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Framework of International Marketing DEFINITION OF INTERNATIONAL MARKETING: Kotler defines marketing as 'human activity directed at satisfying needs and wants through exchange process.' International marketing can be defined as "marketing carried on across national boundaries". International marketing has also been defined as ' the performance of business activities that direct the flow of goods and services to consumers or users in more than in one nation'. It is different from domestic marketing in as much as the exchange takes place beyond the frontiers, thereby involving different markets and consumers who might have different needs, wants and behavioral attributes. Scope of International Marketing: Though international marketing is in essence export marketing, it has a broader connotation in marketing literature. It also means entry into international markets by: Opening a branch/ subsidiary abroad for processing, packaging, assembly or even complete manufacturing through direct investment. Negotiating licensing/ franching arrangements whereby foreign enterprises are granted the right to use the exporting company's know-how's, viz., patents, processes or trademarks with or without financial investment. Establishing joint ventures in foreign countries for manufacturing and or marketing Offering consultancy services and undertaking turnkey projects broad. Depending upon the degree of firms involvement, there may be several variations of these arrangements. International Marketing vs. Domestic Marketing: There are a number of similarities and differences between international and domestic marketing. 1. Both in domestic marketing and international marketing success depend upon satisfying the basic requirements of consumers. This necessarily involves finding out what the buyers want and meeting their needs accordingly.

2. It is necessary to build goodwill both in the domestic market and international market. If a firm is able to develop goodwill of consumers or customers, its tasks will be simpler than the one, which has not been able to do so. 3. Research and development for product development and modification is necessary both for international marketing and domestic marketing. However, there are some salient features of difference between international marketing and domestic marketing. They are as follows: 1. Sovereign Political Entities: Each country has is a sovereign political entity and goods and services had to move across national boundaries. S a result, they may have to face a number of restrictions. This my all in any of the following categories; Tariffs and customs duties Quantitative restrictions Exchange controls Local Taxes. 2. Different Legal Systems: Each country has its own legal system and it differs from country to country. The existence of different legal systems makes the task of businessmen more difficult as they are not sure as to which particular system will apply to their transactions. In the case of domestic marketing the buyers are aware of the legal systems in their country. 3. Cultural Differences: In domestic marketing there is only one nation, same language and culture where as at international marketing many languages and different cultures. 4. Different Monetary Systems: Each country has its own monetary system and the exchange value of each country's currency is different from that of the other. The exchange rates between currencies fluctuate every day. In case of domestic marketing there is only one currency prevailing in the country. 5. Differences in the Marketing infrastructure: The availability of the marketing facilities available in different countries may vary widely. For example, an advertisement medium very effective in one market may not be available or may be under developed in another market. 6. Trade Restrictions: Trade restrictions, particularly import controls are a very important problem which an international marketer faces.

7. Transport Cost: In International trade, transport cost is a major marketing expense where as in domestic trade transport cost influences only to certain extent. 8. Procedures and Documentations: Each country has its own procedures and documentary requirements and traders have to comply with these regulations if they want to export or import goods from foreign countries. 9. Degree of Risk: There is a greater degree of risk involved in international marketing than in domestic marketing due to Large volume of transactions Higher value of transaction Longer time period More time of transit Longer credit period Comparatively less knowledge Exchange fluctuations.

10. Stability in Business Environment: In domestic marketing there is relatively stable business environment. At international marketing multiple environments, many of which are likely instable. TRANSITION FROM DOMESTIC TO INTERNATIONAL MARKET The Decision to enter foreign markets must be based on strong economic factors. Temperamental decision to export is transient in character and totally unsuitable for export marketing. Success in exporting requires total involvement and determination, which can come only out of basic economic necessity as perceived by the corporate unit. They grouped as Preexport behaviour and Motivation to Export. Pre-Export Behaviour: Every firm at some point of time starts as a non-exporter. The point to be studied is what made some of these firms get involved in export business. This must give a clue to the question as to whether a present non-exporter will become an exporter and if so why and

when. The factors, which influence a non-exporting firm's decision to go in for export business, can be classified under the following categories: (a) Firm characteristics: Firm characteristics include product characteristics; size and growth of the domestic market, optimum scale of production, and potential export markets. If the firm is manufacturing a product, which is internationally marketable, and the present and future market prospects in the domestic market are not much encouraging, the motivation of the firm to get involved in export business will be considerable. (b) Perceived External Export Stimuli: This will include fortuitous order, market opportunity and government's stimulation in the form of incentives and assistance. (c) Perceived Internal Export Stimuli: This refer to the management's expectations about the effects of exports on the firm's business. This covers the level of capacity utilization, the higher level of profits and the growth objectives of the firm. (d) Level of Organizational commitment: The decision makers must agree on the level of commitment. This is crucial because it will determine whether adequate resources will be made available for embarking on international marketing. Resources will be required for hiring new staff specialized in international marketing, hiring of consultants for carrying out overseas market potential studies etc., Motivation to Export: (Economic reasons) There are some basic economic reasons which might influence a firm decision regarding export business: These are under: Relative Profitability: The rate of profit to be earned from export business may be higher than the corresponding rate on the domestic sales. Insufficiency of Domestic Demand: The level of domestic demand may be insufficient for utilizing the installed capacity in full. Export business offers a suitable mechanism for utilizing the unused capacity. This will reduce costs and improve the overall profitability of the firm. Recession in the domestic market often serves as a stimulus to export ventures. Reducing business risks: When a firm is selling in a number of markets, the downward fluctuations in sales in one market, which may be the domestic market, may be fully or

partly counter balanced by a rise in the sales in other markets. Secondly, geographic diversification also provides the momentum to growth in as much as a single or few markets will have only limited absortive capacity. Legal restrictions: Governments may impose certain restrictions on further growth and capacity expansion of some firms within the domestic market in order to achieve certain social objectives. But there may not be any such restrictions, if the additional capacity is utilized for exports. Then the firm may be tempted to export its products abroad. Obtaining imported inputs: Nations have to pay for imports of materials, technology or processes not available within their national boundaries. Governments, therefore, may be compelled to impose export obligations on the firms, especially those in need of imported inputs. In other words, in order to import, the firms will have to export. Social responsibility: Sometimes businessmen themselves feel a sense of responsibility and contribute towards the national exchequer by increasing their exports. They also build up their image in domestic marketing by their export activities. They also look at exporting to attain status and prestige. Increased productivity: Increased productivity is necessary for ultimate survival of a firm. This will lead the firm to increase production and then move to export business. To meet the increased costs of Research and Development, larger markets become a necessity and exports become unavoidable. Technological improvement: Entry to export market may enable a firm to pick up new produce ideas and to add to product line, improve its product, reduce costs and discover new applications for its product.