Both in domestic marketing and international marketing, a company needs to identify and fulfill the needs of the customers. Just like a domestic marketer, an international marketer can only be successful, if he comes out with the right kind of products or services with an attractive price tag.
The product or service also needs to be widely available and the communication needs to be effective. But there are a lot of differences also, which makes it a very complex exercise.
Following are the differences:
1. Currency:
Each country has its own monetary system and that’s why each one has a separate currency also. Thus, the exchange value of the currency is different from that of other. For exam. In India, currently the exchange rate for US Dollar (USD) to Indian Rupee (INR) is around 62, while the exchange rate for USD to Nepali Rupee is around 100.
Due to the difference in currency, a company needs to quote the rates in currency, which is acceptable to the other party. All across the world US Dollar is the widely accepted currency. As the exchange rate changes every moment, a company bears the risk of changes in the exchange rate. Although there are measures through which you can hedge the currency, but still the risk lies with the company. Recently with the value of Indian Rupee going down, IT companies in India has benefitted a lot.
2. Culture:
Culture is a major factor of differentiation. Edward Taylor has defined culture as ‘that complex whole, which includes knowledge, belief, art, morals, law, custom and any other capabilities and habits acquired by individuals (as members) of society’. Each country is unique and the requirements for their customers also tend to be different.
This makes the marketing exercise very complex. For each market, the company needs to take into consideration the concerned market to formulate and implement the right strategy.
3. Language:
In almost every country, the language is different. Although English is widely spoken all across the world, yet the languages are different in many countries. In India also, an international company has to take care of so many languages besides Hindi to cater to the whole market.
4. Legal:
Each country has its own legal system and a company needs to follow the system to market the products. In every country, the export-import procedures and documentations are also different. All of these need to be taken care of, while dealing with the international markets.
Sometimes, a company can also benefit from the legal system. For example – In India Ford sells Ecosport in less than four meter size, while it sells the same compact SUV over four meter length in Chin, to take advantage of the excise duty structure for small cars.
5. Trade Barriers:
Each country imposes certain trade barriers, to restrict the trade. These barriers can either be tariff or non-tariff barriers. A company is affected by the trade barriers in different countries. It needs to find out better ways to access the international markets.
6. Mobility of Factors of Production:
Internally, in any country the factor of production are highly mobile. But internationally, there is limited mobility due to the difference in legal structure. Now, with the various advancements, the mobility of labour is increasing, while money or capital is also becoming more mobile. Overall, mobility of factors of production impacts internal marketing a lot.
All the above factors make international marketing a complex exercise. The only way to counter this is to implement the right kind of marketing mix, in this changed scenario.