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Basics of Marketing - Kotler Philip

Decision on the structure of the marketing service

Firms organize managing their international marketing activities in at least three different ways. The majority first create an export department, then an international branch and, in the end, turn into transnational companies.

Export department

Usually, a firm embarks on international marketing when it begins to simply ship its goods abroad. If sales abroad grows, the firm establishes an export department , consisting of a sales manager and several of his assistants. As the sales continue to grow, the export department is expanded, which includes a variety of marketing services, which makes it possible to conduct business more aggressively. If the company starts to engage in joint ventures or direct investment, it is not enough for one export department.

International branch

Many firms are involved in activities in several international markets and in several joint ventures. In one country, a company can export, in another - with licensing, in the third - with joint-ownership enterprises, in the fourth - with its own subsidiary. To control all this international activity, the firm will sooner or later establish an international branch or a special subsidiary. The head of the international branch usually has its own president, which determines the goals of this branch, its budget and is responsible for expanding the company's activities on the world market.

Transnational company

Some firms outgrow the scope of activities at the level of the international branch and become multinational organizations. Such a firm no longer thinks of itself as an activist of the national market, sometimes engaged in business abroad, but begins to consider itself a world market player. The highest and functional leadership of such a firm is involved in production planning, marketing policy, cash flow and the logistics system on a worldwide scale. Units dealing with activities on a global scale are not subordinated to the head of the international branch, but directly to the managing director or the executive committee of the firm as a whole. Leading employees of such a firm are trained to operate not just on the domestic or international market, but to activities on a global scale. Leadership is formed from representatives of many countries; Component parts and auxiliary materials are purchased where they are cheaper than all, and investments are made where they can be expected to receive the greatest return.

Large firms interested in their further growth should increasingly become transnational companies. As foreign firms successfully invade the US domestic market, American firms need to aggressively penetrate the markets of other countries. From ethnocentric firms that view their foreign operations as something of a secondary nature, they should be transformed into geocentric companies that consider the whole world as a single market.