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INTERNATIONAL MARKETING

Romi Alhadid Rangkuti

, Nuri Aslami

State Islamic University of North Sumatera, Indonesia

romeoalhadid@gmail.com

nuriaslami@uinsu.ac.id

Abstract

International marketing is the performance of business activities designed to plan, price, promote and direct

the flow of a company's goods and services to consumers or users in more than one country for profit. The

purpose of this study is to reveal the meaning of International Marketing, to explain the background of the

emergence of International Marketing, to explain the various objectives of International Marketing, to

explain in general the related and influencing factors, and to explain in general the steps in International

Marketing. This study uses a qualitative approach with descriptive analysis method, this method is

considered relevant and in accordance with the research to be carried out, namely to obtain a true

understanding of International Business in Indonesia. International business is unavoidable because in fact

there is not a single country in the world that can meet all the needs of its country from goods or products

produced by the country itself.

Keywords: International, Marketing, Business

This work is licensed under CC BY-SA 4.0

INTRODUCTION

International marketing is the performance of business activities designed to plan, price,

promote, and direct the flow of a company's goods and services to consumers or users in more

than one country for profit (Cateora, 2007; Graham, 2007). The only difference between the

definition of domestic marketing and international marketing is that in the latter case,

international marketing activities take place in more than one country. While domestic

marketing is carried out by business people who are still in one country (Chandra et al., 2004).

The creation of international marketing arises because of the following (Krugman & Obstfeld,

1994).

1) Saturation of Domestic Market: This saturation is due to sales data has reached the

maximum point for the domestic market, so companies are trying to benefit from the

open opportunity to do growth and expansion.

2) The existence of Diplomatic Relations: Political aspects cause the emergence of

diplomatic relations that encourage international marketing.

3) Economic Development: In its development, the economy is affected by the

simultaneous relationship between state revenues generated by exports and imports, if

import exports rise, then income will experience a surplus and vice versa if exports-

imports fall, then state revenues will fall as well.

The types of businesses that support and are included in economic development are as

follows (Simamora, 2007):

1) Substantial, i.e. producing a product for yourself

2) Export of raw materials that are reasoned or not processed

3) Export semi-finished goods

4) Export finished goods

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5) Export of industrial goods

6) Export of industrial goods

7) There is an influence on the social aspect of culture.

8) There is a development of science and technology.

9) There are natural factors

10) There is a security defense

METHOD

Qualitative research method according to Sugiyono (2009), qualitative research method is

a research method used to examine the condition of natural objects. Qualitative descriptive

research seeks to dig up information that fits the picture of conditions, objects, or social

phenomena when research is conducted. This research uses a qualitative approach with a

method of descriptive analysis, this method is considered relevant and in accordance with the

research to be conducted, namely to gain an actual understanding of International Business in

Indonesia, and by using this method can comprehensively reveal how the international

marketing process, export, licensing. Franchising marketing abroad; production and marketing

abroad, so researchers believe that qualitative research methods are considered relevant.

RESULTS AND DISCUSSION

A country or a company conducts international business transactions either in the form of

international trade generally has some consideration or reason (Kotler, 2010). These

considerations include several reasons or considerations. The development includes economic,

political or socio-cultural considerations and not even rarely on the basis of military

consideration (Cravens, 1997). International business is inevitable because there is not a single

country in the world that can meet all the needs of its country from goods or products produced

by the State itself. No country can meet 100% self-sufficiency. This is due to the uneven spread

of resources from both natural resources and human resources (Porter, 1980).

The inequality of these resources will result in the existence of a certain advantage of a

particular country that has certain resources as well. For example, The State of Australia which

has a very large landmass that has a very small number of people, whereas Hong Kong has a

very narrow landmass but a very dense population. The fertility of the soil will also not be the

same between one state with another there is a country suitable for certain plants while the

other state can be said to be impossible to grow plants that are needed by humans. This situation

determines the implementation of business or international trade. Therefore, there are several

reasons for doing international business.

Forms of International Marketing

General Instructional Objectives

After the lecture of the first part or introduction of International Marketing materials, it is

expected that participants or students can, know (Cognitive), understand (Affective), and be

able to implement (Psychomotor) in the form of examples about or often mentioned types of

international marketing.

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Special Instructional Purpose

After the lecture of the preliminary part of international marketing materials, it is expected

that participants or students can explain the various types of international marketing, explain

the forms of international marketing implemented by a country, and reveal examples of the

forms and types of international marketing.

Export Mode

Export is the activity of selling goods or services to another country or foreign country. A

good export occurs when the ownership changes from the population to a non-resident, this

does not necessarily mean that either in the physical question of the border crossing. However,

in certain cases the national account blames a change in ownership even though legally no

change in ownership occurs (e.g. cross-border financial leasing, cross-shipping borders

between affiliates of the same company, goods crossing borders for significant processing for

ordering or repair). Also, contraband should be included in export measurements.

