SEMESTER-VI — www.ppFFiLes.N 1. International Marketing- An Introduction 2. Intemational Marketing Environment 3. Foreign Market Entry Modes 4. Product Planning for International Markets: Standardisation, Adaptation and New Product Development 5. Branding, Packaging and Labelling 6. International Pricing. . . . 7. International Price Quotations and Payment Terms. .W oo © 10. 12. WWW.PDFFILES. tty . International Distribution: Management of Promotion of Products Abroad: Direct Mail, Sales Literature, Trade Fairs and Exhibitions ............. . International Advertising... 0... se ee cere eee Personal Selling Distribution Channels and Logistics . Selection and Appointment of Foreign Sales Agents .Ghiaioveiea INTERNATIONAL MARKETING -AN INTRODUCTION WWW.PDFFILES.IN @ 1. Introduction and Meaning The success of global business units depends not only on good quality goods but also on the marketing policies adopted to sell these goods in the global market. It is only marketing that guides the global manufacturers to produce globally standardised products or locally customised products. Most of the global firms vary their marketing mix from country to country depending upon difference in the level of economic development, culture, packaging norms, geographic conditions, level of education, etc. among various nations. International marketing is more complex than domestic marketing as the global firms have to analyse marketing environment of different nations. Due to heterogeneous marketing environment, global units cannot adopt uniform marketing strategies Matketing is performance of business activities which direct the flow of goodsand services from the place of production to the place of consumption. Modern approach of marketing is customer oriented which requires that goods and services be produced according to tastes and preferences of consumers. Customer satisfaction is the key goal of marketing. Marketing creates utility and delivers standard of living to society. The meaning of marketing is clear from the following definitions: (i) According to Richard Buskrik, “Marketing is an integrated system of action that creates value in goods through creation of form, place, time and ownership utilities. (ii) According to Philip Kotler, “Marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others.” (ii) According to American Marketing Association, “Marketing is the performance of business activities that direct the flow of goods and services from producer to consumer or Extension of marketing activities actoss the globe is known as global marketing. When a business unit carries on its marketing activities in more than one nation, then it is indulging in intemational marketing. Now a days due to on-going globalisation process, tariff and non-tariff barriers are eliminating Further, due to faster means of transportation and communication, distance barriers have reduced, Now the marketers view the whole world asa single unit. Many brands like Coca-Cola, Pepsi, Loreal, Samsung, Nokia, Dell, Rolex watches, Apple computers, McDonald, Levis Jeans, L.G., Sony, Vodafone, etc. are popular worldwide. The marketers of these brands view the whole world as their market. Many big companies originate in small nations, Without foreign markets these companies cannot sell their huge production. For example, Nestle belongs to Switzerland, which is a very small nation; Nokia is fromInternational Marketing Finland, a very small nation; Unilever originated in Netherlands, again a small nation. These companies, originating in small countries, could not have achieved mass scale of production without intemational marketing, Itis international marketing only that has enabled these companies to grow to a very huge size. ‘The popular definitions of international marketing are given below (i) According to Harold Barson, “International marketing is the process of establishing ‘multinational physical distribution channels and undertaking various activities for selling the products and services in different nations.” (ii) According to Van Terpestra, “International marketing is the process of planning, designing, executing marketing strategies to achieve marketing objectives in the markets of other countries.” (ii) According to Hess and Cateora, “To make available company’s products and services to ‘more than one country’s customers for use is known as international marketing.” (iv) According to Backman and T.N. Davidson, “The performance of ai activities necessary for ‘ascertaining the needs and wants of markets, planning product availability, effecting transfers in ownership of products, providing for their physical distribution and facilitating the entire ‘marketing process in more than one country is known as international marketing.” Itmay be made clear that international marketing is just not simple extension of domestic marketing ‘mix to various nations. Itis much more than that due to heterogeneous marketing environment in different nations. The marketing strategies are to be customised to local needs, culture, economic conditions, ‘geographic conditions, government legislations, etc. of different nations. For example, McDonald has ‘customised its menu among different nations as per local food habits. The names of dishes are determined according to local language of that nation, the distribution and promotion programmes are designed according to local customs. International marketing is wider than export marketing. In export marketing, surplus products are ‘exported to foreign markets but the business unit does not undertake full-fledged marketing operations in foreign nations. International marketing includes both export marketing as well as direct marketing ‘activities undertaken in foreign nations. Under direct marketing, full-fledged marketing operations are ‘undertaken in various nations of the globe, like setting up distribution network, launching advertising, Personal selling, sales promotion programmes in foreign nations. In direct marketing, global manufacturing companies may establish subsidiaries to undertake full-fledged marketing activities in other nations. @ 2. Nature of International Marketing (1) Complex: It is very complex Serle: fee comples innate asthe global company has to analyse marketing (2) Wide Scope: Its scope is very wide. The global company can sellits products and servicesin ‘many nations; like Coca-Cola is selling its products in more than 150 nations. @) Controllable and Uncontrollable Variables: International marketing has both controllable and uncontrollable variables. Controllable variables are components of ‘marketing mix, ie. 4 Ps (Product, Price, Place, Promotion]. These are components of internal marketing environment. While components of extemal marketing environment, viz competition, government policy, technology, political environment, etc. of both domesticand foreign nations constitute uncontrollable variables. (4) More Risky: It involves more risk due to uncertainties associated with political risk of different nations. with country risk and(5) Requires Services of Experts: It requires services of experts like export agents, shippers packaging companies, information-technology technocrats, ete (6) More Competition: The level of competition in international marketing is more in ‘comparison to domestic marketing. The international marketers face competition from other global companies, domestic marketers of home nation and domestic marketers of host nation. So global companies face both domestic competition and foreign competition @ 3. Benefits/Need/Importance of International Marketing yyyW,.PDFFILES.IN © Benefits to Manufacturer (i) Increase in Market Area: International marketing has helped the companies to expand their market areas, Now the whole world constitutes their market, Like Philips, Nestle, Nokia, Sony, Panasonic, Toyota, ete. are selling their products worldwide although their home ‘country market is very small. (ii) Increase in Sales and Profits: Global companies have huge level of sales and profits due to large market area. The companies can sel their surplus procluction in foreign markets, The sale of many MNCs is even more than GDP of many nations. Diversification of Risk: With global marketing, companies can diversify country risk, politcal risk, natural risk, economic risk, etc. For example, if there is recession, natural calamity, law and order problem in one nation, then the company can concentrate on markets of other nations. The global company isnot dependent on market of ingle nation. (iv) Economies of Large Scale: Global companies manufacture their products on a very large scale. Due to modern techniques of production, division of labour and specialisation, cost of production is low and the quality is better. Thus, global