UNIT 1

INTERNATIONAL MARKETING

International marketing involves planning, pricing, promoting, and

directing the flow of a company's goods and services to consumers in
multiple nations for profit. In today's interconnected world, no country can
fully isolate itself from external influences. The shift towards global
economic integration is driven by economic, technological, industrial,
political, and demographic forces.
MEANING OF MARKET:
Market is a place where buyer and Seller are in a Contact with a purpose of
buying and selling of a Commodity at a Particular place, in a Particular
price of time period
In other words: A physical place where people gather to buy and sell goods
Meaning of domestic market:
A domestic market is the buying and selling of goods and services within
the borders of a single country. It's also known as the "home market,"
"local market," and "internal market".
Trading in domestic market is done in two ways:
1.Wholesale Trade: Purchasing goods from manufacturers in bulk and
selling them to intermediaries or end customers.
2.Retail Trade: Purchasing goods from wholesalers and selling them to
consumers in small quantities.
Example: Imagine a bakery in your city. They sell their bread, cakes, and
pastries to local residents. The bakery operates within the domestic market
of your country.
Characteristics:
 Relatively homogeneous consumer base with similar needs and
preferences (compared to the international market).
 Subject to the same economic conditions and government regulations.
 Less complex in terms of logistics and currency exchange.
Benefits of Focusing on the Domestic Market:
 Lower entry barriers for new businesses due to familiarity with the
market landscape.
 Reduced complexity in terms of regulations and logistics compared to
international trade.
 Stronger understanding of consumer preferences and needs within the
local market.
Limitations of the Domestic Market:
 Limited growth potential compared to the international market.
 Increased competition as the market becomes saturated.
 Vulnerability to economic downturns within the country.

In essence, domestic marketing involves tailoring marketing strategies, products,

and services to meet the specific needs and preferences of customers within a single
country, focusing on local markets and operating within familiar regulatory and
cultural environments.

MEANING OF INTERNATIONAL MARKETING:

International Marketing refers to application of marketing principles in
more than a nation. International marketing involves making one or more
marketing mix decisions across national borders. International marketing
involves establishing production facilities overseas and coordinating
marketing strategies across the world.
In simple words, international marketing involves business activities that
directs the flow of an organisation's goods or services to consumers or
users in more than a nation for a profit.
Definition of International Marketing
1) Kotler's Definition: Global marketing involves integrating and
standardizing marketing actions across multiple geographic markets.
2) Cateora and Graham's Definition: International marketing is the
performance of business activities planning, pricing, promoting, and
directing the flow of a company’s goods and services to consumers in more
than one nation for profit.
3) Terpstra and Sorathy's Definition: International marketing is about
finding and satisfying global customer needs better than the competition,
both domestic and international, while coordinating marketing activities
within the constraints of the global environment.

Overall, International marketing refers to the process of creating,

promoting, and delivering products or services to customers outside a
company's domestic market. It involves adapting marketing strategies to
different cultural, political, economic, and legal environments across
international borders.

Nature and Importance of International Marketing:

