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International marketing (IM) refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an extension of the techniques used in the home country of a firm. It refers to the firm-level marketing practices across the border including market identification and targeting, entry mode selection, marketing mix, and strategic decisions to compete in international markets. According to the American Marketing Association

(AMA) "International Marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives

International Marketing is Marketing across the national frontiers. It refers to the strategy, process and implementation of the marketing activities in the international arena.

International marketing may be defined as an activity related to the sale of goods and services of one country in other, subject to the rules and regulation framed by the countries concerned. In simple words it refers to the marketing activities and operations among the countries of the world following different political and economic systems. International Marketing is marketing abroad beyond the political boundaries of the country. International Marketing brings countries closer due to economic needs and facilitates understanding and co-operation among them; it is essentially a constructive economic and commercial activity which is useful and beneficial to all participating countries. International marketing act as an instrument of global growth and development. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term. The intersection is the result of the process of internationalization. Many American and European authors see international marketing as a simple extension of exporting, whereby the marketing mix 4P's 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.

Scope of International Marketing

Though international marketing is in essence export marketing, it has a broader connotation in marketing literature.

Opening a branch / subsidiary abroad for processing, packaging, assembly or even complete manufacturing

through direct investment.

Negotiating licensing / franchising arrangements whereby foreign enterprises are granted the right to use the exporting company know how, viz., patents processes or trade marks, with or without financial investment.








manufacturing and/or marketing.

Offering consultancy services and undertaking turnkey projects abroad.

Important for export production.

Characteristics of International Marketing

Large scale operations Dominance of Multi Nationals Develop cultural relation and maintain world peace Characterist ics of internationa l marketing

Internationa l restriction and trading blocs

Need for long term planning

Need of marketing research

Advance technology

Large scale operations

International Marketing transaction is always conducted in large and bulky quantity. It is not conducted on the retail basis but on the wholesale basis.

Dominance of multinationals Multinational cooperation dominates the International

Marketing scene. Such enterprise has worldwide contacts. They conduct Business operation more efficiently and economically. They are in better position to adopt global approach, which is necessary in International Marketing. Multinational corporations usually market their product in large number of countries and thereby dominate developing countries.

International restriction and trading blocs International Marketing is not free like internal marketing; there are various restrictions and barriers because of the protective policies of different countries. Foreign exchange

regulation also imposes various regulations on export and import.

Need for marketing research International Marketing requires marketing research in the form of marketing surveys, product surveys, and product testing as it is highly competitive.

Advance technology International Marketing is extremely dynamic and competitive; in such a type of marketing an enterprise must be able to sell its product that carries the best quality articles at competitive prices. Countries like USA. Japan and Germany have a dominating position in international marketing because of the use of advance technology in production and marketing of goods.

Need for long term planning


International Marketing requires long term planning. The marketing situations in different countries because of social .economical and political factors. This stresses the need for long term planning in International marketing.

Develop cultural relations and maintain world peace International Marketing brings different counties closer and also develops cultural relations with them. Closer cultural relations improve the quality of life f people in different countries. The participating countries have to maintain friendly relations among themselves

Globalization of Markets and Competition through International Marketing

Trade is increasingly global in scope today. There are several reasons for this. One significant reason is technological because of improved transportation and communication opportunities today, trade is now more practical. Thus, consumers and businesses now have access to the very best products from many different countries. Increasingly rapid technology lifecycles also increases the competition among countries as to who can produce the newest in technology. In part to accommodate these realities, countries in the last several decades have taken increasing steps to promote global trade through agreements such as the General Treaty on Trade and Tariffs, and trade organizations such as the World Trade Organization (WTO), North American Free Trade Agreement (NAFTA), and the European Union (EU).

Stages in the International Involvement of a Firm

We discussed several stages through which a firm may go as it becomes increasingly involved across borders. A purely domestic firm focuses only on its home market, has no current ambitions of expanding abroad, and does not perceive any significant competitive threat from abroad. Such a firm may eventually get some orders from abroad, which are seen either as an irritation (for small orders, there may be a great deal of effort and cost involved in obtaining relatively modest revenue) or as "icing on the cake." As the firm begins to export more, it enters the export stage, where little effort is made to market the product abroad, although an increasing number of foreign orders are filled. In the international stage, as certain country markets begin to appear especially attractive with more foreign orders originating there, the firm may go into countries on an ad hoc basisthat but is, each country may little be entered and sequentially, with relatively learning

marketing efforts being shared across countries. In the multi-national stage, some efficiencies are pursued by standardizing across a region (e.g., Central America, West Africa, or Northern Europe). Finally, in the global stage, the focus centers on the entire World market, with decisions made optimize the products position across marketsthe

home country is no longer the center of the product. An example of a truly global company is Coca Cola. Note that these stages represent points on a continuum from a purely domestic orientation to a truly global one; companies may fall in between these discrete stages, and different parts of the firm may have characteristics of various stagesfor example, the pickup truck division of an auto-manufacturer may be largely domestically focused, while the passenger car division is globally focused. Although a global focus is generally appropriate for most large firms, note that it may not be ideal for all companies to pursue the global stage. For example, manufacturers of ice cubes may do well as domestic, or even locally centered, firms.

