Nature, Definition and scope of international marketing
Today, marketing organizations aren't limited to borders. the entire world is open for them. New markets are arising in emerging economies like China, Indonesia, India, South Korea, Mexico, Chile, Brazil, Argentina and lots of other economies round the world. Today's global market opportunities are on par with growing economies, with increasing purchasing power and with changing consumer tastes and preferences.
Economic, social and political changes affect business practices round the world, and business organizations got to react quickly to changing global trends to be competitive.
The purpose of this text is to assist you understand the term “international marketing" and therefore the nature and scope of international marketing. Definition of international marketing
It is about integrating and standardizing marketing actions in many geographic markets." Kotler
Performance of a commercial activity are to direct a company's flow of products and services to consumers or users in multiple countries for planning, pricing, promoting, and profit." Cateora and Graham,
It is the character and scale of international marketing that international marketing continues to differ from domestic marketing not only in scope but also in essence.
The nature of international marketing:
1. Availability of broader market unlike domestic marketing, the market isn't limited to the national population. Populations in other countries also can be targeted in international marketing.
2. In domestic marketing, marketers got to interact with only a group of uncontrollable variables. International marketing will have a minimum of two sets of control variables, but the union is organized. 3. It requires a good range of capabilities–special management skills and a good range of capabilities required for international marketing/business.
3. Competition is fierce-international marketing organizations must compete with both domestic and international competitors. Therefore, competition is fierce in international marketing.
4. With high risks and challenges–international marketing has proven to be a spread of risks and challenges: political risks, cultural differences, fashion and elegance changes for foreign customers, sudden wars, changes in government rules and regulations, and communication challenges thanks to language and cultural barriers.
Scope of international marketing
1. Export-it may be a function of international business during which goods produced in one country are shipped to a different for further sale or trade.
2. Import-goods or services delivered to one country from another country to be used for sale.
3. Re-export-import of semi-finished products, further processing and export of finished products.
4. International Business Management Operation of overseas marketing and sales facilities, establishment of production or assembly facilities in foreign countries, also as monitoring the operations and practices of other multinational corporations and institutions.
Domestic marketing vs. international marketing
Marketing is defined as a group of activities that a corporation performs to supply satisfaction to its customers by building good relationships with them to supply added value and increase brand value. There are two sorts of marketing: domestic and International, where it identifies and transforms needs into products and services to satisfy their wants. Domestic marketing is when the commercialization of a product or service is restricted only to the house country. On the opposite hand, international marketing, as its name suggests, may be a sort of marketing that spans several countries of the planet, that is, the marketing of products and services is administered globally. Within the excerpt of this text , you'll find intimately the differences between domestic and international marketing. Definition of domestic marketing
Domestic marketing may be a country where marketing is used. Marketing strategies are undertaken, generally to cater for little areas within the country's local limits. This may only serve and affect customers in certain countries.
Domestic marketing has quick access to data, fewer barriers to communication, deep knowledge of consumer demand, tastes and tastes, knowledge of market trends, and competition. However, thanks to the limited market size, growth is additionally limited.
Definition of international marketing
International marketing practices are adopted when it involves responding to the worldwide market. Usually, companies start their business in their home country and, after success, try to take their business to a different level, become a transnational company and enter the markets of several countries; therefore the company must be known about the principles and regulations of that country.
International marketing enjoys no boundaries, keeping the main target of worldwide customers. But some shortcomings also are related to it, just like the challenges we face on the trail of expansion and globalization. a number of them are socio-cultural differences, changes in foreign currency, language barriers, differences in customer buying habits, product settings and international prices, etc. the most differences between national and international marketing
BASIS FOR COMPARISON | DOMESTIC MARKETING | INTERNATIONAL MARKETING |
Meaning | Domestic marketing refers to marketing within the geographical boundaries of the nation. | International marketing means the activities of production, promotion, distribution, advertisement and selling are extend over the geographical limits of the country. |
Area served | Small | Large |
Government interference | Less | Comparatively high |
Business operation | In a single country | More than one country |
Use of technology | Limited | Sharing and use of latest technology. |
Risk factor | Low | Very high |
Capital requirement | Less | Huge |
Nature of customers | Almost same | Variation in customer tastes and preferences. |
Research | Required but not to a very high level. | Deep research of the market is required because of less knowledge about the foreign markets. |
On the differences of national and international marketing could also be the following:
a) Domestic production, promotion, advertising, distribution, sales and customer satisfaction activities are referred to as domestic marketing. International marketing is that the practice of selling activities.
