exports on the firm's business. This covers the level of capacity utilization, the higher level o f profits and the growth objectives of the firm.

(d) Level of Organizational commitment: The decision makers must agree on the level of commitment. This is crucial because it will determine whether adequate resources will be made available for go aboard on international marketing. Resources will be required for hiring new staff specialized in international marketing, hiring of consultants for carrying out overseas market potential studies etc.

Transition from Domestic to International Business

Motivation to Export: (Economic reasons) There are some basic economic reasons which might influence a firm decision regarding export business: These are under: Relative Profitability: The rate of profit to be earned from export business may be higher than the corresponding rate on the domestic sales. Insufficiency of Domestic Demand: The level of domestic demand may be insufficient for u tilizing the installed capacity in full. Export business offers a suitable mechanism for utilizing the unused capacity. This will reduce costs and improve the overall profitability of the firm. Recession in the domestic market often serves as a stimulus to export ventures. Reducing business risks: When a firm is selling in a number of markets, the downward fluctuations in sales in one market, which may be the domestic market, may be fully or partly counter balanced by a rise in the sales in other markets. Secondly, geographic diversification also provides the momentum to growth in as much as a single or few markets will have only limited absortive capacity. Legal restrictions: Governments may impose certain restrictions on further growth and capacity expansion of some firms within the domestic market in order to achieve certain social objectives. But there may not be any such restrictions, if the addition al capacity is utilized for exports. Then the firm may be tempted to export its products abroad.

Transition from Domestic to International Business

Obtaining imported inputs: Nations have to pay for imports of materials,
technology or processes not available within their national boundaries. Governments, therefore, may be compelled to impose export obligations on the firms, especially those in need of imported inputs. In other words, in order to import, the firms will have to export.

Social responsibility: Sometimes businessmen themselves feel a sense of

responsibility and contribute towards the national exchequer by increasing their exports. They also build up their image in domestic marketing by their export activities. They also look at exporting to attain status and prestige.

Increased productivity: Increased productivity is necessary for ultimate survival

of a firm. This will lead the firm to increase production and then move to export business. To meet the increased costs of Research and Development, larger markets become a necessity and exports become unavoidable.

Technological improvement: Entry to export market may enable a firm to pick up

new produce ideas and to add to product line, improve its product, reduce costs and discover new applications for its product.