NATURE, SCOPE AND IMPORTANCE

Meaning of International Marketing

It to the buying or selling of goods and services beyond
the boundaries of a country. When a country crosses
its national frontiers to market its products it is
indulging in international marketing. In simple words,
when two countries exchange the products and
services with the motive of business trade, the process
is called International Marketing.
Definitions of International Marketing
According to Kotler, "Global marketing is concerned
with integrating and standardizing marketing actions
across a number of geographic markets."

According to Cateora, "International marketing is the

performance of business activities that direct the flow
of goods and services to consumers and users in more
than one nation."
According to Cateora and Graham, "International marketing is the
performance of business activities designed to plan, price, promote, and
direct the flow of a company’s goods and services to consumers or users
in more than one nation for a profit."

According to Terpstra and Sorathy, “international marketing consists

of finding and satisfying global customer needs better than the
competition, both domestic and international and of coordinating
marketing activities with in the constraints of the global environment.”

International marketing is different from domestic marketing not only

in scope but also in nature. Following are the nature and scope of
international marketing.
Nature of International Marketing
1. Broader market is available – Unlike domestic
marketing the market is not restricted to national
population. Population of other countries can also be
targeted in international marketing.

2. Involves at least two set of uncontrollable

variables – In domestic marketing the marketers
have to interact with only one set of uncontrollable
variables. In international marketing at least two set
of uncontrollable variables are involved or more if
the marketing organization deals in more countries.
3. Requires broader competence – Special management skills
and broader competence is required in international
marketing/business.

4. Competition is intense – An international marketing

organization has to compete with both the domestic
competitors and the international competitors. Hence, the
competition is intense in international marketing.

5. Involve high risk and challenges – International marketing

is prove to various kinds of risk and challenge like – political
risk, cultural differences, changes in fashion and style of
foreign customers, sudden war, changes in government rules
and regulations, communication challenges due to language
and cultural barriers, etc,.
 The Scope of International Marketing
International marketing that is also known as global marketing has earned
a great scope today. No business can survive in international market until
they don’t have internal marketing plan. Thanks to globalization, the
marketing strategies of today are not limited to stay confined within the
borders of a country. Instead, the world is like an open market for
marketers and they can enter whichever market they want. In other words,
the scope of international marketing has grown wildly than it was in the
past. Promoting a product internationally is rising up Indonesia, China,
India, Mexico, Korea, Chile, Argentina, and Brazil in the form of new and
potential markets. Moreover, increased power of purchasing and ever
changing customer taste along with the assistance in gaining the
knowledge about these taste has changed the shape of the world
altogether.

Since the number of potential markets is growing, so it is important for any

brand for having complete information about how messy it can get for
them out there, if they are not fully aware of how far they can go for
promoting their product. That’s why we wrote a full-fledged article for
fulfilling the purpose of making you understand the limits and freed of
international businesses.
Scope of International Marketing
1. Imports
Importing products for a brand works the same way like as
it does for a whole country. Businesses buy up the products
so that they can resale it to potential customer base inland
that they have gathered with a lot of hard work and passing
through tough times. But most of the times, companies
take help from imports for their own use – creation and
improving their own production line. They do so when they
are pretty sure that using the product can let them achieve
their objective or can be helpful in putting up a unique
solution.
2. Exports
Exporting is similar in terms of concept for a brand as it is
for a country. Companies export their finalized products to
international markets or on to their other franchises in far
off markets where they can sell the products to their
localities for generating huge revenues. Not just this, even
semi-finalized products are exported for getting an extra
boost for the brand’s treasury. This revenue generated
through exports is then used for paying up the costs of
imports, covering up the costs of development as well as
ripening profits. Both the imports and exports help in
expanding the reach of the companies.
3. Contractual Agreements
Whenever, business moves out to international level, its scope of
international marketing exposes it to greater chances of doing a
lot more business. In fact, the fun part starts there when you see
your company making contractual agreements with many others.
Those agreements can either be in terms of licensing or co-
production or even of technical assistance.

Licensing then moves further down the road and includes even
more agreements in the form of trademarks, patents, secrets of
the brand and brand names, too, which those companies are
allowed to use only if the fee is paid. Well! The fee part surely
scares some of the traders but it’s better to give one-time sacrifice
and once your business starts running normally, the fee for such
licenses can be automatically covered.
4. Joint Venturing
Joint Venture is the name of a collaborative association of two
brands for a reasonable period of time. This association then gives
birth to an even new firm that works individually and pursues goals
other than parent companies. This new firm works under the
banner of both the “venturing” brands and the division of profits
and losses takes places between both in a certain ratio.