companies can avail economies of large scale (0) Global Image: MNCs sell their products throughout the world Itimproves their corporate image and brand image. Due to global brand equity, these companies can easily launch new products, capture new markeis, can even charge high price due to their deep brand lovalty Due to their good global image, MNCs can easily face competition with domestic manufacturers of host nation (the country where MNC expands its marketing activities). © Benefits to Economy {@) Control over Inflation: Global companies increase the supply of products in host nations Ifin any nation, domestic prices are tising then it can import goods through international matketers and thereby check the rising prices in the economy by increasing the supply of these goods... (ii) Increase in Employment: Many persons are getting direct and indirect employment in international marketing. Many persons are engaged in physical distribution, advertising, personal sling, transportation, warehousing, et. Further, international marketing yells in aeeease in demand and hence increase in production, Persons engaged in extra production sativities also get employmentindirecly due to global marketing In developing countries, the problem of unemployment and disguised unemployment is very serious, By identifying the Bpportunities of international marketing, new employment avenues can be created. For ceample, China has created employment avenues for its huge population by indulging in export marketing. Chinese products are being sold worldwide Increase in Exports: Intemational marketing increases exports and thus helps to earn precious foreign exchange. It helps to solve the problem of negative balance of payments. (iii) SEBEL IInternational Marketing (iv) Increase in Standard of Living: Global marketing makes available the goods being ‘manufactured in other nations. The persons living in least developed nations and developing nations can use these modern goods and thereby increase their standard of living. Global marketing increases choice for consumers, promotes healthy competition which helps to reduce pricesand improve quality of goods. So consumers get better quality products at lower prices. Rapid Economic Growth: International marketing promotes economic activities in the economy of parent nation. It results in increase in national income and thereby promotes economic growth in the economy. For example, China has achieved high rate of economic growth due to international marketing. (vi) Optimum Utilisation of Global Natural Resources: A nation may have some natural resources in abundance which are more than its domestic requirements, while some other nation may be deficient in the same natural resource. Due to international marketing, nation can use the natural resources available in the other nations. For example, Arabian nations have crude oil in abundance. Due to international marketing, other nations of the world are using its crude oil. In the absence of international marketing, the crude ol reserves of Arabian nations would have remained under-utlised. Strengthens International Ties: International marketing brings participating nations closer to each other It results in increased interaction among people of different nations. It promotes international cooperation and helps to strengthen international ties. It, in turn, improves international relations. © Benefits to Consumers (i) Wider Choice: international marketing increases availabilty of variety of foreign goods. The consumers can use goods being produced in various nations. It widens consumer's choice. It also helps to increase standard of living of masses by providing new and improved products. (ii) Better Quality Goods: International marketing promotes competition between domestic ‘business units and foreign business units. Increased competition promotes market efficiency. ‘The business units provide best quality goods to attract customers and to face competition effectively. (ili) Goods Available at Low Price: International marketing enables production on a mass scale. Asa result, economies of large scale can be availed viz, reduction in per unit production cost, distribution cost, ete. It helps to make the goods available at low price. Further, international marketing promotes competition which, in turn, results in low prices. 4. Difficulties in International Marketing WWW.PDFFILES.IN (1) Difference in Consumers’ Tastes and Preferences: Due to different culture, climatic conditions, food habits, literacy level, level of economic development, etc. the consumers in different nations have different expectations ofthe product. becomes very dificult for global manufacturer to design customised product for these heterogeneous groups. (2) Uncertainties in Government Policy: Ifthe government of importing nation or exporting nation is unstable, then there may be uncertainty regarding tariff rates, import regulations like import licence, quota, permit, export regulations, etc. So the importing/exporting firm cannot make long-term plans regarding international marketing, Government may impose ban on import or export of certain goods. Similarly, packing norms may also be changed. The relation between home nation and host nation may turn hostile leading to stoppage of trade between these two nations. one(3) Bureaucratic Hurdles: International marketing involves excessive documentation. The bureaucrats create unnecessary hurdles in getting the documents cleared. The excessi formalities for custom clearance add to the complexities of international marketing. (4) Foreign Exchange Fluctuations: Exchange rates of two nations never remain stati value of a particular currency in terms of another currency keeps on appreciating or depreciating. It creates environment of uncertainties for both exporter and importer. (5) Opposition by Domestic Manufacturers: The manufacturers of importing/host nation akways oppose the entry of global companies in the domestic territory. Many a time, social ‘protests and demonstrations are made against foreign goods. Ittarnishes the image of foreign goods. (6) Technological Piracy: In some nations, Patent Act is not strictly implemented leading to piracy of foreign technology and duplicate foreign goods. So, the global companies hesitate to enter into such nations. (7) Dumping: Many a time, global manufacturers dump their surplus production below their cost in foreign nations with a view to damage domestic industry of host nation. Ithas negative effect on domestic units. It also tarnishes the image of global company. (8) Corruption: In some nations, global companies have to pay huge amount as bribe to the ministers to get entry in foreign nations. (9) Difference in Consumers’ Response to Marketing Mix Elements: Consumers of different nations differ in their attitude, opinion, ideology towards different elements of marketing mix, etc. In some nations consumers are very price sensitive. Consumers of different nations give different weights to various product features. For example, in France and Italy, consumers prefer stylish products. Consumers of USA are cynical towards advertising, while Japanese consumers view advertising positively. Indian consumers are very price sensitive. So, due to different responses to marketing mix, the global manufacturers find it very difficult to design appropriate marketing mix. ference in Marketing Infrastructure: Basic marketing infrastructure may differ from country to country which makes the implementation of the same marketing strategy difficult in different nations. For example, channels of distribution, retail practices, media availability and media costs all vary significantly among various nations. Foreign companies have struggled for years to get entry into Japan's rigid distribution system that has restricted the enetration of foreign yds in Japan. aes — WWW.PDFFILES.IN The (10) 5. International Marketing Mix The main components of international marketing mix are: Product, Price, Place and Promotion. ‘These are better known as 4Ps of international marketing. These are discussed below: @ 5.1 Product Product isthe starting point in marketing, No marketing activity can be undertaken in the absence of product. Product includes physical product and services. It includes both tangible and intangible attributes. A product is a complex of tangible and intangible attributes including packaging, colour, price, ‘manufacturer's and retailer's services, which the buyer may accept as offering satisfaction of wants ot needs. A product may be regarded from the marketing view point as a bundle of benefits which are being offered to consumer. According to Philip Kotler, ‘A product is a bundle of physical objects, services and symbolic particulars expected to vield