DOMESTIC MARKETING AND INTERNATIONAL MARKETING
HOW DOES DOMESTIC MARKETING DIFFER FROM INTERNATIONAL MARKETING?
Both marketing practices involves the same basic marketing tools, concepts, techniques and knowhow. Differences only arise in applications of these fundamental domestic marketing practices to international markets. International marketing is characterized by complex environmental differences and conditions.
Domestic marketing is the production, promotion, distribution and selling of goods and/or services within the borders of the country of the company origin. International Marketing involves production, promotion, distribution and selling of goods and/or services outside the country borders. International marketing becomes complex due to the host country government polices, political and economical situations, social and cultural difference as well as competition
Product Orientation: Every company believes that it has a superior quality product based on quality and features. Because of this, they feel that the customer will like it. In both domestic and international marketing, this view is the same. However, in international marketing, tastes and preferences of customers differ due social cultural differences. This calls for standardization or adaptation of the product in order to fit into the international market.
Market Orientation: In both cases, the customer is placed at the heart of the business. The organization tries to understand the needs of the customer by using appropriate research methods. Appropriate processes are developed to make sure feedback from customers is fed back into the organization. Here, the customer is the king. In international marketing, the process gets complicated due to environmental differences and conditions like government policies and geographical differences. The marketer has to understand target market cultures and beliefs to create a niche for his product.
Sales promotion concept: This is applied in both domestic and international marketing strategies. This calls for the marketer to understand what and how the customer perceives the product the company is selling. International market perception is much complex to understand and there more resources are required to conduct market research. This will help the company understand what product the customer prefers and how they would like it physically. This gets complex because of geographical distances between the host and local countries.
Consumer/Customers or clients: In domestic marketing, the company deals with one set of consumers who are well known to the marketer or the organization. It gets complex when one crosses the borders to go
international. Here, the company has to deals will different sets of customers
with different needs and perception. The company products meet with other international product as well as host country products in the market to compete. The company products therefore should be of internationals standards in quality, packaging, quality, size and shape.
Pricing of the products: The company takes into consideration several factors when setting prices for their products. This factors ranges from level of completion, cost of producing the product, price range of similar products, age of the organization, reputation of the company and the product, government regulations and controls. In international marketing, pricing decisions calls for a wider scanning of the international environment and domestic environment. In international marketing, other factors comes into play like the foreign currency exchange rates, transport costs, level of competition in the host country, government regulations like quotas and tariffs, prices of like products, economic level and willingness of the customers to pay at what price.
Distribution channels and strategy: In both cases, the marketer and the organization should look ate different and appropriate channels of distribution of their products. In domestic marketing, available and most efficient and effective channels are well known to the company. It gets very complex in international markets. This is due distances between the domestic and host countries. In international marketing, the company has to look for various ways and methods of entry and distribution like franchising, licencing, direct export, assembly, management service contracts, takeovers, contract manufacturing and strategic alliances, use of retailers, wholesalers.
Business and Financial Risk: In both ventures, business and financial risk is inevitably present. In domestic marketing, it is easier to manage, predict and hedge against these risks. It is easier to conduct business. These risks become complex and easier to get into when one ventures international. Doing business in other countries can get risky and difficult due to political situations in those countries, host government regulations, change of policies, competition, indigenous and native customers hostilities, rise of differences between the host and domestic countries.
Financial Resources: Domestic and international marketing requires financial resources. International marketing requires relatively large amount of resources compared to domestic marketing. Costs associated with international marketing gets larger due to geographical distances, marketing research required etc.
Entry strategy: In international marketing, the marketer and the organization should strategize once proper research has been conducted on methods of entry into the foreign markets. Entry methods can be franchise, licencing, direct export, assembly, management service contracts, takeovers, contract manufacturing and strategic alliances. It is much easier to set up a business in the domestic market and this is much less complex than in international trade.
By Godfrey Chege
Senior Accountant, Dreamcatcher Productions Limited
CPA, BBM (Moi University, Finance and Banking)