b) A small area of domestic marketing response covers international marketing.
c) In domestic marketing, there's less government influence compared to international marketing because the corporate has got to affect the principles and regulations of multiple countries.
d) In domestic marketing, business operations are administered only in one country. On the opposite hand, in international marketing, we do business in multiple countries.
e) In international marketing, a business has the advantage of having the ability to possess access to the newest technologies in some countries that don't exist within the domestic case.
f) The risks and challenges within the case of international marketing are very high thanks to several factors, like socio-cultural differences, exchange rates, the setting of international prices for products. within the case of domestic marketing, the danger factors and challenges are relatively small.
g) Large capital investment within the international marketing field may be a resource for investment acquisition through domestic marketing.
h) In domestic marketing, executives face the subsequent problems, while addressing people for an identical nature: However, within the case of international marketing, it's very difficult to affect customers of various tastes, habits, preferences, segments, etc.
i) International marketing involves in-depth research on foreign markets thanks to lack of familiarity, which is simply the other within the case of domestic marketing, where a little survey will convince help to understand the market situation.
Conclusion
After delving into the differences between the 2 themes, we came to the conclusion that the planet itself may be a market, which is why the rules are versatile. It doesn't make changes where the principle applies, that is, within the local or global market. The elemental explanation for the difference between domestic marketing and international marketing is its implication areas and market conditions.
International marketing environment –external and internal
The international marketing environment surrounds and influences the organization. In order to satisfy customers, they need to evaluate the internal and external environments subdivided into micro and macro.
This includes mainly three parts of the international marketing environment:
1. Internal environment
2. External environment
The internal environment refers to factors related to the enterprise. The factors related to the enterprise are that the enterprise controls them and can be appropriately used as functional means such as HR, physical facilities, organization and marketing mix to suit the environment.
The company's internal environment includes all departments, such as management, finance, research and development, purchase, operation and accounting. Each of these divisions affects international marketing decisions. For example, research and development has input on the functions that the product can perform, and accounting approves the financial side of the marketing plan.
The company's ability to do international business depends on a number of internal factors such as the mission and purpose of the company; organizational and management structure and nature; internal relationships between employees, shareholders and board of directors, etc.; Company image and brand equity; physical assets and facilities; R&D and technological capabilities; personnel factors such as technology, quality, morale, commitment, attitude, etc. Marketing, quality marketing male and distribution network for the organization of marketing factors together with doing; and financial factors such as fiscal policy, financial condition and capital structure.
Let's take an example of how the internal environment affects a company like Wal-Mart. In this case, the impact of other features such as marketing planning, how customer relationship management is implemented, strategies from top management, research and development into new logistics solutions, how to buy high-quality products at the lowest possible price, how accounting is done efficiently and effectively, and of course Walmart is famous for local supply chain management. this includes the direct impact of the network infrastructure and logistics.
Useful tools for quickly auditing the internal environment are known as five Ms, which are men, money, machines, materials and markets. Some may include the sixth M, which is a minute, because time is a valuable internal resource. All these factors are company-related factors that are completely controllable. All these must be taken into account when entering the international market.
2. External environment:
It means those factors which are outside the company. We can say that these factors are out of control or these are beyond the control of the company. External factors such as economic, socio-cultural, government and legal, demographic and geographical factors are generally considered an uncontrollable factor.
The external environment can be further divided into two parts:
Micro environments are created from individuals and organizations that are close to the company and have a direct impact on the customer experience. They can be defined as actors in the immediate environment of a company that directly affects the company's decisions and operations. These include suppliers, various market intermediaries and service organizations, competitors, customers, and the public. The micro-environment is relatively controllable because business behavior can affect such stakeholders.
