11. International marketing

Marketing is the process of studying the wants and needs of others and then satisfying those wants and needs with quality products or services at competitive prices.

International marketing is marketing activities that are performed to compete beyond the domestic market. International marketers must have a profound awareness of the foreign environment. The marketing strategy ordinarily is adjusted to meet the needs and desires of foreign markets.

The level of involvement in international marketing can range from casual exporting to globalization of markets. Casual or accidental exporting is the lowest level of commitment. Full-scale international marketing involvement means that top management recognizes the importance of developing international marketing strategies to achieve the firm's goal. Globalization of markets requires total commitment to international marketing; it embodies the view that the world is a single market.

Traditional full-scale international marketing is based on products customized according to cultural, regional, and national differences.

Marketers must understand the complexities of the international marketing environment before they can formulate a marketing mix. They therefore collect and analyze secondary and primary data about international markets.

Environmental aspects of special importance include cultural, social, economic, political and legal forces. Cultural aspects include customs, values, morals, knowledge. Economic forces – credit, buying power, income distribution. Political and legal forces include the political system, national laws, pressure groups, courts.

After a country's environment has been analyzed, marketeers must develop a marketing mix and decide whether to adapt product or promotion. There are five possible strategies for adapting product and promotion across national boundaries: (1) keep product and promotion the same worldwide; (2) adapt promotion only; (3) adapt product only; (4) adapt both product and promotion; (5) invent new products. But only if foreign marketing opportunities justify the risk will a company go to the expense of adapting the marketing mix.

There are several ways of getting involved in international marketing. Exporting is the easiest and most flexible method. Licensing is an alternative to direct investment; it may be necessitated by political and economic conditions. Direct ownership of foreign divisions or subsidiaries is the strongest commitment to international marketing and involves the greatest risk.

12. International trade organizations

Most nations recognize the need to expand world trade. Some nations have joined together to form trading partnerships and to write up trade agreements that facilitate open trade.

Organizations and trade agreements that facilitate world trade include the International Monetary Fund (IMF), the World Bank, the General Agreement on Tariffs and Trade (GATT), common markets, and producers' cartels.

The International Monetary Fund was signed into existence by 44 nations in 1944. The IMF is an international bank that usually makes short-term loans to countries experiencing problems with their balance of trade.

The World Bank, an autonomous United Nations agency, is concerned with the development of the infrastructure (roads, schools, hospitals, power plants) in less-developed countries. The World Bank borrows from the more prosperous countries and lends at favourable rates to less developed countries.

The General Agreement on Tariffs and Trade (GATT) was established in 1948. This agreement provided a forum for negotiating mutual reductions in trade restrictions.

Some countries felt that their economies would be strengthened if they were to establish more detailed trade agreements with other countries in the same region. Some of these agreements involved forming producers' cartels and common markets.

Producers' cartels are organizations of commodity-producing countries. They are formed to stabilize or increase prices, optimizing overall profits in the long run. The most obvious example today is OPEC.

A Common market is a regional group of countries that have no internal tariffs. Common markets have a common external tariff and a coordination of laws to facilitate exchange. Notable are the European Union (EU), the Central American Common Market (CACM), and the Caribbean Common Market (CCM).

There are many more such arrangements including negotiating groups (such as the Special Coordinating Committee for Latin America) that join together to negotiate trade agreement; commodity associations that bring together countries that are concerned with specific commodities; commodity agreements, which are multilateral agreements among buyers and sellers to stabilize prices and earnings (such as for cocoa, sugar, tea, and coffee); and more.