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in one country and marketing them in different countries of the world while international marketing is a boarder concept and includes globalisation, MNCs and TNCs, joint venture and foreign collaborations.
DEFINITION
International marketing can be defined as marketing carried on across national boundaries. According to Hess and Eateora, International marketing is The performance of business activities that direct the flow of goods and services to consumers or users in more than one nation. According to Subhash C. Jain, The term international marketing refers to exchanges across national boundaries for satisfaction of human needs and wants. International marketing is a process of planning and executing the conception, pricing, promotion and distribution of ideas goods and services to create exchanges between nations that satisfy individual and organizational objectives. American marketing association International marketing is the performance of business activities designed to plan price, promote and directs the flow of the companys goods and services to consumer or user in more then one nation for profit. Graham Cateora &
International Marketing is essential for all countries-small & big; developed & developing and rich & poor. This is because no country in the world is self sufficient as regard all the requirements and no country can live in complete economic and political isolation. Every country has to import something from other country and has to export whatever surplus available. The natural resources are not divided equally among the countries of the world. There is disparity among countries as regards geographical area, population, climate condition, availability of natural resources, economic growth, technology development, production activities and so on. Such disparity leads to inter dependent of countries. It is this situation which serves as base for the conduct of large scale international marketing activities. It is through international trade that a country can obtain goods which it can not produce or can produce as cheaply as other countries. Hence a countrys well being is determining the great extent by the nature of its foreign trade. Strictly speaking, there is international interdependence which serves as a base for international marketing activities.
The
term
INTERNATIONAL
TRADE
and
GLOBALISATION TRADE are also known as WORLD TRADE. The term GLOBALISATION OF TRADE is a recent one and is wider in meaning and significant as compare to the term INTERNATIONAL TRADE. The decades 1980-1990 witnessed number of events which brought countries closer. Such events includes reunification of Germany, decline of communism, integration of erstwhile Soviet Union and East European countries, closer co-operation among European countries and so on. This was followed by economic reforms and liberalization in many other countries including India. These far reaching changes brought the countries closer and the world into a Global Village. Globalization means integration of economics of different countries in Global economic order.
1. Large Scale operation International marketing transaction is always conducted in large quantity. It is not conducted on a large scale. This is necessary for securing the advantages of large scale operation as regards transportation, handling and warehousing. 2. Domination of multinationals and developed countries Multinational Corporation dominates the international marketing scene. It has world wide contacts. They conduct business operation more efficiently and economically. They are in a better position to adopt global approach which is necessary in international marketing. MNCs usually market their goods in large number of countries and thereby dominate developing countries.
3. International restrictions
International marketing imposes various trade restriction (tariff & non-tariff) because of productive policies followed by differences countries. Tariff barriers are adopted practically by all countries. Foreign exchange also imposes various restrictions on imports & exports. Regional blocks/regional grouping of countries like EU also impose restriction on international marketing. Such restriction may be in the form of quotas and other indirect restriction on free imports. Efforts of WTO and UNC0TAD are not very effective in removing such trade barriers. The growth of
international marketing is adversely affected due to such trade restrictions. 4. Sensitive character International marketing is highly sensitive flexible in the character. A product may suddenly become unpopular or market may come down quickly due to political and economic reasons. Even the use of advanced technology by the competitors or the introduction of new product by the competitor may affect the sale at the global level. 5. Need of international marketing research International marketing requires marketing research in the form of marketing surveys, product surveys and product testing as it is highly competitive. Government policies change, new substitutes enter in to the market and new restriction is imposed because of political, economic, social and cultural factors. Such challenges are common in international marketing and for this continues watch on international marketing environment is required. Marketing research, sale forecasting, etc. are useful techniques for this purpose. They bring adoptability in international marketing activities. 6. Importance of Advance Technology Countries like the USA, Japan & Germany have a dominating position in international marketing because of the use of advanced technology in production & marketing of goods. They are able to promote export & capture world market due to their ability to
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sell superior quality goods at competitive prices. At present, world markets are flooded with Japanese goods. this is the result of intensive use of automation & advanced computer technology in Japan.
7.
this competition is between developed & developing countries which are unequal partners. Such competition is made sever due to special facilities & incentives provided by the government to the exporter for export promotion. World are dynamic & this makes it necessary to the use competitive techniques for export promotion. Scanning of the international marketing environment in a regular & continues manner is essential in order to face global competition effectively.
