International Marketing

International Marketing

International marketing means any marketing activity that occurs across national borders to meet the requirements of the customers.

Multinational corporations, exporters, importers, and service companies are the major participants.

Global Marketing in the 21st Century

The world is shrinking due to,

  • Faster connection
  • Faster transport
  • Financial flow
  • International brand acceptance (For example : SONY- Electronics, McDonald- Burgers)

International Trade is Booming…

  • Since 1969 the number of multinational companies has grown from 7000 to 63000.
  • USA companies in international marketing – Coca-Cola, IBM

Need to go international is higher, so is the risk barriers such as,

  • Highly unstable government
  • Restrictive government policies
  • High trade barriers
  • Corruption

A firm that manages in more than one country, gains R&D, production, marketing, and financial advantages with their costs and reputation which are not available in domestic competitors.

Also, they see the world as one market.

Major Decisions in International Marketing

  • Looking at global marketing environment – what are the opportunities available around you.
  • Deciding whether to go international- consider do we have required resources
  • Considering which markets are suitable to enter – so they look in few countries.
  • Deciding ways to enter those markets- consider about characteristics of the market.

Global Marketing Environmental

– Trade Restrictions

  • Tariff – A tax levied by a government on certain imported products ( to increase revenue or to protect local markets).
  • Embargo – A boycott or total ban on product categories.
  • Quota – A limit on the amount of goods that the importing country will accept.

Forces which assist foreign trade

  • WTO – World Trade Organisation

Monitor international trade. Also, has the legal authority to arbitrate in trade disputes. Areas of activities are trade negotiations, dispute settlements, Implementation and monitoring, and building trade capacity.

  • GATT – General Agreement on Tariffs and Trade(1948)

This covers international trade in goods. The goods council has 10 committees for different subjects such as agriculture subsidies, market access, etc.

Establish to ensure the following set of rules

  • Non discrimination
  • Clear procedures
  • Negotiations of disputes tariff
  • Participation of lesser developed countries
  • Countries in international trade

In the 7th round, reduce tariffs from 45% to 5%

8th round in Uruguay 1986 – 1993

  • Promote long term global trade growth
  • Reduce tariff
  • Boost global trade by 10%
  • Covers wide area such as agriculture
  • Overseeing GATT
  • Contact in global dispute
  • Introduced WTO to enforce GATT rules
  • Regional leaders fTZ’s (Economic Communities)

A group of nations organized to work towards a common goal in the regulation of international trade.

  • European Union- 1957

This is a political and economic union located primarily in Europe. So this union aims to ensure the free movement of people, goods, services, and capital within the international market.

  • Create single European market
  • Free flow of goods
  • Common currency- no tariff
  • 27 members account for over 20% of world trade
  • Provide competition to others
  • NAFTA – North American Free Trade Agency(1994)

Here no trade barriers or investment restrictions.

For example America, the USA

Economic Environment

Two factors

  • Country’s industrial structure
  • Product/service needs
  • Income level
  • Employment level

They have their requirements.

Four Types of Industrial Structures are,

  • Subsistence Economies – Most people rely on Agriculture.So, they consume a large portion of it.
  • Raw Material Exporting Economies – Rich in one or mode natural resources. Revenue is earned from export of resources. For example Middle-East countries.
  • Industrial Economies- Their 10% to 20% of a country’s economy consists of manufacturing. Such as Egypt , India, Brazil
  • Industrial Economies- Major exporters of manufactured goods/services/ investment funds. For example Japan and Korea.
  • Country’s Income Distribution

Subsistence economies – It has very low household income.

Industrial Economies- it has a mix of low, medium, high household income. Moreover, it is very attractive.

Other economies- very high low income.

Varies according to lifestyle – For example, younger generation’s lifestyle.

Cultural changes – East Germany vs West Germany