Financial Dimensions of Pricing in International Business

Strategies
Module 5 - International Market

The students will be able to:

1. Define International Marketing.

2. Describe International Marketing in terms of scope,

characteristics, significance, strategies, trade barriers
and trade restrictions.

3. Discuss International Marketing Strategies,

International Commercial Mix and Marketing Channel
Design

What is International Marketing?

Article Shared by Vishakha B

International marketing may be defined as an activity related to

the sale of goods and services of one country in the other,
subject to the rules and regulations framed by the countries
concerned.

In simple words, it refers to marketing activities and operations

among the countries of the world following different political
and economic systems.
International marketing is marketing abroad i.e., beyond the
political boundaries of the country. International marketing
brings countries closer due to economic needs and facilitates
understanding and co-operation among them.

It is essentially a constructive economic and commercial activity

which is useful and beneficial to all participating countries.
International marketing act as an instrument of global growth
and development.

Learn about:-

1. Definitions of International Marketing

2. Scope of International Marketing
3. Characteristics
4. Significance
5. Factors Affecting
6. Strategy
7. Distribution Channel
8. Decisions 9
. Present Scenario
10. Trade Barriers/Restrictions.
What is International Marketing – Definitions Provided by
Eminent Authors: Philip Kotler, J.B. Mckitterick, Hess and
Cateora

International marketing, though it has certain distinct

characteristics, is similar to domestic marketing in terms of
certain technical attributes. Marketing can be concerned as an
internal part of two processes, viz. technical and social.
International marketing and Domestic marketing are identical,
so far as technical process is concerned.

It includes non-human factors such as product, price, cost,

brands etc. The basic principles regarding these variables are of
universal applicability. But the social aspects of marketing are
unique in any given stratum, because it involves human
elements, namely, the behaviour pattern of customers and the
given characteristics of a society, such as consumers attitude,
values etc. It is obvious that marketing, to the extent it is
visualized as a social process, will be different from domestic
marketing.

Kotler has defined marketing as, “Marketing is the analysis,

planning, implementation and control of programmes designed
to bring about desired exchanges with target audiences for the
purpose of mutual or personal gain. It relies heavily on the
adoption and coordination of product, price, promotion and
place for achieving effective response.”

There are two sets of variables in this definition. One is markets

and other one is human needs and wants and a process or
techniques to convert potential exchanges into realized
exchanges. The techniques involved are more or less similar in
both domestic and international marketing. But the variables
involved are totally different in case of International Marketing.
International marketing can, therefore, be defined as,
“marketing carried on across national boundaries.”

The International marketing is different from domestic

marketing both in the way of exchange and needs and
requirements of international buyers. Therefore the knowledge
of and the ability to perceive basic pattern in consumer
behaviour in different environments is a particularly vital
element in the makeup of the international marketing.

The role of marketing manager becomes very important in this

context. To work successfully in an international environment,
the marketing manager must have the ability to seek to
understand the environment and way of thinking regarding the
consumers, competitors, suppliers or employees in the new
country.

There must be at least three major dimensions to the spills of

international marketing:
1. Competence in marketing, with a sound grasp of marketing
concepts, tools and techniques.
2. Ability to perceive patterns of consumer behaviour in
different countries and the ability to evaluate
the essential differences and similarities between markets.
3. Management skill to organise, plan, co-ordinate and control
an operation of considerably greater
complexity particularly in its human relationships – than that
involved in the home market.
The skills involved in marketing have been aptly summed up
by J.B. Mckitterick of the General
Electric Company as, ” the principal task of the marketing
function in a management team wedded
to the marketing concept is not so much to be skillful in
making the customer to what suits the
 interests of the business as to be skillful, in conceiving and
then making the business to what suits
the interests of the customer.”

Therefore it is apparent that the job of International marketing

involves an additional dimension and requires a unique
combination of skills.

International marketing is the marketing across the national

frontiers. It refers to the strategy, process, and implementation
of the marketing activities in the international arena.
International marketing may be defined as an activity related to
the sale of goods and services of one country in the other,
subject to the rules and regulations framed by the countries
concerned. In simple words, it refers to marketing activities and
operations among the countries of the world following
different political and economic systems.

International marketing is marketing abroad i.e., beyond the

political boundaries of the country. International marketing
brings countries closer due to economic needs and facilitates
understanding and co-operation among them. It is essentially a
constructive economic and commercial activity which is useful
and beneficial to all participating countries. International
marketing acts as an instrument of global growth and
development.

According to Hess and Cateora international marketing is ‘the

performance of business activities that direct the flow of goods
and services to consumers or users in more than one nation.’
Marketing may be understood as human activity directed at
satisfying needs and wants through exchange process.

