International marketing part 1 - Factors that International Marketing make Different from Domestic Marketing

 Factors that International Marketing make Different from Domestic Marketing

As international marketing involves marketing across many countries, the differences in distance create many other differences such as time differences between domestic and international marketing. This session will explain the Basic differences one finds in overseas marketing compared with local marketing. A firm must determine whether domestic strategies will work and where and how these strategies will work and where and how those strategies may need to be changed.                                                                        The society and the culture in which a person is brought up play a significant role in the way he behaves. International marketing involves dealing with consumers and dealers in approximately 200 countries. In this session, we will learn about socio-cultural differences in overseas markets.                                                                                                                                           Firm offering products to a foreign country may be under the influence of political forces prevailing in that country. In this session, we will also learn about these political differences.                                                                                                                                    Differences in economic characteristics also have a greater bearing on the strategies that marketers adopt. Therefore, we will also have to look at the differences in economic characteristics.

Basic Differences in overseas markets

Following are the basic differences that one could observe in international marketing when compared to marketing in a domestic environment.

 

·         Sovereign political entities

Each country is a sovereign political entity and, therefore they impose several restrictions for

importing and exporting the goods and services to safeguard their national interest. So

those who are engaged in marketing in foreign countries must face the restrictions imposed

by the countries with which they are dealing.

 

·         Different legal systems

Different countries operate different legal systems, and they all differ from each other. The

existence of different kinds of legal systems makes the task of businessmen more difficult as they are

not comfortable with which system will apply to their transactions.

·         Different monetary systems

Each country has its own monetary system. Therefore, international transactions are based on

the prices of goods that are determined by the exchange rates. When the exchange rates

fluctuate the prices of the exports/imports also fluctuate involving risks for the marketer.

 

·         Lower mobility of factors of production

Mobility of factors of production is comparatively less within a country itself. However the

development and advancements in infrastructure have reduced these barriers to a certain extent.

 

·          Differences in market characteristics

What Makes International Marketing Different from Domestic Marketing In the domestic market we find many differences between and between various segments of customers. In the international context, each country constitutes segments with such differences.

 

·        Differences in procedures and documentation

The differences in the legal systems of countries result in each such country having a separate set of laws. Therefore, the same transaction may be handled in a completely different manner in two different countries. This may demand different procedures and documentation requirements for the imports and exports of goods and services. These differences themselves necessitate the firms to adopt different strategies in different markets.

 

Differences in Strategy with different Markets

When a firm enters the international markets to do its business, it is operating in more than the domestic environment. The complexity of the surrounding factors in international business expands with the number of markets in which a country operates. There are mainly three such environments (uncontrollable by the firm) the company must operate in. They are the domestic environment immediately surrounding the company, the environment in the importing country, and the conditions in the international environment. These differences in environments may create many differences in consumer behavior. This ultimately results in the same marketing mix being unable to be used in every market. Therefore, a firm engaged in international marketing must consider these factors in deciding the marketing mix for its target market. In this context, the marketer must identify the areas where a uniform marketing mix could be developed.