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Step 1: Considering exporting

You are here:Step 1: Considering exporting > The difference between domestic and export marketing


 

 

The difference between domestic and export marketing

 

What is marketing?

Clearly, the term "marketing' is the common element in domestic marketing and export marketing. But what does marketing entail? Although marketing is often considered in the same light as selling, selling is essentially the end result of the process of marketing. In other words, although selling and sales are part of the marketing process, marketing is in fact much more.

Marketing can be defined as the process of managing the efficient and effective utilisation of a firm's resources with the aim of understanding and meeting the opportunities and threats in a dynamic environment in such a way that the firm's market offering(s) lead to the satisfaction of consumers' needs and wants so that the objectives of the enterprise, the consumer and society are achieved." (adapted from Marketing Management, Cant et al: 2006.)

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The marketing concept

This definition underscores the marketing concept, which has six pillars on which it is built. These are:

  1. Bringing together in an efficient way all of the resources of the firm (people, machines and money) to produce a product or service
  2. Understanding the environment and the needs of consumers
  3. Meeting the needs of customers with products or services produced
  4. Addressing the opportunities and threats in the environment
  5. Achieving the objectives of the firm which is usually to make money
  6. Doing all of this with the good of society in mind

The marketing mix

In doing so, the firm will engage in a marketing process that has four main objectives, namely:

  1. To produce a product that meets customer's needs
  2. At a price that customers can afford and are willing to pay
  3. Promoted in such a way that customers become aware of and are convinced to buy the product
  4. Delivered to a place where the customer can easily acquire the product

These four elements are referred to as the firm's marketing mix (also termed the 4Ps of marketing - product, price, promotion and place) and represent those aspects of marketing over which the marketer has control. In this regard, they are sometimes referred to as 'controllables'.

The marketing environment

The marketing manager must also take into account the 'uncontrollables', i.e. environmental factors in the market over which (s)he has no control, yet which have a significant impact on the success of firm's operation. These environmental factors include, for example, business practices and institutions, technological developments, social and cultural norms, economic patterns, competitive activities, etc. (click here to learn more about the external environment).

Marketing environmental factors

figure 1
Marketing environmental factors

The customer is king

What the above definition also implies is that marketing must be orientated towards the customer. Today, marketers (and exporters) are becoming increasingly aware of the fact that a company does not make money from products but rather from people (wherever in the world they may be), and that a mismatch between what the company offers and what customers buy will result in large inventories of unwanted products and the loss of customers to competitors.

The challenge of marketing

A company which is able to co-ordinate its entire business system including its capital, its human resources, its competitive processes and its marketing mix to focus on the satisfaction of customer needs profitably within a dynamic external environment is usually assured of success. Against the background of the company's overall business and marketing objectives, the challenge of the marketing manager is to use tools such as market research to mould the controllable elements of marketing (i.e. product, price, promotion and distribution) within the framework of the uncontrollable elements of the market place.

What is Marketing? Another view!

"If the circus is coming to town and you paint a sign saying "Circus coming to the Fairground, Saturday," that's advertising. If you put the sign on the back of an elephant and walk him into town, that's promotion. If the elephant walks through the Mayor's flower bed, that's publicity. If you can get the Mayor to laugh about it, that's public relations. And if you planned the elephant's walk, that's marketing."

Anonymous

Domestic marketing

Domestic marketing is about doing all of the above tasks within the confines of the local or domestic/home market.

What is export marketing?

Export marketing is about marketing across national borders. All the basic principles of marketing can be applied to both domestic and export marketing, the latter is far more challenging because when entering a new country/market, the marketer will have to deal with a different kind of customer in a foreign environment with laws and regulations that may differ radically from those of the domestic market. Even in a world that is moving towards increasing similarities in consumer tastes, marketing methods, production processes and business practices, there are still a significant number of differences between international markets to make selling to them challenging - see figure 2.

International marketing

figure 2
International marketing

When trading across national borders for example:

  • The customer profile in the foreign market is often very different from that of the customer in the domestic market, particularly in the areas of language, religion, ideology, living standards and fashion
  • Different and unfamiliar cultural, economic, legal, social and political systems may be encountered in foreign markets Foreign markets represent unfamiliar environments
  • There are greater complexities associated with payment, distribution, transport and insurance
  • The role of documentation assumes added importance to prevent misunderstanding and costly litigation
  • Goods are subject to customs control and the payment of import duty (where applicable)
  • A number of technical and administrative regulations may apply to exports - legal requirements in certain foreign markets in respect of the technical specifications of a product, that call for changes to be made before the product may be imported
  • Exchange rates, and in some cases exchange control regulations, are applicable
  • There are new parameters that the exporter will need to take into conisderation, such as import duties as well as legal restrictions, different modes of transport, international trade documentation, foreign currencies, and different and additional marketing channels
  • There is generally more extensive use made of the fax and e-mail than the telephone and when these are used, different time zones and different languages have to be considered
  • Operating in foreign markets exposes the exporter to far wider and more intense competition than would be the case in the domestic market
  • The complexity of exporting, the additional environments that exporters face, as well as new parameters that exporters will need to deal with, makes the export management task far more difficult

The main distinguishing feature between export marketing and domestic marketing is thus that with the former, a company is operating within external environments that are highly uncertain and where the rules of the game are often ambiguous, contradictory and subject to rapid change! Export marketing is therefore more challenging, complex, risky and expensive. Ultimately, export marketing takes more effort and more time, and requires greater financial resources than domestic marketing. In addition, it requires at least the same level of commitment that companies give to their local operations.

Multinational marketing (marketing across several different foreign markets) is even more complex. When dealing with more than one foreign market, the firm is faced with several different external environments, each of which may call for different product, pricing, promotion and distribution strategies. The challenge is to co-ordinate, integrate and manage the various marketing programmes to achieve the firm's overall marketing objectives.

 
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Step 1: more information

Step 1: Considering exporting
      The various benefits of exporting
      The various drawbacks to exporting
      arrowThe difference between domestic and export marketing
      The various environments you may encounter
      The various barriers you may face

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More information on Step 1
Learning to export...
The export process in 21 easy steps
Step 1: Considering exporting
Step 2:Current business viability
Step 3:Export readiness
Step 4:Broad mission statement and initial budget
Step 5:Confirming management's commitment to exports
Step 6: Undertaking an initial SWOT analysis of the firm
Step 7:Selecting and researching potential countries abroad
Step 8: Preparing and implementing your export plan
Step 9: Obtaining financing for your exports
Step 10: Managing your export risk
Step 11: Promoting the firm and its products abroad
Step 12: Negotiating and quoting in exports
Step 13: Revising your export costings and price
Step 14: Obtaining the export order
Step 15: Producing the goods
Step 16: Handling the export logistics
Step 17: Export documentation
Step 18: Providing follow-up support
Step 19: Getting paid
Step 20: Reviewing and improving the export process
Step 21: Export Management
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