International Business Definition
Business activities that are planned to produce goods or
services, set their prices, and promote them to the consumers in more than one
country for a profit. The sole difference between domestic and foreign
marketing is only "in more than one country".
Marketing ideas,
procedures, and ideologies are commonly applicable all over the world and
similarly, the marketer's task is also the same whether doing business in
Dimebox, Texas, or Dar-es-Salaam, Tanzania. The business goal is to make profit by promoting, pricing and distributing products or services for
which there is a marketplace.
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| International Marketing need effective strategies for promoting products or brands in foreign market place. (Photo by Gerd Altmann) |
International Marketing Strategies and Benefits
As we discussed above, International Marketing is the same as
marketing our goods or services, ideas, procedures, and ideologies in a
Domestic country but the only difference is cultural change. Similarly, marketer's task is also same all over the world. The main object is to make the
profit through these activities. Like as Domestic Marketing, International
marketing also influences the consumers or prospect in many ways. Although,
some Government officials and other observers point to the negative aspects of
international business and devalued its importance. However, due to its
superlative benefits and excellent Global Marketing Strategies, it has become a popular business now. Here we
discuss, some benefits and strategies for international marketing:
Survival and growth
The companies who want to survive in the industry as well as in
foreign markets, they need to grow their business or marketing activities. As
you know, all the companies are not as privileged in their home countries as in
the USA due to a rich market size, resources, and opportunities. These
companies must trade with others companies in foreign markets to survive and
grow faster in the industry. As most countries are comparatively small in size,
thus the companies doing business in these countries must enter foreign markets
to achieve economies of scale to become competitive as the American companies.
Sales and Profit Margin
The international markets establish a great share of the total
business of many companies that have wisely sophisticated markets abroad. To
know the importance of international marketing, you can see the case of
Coca-Cola as the company is gaining more than 80% of its operating
profit from foreign sales account. The Coca-Cola sells one gallon of soda in
Japan and earns 37 cents and with a mere difference
of 7 cents per gallon in the USA. The Coca-Cola adds
about $350 million in its operating income from the Japanese market
and $324 million from USA market. The Japanese market is the most
profitable market of the company.
Diversification
The demand for many products is changed due to some cyclical
factors (recession) or some seasonal factors (climate) resulting in sales
fluctuations, which can often be substantial enough to cause redundancies of
personnel. The foreign market is an alternative target place to diversify the
company’s risk as a solution to changing demands. For example, the cold weather
may reduce the consumption of soft drink in one country but not in all
countries at the same time.
Employment
The international marketing increases the employment opportunities
for domestic as well as foreign workers. The trade restrictions and high
tariffs instigated by 1930 Smoot-Hawley Bill, had enlarged the
average tariff rates to ascent 60%, which significantly contributed
towards huge depression and widespread unemployment. However, on the other
hand, a free trade activity increases the world’s GDP and employment
opportunities for all the nations.
Standard of living
International marketing improves the standard of living of the
people. Without foreign trade, the scarcities of products may force people to
pay more for less, and the life would be more difficult in many countries due
to some strategic metals requirement that must be imported. International marketing
makes it easier for the companies to specify and gain access to raw materials.
The World Bank’s study shows that those developing countries which chose their
growth and prosperity through trade activities developed faster than those
which chose more restrictive trade regimes.
Globalization of U.S. Business
The current interest in foreign marketing can be described by
altering the competitive structures coupled with shifts in demand
characteristics in markets all over the world. With the growing international
markets, the companies find that they are inevitably tangled with foreign
customers, competitors, and suppliers even within their own countries. They
face rivalry on all fronts from domestic firms and foreign firms. A significant
portion of all CD players, computers, apparel, and dinnerware sold in the
United States is foreign made. Sony, Norelco, Toyota, Samsung, and Nescafe are
familiar brands in the United States, and for U.S. industry they are difficult
rivals in a competitive struggle for U.S. and world markets.
Many acquainted U.S. companies are now foreign controlled. When
you visit at a 7-Eleven convenience store or buy Firestone tires, you are
purchasing directly from a Japanese company. Some famed brands no longer
possessed by U.S. firms are Carnation (Swiss), Chrysler (German), and the
all-American Smith and Wesson handgun that grab the U.S. West, which is
sponsored by a British company. The last U.S. owned firm to produce TV sets was
Zenith, but even it was acquired by LG Electronics, Inc. of South Korea, which
produces Goldstar TVs and other products. Pearl Vision, Universal Studios, and
much more are currently owned and controlled by the international companies.
