630 The Marketing Book
and process adjustments, logistical co-ordina-
tion, knowledge about the counterpart, per-
sonal confidence and liking, special credit
agreements, and long-term contracts. Getting
established in a new market involves creating
a network new to the firm. It has to build
relationships new to itself and its counter-
parts. This may lead to the breaking of old
existing relationships, sometimes adding a
new relationship to an existing one. Either the
buyer or the seller may take initiatives. Mar-
kets then are seen only as networks of rela-
tionships between firms. This environment is
not static but dynamic. The opportunities exist
then for grey markets, for parallel exports and
parallel imports, whereby domestic whole-
salers effectively disrupt a manufacturer’s
official channels of distribution in a foreign
market with exports designated for the home
market. The aim is to take advantage of a
higher profit margin in the price differential
between home and overseas markets. This
trade is not illegal and is encouraged by the
European Union in the interest of free trade. It
may have been brought about by a partic-
ularly favourable foreign rate of exchange,
but, given the volatility of exchange rates, this
can change suddenly in the opposite direction.
For the manufacturer concerned, who is facing
hostile distributors abroad, the option is to
take the product off the market at home,
increase the price on the home market or do
nothing and wait for exchange rates to move
against the domestic wholesalers who are
doing this exporting.
Levels of personal disposable income vary
across markets. There are differences in infla-
tion rates, access to personal credit, product
prices, specifications and sizes. All this serves
to create confusion and to make direct compar-
isons very difficult. In such circumstances, grey
marketers can flourish.
Will this strategy ward off known threats,
exploit opportunities, enhance current
advantages and provide new sources of
advantages?
Can this strategy adapt to different foreseeable
environments?
Can competitors match, offset or leapfrog the
expected advantages?Conclusions
International marketing is not to be seen as an
esoteric interest or as a standby when the
domestic market undergoes an economic
downturn. It is increasingly becoming a vital
commercial activity for companies of all sizes
and commitment. With greater moves towards
political and commercial harmonization world-
wide, the potential market that a company can
reach correspondingly increases. Small com-
panies in high-technology sectors of industry
have increasingly to turn not to the domestic
market but to international or even the global
market for their specialized products and
services.
International marketing is different from
marketing simply within one’s own domestic
economy. Variables which can be assessed
domestically (for example, political change,
rate of inflation, pending political legislation
and likely political responses) are known in this
domestic context, but unknown when one
starts to consider the international marketing
arena. There are just too many variables to
consider and to amass all that knowledge
would require resources input. For large com-
panies it is not a problem but for the smaller
companies it is a minefield, although the range
and quality of information is rapidly improving
through access to new information tools such as
the Internet where banks, Dun & Bradstreet
and others may be easily contacted for their
valued opinion, which may come at little, no or
low cost.
Again, markets are not passive but active,
even if your company happens to treat the
domestic market as passive. Do not assume that
your standard marketing mix will work even if
successful at home – the examples of truly