Reasons for Entering International markets1. GrowthWhen the domestic market potential saturates.

Firm enter international markets to explore opportunities their. Companies ha ing small home market like-!ingapore" #ongkong" $apan. Example - #ealthcare companies Cipla" %r. Redd&" Candilla 'harma entered into !outh (merica countries like )ra*il and (rgentania. +. 'rofita,ilit&'rice differentials and enhanced profits in international markets. Exemption from indirect taxes and duties" se eral incenti es ,& go ernment for export oriented production" marketing support schemes contri,ute to enhance the profita,ilit& of firms. Example- (pple earn -./ million 0.! dollar net profit from foreign land and -1/ m 0.! dollar from domestic land. -. (chie ing Economics of !cale1arge scale production capa,ilities in international markets. 1arge scale production" reduction in unit production cost. Example- world market is 2 times larger than 0.! market

2. Risk spread3 erseas markets pro ide an opportunit& to reduce their dependence on one market and spread the market risks. It reduces dependence on one market onl&.

4. 0ni5ueness of product or ser ice-

6he products with uni5ue attri,utes in order to meet competition in the o erseas markets and en7o& enormous opportunities in international markets. #er,al products" #andicraft" !oftware" ).'.3 sell at competiti e price pro ide Indian firms edge o er other countries. 8. 9ualit&9ualit& and cost are the two important determinants of demand : these can ,etter achie ed in glo,al firm. International marketing strategies can generate greater re enue and greater operating margins. Example- ;issan" Caterpillar" <atsushita etc. =. World Economic 6rendsFast growth of de eloping economies has created new marketing opportunities and has pro ided a ma7or incenti e for companies to expand glo,all&.

>. 1.'.G mo ement1i,erali*ation" pri ati*ation and glo,ali*ation mo ement is opening up closed markets and has pro ided opportunities and threats. Example- 'ri ati*ation of telephone s&stem. .. 1e erage 1e erage is an ad antage that a compan& en7o&s that conducts ,usiness in more than one countr&. Example -Experience transfers" scale economics" resource utili*ation" glo,al strateg&.

<anagement 3rientations? E'RG Concept

1. ETHNOCENTRIC ORIENTATIONIt assumes home country superior to the rest of world. Opportunities outside the home country are i nored. It has a !elief that the same mar"etin strate y can wor" in domestic and international mar"et. En#ironmental differences !etween mar"ets are i nored. E$ample - Indian products sold outside as %al war- "urta &%aris& 'osa mi$& Idli mi$& %am!har mi$ etc. (. )O*+CENTRIC ORIENTATIONIt is a stron orientation to the host country. It emphasi,es differences !etween mar"ets. Each su!sidiary de#elops its own uni-ue !usiness and mar"etin strate ies to succeed. The mar"etin mi$ decisions& product de#elopment strate ies& pricin strate ies are different for different countries. E$ample- Citicorp.s financial ser#ices /. RE0IOCENTRIC ORIENTATION1irm treats a re ion as a uniform mar"et se ment and adapts a similar mar"etin strate y within the re ion. E$ample- 2c 'onald.s strate y to not to ser#e por" and to slau hter animals throu h the Halal process is followed in 2iddle East or 2uslim dominated countries. 3. 0EOCENTRIC ORIENTATIONIt considers the whole world rather than any particular country as the tar et mar"et. It identifies similarities !etween #arious mar"ets and formulates a uniform mar"etin strate y.

International 4usiness

'efine International 4usiness. E$plain the importance 5 %cope of International 4usiness. Accordin to Cateora6 7 International 4usiness is the performance of !usiness acti#ities That directs the flow of oods and ser#ices to consumers or users in more than one nati on. Accordin to Cateora 50raham67It is the performance of !usiness acti#ities desi ned to pl an& price& and promote 5direct the flow of a company.s oods 5 ser#ices to consumers or users in more than one nation for a profit Accordin to 8otler6 7 0lo!al 2ar"etin is concerned with inte ratin or standardi,in ma r"etin actions across a num!er of eo raphic mar"ets.

Nature of International 4usiness 1. 2ultinational 4usiness 92ar"etin : 2ana ement (. Controlla!le and uncontrolla!le factors67for international mar"et uncertainty is create d !y uncontrolla!le factors. /. 4roader Competence 3. Intense Competition ;. Credit Oriented <. )olitical ris" =. Comprehensi#e ris" e$port 5 Import )ayments >.Chan es in fashion 5 %tyles ?. %udden @ar 1A. Rules and Re ulations 11.Chan es in 0o#ernment 1(. )olitical Nature

Importance and 4enefits of International 4usiness

1: %ur#i#al (: 0rowth of O#erseas 2ar"ets /: %ales 5 )rofits 3: 'i#ersification ;: Inflation 5 )rice 2oderation <: Employment =: %tandard of *i#in >: Bnderstandin of 2ar"etin )rocess %cope of International 4usiness 1. E$portin 9%ellin to forei n mar"ets: (. Importin 94uyin from a!road: /. Re-e$portin 9Importin semi-finished oods 5 E$portin final oods: 3. 2ana ement of International Operations 3.1: Operatin & 2ar"etin 5 %ales 1acilities a!road 3.(: Esta!lishin )roduction or assem!ly facilities in forei n countries. 3./: 2onitorin Operation of mar"etin practices of multinationals 5 other a encies. Characteristics of International 4usiness6a: *ar e %cale Operations !: 'ominance of 2ultinationals c: International Restrictions 5 Tradin 4loc"s d: Need of 2ar"etin Research e: Importance or Ad#anced Technolo y f: 8eep and acute competition : Need for lon term )lannin h: 'e#elops cultural relations 5 maintains world peace

6he terms in international )usiness@aA %omestic <arketing

,A International <arketing cA Glo,al <arketing dA Foreign <arketing

%omestic <arketing@-It is concerned with the marketing practices within the researchers or <arketers home countr& Bdomestic marketA. International <arketing@ - It focuses on the firm le el marketing practices across the ,roader including market" identification :targeting" Entr& mode selection : marketing mix : !trategic decisions. Glo,al <arketing@ - It treats the whole world as a single market : standardi*es the marketing mix of companies. Eg- <cC %onald ha e designed a restaurant an&where in the world. It has customi*ed its menu offering according to local customers.

Foreign- <arketing@ - <arketing methods used outside the home market. It encompasses the domestic operations with a foreign countr&. Eg- ( 0.!. Compan& considers marketing in India as foreign marketing.

%ifferences ,etween %omestic 6rade : International 6rade

6he following are the ma7or differences ,etween domestic trade and international trade@1. <o,ilit& in Factor 3f 'roduction D %omestic 6rade@ Free to mo e around factors of production like land" la,or" capital and la,or capital and entrepreneurship from one state to another within the same countr& D International 6rade@ 9uite restricted

+. <o ement 3f Goods D %omestic trade@ easier to mo e goods without much restrictions. <a&,e need to pa& sales tax"etc D International 6rade@ Restricted due to complicated custom procedures and trade ,arriers like tariff" 5uotas or em,argo

-. 0sage of different currencies D %omestic trade@ same t&pe of currenc& used D International trade@ different countries used different currencies

2. )roader markets D %omestic trade@ limited market due to limits in population" etc D International trade@ )roader markets

4. 1anguage (nd Cultural )arriers D %omestic trade@ speak same language and practice same culture D International trade@ Communication challenges due to language and cultural ,arriers