Trade balances and exchange rates

When exchange rates are allowed to fluctuate, the currency of a country that tends to run a trade deficit will tend to decline over time, since there will be less demand for that currency. This reduced exchange rate will then tend to make exports more attractive in other countries and imports less attractive at home.


Political and Legal Influences


The political situation

The political relations between a firms country of

headquarters (and other significant operations) and another one may, through no fault of the firms, become a major issue. For example, oil companies which invested in Iraq or Libya became victims of these countries misconduct that led to bans on trade. Similarly, American firms may be disliked in parts of Latin America or Iran where the U.S. either had a colonial history or supported unpopular leaders such as the former shah. Certain issues in the political environment are particularly significant. Some countries, such as Russia, have relatively unstable governments, whose policies may change dramatically if new leaders come to power by democratic or other means. Some countries have little tradition of democracy, and thus it may be difficult to implement. For example, even though Russia is supposed to become a democratic country, the history of dictatorships by the communists and the czars has left country of corruption and strong influence of criminal elements.

Laws across borders

When laws of two countries differ, it may be possible in a contract to specify in advance which laws will apply, although this agreement may not be consistently enforceable. Alternatively, jurisdiction may be settled by treaties, and some governments, such as that of the U.S., often apply their laws to actions, such as anti-competitive behavior, perpetrated outside By the their borders (extraas territorial application). doctrine known

compulsion, a firm that violates U.S. law abroad may be able to claim as a defense that it was forced to do so by the local government; such violations must, however, be compelledthat they are merely legal or accepted in the host country is not sufficient.

The reality of legal systems

Some legal systems, such as that of the U.S., are relatively transparentthat is, the law tends to be what its plain


meaning would suggest. In some countries, however, there are laws on the books which are not enforced (e.g., although Japan has antitrust laws similar to those of the U.S., collusion is openly tolerated). Further, the amount of discretion left to government officials tends to vary. In Japan, through the doctrine of administrative guidance, great latitude is left to government officials, who effectively make up the laws. One serious problem in some countries is a limited access to the legal systems as a means to redress grievances against other parties. While the U.S. may rely excessively on lawsuits, the inability to effectively hold contractual partners to their agreement tends to inhibit business deals. In many jurisdictions, pre-trial discovery is limited, making it difficult to make a case against a firm whose internal documents would reveal guilt. This is one reason why personal relationships in some cultures are considered more significant than in the U.S.since enforcing contracts may be difficult, you must be sure in advance that you can trust the other party.


Legal systems of the World

There are four main approaches to law across the World, with some differences within each:

Common law, the system in effect in the U.S., is based on a legal tradition of precedent. Each case that raises new issues is considered on its own merits, and then becomes a precedent for future decisions on that same issue. Although the legislature can override judicial decisions by changing the law or passing specific standards through legislation, reasonable court decisions tend to stand by default.

Code law, which is common in Europe, gives considerably shorter leeway to judges, who are charged with matching specific laws to situationsthey cannot come up with innovative solutions when new issues such as patentability of biotechnology come up. There are also certain differences in standards. For example, in the U.S. a supplier whose factory is hit with a strike is expected to deliver on provisions of a contract, while in code law this responsibility may be nullified by such an act of God.


Islamic law is based on the teachings of the Koran, which puts forward mandates such as a prohibition of usury, or excessive interest rates. This has led some Islamic countries to ban interest entirely; in others, it may be tolerated within reason. Islamic law is ultimately based on the need to please God, so getting around the law is generally not acceptable. Attorneys may be consulted about what might please God rather than what is an explicit requirements of the government.

Socialist law is based on the premise that the government is always right and typically has not developed a sophisticated framework of contracts (you do what the governments tells you to do) or intellectual property protection (royalties are unwarranted since the government ultimately owns everything). Former communist countries such as those of Eastern Europe and Russia are trying to advance their legal systems to accommodate issues in a free market.


