Q. What do you mean by International Marketing? How it differs from National Marketing?
OR
Write a detailed note on Domestic Marketing v/s International Marketing.
Ans. Meaning of International Marketing: Extension of marketing activities across the globe is known as global marketing. When a business unit carries on its marketing activities in more than one nation, then it is indulging in international marketing.
According to Harold Barson, “International marketing is the process of establishing multinational physical distribution channels and undertaking various activities for selling the products and services in different nations.”
According to Van Terpestra, “International marketing is the process of planning, designing, executing marketing strategies to achieve marketing objectives in the markets of other countries.”
Difference between Domestic Marketing and International Marketing
| Basis | Domestic Marketing | International Marketing |
|---|---|---|
| 1. Meaning | Products are sold within the boundaries of a country. So the geographic area of market is limited to the country. OR Marketing activities carried out within the boundaries of a country. |
Products are sold in different nations across the world. Goods of one country are marketed across the border of a nation. So, the goods are sold over a vast geographic area. OR Marketing activities carried out across national boundaries. |
| 2. Currency | There is no problem of arranging currency as payments are made in terms of domestic currency. | Different currencies are used in different countries. So, the problem of arranging foreign currency arises. Further, the exchange rate is always fluctuating which also adds to the problem of settling accounts. |
| 3. Economic Policies | Various economic policies of the government regulating business and trade are uniform within the country, like fiscal policy, monetary policy, industrial policy, licensing policy, etc. are uniform within the country. | Economic polices are usually different in various nations. The economic policy of one country are not applicable in the other nations. Show the international marketer has to understand economic policies of all the countries where it intends to extend its marketing activities. |
| 4. Socio-Cultural Environment | Within a nation, certain socio-cultural variables are homogeneous. So it is easy to analyse and understand socio-cultural environment in case of domestic marketing. | There may be more heterogeneity in socio-cultural environment among different nations. So, the analysis of socio-cultural environment of various nations is a difficult task. |
| 5. Magnitude of Risk | It has lesser risk as goods are sold within a country. It involves less travelling time, less risk of bad debts as it is easier to analyse credit-worthiness within a nation. It does not involve risk of fluctuations in foreign exchange rate. | It has more risk as goods are sold across the boundaries of the nation. It involves more travelling time, political risk, exchange rate risk, sea-route risk, more credit risk as it is difficult to analyse credit-worthiness of customers across the world. |
| 6. Legal and Political System | Within the country the larisrians regulating marketing activities are uniform, like Sale of Goods Act, Consumer Protection Act, Contract Act, Income Tax Act, etc. are uniform within India. Understanding these legislations within a nation is easier. | The legislations regulating international marketing are different in various nations. Further, international institutions like WTO, UNCTAD, IMF, etc, and Regional Economic Groups like SAARC, EU, SAFTA, NAFTA, etc. also affect various transactions of international marketing. So understanding legislative set up affecting international marketing is very complex. |
| 7. Mobility of Factors of Production | Factors of production like labour and capital have easy mobility within the boundaries of the nation. | Factors of production are less mobile across nations. In some cases, these may be totally immobile due to legal hindrance, long distance, language hurdle, patriotism, customs, traditions, etc. |
| 8. Tarrif and Non-Tariff Barriers | Within the nation, there are no tariff (import duty and export duty) and non-tariff barriers (quota, licence). So mobility of goods within the country from one state to other state is easy. | There are some tariff and non-tariff barriers on movement of goods from one country to other country. These barriers hinder the movement of goods from one nation to other nation. |
| 9. Procedural Formalities | It involves less documentation and procedural formalities. Executing the transactions related to domestic marketing is not very complex task. | It involves very complex procedural formalities and documentation. The services of specialised staff are required to comply with official formalities. It increases the transaction cost of international marketing. |
| 10. Language Problem | In domestic marketing, language barrier is not a serious problem. Although there may be various regional languages, but still because of common national language, the persons engaged in domestic marketing can communicate with each other. | Language problem is very serious across the nations. More than 10,000 languages are spoken in the world. Even in case of same language, the way of pronunciation is different in different nations. Services of translator/ interpreter are required. |
| 11. Competition | The level of competition is less as marketers of one nation only compete with each other. | The level of competition is very high as marketiers from all over the world compete with each other. |
| 12. Government Incentives | Generally, domestic traders get less incentives in comparison to exporters from government. | Government always gives more concessions and incentives to exporters so as to promote exports. |
| 13. Market Research | Conducting market research is easier and less expensive as market area is less. | It is very difficult, costly and time consuming to conduct market research across the world. Further, global marketing environment is more dynamic in comparison to domestic marketing environment. |
| 14. Measurement of Units and Packaging Norms | Packaging norms and measurement units are same within domestic economy. So, packaging and measuring do not pose any problem. | Packaging norms and measurement units may be different across the nations. For example, gold is weighed in tolas (10 grams) in India, while it is weighed in terms of ounce (28.349 grams) in some nations. |
| 15. Quality Standards | Quality standards and norms are same within a nation. For example, in India, for electric appliances, ISI mark reflects good quality of product. But ISI mark is of little significance in international marketing. | Quality standards and norms are different in different nations. So international marketer will have to comply with quality norms of all such nations where it intends to market its product. |
| 16. Market Characteristics | The characteristics of market viz. channels of distribution, advertising, sales promotion, personal selling, etc. are more or less similar within domestic market. | The characteristics of market viz. distribution network, advertising media, personal selling, tools of sales promotion, etc. across the world are significantly different. |
| 17. Transportation | Rail and Road transport modes are generally used as the distance is less. | Sea-transport is the most commonly used mode of transport as the distance is very long. For sea transport, container packaging is used. |
| 18. Chauvinism | Chauvinism (extreme love for one’s nation) supports purchase and sale of domestic goods. It promotes domestic marketing. | Chauvinism hinders the flow of goods across the world. For example, the slogan ‘Be Indian buy Indian’ creates hurdle for foreign marketers intending to sell goods in India. |
Q. What do you mean by International Marketing? How it differs from National Marketing?
OR
Write a detailed note on Domestic Marketing v/s International Marketing.
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