It means working with markets. It means attempting to

actualise potential exchange for the purpose of satisfying
human needs and wants. It includes analysing the markets for
their potentials in order to assess the needs of the customers.
International marketing is a part of total marketing process.
It is marketing activities carried on by a marketer in more than
one nation. It may be defined as – ‘marketing carried on across
national boundaries.’ Marketing activities, i.e., buying, selling,
transportation, storage and warehousing, financing risk
bearing, pricings, standardising, advertising and sales
promotion etc., may be called international marketing when
performed in foreign markets across the national border.

What is International Marketing – Scope: Establishing, Joint

Ventures and Collaboration, Licensing Arrangements,
Consultancy Services and a Few Others

The scope of international marketing essentially includes

exporting of goods and services in foreign markets. The
exporter performs various activities, other than exporting the
goods and services.
These activities are:

1. Establishing:
A branch in foreign market for processing, packaging or
assembling the goods according to the needs of the markets.
Sometimes complete manufacturing is carried out by the
branch through direct investments.

2. Joint Ventures and Collaborations:

International marketing includes establishing joint ventures and
collaboration in foreign countries with some foreign firms for
manufacturing and/or marketing the product. Under these
arrangements, the company works in collaboration with the
foreign firm in order to exploit the foreign markets.

3. Licensing Arrangements:
The company, under the system, establishes licensing
arrangements with the foreign term whereby foreign
enterprises are granted the right to use the exporting
company’s know- how, viz., patents, processes or trademarks
according to the terms of agreement with or without financial
investment.

4. Consultancy Services:
Offering consultancy services are also covered in international
marketing scope. The exporting company offers consultancy
services by undertaking turnkey projects in foreign countries.
For this
purpose, the exporting company sends its consultants and
experts in foreign countries who guide and direct the
manufacturing activities on the spot.

5. Technical and Managerial Know-How:

The scope of international marketing also includes the technical
and managerial know-how provided by the exporting company
to the importing company. The technicians and managerial
personnel of the exporting company guide and train the
technicians and managers of the importing company.
What is International Marketing – Characteristics: Different
Legal System, Market Characteristics, Monetary System and
Procedure and Documentation

1. Different Legal System:

Every Country has its own legal system. Some of the countries
follow English Common Law while others follow the civil law.
Some of the European countries are having their own legal
system. This difference in the legal system among different
countries increases the difficulties of businessmen.

It is not sure for the businessmen that which legal system will
be applicable to their business transactions. There must be
uniform legal system. However some of the agencies are trying
to make it uniform for all countries. The United Nations
Commission on International Trade Law is also supporting the
opinion of uniformity and is doing, its efforts to bring
uniformity in International trade Law.

2. Market Characteristics:

The Market Characteristics of every Country is different due to

the environmental factors, demand patterns, Government
Controls etc. In some countries like India and USA the market
characteristics are found different from state to state. It is
because of all above factors responsible for the market
characteristics.

3. Monetary System:
The monetary system of each country is decided by the
government of that country and the exchange value of
country’s currency is being determined by the forces of supply
and demand.

4. Procedure and Documentation:

Every country has its own procedure of documentation
requirements for the purpose of experts. Every business house
has to comply with these rules and regulation for the purposes
of export and imports.

What is International Marketing – Significance: Survival,

Growth of International Market, Sales and Profits, Benefit from
Diversification and a Few Others
The term International marketing refers to exchanges across
national boundaries for the satisfaction of human needs and
wants. International Marketing affects consumers in many
ways, though its importance is neither well understood nor
appreciated. The significance of international marketing may be
explicitly in order to dispel such notions.

1. Survival:
Most of the countries in the world are lacking of market size,
resources and opportunities. Therefore it is their compulsion to
trade with other countries for their survival. Since the European
Countries are small in size therefore without overseas markets
their firms would not have sufficient economies of scale to be
competitive with U.S. based firms. It is pertinent to mention
here that international competition may not be a matter of
choice when the survival is at stake.

Will Mitchell, J. Myles Shaver and Yeung Bernard conducted a

study on “Performance following changes in International
Presence in Domestic and Transition Industries. In a study of
five pharma-sector industries, he found that international
expansion is necessary when overseas firms enter a domestic
market. He revealed that the firms having substantial market
share and international experience expanded their business
activities successfully. And all those firms disappeared that
retrenched after an international expansion.”

2. Growth of International Market:

Despite having numerous problems like economic and
marketing problems, the developing nations are considered be
an excellent market to do business. The vast potential of
international markets can never be ignored. According to one
survey total world market is four times longer in comparison to
U.S. Market.

