International Marketing and Strategic orientation
International marketing is the process of exchange of goods and services in the international environment or applying the marketing principles to fulfill the individual and organizational objectives in more than one country.
Globalization, technological advancements, and availability of internet create an opportunity to enter into the international markets to maximize the profits and organization’s reputation. Though the marketing principles and strategies may be similar, international marketing is not that much easy as domestic marketing. It involves uncertainty, risk, challenges and severe competition, so the marketers should analyze the international environment before taking key business decisions.
Economic development, the disappearance of communication barriers, advancement in the international trade and technology facilitates business across the national borders. Opportunities from the external business environment and changing needs, tastes and preferences of the customers make possible to introduce new and innovative products by overcoming all the barriers of international marketing.
International marketing does not mean only to export the domestic products; it is the process of identifying the customer’s needs, existed technology in the international environment, socio-cultural variations of the particular country where the marketers want to launch their products, developing marketing mix and various strategies suitable to different countries.
It is the process of extending the organization’s local marketing strategies through the identification of target markets and implementing positioning strategies to get success in the international markets.
Controllable and uncontrollable factors of international markets
Handling business operations and implementing strategic marketing decisions in the international environment involves both controllable and uncontrollable factors. These factors are the combination of strengths, weaknesses, opportunities and threats. Marketing decisions and marketing mix such as price, place, product and promotion are controllable factors, whereas competition in the international markets, technological advancements, differences in the economy, cultural variations, influence of political and legal environments, variations in the environmental conditions, differences in the geographical conditions, infrastructure and structure of distribution are considered as uncontrollable factors. Marketers cannot influence or control the uncontrollable elements. Adjusting, adopting and modifying according to the situations in the international environment can lead an organization towards success.
So the successful strategy of one country may not get success in the multinational environment because of these uncontrollable elements. In order to reduce the risk and uncertainty organizations follow various approaches to enter into the foreign business environment. In this case, exports can play an important role in the reduction of risk. International joint ventures may also reduce the risk to an extent by doing combined efforts with other businesses to get a mutual benefit.
Manufacturing products in the foreign countries with direct investment involve risk and challenges at high extent. Such companies have to take decisions and implement in the foreign countries with their own risk. Proper market research, identification of target markets, suitable positioning strategies, knowledge of sociocultural variations in the international environments, and strategic decisions can reduce the risk and uncertainty.
There are various types of foreign marketing approaches depending on the factors such as rate in the domestic countries, product’s demand, foreign agents approach, contacts of foreign managers, subsidiaries in various countries, suitability of the products to the foreign environment, production capacity to meet the requirement of the foreign markets, suitability of products to the customer’s needs and preferences, these approaches are non-active direct foreign marketing, infrequent foreign marketing, regular foreign marketing, international marketing or multinational marketing and global marketing.
Depending on the nature of business operations and producing products according to the suitability of the foreign environment and customers, organizations perform business with different orientations.
It involves the extension of the various domestic products to the suitable foreign markets or in order to dispose of the excess domestic production. Here the prime focus of organizations is to develop products fit for the domestic market environment and strategies are also developed according to the existed local market conditions. Ethnocentric orientation involves producing products in order to satisfy the home country customers. The marketing mix is also developed on the basis of suitability of the home country but they do international business for the purpose of creating extra business and to dispose of the surplus domestic production.
The polycentric orientation of international marketing involves producing different products in order to satisfy the customers of different countries. Organizations give freedom to the subsidiaries to take marketing mix decisions suitable for that particular market conditions. So that subsidiary takes decisions and operates independently with unique marketing strategies.
Regio or Geocentric
In geocentric orientation, marketers consider the entire world as a single market. Nowadays major companies are adopting this method to get the brand image and to occupy the major share of the world’s market. Here they apply standardized marketing mix strategies across the national borders. Though the marketers consider the entire world as a single market, they take launching decisions with proper analysis of the cost of living and culture variation.
Marketing mix and international markets
Marketing mix involves 4p’s i.e. product, price, place, and promotion. In the international level organizations develop marketing strategies suitable for different foreign market by making changes in the marketing mix elements.
While taking product decisions for international markets organizations follow various orientations such as ethnocentric, polycentric and geocentric. In the case of ethnocentric orientation, organizations produce products with a complete domestic focus, whereas in geocentric orientation products are designed and produced by treating the entire world as a single market. Luxury products, innovative products, and technologically advanced products are marketed under geocentric orientation.
Any organization fixes prices to get profit margin. In international marketing, marketers take unique marketing decisions suitable to the foreign market conditions. Here different variables affect the pricing decisions of the marketers such as the cost of production, transportation costs, tax and tariffs, prices of related products or competitor’s products and cost of product development. So the marketers take strategic pricing decisions by considering various factors.
Successful distribution of products to the end users is the challenge in the foreign markets. Many organizations are selling products through online for creating ease and profitable. Here also identifying target markets and offering products to the end users through various distribution channels varies with the lifestyle of the customers from one country to another country.
Product promotion in the domestic markets is more or less same, but the most important thing to know is delivering suitable promotional strategies in order to attract the foreign markets. Marketers should know the values, beliefs, perceptions, legal and socio-cultural aspects of the different foreign environments. So while making efforts to creating product awareness, generating sales and maximizing brand loyalty marketers have to identify the target customers, and deliver the message to attract the foreign customers.
Advantages of knowing the concept international marketing
- knowing the concept international marketing helps in formulating and implementing various strategies suitable to the different environmental conditions.
- Makes possible to produce innovative products suitable for the foreign markets.
- Market research makes possible to know the values, beliefs, traditions, and culture of the different countries
- Helps in reducing the unnecessary efforts, time and cost
- Knowing about foreign markets enable the marketers to take the strategic pricing decisions.
- Makes easy to identify the target customers of the foreign markets.
- Easy to deliver the products by using possible distribution channels.
- Creates a scope to maximize brand loyalty in the international markets.
- Helps to take marketing mix decisions suitable to the various foreign markets.
- Makes easy to implement strategies effectively in the international markets.
- Maximizes economic development and standard of living.