Unit -5 international marketing

UNIT-5

1. Why does organization go for Global Marketing?

Global marketing is more than simply selling a product internationally. Rather, it includes the whole process of planning, producing, placing, and promoting a company’s products in a worldwide market. Large businesses often have offices in the foreign countries they market to; but with the expansion of the Internet, even small companies can reach customers throughout the world.

Global marketing is “marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives”.

Global marketing is also a field of study in general business management that aims to market products, solutions and services to customers locally, nationally, and internationally.

8 Reasons Why Companies Go Global are:

1. Domestic Market Saturated,
2. Domestic Market Small,
3. Slow Growth of Domestic Market,
4. Suppliers follow their Customers Internationally,
5. Competitive Pressures,
6. Attractive Cost Structures Globally,
7. Growth Rate and Potential,
8. Compete Successfully in Domestic Market.

Traditionally many companies have stayed focused in their domestic markets and have refrained from competing globally. They know their domestic markets better and understand that they have to make fundamental changes in the way they work to be able to compete globally.

But increasingly companies are choosing or are being forced to sell their products in markets other than their domestic markets. It has become imperative for most companies to compete in foreign markets.

1. Domestic markets are saturated and there is pressure to raise sales and profits. Most companies have very ambitious sales and profit targets. If such figures have to be realized, companies have to move out of their domestic markets.
2. Domestic markets are small. Companies which have ambitions to become big will have to look for bigger markets outside their boundaries.

iii. Domestic markets are growing slowly. Most companies are no longer content to grow incrementally. If such companies have to achieve high growth rates, they have to obtain some of their sales from international markets.

1. In some industries like advertising, customers want their suppliers to have international presence so that suppliers can contribute in most of the markets where the buyer is operating. For instance, a multinational will choose an advertising agency which has a presence in all the markets where the multinational is selling its product. The customer does not want the hassle of hiring a separate advertising agency for each of its markets. This process will be replicated in more industries.

A multinational company seeking materials and equipment’s would want its supplier to supply to all its international manufacturing locations. The supplier is forced to develop competencies and resources at many international locations to be able to serve the international manufacturing locations of its buyer.

1. Some companies will have to move out of their domestic markets when their competitors have done so, if they want to maintain their market share. If the competitor is allowed to pursue its international growth alone, the competitor is likely to plough back some of the earnings from its international operations to the domestic market, making it difficult for the companies which refrained from pursuing international markets, to focus on the domestic market. In other cases, a domestic player would start operations in the home country of its global competitor, to divert the attention and resources of its competitor towards operations at home to safeguard its home market.
2. Developed markets have high cost structures and companies may move their operations to regions and countries where costs of production are lower. Once a company starts operating in a geographical region, it becomes easier and profitable to market their products in that area.

vii. Countries and regions are at different stages of development, and their growth rates and potential are different. Companies do not like to concentrate all their efforts in limited regions and want to spread out their risk. Such companies will look for markets which are likely to behave differently from their existing ones in terms of economic parameters like growth rate, size, affluence of customers, stage of market development, etc.

A company would not like all its markets to be under recession or inflation simultaneously, and would not like all its markets to be in mature stage, or in growth stage. Having different type of markets will make revenues and profits more consistent. The investment requirements would also be more balanced.

viii. Even if a company decides to concentrate on its domestic market, it will not be allowed to pursue its goals unhindered. Multinational companies will enter its market and make a dent in its market share and profit. The company has no choice but to enter foreign markets to maintain its market share and growth.

1. Companies are realizing that it is no longer an option to stay put in one’s domestic market. The ability to compete successfully in domestic markets will depend upon their ability to match the resources and competencies of multinational companies, with whom they have to compete in their domestic markets.

And once they decide to take on the multinational companies on their home turf, they have to improve their resources and competencies to be able to match those of the multinational companies. They will also learn about the ways of operation of multinational companies. This experience will be helpful when they have to protect their domestic markets against the multinational companies.

The boundary between a company’s domestic market and other markets is getting blurred. Only a company which is internationally competitive can protect its domestic market. No market is or will be protected from incursion by multinational companies. A company’s only choice is to go global, even if its prime interest is to protect its domestic turf.

