KORBEL FOUNDATION COLLEGE, INC.

Purok Spring 1, Brgy. Morales, Koronadal City

Contact No. 228-1996/887-2051
Business Department
[email protected]
Lecturer: Rey Apaez A.Y. 2ND SEMESTER, 2020-2021

SUBJECT CODE: MKTG 6

MODULE NO: Module 1
SUBJECT NAME: INTERNATIONAL MARKETING
TOPIC: DEFINITION OF INTERNATIONAL MARKETING, MAJOR PARTICIPANTS IN INTERNATIONAL
MARKETING, MAJOR OBJECTIVES OF INTERNATIONAL MARKETING, BASIC CHARACTERISTICS OF
INTERNATIONAL MARKETING, FACTORS THAT HAVE INFLUENCED THE GROWTH OF INTERNATIONAL
MARKETING, AND THE MAIN ADVANTAGES OF INTERNATIONAL MARKETING

OBJECTIVE/S:
At the end of the lecture/discussion/week, the student should be able to:
 Define international marketing.
 Understand the role and importance of international marketing.
 Know the objectives, characteristics and advantages of international marketing

PART 1. LECTURE/DISCUSSION

WHAT IS INTERNATIONAL MARKETING?

‘International Marketing’ is defined as the exchange of goods and services across national borders to
meet the requirements of the customers. The word ‘International Marketing’ is defined as the exchange of
goods and services across national borders to meet the requirements of the customers. It includes customer
analysis in foreign countries and identifying the target market.

International marketing is the application of marketing principles by industries in one or more than one
country. It is possible for companies to conduct business in almost any country around the world, thanks to
the advances in international marketing. In simple words, international marketing is trading of goods and
services among different countries. The procedure of planning and executing the rates, promotion and
distribution of products and services is the same worldwide.

The major participants in International Marketing

The major participants in international marketing are as follows –

• Multinational Corporations (MNCs) – A multinational corporation (MNC) is an organization that

ensures the production of goods and services in one or more countries other than its home country.
Such organizations have their offices, help desks or industrial set-up across nations and usually have a
centralized head office where they co-ordinate global management.
• Exporters – They are the overseas sellers who sell products, and provide services across their home
country by following the necessary jurisdiction.
• Importers – They are the overseas buyers who buy products and services from exporters by complying
with the jurisdiction. An import by one nation is an export from the other nation.
• Service companies – A service company generates revenue by trading on services and not on physical
commodities. A public accounting company is the best example of a service company. Revenue here is
generated by preparing returns of income tax, performing audit services, and by maintaining financial
records.

International marketing simply means the sale and purchase of products and services in a market that acts
as a platform for several other markets. Companies from different countries attempt to draw customers by
advertising their products and services on the same platform.

Page 1 of 6
 KORBEL FOUNDATION COLLEGE, INC.
Purok Spring 1, Brgy. Morales, Koronadal City
Contact No. 228-1996/887-2051
Business Department
[email protected]
Lecturer: Rey Apaez A.Y. 2ND SEMESTER, 2020-2021

The major objectives of international marketing

The major objectives of international marketing are outlined as follows

• To enhance free trade at global level and attempt to bring all the countries together for the purpose of
trading.
• To increase globalization by integrating the economies of different countries.
• To achieve world peace by building trade relations among different nations
• To promote social and cultural exchange among the nations.
• To assist developing countries in their economic and industrial growth by inviting them to the
international market thus eliminating the gap between the developed and the developing countries.
• To assure sustainable management of resources globally.
• To propel export and import of goods globally and distribute the profit among all participating
countries.
• To maintain free and fair trade.

International marketing aims to achieve all the objectives and establish a connection among the nations
that participate in global trade. Establishing a business in one’s home country has limited restrictions and
demands but when it comes to marketing at international level, one has to consider every minute detail and
the complexities involved therein. In such instances, the demand grows as the market expands, preferences
change and the company has to abide by the rules and regulations of two or more countries.

Points that describe the basic characteristics of international marketing

International marketing can be described as the various activities designed in the planning process.
Activities such as fixing pricing structures to suit local needs, formulating promotional offers and assuring that
the products and services are available to customers residing in the home country as well as the foreign
country. Identifying and satisfying the consumer needs globally are the major functions to be taken care of.

Given below are some points that describe the basic characteristics of international marketing

1. Broader market is available

A wide platform is available for marketing and advertising products and services. The market is
not limited to some precise local market or for people residing in a particular place, region or country
but is free for all. People from different nations sharing different cultures and traditions can actively
participate in it.

2. Involves at least two set of uncontrollable variables

By uncontrollable variables, we mean the geographical factors, political factors prevailing in

different countries. At the global level, all the companies have to face uncontrollable variables from
different countries. While establishing business globally, a company has to learn to deal with these
variables.