8. Need for specialized Institutions
International marketing is risky & complicated. It requires lengthy procedures & formalities. Professional exports are necessary for dealing with various aspects of international marketing. Similarly, financial institution like indent houses, exchange bank & export houses are established world over for effective participation in international marketing. 9. Need for long term planning International marketing requires long term marketing planning. The marketing situation in different countries changes because of social, economic & political factors. This stresses the need for long term planning in international marketing. A
comprehensive & dynamic marketing programmed can be prepared through such long term planning. 10. Lengthy & Time Consuming International marketing activity is lengthy, time-
consuming & complicated. This is due to long distances, restrictions imposed by different countries, payment difficulties due to the use of different currencies & lengthy procedural formalities which need to be completed in an orderly manner.
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countries following different political philosophies & system maintain trade relation & make the life of their citizens richer & happier.
production in some other countries. It is also needed as some countries have huge unused production capacity while other have no capacity to meet even their domestic need. This situation can be corrected only through international marketing which facilities exchange of goods as per the need of different countries.
7. Bridging
countries
gap
between
developed
and
developing
International marketing is need in order to bridge the gap between the advance countries & the developing countries. Such marketing not only brings exchange of goods & services but also
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facilitates transfer of technical know-how & skills. Such transfers are necessary for rapid growth of developing countries.
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1. Payment difficulty:
Payment is an important difficulty in international marketing because of different currency systems followed by different countries of the world. The buyer will like to make payment in one currency, while the seller desires to have payments in his home currency. In addition, strict foreign exchange is necessary. All these factors create complication in the payments for the goods sold or the services rendered. Such difficulties are absence in the case of domestic marketing due to the existence of uniform currency system.
3. Government restrictions:
International marketing is not free like domestic marketing. Export & imports are restricted by the Govt in all countries. The govt restriction compel the exporter to follow rules & regulation in the form of licenses, quotes, foreign exchange
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regulation &custom formalities. For imports also various formalities are required to de completed. Due to such restriction, various problems are created before the exporters. Even the restriction in foreign countries create problem before the exporting community. Such trade restrictions are in the form of heavy tariffs, quotes, exchange control & so on.
4. Difficulties in communication:
The operation of international marketing is between people of different language groups, traditions, customs, nationality, socio-system &national laws. More over, direct contact between the parties is not possible. Hence, a special procedure in the form of letter of credit, bank guarantee, insurance, etc., is necessary for safety & security of payments.
5. Time difficulty:
There is a wide gap between the time when the group are dispatched & the time when the goods are received & paid for. There is delay in receiving the delivery of goods due to complicated procedures & long distance. Such delay is always troublesome to exporter as well as importer.
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8. Miscellaneous difficulties:
These difficulties in international marketing include (a) difference in weights & measures in different countries, (b) political affiliations of countries, (c) trade barriers & trade blocs, (d) differences in the marketing practices followed in different countries and (e) war or international tensions.
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includes EU, LAFTA, ASEAN, EFTA & CACM. Regional trade blocks are the mutual benefits & concessions to member countries but deny
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similar to non-member countries. However, such trade blocks are harmful to the growth of free world trade.
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Advantages/benefits
of
International
Trade/Marketing to a Country/Nation
1. Provides higher standard of leaving:
International marketing provides better life & welfare to people in different countries. It provides goods which cannot be produced in the home country due to geographical limitations. This raises the standard of living of the people & social welfare. International marketing facilities large scale production & create employment opportunities in different countries. This provides purchasing power to the people & ensures higher living standard to them.
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country, provides massive employment opportunities to the people & full utilization of natural resources available.
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domestic production, introduction of new varieties of goods, improvement in the quality of production & promotion of mutual cooperation marketing. among countries are the benefits of international
10.
Special benefits during emergency situation: International marketing offers special benefits during
natural calamities such as floods & famines. Emergency supply of goods is required to meet urgent needs. This is possible because of large scale imports. Even other country offers cooperation to county facing difficulties through supply of essential goods & services.
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3. Adverse
effects
of
trade
blocs
on
International
Marketing: Along with trade barriers, trade blocs exist among the countries of the world. EU, LAFTA, ASEAN are some active trade blocs. They encourage trade among the members of the group but put artificial restrictions on the trading activities with non-members. As a result, the growth of international marketing is restricted. Similarly, free trade among nations is not allowed. In addition,
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countries which have not joined such trade blocs suffer in regards to their exports and imports.