Culture is part of the external influences that impact the consumer. That is, culture represents influences that are imposed on the consumer by other individuals. The definition of culture offered one text is That complex whole which includes knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by man person as a member of society. From this definition, we make the following observations:








interdependent components.

Knowledge and beliefs are important parts. In the U.S., we know and believe that a person who is skilled and works hard will get ahead. In other countries, it may be believed that differences in outcome result more from luck. Chunking, the name for China in Chinese, literally means The Middle Kingdom. The belief among ancient Chinese that they were

in the center of the universe greatly influenced their thinking.

Other issues are relevant.

Art, for example, may be

reflected in the rather arbitrary practice of wearing ties in some countries and wearing turbans in others. Morality may be exhibited in the view in the United States that one should not be naked in public. In Japan, on the other hand, groups of men and women may take steam baths together without perceived as improper. On the other extreme, women in some Arab countries are not even allowed to reveal their faces. Notice, by the way, that what at least some countries view as moral may in fact be highly immoral by the standards of another country.

Dealing with culture

Culture is a problematic issue for many marketers since it is inherently nebulous and often difficult to understand. One may violate the cultural norms of another country without being informed of this, and people from different cultures


may feel uncomfortable in each others presence without knowing exactly why (for example, two speakers may unconsciously continue to attempt to adjust to reach an incompatible preferred interpersonal distance).

Warning about stereotyping

When observing a culture, one must be careful not to overgeneralize about traits that one sees. Research in social psychology has suggested a strong tendency for people to perceive an outgroup as more homogenous than an ingroup, even when they knew what members had been assigned to each group purely by chance. When there is often a grain of truth to some of the perceived differences, the temptation to over-generalize is often strong. Note that there are often significant individual differences within cultures.

High vs. low context cultures:


In some cultures, what you see is what you getthe speaker is expected to make his or her points clear and limit ambiguity. This is the case in the U.S.if you have something on your mind, you are expected to say it directly, subject to some reasonable standards of diplomacy. In Japan, in contrast, facial expressions and what is not said may be an important clue to understanding a speakers meaning. Thus, it may be very difficult for Japanese speakers to understand anothers written communication. The nature of languages may exacerbate this phenomenon while the German language is very precise, Chinese lacks many grammatical features, and the meaning of words may be somewhat less precise. English ranks somewhere in the middle of this continuum.

Language issues
Language is an important element of culture. It should be realized that regional differences may be subtle. For example, one word may mean one thing in one Latin American country, but something off-color in another. It should also be kept in mind that much information is carried in non-verbal communication. In

some cultures, we nod to signify yes and shake our heads to signify no; in other cultures, the practice is reversed. Within the context of language:

There are often large variations in regional dialects of a given language. The differences between U.S., Australian, and British English are actually modest compared to differences between dialects of Spanish and German.

Idioms involve figures of speech that may not be used, literally translated, in other languages. For example, baseball is a predominantly North and South American sport, so the notion of in the ball park makes sense here, but the term does not carry the same meaning in cultures where the sport is less popular.

Neologisms involve terms that have come into language relatively recently as technology or society involved. With the proliferation of computer technology, for example, the idea of an add-on became widely known. It may take longer for such terms to diffuse into other regions of the world. In parts of the World where English is heavily studied

in schools, the emphasis is often on grammar and traditional language rather than on current terminology, so neologisms have a wide potential not to be understood.

Slang exists within most languages. Again, regional variations are common and not all people in a region where slang is used will necessarily understand this. There are often significant generation gaps in the use of slang.


Domestic marketing vs International marketing

Difference Between Domestic marketing and International marketing

Domestic marketing and International marketing are same when it comes to the fundamental principle of marketing. Marketing is an integral part of any business that refers to plans and policies adopted by any individual or organization to reach out to its potential customers. A web definition defines marketing as a process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. With the world shrinking at a fast pace, the boundaries between nations are melting and companies are now progressing from catering to local

markets to reach out to customers in different parts of the world. Marketing is a ploy that is used to attract, satisfy and retain customers. Whether done at a local level or at the global level, the fundamental concepts of marketing remain the same.

Domestic Marketing
The marketing strategies that are employed to attract and influence customers within the political boundaries of a country are known as Domestic marketing. When a company caters only to local markets, even though it may be competing against foreign companies operating within the country, it is said to be involved in domestic marketing. The focus of companies is on the local customer and market only and no thought is given to overseas markets. All the product and services are produced keeping in mind local customers only.