Wal-Mart's micro-environment will be very focused on the immediate local issues. It will consider ways to recruit, retain and extend products and services to customers. It will pay close attention to the actions and reactions of direct competitors. Wal-Mart will build and nurture close relationships with major suppliers. Business must communicate and communicate with the public, such as neighbors close to the store, or other road users. There will also be intermediaries such as advertising agencies and trade unions.
i. Suppliers:
The marketing manager is responsible for the supply availability and supply chain management to ensure that products are delivered to customers in the time frame required to maintain strong customer relationships.
ii. Marketing intermediaries:
Marketing intermediaries are resellers, logistics companies, marketing service agents, and financial intermediaries. These are the people who help companies promote, sell and distribute their products to the final buyer. Resellers are those who hold and sell the company's products. They match distribution to customers and include sites such as Wal-Mart, Target and Best Buy.
A logistics company is a place such as a warehouse where a company's products are stored and transported from place of origin to destination. Marketing, advertising and consulting to provide services for companies related to marketing services.
iii. Customer:
Another aspect of Microenvironment is the customer. There are different types of customer markets, including consumer market, business market, government market, international market, and reseller market. The consumer market consists of individuals who purchase goods and services for their own personal use or home use. The business market includes those that purchase goods or services to produce products for sale.
This is different from the reseller market, which includes the business of purchasing goods to resell so that they are for profit. These are the same companies that were mentioned as market intermediaries.
iv. Competitors:
Competitors are also micro-environmental factors, and include companies with similar products for goods and services. To remain competitive, companies need to consider who their biggest competitors are, while taking into account their own size and position in the industry. The company must develop a strategic advantage over its competitors.
v. Public:
The final aspect of the microenvironment is the public, which is any group that has an interest or influence on the organization's ability to achieve its goals. For example, financial public companies can interfere with the ability of the company to obtain funds that affect the level of credit the company has. Media publishing can include newspapers and magazines that can publish articles of interest about the company, editorials that can influence your opinion.
The government public can influence the company by passing laws and laws that place restrictions on the conduct of the company. Civil and action rights, such as environmental groups and minority groups, can be questioned by the company in the form of public support. The local public is a neighborhood and community organization, and it also questions the company's impact in the local area and the level of action commitment.
Since the general public is the customer base of the company, ultimately employed within the company and those who deal with the organization and construction of the company's products, it can have a huge impact on the company, whether positive or negative, because a change in their attitude can drive up or down sales.
B. Macro environment:
The macro environment is not very controllable. The macro environment consists of a much greater comprehensive impact (affecting the micro environment) from the broader global society. The macro environment includes cultural, political, technological, natural, economic and demographic factors.
Walmart trades primarily in the United States as well as international markets. In the UK, for example, Walmart trades as ASDA.
Many factors make up the international environment: social, cultural, political, legal, competitive, economic and technological. Each should be evaluated before the company decides to go international.
i. Social and cultural environment:
Marketers who intend to sell their products abroad may be very sensitive to foreign cultures the differences between their home country and foreign countries may seem small, but marketers who ignore these differences, not considering differences in marketing program culture is one of the main reasons for overseas marketing failure. This task is not so simple that different features of culture can create the illusion of similarity. Even a common language does not guarantee the similarity of interpretations.
ii. Political environment:
The political environment abroad is quite different from India. Most countries want to become independent and raise their status in the eyes of the rest of the world. This is the essence of nationalism.
iii. Legal environment:
Companies are in many ways influenced by the legal environment of the country. The legal environment is not only based on a variety of laws and regulations related to business, but also the essential legal environment such as the rule of law, access by foreigners to legal systems, litigation systems, and changes in the rule of law, laws and legal systems affect foreign companies in many regions or regions.
iv. Technical environment:
Know-how of technology in all aspects of the impact production Information Systems, Marketing, etc., including the work of international marketing companies international marketers need to understand technology development and its impact on the total work. Marketing intelligence systems have a critical role to play in the company's increasing scientific and technological capabilities in research and development (R&D), which helps international companies to know the technical orientation of other companies and update their own technologies to maintain competitiveness.
