Page 8 - DMGT547_INTERNATIONAL_MARKETING

Unit 1: Basics of International Marketing

Notes

Notes It is obvious that the difference between domestic and international marketing is
essentially environmental and cultural in character. And cultural diversity continues
despite the world getting closer.

Modern communication and transport systems have no doubt brought the nations of the world
closer, but the cultural differences continue. So, understanding the cultural variances and nuances,
and responding to them in a manner and style that is appealing to the foreign buyer becomes the
crucial task. It is not enough if the international marketer communicates in the buyer’s language.
Language is only one aspect of culture. A national history, its social and religious heritage, the
value system of its people, the code of conduct handed down through generations all these are
components of a national culture. Moreover culture is not a static entity. It undergoes a continuous
evolution. So, sizing up the cultural dynamics of the different markets of the world is quite a
difficult exercise. And that explains the difficulty of international marketing.

1.1.2 Main Functions in International Marketing

Let us briefly touch upon the main functions involved in International marketing. They are:
Choosing the basic route for global marketing
Market selection and product selection
Selection of distribution channels

Developing pricing strategy
International marketing communication
Mastering the procedural complexities
Organizational adaptations
Handling business ethics

Choosing the Basic Route

A properly conceived entry strategy is the starting point. There are five basic routes to enter a
foreign market:

Exports
Licensing of technology and know how
Multinational trading
Joint venture
Full-fledged global operation
We shall mention the salient features of each of these routes.
Export is the primary route for entry into the global markets. Many firms stop with this step in
their international marketing endeavour. Some firms, however, go beyond; they license their
technology and know how to foreign firms who may be interested in importing it into their
land. In multinational trading, the companies source products from any part of the world and
cart it to any place where demand for the product exists. Setting up joint ventures in foreign
countries is another effective strategy for gaining entry into world markets. Through the joint
ventures, the firm literally gets close to the foreign markets. Through joint ventures, a firm
becomes a native in foreign lands and that is the surest way to the birth of a full-fledged MNCS.

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