Difference between international and global

marketing

Global Marketing is a lot different from international marketing. They

seem similar but when you are creating and expanding your business you
have to know the differences between the two. This way, when you are
ready to expand, you will know which way is better and not worry about
doing everything at once.

Global marketing is defined by the Oxford University Press as

"marketing on a worldwide scale reconciling or taking commercial
advantage of global operational differences, similarities and opportunities
in order to meet global objectives." So basically global marketing is selling
your product all over the world. It sounds a lot like international
marketing or like the two are exactly the same but here are the
differences.

Global marketing is basically when a company looks at the entire world as

one market. There are no differences between a local market and the
market 10,000 miles away. It views everything in the same way and not
like it is any different in any specific ways. Global marketing is used by
huge chain stores that sell only certain products. They usually won't bring
anything different or new to the store near to you that might cater to a
certain religion or cultural group, because they are based somewhere
else. They usually won't bring in cultural foods or products, just because
they are a general store. They sell the same exact products all over the
world and the exact same things in every single store.

To become a global company a company has to use the "Four P's of

marketing." They are price, promotion, product, and placement. A
company doesn't just become a global company overnight but goes
through several steps to become global. They have to have a global team.
They have to have a global marketing plan. It takes time for a company
to evolve from a local company to one that sells products all over the
world.
International marketing is a little different still from global marketing.
International marketing is when a company that is based in one country
decides to sell products in another. It sets up offices and headquarters in
the other countries. International marketing is almost like a franchise is
being built, just in another country. The company still owns and operates
the business in the other country, but the headquarters in the specific
country cater the business to the country's needs.

FRANCHISING AND LISENCING

While franchising is a recognized legal terminology, in the sense that it subjects the party offering these services
to certain rules and regulations, licensing does not come with these issues, but it is necessary to be careful as
licensing can also be considered a franchise from a legal standpoint.

In franchising, the franchisee and the franchisor are very closely linked and have better working relationships.
The franchisee gets to retain the rights to the franchisor’s logo and trademark. This also goes a long way in
providing a visible presentation of the relationship between the two. Franchisees are often an extension of the
parent company, in that they represent the parent company’s brand and image. Therefore, they are usually
provided some level of training and support. Also, they get to leverage some amount of territorial exclusivity in
addition to control over the products and services offered.

The relationship between a licensee and the parent company is not as tight-knit as a Licensee franchisor
relationship. That is because a licensee does not hold the rights to the trademark and logo of the parent
company’s brand. Also, the franchisee is expected to create its own niche and identity in the market. Another key
difference is in the fact that licensees do not get to have territorial rights from the parent company. Which means
that licensing organization gets to sell similar licenses and products in the same geographical area. Licensees
also do not receive the same extent of support and training as compared to a franchisee.

Even though from the looks of it, a licensing opportunity seems to be less advantageous as compared to a
franchising business, licensing has its advantages as well. One advantage is that licensing costs much lesser in
terms of the initial investment and ongoing charges. While a franchising business may require you to pay royalty
every time a profit is made, a licensing opportunity does not demand such an expense. Also, once the licensee is
able to successfully set up its business and spin off on its own, the relationship between licensee and the parent
company is restricted to the frequent purchase of products.

Counter trade

What Does Countertrade Mean?

A trade between two countries by which goods are exchanged for other goods rather than for hard
currency.

Investopedia explains Countertrade

Sometimes both parties are happy with the goods they receive; other times one country will liquidate
the received asset, ultimately receiving cash in the deal. This is also referred to as "using barter to
complete a trade."
The former Soviet Union would often countertrade, agreeing to trade, say, Soviet oil for another
country's vehicles.

Countertrade means exchanging goods or services which are paid for, in whole or part, with
other goods or services, rather than with money. A monetary valuation can however be used
in counter trade for accounting purposes. In dealings between sovereign states, the term
bilateral trade is used. OR "Any transaction involving exchange of goods or service for
something of equal value."

Contents
[hide]

• 1 Types of countertrade
• 2 Necessity
• 3 Role of countertrade in the world market

• 4 References

[edit] Types of countertrade

There are five main variants of countertrade:

• Barter: Exchange of goods or services directly for other goods or services without the
use of money as means of purchase or payment.

