INTERNATIONAL MARKETING Vs DOMESTIC MARKETING

INTERNATIONAL MARKETING Vs DOMESTIC MARKETING

International marketing refers to the marketing activities a company carries out in markets outside its core constituency. This strategy uses an extension of the techniques used in the home country of a firm. International marketing is simply the application of marketing principles to more than one country. International marketing may differ from global marketing when one considers the number of countries involved. But usually the terms international marketing and global marketing are used interchangeably. 

According to Doole and Lowe “International Marketing is the performance of business activities that direct the flow of a company's goods and services to consumers or users in more than one nation for a profit.”

Doole and Lowe differentiated between international marketing (simple mix changes) and global marketing (more complex and extensive).

Cateora and Ghauri defined international marketing as the application of marketing orientation and marketing capabilities to international business. Trapestra and Sarthy has given a more comprehensive definition to understand international marketing as “International marketing consists of finding and satisfying global customer needs better than the competition, both domestic and international, and of coordinating marketing activities within the constraints of the global environment.”

Sovereign Political Nations:  sovereign political entity and goods have to move across national borders as a result they may have to face a number of restrictions. They may fall in any of they may face the problem of tariff and customs duties, quantitative restrictions, exchange controls and local taxes etc. Tariff and custom duties make the goods expensive but they do not intend to ban the entry of foreign goods completely. Quantitative restrictions are to restrict trade in the specific commodities subject to restrictions, the major objective being protection of domestic markets. In some cases though the entry of foreign goods is not banned, importers may be allowed only after arranging necessary foreign exchange for the payment of goods due to the existence of exchange controls. Local taxes are imposed to make foreign goods comparatively costlier than the domestic goods.  The major differences between international marketing and domestic marketing are created by the following points:

Different legal system: Each country has its own legal system and very often the legal systems operated by different countries differ from each other. A number of countries follow English common law while several important European countries follow civil law. The existence of different legal systems makes the task of businessmen more difficult as they are not sure as to which system will apply to their transaction. However, attempts are being made to bring about infirmity in some specific areas e.g. terms and uniform customers and practice on documentary credits.

Different Monetary System: Each country has its own monetary system and the exchange value of each country’s currency is different from that of the other country’s currency. Some countries also follow what are known as multiple exchange rates, each exchange rate applying to a certain set of transactions.

Lower mobility of factors of production: Factors of production are less mobile between nations than in the country itself. However due to the advent of air transport, the mobility of labour has increased. Due to the development of international banking and removal of restrictions on movement of capita, the mobility of capital has increased. Despite all this, the fact remains that the mobility of FOPs is much lower between different countries than in the country itself.

Differences in market characteristics: Each country is a separate market having its own demand patterns, channels of distribution, methods of promotion etc. These differences are accentuated due to the existence of government controls and regulations even in one single country there may be demand differences in different parts of the country.

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

Greater Degree of Risk: There is a greater degree of risk involved in international marketing than in domestic marketing due to larger volume of transactions involved longer time period involved in these transactions due to longer transit time and longer credit periods. Comparatively less knowledge about the parties’ reputations and credibility, exchange fluctuations risk and political risk are also involved.