New technologies create new markets and opportunities. But every new technology replaces the old technology. Zerography hurts the carbon paper industry, and computers hurt the typewriter industry, examples are so. New technology businesses that other international marketers have ignored or forgotten are falling. Therefore, marketers should closely monitor the technical environment. No company has the technology to change, and soon the product will be added.
Scientists today are researching a wide range of promising new products and services ranging from solar energy, electric vehicles and cancer treatments. All these studies give marketers the opportunity to set up their products according to the current desired standard. The challenge in each case is not just technology, but commercial, which means manufacturing a product that can be given by a large crowd. Marketers in developed countries can't take much technology progress for granted. They may not be available in underdeveloped countries.
v. Competitive environment:
To effectively plan an international marketing strategy, international marketers should be well informed about the competitive landscape in the international market.
vi. Economic environment:
International marketer tries to understand the economic environment variables of the global market for identifying the right marketing opportunities for the industry.
Key takeaways:
Identifying and selecting foreign market
Process 1 # –Identify overseas markets:
Identification and selection of the market is the first stage of international marketing. Before entering the international market, companies need to identify markets in which they can easily sell their products. To take this decision, the company must analyze the potential of various overseas markets and their respective marketing environments. In some markets, the purpose and resources of the Company shall be of the Free Will, and the operation of the market.
Therefore, proper analysis is necessary to choose the right and right overseas market. As for the response to another, unlike one market, it is important to Group different segments so that companies entering the global market can effectively meet their requirements. No matter how many attempts are made, the company will not succeed unless it is marketing the right product in the right market.
It takes a lot of time and money to find a suitable overseas market for the product. The company does not have unlimited resources. Proper selection of the market will avoid the waste of time and effort. Some countries accept one product. Therefore, it is better to focus on several markets than on more.
Process 2#-proper selection of international market:
There are ample opportunities for export in some countries, but considering various factors, companies cannot do business in all countries. It must select a few possible markets from the total market studied. Preliminary studies may help in avoiding markets that are obviously impossible or less likely ones in comparison to others.
Criteria for eliminating the market:
Below are some of the points that could serve as a criterion for eliminating the market from the point of view of the exporting country of India:
(i) The government of India has banned exports to some countries.
(ii) There may be some goods whose exports are restricted or prohibited in full or in some countries only.
(iii) Incompatibility of technical standards may eliminate some markets.
(iv) In some cases, the cost of product adaptation is very high and the exporting country cannot afford it.
(v) Some importers may impose quotas on imports of certain products from certain countries. In such cases, export is impossible.
(VI) If a country imposes a formidable tariff barrier that makes a product expensive in that country, such goods may not be exported to those countries.
(vii) There may be non-tariff barriers that may make the export of some products to some countries virtually impossible or difficult.
(viii) In some cases, the shipping cost may be too high. Therefore, export in such cases is impossible.
(ix) If the competition is quite severe, it may not be easy to enter the market and it may not be profitable to sell products in such markets without high costs
(X) For technically sophisticated products, you should make too much promotional spending and make it difficult to export them.
In this way, the selection process of overseas markets usually begins with the screening process of collecting relevant information for each country and eliminating the countries that make losses after screening. therefore, when choosing overseas markets, you need to keep in mind the above facts and carefully analyze the next steps.
Process 3 # - steps for overseas market selection:
The first step:
The first step in the foreign market selection process is to use macro variables to distinguish between countries with basic opportunities and those with no or little opportunities. Macro variables of the country describe the total market in terms of social, economic, geographical and political information. For example, the country's economic statistics disclose gross national product, population size, per capita income, personal disposable income, etc. Political stability,political relations with the exporter, geographical distance,climatic conditions, etc., also affect the choice of country.
Second step:
The second stage of the process focuses on factors that indicate the potential market size and acceptance of the product. General proxy variables are used to evaluate. Proxy variables are similar or related products that indicate the demand for a company's products. Other factors such as the stage of economic development of the country, taxes, tariffs, etc when choosing a country, it is also taken into account.
Third step:
The third stage of the selection process focuses on micro-level considerations such as competition, entry costs and profit potential. In other words, in this process, the main focus is given to profitability.