International marketing refers to the process of promoting and selling
products or services across national borders. It involves understanding and
navigating the complexities of different cultures, languages, legal systems,
and economic conditions in multiple countries.
Nature:
 Global Scope: International marketing transcends national borders,
requiring companies to operate in diverse cultural, economic, and legal
environments.
 Complexity: International marketing is more complex than domestic
marketing due to factors like currency fluctuations, international trade
regulations, and logistical challenges.
 Adaptation: Successful international marketing requires adapting
marketing strategies, products, and communication to resonate with local
markets.
Importance:
 Growth Opportunities: International marketing allows companies to tap
into new markets and expand their customer base, fostering growth and
profitability.
 Risk Mitigation: By diversifying geographically, companies can reduce
their dependence on a single market and mitigate economic risks in their
home country.
 Competitive Advantage: Understanding international markets can help
companies identify and exploit global trends and develop a competitive edge.
 Brand Recognition: A successful international presence can enhance a
company's brand image and reputation worldwide.
Overall,international marketing offers significant opportunities for
companies willing to embrace the challenges and complexities of operating
in a globalized world. It's a strategic approach that can lead to substantial
growth, risk mitigation, and a competitive advantage.
SCOPE OF INTERNATIONAL MARKETING:
 1. Exports and Imports: Entering international markets through trade
allows companies to mitigate risks, gain experience, and later expand
operations abroad. For example, a clothing manufacturer in Italy may
start exporting its products to the United States to test the market before
establishing a production facility there.
2. Contractual Agreements: Licensing agreements enable the transfer of
intangible assets in exchange for fees, facilitating market entry
without direct investment. An example is a software company in Silicon
Valley licensing its technology to a company in India for use in their
products.
3. Joint Ventures: Collaborative associations between foreign and local
firms, or the formation of new entities, serve as alternatives in
countries restricting fully owned foreign operations. For instance, a
Japanese automobile manufacturer forming a joint venture with a local
company in China to manufacture and sell vehicles in the Chinese market.
4. Third Country Location: In situations where direct transactions are
not feasible between two countries, firms may operate from a third
country base to access target markets. An example is a South Korean
electronics company setting up operations in Singapore to serve the
Southeast Asian market due to political tensions with neighboring countries.
5. Mergers and Acquisitions: These strategies provide access to new
markets, technologies, and patents, while also reducing competition
through consolidation.
6. Strategic Alliances: By partnering with competitors, firms enhance
competitive advantage, leverage critical capabilities, and increase
innovation and flexibility in response to market dynamics.
Remember, the specific scope of international marketing will vary depending on
the company, its industry, and its target markets. However, by considering these
key areas, companies can develop a comprehensive and strategic approach to
succeed in the global marketplace.
DOMESTIC MARKETING VERSUS INTERNATIONAL MARKETING:
Domestic marketing and international marketing are two distinct
approaches to promoting and selling products or services, each with its
own set of considerations and challenges.
Aspect Domestic Marketing International Marketing
Scope Focuses on a single country Involves multiple
market. countries/markets.

Market Size Limited to the Access to larger, diverse

and Potential population/economy of one markets.
country.

Competition Competes mainly with Faces competition from

domestic companies. domestic and intl. firms.

Marketing Tailored to the domestic Adapted to suit various

Strategies market's needs. international markets.

Distribution Relatively localized May require

Channels distribution channels. establishing/adapting intl.
channels.

Risk and Lower risk due to familiar Higher risk due to diverse
Uncertainty environment. markets/conditions.

In summary, the domestic market is a subset of the international market, which

encompasses all international trade activities across borders. Businesses can choose
to operate solely in the domestic market or expand internationally to access new
markets and growth opportunities.

