Stimulative Marketing

(The author is a Professor of Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted at m.bibhas@gmail.com)

Importance of international marketing revisited

It is beyond any shade of doubt that openness of economies has been gaining ground - de scribed as total foreign trade (exports plus imports), as a proportion of GDP, and as such the degree of openness of an economy plays the dominant role. Openness of the goods market refers to free exchange of commodities across national boundaries showing and indicating greater interaction with the global market. Side by side, openness of the factor market also deserves attention - labour and capital have more freedom to choose between domestic and foreign assets. In fact the MNCs are moving their operations with greater ease around the world in search of lower costs. For example, workers can move freely from one country of EU to another without facing much restrictions.

Reflecting the reality

International marketing has emerged as targeted area of highest priority among the progressive nations globally. International business expanded at a jet speed in the current decade - reasons mainly being rapid growth in technology, coming up of supportive institutions, openness of the different economies as well as increase in competition. Making full use of competitive advantage (a country has a comparative advantage over another if in producing a commodity it can do so at a relatively lower opportunity cost in terms of the foregone alternative commodities that could be produced), for example, in the arena of cheap labour, is a strong point on this score. The EU’s internal market is all about removing barriers to free movement of goods and services, people and capital. Organizations are also there to encourage the removal of barriers to free global trade.

It is a reality that today world trade has assumed an importance hitherto unknown to the global community. The modern marketer or manager cannot manage a business without looking at the global arena where economic transactions take place even if a marketer decides to confine his own business within the national borders. The fact now is: while in the past trade was undoubtedly conducted internationally, but never before did it have the broad and simultaneous impact on nations, firms and individuals that it has today. In over three decades, world trade zoomed. Clearly, the global nature of modern economics influences one’s decisions in any case.

What is more, trade growth on a global level has consistently been outperforming the growth of domestic economies in the past few decades, as a result of which many new countries and firms, especially in the emerging economies, have practically located it as highly desirable to become major participants in the international market. Global marketing (marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives as defined by the Oxford University Press) has thus emerged as number one - more so since the emergence of computers and internet has reduced the world to a global village where producers and customers can just log onto the internet to interact and exchange goods and services.

International business essentially covers international transaction of economic resources as well as international production of goods and services, and as such the broad forms of business internationalization cover trade, technical collaboration and investment. International marketing is simply the application of marketing principles to more than one country. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term.

International marketing and global marketing are interchangeable. That is to say, international marketing is a simple extension of exporting, whereby the marketing mix is simply adapted in some way to take into account differences in consumers and segments. It then follows that global marketing takes a more standardized approach to world markets and focuses upon sameness, in other words the similarities in consumers and segments.

We can remember Keegan who nicely stated that ‘the international market goes beyond the export marketer and becomes more involved in the marketing environment in the countries in which it is doing business’. True - international marketing is the performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit and international marketing is simply the application of marketing principles to more than one country.

Intensifying the Drive

The fact is that for both the developed as well as the developing world, marketing high has not only been considered from the point of view of being an integral component in the context of economic development, but as a rich gold-mine as well (earning foreign exchange which is described as claims on a country by another held in the form of a currency of that country). If one knows the technique to explore, then the resource is meant for one, of course, in a transparent way also. Reaping adequately from modernized, highly fluid and fast-changing global business/commercial environment does depend on its abundant natural/ human/ technological/ financial resources as well as crucially on the very ability to undertake expanded task of adapting to befitting marketing strategies.

What is more, the very management functions in the sphere of international business are now more complex - mainly visible in areas like accounting and finance, personnel, marketing and production. For example, multinational companies operate in many countries simultaneously and the different units are linked through common ownership responding to common strategy (although the degree of integration varies from case to case). During the last five decades, MNCs have registered a phenomenal growth. The trend is all set to continue provided the reputation risk factors (as normally experienced in countries like China) are adequately taken care of.

Naturally, the challenge is to create exportable surplus (trade surplus referring to an excess of export receipts over import payments as compared against trade deficit which means an excess of import expenditures over export receipts measured on the current account and also known as merchandize trade deficit) and at the same time producing goods/ rendering services at the least comparative cost - so as to get a strong foothold on the international market in the face of intense competition.

As such although both use all the basic marketing principles, international marketing is more challenging and requires more commitment from the company because of the uncertainty and differences in laws and regulations in the global market while domestic marketing deals only with the laws and regulations of one country.

Obvious enough: international marketing requires different strategies in the promotion of their products. As every country has its own laws on business and a company that aims at entering into business in another country must first know about them. Since consumer tastes and preferences may also differ so marketing strategies must be formulated to cater to the needs of different consumers.

International marketing deals with different types of consumers with different tastes. That is to say: international marketing calls for time and effort, not to mention it being very risky too in as much as international market is very uncertain and a company must always be ready for changes that may suddenly occur. And naturally, it requires a higher level of commitment to succeed in an international market. International marketing is more risky and more complex. Not only the existing challenges, but the nature, volume of challenges also galore indeed!

Grab the market, retain the same and move ahead in a fast and consistent manner and of course, keeping enough of attention on the domestic market it has already gained.