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Organising For International Marketing

BusinessPlanNigeria

ORGANISING FOR INTERNATIONAL MARKETING

APPROACHES TO INTERNATIONAL MARKETING

Indirect Export

Indirect market entry methods involve the use of intermediaries who handle all documentations, physical movement of goods, and channels of distribution for sale, indirect exports may take place either with or without the knowledge of the manufacturer himself.

Direct export

Companies eventually may decide to handle their own exports. The investment and risks are somewhat greater, but so is the potential return as a result of not paying an intermediary.

Licensing

Licensing is a simple way for a manufacturer to become involved in international marketing. The licensor licenses a foreign company to use a manufacturing process, trademark, patent, trade, secret, or other item of value for a fee or royalty. The licensor thus gains entry into the foreign market at little risk; the licensee gains production expertise of a well-known product or name without having to start from scratch.

Joint Ventures

Foreign investors may join with local investors to create a joint venture in which they share ownership and control. Many companies have announced joint ventures in recent years.

Direct Investment

The ultimate form of foreign involvement is direct ownership of foreign-based assembly or manufacturing facilities. The foreign company can buy part or full interest in the local company or build its own facilities.

ADAPTATION  OF  MARKETING  PLANS  FOR  INTERNATIONAL MARKETING

Planning in world markets entails determining in advance how your business can meet its objectives internationally.

You should start with market research to help you identify and evaluate the target markets where your business can succeed. Are you going to import or export? Look at what you can import; how it can help your business; what is the predicted demand in your target country for your exports; whether your product is suitable for export, the potential of developing your own manufacturing arm; where the best location would be for this; what labour costs and supplies are like; and what the legal and tax implications are.

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PROBLEMS OF INTERNATIONAL MARKETING

Going abroad despite its various advantages and the high stake involved has a lot of disadvantages. Just as the stake is high so is the risk. Some of the risks associated with a firm going abroad include amongst others:

The company might not understand foreign customers’ preferences and fail to offer a competitive product.
The firm may not understand the foreign country’s business culture or know how to deal effectively with foreign nationals.
The firm might underestimate foreign relations and thereby in cur unexpected losses.
Marketing research efforts may completely be ignored or sometimes such research is insufficient, misdirected or grossly inadequate.
The firm might realise that it lacks managers with international experience.
The foreign country might change its commercial laws by way of devaluing its currency or undergo a political revolution to the disadvantage of foreign firms.
TARIFFS REGULATE INTERNATIONAL MARKETING

What Is a Tariff?

In simplest terms, a tariff is a tax. It adds to the cost of imported goods and is one of several trade policies that a country can enact.

Why Are Tariffs and Trade Barriers Used?

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Tariffs are often created to protect infant industries by developing economies, but are also used by more advanced economies with developed industries. Here are some of the reasons tariffs are used:

Protecting Domestic Employment

The levying of tariffs is often highly politicised. The possibility of increased competition from imported goods can threaten domestic industries. These domestic companies may fire workers or shift production abroad to cut costs, which means higher unemployment and a less happy electorate. The unemployment argument often shifts to domestic industries complaining about cheap foreign labor, and how poor working conditions and lack of regulation allow foreign companies to produce goods more cheaply. In economics, however, countries will continue to produce goods until they no longer have a comparative advantage (not to be confused with an absolute advantage).

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Protecting Consumers

A government may levy a tariff on products that it feels could endanger its population. For example, South Korea may place a tariff on imported beef from the United States if it thinks that the goods could be tainted with disease.

Protecting Infant Industries

The government of a country will levy tariffs on imported goods in industries in which it wants to foster growth. This increases the prices of imported goods and creates a domestic market for domestically produced goods, while protecting those industries from being forced out by more competitive pricing.

National Security

Barriers are also employed by developed countries to protect certain industries that are deemed strategically important, such as those supporting national security. Defense industries are often viewed as vital to state interests, and often enjoy significant levels of protection.

Who Benefits from tariffs?

The benefits of tariffs are uneven. Because a tariff is a tax, the government will see increased revenue as imports enter the domestic market. Domestic industries also benefit from a reduction in competition, since import prices are artificially inflated. Unfortunately for consumers – both individual consumers and businesses – higher import prices mean higher prices for goods. If the price of steel is inflated due to tariffs, individual consumers pay more for products using steel, and businesses pay more for steel that they use to make goods. In short, tariffs and trade barriers tend to be pro-producer and anti-consumer.

The effect of tariffs and trade barriers on businesses, consumers and the government shifts over time. In the short run, higher prices for goods can reduce consumption by individual consumers and by businesses. During this time period, businesses will profit and the government will see an increase in revenue from duties. In the long term, businesses may see a decline in efficiency due to a lack of competition, and may also see a reduction in profits due to the emergence of substitutes for their products. For the government, the long-term effect of subsidies is an increase in the demand for public services, since increased prices, especially in foodstuffs, leave less disposable income.

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How Do Tariffs Affect Prices?

Tariffs increase the prices of imported goods. Because of this, domestic producers are not forced to reduce their prices from increased competition, and domestic consumers are left paying higher prices as a result. Tariffs also reduce efficiencies by allowing companies that would not exist in a more competitive market to remain open.

SUMMARY

Approaches for international marketing are; Indirect Export, Direct export, Licensing, Joint Ventures, and Direct Investment.

Planning in world markets entails determining in advance how your business can meet its objectives internationally.

The problems of international marketing are: language and cultural barriers, lack of skilled managers, political revolutions, and change in commercial laws of the host country, and so on.

A tariff is a tax which adds to the cost of imported goods and is one of several trade policies that a country can enact.

Some reasons why tariffs are used are: Protecting Domestic Employment, Protecting Consumers, Infant Industries, and National Security.

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