A slow growth of U.S. population and changing life style viewed

the growth of other markets with a critical eye. It is evident
that Russian smokers show no concern about the health risks.
And International giants Philip Moris Co, R.J. Reynolds, Tobacco
International SA and British-American Tobacco Co. have
entered the market very aggressively.

3. Sales and Profits:

It is clear that there is a large potential to sell the products in
the international market. The International Market constitutes
a large amount of share of the total business of many firms.
Further it is evident that many large U.S. based companies have
performed very well in the overseas market.

IBM and Compaq are the best examples in this regard.

Both of them have maximized their sales in abroad in
comparison to their domestic market. In case of coca-cola it is
important to mention here that 80 percent of the total
operating profit is contributed by the international sales
account of the company. Thus market is on saturation level,
where as there is still a great potential for its future growth in
other countries. Thus it can be concluded that international
market provides huge potential to increase sales value and
profits of the firms.

4. Benefit from Diversification:

The investors can be benefited from global diversification. It is
evident that the demand of certain products is affected by
cyclical factors like recession and seasonal factors like climatic
change. The sale of such products fluctuate adversely due to all
these variables. It is the only solution for such kind of risks, to
diversify a company’s risk and to consider foreign market as
only solution to overcome with variable demand.

Such markets can provide outlets for excess production

capacity and can easily counter such fluctuations. Seasonal
factors, for instance, may affect consumption level of soft
drinks. And keeping in mind such limitation, the soft drink
industries are spreading their marketing activities throughout
the global market. It has been observed that global selling has
enabled the company to carry on with production throughout
the year and help the companies to stabilize their business.

5. Inflation and Price Modernization:

The benefits of International trade are readily self-evident.
Exports are always considered beneficial to a country. On the
other hand imports can also be highly beneficial to a country.
Because there is not any incentive for domestic firms to
moderate these prices. The lack of alternatives in imported
products may compel consumers to pay more for the products
to local firms, resulting in inflation and excess profits for local
firms.

It is evident that in Europe, when the prices of orange Juice

were jumped up, their customers switched over to other
alternative drinks. Finally it took ten years for citrus industry to
win back these consumers. The U.S. orange growers finally
compromised to live with import as they found that alternative
juice is able to keep consumers by minimizing the price
increases.

6. International Marketing and Standard of Living:

International marketing helps the countries and their citizens to
increase their standard of living. On the other hand without
trade, there may be product shortage and which may force
people to pay more or less. International trade make easy for
industries to get specialization and gain access to raw
materials.
And at the same time it foster competition and efficiency. In
overall it leads to the conclusion that international trade is
helpful to provide their citizen higher standard of living.
What is International Marketing – Factors Affecting: Social
Factors, Economic Factors, Competition, Political Factors, Legal
Environment, Logistics and Risk
It is important at this stage to discuss various factors affecting
international marketing.

These factors can be divided in two ways:

(1) Controllable factors
(2) Uncontrollable factors.
The controllable factors refer to those variables which are
under the control of company’s management. It includes the
control and design of elements of marketing mix. The Company
is in a position to control and design product, price, place and
promotion. All marketing activities relating to these factors can
be well controlled and managed by the company’s
management.

On the other hand uncontrollable factors are those, which are

beyond the control of the company. It consists of total
environment in which the marketing mix elements operates.

Some of the relevant factors to international marketing are

given as under:
1. Social Factors:
The social factors of a nation determine the value system of the
society, which in turn affect the International Marketing mix.
Social factors are culture, caste, customs, languages, life style,
standard of living, climate and marketing infrastructure etc. The
demand for goods and services is affected by all these factors.

There is a lot of change in quality of life style of the people.

They are willing to purchase many consumer durables like T.V.,
Fridge, Computer etc., even when they cannot afford to buy it.
It became possible because of availability of hire purchase
system or installment basis.
Cultural factors also influence every aspect of International
Marketing. International marketing decisions are based on
recognition of needs and wants of the customers. The cultural
factors help to understand the behaviour patterns and life style
of the societies culture, in which individual has grown up. Thus
an individual’s perception is groomed and influenced by
cultural factors.

2. Economic Factors:
The economic factors are the most significant determinants of
International Marketing. They also affect the survival of a
business organization and its success.

The economic factors can be studied under following

categories:
(i) Exim Policy of the Country
(ii) Commercial Policy
(iii) Financial system
(iv) Monetary system
(v) Currency restrictions
(vi) Inflation/ Deflation.
The decision regarding international marketing mix is taken by
keeping in mind the above stated economic factors which
determine the economic environment of a country. Therefore
before going for export business or before going for any
decision regarding international marketing mix, it is necessary
to examine the economic factors, which determines the
economic environment of a country.

