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Marketing mix differ in the domestic and international environment

When a nation is politically unstable, multinational firms can still conduct business profitably. Their strategies will be affected however. Inventories will be low and currency will be converted rapidly. The result is that consumers in the foreign nation pay high prices, get less satisfactory products, and have fewer jobs. Governments set some exchange rates independently of the forces of supply and demand. The forces of supply and demand set others.

  1. Consider some of the following technologically related problems that firms may encounter in doing business overseas. Multi-Domestic Marketing A multi-domestic marketing strategy assumes consumers in different countries or geographic regions differ drastically from one another.
  2. Decision-making control is decentralized because management must be able to respond on a local level.
  3. Global Marketing A global marketing strategy assumes all consumers in all countries or geographic regions are the same. International marketing requires huge capital investment, but domestic marketing requires less investment for acquiring resources.
  4. When a nation is politically unstable, multinational firms can still conduct business profitably.

While the concept of exchange rates appears relatively simple, these rates fluctuate widely and often, thus creating high risks for exporters and importers. Regional trading blocs represent a group of nations that join together and formally agree to reduce trade barriers among themselves. A free trade agreement within ASEAN member nation allows for the free exchange of trade, service, labor and capital.

However, a universal implementation of these standards is scheduled for 2020. One of the potentially interesting results of trade agreements like ASEAN or NAFTA is that many products previously restricted by dumping laws, laws designed to keep out foreign products, would be allowed to be marketed.

The laws were designed to prevent large producers from flooding markets. In 2007, about 60 nations had anti-dumping legislation. Such agreements are designed to facilitate trade through the establishment of a free trade area, customs union or customs market. Free trade areas and customs unions eliminate trade barriers between member countries while maintaining trade barriers with nonmember countries.

Global Marketing

Customs unions maintain common tariffs and rates for nonmember countries. A common market provides for harmonious fiscal and monetary policies while free trade areas and customs unions do not.

Trade agreements are becoming a growing force for trade liberalization; the development of such agreements provides for tremendous opportunities for companies with global operations. The creation of the single European market in 1992 was expected to change the way marketing is done worldwide. It meant the birth of a market that was larger than the United States, and the introduction of European Currency Units Euros in place of the individual currencies of member nations.

Experience in multilingual marketing would help non-European companies succeed in this gigantic market. With new technologies such as multilingual processing programs, it would be possible to target potential customers anywhere in Europe, in any language, and in the same marketing campaign. Progress toward European unification has been slow-many doubt that complete unification will ever be achieved.

However, on 1 January 1999, 11 of the 15 member nations took a significant step toward unification by adopting the Euro as the common currency. These 11 nations represent 290 million people and a USD 6. Tariffs Most nations encourage free trade by inviting firms to invest and to conduct business there, while encouraging domestic firms to engage in overseas business. These nations do not usually try to strictly regulate imports or discriminate against foreign-based firms.

There are, however, some governments that openly oppose free trade. But these restrictions vary with East-West relations. The most common form of restriction of trade is the tariff, a tax placed on imported goods. Protective tariffs are established in order to protect domestic manufacturers against competitors by raising the prices of imported goods.

Expropriation All multinational firms face the risk of expropriation. That is, the foreign government takes ownership of plants, sometimes without compensating the owners.

However, in many expropriations there has been payment, and it is often equitable. Many of these facilities end up as private rather than government organizations.

They may not be available in lesser developed nations.

Differences Between Domestic and International Business

Consider some of the following technologically related problems that firms may encounter in doing business overseas: A way of classifying the economic growth of countries is to divide them into three groups: They have high literacy, modem technology, and higher per capita incomes.

Developing nations are those that are making the transition from economies based on agricultural and raw materials production to industrial economies.

The developing nations, on the other hand, have growing population bases, and although they currently import limited goods and services, the long-run potential for growth in these nations exists. Marketers in such nations must be educators, emphasizing information in their market programs.

As the degree of economic development increases, so does the sophistication of the marketing effort focused on the countries.

Global Marketing vs. Multi-Domestic Marketing

A typical American company will design a new product, then calculate the cost. Product designers and engineers are then directed to meet the cost target. US firms tend to build products, figure how much it costs to build the product, and then ask whether the product can be sold at a profitable price. US companies tend not to assess what the market will be willing to pay.

Examples of objectives might be: The Wall Street Journal wsj. The Interactive Journal provides extensive information about world business.

Difference Between Domestic and International Marketing

World-Wide focuses on international news and events. Under the Asia, Europe, and The Americas headings, you will find information specific to these regions. For country specific information, page down to Country News in any of the regional sections.

  1. International marketing requires more time and effort, not to mention its being very risky too. There are new skills to learn and new knowledge to acquire about the country you will be going into.
  2. The results of the cross-cultural analysis and the type of product offered will determine the appropriate international strategy -- global or multi-domestic.
  3. Although the people that you will deal with will not expect you to be completely in tune with the culture, respect and politeness will go a long way. Rather they should whet your appetite for success.
  4. Intellectual Property Link to Level 4. These laws and regulations can severely impact the potential long term success of your business and it is wise to consult with legal counsel, based in that country, to ensure you reduce the risk of these laws and regulations effect on your firm.
  5. Products are tailored for each market, based on consumer wants and needs. The international market is very uncertain and a company must always be ready for changes that may suddenly occur.

Using the drop down menu, you will find links to recent news and business articles. Travel news is found in the Business Fare section of Marketplace. Here you will find a Currency Converter as well as travel related business articles. Review the articles and write a one-paragraph synopsis of each. Summary Most American firms have discovered that many opportunities exist in international marketing, as evidenced by the vast amount of goods exported by US-based firms.

There are many reasons why US firms choose to engage in international marketing. Perhaps the most attractive reasons are the market expansion and profit opportunities afforded by foreign markets. Basic principles of domestic marketing apply to international marketing. A firm has five basic foreign market entry options, the selection of which depends largely on the degree of control that the firms wishes to maintain over its marketing program.

Some firms choose to customize their market programs, adjusting their marketing mix to meet the needs of each target market. Others use a standardized marketing mix. The international marketing environment includes concern for: