Domestic Market Expansion Concept
The domestic company that seeks sales extension of its domestic products into foreign markets illustrates this orientation to international marketing. It views its international operations as secondary to and an extension of its domestic operations. The primary motive is to dispose of excess domestic production. Domestic business is its priority and foreign sales are seen as a profitable extension of domestic operations. While foreign markets may be vigorously pursued, the orientation remains basically domestic. Its attitude toward international sales is typified by the belief that if it sells in Peoria, it will sell anywhere else in the world.
Minimal, if any, efforts are made to adapt the marketing mix to foreign markets. The firm’s orientation is to market to foreign customers in the same manner the company markets to domestic customers. It seeks markets where demand is similar to the home market and its domestic product will be acceptable. This Domestic Market Expansion Strategy can be very profitable. Large and small exporting companies approach international marketing from this perspective.
Multi Domestic Market Concept
Once a company recognises the importance of differences in overseas markets and the importance of offshore
business to their organisation, its orientation toward international business may shift to a Multi-Domestic Market
Strategy. A company guided by this concept has a strong sense that country markets are vastly different (and they
may be, depending on the product) and that market success requires an almost independent programme for each
country. Firms with this orientation market on a country-by-country basis with separate marketing strategies for
each country.
Subsidiaries operate independently of one another in establishing marketing objectives and plans. The domestic
market and each of the country markets have separate marketing mixes with little interaction among them. Products
are adapted for each market with minimum coordination with other country markets, advertising campaigns are
localised as are the pricing and distribution decisions.
A company with this concept does not look for similarity among elements of the marketing mix that might respond
to standardisation. Rather, it aims for adaptation to local country markets. Control is typically decentralised to reflect
the belief that the uniqueness of each market requires local marketing input and control.
Global Marketing Concept
A company guided by this new orientation or philosophy is generally referred to as a global company, its marketing
activity is global marketing, and its market coverage is the world. A company employing a Global Marketing
Strategy strives for efficiencies of scale by developing a standardised product, of dependable quality, to be sold at
a reasonable price to a global market (that is, the same country market set throughout the world). Important to the
Global Marketing Concept is the premise that world markets are being” driven toward a converging commonalty”
that seek much the same ways to satisfy their needs and desires and thus, constitute significant market segments
with similar demands for the same product the world over. With this orientation a company attempts to standardise
as much of the company effort as is practical on a world-wide basis. Some decisions are viewed as applicable
worldwide, while others require consideration of local influences. The world as a whole is viewed as the market
and the firm develops a global marketing strategy.
International Institutions
An international institution is an organisation whether or not established by a treaty, in which two or more states
(or government agencies or publicly funded bodies) are members and in which a joint financial interest is overseen
by a governing body. The purpose of such an international institution could be to achieve international cooperation
in dealing with issues of an economical, technical, social, cultural or humanitarian character.
This could be co-operation in the field of governance, security, finance, scientific research, environment or the
realisation of joint technical, economical, financial or social projects. The global financial system (GFS) is a financial
system consisting of institutions and regulations that act on the international level, as opposed to those that act on
a national or regional level. The main players are the global institutions, such as International Monetary Fund and
Bank for International Settlements, national agencies and government departments, example, central banks and
finance ministries, and private institutions acting on the global scale, example, banks and hedge funds. Deficiencies
and reform of the GFS have been hotly discussed in recent years. The history of financial institutions must be
differentiated from economic history and history of money. In Europe, it may have started with the first commodity
exchange, the Bruges Bourse in 1309 and the first financiers and banks in the 1400-1600s in central and western
Europe. The first global financiers the Fuggers (1487) in Germany; the first stock company in England; the first
foreign exchange market; the first stock exchange.
Milestones in the history of financial institutions are the Gold Standard (1871-1932), the founding of International
Monetary Fund (IMF), World Bank at Bretton Woods, and the abolishment of fixed exchange rates in 1973. The
most prominent international institutions are the IMF, the World Bank and the WTO: The International Monetary
Fund keeps account of international balance of payments accounts of member states.
The IMF acts as a lender of last resort for members in financial distress, e.g., currency crisis, problems meeting
balance of payment when in deficit and debt default. Membership is based on quotas, or the amount of money a
country provides to the fund relative to the size of its role in the international trading system. The World Bank aims to
provide funding, take up credit risk or offer favourable terms to development projects mostly in developing countries
that couldn’t be obtained by the private sector. The other multilateral development banks and other international
financial institutions also play specific regional or functional roles. The World Trade Organisation settles trade
disputes and negotiates international trade agreements in its rounds of talks (currently the Doha Round).
Government Institutions
Governments act in various ways as actors in the GFS: they pass the laws and regulations for financial markets
and set the tax burden for private players, e.g., banks, funds and exchanges. They also participate actively through
discretionary spending. They are closely tied (though in most countries independent of) to central banks that issue
government debt, set interest rates and deposit requirements, and intervene in the foreign exchange market.