1) Indirect Export: Indirect export is a technique in which goods are sold through the

intermediary / exporter of the country of origin and then sold by the intermediary.

Through, export management companies (export management companies) and export

trading companies (export trading companies). This strategy option is suitable for

companies that from the beginning have only a very limited purpose, not relying on

their growth in the global market. The advantage is that production resources are

concentrated and do not need to handle exports directly. The downside is that control

over distribution is lacking and knowledge of operations in other countries is lacking.

Indirect exports provide various benefits for the company, namely as follows:

A) Companies can export without having to make investments.

B) Companies only assume business risks, especially relatively low financial risks.

C) Allows companies to have a high degree of flexibility.

The downside of indirect exports is that companies have absolutely no idea about the

way used in selling the goods produced and the use of indirect exports causes the loss

of the company's opportunity to get to know the foreign market to be addressed.

2) Export Cooperation: Export cooperation strategy should be chosen by companies that

will try to have greater control over the marketing process that will be carried out in the

global market. Basically, this option has a characteristic between indirect exports and

direct exports. Therefore, the advantages and disadvantages of export cooperation lie

between the advantages and weaknesses of the strategy possessed by indirect exports

and direct exports. This strategy requires companies to cooperate with other companies

to carry out various export activities, from planning to supervision. The choice of

details of cooperation between companies can vary, depending on the formulation of

cooperation that can be built by the companies involved.

3) Direct Export: Direct Export is a way of selling goods or services through an

intermediary/export located in another country or export destination country. Sales are

made through distributors and sales representatives of the company. This strategy was

chosen when the company has a vision of exploiting the global market more deeply

along with the resources and funds at its disposal. Direct exports depend on two

principles: companies using distribution networks in other people's global markets or

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building their own distribution channels as subsidiaries abroad. Direct relationships

with end consumers are also categorized as a third model, but very rare. Direct exports

have several advantages, namely:

A) The company has much greater control over the planned marketing program.

B) Companies have a greater opportunity to obtain the feedback information necessary

in conducting marketing program evaluations.

C) Companies have a better chance at observing competitor behavior. However, it

should also be noted that this strategy should be made with a clear and firm

managerial commitment. Thus, the company can be sure to be ready to use greater

resources and funds. In choosing a distribution channel abroad, the company

manager requires decision making in two stages, namely the company needs to

decide the work specifications that need to be achieved by the distribution channel,

and the company needs to decide on the optimization of the distribution channel

mix by comparing the various possible combinations available.

Contract Mode

License

A license is a license granted by a registered brand owner to another party through an

agreement based on the granting of the right (not transfer of rights) to use the mark, whether

for all or part of the type of goods and/or services registered within a certain period and

conditions. The license covers any form of contractual arrangement that makes a foreign

company (licensor) use intangible assets held to a particular domestic company in exchange

for royalty or other forms of payment.

The advantages of the licensing strategy are:

1) Licenses can be applied to bypass import bans, quota restrictions, or investments set by

a particular country.

2) Low political and business risks borne

3) Licensing can be done without a large investment commitment, as it requires only much

smaller funds than direct investment.

4) The license is also free from export issues.

5) Licenses have exclusive characters.

Disadvantages of the licensing strategy are:

1) Licenses can only be selected by companies that have intangible assets and at the same

time there are other companies interested in using them. If both conditions cannot be

met, then the license option cannot be exercised.

2) Licenses also only generate relatively limited additional revenue compared to the

possible revenue that can be generated with other strategies.

3) There is a possibility that the agreed license is the cause of the growth of competing

companies in the third market. In choosing licensees, licensors also conduct the

selection process, including:

a) Determination of the desired criteria and profile of the licensee.

b) Search for sources and data about potential licensees.

c) Evaluation and analysis of comparisons between candidates at once with

predetermined criteria and profiles.

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d) Determination of the candidate who best fits the most desired profile. In addition,

licensor also prepares projections of expected revenue receipts. Once known

operating royalty income, usually licensor still expects various other types of

income that are expected to be received. While the costs taken into account, are

usually categorized into three large groups, namely: 1) Opportunity Cost (Exporter

other revenue lost and revenue expected to be lost in the future due to licensing); 2)

Star Up Cost: Costs required for market investigation, licensing selection, patent

protection, negotiation, preparation of license documents, and others;and3) On

Going Cost: The costs required to renew exercise, brand and patent protection

guarantees, quality testing, inspection and auditing, etc.

Franchise

Franchises in Indonesia are more popular with franchises. Franchising is a special form of

license that usually applies to the service industry, particularly one that does not require the

complexity of production and marketing technology and production control. The franchisor

company (Franchisor) grants the right of use (License) of the business system and other

ownership rights to the company or other person (Franchise). Using trademarks provided by

the franchisor, the franchisee operates the business using a business system owned by the

franchisor, including strategy management and functional management practices, especially

production and marketing management that meet the desired business operating criteria. The

difference between franchising with a license, i.e. usually franchising requires more stringent

supervision of business operations, as a franchise acceptance effort. The advantages of this

franchise or franchise are:

1) Franchises have a higher likelihood of success than other business models. Some

studies have shown that franchise success is 90% higher than the 15% indication of

success that other business models have.

