Domestic to International Marketing

The shift from domestic to international marketing involves a great deal of organizational adjustments as well. An international marketing organization needs people with a good deal of knowledge in fields such as finance and currency, international banking, taxation, tariffs and quotas. In addition to people proficient in such technical aspects, international, marketing also requires certain changes in management attitudes, outlook and approaches.

Devising an effective organization structure capable of handling the unique problems and tasks involved is a major concern in international business. Many of the established MNCs, in their earlier years, went on organizing and reorganizing their outfits in their eagerness to meet the ever changing scenario of world markets. From division structure, companies have changed over to global product structure, or area division structure and then to a global matrix, or grid structure. Then most of them reversed the steps. They changed the global matrix structure and went back to the simpler international division structure.

For example, Dow Chemicals which served as a case study of the global matrix, finally returned to a conventional structure with geographically based managers. Citibank too adopted the matrix organization and then retreated from it. The experiences of several companies point towards the futility of frequently changing the organization structure for handling the diverse demands of international business. In fact, several MNCs stayed with a simple divisional structure and demonstrated that with such a simple structure they could tide over any difficult situation. It has been, by and large, accepted that there is no such thing as the ideal organization structure that will take care of all problems faced in international business. What really matters is right business strategies and competent executives, who can give fast and right decisions to local problems. Flexibility is the key requirement.

Adjusting to the demands of host government, the approach towards the host government is an area that demands subtle handling by the multinational corporation. The corporation may have to make changes even in its core strategies and policies for continuing its presence in certain nation markets.

Handling Business Ethics:

Ethical aspects of business also pose problems to the international business firm. What passes as an accepted business custom in one country may be an instance of gross violation of business tradition in another. The marketer cannot refer to any ready reckoner in identifying these dos and don’ts of business practices in the various nations. He can gain an insight into this sensitive area only through a first-hand study of the business environment of the concerned foreign market. Business practice and customs in different national markets differ considerably; hence no universally acceptable guidelines can be fixed in this respect.

The point to be remembered is that the business behavior of a country is a manifestation of its total national behavior or national culture. And an international marketer has to be aware of and sensitive to the business behavior and business ethics of the country in which he seeks to market his products.

Issues Indian Firms have to reckon in global Marketing:

The issues unique to Indian Firms in their efforts at global marketing fall under two heads:

1. India’s competitive advantage as a nation
2. Competitive advantage of the Individual firm

Attributes that shape a Nation’s competitive advantage:

Factor condition is the first of these attributes. In sophisticated industries, this means more than factor costs, the availability of infrastructure and specifically skilled labor. They are basic conditions for competing in an industry and they influence the nation’s competitive advantage.

Demand condition is the next attribute. The nature quality as well as quantity of demand at home for the relevant product will influence the nation’s competitive advantage.

Related and supporting industries are the third attribute. The presence of strong related industries with high degree of competitiveness influences a nation’s competitive advantage in the specific industries. A particularly relevant issue is whether there exists in the nation suppliers of international class.

Strategy, structure and rivalry of firms: Strategy, structure and rivalry of firms is the last of the attributes.

India’s Competitive Advantage as a Nation:

Just as individual business units have their competitive advantage entire nations also have their competitive or comparative advantage in the global business context. So, companies going global have to size up their national competitive advantage and develop their strategies on the strength of this competitive advantage.