3. Requires broader competence

International market requires more expertise and special management skills and wider
competence to deal with various circumstances and handle different situations like changes in the
strategies of the government, the mindset of the people and many other such factors.

Page 2 of 6
 KORBEL FOUNDATION COLLEGE, INC.
Purok Spring 1, Brgy. Morales, Koronadal City
Contact No. 228-1996/887-2051
Business Department
[email protected]
Lecturer: Rey Apaez A.Y. 2ND SEMESTER, 2020-2021

4. Competition is intense

Competition is very tough in international market, as the organizations at the global level have
to compete with both competitors in their home countries and also in the foreign lands. Competition is
high because the clash is between developed & developing countries and both have different
standards and are unequal partners.

5. Involves high risk and challenges

International marketing with its own advantages is also prone to different and tangible risks
and challenges. These challenges come in the form of political factors, regional and cultural
differences, changing fashion trends, sudden war situation, revision in government rules and
regulations and communication barriers

6. Large-scale operation

Large-scale operations involve relative amount of labor and capital to cater to the needs such as
transportation, and warehousing.

7. Domination of multinationals and developed countries

International marketing is highly dominated by multinational corporations due to their

worldwide reach. These organizations apply efficient and effective business practices to all their
business operations. They have a stable position and with their global approach find themselves fitting
into the arena of international marketing.

8. International restrictions

The international market needs to abide by different tariff and non-tariff constraints. These
constraints are regulated because different countries follow different regulations. All nations tend to
rationally abide by tariff barriers. All the imports and exports between the nations participating in
international marketing follow some restrictions in foreign exchange.

9. Sensitive character

International marketing is highly sensitive and flexible. The demand for a product in a market is
highly influenced by political and economic factors. These factors can create as well as decrease the
demand for a product. In fact, use of advanced technology by a competitor or the launch of a new
product by another competitor may affect the sale of a particular firm’s product worldwide.

10. Importance of Advanced Technology

International market is dominated by developed countries like the USA, Japan, and Germany as
they use highly advanced technology in production, marketing, advertising and establishing a brand
name. They provide admirable quality of products at reasonable prices. Presently, Japanese products
have got substantial existence in markets around the world. The Japanese could achieve this only
because of automation and effective use of advanced computer technology.

11. Need for specialized institutions

Marketing at global level is highly prone to risks & is very complex and knotty. It undergoes
lengthy and time taking procedures & formalities. Competent expertise is required for handling various
sections of international marketing.

Page 3 of 6
 KORBEL FOUNDATION COLLEGE, INC.
Purok Spring 1, Brgy. Morales, Koronadal City
Contact No. 228-1996/887-2051
Business Department
[email protected]
Lecturer: Rey Apaez A.Y. 2ND SEMESTER, 2020-2021

12. Need for long term planning

International marketing calls for long term planning. Marketing practices differ from nation to
nation influenced by social, economic & political factors.

13. Lengthy & Time Consuming

The activities in international marketing are very time-consuming and knotty or complex. The
main cause of these difficulties are the local laws and policies enforced on different nations, issues in
payment as different countries use different currencies, distance between the participating nations
and time taking formalities involved therein.

The nature of international marketing is dependent on various factors and conditions and above all, it
is dependent on the policies framed by different countries which are active participants in international
marketing. International marketing tends to ensure balanced import and export to all countries big or small,
rich or poor, developed or developing.

Factors that have influenced the growth of international marketing

1. Export – Trading of goods and services from one country to another by promoting the same on
social media, and abiding by the rules and regulation of both the home country and the foreign country
with respect to the rules and regulations is known as export. In short, exporting means shipping the
products and services from one nation to another.

2. Import – Buying of products and services from an external source across national borders is known
as import.

3. Re-export – Re-export refers to the export of foreign goods in the same state as previously
imported, from the free circulation area, premises for inward processing or industrial free zones,
directly to the rest of the world and from premises for customs warehousing or commercial free zones,
to the rest of the world.

4. Regulation on marketing activities – Re-export refers to the export of foreign goods in the same
state as previously imported, from the free circulation area, premises for inward processing or
industrial free zones, directly to the rest of the world and from premises for customs warehousing or
commercial free zones, to the rest of the world.

5. Formalities and procedures of marketing – There are a number of laws and policies framed by
different countries and these make international marketing more complex, and a time consuming
process. The exporters & importers are compelled to abide by all the formalities & procedure related
to licensing, foreign exchange, customs duties & goods clearance. These policies, rules and regulations
are not static for all participating countries. So, it is important to be well aware of the procedure and
formalities and plunge into the vast expanse of international marketing.