satisfaction or benefits to the buyer.” eeIntemational Marketing motion, advertising, personal selling, etc. All marketing activities like pricing, distribution, sales pror The life cycle of the business are planned on the basis of nature, quality and other features of the product. init depends upon the produet. Any wrong decision in product planning and development can lead to failure of business, The product planning and development is a complex task in international marketing Gue to heterogeneous marketing environment in different nations. Now global companies make customised products to match the product features with customers’ expectations, local requirements, culture. etc. In international marketing, various product strategies related to standardisation or customisation, branding, packaging, ete. are decided. Some global companies manufacture standardised products which con be stl in any nation, i. the same product with litle or no modification is sold in the global market. Like Coca-Cola, Pepsi follow standardised product strategies with litle difference in the level of sweetness. In other words, such companies adopt undifferentiated product strategies. But with increase in competition, global companies have to follow differentiated product strategy, i. the products have to be of different customers, etc. This strategy is also modified as per the taste, likings, preferences, requirements lled customised product strategy. Under this strategy different products are designed for different market scavinations, For example, McDonald has different menu in different nations as per local tastes, food habits and culture. In European nations, its menu is mainly non-vegetarian; but in Asian nations, it is mainly vegetarian. ‘Another important issue in international product strategy is branding decisions. Brand means any name, term, sign, logo, symbol or combination of them used for identification ofthe product. Ithelps in ‘Mforentating marketer's product from other products. Brand creates individuality in the product. It crouldes piysieal identification and bass for promotion. Brand names to products facilitate effective a pertiing campaign. In domestic marketing the marketer can think of marketing the product without Sranding, But in intemational marketing, where the size of market is vey large and competition level is alsovery high, itis very dificltto sel the product without branding, Most of the global companies goin for cee tting, The brands having global image can be easily marketed in comparison to unbranded products. Baand aves identity to the products. Global brands are symbol of good quality, durability and good features of the product. Dell computers, Coke, Pepsi, Samsung, LG, LOréal, Apple, Rolex watches, Gucci handbags, Mercedes Benz car, BMW car, McDonald, KFC, Toyota, Sony, Nokia, Nestle, Panasonic, Philips ete. are common examples of global brands Packaging decision is another productrelated decision which helps in product identification. product protection and serves as a promotional tool. Packaging is necessary to ensure convenience in handling. Package is a wrapper or container in which product is enclosed or sealed. Packaging helps in FE geentiating the product fem competion’ products. Labelingisnotpossble without packaging, helps ‘maintaining freshness and quality ofthe product. Packaging prevents adulteration of product. It ke product sate and in good condition from the time of producGon tll the tme of consumption. tis essential for transportation and handling of goods. It isa silent salesman. ; © 5.2 Price WWW.PDFFILES.IN Price is an important element of marketing mix. All other Ps viz. Produ in the form of cost to the business unit while price brings revenue to itn Piva a ret importance forboth buyer and seller. tis only when buyer and seller agree on price thatsakéf produit can materialise. So pricingis the key element of marketing, Price isthe exchange value of goods and services in termsof money which is charged by seller from customer, Itis the amount of money that the customers pa tosdller for the benefits they receive from the product or for geting possession ofthe product. Pridngisan = _International Marketing ~An... important marketing tool to face competition, to promote customer satisfaction, to earn profit, to expand market share, etc. Pricing decisions have important implications for advertising and sales promotion programmes. Pricing is used as a promotional tool for attracting customers and for increasing sales. Some ‘companies follow high price policy to attract status conscious customers. The business unit can adopt skimming the market cream pricing policy or market penetration pricing policy. In skimming pricing policy, very high price is charged in the introduction stage of product so as to earn huge profits in the initial stage. Gradually, the prices are lowered as competitors start entering in the market. This strategy is usually ‘adopted in case of innovative products. n case of market penetration pricing policy, very low prices fixed in the introduction stage to get large market share. When the product becomes popular, the price is increased. This strategy helps the marketer in keeping out the competition, expanding market share and in promoting brand preference. International marketers adopt any of the following pricing policies: (1) Standard Price Policy: In this price policy, exporter sells the products at the same price to the buyer of any nation. Crude oil producers adopt standard price policy for their product. They quote same price forall nations. Similarly, Boeing company sells its commercial aircrafts at almost the same price to different airlines worldwide. This policy is used by the marketers who sell standardised product. (2) Two-tier Pricing Policy: In two-tier pricing policy, marketer sells its products at two prices, Lower price is quoted in the domestic nation of the exporter while higher price is charged in the foreign nation. For foreign sales, higher price is charged due to extra expenses like transportation charges, import duty imposed by importing nation, dock charges, etc. (3) Market Pricing Policy: This pricing policy is adopted by international marketers who sell their products under polycentric approach (selling different products in different nations). ‘Separate prices are charged in different nations. Automobile manufacturers often adopt this price policy. © 5.3 Placement (Physical Distribution) WWW.PDFFILES.IN Placement here means movement of goods and services from the place of production to the place of ultimate consumption. All the activities in this flow of goods/services from producer's place to Consumers’ place are covered in placementidistribution. It includes channels of distribution, transport agencies, banks, insurance companies, warehouses, etc. These agencies facilitate the flow of product to the ultimate buyer. Physical distribution involves the management of the physical flow of products and the establishment and operation of flow system. According to Cundiff and Still, “Physical distribution involves the actual movement. and, storage of goods after they are produced and before they are consumed.” ‘The main components of physical distribution include distribution channels, transportation, ‘warehousing, inventory control, order processing, etc. Distribution channel isa route or path in which produits flow rom the point of production tothe point of consumption. Distribution channel includes both reducer and inal consumers as wellas market intermediaries and middlemen who are engaged in transer of file of goods and services, In international marketing, the market intermediaries include banks, insurance companies, transport agencies, warehouses, etc. Institutions that serve as market intermediaries or triddlemen, have specialised knowledge in distributing goods, and they are independent of production vretiities, When these specialised intermediaries join with a manufacturer to carty the goods of producer tip tothe ultimate consumer, a channel of distribution is formed. In case of mass production and large vrarket size, itis very difficult for producer to contact the scattered customers directly without the help of intermediaries, Although with the growth of information and technology and online trading, the direct contact between producer and ultimate consumer is established, but still the scope of online trading isInternational Marketing limited. In international marketing, the global companies can distribute their goods in the foreign markets ; 1 either through direct channel or through indirect channel + ects vuln ebornalna abe (1) Direct Distribution Channel: In case o' bch the manufacturers set up their own overseas marketing departments/sul aries in different ations, These