4. Domination
MNCs
of
MNCs
and
developed
countries
on
International Marketing: from rich and developed countries dominate international trade since long. Their operations are for profit maximizations. Poor and developing countries suffer due to virtual monopolistic position of MNCs in international marketing. These corporations sell their products in many developing countries as per the terms and condition which are profitable to them. This leads to exploitation of poor and developing countries also dominate international marketing.
5. Existence
marketing:
of
severe
competition
in
international
One limitation of present day international marketing is the existence of stiff competition among participating countries and companies from such countries. Unfortunately, this competition is between unequal competitors. It is between rich and poor or developed and developing countries. Developing countries lack advance technology, skilled labour, infrastructure facilities and so on. As a result, they find it difficult to compete with the developed countries which use updated technology in the production activities. Many poor countries have to sell their raw materials and other resources at a low price to rich countries.
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Coffee Board sees exports at 2 lakh tonnes this season Coffee Board said India will be able to export around 2.10 lakh tonnes of the commodity this season (02-03) nearly the same as last year, but a lot will depend on the quantum, which is eventually produced in the country. Being an export-oriented coffee nation, depending on how much is produced, more than 70% will be exported at whatever international price is offered, the boards chairperson said. She said post-blossom estimates are that India will produce around 2.8 lakh tonne coffee this season and the post-monsoon estimates will not be much different from this figure. Exports this year at 2.10 lakh tonne will only be marginally lower than last seasons 2.13 lakh tonne. Courtesy: The Economic Times, November 30 '02 (Website: www.economictimes.com ) Grain offtake from central pool doubles in first half on higher exports Offtake of rice and wheat from the central pool during the first half of the current fiscal has nearly doubled over the same period last year on account of increased exports of the commodities. The offtake of these foodgrains during April period stood at 223.43 lakh tonnes against 114.4 lakh tonnes during the corresponding period of the last fiscal, an official release said. The 95.3% increase in offtake has been achieved mainly on account of increased exports of the two commodities. Courtesy: The Economic Times, November 28 '02
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(Website: www.economictimes.com ) Farm exports treble in 7 years to Rs 10,000 cr. Indias agricultural exports have registered a three-fold increase in seven years to a record Rs 10,000 crore in 01-02, even though substantial headway will have to be made to correspondingly augment income of the farmers. Furthermore, Indias share in the world agro-trade remains minuscule and efforts should be made to achieve at least 5% share in the sectors global exports. Stating this in a function organized by APEDA minister of state for commerce RP Rudy said while exports have increased from Rs 3,000 crore to Rs 10,169.4 crore in seven years farmers still have to be made the ultimate commercial beneficiary of the sale, as it is his produce that is traded. Agro exports will be sustainable and competitive in the global scenario only if adequate return to the farmers is assured. Courtesy: The Economic Times, November 26 '02 (Website: www.economictimes.com ) Coir exports to set new record Coir exports during the current fiscal ending March 03 are expected to touch an all-time high, even surpassing the export target of Rs 408 crore, Coir Board sources said. During AprilSeptember this year, export of coir touched 40,848 tonnes, valued at Rs 179.27 crore, recording an increase of 21% in terms of quantity and 18% in value terms as compared to the exports in the
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previous fiscal. If the trend continued, export of coir during the current year would exceed Rs 450 crore, sources said, adding that would be about Rs 129 crore more than the previous year. Courtesy: The Economic Times, November 26 '02 (Website: www.economictimes.com ) Govt. hikes ex-FCI prices of grain for export by Rs 250-600 per tonne The government on Friday hiked ex-FCI export prices of food grains by Rs 250-600 per tonne. Official sources said except for the price of new crop of rice harvested last month, which will be effective from Saturday, the rest of the rates would be applicable from January next year. This will make Indian wheat and rice costlier by $5-12 a tonne in the international market, they said. Price of last year's lustre loss wheat affected by rains has been left unchanged at Rs 3,960 per tonne. Courtesy: The Economic Times, November 16 '02 (Website: www.economictimes.com ) Sugar exports may touch 15 lakh tonnes t The current slump in domestic sugar prices could prove to be a blessing in disguise as they may spur exports of the commodity which may touch 15 lakh tonne this season(October-September), traders said here. If domestic prices continue to fall, local mills may soon offer their produce for export at $195 per tonne free-on-board (FOB) against $213 at present. Courtesy: The Economic Times, November 14 '02
