Scope of International Marketing

Though international marketing is in essence export marketing, it has a broader connotation in marketing literature. It also means entry into international market by:

(a) Opening a branch / subsidiary abroad for processing, packaging, assembly or even complete manufacturing through direct investment.

(b) Negotiating licensing / franchising arrangements whereby foreign enterprises are granted the right to use the exporting company’s know how, viz., patents processes or trade marks, with or without financial investment;

(c) Establishing joint ventures in foreign countries for manufacturing and/or marketing;

(d) Offering consultancy services and undertaking turnkey projects abroad;
(e) Sun contracting and counter trade; and

(f) Important for export production;

Depending upon the degree of a firm’s involvement, there may be several variations of these arrangements.

International Trade, International Marketing and International Business:

It would be useful to discuss three terms very often used in this context, international trade, international marketing and international business. International trade, which arises due to divergent scarcities between nations, points out the possibilities and advantages of trade. International marketing is the process through which international trade takes place.

Analyzing the behavioral orientation of international executives, it was found that these could be categorized into three: ethnocentric, regiocentric and geocentric. This idea was later further developed into the four fold classification of EPRG, where the fourth Polycentric was added. The basic idea behind the concept is that manager’s views their home country culture in different ways and that in turn influence their world view which in turn impact the corporate growth process.

In ethnocentric orientation, home country is considered to be superior. Further the manager looks for similarly in the foreign market. He supposes that products and processes which have succeeded in the home country would also succeed abroad and should therefore be used.

The overseas market markets are considered secondary and all make planning is done in the head office in the home country.

In polycentric orientations the manager recognizes that each country is unique. To succeed abroad, such uniqueness has to be respected and addressed in the company’s offerings. The centralized structured as favored in the ethnocentric culture is found to be not appropriate structure. In this orientation local operations are given more autonomy. Subsidiaries are setup with operational independence.

In regiocentric and geocentric approaches, the region / world is viewed as one market and the firm seeks to develop regional / global marketing plans and strategies. The geocentric orientation is a synthesis of the ethnocentric orientation and polycentric orientation. This is the so called world view that sees similarities and differences in markets and countries and seeks to create a Global strategy that is fully responsible to local needs and wants. The regiocentric orientation is a geocentric orientation that is limited to a region. The ethnocentric company is centralized in its marketing, polycentric company is decentralized and the regiocentric and the geocentric are integrated.

International business includes any type of business activity that crosses international borders. Thus, international business is wider in scope than international marketing. It includes besides marketing, investments abroad including establishment of subsidiaries and joint ventures abroad.

Each country is a separate market having its own demand pattern, channels of distribution, methods of promotion etc. These differences are accentuated due to the existence of government controls and regulations. However, this is a difference of degree only. Even in one single country there may be differences in demand characteristics in different parts of the country. This is specially so for big countries like India and the USA whether the demand patterns differs from state to state.

Each country has its own procedures and documentary requirements and traders have to comply with these regulations if they want to export to or import goods from foreign countries.

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