Drivers of international marketing

The world has become a global market. The opportunities emerging in any nation are not confined to that nation alone but are getting extended to the globe. Global thinking, liberal dealings with each other, positive attitudes toward privatization, access to necessary guidelines and facilities and encouragement by the governments and international trade organizations all these factors have collectively contributed to the growth of international marketing. Let us analyze these factors in detail: 

1. Liberalization

Liberalization refers to the relaxation of government restrictions on trade and commerce. While the credit for liberalization of economic policies in a number of countries goes to the GA'IT/WTO, substantial liberalization has been occurring outside GATT/WTO as well. For example, the revolutionary economic policy reforms in China and other socialistic and communist countries. Liberalization has contributed to two-way movement of goods in all economies. 

2. Privatization

Privatization is the process of divesting the government stake, both in terms of money and control from public companies. In lndia, this process has been kicked off from a long time and is moving in steady albeit slow pace with the government divesting its stake in public enterprises and offering it to the common public. Private companies are better equipped to exploit emerging opportunities in different parts of the world. 

3. Globalization

Globalization is described as an ongoing process by which regional economies, societies and cultures have become integrated through globe-spanning networks of exchange. The term is sometimes used to refer specifically to economic globalization, i.e., the integration of national economies with the international economy through trade, foreign direct investment, capital flows, migration and the spread of technology. 

4. World Economic Growth

One of the important trends of 21st century is the difference in the growth rates of the economies. The comparative slow growth of the developed economies or the stagnation of their markets and the fast growth of a number of developing countries, prompt firms of developed countries to turn to the expanding markets, elsewhere. This has prompted a number of MNCS to turn to markets of the developing and underdeveloped economies. 

5. Multinational Companies (MNCs)

MNCs that link their objectives and resources with world market opportunities have been a powerful force driving globalization. Due to liberalization, there has been a fast growth of the number of MNCs and their affiliates. As per the World Investment Report 2009 (UNCTAD), there is a total of 8,89,416 MNCs around the world; 82,053 parent corporations and 807,363 affiliates. These MNCs dominate the world trade scenario. 

6. Technological Development

Technological advances have tremendously fostered globalization. Technology has, in fact, been a very important facilitating factor of globalization, with its rising costs and risks, which makes it imperative for firms to tap world markets and to spread these costs and risks. Technology is truly stateless, there are no cultural boundaries limiting its application. Once a technology is developed, it soon becomes available everywhere in the world. 

7. Transport and Communication Revolutions 

Revolutions in transport and communication technology has enormously contributed to the emergence of the global village. IT revolution has made it possible for buyer and seller to negotiate the terms of contract without meeting personally. The development in satellite, optical fiber, wireless technologies and internet services are greatly contributing to increased exchange of goods and services at the global level. 

8. Cost and Efforts of Product Development

The cost and efforts required for the development of new products is very huge in some industries like pharmaceuticals. To recoup such high costs, it is necessary to spread it over several markets. Further, due to huge investment and diverse requirements of skills associated with new product development, cross-border alliances in research and development are becoming more and more popular. 

9. Competition

Another factor that has contributed to increased internationalization of trade and commerce is the increasing competition, internally as well as externally. Heightened competition compels firms to explore new ways of reducing costs and increasing their efficiency. Internationalization is one of the ways of reducing costs and increasing efficiency resulting from economies of large-scale production and distribution and spread of risks to several markets. 

10. Regional Integration

The proliferation of regional economic integrations, like European Union (EU), North American Free Trade Agreement (NAFTA), South Asian Association of Regional Cooperation (SAARC), Association of South East Asian Nations (ASEAN), etc. by creating a borderless world between the member of such trade blocs, foster the Internalization trend. These regional trade blocs also give a fillip to the cross-border Investments and financial flows. 

11. Leverages from Internationalization

Leverage is some type of advantage that a company enjoys by virtue of the fact that it conducts business in more than one country. These leverages are economies of large-scale operations, sharing management practices, advantage of technological breakthroughs and International strategy to scan the world business environment to identify opportunities, trends, threats and resources. These leverages promote internationalization. 

12. Consumer Expectations

Due to increasing levels of education and exposure to the electronic media, the aspirations of people all around the world are rising. The customer today is by and large international, as he/she wants a world-class product or products of desired attributes at the competitive prices. Further, consumers have become quality and brand conscious. This has given boost to trade prospects of international brands owned by MNCs. 

References

• International marketing, Michael R. Czinkota, ilkaa A. Ronkainen, Cengage publication, 10th edition 

• Department of business administration, Government arts college (autonomous), Coimbatore