Fourth step:
The fourth and final step in the screening process is the assessment of the potential target market based on the company's resources, objectives and strategy.
Process 4 # - criteria for selecting the target country:
The process of selecting a target country through the screening process involves identifying the criteria that an exporter uses to select a country, or comparing one country to the other.
International marketing market research has shown that the following major factors are responsible for market selection:
1. Market size.
2. Political environment.
3. Social and cultural environment.
4. Legal environment.
1. Market size:
Market size is an important factor in choosing overseas markets.Various factors affect the market size and growth. Some important factors include:
Economic factors:
a) Gross National Product.
b) Income per capita.
c) Income growth rate.
d) Distribution of income and wealth.
e) Personal disposable income.
f) Country's import size and import growth rate.
g) Import and export policy and other trade policy of the country.
h) Export controls and incentives.
i) Payment balance.
j) Trade agreements with other countries, and
k) Market and competitor market share competition.
Population factors:
(B) Total population
(II) Population growth rate
(iii) Distribution of population
a) rural-urban wise
b) by age
c) Sex wise
d) thinking about income
e) literacy, and
f) Religious wise.
g) Work habits and occupations.
h) within the structure of consumer mobility, geographical and social class
i) Population density.
Geographical factors:
(i) Country size.
(ii) Climate.
(iii) Topographical features.
3.Political environment:
The impact of the political environment of the importing country on market selection is clear. Exporters must consider the political implications that affect consumers, current and potential customers or suppliers, International Trade Policy and the economy with respect to business cycles, financial stability, and taxation, etc. This means that government policies and their impact on the national economy should also be carefully analyzed.
4. Legal environment:
In different countries, the rules of business are not only different, but also different ways of applying them? This variation presents a very difficult environment for international marketing, so it is necessary to understand the legal complexities before determining the choice of overseas markets.
Process 5 # - Set available to Indian exporters:
Export promotion is an important way to boost economic growth and correct trade imbalances. Export promotion is an export promotion that encourages new and old exporters to increase their exports. They are offered cash help for this purpose. Bank loans are given. Imports of some capital goods, necessary machinery and other raw materials are allowed instead of exports. Concessions are given by train and sea freight for exporting goods.
Some indicators of political risk are:
(i) Probability of nationalization,
(ii) Government intervention and restrictions,
(iii) Restrictions on foreign ownership,
(IV) Restrictions on capital and profit movements; and
(v) Number of riots.
Social and cultural environment:
Culture, to some extent, determines the needs and expectations of its members. Understanding the socio-cultural conditions of the country is very important, since in the end it is the consumer that the enterprise provides. Therefore, the influence of the social and cultural environment on market selection is of great importance.
The main elements of culture are:
(I) Material Culture-Technology, Technology and physical
ii) Language
(iii) Education, and
(iv) Religion, beliefs and attitudes.
In addition, exporters and Export Organizations are given tax breaks. Economists are of the opinion that export promotion is the only way to make India self-reliant, balance trade and win foreign exchange and industrial development. Forex can be earned only by exports.
Therefore, it is the duty of the government to place greater emphasis on export promotion. The success of the five-year plan depends on exports. It corrects trade imbalances and completes progressive projects. Since independence, India's trade balance has always been at a disadvantage.
Therefore, there is a constant need for export promotion. Various projects in the country depend on export growth as the machinery, equipment and chemicals required for these projects are imported. To reduce the burden on foreign lending, export promotion is necessary. It is also used for the sale of new products made in India.
The different types of preferences available to Indian exporters are:
1. Generalized System of preferences or GSP:
Under a system of generalized preference, developed countries allow imports from developing countries such as India at duty-free or concessional rates. It naturally helped India's export to such countries. GSP makes imports cheaper in comparison to products coming from countries that are not entitled to GSP.
In order to utilize GSP, exporters must: (i)whether the product is covered by the GSP; (ii)the preference margin enjoyed by the product; (iii)the quota of imports in the country; and(iv)procedural formation in this regard can be collected from the India Institute for Foreign Trade, Trade Development Agency, Ministry of Commerce and the Export Promotion Council.