6. Trade block and their impact – Active participation of several nations in marketing activities builds
trade block. These blocks involve EU, LAFTA, ASEAN, EFTA & CACM. Measures should be taken to
reduce trade blocks as they are harmful to the growth of free world trade.

7. Commercial policies and their impact – The countries participating in the international marketing
design their own commercial policies that suit their requirements. Different policies of different
nations invoke the commercial environment of international market.

Page 4 of 6
 KORBEL FOUNDATION COLLEGE, INC.
Purok Spring 1, Brgy. Morales, Koronadal City
Contact No. 228-1996/887-2051
Business Department
[email protected]
Lecturer: Rey Apaez A.Y. 2ND SEMESTER, 2020-2021

8. International marketing research – International market is important, as it deals with marketing on

a larger scale and also paves way for productive research. Research requires complete knowledge of
the in and out of target market, customers’ needs and requirement, buying behavior, prevailing market
competition and many more. Market research at international level provides base for product planning
& development, introduction of sales promotion techniques

The main advantages of international marketing

1. Provides higher standard of living

International marketing ensures high standard life style & wealth to citizens of nations
participating in international marketing. Goods that cannot be produced in home country due to
certain geographical restrictions prevailing in the country are produced by countries which have
abundance of raw material required for the production and also have no restrictions imposed towards
production.

2. Ensures rational & optimum utilization of resources

Logical allocation of resource & ensuring their best use at the international level is one of the
major advantages of international marketing. It invites all the nations to export whatever is available as
surplus. For example, raw material, crude oil, consumer goods & even machinery & services.

3. Rapid industrial growth

Demand for new goods is created through international market. This leads to growth in
industrial economy. Industrial development of a nation is guided by international marketing. For
example, new job opportunities, complete utilization of natural resources, etc.

4. Benefits of comparative cost

International marketing ensures comparative cost benefits to all the participating countries.
These countries avail the benefits of division of labor & specialization at the international level through
international marketing.

5. International cooperation and world peace

Trade relations established through international marketing brings all the nations closer to one
another and gives them the chance to sort out their differences through mutual understanding. This
also encourages countries to work collaboratively with one another. This thereby designs a cycle
wherein developed countries help developing countries in their developmental activities and this
removes economic disparities and technological gap between the countries.

6. Facilitates cultural exchange

International marketing makes social & cultural exchange possible between different countries
of the world. Along with the goods, the current trends and fashion followed in one nation pass to
another, thereby developing cultural relation among nations. Thus, cultural integration is achieved at
global level.

7. Better utilization of surplus production

Page 5 of 6
 KORBEL FOUNDATION COLLEGE, INC.
Purok Spring 1, Brgy. Morales, Koronadal City
Contact No. 228-1996/887-2051
Business Department
[email protected]
Lecturer: Rey Apaez A.Y. 2ND SEMESTER, 2020-2021

Goods produced in surplus in one country are shipped to other countries that have the need for
the goods in international marketing. Thus, foreign exchange of products between exporting country &
importing countries meets the needs of each other. This is only possible if all the participating
countries effectively use surplus goods, service, raw material, etc. In short, the major advantages of
international marketing include effective utilization of surplus domestic production, introduction of
new varieties of goods, improvement in the quality of production & promotion of mutual co-operation
among countries.

8. Availability of foreign exchange

International marketing eases the availability of foreign exchange required for importing capital
goods, modern technology & many more. Essential imports of items can be sponsored by the foreign
exchange earned due to exports.

9. Expansion of tertiary sector

International marketing promotes exports of goods from one country to another encouraging
industrial development. Infrastructure facilities are expanded through international marketing. It
indirectly facilitates the use of transport, banking, and insurance in a country ensuring additional
benefits to the national economy.

10. Special benefits at times of emergency

Whenever a country faces natural calamities like floods & famines, it is supported by other
countries in the international market. The international market provides emergency supply of goods
and services to meet urgent requirements of the country facing the calamity. This distribution can only
be facilitated by a country which has surplus imports.

A company exporting goods to other foreign countries earns substantial profit through export
operation as domestic marketing is less profitable than international marketing. The loss a company suffers in
domestic marketing can be compensated from the profit earned through exports in international marketing.
Foreign exchange can be earned by exporting goods to foreign countries. Thus, the profit earned can be used
for the import of essential goods, new machinery, technology, etc. This would further facilitate large-scale
export in future.

PART II. ASSESSMENT

1. What are the activities involved in international marketing?

2. What are the types and takeaways of international marketing?

PART III. SOURCES/REFERENCES

www.tutorialspoint.com/international_marketing/interntional_marketing_introduction

Page 6 of 6