INTERNATIONAL MARKETING ENVIRONMENT

“A company’s marketing environment consists of the actors and forces outside of
marketing that affect marketing management ability to build and maintain
successful relationships with target customers”. – Philip Kotler
Internal Environment
The internal marketing environment of a firm comprises all those factors
which are inside firm marketing activities, including the firms’ employees,
firm’s policies, firms’ capital assets, firms’ organizational structure and its
products and services. The firm can control these factors. Two key
components of the internal environment are the 5M framework and
organizational culture.
1. 5M Framework: The 5M framework encompasses five critical resources
or factors within an organization that are controllable and essential for
its operations:
 Minds (Staffing): This refers to the human resources within the
organization, including employees, their skills, knowledge, and
capabilities. Effective staffing involves recruiting, hiring, training,
and retaining employees who possess the right skills and attitudes
to contribute to the organization's success.
 Minutes (Time): Time is a crucial resource that organizations
must manage effectively. This includes scheduling tasks,
allocating time for projects, meetings, and deadlines, as well as
optimizing workflow to enhance productivity and efficiency.
 Machinery (Equipment): Machinery refers to the physical assets
and equipment used in the organization's operations. This
includes tools, technology, infrastructure, and any other resources
needed to produce goods or deliver services efficiently.
 Materials (Production): Materials are the resources required for
the production process. This can include raw materials, supplies,
components, or any inputs necessary to create the organization's
products or services. Managing materials effectively involves
procurement, inventory management, and quality control.
 2. Money (Finance): Finance is the lifeblood of any organization,
encompassing the capital, funding, budgets, and financial resources
necessary for operations and growth.
2. Organizational Culture: Organizational culture refers to the shared
values, attitudes, expectations, norms, and practices that characterize an
organization. It represents the collective beliefs and behaviors of
employees and influences how they interact and work together. Here's a
breakdown of its components:
 Shared values: These are the fundamental beliefs and principles
that guide the behavior and decision-making within the
organization. Shared values provide a sense of identity and
purpose, shaping the organization's culture and influencing its
actions.
 Attitudes: Attitudes reflect the collective mindset and feelings of
employees toward their work, colleagues, and the organization as
a whole. Positive attitudes foster motivation, engagement, and
collaboration, while negative attitudes can hinder performance
and morale.
 Expectations: Expectations refer to the standards, goals, and
performance criteria set by the organization for its employees.
Clear expectations help align individual efforts with
organizational objectives and promote accountability and
achievement.
 Norms: Norms are the unwritten rules and standards of behavior
that govern interactions and practices within the organization.
They dictate what is considered acceptable or unacceptable
behavior and shape the organizational culture.
 Practices: Practices encompass the rituals, traditions, processes,
and behaviors that are commonly observed within the
organization. These can include communication styles, decision-
making processes, reward systems, and other established ways of
operating.
 Overall, organizational culture plays a significant role in shaping employee
behavior, driving performance, fostering collaboration, and ultimately, influencing
the organization's success.
External Environment:
The external environment consists of both the micro environment and
macro environment. These external factors are not controlled by a firm,
but they greatly influence the decision of marketers when developing the
marketing strategy.
1. Micro Environment
 The Supplier: Business success depends on the suppliers when they
enjoy an authority. The supplier of a company holds the power when
they are the only one in the market or when they are the largest supplier
of the goods.
 The Resellers: The success of companies marketing strategy also
depends on resellers if the finished goods of a company are taken to
market-by-market intermediaries or any other third party. These forces
include wholesaler, retailers etc.
 The Customers: The success of marketing strategy also depends on the
customers of company’s product. The nature of customer such as b2c,
b2b, international or local and the reason for buying the product will
play a role in establishing the marketing strategy of company and how
they approach the customers and serve them.
 The Competition: Market competition exists when two or more firms
sell same or similar products and services. The companies must take
into account the way they approach the customers and sell their
products to the customer, what price and product differentiation they
have for their customer.
 The General Public: The satisfaction of general public is a duty of
organization. Company must take decisions while taking the
perspective of general public into consideration and how they will get
affected by their decision. The customers hold the power to make a win-
win situation for a company by helping it reach the goals.
2. Macro Environment:
 Demographic Factors: Demographic forces do impact the different
market segments, which includes region, country, age, educational level,
ethnicity, lifestyle, cultural norms and values.
 Economic Factors: The organization production and decision-making
process of customer also affected by the economic environment.
 Natural/physical Factors: The Company must take into account the
renewal of the natural resources of the earth such as agricultural
product, forest, marine resources etc. The organizations production can
also be affected by the non-renewable resources which includes coal, oil
mineral.
 Technological factors: The organization must consider
the technological factors as the knowledge and skills used in
production of goods. The technology and materials used in production
of goods and services helps in smoothing the process of business.
 Political and Legal Factors: The organization should take into
consideration the political and legal development relating to market and
organization during decision-making process.
 Social and Cultural Forces: The impact of your organization’s services
and products on the society must be taken into consideration. If there is
any element used in production process or product that is harmful to
society should be avoided as it is a social responsibility of an
organization.
Conclusion
Strategic marketers must take into consideration the micro-economic factors and
macro-economic factors during decision-making process as these forces have a
major effect on the marketing campaigns success. Thus, marketing environment
forces can play a vital role in the success of a business, its marketing strategies,
marketing campaigns and its branding.