2. Exchange of preferences among developing countries:
16 developing countries, including India, have exchanged preferences among themselves under the 1972 pact. Brazil, Chile, South Korea, Spain, Mexico, Pakistan, the Philippines, Tunisia, Turkey, Uruguay, Yugoslavia, Israel, Egypt, Paraguay, Bangladesh and India. India is also a member of ESCAP. ESCAP members have extended their preferences to each other with 93 products. The exporter must be aware of the products listed in the list of those 93 products.
3. Import Promotion Center for some countries:
Some countries have established import Promotion Centers for imports from developing countries to provide assistance to exporters. The directory of such import Promotion Center (IPC) is compiled by the International Trade Center UNCTAD/GATT and can be obtained from them. The countries in which such centers were established include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hungary, Israel, Italy, Japan, New Zealand, Norway, Poland, Sweden, Germany, Germany, Italy, Italy, Japan, Japan, Japan, Japan, Japan, Japan, Japan, the United States, the United States, the United States, the United States, the United States, the United States, the United States, the United States, the United States, the United States,
4. Other advantages:
Indian exporters also need to find out if India has certain advantages in the market. Such advantages may be:
(a) Proximity,
(b) Trade governed by persons of Indian origin,
(c) The presence of shipping facilities,
(d) political relations, if they are not good, business may retreat, even if the conditions offered are more attractive, and
(e) The presence of rupee payment contracts.
Therefore, after conducting market research, some markets where entry is impossible or difficult should be rejected, and in other cases where some additional preferences are available, those markets should be considered favorably.
Sources of information available to exporters:
As a short wavelength coherent X-ray source:
(i)Export Promotion Council, commodity Commission, Trade Development Agency, and various chambers of Commerce.
(ii) The library maintained by foreign embassies in India provides many references to assist exporters.
(iii) The United Nations publishes detailed international trade statistics to help exporters find markets for their products.
(iv) Commercial banks and India Export Credit Guarantee Co., Ltd. may provide information on foreign exchange and payment terms of different countries, as well as credit ratings and risks.
(V) The import / export bank may provide information on the assistance provided by the bank to Indian exporters and foreign importers of Indian goods.
(vi) The Reserve Bank of India publishes a bulletin of the Reserve Bank of India that includes currency control rules and other credit information policies.
Process 6# - Export Promotion Agency:
The Export Promotion Agencies of each country are trying to promote their own exports. Also in India, the Export Promotion Council (EPC), the Export Development Authority, the commodity Commission, the Trade Promotion Organization of India (ITPO), Exim Bank and others provide great help in easing the sale of Indian products abroad. They provide information through advertising, sales promotion programs and public relations. They do not do this to help a particular company.
Their aim is to promote Indian products abroad. The main objectives of the Export Promotion Agency are: (I)to recognize the potential of exporting Indian products; (ii)to impress foreigners on India's industrial development and technical capabilities; and(iii)to improve their impression on the quality of Indian goods.
The following proposals are considered necessary for promoting Indian exports:
1. The government should set up a control room in the Ministry of trade to encourage exporters. The task of this control room is to increase the equipment of export and solve the problems we face in export. This should work towards streamlining exports.
2. It is necessary for the government to increase exports to set up training institutions. Export training should be popular in countries. The Indian Trade Promotion Organization should make special efforts. It should arrange for foreign trade courses to be taught in various universities. Gandhi
3. The government must arrange the production of goods in demand abroad. Proper planning should be prepared for the export of goods. Export goods should be produced constantly. Goods that are in demand in the domestic market should be exported only when domestic demand is met. These goods should be high quality and should be competitively priced.
4. It needs to be public about what is in demand abroad. Country doctor, technician etc. You should be encouraged to work abroad on the basis of a business contract. Foreign tourism should be given facilities based on priorities.
5. However, in our country it has not proven to be very effective and beneficial. The government sector needs to adopt a private sector-like approach towards exports. For exports to increase, it is important for the government to make bilateral trade agreements with other countries. Foreign trade must be successful.
