What is
Marketing?
Marketing is defined as a
process by which the producer and final consumer are linked together. Thus the above definition of Marketing has
got two points.
1. Producer
2. Consumer
Producer Consumer
Marketing
The producer manufactures a
product to satisfy specific needs/wants of a consumer. The process by which these products are made
to reach the consumer is called as Marketing.
Marketing deals with markets. A Market is a place where buyers and sellers
meet. The following are the activities
that usually takes place during marketing.
1. Merchandising: Buying and selling
2. Physical
Distribution: Transpiration and warehousing (warehouse:
Building for storing goods before distribution to retailers. A store house).
3. Facilitation: Financing,
risk bearing, standardization, sales promotion, Marketing Research etc.
What is international Marketing?
Marketing activities carried across
national boundaries is called as International Marketing. It is also defined as flow of goods and
services across the boundaries from one country to another’s.
In other words, all the marketing
activities such as buying, selling ,transportation warehousing, financing, risk
bearing, pricing, standardization, advertising and sales promotion when
performed in foreign markets across national border is called as international
marketing. Hence international marketing
can be country to another.
Some anthers observe that
international marketing has got two main domains namely
1. Foreign Marketing: Marketing
with in foreign countries.
2. Global Marketing:
Co- coordinating marketing in multiple markets, in the face of global
Competition.
Hence international Marketing deals
with globalization of business.
International
trade, International Marketing and International Business
Before we proceed
further it is very essential to know the shades of difference of meaning between
the terms: International trade,
International Marketing and International Business.
No two nations are
alike. (For. eg) Tea plantation is very
abundant in Sri Lanka. Wood is very famous in Malaysia. These two items namely tea and wood are
scarce in Maldives. But on the other
hand, Maldives is very famous for Tourism and Fisheries. This difference of
scarcity between nations lays the foundation for international trade. This scarcity between Nations/Countries forms
the driving force for international trade between nations. Hence international trade includes import and
export of goods across countries.
The Marketing process which
takes place during the international trade between two nations is called as
International Marketing.
International
business includes any type of business activity that crosses
international borders. Thus
international business is broader than international trade and international
Marketing.
The nature of Global Marketing:
The world today has become a
global village. This is because of the
availability of the internet facilities.
The flow of information between the countries / continents is not only
easy but also very fast. This fast flow
of information across the globe has led to the shrinkage of world space. The world has now become a global
village. This phenomenon is called as globalization.
Because of the internet
facilities, consumers across the world are increasingly becoming global in
their shopping.
A patient for example
in Maldives can log on to the internet and get details about the disease,
treatment, hospitals and doctors known for the treatment of that particular
disease, the cost in different hospitals in India. Hence the consumer is not only aware of what
is happening in the domestic market but he is also well aware of what is
happening in international market. In
short, consumer has become global.
This Globalization has made
business environment increasingly global even for domestic firms. The Mayor
competition which many firms encounter in the home market now, for instance, is
from foreign firms - Multinational Companies (MNC’S).
Faced with the growing global
Competition a number of companies have bought about highly commendable
improvements in their operations and marketing strategies. In other words, their operations and
marketing strategies have also come very close to achieving global
standards. This is one of the major
advantage brought about by - Globalization - quantity improvement in business
procedures done domestically.
Special
problems in International business (Or) Important features of International
business
Some people talk about differences between domestic
marketing and international marketing.
But the fact is, there is no actual difference between these two. The principles of marketing does not
change. It is universal. What are referred to by some people as
differences are actually special problems or features of international
marketing.
What makes international business
strategy different from the domestic is differences in business
environment. The important special
problems encountered in international business are as follows.
1. Political and legal
differences: The political and legal environment of
foreign markets is different from that of domestic market. The best example for this are MNC’S. They do business in many countries. Hence they encounter different political and
legal systems in each country. It does not
remain same or constant throughout the world.
This may pose serious problem to international business.
2. Cultural differences: Let us
imagine a company doing export and import business between Maldives and
India. Maldives is a Muslim country
where as India is a country that follows Hinduism. The culture experienced in both the countries
is entirely different and this may pose a great problem for the smooth
functioning of business.
3. Differences in
currency unit: The currency Unit varies from nation to
nation. Let us imagine a MNC doing
business between two countries namely Maldives and USA. In Maldives the currency Unit is Rufiyaa
where as in USA it is dollars. The unit
of this currency also greatly varies 12.85 Moldavian Rufiyaa is equivalent to
us dollar. This difference of currency Unit
creates a great problem for the functioning of business.
4. Difference of language: An
international Company often encounters problems arising out of differences in
language. In Maldives people speak Dhivehi,
where as in USA it is English. Hence
there is a problem of understanding the language. Many MNC companies which function in various
regions of the world have effectively solved this problem by appointing a
linguist in their organisation. A
linguist is a person who is skilled in foreign languages.
5. Differences in the
Marketing Infrastructure: The nature of marketing facilities available
in different countries may vary greatly.
(For eg.) An advertising medium that is very effective in one market may
not be equally effective in another market.
The best example for this Maldives and India. In India, print media (Newspaper) is a very
effective way of advertising. But the
same advertising media if followed in Maldives would prove disastrous. In Maldives most of the people watch TVM
channel rather than read newspaper.
Hence using television in ad campaigns is more effective in Maldives
rather than print media.
6. Trade and investment
restrictions: Trade and investment restrictions are very
important problems in international business.
(For eg.) Use of alcoholic drinks in Maldives is prohibited. Hence
liquor trade with Maldives may not be very profitable. On the other hand Maldivians use lot of
perfume. Hence perfume trade in Maldives
can be very profitable business.
7. High Cost of
distance: When the markets are a away by distance, the
transport cost becomes high and the time required for effecting delivery tends
to become larger.
8. Differences in
business practices: Trade and other business practices and
customs may differ between markets.