subsidiaries sell the products in foreign nations, In direct channel, the manufacturer directly deals with foreign firms through its own internal organization, or the Global manufacturer may appoint foreign distributors, foreign wholesalers or export the product ditectly to the ultimate customers in the foreign nation. In case of costly industrial yhachinery, the global manufacturer directly establishes link with customers anywhere in the ‘world through internet. Direct channels are generally used for marketing costly, high image/prestige products, low turnover goods. In direct channel, the manufacturer has fall control over overseas marketing and can adopt marketing strategies of his choice. In this type of distribution, risk of export marketing is borne by manufacturer itselfand goods are exported to foreign market under the brand name of manufacturer. The manufacturer can take the help of foreign distributors/foreign selling agents for distributing products in foreign market, All activities related to export marketing are conducted under the control of manufacturer. (2) Indirect Distribution Channel: In case of indirect distribution channel, business unit sells its products in its own country to some merchant exporters/export houses/visiting foreign buyers. Such merchant exporters/export houses or visiting foreign buyers/import houses of host nation undertake the responsibility of actual export. These merchants/export houses sll the goods in foreign markets at their own account. They sell these goods in their own brand name and bear the whole risk of export. The manufacturer shifts the title of goods to these merchant exporters/export houses in its parent nation itself. Indirect channel of distribution is more effective in case of low price and high turnover products. Sometimes, due to government regulations it is not possible for the global manufacturer to set up its direct channel in other nations. In some nations, government has its own agencies which have sole right to import specific goods from global manufacturers. In such cases, the global manufacturer cannot set up its own subsidiary for such goods in foreign nation. So here, the egperer has no option but to rely on indirect channel members to sell its goods in foreign markets, Length of distribution channel depends on various factors viz. retail concentration, value of goods, nature of goods, use of internet among target customers, tc, retail sector is well organised and there are big retail stores like Wal-mart, then global manufacturer can bypass the wholesalers and can establish direct link with well- organised huge-sized retail stores, © 5.4 Promotion Mix or Communication Mix WWW.PDF7"..SS.IN Marketing communication is a dialogue between busin, ‘ 7 vcs tht faa plas uring presi alg aeet Retain see ee S ype ond pagel methods can be used to communicate wit individuals, groups and orgenivanee Were ee vetion combines specific elements of communication to promote aparticular mode ee ee eoun as marketing communication mix for that product. In communication, eee ee An persuade, remind the customers of the products. In marketing, prove or are mace {0 inform. communication mix. Promotion mix is also known as Marketing communication mix ot promotion mix is a part advertising, sales promotion, publicly, personal-seling, direct meee eter Bromotion tools: ‘marketing. Together these tools make up the international promotion Retng. and interactvelinternes ‘communication mix refers to totality of efforts made by the busheen oe munication mix. Marketing (wholesalers, retailers, present consumers, potential consumers, gaan ness, Unit to. communicate with the "ers, general public, ete. It includes all types OF toatl 10International Marketing ~An... efforts made by the business unit whether personal, non-personal, paid or unpaid. In addition to six promotional tools named above, communication mix also includes product's design, packaging, labelling, etc. as all these communicate something to buyers. For example, instructions and informations 7n on the package like — date of manufacture, date of expiry, ingredients, how to use it, where to store it, side effects, price, ete. all these give some message to the consumers. According to Philip Kotler, “A company’s total marketing communication mix — also called its promotion mix consists of the specific blend of advertising, personal selling, sales promotion, public relations and direct marketing tools that the company Uses fo pursue its advertising and marketing objectives.” ‘Consumers are exposed to various types of marketing communications such as~ advertising, personal selling, public relations, sales promotion, publicity, direct marketing and internet marketing. Integrated communication suggests that effects of any tool of communication mix should have positive impact on other tools of communication mix. If conflicting message is given by different communication. sources, then consumers will be confused regarding company image and brand position. Conflicting messages from different sources may arise because different promotional components are managed by different departments or functional specialists. For example, advertising messages are designed by advertising department or advertising agency. Personal selling communication is handled by sales department. Publicity, public relations, sales promotion, direct marketing and internet marketing are handled by different functional specialists. Hence, there is need for coordination among different components of communication mix so that clear and consistent message can be delivered to the consumers. Integrated Marketing Communication (IMC) coordinates various elements of communication mix to deliver a clear, consistent and convincing message about the organisation and its product. Some companies like Nestle, IBM, Microsoft, Nike, etc. have adopted IMC approach to marketing communication. These companies appoint a specialised director to coordinate various elements of communication mix so that clear and consistent message can be delivered to customers. Effective promotional mix balances the strengths and weaknesses of different elements of promotional mix, Nowadays, because of increased competition, business cannot depend upon a single promotion tool. It has to use combination of different promotion tools in different degrees, depending upon the factors discussed earlier. § 6. Difference between Domestic Marketing and International Marketing Basis Domestic Marketing International Marketing [Products are sold within the boundaries of a) Products are sold in different nations across the| country. So the geographic area of market is| world. Goods of one country are marketed across| limited to a country the border of a nation. So the goods are sold over a vast geographic area [hove Is no problem of arranging currency as[ Different currencies are used in diferent countries, payments are made in terms of domestic] Sothe problem of arranging foreign currency arises jcurrency, Further, the exchange rate is always fluctuating Which also adds to the probiom of setting accounts, Warious economic policies of the government] Economic polices are usvally diferent in various| regulating business and rade are uniform wthin|nations, The economic policies of one county are ihe countty, lke fiscal policy, monetary policy.|not applicable in the other nation. So the| industrial policy, licensing policy, etc, are[intemational marketer has to understand economic| uniform within the county. policies of all the countries where it intends to lextend its marketing activites 1. Meaning 2. Currency 3. Economic Policies WWW.PDFFILES.IN "Intemational Marketing 4. Socio-Cuttural Environment [Within @ nation, certain socio-cultural variables] are homogeneous. So its easy to analyse and} lunderstand socio-cultural environment in case} lof domestic marketing [There may be more heterogeneity in socio-cultural] environment among different nations. Socio-cutural variables like education level. religion, atitude| towards work, value system, customs, traditions, etc. significantly affect likings, dislkings, tastes, | lpreferences, of consumers. The analysis off [socio-cultural environment of various nations is al cificutt task. 5. Magnitude of Risk it has lesser risk as goods are sold within a] county. Itinvolves less travelling time, less sk] lof bad debts as i is easier to analyse credit worthiness within a nation. It does not involve} foreign exchange rate risk it has more risk as goods are sold across the lpoundaries of the nation. It involves more traveling} time, politcal risk, exchange rate isk, sea-route risk, more credit risk as it is difficult to analyse| credkt-worthiness of customers across the word (6. Legal and Political System [Within the country the legislations regulating] marketing activities are uniform, lke Sale off IGoods Act, Consumer Protection Act, Contract Act, Income Tax Act, etc. are uniform within India. Understanding these legistetions within a The legislations regulating international marketing are ditferentin various nations. Further, international institutions like WTO, UNCTAD, IMF, etc. ang| Regional Economic Groups like SAARC, EU, |SAFTA, NAFTA, etc. also affect various transactions lof international marketing. So understanding| legistative set up affecting intemational marketing is very complex. 