Introduction to International Marketing (IM 18 Aug 2020)

 Introduction 

Domestic marketing and International marketing are same when it comes to the fundamental principle of marketing. Marketing is an integral part of any business that refers to plans and policies adopted by any individual or organization to reach out to its potential customers. A web definition defines marketing as a process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. With the world shrinking at a fast pace, the boundaries between nations are melting and companies are now progressing from catering to local markets to reach out to customers in different parts of the world. Marketing is a play that is used to attract, satisfy and retain customers. Whether done at a local level or at the global level, the fundamental concepts of marketing remain the same.

Domestic Marketing

The marketing strategies that are employed to attract and influence customers within the political boundaries of a country are known as Domestic marketing. When a company caters only to local markets, even though it may be competing against foreign companies operating within the country, it is said to be involved in domestic marketing. The focus of companies is on the local customer and market only and no thought is given to overseas markets. All the product and services are produced keeping in mind local customers only.

International Marketing

When there are no boundaries for a company and it targets customers overseas or in another country, it is said to be engaged in international marketing. If we go by the definition of marketing given above, the process becomes multinational in this case. As such, and in a simplified way, it is nothing but application of marketing principles across countries. Here it is interesting to note that the techniques used in international marketing are primarily those of the home country or the country which has the headquarters of the company. In America and Europe, many experts believe international marketing to be similar to exporting. According to another definition, international marketing refers to business activities that direct the flow of goods and services of a company to consumers in more than one country for profit purposes only.

International Marketing

Definition: The International Marketing is the application of marketing principles to satisfy the varied needs and wants of different people residing across the national borders.

Simply, the International Marketing is to undertake the marketing activities in more than one nation. It is often called as Global Marketing, i.e. designing the marketing mix (viz. Product, price, place, promotion) worldwide and customizing it according to the preferences of different nation people.

International Marketing is defined as the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. The only difference between the definitions of domestic marketing and international marketing is that in the latter case, marketing activities take place in more than one country. No matter domestic or international the Marketing objective remains the same for marketers. The objective is to make profit by selling products or services in geographies which have a demand for them.

Definition of International Marketing

According to the American Marketing Association (AMA) "international marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives."

According to Cateora and Graham, “international marketing is the performance of business activities designed to plan, price, promote and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.”

According to Terpstra and Sorathy, “international marketing consists of finding and satisfying global customer needs better than the competition, both domestic and international and of coordinating marketing activities with in the constraints of the global environment.”

The foremost decision that any company has to make is whether to go international or not, the company may not want to globalize because of its huge market share in the domestic market and do not want to learn the new laws and rules of the international market.

But however, there are following reasons that attract the organization to be global:

§     Increased Economies of Scale

§     High-profit opportunities in the international market than the domestic market

§     Huge Market Share

§     Elongated life of the product

§     Untapped International Market

 

Difference between domestic marketing and international marketing

As explained earlier, both domestic as well as international marketing refer to the same marketing principles. However, there are glaring dissimilarities between the two.

Scope – The scope of domestic marketing is limited and will eventually dry up. On the other end, international marketing has endless opportunities and scope.

Benefits – As is obvious, the benefits in domestic marketing are less than in international marketing. Furthermore, there is an added incentive of foreign currency that is important from the point of view of the home country as well.

Sharing of technology – Domestic marketing is limited in the use of technology whereas international marketing allows use and sharing of latest technologies.

Political relations – Domestic marketing has nothing to do with political relations whereas international marketing leads to improvement in political relations between countries and also increased level of cooperation as a result.

Barriers – In domestic marketing there are no barriers but in international marketing there are many barriers such as cross cultural differences, language, currency, traditions and customs.

 

1. Domestic marketing is the production, promotion, distribution, and sale of goods and services in a local market while international market is the production, promotion, distribution, and sale of goods and services in a global market.
2. Domestic marketing is less risky and easier to conduct while international marketing is more risky and more complex.

3. Domestic marketing requires lesser financial resources while international marketing requires huge financial resources.

4. Domestic marketing deals with only a single market while international marketing deals with several different countries and markets.

5. Although both use all the basic marketing principles, international marketing is more challenging and requires more commitment from the company because of the uncertainty and differences in laws and regulations in the global market while domestic marketing deals only with the laws and regulations of one-country.

6. Domestic marketing deals only with one set of consumers while international marketing deals with different types of consumers with different tastes.

7. In domestic marketing, the company can have the same policies and strategies while international marketing requires different strategies in the promotion of their products.

8. The actions of creation or production, promotion, advertising, distribution, selling and customer satisfaction within one’s own country is known as Domestic marketing. International marketing is when marketing activities are undertaken at the international level.

9. In domestic marketing, there is less authority influence as compared to international marketing because the company has to contend with rules and regulations of numerous countries.

10. A small survey will demonstrate helpful to know the market conditions, whereas international marketing probes deep examine on the foreign market due to lack of knowledge, which is just the opposite in the case of domestic marketing.

11. In domestic marketing, business activities made in one country only whereas in international marketing, the business activities conducted in multiple countries.

12. The element of danger and challenges are comparatively less in the case of domestic marketing. The risk involved and difficulties in case of international marketing are very high due to some causes like sociology-cultural differences, exchange rates, setting an international price for the product and so on.

13. In domestic marketing, the executive’s faceless problem while dealing with the people because of a similar nature. However, concerning international marketing, it is quite difficult to deal with customers of different tastes, habits, preferences, segments, etc.

Difference between International Marketing and Domestic Marketing

Basis	Domestic Marketing	International Marketing
Definition	“It is concerned with the marketing practices within the researchers or Marketers home country (domestic market).”	“It is the performance of business activities designed to plan, price, promote and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit.”
Role of Politics	Political factors are of minor importance.	Political factors play a vital role.
Languages & Cultures	One language and culture.	Many languages and differences in cultures.
Financial Climate	Uniform financial climate.	Variety of financial climate.
Risk Involved	Normal risk is involved.	Higher risks of different nature are involved.
Control of Marketing Activities	Control of marketing activities is easy as compared to international activities.	Control of marketing activities is difficult because of different factors like – regional, cultural, political, etc.
Payment	Minimum payment and credit risks.	Considerable payment and credit risks.
Familiarity	Well familiarity with domestic market.	Lack of Familiarity with foreign markets, research becomes essential.
Knowledge Requirement	Management knowledge is required.	Specific management knowledge and competence is required.
Product Mix	Product mix is decided keeping in view the satisfaction and more sales.	Product mix is decided according to foreign market.
Product Planning and Development	Product planning and development according to domestic market.	Product planning and development according to foreign market.
Focus	Focus of interest is on general information.	Focus of interest is on strategic emphasis.
Market Aspect	Market is much more homogeneous and different segments.	Different or diverse markets fragmented in nature.