When a business crosses the borders of a nation, it becomes complex.
International marketing involves all the activities that form part of domestic marketing. An enterprise engaged in international marketing has to correctly identify, assess and interpret the needs of the overseas customers and carry out integrated marketing operations to satisfy those needs. In other words, the basic functions are the same in international marketing as well as in domestic marketing.
At the same time, there are several characteristics that are unique to international marketing. When the business crosses the national borders of a given country, it becomes enormously more complex. The resulting problems and management situations transcend those of marketing, finance and production. A wide range of legal, political, cultural and sociological dimensions enter the picture, adding a lot of complexity to the task. And, the one factor that contributes maximum to the complexity is the environmental and cultural dynamics of the global markets.
Environmental and Cultural Dynamics of Global Markets:
The environmental and cultural dynamics of the markets of different countries can be understood only by studying the respective people, their patterns of life, their tradition, their social interactions, their sensibilities, their faiths and fancies. In other words, the international marketer has to become a native in the foreign land. He has to communicate with the people of those lands in their lingo and idiom.
Multinational enterprise must function in a world of contrasts: old and new, primitive and modern, pious, and agnostic, unutterably beautiful and sickeningly squalid, educated and ignorant, progressive and stagnant, sophisticated and naive â€“ all in constant agitation. To interpret this volatile diversity, to make sense of this apparent chaos, we must try to identify the underlying forces the prime movers which produce the global dynamics.
It is obvious that the difference between domestic and international marketing is essentially environmental and cultural in character. And cultural diversity continues despite the world getting closer. Modern communication and transport systems have no doubt brought the nations of the world closer, but the cultural differences continue. So, understanding the cultural variances and nuances, and responding to them in a manner and style that is appealing to the foreign buyer becomes the crucial task. It is not enough if the international marketer communicates in the buyerâ€™s language. Language is only one aspect of culture. A nationâ€™s history, its social and religious heritage, the value system of its people, the code of conduct handed down through generations â€“ all these are components of a nationâ€™s culture. Moreover culture is not a static entity. It undergoes a continuous evolution. So, sizing up the cultural dynamics of the different markets of the world is quite a difficult exercise. And that explains the difficulty of international marketing.
Main Functions in International Marketing:
Let us briefly touch upon the main functions involved in International marketing. They are:
* Choosing the basic route for global marketing
* Market selection and product selection
* Selection of distribution channels
* Developing pricing strategy
* International marketing communication
* Mastering the procedural complexities
* Organizational adaptations
* Handling business ethics
Choosing the basic route:
A properly conceived entry strategy is the starting point. There are five basic routes to enter a foreign market:
* Licensing of technology and know how
* Multinational trading
* Joint venture
* Full-fledged global operation
We shall mention the salient features of each of these routes.
Export is the primary route for entry into the global markets. Many firms stop with this step in their international marketing endeavor. Some firms, however, go beyond; they license their technology and know how to foreign firms who may be interested in importing it into their land. In multinational trading, the companies source products from any part of the world and cart it to any place where demand for the product exists. Setting up joint ventures in foreign countries is another effective strategy for gaining entry into world markets. Through the joint ventures, the firm literally gets close to the foreign markets. Through joint ventures, a firm becomes a native in foreign lands and that is the surest way to the birth of a full-fledged MNC. In modern days, the joint venture strategy is taking firmer roots among companies planning massive global marketing. Becoming full-fledged global operators or MNCs with manufacturing and marketing set up across countries is the most difficult but also rewarding of all strategies of International Marketing.