 

 

 

 

2. Explain in detail International Marketing plan. Aspects in International Marketing planning?

INTERNATIONAL MARKETING PLAN

 

Planning involves where the organisation would like to be and how to get there, which involves goal setting and strategy determination. As already pointed out earlier, the marketing plan must be developed at two levels i.e. at the country level and the corporation level.

At the country level the marketing plan resembles any domestic marketing plan in the sense that it lays down the strengths, weaknesses of the organisation and opportunities and threats faced by it. It proceeds to define the organisation objective along with the assumptions. Having undertaken the above steps it lays down the broad action plan, the organisation structure and control system necessary for accomplishing the above plan.

The international marketing plan is more than a mere integration of the country plans, for it seeks to direct and co-ordinate the activities of the corporation on a global basis and at country levels. This involves a number of variables viz.

Knowledge of the market

Knowledge of the product

Knowledge of the marketing systems

International Marketing Plan Definition

An international marketing plan is a marketing plan aimed at global expansion of product sales and brand recognition.

In essence, international marketing is aimed at customizing or tailoring products, marketing, and sales tactics at the international market they are expanding into. Rather than broadcasting the same media advertisements to multiple countries, each country/market segment receives different marketing messages to appeal to that particular community.

 

 

The corporation must decide how it will obtain information about all these variables on a global and country basis. This information will then be formalised into a marketing plan to provide guidance to each country manager. Below table gives a comparison of domestic planning and international planning.

 

Sl. No.	DOMESTIC PLANNING	INTERNATIONAL PLANNING
1.	Single language(generally) and nationality	Multilingual/multinational/multicultural factors
2	Relatively homogeneous market	Fragmented and diverse markets
3.	Data available, usually accurate and collection easy	Data collection a large task requiring significantly higher budgets and personnel allocation
4.	Political factors relatively unimportant	Political factors frequently vital
5.	Relatively stable business environment	Multiple environments, many of which are highly unstable (but may be highly profitable)
6.	Uniform financial climate	Variety of financial climates ranging from conservative to wildly inflationary
7.	Single currency	Currencies differing in stability and real value
8.	Business “rules of the game” mature and understood	Rules diverse, changeable and unclear
9.	Management generally accustomed to sharing responsibilities and using financial controls	Management frequently unautonomous and unfamiliar with budgets and controls.

 

The International marketing plan

Companies and organizations plan to compete effectively in world markets will need a clear and well-focused international marketing plan that is based on a thorough understanding of the markets in which the company is introducing its products. The challenge, then, of international marketing is to ensure that any international strategy has the discipline of thorough research, and an understanding and accurate evaluation of what is required to achieve the competitive advantage. As such, the decision sequence in international marketing is much larger than that of domestic markets. As noted in the next “Integrated marketing”, it is also more complicated.

 The decision sequence in international marketing

The corporate level

We begin at the corporate level, where firms decide whether to become involved in international markets and determine the resources they are willing to commit. Thus, this stage is primarily concerned with the analysis of international markets. Decisions here will be dependent on matching the results of that analysis with the company’s objectives. These objectives, in turn, will be determined by the many motivating factors we have discussed in the earlier sections. The level of resources that the company is willing to commit should be determined by the strategy that is needed to achieve the objectives that have been set.

The business level

Business-level considerations begin with the assessment of the stakeholders involved in the business. It is important to clearly identify the different stakeholder groups, understand their expectations, and evaluate their power, because the stakeholders provide the broad guidelines within which the firm operates. In the case of international marketing, it is particularly important to address the concerns of the stakeholders in the host company.

Conducting a situation analysis in an international setting is a bit more extensive. It not only includes the normal assessment of external environmental factors and resources /capabilities, it also includes a determination of the level of commitment exhibited by the business, as well as possible methods of entry. It is important, too, to evaluate the capacity of the firm to be flexible, adaptable, and proactive, as these are the attributes necessary, for success in a highly competitive and rapidly changing world.

Undoubtedly, environmental factors have received the most attention from marketers considering international markets.

