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Monday, 11 June 2012

Q.2 Differentiate between foreign marketing and domestic marketing.

Domestic vs. International marketing
Domestic marketing refers to the practice of marketing within a firm’s home country. Whereas International or foreign marketing is the practice of marketing in a foreign country; the marketing is for the domestic operations of the firm in that country.
Domestic marketing finds the "how" and "why" a product succeeds or fails within the firm’s home country and how the marketing activity affects the outcome. Whereas, foreign marketing deals with these questions and tries to find answers according to the foreign market conditions and it provides a micro view of the market at the firm’s level.
In domestic marketing a firm has insight of the marketing practices, culture, customer preferences, climate and so on of its home country, while it is not totally aware of the policies and the market conditions of the foreign country.
The stages that have led to achieve global marketing are:
· Domestic marketing - Firms manufacture and sell products within the country. Hence, there is no international phenomenon.
· Export marketing - Firms start exporting products to other countries. This is a very basic stage of global marketing. Here, the products are developed based on the company’s domestic market although the goods are exported to foreign countries.
· International marketing - Now, Firms start to sell products to various countries and the approach is ‘polycentric’, that is, making different products for different countries.
· Multinational marketing - In this stage, the number of countries in which the firm is doing business gets bigger than that in the earlier stage. And hence, the company identifies the regions to which the company can deliver same product instead of producing different goods for different countries. For example, a firm may decide to sell same products in India, Sri lanka and Pakistan, assuming that the people living in this region have similar choice and at the same time offering different product for American countries. This approach is termed ‘regiocentric approach’.
· Global marketing - Company operating in various countries opts for a common single product in order to achieve cost efficiencies. This is achieved by analysing the requirements and the choice of the customers in those countries. This approach is called ‘Geocentric approach’.
The practice of marketing at the international stage does not designate any country as domestic or foreign. The firm is not considered as the corporate citizen of the world as it has a home base.
The firm must not have a ’single marketing plan’, because there are differences between the target markets (that is domestic or international markets). There should never be a rigid marketing campaign. A firm that is successful internationally first obtains success locally.
Few approaches that you can consider for an international marketing are:
· Advertise as a foreign product - By doing so, the product will be considered as genuine and original in some countries.
· Joint partnership with a local firm - finding a firm that has already established credibility will benefit a lot. The product will be considered as a local product by following this marketing approach.
· Licensing - You can sell the rights of your product to a foreign firm. Here the problem is that the firm may not maintain the quality standard and therefore may hurt the image of the brand.
Culture is a major factor which influences marketing decisions and practices in a foreign country. For example, in the middle-eastern countries the prior approval of the governing authorities should be taken if a firm plans to advertise a product related to women’s apparel, as showcasing some aspects of women clothing is considered immodest and immoral.
The differences between domestic marketing and international marketing are listed below:
Characteristics
International Marketing
Domestic Marketing
1. Culture
Multi culture
Single culture and in some cases multi culture
2. Data accessibility
Very difficult
Easy
3. Data reliability
Very Low
High
4. Control
Difficult
Relatively easy
5. Consumer preferences
Vary from country to country
Vary in small extent
6. Product mix
Adaptability required
Standardization required
7. Business operation
More than one country
Home country only
8. Currency exposure
Required
Required only if there is importing

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