Q.1) Name & explain with suitable examples, three reasons why international marketing is more challenging than domestic marketing? [10marks]
Ans> Domestic Marketing Versus International Marketing- Domestic marketing involves one set of uncontrollables derived from the domestic marketing. International marketing is much more complex because a marketer faces two or more sets of uncontrollable variables originating from various countries.The marketer must cope with different cultural, legal, political & monetary systems.
Benefits of International Marketing
i. Growth of Overseas markets-> Developing countries inspite of economic & marketing problems, are excellent markets. The world market is four times larger than the US market. Hence many US companies grow by going international. For eg, in case of Amway Corp., a privately held US manufacturer of cosmetics, soaps & vitamins Japan represents a larger market than the United States.
ii. Sales & Profits-> Foreign markets constitute a larger share of the total business of many firms that have wisely cultivated markets abroad. IBM & Compaq, for eg, sell more computers abroad than at home. In case of Coca-Cola, international sales account for more than 80% of the firm’s operating profits.
iii. Diversification-> Demands for most products is affected by such cyclical factors as recession & seasonal factors as climate. The unfortunate consequence of these variables is sales fluctuations, which can be substantional enough to cause layoffs of personnel. One way to diversify a company’s risk is to consider foreign markets as a solutions for variable demand.
iv. Inflation & Price Moderation-> Imports can also be highly beneficial to a country because they constitute reserve capacity for local economy. Without imports, there is no incentive for domestic firms to moderate their prices. The lack...