7. Mobility of Factors of Production Factors of production like labour and capital have easy mobilty within the boundaries of the| nation. Factors of production are less mobile across nations. In some cases, these may be totally immobile due to legal hindrance, long distance, language hurdle, patriotism, customs, traditions, etc. a. Tariff and Non-Tarift Barriers Within the nation, there are no tan (port duty land expon duty) and non-tariff bamers (quota, licence). So mobility of goods within the country} from one state to other state is easy There are various tariff and non-tanf barriers on Imovement of goods from one country to other Jcountry. These barriers hinder the movement of |goods from one nation to other nation. 9. Procedural Formalities it involves less documentation and procedural formalities. Executing the transactions related to domestic marketing is not very complex task. Itinvolves very complex procedural formaities and |documentation. The services of specialised staf are| required to comply with official formalities. I increases the transaction cost of intemational marketing, 10. Language Problem in domestic marketing, language barriers nota serious problem. Although there may be various regional languages, but still because of lcommon national language. the persons| lengaged in domestic marketing can] [communicate with each other. Language probiem is very serious across te] nations. More than 10,000 languages are spoken | the worid. Even in case of same language, the way a pronunciation is different in different nations Services of translatorinterpreter are requied. 11. Competition The level of competition is less as marketers of lone nation only compete with each other. The evel of competition is very high as marketers from all over the world compete with each other 42. Government Incentives [Gencrally, domestic traders get less incentves| in comparison to exporters from goverment [Goverment always gives more concessions and incentives io exporters so ato promote exports. 3. Market Research [Conducting market research is easier and iess| expensive as market area is less, it is very aificut, costly and time consuming to [Conduct market research across the world. Further, lobal marketing environment is more dynamic in [comparison to domestic marketing environment. 74, Measurement Units and Packaging Norms Packaging norms and measurement units are [same within domestic economy. So packaging [and measuring do not pose any problem [Packaging norms and measurement units may be |S#ferent across the nations. For example, gold i Jwelghed in tolas (10 grams) in India, while tis weighed in terms of ounce (28.349 grams) in some nations. ‘ WWW.PDFFILES. ty _. eelIntemational Matketing ~An... 18. Quality Standards, | Quatity standards and norms are same within a nation. For example, in India, for electric Jappiiances, 1Si mark reflects good quality off product. But ISI mark is of litle. signficance in interational marketing JQuaiity standards and norms are different in| ciflerent nations. So intemational marketer wal have to comply with quality norms of all such] nations where it intends to market its product 16. Market Characteristics The characteristics of market viz. channels of distribution, advertising, sales promotion, Personal selling, etc. are more or less similar within domestic market [The characteristics of market viz. distribution| Jnotwork, advertising media, personal selling, tools lof sales promotion, etc. across the world are| significantly diferent. 17. Transportation Rail and Road transport modes are generally used as the distance is less, [Sea-transportis the most commonly used mode of lransport as the dstance is very long. For sea lransport, container packaging is used. 18. Chauvinism [Chauvinism (extreme love for one’s nation) [Chauvinism hinders the flow of goods across the| supports purchase and sale of domestic goods. Jworid. For example, the slogan ‘Be Indian buy| i promotes domestic marketing indian’ creates hurdle for foreign marketers| intending to sell goods in India & 7. Major Decisions in International Marketing —\/WW.PDFFILES.t\y As the tariff and non-tariff barriers in the path of international marketing are reducing, and the ‘means of transportation and communication are improving significantly, so the scope of international marketing is expanding. A business unit which plans to go for international marketing has to take following major decisions. (1) International Marketing Decision: Entry in international business involves more risk in ‘comparison to domestic business. It is a very strategic decision. Before deciding that the business unit should go for international marketing or not, in-depth analysis of strengths and weaknesses of business unit itself; and opportunities and threats in the foreign market (where the business unit intends to enter) should be conducted. The business unit may have sufficient production capacity to capture overseas marketing opportunities. Considering the available financial resources, human resources, managerial calibre, marketing capabilities, and the product quality, business unit may take decision to expand its market area beyond the national boundaries, Country Selection Decision: The global market area is very wide, Global business unit has to take decision that in which country it should take entry for selling the products and in which country it should locate its production base to serve different markets. Due to limited. resources, trade barriers, restriction on foreign direct investment, political risk, law and order situation, etc. itis not possible for the global business unit to operate in markets of al nations. If in any country tariff and non-tariff barriers are very strict or it has imposed restrictions on inflow of foreign direct investment or the market ofthat nation i isky due to political or other reasons, then entry into such country is very dificult and is not profitable, Some foreign ‘markets may not have good potential. Entry in such foreign markets may result in huge losses. So right country selection is a very strategic decision. Mode of Entry Decision: The decision regarding selection of mode of intemational business is very strategic as it has too much bearing on the future growth of the global business unit, The popular modes of taking entry or conducting business in the territories of other nations are—trace mode and investment mode. In trace mode, export route isadopted for taking entry in foreign markets. In investment mode, business is expanded to other nations through the route of foreign direct investment by setting up subsidiaries, through mergers, ‘acquisitions, etc. Choice of particular mode depends upon many factors like company’s available resources, domestic environment of host nation (the country in which business 1 ssisiicaaeeeasli (2) (3)Intemational Marketing eniry isto be taken), risk level, level of investment, factor cost (cost of factors of production) in host nation, etc. The same mode may not be suitable for entry in all foreian markets, The company may have to adopt different modes to enter in different foreign markets. The global company may opt for export mode in one nation, while investment mode in another foreign market, The decision regarding selection of mode of entry is very strategic. So all relevant factors should be carefully analysed before final selection of mode of entry in foreign market. (4) Marketing Mix Decision: The decision regarding various elements of marketing mix viz, product, price, place (distribution) and promotion is very strategic. There can be following three main strategies in this regard: (i) Extending Domestic Marketing Mix to International Markets (Ethnocentric Approach): When the business unit just intends to sellits surplus domestic production in the international markets, the business unit may adopt ethnocentric approach. In this approach, the foreign markets are considered to be similar to domestic markets, and the domestic marketing mix is extended to foreign markets. This strategy is also called Extension Strategy. Generally, this strategy is adopted when the business units in the initial stage of