Comparing domestic and international business

Though, fundamentally international business operations look like domestic business operations, yet some important distinctions can be perceived following an indepth insight. The firms having an experience of domestic business can probably have an edge while diversifying into international operations. Keeping this in mind, a (7) leading management guru, Micheal E. Porter has observed that firms aspiring to be successful globally must attempt at being successful in the domestic market first. Most firms like IBM, Coca Cola, Unilever, Proctor and Gamble, Suzuki, Sony operating globally infact started initially as domestic companies. As the magnitude of their operations grew, they found it profitable to venture abroad by setting up manufacturing and distribution centres in other countries. Some of the points of difference between international and domestic marketing are:

1. Process of marketing : The marketing is deemed to involve two processes viz., technical and social. The technical process essentially comprises of non human factors such as product, price, cost, brand. But, the social process takes care of human behaviour, customs, attitudes, values etc. The latter is unique to a national market. Hence, this shows that international marketing is different from domestic marketing. Accordingly, sociological & cultural factors predominate the decision making with regard to marketing mix
2. Marketing environment : The environmental and operational variables also assume a different structure in international business. The environmental factors such as economic, politico legal, geographic, cultural and competition are much more dynamic and uncontrollable in foreign markets as compared to domestic markets. Different countries have different currencies, accounting practices, legislation, interest rates, inflation etc. So, the controllable factors of a firm (marketing mix) have to be redesigned according to the needs of individual countries. The very complexity of exchange transactions across nations makes it significantly different from domestic business operations.