6. Indian businessmen should set up joint ventures in India, and governments should do so abroad. In addition, foreign businesspeople should be encouraged to set up more and more export-oriented units in India.
7. It is necessary for the government to provide the people with the necessary information on exports. People should know what to export. A country-by-country export survey should be conducted. It is necessary to study the possibility of export. People should know about the facilities the government gives to exporters.
Foreign market entry mode decisions
Is our company the first to establish overseas export bases or licensed products in newly eligible countries and regions? Or does the possibility associated with the position of the starter justify such bold moves as entry into the alliance, acquisition and even the establishment of a new subsidiary? Many companies have moved from exporting to licensing to higher investment strategies and are actually treating these alternatives as a learning curve. Each of them has clear advantages and disadvantages. This section explores the entry mode of traditional international expansion. In addition to imports, exports, licensing agreements, partnerships and strategic alliances, acquisitions, and new wholly owned subsidiaries, also known as Greenfield ventures, these modes of entry into the international market "international expansion entry mode". Select enterprise valuation options in input mode to achieve optimal strategic objectives.
Export
Export is the marketing and direct sale of domestically produced goods in other countries. Export is a traditional and well-established way to reach overseas markets. There is no need to produce goods in the target country, so there is no need to invest in foreign production facilities. Most of the costs associated with exports take the form of marketing costs.
License
Itcan consider licensing agreements with foreign companies. Here's how it works: you own a US company that sells coffee-flavored popcorn. There is no doubt that your products will be a big hit in Japan, but you do not have the resources to set up a factory or sales office in that country. So, you will be paid by licensee in exchange for your licensee producing coffee flavored popcorn using your special process and selling it in Japan under your brand name, but for a royalty fee.
Consignment manufacturing and outsourcing
Due to the high domestic labor costs, many US companies manufacture their products in countries with low labor costs. This array is an international contract manufacturing or outsourcing US Company may contract with a foreign local company to manufacture any of its products. But it keeps control of product design and development and puts its own label on finished products. Contract manufacturing is very common in the United States apparel business where many American brands are made in Asian countries such as China, Vietnam, Indonesia and India.
Partnership
Another way to enter the new market is through strategic alliances with local partners. A strategic alliance provides that the parties concerned cooperate in a certain way for a certain period of time to achieve a common objective an alliance on a contract between two or more companies to determine whether an approach is suitable for the company, partners can bring to the venture in terms of both tangible and intangible aspects the advantage of partnering with local companies is that the local companies the fact is that they are more likely to understand the local culture, the market, and how to do business than external companies. If they have a recognized and reputable brand name in the country or have an existing relationship with a customer that the company may want to access, a partner acquisition can be difficult.
Acquisitions
Acquisitions are transactions in which companies gain control of other companies by buying their shares, exchanging shares for themselves, or, in the case of private companies, in our increasingly flat world cross-border acquisitions have risen dramatically. In recent years, cross-border acquisitions have accounted for more than 60% of all acquisitions completed worldwide Foreign direct investment and subsidiaries.
However, as the market expands, companies may decide to increase their competitive advantage by investing directly in businesses that take place in other countries.
Key takeaways:
a) The government of India has banned exports to some countries.
b) There may be some goods whose exports are restricted or prohibited in full or in some countries only.
4. The first step in the foreign market selection process is to use macro variables to distinguish between countries with basic opportunities and those with no or little opportunities.
5. The process of selecting a target country through the screening process involves identifying the criteria that an exporter uses to select a country, or comparing one country to the other.
6. Market size is an important factor in choosing overseas markets .
7. The impact of the political environment of the importing country on market selection is clear.
8. Export promotion is an important way to boost economic growth and correct trade imbalances.
9. Culture, to some extent, determines the needs and expectations of its members.
10. Sources of information available to exporters
11. The Export Promotion Agencies of each country are trying to promote their own exports.
12. Is our company the first to establish overseas export bases or licensed products in newly?
13. Another way to enter the new market is through strategic alliances with local partners.
14. Acquisitions are transactions in which companies gain control of other companies by buying their shares, exchanging shares for themselves, or, in the case of private companies.
References:
