Page 15 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes
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Caution The underlying assumption of the polycentric approach is that there are so many
differences in cultural, economic, and marketing conditions in the world that it is impossible
and futile to attempt to transfer experience across national boundaries.
There is likelihood that geocentric company does not identify itself with any particular country.
Therefore, it is difficult to determine the firm’s home country except the location of its headquarter
and its corporate registration.

Self Assessment

Fill in the blanks:

10. As per…………………approach, every country has a unique business environment and
therefore should be dealt with differently.
11. European Union is based on ……………………..orientation.

12. Ethnocentric companies are………………..in their business approaches.

1.5 Benefits of International Marketing

The importance of international marketing is neither understood nor appreciated by the
consumers though they are carrying out international marketing daily. The Government officials
especially the bureaucrats seem always to point a negative aspect of international business.
Many of their charges on international marketing are imaginary than real. Hence, it is essential
that the benefits of international marketing be explicitly discussed.
These benefits are:

Endurance: Every country is not that fortunate as USA in terms of infrastructure, size,
resources and opportunities. Hence, they must trade with other countries to survive.
Similarly, every country is not fortunate as India, which has abundant natural resources
and treasure of biodiversity that it can survive within its resources even if there is a
resource crunch. Even then it has to carry out trading with other countries to get oil and
armaments for its own survival. Hongkong cannot survive without food and water from
China. The countries of Europe have had similar experience since most of the European
nations are relatively small in size. Without foreign market, European firms would not
have sufficient economies of scale to allow them to be competitive with US firms.

Progress of overseas markets: Developing countries, inspite of poor economy having
serious marketing problems are excellent markets. The US has found that India is the
biggest market in the world for consumer and engineering products. According to a
report prepared by US Congress by the US Trade Representative, Latin America and Asia
are experiencing the worst economic recession though they have the potential in the
world market. American market cannot ignore the vast potential of international market.
The world market is four times larger than US market. In the case of Amway Corp., a
privately held US manufacturer of cosmetics, soaps, and vitamins, Japan represents a
larger market than the US.
Sales promotion: Foreign markets constitute a large share of total business of many firms
that have cultivated market abroad. Many large US companies have done very well because
of their overseas customers. IBM and Compaq sell more computers abroad than at home.
The case of Coca-Cola clearly emphasizes the importance of overseas markets. Coca-cola

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