International Marketing
When there are no boundaries for a company and it targets customers overseas or in another country, it is said to be engaged

in international marketing. If we go by the definition of marketing given above, the process becomes multinational in this case. As such, and in a simplified way, it is nothing but application of marketing principles across countries. Here it is interesting to note that the techniques used in international marketing are primarily those of the home country or the country which has the headquarters of the company. In America and Europe, many experts believe international marketing to be similar to exporting. According to another definition, international marketing refers to business activities that direct the flow of goods and services of a company to consumers in more than one country for profit purposes only.

Difference between domestic marketing and international marketing

As explained earlier, both domestic as well as international marketing refer to the same marketing principles. However, there are glaring dissimilarities between the two:


Scope The scope of domestic marketing is limited and will eventually dry up. On the other end, international marketing has endless opportunities and scope. Benefits As is obvious, the benefits in domestic marketing are less than in international marketing. Furthermore, there is an added incentive of foreign currency that is important from the point of view of the home country as well. Sharing of Technology Domestic marketing is limited in the use of technology whereas international marketing allows use and sharing of latest technologies. Political relations Domestic marketing has nothing to do with political relations whereas international marketing leads to improvement in political relations between countries and also increased level of cooperation as a result. Barriers In domestic marketing there are no barriers but in international marketing there are many barriers such as cross cultural differences, language, currency, traditions and customs.
Multinational, global, and world marketing is all the same thing. Multinational marketing treats all countries as the world market without designating a particular country as domestic or foreign. As


such, a company engaging in multinational marketing is a corporate citizen of the world, whereas international marketing implies the presence of a home base. However, the subtle difference between international marketing and multinational marketing is probably insignificant in terms of strategic implications.

Foreign Trade Policy of India

Foreign Trade Policy of India

To become a major player in world trade, a comprehensive approach needs to be taken through the Foreign Trade Policy of India . Increment of exports is of utmost importance, India will have to facilitate imports which, are required for the growth Indian economy. Rationality and consistency among trade and other economic policies is important for maximizing the contribution of such policies to development. Thus, while incorporating the new Foreign Trade Policy of India, the past policies should also be integrated to allow developmental scope of Indias foreign trade. This is the main mantra of the Foreign Trade Policy of India.

Objectives of the Foreign Trade Policy of India


Trade propels economic growth and national development. The primary purpose is not the mere earning of foreign exchange, but the stimulation of greater economic activity. The Foreign Trade Policy of India is based on two major objectives, they are : Todouble the percentage share of global merchandise trade within the next five years. To act as an effective instrument of economic growth by giving a thrust to employment generation.

Strategy of Foreign Trade Policy of India:

Removing of government trust and controls and creating to an




entrepreneurship, industrialization and trades. Simplification of commercial and legal procedures and bringing down transaction costs. Simplification of levies and duties on inputs used in export products.


Facilitating development of India as a global hub for manufacturing, trading and services. Generating additional employment opportunities,

particularly in semi-urban and rural areas, and developing a series of Initiatives for each of these sectors. Facilitating technological and infrastructural

upgradation of all the sectors of the Indian economy, especially through imports and thereby increasing value addition and productivity, while attaining global standards of quality. Neutralizing inverted duty structures and ensuring that India's domestic sectors are not disadvantaged in the Free Trade Agreements / Regional Trade Agreements / Preferential Trade Agreements that India enters into in order to enhance exports. Upgradation of infrastructural network, both physical and virtual, related to the entire Foreign Trade chain, to global standards.


Revitalizing the Board of Trade by redefining its role, giving it due recognition and inducting foreign trade experts while drafting Trade Policy.

Involving Indian Embassies as an important member of export strategy and linking all commercial houses at international locations through an electronic platform for real time trade intelligence, inquiry and information dissemination.



The importance of STP
Segmentation is the cornerstone of marketingalmost all marketing efforts in some way relate to decisions on who to serve or how to implement positioning through the different parts of the marketing mix. For example, ones distribution strategy should consider where ones target market is most likely to buy the product, and a promotional strategy should consider the targets media habits and which kinds of messages will be most persuasive. Although it is often tempting, when observing large markets, to try to be "all things to all people," this is a dangerous strategy because the firm may lose its distinctive appeal to its chosen segments. In terms of the "big picture," members of a segment should generally be as similar as possible to each other on a relevant dimension (e.g., preference for quality vs. low price) and as different as possible from members of other segments. That is members should respond in similar ways to various treatments (such as discounts or high service) so that common campaigns can be aimed at segment members, but in order to justify a different


treatment of other segments, their members should have their own unique behavior.


