Page 323 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes International Marketing: Companies at this level have full commitment and involvement in
international marketing operations. They look for potential markets throughout the world and
sell goods and services in various countries. They often set up production facilities in foreign
countries and become international or multinational companies and depend on revenues from
these markets.
Global Marketing Operation: The firm is fully committed and involved in the international
marketing activities. While a multinational company views the world as a series of different
markets with unique characteristics, and develops separate strategies for each market, the global
company views the entire world, including the domestic country, as one big market for products
and services. The global company considers the common market needs and wants and attempts
to maximise returns through global standardisation of its business operations. The production
is planned to meet the demand of the total world market.

As a result of globalisation, firms involved in international marketing operations reflect the
dynamic patterns of competitiveness, interdependence of economies of counties, and ever
increasing number of competing businesses from developed and developing countries.
Self Assessment

State whether the following statements are true or false:
1. In infrequent international marketing, the company has no direct contact with foreign
consumers but their products reach them via indirect means.
2. A company engaged in regular international marketing begins to depend on profits from
foreign markets.
3. In global marketing, the production is planned to meet the demand of the total world
market.

14.2 International Market Entry Strategies

The approaches to international marketing include exporting, contracting, joint ventures, and
direct ownership.

14.2.1 Exporting

Exporting is selling products to one or more foreign countries and is an indispensable part of all
international marketing. Exporting is fairly popular with small companies. This involves little
risk or investment on the part of the exporting firm and represents the lowest level of involvement
in international marketing. Most companies involved in international marketing first start as
exporters and companies generally rely heavily upon home country production to supply goods
to foreign markets. Exporting companies sell their goods either directly to importers in foreign
markets or operate through export agents. Export merchants or agency performs most of the
marketing functions involved in selling in foreign markets.
According to Joseph V. McCabe, export agencies can assist firms with limited resources at low-
cost and help avoid significant investments. Also, exporting involves minimal time and effort
on the part of exporting producer. The drawback is that the exporter has little or no control on
exporting agency. Some firms export through company’s own sales branches located in foreign
markets. This enables them to control sales effort more completely and streamline distribution.
Sometimes a distinction is drawn between direct and indirect export. Direct export means that the
producer itself performs the tasks involved in exporting. Indirect export refers to selling company
products in its own country to another party operating as an exporter. The difference is in the
level of involvement in export operations and related costs, risks, and benefits.

316 LOVELY PROFESSIONAL UNIVERSITY