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Reasons For Going International

International marketing involves the exchange of goods and services between different national markets and includes various activities like exports, imports, contractual agreements, joint ventures, wholly owned manufacturing facilities abroad, contract manufacturing, management contracting, third country locations, and mergers and acquisitions. The key reasons for companies to engage in international marketing are to take advantage of large foreign markets, appeal to a more diversified range of customers, and gain access to lower costs or resources not available in the home country.

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41 views

Reasons For Going International

International marketing involves the exchange of goods and services between different national markets and includes various activities like exports, imports, contractual agreements, joint ventures, wholly owned manufacturing facilities abroad, contract manufacturing, management contracting, third country locations, and mergers and acquisitions. The key reasons for companies to engage in international marketing are to take advantage of large foreign markets, appeal to a more diversified range of customers, and gain access to lower costs or resources not available in the home country.

Uploaded by

sanjay_kamath4886
Copyright
© Attribution Non-Commercial (BY-NC)
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International Marketing can be defined as exchange of goods and services between different national markets involving buyers and

sellers. According to the American Marketing Association, International Marketing is the multi-national process of planning and executing the conception, prices, promotion and distribution of ideal goods and services to create exchanges that satisfy the individual and organi ational ob!ectives."

REASONS FOR GOING INTERNATIONAL

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SCOPE OF INTERNATIONAL MARKETING International Marketing constitutes the following areas of business8-

-xports and Imports8 International trade can be a good beginning to venture into international marketing. 6y developing international markets for domestically produced goods and services a company can reduce the risk of operating internationally, gain ade9uate experience and then go on to set up manufacturing and marketing facilities abroad

(ontractual Agreements8 #atent licensing, turn key operations, co : production, technical and managerial know : how and licensing agreements are all a part of international marketing. 3icensing includes a number of contractual agreements whereby intangible assets such as patents, trade secrets, know : how, trade marks and brand names are made available to foreign firms in return for a fee.

;oint 4entures8 A form of collaborative association for a considerable period is known as !oint venture. A !oint venture comes into existence when a foreign investor ac9uires interest in a local company and vice versa or when overseas and local firms !ointly form a new firm. In countries where fully owned firms are not allowed to operate, !oint venture is the alternative.

7holly owned manufacturing8 A company with long term interest in a foreign market may establish fully owned manufacturing facilities. 'actors like trade barriers, cost differences, government policies etc. encourage the setting up of production facilities in foreign markets. Manufacturing abroad provides the firm with total control over 9uality and production.

(ontract manufacturing8 7hen a firm enters into a contract with other firm in foreign country to manufacture assembles the products and retains product marketing with itself, it is known as contract manufacturing. (ontract manufacturing has important advantages such as low risk, low cost and easy exit.

Management contracting8 $nder a management contract the supplier brings a package of skills that will provide an integrated service to the client without incurring the risk and benefit of ownership. )hird country location8 7hen there is no commercial transactions between two countries due to various reasons, firm which wants to enter into the market of another nation, will have to operate from a third country base. 'or instance, )aiwan<s entry into china through bases in &ong 1ong.

Mergers and Ac9uisitions8 Mergers and Ac9uisitions provide access to markets, distribution network, new technology and patent rights. It also reduces the level of competition for firms which either merge or ac9uires.

Issues #-%)3competition

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