2) The importance of a proven business model. All franchises have business models

designed to generate high productivity and sales. This means that franchises can get up

and running quickly and save time from building systems and processes.

3) Franchises are easier to access financing. Lenders are more confident in financing a

franchise than any other business model, that's because the franchise already has a

proven track record of success.

4) Buy a strong brand. Buying a franchise is actually buying brands, logos and other

intellectual property rights from the franchisor. This will be an excellent marketing tool

if you buy a franchise with a brand that is already known and trusted.

5) Right to exclusive territory. Franchisors will only allow a certain number of franchises

(franchises) only in one particular geographical area. Then you just need to determine

a good enough location and look at the existing provisions before determining buying

a franchise. And interestingly you will be protected in that area where there should be

no other franchisees trading in your area.

6) Fraternity between franchises (franchises) one advantage that is rarely talked about in

franchises is brotherhood between franchises. Actually, this is a huge advantage

because franchises can share ideas and provide support between them. They can share

trial &error experiences to reduce their mistakes in running a business as a franchise.

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g. Franchisors provide real estate and construction assistance. The franchisor will help

choose the right location of real estate for the franchise, which is an amazing help

because the franchisor has had excellent experience in building the business before.

7) As a franchise, you are given a training program. The training program is one of the

most important elements of the franchise package, where it gives you to use one new

technology, learn a new skill, manage finances and staff. These abilities are all very

important to you as a business owner.

8) As a franchise you have the flexibility to get up early and choose the job you want to

do. Being a franchise gives you a lot of freedom and flexibility to choose what job you

will choose. Disadvantages of franchising are limited control, low revenue, creation of

competitors, pressure to command, difficult to assess the quality of the franchisor, the

level of dependence on the franchisor is high, and the reputation and brand image can

decline.

Determination of local business partners in franchising also requires several stages,

including the calculation of the available market possibilities, the determination of

candidates or potential candidates who are assessed according to the predetermined

profile criteria, the negotiation process with potential candidates who are deemed

appropriate, and the process of building cooperation between the two companies.

Property Investment Mode

Joint Venture

A joint venture occurs if two or more companies share ownership rights. Joint ventures are

chosen when a global company tries to enter the marketing of a destination country that has a

different economic system and/or marketing environment to the company's home country. The

joint venture will terminate if one or both companies conclude that there are greater benefits if

both do not continue the joint venture.

The advantages of this joint venture are reduced sourcing commitment, risk spread, and

access to local markets and expertise. Meanwhile, the weakness of joint ventures is the

potential for conflict with partners. communication and management, and limited control.

Sole Venture

Self-ownership investment provides an opportunity to fully control the management of the

company and eliminates the opportunity for managerial conflicts that are common in the

contract system. In this strategy also the company is fully entitled to the profits earned. Global

corporate management has two options in making own-ownership investments, namely:

1) Acquisition

Acquisition advantages: Fast entry, access to purchased companies, reduced

competition.

Acquisition weaknesses: Adjustment of operations, communication and coordination,

misjudgment.

2) Internal Growth by Building Your Own Company

Advantages: Latest technology, integration of production systems, efficiency of

operation. Disadvantages: Investment costs, it takes time, no local partners.

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CONCLUSION

International marketing is the performance of business activities designed to plan, price,

promote, and direct the flow of a company's goods and services to consumers or users in more

than one country for profit. A country or a company conducts international business

transactions either in the form of international trade generally has some consideration or reason.

These considerations include several reasons or considerations. The development includes

economic, political or socio-cultural considerations and not even rarely on the basis of military

consideration. International business is inevitable because there is not a single country in the

world that can meet all the needs of its country from goods or products produced by the State

itself. No country can meet 100% self-sufficiency. This is due to the uneven spread of resources

from both natural resources and human resources.

REFERENCES

Cateora, P. R. (2007). International marketing (Pemasaran internasional). Salemba Empat.

Chandra, G., Tjiptono, F., & Chandra, Y. (2004). Pemasaran Global: Internasionalisasi dan

Internetisasi. Yogyakarta: Andi.

Cravens, D. W. (1997). Strategic marketing. Irwin.

Graham, J. L. (2007). International marketing (Pemasaran internasional). Rajawali Press.

Kotler, P. (2010). Marketing management. McGraw Hill.

Krugman, P. R., & Obstfeld, M. (1994). International economics: Theory and policy (H.

Munandar & F. H. Basri, Eds.; Translated). Raja Grafindo Persada.

Porter, M. E. (1980). Competitive strategy. The Free Press.

Simamora, H. (2007). Ekonomi Intenasional. In Jakarta: Erlangga. Erlangga.

Sugiyono. (2009). Metode penelitian kualitatif dan kuantitatif. R & B.