Barter is the direct exchange of goods between two parties in a transaction. The
principal exports are paid for with goods or services supplied from the importing
market. A single contract covers both flows, in its simplest form involves no cash. In
practice, supply of the principal exports is often held up until sufficient revenues have
been earned from the sale of bartered goods. One of the largest barter deals to date
involved Occidental Petroleum Corporation´s agreement to ship sulphuric acid to the
former Soviet Union for ammonia urea and potash under a 2 year deal which was
worth 18 billion euros. Furthermore,during negotiation stage of a barter deal, the
seller must know the market price for items offered in trade. Bartered goods can
range from hams to iron pellets, mineral water, furniture or olive-oil all somewhat
more difficult to price and market when potential customers must be sought.

• Switch trading: Practice in which one company sells to another its obligation to make
a purchase in a given country.
• Counter purchase: Sale of goods and services to one company in other country by a
company that promises to make a future purchase of a specific product from the same
company in that country.
• Buyback: occurs when a firm builds a plant in a country - or supplies technology,
equipment, training, or other services to the country and agrees to take a certain
percentage of the plant's output as partial payment for the contract.
 • Offset: Agreement that a company will offset a hard - currency purchase of an
unspecified product from that nation in the future. Agreement by one nation to buy a
product from another, subject to the purchase of some or all of the components and
raw materials from the buyer of the finished product, or the assembly of such product
in the buyer nation.

[edit] Necessity
Countertrade also occurs when countries lack sufficient hard currency, or when other types of
market trade are impossible.

In 2000, India and Iraq agreed on an "oil for wheat and rice" barter deal, subject to UN
approval under Article 50 of the UN Gulf War sanctions, that would facilitate 300,000 barrels
of oil delivered daily to India at a price of $6.85 a barrel while Iraq oil sales into Asia were
valued at about $22 a barrel. In 2001, India agreed to swap 1.5 million tonnes of Iraqi crude
under the oil-for-food program.

The Security Council noted: "... although locally produced food items have become
increasingly available throughout the country, most Iraqis do not have the necessary
purchasing power to buy them. Unfortunately, the monthly food rations represent the largest
proportion of their household income. They are obliged to either barter or sell items from the
food basket in order to meet their other essential needs. This is one of the factors which partly
explains why the nutritional situation has not improved in line with the enhanced food basket.
Moreover, the absence of normal economic activity has given rise to the spread of deep-
seated poverty."

[edit] Role of countertrade in the world market

Noted US economist Paul Samuelson was skeptical about the viability of countertrade as a
marketing tool, claiming that "Unless a hungry tailor happens to find an undraped farmer,
who has both food and a desire for a pair of pants, neither can make a trade". (This is called
"double coincidence of wants".) But this is arguably a too simplistic interpretation of how
markets operate in the real world. In any real economy, bartering occurs all the time, even if
it is not the main means to acquire goods and services.

The volume of countertrade is growing. In 1972, it was estimated that countertrade was used
by business and governments in 15 countries; in 1979, 27 countries; by the start of 1990s,
around 100 countries. (Vertariu 1992). A large part of countertrade has involved sales of
military equipment (weaponry, vehicles and installations).

More than 80 countries nowadays regularly use or require countertrade exchanges. Officials
of the General Agreement on Tariffs and Trade (GATT) organization claimed that
countertrade accounts for around 5% of the world trade. The British Department of Trade and
Industry has suggested 15%, while some scholars believe it to be closer to 30%, with east-
west trade having been as high as 50% in some trading sectors of Eastern European and Third
World Countries for some years. A consensus of expert opinions (Okaroafo, 1989) has put
the percentage of the value of world trade volumes linked to countertrade transactions at
between 20% to 25%.
According to an official US statement, "The U.S. Government generally views countertrade,
including barter, as contrary to an open, free trading system and, in the long run, not in the
interest of the U.S. business community. However, as a matter of policy the U.S. Government
will not oppose U.S. companies' participation in countertrade arrangements unless such
action could have a negative impact on national security." (Office of Management and
Budget; "Impact of Offsets in Defense-related Exports," December, 1985).