A mode of entry into an international market is the channel which your organization employs to gain entry to a new international market. This lesson considers a number of key alternatives, but recognizes that alternatives are many and diverse. Here you will be consider modes of entry into international markets such as the Internet, Exporting, Licensing, International Agents, International Distributors, Strategic Alliances, Joint Ventures, Overseas Manufacture and International Sales Subsidiaries. Finally we consider the Stages of Internationalization. It is worth noting that not all authorities on international marketing agree as to which mode of entry sits where. For example, some see franchising as a stand alone mode, whilst others see franchising as part of licensing. In reality, the most important point is that you consider all useful modes of entry into international markets - over and above


which pigeon-hole it fits into. If in doubt, always clarify your tutor's preferred view.

The Internet
The Internet is a new channel for some organizations and the sole channel for a large number of innovative new organizations. The eMarketing space consists of new Internet companies that have emerged as the Internet has developed, as well as those preexisting companies that now employ eMarketing approaches as part of their overall marketing plan. For some companies the Internet is an additional channel that enhances or replaces their traditional channel(s). For others the Internet has provided the opportunity for a new online company.

There are direct and indirect approaches to exporting to other nations. Direct exporting is straightforward. Essentially the organization makes a commitment to market overseas on its own behalf. This gives it greater control over its brand and operations

overseas, over an above indirect exporting. On the other hand, if you were to employ a home country agency (i.e. an exporting company from your country - which handles exporting on your behalf) to get your product into an overseas market then you would be exporting indirectly. Examples of indirect exporting include:

Piggybacking whereby your new product uses the existing distribution and logistics of another business. Export Management Houses (EMHs) that act as a bolt on export department for your company. They offer a whole range of bespoke or a la carte services to exporting organizations.

Consortia are groups of small or medium-sized organizations that group together to market related, or sometimes unrelated products in international markets.

Trading companies were started when some nations decided that they wished to have overseas colonies. They date back to an imperialist past that some nations might prefer to forget e.g. the British, French, Spanish and Portuguese colonies. Today they exist as mainstream businesses that use traditional business relationships as part of their competitive advantage.


Licensing includes franchising, Turnkey contracts and contract manufacturing.

Licensing is where your own organization charges a fee and/or royalty for the use of its technology, brand and/or expertise.

Franchising involves the organization (franchiser) providing branding, concepts, expertise, and infact most facets that are needed to operate in an overseas market, to the franchisee. Management tends to be controlled by the franchiser. Examples includeDominos Pizza, Coffee Republic and McDonald's Restaurants.

Turnkey contracts are major strategies to build large plants. They often include a the training and development of key employees where skills are sparse - for example, Toyota's car plant in Adapazari, Turkey. You would not own the plant once it is handed over.


International Agents and International Distributors

Agents are often an early step into international marketing. Put simply, agents are individuals or organizations that are contracted to your business, and market on your behalf in a particular country. They rarely take ownership of products, and more commonly take a commission on goods sold. Agents usually represent more than one organization. Agents are a low-cost, but low-control option. If you intend to globalize, make sure that your contract allows you to regain direct control of product. Of course you need to set targets since you never know the level of commitment of your agent. Agents might also represent your competitors - so beware conflicts of interest. They tend to be expensive to recruit, retain and train. Distributors are similar to agents, with the main difference that distributors take ownership of the goods. Therefore they have an incentive to market products and to make a profit from them. Otherwise pros and cons are similar to those of international agents.

Strategic Alliances (SA)

Strategic alliances is a term that describes a whole series of different relationships between companies that market








competitors. There are many examples including: Shared manufacturing e.g. Toyota Ayago is also marketed as a Citroen and a Peugeot. Research and Development (R&D) arrangements. Distribution alliances e.g. iPhone was initially marketed by O2 in the United Kingdom. Marketing agreements. Essentially, Strategic Alliances are non-equity based agreements i.e. companies remain independent and separate.

Joint Ventures (JV)

Joint Ventures tend to be equity-based i.e. a new company is set up with parties owning a proportion of the new business. There are many reasons why companies set up Joint Ventures to assist them to enter a new international market: Access to technology, core competences or management skills. For example, Honda's relationship with Rover in the 1980's.


To gain entry to a foreign market. For example, any business wishing to enter China needs to source local Chinese partners.

Access to distribution channels, manufacturing and R&D are most common forms of Joint Venture.






A business may decide that none of the other options are as viable as actually owning an overseas manufacturing plant i.e. the organization invests in plant, machinery and labor in the overseas market. This is also known as Foreign Direct Investment (FDI). This can be a new-build, or the company might acquire a current business that has suitable plant etc. Of course you could assemble products in the new plant, and simply export components from the home market (or another country). The key benefit is that your business becomes localized - you manufacture for customers in the market in which you are trading. You also will gain local market knowledge and be able to adapt products and services to the needs of local consumers. The downside is that you take on the risk associated with the local domestic market. An International Sales Subsidiary would be similar, reducing the

element of risk, and have the same key benefit of course. However, it acts more like a distributor that is owned by your own company.