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(Website: www.economictimes.com )
Indonesia to buy Indian wheat A local firm has got an order to export 30,000 tonne wheat to Indonesia through a Japanese firm and the delivery is scheduled for early next year. Courtesy: The Economic Times, November 13,'02 (Website: www.economictimes.com ) High soyabean prices may hit meal exports Soyameal exports have taken a beating owing to a smaller crop this year and rise in domestic demand and prices. Exports are pegged to decline by a significant 28% this fiscal to 18 lakh tonnes from 25.09 lakh tonnes last year, traders said. Exports so far have fallen to 3.2 lakh tonne in April-October this year from 5.3 lakh tonne in the year earlier period. Courtesy: The Economic Times, November 12,'02 (Website: www.economictimes.com ) Tea exports up in Jan-Sept despite fall in production Tea exports showed a positive trend during the ninemonth period ended September 02. While exports of tea from the country stood at 134.5m kg between January and September 01, it
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was 137.1m kg in the same period this year, according to data compiled by the Tea Board. However, production of tea on an all India basis has declined by 1.8m kg during the period January to September. While production at the northern gardens during September was up by 0.8m kg, the southern tea estates registered a fall of 2.6m kg in the same month. Sources in Indian Tea Association said the fall in production was due to erratic climatic conditions, adding that the target level of 822m kg during the year was still attainable. Courtesy: The Economic Times, November 2,'02 (Website : www.economictimes.com ) Coffee exports edge up in September The International Coffee Organization said on Friday producing members exports in September 02 rose to 7.7m 60-kg bags, compared with 6.9m in September 01. Provisional cumulative exports from October 01 to September 02 totalled 87.9m bags, against 89.7m during the same period in 00-01, representing a drop of 1.9%. Courtesy: The Economic Times, November 2,'02 (Website: www.economictimes.com ) Rice exporters to meet Yadav over access to local market Much to the chagrin of rice exporter, the government has failed to give the promised 45 day time before switching over to a new policy under which traders will not be provided additional rice
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for processing and will be prohibited to sell brokens in the domestic market. Ina last ditch effort, exporters are scheduled to meet food minister Sharad Yadav tomorrow to convince him of the efficacy of giving the earlier incentive at least to those contracts which had been signed for export before the new policy was announced on August 16 this year. Courtesy: The Economic Times, October 29,'02 (Website : www.economictimes.com ) Farmers in a bind as rice exporters join hands to beat down prices Countrys top basmati exporters have decided this year to operate as a cartel and stagger procurement so that they can beat down mandi prices. Exporters have also decided to officially adopt Rs 10 a kg as a bench mark while buying Pusa basmati from farmers. Courtesy: The Economic Times, October 22,'02 (Website: www.economictimes.com ) Centre clears N-E agri-export aid plan The centre has cleared a scheme of inland transport reimbursement for horticulture produce exports from the northeastern region, including Sikkim. The scheme would apply to transportation by road, rail or for of export shipment of all fresh and processed items and certified organic products from the north-east,
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official sources said. The scheme, meant for exports during the current fiscal, may be extended depending on the exporters response. The rate of assistance for road transport is Re 1 per kg from NE states to Guwahati for export by air. It will be Rs 2 per kg if transported by these states to Calcutta by rail. In case of products transported by air, the assistance will be 75% of the airfreight from an airport in NE states and Bagdogra airport to Guwahati or Calcutta. The processed items include ones prepared from guava, lemon, citrus, oranges, pears, pineapple, jaggery and pepper. Courtesy: The Economic Times, October 19,'02 (Website: www.economictimes.com )
1. 2. 3. 4. 5. 6. 7. 8.
Basmati rice Cashew Cashewnut shell liquid Castor oil Coffee Cotton raw including waste Floriculture products Fresh fruits
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9. Fresh vegetables 10. Fruits and vegetable seeds 11. Groundnuts 12. Marine products 13. Meat & preparations 14. Miscellaneous processed items 15. Non-Basmati rice 16. Oil meals 17. Other cereals 18. Poultry and Dairy products 19. Processed fruits and juices 20. Processed vegetables 21. Pulses 22. Sesame & niger seeds 23. Shellac 24. Spices 25. Sugar and molasses 26. Tea 27. Tobacco manufactured 28. Tobacco unmanufactured 29. Wheat
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1. Wheat 2. Rice 3. Other cereals 4. Cereal preparations 5. Pulses 6. Milk & cream 7. Fruits and nuts 8. Spices 9. Sugar 10. Vegetable oils
Cashew nuts
1. 2. 3. 4. 5.
Silk raw Wool raw Natural rubber Raw hides &skin Jute raw
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