International Marketing Environment

Internationalization of business has become a fact of life. Company after company

finds that decisions made elsewhere in the world have a deep impact on its business.

Although many firms have long been engaged in foreign business ventures,

the real impetus to overseas expansion came after World War II. The globalization

of business is accounted for by such forces as (a) growing similarity of countries

(e.g., commonality of infrastructure and channels of distribution); (b) falling tariff

barriers; and (c) technological developments that, for example, permit the

development of compact, easy-to-ship products.

Traditionally, major U.S. business activities overseas have been concentrated

in developed countries. In recent years, developing countries have provided

additional opportunities for U.S. corporations, especially in more politically stable

countries. Yet although an individual developing country may not provide

adequate potential for U.S. companies, developing countries as a group constitute

a major market. The emerging markets in developing countries can help many

U.S. corporations counter the results of matured markets in Western nations.

A firm aspiring to enter the international market may choose among various

entry modes--exporting, contractual agreement, joint venture, or manufacturing.

Each entry mode provides different opportunities and risks. The differentiation of

global and domestic marketing largely revolves around the nature of environmental

forces impinging on the formulation of strategy. International marketers

must be sensitive to the environmental influences operating in overseas markets.

The principal components of the international marketing environment include