Internationalization Stages
So having considered the key modes of entry into international markets, we conclude by considering the Stages of Internationalization. Some companies will never trade overseas and so do not go through a single stage. Others will start at a later or even final stage. Of course some will go through each stage as summarized now: Indirect exporting or licensing Direct exporting via a local distributor Your own foreign presences Home manufacture, and foreign assembly Foreign manufacture


Export Pricing And Costing

Pricing and costing are two different things and an exporter should not confuse between the two. Price is what an exporter offer to a customer on particular products while cost is what an exporter pay for manufacturing the same product. Export pricing is the most important factor in for promoting export and facing international trade competition. It is important for the exporter to keep the prices down keeping in mind all export benefits and expenses. However, there is no fixed formula for successful export pricing and is differ from exporter to exporter depending upon whether the exporter is a merchant exporter or a manufacturer exporter or exporting through a canalizing agency.

Determining Export Pricing

Export Pricing can be determined by the following factors:

Range of products offered. Prompt deliveries and continuity in supply.


After-sales service in products like machine tools, consumer durables. Product differentiation and brand image. Frequency of purchase. Presumed relationship between quality and price. Specialty value goods and gift items. Credit offered. Preference or prejudice for products originating from a particular source. Aggressive marketing and sales promotion. Prompt acceptance and settlement of claims. Unique value goods and gift items.

Export Costing
Export Costing is basically Cost Accountant's job. It consists of fixed cost and variable cost comprising various elements. It is advisable to prepare an export costing sheet for every export product. As regards quoting the prices to the overseas buyer, the same are quoted in the following internationally accepted terms which are commonly known as Incoterm.


Export License
An export license is a document issued by the appropriate licensing agency after which an exporter is allowed to transport his product in a foreign market. The license is only issued after a careful review of the facts surrounding the given export transaction. Export license depends on the nature of goods to be transported as well as the destination port. So, being an exporter it is necessary to determine whether the product or good to be exported requires an export license or not. While making the determination one must consider the following necessary points

What are you exporting? Where are you exporting? Who will receive your item? What will your items will be used?

Canalisation is an important feature of Export License under which certain goods can be imported only by designated agencies. For an example, an item like gold, in bulk, can be imported only by specified banks like SBI and some foreign banks or designated agencies.

Application for an Export License

To determine whether a license is needed to export a particular commercial product or service, an exporter must first classify the item by identifying what is called ITC (HS) Classifications. Export license are only issued for the goods mentioned in the Schedule 2 of ITC (HS) Classifications of Export and Import items. A proper application can be submitted to the Director General of Foreign Trade (DGFT). The Export Licensing Committee under the Chairmanship of Export Commissioner considers such applications on merits for issue of export licenses.

Exports Free unless regulated

The Director General of Foreign Trade (DGFT) from time to time specifies through a public notice according to which any goods, not included in the ITC (HS) Classifications of Export and Import items may be exported without a license. Such terms and conditions may include Minimum Export Price (MEP), registration with specified authorities, quantitative ceilings and compliance with other laws, rules, regulations.



Risks in International Trade are the major barriers for the growth to the same. International trade has been a much debated topic. Economists have differed on the real benefits of international trade. The increase in the export market is highly beneficial to an economy, but on the other hand the increase in imports can be a threat to the economy of that country. It has been the worry of the policy makers to strike the right balance between free trade and restrictions. International trade can develop an economy, but at the same time certain domestic players can be outperformed by financially stronger multi nationals and forced to close down or get merged. Sometimes these multinational companies become so powerful, especially in smaller countries, that they can dictate political terms to the government for their benefit.

International trade is characteristically costlier in terms of domestic trade. There are a number of reasons such as, tariffs, cost of delay, cost related to differences in legal system, etc. The factors of production like labor and capital are more mobile within the territories of the country than across other countries. International trade is restricted to

the exchange of goods and services. It does not encourage the exchange of production factors, which may be more beneficial in certain cases. The assessment of risks in the international trade plays an important role in deciding the modes of payment to be used for the settlement between buyer and seller.

