Challenges in International Marketing and Sales by

The Challenges in International Sales & Marketing

Presented by,Praveen Jalaraddi

Regional Marketing OfficerFuture Robo System

International Sales and Marketing?

Definition of International Sales & Marketing:“The performance of business activities designed to plan, price, promote and direct the company’s flow of goods and services to consumers or users in more than one nation for a profit” (4 P’s)

What is the difference between marketing domestically and internationally

Marketing concepts are universal (goal is to make a profit)Difference is that in international marketing ALL environments have to be taken into consideration when the marketing plan is developed and executed

• Must consider the legal environment, governmental controls, climate & weather, cultural beliefs, buyer behavior… (uncontrollable elements)

Globalization of Markets

Why international marketing is so important:Companies can no longer ignore the effects of internationally marketing

• Competition no longer exists just from domestic companies

• In order to sustain profitability and growth margins of the past, companies have to look for alternative methods of marketing their products and services

– “In a study conducted on U.S. manufacturing companies of all sizes, it was found that multinational companies outperformed their strictly domestic U.S. counterparts by more than twice as fast in sales and earned much greater returns on equity and assets..”

International Sales & Marketing Task

The TasksMarketing Plan (controllable)

• Price, Promotion, Product, Place (distribution)

Domestic Environment (uncontrollable)• Political/legal, competition, economy

Foreign Environment (uncontrollable)• Structure of distribution, geography and infrastructure,

culture, political/legal, economy, competition, level of technology…

International Sales & Marketing Task

Importance of “uncontrollable elements”In order to succeed internationally a company must understand the impact of the uncontrollable elements that make up that country’s culture

• “Cultural understanding is like an iceberg – we are not aware of nine-tenths of it”

• In order to be successful in adapting to the international markets, the market plan needs to incorporate strategies to anticipate as much of the uncontrollable factors that influence both the foreign and domestic markets and allow for maximum flexibility to adjust for future changes

International Sales & Marketing Task

Obstacles to success in international marketing:

“SRC” – Self-reliance criterion & ethnocentrism:• Using one’s culture, values, experiences as a basis for

decisions in international situations– By reacting to situations in this manner, cultural differences

are ignored, and behavior might be offensive– The less ego-centric a company is, the greater success it

will have in marketing it’s products and services

Developing Global Awareness

To be globally aware, a company must have the following

ObjectivityTolerance of cultural differencesKnowledge of cultures, history, world market potential, and global economic, social, and political trends

Stages of International Marketing Involvement

1. No Direct Foreign MarketingCompany does not actively pursue customers in foreign markets, but receives them thru unintended channels

• Products are bought abroad through domestic wholesalers/distributors, website on the internet

2. Infrequent Foreign MarketingCompany sells to foreign markets only when a temporary surplus of product exists

• Once surplus is gone, foreign activity is gone• Few companies fit this model because of the need to

develop long term relationships in foreign countries

Stages of International Marketing Involvement

3. Regular Foreign MarketingCompanies produce their products and services to primarily sell domestically, but also internationally

• Through domestic/foreign middlemen, sales force in foreign countries

4. International MarketingCompanies are fully engaged in international marketing strategies

• Companies are now international or multi-national

Stages of International Marketing Involvement

5. Global Marketing ImportanceChange from its marketing activities to all activities focused in a global perspective

• Treat the world as one market• Market segment is no longer focused on

national borders, rather such things as income levels, usage patterns, or other factors are looked across borders

Strategic Approaches to Marketing Internationally

1. Domestic Market Extension OrientationInternational markets are secondary to its domestic markets

2. Multidomestic Market OrientationEach country has a specific and separate marketing plan to adjust to differences

3. Global Marketing OrientationMarketing activities are globalStrives for efficiencies of scale through standardization

DOCUMENTATION REQUIRED FOR INTERNATIONAL SALES AND MARKETING

Export documentation is complex in nature as the number of documents to be filled-in is very large, so also is the number of the concerned authorities to whom the relevant documents to be submitted. It is, therefore, advisable to take the help of shipping and forwarding agents who will obtain and fill out the documents correctly as well as arrange for transportation.There are buyers and exporters, buying agents, RBI, authorized dealers (where the exporter has his bank Account), buyer’s bank (foreign bank), Customs and Port Authorities, VAT and Excise Authorities, Insurance Companies, Inspection Agencies, Clearing and Forwarding Agents, Shipping Companies/Airlines and Inland Carriers etc

Classification of Export Documents

Export Documents can be classified into following four categories:

(1) Commercial Documents(2) Regulatory Documents(3) Export Assistance Documents(4) Documents Required by Importing Countries

(1) Commercial Documents: These documents are used by exporters/importers to discharge their respective legal and other incidental responsibilities under sales contract.

Classification of Export Documents

Commercial documents can be further sub-divided into:(i) Principal Commercial Documents(ii) Auxiliary Commercial Documents ( i) Principal Commercial Documents: These

documents serves the following purposes:(a) To effect physical transfer of goods and title of the

goods from exporter to the buyer.(b) To realize export sales proceeds.

Classification of Export Documents

Principal Documents include:• Commercial Invoice (and the invoice prescribed by

the importer)• Packing list• Certificate of Inspection• Certificate of Insurance/Insurance Policy• Bill of Lading/Airway bill/Combined Transport

Documents• Certificate of Origin• Bill of Exchange• Shipment Advice

Classification of Export Documents2) Regulatory Documents: These are prescribed by various

Government Departments/Bodies for compliance of formalities under relevant laws governing export transactions. These include:

(i) Exchange Control Declaration Form-GR Form(ii) Freight Payment Certificate(iii) Insurance Premium Payment Certificate(iv) ARE I/ARE II Forms(v) Shipping Bill/Bill of Export(vi) Port Trust Copy of Shipping Bill/Export Application/Dock

Challan(vii) Receipt of Payment of Port Charges

(viii) Vehicle Ticket.

Classification of Export Documents(3) Export Assistance Documents: These are the

documents which are required for claiming assistance under the various export assistance measures as may be in operation from to time. Currently, these refer to drawbacks of central excise and customs duties, packing credit facilities etc

(4) Documentation required by Import ing Countries: These are the documents which are required by the importer in order to satisfy the requirements of his Government. These include certificates of origin, consular invoice, quality control certificate etc.

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