internationalisation. (ii) Separate Marketing Mix for Each Foreign Nation Market (Polycentric Approach): This strategy is adopted when marketing environment of each nation (where the business unit intends to sel its products) is significantly different. Separate marketing mix is designed for each country considering marketing environment of that nation, This strategy is also called adaptation strategy or customer centric strategy. ‘This strategy should be adopted when each country has huge market potential to justify separate marketing mix. (iii) Uniform Marketing Mix for a Group of Nations (Geocentric/Region-centric Approach): In this approach, the global business unit realises that although all the countries of the world cannot be grouped as a homogeneous market, but stil there is possibilty of identifying some countries where customers have similar likings, dishkings, tastes, preferences, buying motives, buying patterns, etc. Such countries can be grouped asa homogeneous market and same marketing mix can be adopted within this group of nations. In this way, the total global market is classified in a few groups, ignoring their national boundaries. This strategy provides economies of scale which are not available in polycentric approach (Itrequites separate marketing mix for each country), In geocentric approach, the same marketing mix is used for a group of nations having some homogeneity. (5) Decision Regarding International Organisational Structure: |f international marketer plans to go for direct distribution in foreign nations, it will have to take decision regarding organisational structure of international business. The decision regarding organisational structure depends upon various factors viz. size of business unit, nature of product, resources of company, expected volume of exports, global marketing environment, number of products, stage of globalisation, etc, The wrong selection regarding organisational structure may result in inefficiency in international marketing. m1 8. Approaches to International Marketing WWW en —— == any The main approaches to international marketing are discussed below: (1) Export Marketing: Itis also known as domestic market extension approach. Itis based on ethnocentric strategy of international marketing, In this strategy, the domestic businessInternational Marketing ~An. ‘units export their surplus production to other nations. The primary motive of this strategy is to sell excess domestic production. The marketing mix used in domestic market is extended to foreign markets. New marketing mix is not adopted in foreign markets. In this strategy, exports can be in the form of direct exports or indirect exports. Direct export means the business unititselfis directly involved in exporting the product to end-users in foreign markets through agents or own sales force. In indirect exports, goods are exported through some intermediary who buys the goods from exporter. Then these goods are sold in the foreign market by this intermediary. Some business units may be regular exporters, while other business units may be exporting irregularly. (2) Multinational Marketing: When the business unit recognises the differences in marketing environment of different foreign nations, its approach towards intemational marketing will be ‘multinational marketing. This approach is based on polycentric strategy. Itis also known as multi domestic marketing strategy. In this strategy, different countries are recognised as independent marketing units. Separate marketing mix is designed for domestic market and foreach of the foreign national market. For each market, all components of marketing mix are adapted considering the heterogeneity in marketing environment. For each different country, separate marketing strategies are framed. In this strategy, the production centre may be shifted to other countries, Different subsidiary companies may be set up in different nations to make customised product for each nation. This strategy is adopted when the volume of business in each country is sufficiently large to justify separate marketing mix. (3) Global Marketing: In this approach, global market is treated as single market. The decision regarding market segmentation is made not on the basis of national boundaries butitis based on similarities among various nations with regard to likings, usage pattern, income level, buying pattern, buying motive, etc, Countries with homogeneous attributes are grouped asa single market segment. A single marketing mix is designed for this group. It helps the business unit in availing economies of scale. This strategy of international marketing is based on geocentric approach, Within each segment, standardised products are marketed. In this ‘way, the total global tharket is classified in a few groups ignoring the national boundaries of countries. This strategy provides the benefits of economies of scale which are not available in polycentric approach. In polycentric approach, separate marketing mix is designed for each country. But in geocentric approach, same marketing mix is used for a group of nations having similar features. Some global business units may standardise any one or more components of marketing mix to avail benefits of some homogeneous features. For example, McDonald has standardised its brand name, logo, store-layout, forall its market nations: but has adopted customised product strategy and customised price strategy for different nations, i.e. certain elements of marketing mix are standardised (common), while other elements of marketing mix are customised (different). This strategy enables the business unit to avail the benefits of both ethnocentric and polycentric marketing approach. = 9. Scope of International Marketing \WWW.PDFFILES.iny The essence of international marketing includes export of goods and services in foreign markets. It also includes entry into foreign markets by opening branches/subsidiaries, joint ventures with foreign firms, licensing)franchising arrangements, offering consultancy services, contracting and sub-contracting, appointing foreign agents/distributors, etc. in foreign matkets. Various modes used for taking entry in international markets constitute scope of international marketing. These modes are discussed below: (1) Exporting: Exporting s the essence of international marketing. Initially, a domestic business unit starts its international business by exporting to one nation. Gradually, it expands its 5Intemational Marketing . Exporting is very useful when a business unit has surplus exports to various nation: 7 At the same production capacity, i. its domestic sales are less than its production capacity. time, the business unit enjoys comparative advantage in producing these goods in comparison to other business units. The comparative advantage may be due to cheap labour, abundant supply of good quality raw material, technological advantage, ete. (2) Licensing and Franchising: In licensing, business unit of one country (Licensor) allows the business unit of other country (Licensee) to use its technical know-how (patents, trademarks, copyrights, etc.) For this, licensor charges royalty from licensee for a stipulated period of ime. In most of the nations, the rate of royalty ranges from 5 per cent to 8 per cent of sales. Licensing agreements enable the licensor to make maximum utilisation of its intellectual property. Licensee, too, can avail the benefits of modern: technology by entering into licensing agreement. Under franchising, business unit of one nation (Franchiser) grants right to do bbusinessin a particular manner to the business unit of other nation (Franchisee). This right can ‘be with regard to selling the aoods under the brand name of franchiser. In some cases, the key components are provided by franchiser to franchisee. In another form of franchising, the marketer may appoint agents or dealers in other nations. Franchiser provides a comprehensive marketing programme to franchisee that includes brand name. logo, store-layout, method of operation, etc. Franchising arrangement is more comprehensive than licensing. For example, McDonald provides its brand name, logo, store-layout, method of operation, etc. to its franchisee stores. The franchisees have their own stores but they sell the products under the brand name of franchiser. (3) Contract Marketing: In this agreement, business unit of one nation enters into agreement with marketers of other nations to market the goods as per prescribed standards, but right to manufacture these goods is retained by the parent foreign enterprise. Under such agreement, the parent foreign enterprise can expand its business to other nations without setting up its | ‘own marketing infrastructure in other nations. If the parent enterprise feels that