Risks in international trade can be divided under several types, such as,
Economic risks
Risk of concession in economic control Risk of insolvency of the buyer Risk of non-acceptance Risk of protracted default i.e. the failure of the buyer to pay off the due amount after six months of the due date

Risk of Exchange rate


Political risks

Risk of non- renewal of import and exports licenses Risks due to war Risk of the imposition of an import ban after the delivery of the Surrendering of political sovereignty

Buyer Country risks

Changes in the policies of the government Exchange control regulations Lack of foreign currency Trade embargoes



Although some would stem the foreign invasion through protective legislation, protectionism in the long run only raises living costs and protects inefficient domestic firms (national controls). The right answer is that companies must learn how to enter foreign markets and increase their global competitiveness. Firms that do venture abroad find the international marketplace far different from the domestic one. Market sizes, buyer behavior and marketing practices all vary, meaning that international marketers must carefully evaluate all market segments in which they expect to compete. Whether to compete globally is a strategic decision (strategic intent) that will fundamentally affect the firm, including its operations and its management. For many companies, the decision to globalize remains an important and difficult one (global strategy and action). Typically, there are many issues behind a company`s decision to begin to compete in foreign markets. For some firms, going abroad is the result of a deliberate policy decision (exploiting market potential and growth); for others, it is a reaction to a specific business opportunity (global financial turmoil, etc.) or a competitive challenge (pressuring competitors). But, a decision of this magnitude is always a strategic proactive decision rather than


simply a reaction (learning how to business abroad). Reasons for global expansion are mentioned below: Opportunistic markets) b) Following customers abroad (customer satisfaction) c) Pursuing geographic diversification (climate, topography, space, etc.) d) Exploiting different economic growth rates (gaining scale and scope) e) Exploiting product life cycle differences (technology) f) Pursuing potential abroad g) Globalizing for defensive reasons h) Pursuing a global logic or imperative (new markets and profits) Moreover, there can be several reasons to be mentioned including comparative advantage, economic trends, demographic conditions, competition at home, the stage in the product life cycle, tax structures and peace. To succeed in global marketing companies need to look carefully at their geographic expansion. To some extent, a firm makes a conscious decision about its extent of globalization by choosing a posture that may range from entirely global market development (diversifying



domestic without any international involvement (domestic focus) to a global reach where the company devotes its entire marketing strategy to global competition. In the development of an international marketing strategy, the firm may decide to be domestic-only, home-country, host-country or regional/globaloriented.

Global Marketing Strategies

A global marketing strategy that totally globalizes all marketing activities is not always achievable or desirable (differentiated globalization). In the early phases of development, global marketing strategies were assumed to be of one type only, offering the same marketing strategy across the globe. As marketers gained more experience, many other types of global marketing strategies became apparent. Some of those were much less complicated and exposed a smaller aspect of a marketing strategy to globalization. A more common approach is for a company to globalize its product strategy (product lines, product designs and brand names) and localize distribution and marketing communication.


Integrated Global Marketing Strategy

When a company pursues an integrated global marketing strategy, most elements of the marketing strategy have been globalized. Globalization includes not only the product but also the communications strategy, pricing and distribution as well as such strategic elements as segmentation and positioning. Such a strategy may be advisable for companies that face completely globalized customers along the lines. It also assumes that the way a given industry works is highly similar everywhere, thus allowing a company to unfold its strategy along similar paths in country by country. One company that fits the description of an integrated global marketing strategy to a large degree is CocaCola. That company has achieved a coherent, consistent and integrated global marketing strategy that covers almost all elements of its marketing program from segmentation to positioning, branding, distribution, bottling, advertising and more. Reality tells us that completely integrated global marketing strategies will continue to be the exception. However, there are many other types of partially globalized marketing strategies; each may be tailored to specific industry and competitive circumstances.


Global Product Category Strategy

Possibly the least integrated type of global marketing strategy is the global product category strategy. Leverage is gained from competing in the same category country after country and may come in the form of product technology or development costs. Selecting the form of global product category implies that the company while staying within that category will consider targeting different segments in each category or varying the product, advertising and branding according to local market requirements. Companies competing in the multi-domestic mode are frequently applying the global category strategy and leveraging knowledge across markets without pursuing standardization. That strategy works best if there are significant differences across markets and when few segments are present in market after market. Several traditional multinational players who had for decades pursued a multi-domestic marketing approach-tailoring marketing strategies to local market conditions and assigning management to local management teams- have been moving toward the global category strategy. Among them are Nestle, Unilever and Procter&Gamble, three large international consumer goods companies doing business in food and household goods.