Most of the time, joint venture comes into being when a local
company is of great interest for an investor out of the game field or
sometimes, the case can go totally opposite. This technique is of
extreme value to companies are interested in doing business in the
countries where outsiders are not allowed to have their owned
businesses and thus, raises the scope of international marketing.
5.Contract Manufacturing
Contract manufacturing is one of the most used tactics
and is pretty awesome as well since it reduced the costs
of productions for the companies or better said the
company takes off the responsibility of assembling the
products, itself. The other company, with which the
contract is made, assembles the product and keeps
product marketing. This is what a manufacturing
contract is called. This process cuts half the both the
price and risk while encouraging easy exit at the same
time.
6.Fully Owned Manufacturing
This aspect of the scope of international marketing comes
into play when it is in the best interests of the company to
take full control over both the production and promotion
in the target markets. For the purpose, the company sets up
its own facilities for the creation and assembling the
product (if possible). This lets the brand to work for long
term interests instead of pursuing short term goals and
keeping the quality and prices under their own
consideration without having to rely on others.
Well! There are many other factors also that would force
the company to take charge of everything. Such factors
include trade barriers (and that, too, at their maximum
extent), governmental policies and cost differences.
7. Strategic Alliances
Gaining a long term competitive advantage over the
competitors is not an easy task. But at that point, it’s
important for you to learn that what you can’t achieve
alone, you can do so by making some friends. It works just
like the concept which says that enemy of your enemy can
be your friend. It’s capabilities of increasing the innovative
flow while boosting up the flexibility for making the
responses back to the market and that’s what makes this
thing to be included among the important points of the
scope of international marketing.
8.Management Contracts
There is yet another point that’s describable among
the scope of international marketing and that’s the
existence of management contracts. These contracts
are helpful in achieving a skilled labor force for the
brand from the brand with comparatively experienced
workers. In this way, the company can save itself from
greater dangers easily with that skill-filled package
supplied by the supplier as the par contract.
DIFFERENCE BETWEEN INTERNAL AND
INTERNATIONAL MARKETING MEANING

Internal Marketing means when business takes place

within the country but International Marketing means
when marketing of goods and services take place outside
the boundaries of a country.
 Internal marketing International Marketing
 REQUIREMENT:  REQUIREMENT:
Internal Marketing is International Marketing is
essential for the requirement necessary for country’s
of different states and cities economical, technical
development and cultural
of a country
exchange.
 LANGUAGE PROBLEM:  LANGUAGE PROBLEM:
Language problem does not It arises in case of international
arise in Internal marketing. marketing.
 CURRENCY:  CURRENCY:
Same currency is followed in International marketing
internal marketing exchange rate is to be
considered.
 GOVT. INTERFERENCE:  GOVT. INTERFERENCE:
Govt. interference is very Govt. plays a very imp
less in internal roll in case of
marketing. international marketing.
 MARKET RESEARCH:  MARKET RESEARCH:
Market research work is Market research work is
very easy in case of very tougher in case of
internal marketing international marketing
in comparison to
internal marketing.
NATURE OF INTERNATIONAL MARKETING
PROTECTIVE NATURE
International Marketing is protective by nature. There
are some restrictions in IM which protect domestic
industries from foreign competition.
COMPETITIVE MARKET – In IM the exporters have
to face three tier competition, i.e. (1) from
local manufacturers,
(2) from manufacturers of own country, and
(3) from manufacturers of other foreign countries.
MORE RISK – Because of the longer time period
involved due to longer time in transit and longer credit
period involved.

DIFFERENT LEGAL SYSTEMS – Each country has its

own legal system and often the legal systems operating
in different countries differ from each other.
NATURE OF INTERNATIONAL MARKETING
DIFFERENT MONETARY SYSTEMS –
Monetary system and exchange value of each country's
currency are different from that of the other.
CREDIT ORIENTED – Developing countries prefer to buy
goods from those countries which offer liberal credit
facilities i.e. period of payment should be long and interest
charged should be low.
CONTROLLING NATURE – Developed countries like USA
and Japan have dominating position in IM because of the
use of advanced technology.
POLITICAL NATURE – IM is political in nature. There is
virtually no trade between those countries which are not
having cordial relations.
FACTORS INFLUENCING INTERNATIONAL
MARKETING INTERNAL FACTORS –
Factors existing within the marketing firm are called
internal factors. These are the controllable factors which
can be modified according to the environment.
EXTERNAL FACTORS – The external factors which
influence the International marketing decisions of a
business organization can be –
1. Economic Environment
2. Social and Cultural Environment
3. Political Environment
4. Legal Environment
5. Physical Environment
6. Technological Environment
7. Business Environment.
IMPORTANCE OF INTERNATIONAL MARKETING
1. Domestic Market Constraints
(a)Small domestic market
(b)Due to Recession
(c)Sale at Saturation point
(d)Growth in international market
(e)Change in Demand in Domestic Market
(f)Economies of Large Scale Production
2. Govt. policies and regulations
3. Increased productivity
4. Counter competition
5. Relative profitability
6. Reducing Business Risk
7. Control Inflation and Price Rise
8. Product Obsolescence
OTHER FACTORS OF INFLUENCING INTERNATIONAL
MARKETING-
9. Unequal Distribution of Natural Resources.
10. Advantages of Specialization
11. Technological development
12. To Create Research Opportunity
13. Helps in Political Peace
14. Economic Development of a Country
(a) Rapid economic growth
(b) Profitable use of natural resources
(c) Increase in Employment Opportunities
(d) Role of Exports in National Income
(e) Increase in standard of living
(f) International Collaboration
(g) Closer Cultural Relations
THANK YOU…………..

Prepared by:
Babar Mushtaq
(Assistant professor, ABIMS)