Explain the stages that are typically taken by a firm moving from a domestic business to an international?
Domestic Marketing: involves the company manipulating a series of controllable variables such as price, advertising, distribution and the product in a largely uncontrollable external environment that is made up of different economic structures, competitors, cultural values and legal infrastructure within specific political or geographic country boundaries:
International Marketing: Involves operating across a number of foreign country markets in which not only do the uncontrollable variables differ significantly between one market and another, but the controllable factors in the form of cost and price structures, opportunities for advertising and distributive infrastructure are also likely to differ significantly. It is these sorts of differences that lead to the complexities of international marketing.
The key difference between domestic marketing and marketing on an international scale is the multi-dimensionality and complexity of the many foreign markets a company may operate in. The essential elements of effective international marketing are the ability to interpret the business environment, recognize foreign market opportunities and appreciate how the firm’s resources can best be used to match and develop patterns of market demand. The development of successful international marketing strategies is based on a sound understanding of the similarities and differences that exist in countries around the world.
Differences between International and Domestic marketing:
There are many factors within the International environment which substantially increases the challenge of International marketing. These can be summarised as follows:
• Culture - Often diverse and multi- cultural markets.
• Markets - Widespread and sometimes fragmented.
• Data - Difficult to obtain and often expensive.
• Politics - Regimes vary in stability- political risk becomes an important variable.
• Governments - Can be a strong influence in regulating importers and foreign business ventures.
• Economies - Varying levels of development and varying and sometimes unstable currencies.
• Finance - Many differing finance systems and regulatory bodies.
• Stakeholders - Commercial, home country and host country.
• Business - Diverse rules culturally influenced.
• Control - Difficult to control and coordinate across markets.
Moving from being a purely domestic business to an international one is typically a gradual evolution through a number of stages.
1. Management is not interested in exporting and would be unwilling to fill an unsolicited order. The company exists to serve the domestic market only and does not intend to enter foreign markets.
2. Management fills unsolicited orders from abroad. The ‘passive exporter’ tends to lack any international focus and perceives export...