Global Segment Strategy

A company that decides to target the same segment in many countries is following a global segment strategy. The company may develop an understanding of its customer base and leverage that experience around the world. In both consumer and industrial industries significant knowledge is accumulated when a company gains in-depth understanding of a niche or segment. A pure global segment strategy will even allow for different products, brands or advertising although some standardization is expected. The choices may consist of competing always in the upper or middle segment of a given consumer market or for a particular technical application in an industrial segment. Segment strategies are relatively new to global marketing.

Global Marketing Mix Element Strategies

These strategies pursue globalization along individual marketing mix elements such as pricing, distribution, place, promotion, communications or product. They are partially globalized strategies that allow a company that customize other aspects of its marketing strategy. Although various


types of strategies may apply, the most important ones are global product strategies, global advertising strategies and global branding strategies. Typically companies globalize those marketing mix elements that are subject to particularly strong global logic forces. A company facing strong global purchasing logic may globalize its account management practices or its pricing strategy. Another firm facing strong global information logic will find it important to globalize its communications strategy.

Global Product Strategy

Pursuing a global product strategy implies that a company has largely globalized its product offering. Although the product may not need to be completely standardized worldwide, key aspects or modules may in fact be globalized. Global product strategies require that product use conditions, expected features and required product functions be largely identical so that few variations or changes are needed. Companies pursuing a global product strategy are interested in leveraging the fact that all investments for producing and developing a given product have already been made. Global strategies will yield more volume, which will make the original investment easier to justify.


Global Branding Strategies

Global branding strategies consist of using the same brand name or logo worldwide. Companies want to leverage the creation of such brand names across many markets, because the launching of new brands requires a considerable marketing investment. Global branding strategies tend to be advisable if the target customers travel across country borders and will be exposed to products elsewhere. Global branding strategies also become important if target customers are exposed to advertising worldwide. This is often the case for industrial marketing customers who may read industry and trade journals from other countries. Increasingly, global branding has become important also for consumer products where crossborder advertising through international TV channels has become common. Even in some markets such as Eastern Europe, many consumers had become aware of brands offered in Western Europe before the liberalization of the economies in the early 1990s. Global branding allows a company to take advantage of such existing goodwill. Companies pursuing global branding strategies may include luxury product marketers who typically face a large fixed investment for the worldwide promotion of a product.


Global Advertising Strategy

Globalize advertising is generally associated with the use of the same brand name across the world. However, a company may want to use different brand names partly for historic purposes. Many global firms have made acquisitions in other countries resulting in a number of local brands. These local brands have their own distinctive market and a company may find it counterproductive to change those names. Instead, the company may want to leverage a certain theme or advertising approach that may have been developed as a result of some global customer research. Global advertising themes are most advisable when a firm may market to customers seeking similar benefits across the world. Once the purchasing reason has been determined as similar, a common theme may be created to address it.

Composite Global Marketing Strategy:

The above descriptions of the various global marketing models give the distinct impression that companies might be using one or the other generic strategy exclusively. Reality shows, however, that few companies consistently adhere to only one single strategy. More often companies adopt several generic global strategies and run them in parallel. A company might for one part of its business follow a global brand strategy


while at the same time running local brands in other parts. Many firms are a mixture of different approaches, thus the term composite.


Type Manufacturer

Soft drink The Coca-Cola Company

Country of origin United States Introduced 1886

On May 8, 1886, a pharmacist named Dr. John Pemberton carried a jug of Coca-Cola syrup to Jacobs' Pharmacy in downtown Atlanta, where it was mixed with carbonated water and sold for five cents a glass. From humble beginnings 125 years ago, This Company has evolved from one product --Coca-Cola -- to more than 500 brands in 2011. company grown from selling a modest 9 drinks a day in 1886 to 1.7 billion a day. And we've expanded from one city in one country to availability in more than 200 countries around the world. COCA-COLA IN INDIA


Coca-Cola, the corporation nourishing the global community with the worlds largest selling soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus, giving a new thumbs up to the Indian soft drink market. In the same year, the Company took over ownership of the nations top soft-drink brand and bottling network. Its no wonder our brands have assumed an iconic status in the minds of the worlds consumers. The Company has shaken up the Indian carbonated drinks market greatly, giving consumers the pleasure of world-class drinks to fill up their hydration, refreshment, and nutrition needs. It has also been instrumental in giving an exponential growth to the countrys job listings. With virtually all the goods and services required to produce and market Coca-Cola being made in India, the business system of the Company directly employs approximately 6,000 people, and indirectly creates employment for more than 125,000 people in related industries and through its vast procurement, supply, distribution system.

The Indian operations comprises of 50 bottling operations, 25 owned by the Company, with another 25 being owned by franchisees. That apart, a network of 21 contract packers manufactures a range of products for the Company.