 

 

3. Explain the importance of developing International Marketing planning.

Developing an International Marketing Plan

It can be a daunting task to actually begin developing an international marketing plan. We have written a list of required details for developing an international/export marketing plan in a previous post, which highlights the most important details. These are the overarching details to keep in mind:

• Research: You need to know the foreign market you are entering inside and out. International country research is two-fold though:

1. Initial Screening
2. In-Depth Country Analysis

In initial screening involves deciding which company you should move your product marketing efforts to. In-depth country analysis should be performed by overseas analysts or experienced international marketing personnel.

• State Your Objectives: Objectives can be boiled down to your international objectives and market objectives. Be able to answer questions of why the expansion is necessary, why you chose this location, what market segments you plan on working on, and how you want to stand against your international competitors in a few years from today.
• Identify Your Budget: Eventually, dreams need to meet reality. Your company’s budget will largely dictate the strategy you set in place. It wouldn’t be a bad idea to identify your budget before brainstorming market research, foreign country screening, and stating objectives.

 

Importance of International Marketing 

International marketing, as opposed to global marketing, is incredibly important to boost your company’s international image for a few reasons.

1)  Increases Focus

International marketing increases a brand’s focus on a marketing message. Since every marketing message, media advertisement, and media channel is selected based on careful market research, brands are able to demonstrate more intentionality in their marketing decisions.

2)  More Marketing Expertise and Personnel

Unlike global marketing where all decisions are made from personnel at the company’s headquarters, international marketing generally calls for more marketing employees and research teams. The obvious drawback to this is the added salary expense, but for the most part, the added employees frees up HQ marketing personnel from execution of the marketing plan and keeps them more focused on managing and strategizing.

3)  Brand Authority

One of the major importances of international marketing is creating brand authority in a variety of different markets. The key to note here is the difference between brand awareness and brand authority. Suppose a well-established American company begins broadcasting their messages to multiple coun19tries. Just because Brazil sees their ad all the time doesn’t mean that it holds any relevance for their situation. Thus, while the company’s brand awareness may soar, their brand authority remains low in Brazil and high only in America. This all has to do with specialization and market research in each foreign country. An increased understanding of a culture, customized message, and a detailed country-specific marketing plan all work together to create stronger brand authority.

Conclusion

International marketing plans are incredibly important for anyone who wants to get into the world of international business. Keeping in mind, there is a difference between global and international marketing. After having a clear understanding of the two and deciding which is best for your business model, you can begin working on your objectives and country of interest.

 

 

 

4. Difference between domestic and International Marketing

Difference between domestic and international marketing:

 

	Basis		Domestic Marketing		International Marketing
Definition		“It is concerned with the marketing practises within the researchers or Marketers home country (domestic market).”		“It 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.”
Role of Politics		Political factors are of minor importance.		Political factors play a vital role.
Languages & Cultures		One language and culture.		Many languages and difference in cultures.
Financial Climate		Uniform financial climate.		Variety of financial climate.
Risk Involved		Normal risk is involved.		Higher risks of different nature are involved.
	c
	Basis		Domestic Marketing		International Marketing
Definition		“It is concerned with the marketing practises within the researchers or Marketers home country (domestic market).”		“It 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.”
Role of Politics		Political factors are of minor importance.		Political factors play a vital role.
Languages & Cultures		One language and culture.		Many languages and difference in cultures.
Financial Climate		Uniform financial climate.		Variety of financial climate.
Risk Involved		Normal risk is involved.		Higher risks of different nature are involved.

 

 

 

 

 

 

 

Control of Marketing Activities	Control of marketing activities is easy as compared to international activities.	Control of marketing activities is difficult because of different factors like – regional, cultural, political, etc.
Payment	Minimum payment and credit risks.	Considerable payment and credit risks.
Familiarity	Well familiarity with domestic market.	Lack of Familiarity with foreign markets, research becomes essential.
Knowledge Requirement	Management knowledge is required.	Specific management knowledge and competence is required.
Product Mix	Product mix is decided keeping in view the satisfaction and more sales.	Product mix is decided according to foreign market.
Product Planning and Development	Product planning and development according to domestic market.	Product planning and development according to foreign market.
Focus	Focus of interest is on general information.	Focus of interest is on strategic emphasis.
Market Aspect	Market is much more homogeneous and different segments.	Different or diverse markets fragmented in nature