marketing ina particular nation is not much profitable, itcan have easy exit from that nation as it has not set Up its own marketing inastucue in other nation. WWW. PDFFILES. IN (4) Joint Ventures: It is a common strategy for getting an"entry into foreign market. In joint venture, foreign partner makes an arrangement with local unit of other county in which ownership and management ae shared between local unit and foreign partner. Local unit has thorough knowledge of domestic conditions and it has its local set-up and infrastructure like manufacturing unit, marketing set up, distribution network, service centres, et. If foreign partner belongs to developed nation, then it provides its advanced technology and technocrats while local unit makes arrangement for production and matketing. Profit of joint venture is shared between foreign partner and local unit in a pre-determined ratio, (6) Management Contracting: In this arrangement, parent enterprise of one nation sets up ‘management agencies, Through these management agencies, business units of other nations are managed without any stake in ownershipcapital It means the parent enterprise simp provides its managerial expertise to business units of other nations, For this, some fees iris form of percentage of profit or lamp sum fee is charged by parent enterprise (©) Wholly Oumed Seba sats soe Companies et up wholly owed! matting units in ie ly owned by their parent company. MNCs Prefer this route for international marketing when they want to have complete conte marketing activities in other nations. Instead of entering into joint ventures, Inowaay franchising, exporting, etc, they set up their own subsidiary units in dliferent nations, FeyIntemational Marketing “An, Rane dee bes ai has set up LG India as its wholly owned subsidiary unit in India. It facturing and marketing set-up in India. The brand name of parent Company is extended to subsidiary companies. @ oe Castine bs i srateay of infemationl marketing, foreign partner provides lev eomg parts which are assembled in another nation. Usually, business unit of leveloped nation provides key components, while these are assembled in developing nation. These contracts are entered into so as to avail the benefit of cheap labour available in developing nations. The products so assembled are marketed under the brand name of foreign parent company. This arrangement also helps to save custom duty as only key components are imported rather than finished product, The custom duty is lower on components than on finished products. In this form of intemational marketing, political resistance is ess in the hostnation asit creates employment avenues in the developing nation where components are assembled to make finished product. These assembled finished products are not only sold in the domestic market but are also exported to other nations which helps to increase exports of developing nation. WWW.PDFFILES (8) Cross-border Mergers and Acquisitions: Such mergers and acquisitions take place between business units of different nations. In merger, business units—usually operating at the same level, having same types of business—join hands to avoid competition and to enhance their long-term competitive strength. It further adds to economies of scale. In cross-border acquisitions, generally a larger business unit of one nation acquires the comparatively smaller business unit in other nation. For example, Tata Steel (Indian company) acquired Corus Steel (European company). Similarly, Bharti Airtel acquired Zain’s Telecom Operations in Africa. In this way, through cross-border mergers and acquisitions, the business units expand their business activites to other nations. This strategy of international marketing also provides instant access to manufacturing and marketing set-up in other nation (9) Third Country Route/Location: This strategy of international marketing is used to take advantage of friendly relations between two nations. In this case, one country does not make direct investment in other nation, rather investment is made in third nation, Through this third nation, the investment is routed to destination country. For example, India has tax-concession treaty with Mauritius, ie. if any investment is made in India through Mauritius, it will get tax concession, To take advantage of this treaty, some foreign investors of other nations like Japan, UK and USA who intend to invest in India, instead of directly investing in India, route their investment through Mauritius to avail tax concessions. Third 1 location strategy is also used when two nations (say A and B) do net have good ade relations. If an investor of country A wants to invest in country B or vice fhe investor will route its funds through third nation. Thus, in this strategy of third country location is used to expand its business in destination countr political or t versa, then # international marketing, country. (10) Foreign Selling Agents or Distributors: Some international marketers appoint foreign selling agents or distributors to sell their products in the foreign markets. Foreign selling agents work on commission basis, The agent collects the orders from foreign markets supplies the goods and collects the amount of eedit sales from the foreign buyers. In foreign narkets, he acts like an authorised representative of his principal (exporting business unit) Some international marketers capture the foreign market through distributors. These distributors purchase the products from the exporting unit and sel these goods in the foreign market in their own account.(11) Consultancy Services: In this form of entry into foreign markets, the exporting unit sends its marketing consullantslexperts to guide and direct the marketing activities ofits distributors abroad. These consultants also provide the feedback about the international marketing environment, customers’ motives, likings/dislikings/preferences, etc. of foreign markets to the exporting unit. This market information helps the marketer in designing the products as per likings of customers. Questiens @ |. Essay Type Questions . Short Answer Type Questions 1, Define international marketing. How is international marketing different from domestic marketing? Bring out the benefits of international marketing. 2. What is international marketing mix? Explain its main elements. 3. Explain in detail the importance and scope of international marketing. 4, What do you know about nature of international marketing? Explain major decisions in international marketing. 5. How is domestic marketing different from international marketing? Discuss the main challenges in intemational marketing 6. Explain major decisions in international marketing. Also explain the major challenges in international marketing in present scenario. “The scope of international marketing is more comprehensive than internal marketing.” In the light of this statement, explain the difference between internal marketing and international corer WWW.PDFFILES.IN ‘What do you mean by international marketing? ‘What do you mean by distribution channels in the context of international marketing? What do you mean by cross border merger? Write a short note on promotion in international marketing, What do you mean by polycentric strategy in the context of multinational marketing? Explain geocentric approach to international marketing. Explain ethnocentric strategy of international marketing, ‘What is international promotion mix? Write short note on: (Export Marketing, (i) Multinational Marketing, (iii) Global Marketing, Yen anageneINTER MARKETING ENVIRONMENT WWW.PDFFILES.IN ® 1. Introduction and Meaning International marketing environment has been changing rapidly. The information technology has reduced the world to a global village. In the days of multilateral trade, no economy can stand alone and can remain unaffected from the changes in international environment. Nowadays, interdependence and regional economic cooperation among different nationsis increasing. Every type of business, anywhere in the world, has to take note of changing international environment. Marketing environment refers to those aspects of the surroundings of business enterprise which have influence on the functioning of business. An organisation can survive and grow only when it continuously and quickly adapts to changing environment, We are living in the dynamic world which is undergoing a rapid change, because of economic changes, political changes and new technology. Marketing environment is the aggregate of all conditions, events and influences that surround and affect the business. Business does not function in vacuum. Itisaffected by internal and external environmental factors. These internal and external environmental factors collectively constitute marketing environment. The intemal factors are within the control of business, whereas external factors like economic environment, political environment,’ socio-cultural environment, technological environment, international environment are beyond the control of business. Similarly, competition is an external factor which significantly affects the business but is beyond the control of business. The success of business lies in understanding the environmental changes and adapting its business policies accordingly. The surroundings of business enterprise which are constantly changing, carry with them both opportunities and tisks or uncertainties which can make or mar the future of business, The success of business enterprise depends on its alertness and adaptability to changes in the environment, International environment is very important for certain types of businesses. It is particularly important for industries directly depending on imports or exports. A recession in foreign market or protection policy by foreign nations may create difficulties for industries depending on exports. Restriction on imports may help some industries but may adversely affect other industries, e.g, the entry of multinationals in electronics industry such as LG, Samsung, Sony, etc. has adversely affected the market share of domestic business firms like Videocon, Texla, Beltek, etc.Intemational Marketing Several other factors like WTO agreements, international declarations, international political factors ike war, political tension, global financial crisis, etc. have their impact on development process and business, For example, global recession and eurozone debt crisis have seriously affected industries of various nations; attack on World Trade Centre, US-Iraq war, growing international terrorism, etc. have adversely affected international peace and business. With the fast development in the means of communication like internet, fashion shows and beauty contests among different nations, cross-border spread of culture and lifestyle has taken place. This has significant implications for fashion designing business, interior decoration business and dress designing business. Now the Indian consumers are following the trends of western culture. World is becoming small in size due to advanced means of transport and technology. Nowadays, learning of foreign language and familiarity with foreign currency is must for a businessman engaged in foreign trade. Intemational business is related, ditectly and indirectly, to the flows of foreign capital, foreign technology, foreign enterprises, foreign goods and services, foreign brand names, foreign media and so on. Role of MNCs is increasing day by day in both developing and developed countries. The success of MNC depends upon its adaptability to changing business environment that it comes across in different countries. For example, IBM, Coca Cola operating as MNCs in India; INFOSYS, WIPRO in USA and Birla Enterprises in Africa may face difficulties if international environment is not properly assessed. Detailed analysis of marketing environment of various nations is a pre-requisite for formulating international marketing strategies. Such analysis helps the business unit in taking strategic decisions like it should take entry in a particular foreign market or not? Whether it should market customised product or standardised product? What strategies should it adopt for different components of marketing mix, Le. product, price, place, promotion? Itis quite possible that a particular marketing strategy is successful in one nation but notin other nation because of heterogeneous marketing environment n these two nations. This heterogeneity may be with regard to income level, cultural variables, climatic conditions, demographic features viz. education level, population size, age, composition, etc, The success of international business _ tit lies in adaptation to heterogeneous marketing environment of different nations, Intemational "Marketer has to adjust various components of marketing mix according to heterogeneous marketing environment of different nations. © Definitions of International Marketing Environment _ YY WW.PDFFILES.IN (i) According to Cherunitam, “International marketing environment is composed of economic environment, political environment, legal environment, socio-cultural environment, technological environment and other factors which affect international trade and finance.” (ii) According to Armstrong, “International marketing environment refers to all internal and external forces that affect marketing ‘policies, decisions and ‘operations of a business unit.” (iti) According to Cravens, “international marketing environment is that which is external to the marketing management function, lar rgely uncontrollable, potentially relevant to markets decision making and changing and/or constraining in nature.” ° 7 (iv) According to Pride and Ferrell, “International Jorces that directly or indirectly influence an financial and natural resources, raw (goods, services or ideas).” | marketing environment consists of external organisation's acquisition of inputs (human, materials and information) and creation of outputsInternational Marketing... (v) According to Philip Kotler, “Marketing environment refers to external forces that aifect a firm’s ability to develop and maintain successful transactions and relationships with target ‘customers,” Earlier, the market area of any business unit was restricted to national level. But now it may be expanded to international level. Now a business unit which has extended its operations to many countries, has to study the domestic environment of each country where it operates. Careful analysis of their marketing environment will help the MNC to grow and to achieve success. Such organisations will have to follow the rules framed by international organisations. For example, Coca-Cola is operating in ‘more than 150 counities, So it has to analyse the marketing environment of all these countries. Marketing environment in developing economies diflers significantly from developed economies. In developed economies, income level of population is high; there is greater politcal stability and political interference in business is minimum; customs in society are less rigid; level of technology is advanced and better research and development facilities prevail in such economies; infrastructural facilites are of good quality, etc, On the other hand, in developing economies, income level of population is low; there is less political stability and political interference in business is more; social customs and traditions are deep rooted; level of technology is backward, infrastructural facilities still equire lot of improvement, etc. So business units which operate in global environment will have to frame different types of marketing strategies while operating in developing economiesand in developed economies. For example, fan MNC is producing goods for African countries or for South Asian countries, then low cost products will be more successful. On the other hand, if that MNC is producing goods for European countries, then high quality products, even if their cost is more, will be more successful. WWW.PDFFILES.INY & 2. Characteristics of International Marketing Environment (1) Complex in Nature: International marketing environment is very complex in nature. It includes economic, political, socio-cultural, legal, physical, technological environment. In case of international marketing, the business unit has to analyse these environmental ‘components of many nations, The nature of these components significantly varies among different nations. So the study of international marketing environment is complex. (2) Dynamic: The components of marketing environment at the global level are not static ‘These factors keep on changing from time to time. Because of these fast changing components, the international marketing environment is dynamic. So the business unit operating at international level has to analyse it on a regular basis and has to adjust its ‘marketing plans and strategies accordingly. (3) Affects Different Business Units Differently: It is not necessary that any particular change in marketing environment will affect all businesses ina similar manner. One business ‘may weleome a change in marketing environment, while some other business may feel adverse effect of the same change. Therefore, marketing environment may affect different business units in different manner. (@) Short-term and Long-term Impact: Every change in marketing environment has both short-term’ and long-term impact on business. The changed environment affects the profitably, productivity and development of business in both short term and long term.