3. Competition:
Competition is an important determinant of international
marketing mix. The business firm has to face competition in his
home market as well as in the international market. The
international marketing mix is decided by keeping in mind the
strategies of the competitors for the product, price, place and
promotion.

4. Political Factors:
The International Marketing mix is strongly affected by the
political environment of the country. A marketer has to operate
its business activities in a given political factors. The business
operations are greatly affected by the political constraints at
different levels. The change in political scenario leads to change
in the government policies.
The following impact is associated with the political factors- (i)
If the government is stable, it leads to stable policies relating to
the business (ii) If frequent changes are there in the
government, then it leads to frequent changes in the policies of
the government relating to the business operations.
The political factors play a major role in deciding the operation
of a business organization in the international business. Thus a
business organization has to study and analyse the political
environment of a particular country, if it has decided to carry
out its business operations.
Before going for any decision relating to the International
business the business organization has to carry out swot
analysis and cost benefit analysis of International marketing
mix. It must be analysed, keeping in mind the political scenario
of a particular country. The government policy of a country
must be assessed and the role of private sector, small scale
industry is also important. Finally it must be analysed that what
significant role of Multinational Corporation is there in the
national economy.

5. Legal Environment:
International Marketing decisions are influenced by legal
environment pertaining to competition, price setting, taxation,
law etc. The legal system of a particular country should be
studied well before doing business with that country.
6. Logistics:
International Marketing mix is influenced by the Logistics. It
includes mode of transportation, cost of transportation,
inventory management, material handling and warehousing
etc. It is necessary to study all these factors, before going for
any decision regarding international marketing mix.

7. Risks:
The analysis of the risk factor is an important task to be
performed before taking the decisions relating to the
international marketing mix.

What is International Marketing – Strategy: Strategy Design,

Implementation and Control and Adjustment
Many small and medium entrepreneurs wrongly think that an
international marketing plan has to be carried out only by big-
sized companies. This conclusion is based on wrong and
simplistic ideas that relegate the small-sized company plan.
Every enterprise that would like to internationalize must have
its own plan of external business.
To design an adequate strategy, a number of steps relevant to
any company will have to be followed, no matter its size.
Among them, there are:
i. Search for information to take decisions.
ii. Ordering of a series of stages (assignation of priorities and
deadlines) to follow, in order to get access to external markets.
iii. Company internal resources (human, monetary, etc.)
assessment for international penetration.
iv. Quantification of objectives and supervision of their
observance.
v. Putting into practice of the different policies so as to
accomplish the set goals.
vi. Strategy different steps adjustment throughout the
implementation of the plan.
Step # 1. Strategy Design:
Strategy design stage includes a series of sub-stages:
a. Acquisition of Information about International Markets:
However, some aspects on the topic are going to duly discuss
the subject in full.

This stage comprises a series of steps to follow:

i. Fixing of objectives about what the international market
information wanted is.
ii. Information inquiry instruments design and definition of the
research acting field.
iii. Determination of the different traditional and alternative
sources of information (especially for informal market
research).
iv. Acquisition of data elements (historical or current
information and trends).
v. Analysis, comparison, register, accumulation and
interrelation of the information obtained.
vi. Drawing of conclusions of the information obtained and
analyzed.

The initial investigation on international market is going to

throw light upon certain issues like:
i. Determination of the most attractive country-markets for a
particular entrepreneur’s product. If there is a great number of
equally attractive markets, and the budget assigned to
international markets is meager, or the company wants to
concentrate on a few markets, different factors will have to be
considered to select them: similarity between external and
national markets, number of legal regulations or cultural issues
that imply product adaptation, and competition features,
among other factors.
ii. Particular commercial mix policies (product, price,
promotion, market) or penetration strategy to be used (agents,
distributors, etc.).
International market acquisition of information has a value for
the company, which is reflected in some features: exclusivity,
reliability, precision, specificity, uncertainty reduction, etc.
Information acquisition has a cost (in money or time). The
entrepreneur must always make an adequate analysis of the
value-cost ratio, when compiling international information.

This primary goal of this stage is the selection of the most

adequate markets for the company products. Afterwards, the
next stage will proceed.

b. Fixing of Objectives for Market Access:

i. Objectives as International Activity Conducting Structures:
These international strategy objectives are always determined
in relation to a specific product and a particular market (or
submarket).
In order to design them, the following aspects have to be taken
into account:

(a) Company Internal Resources:

Funds bound for international operation development,
personnel affected to the international undertaking (human
talent development), productive structure capacity to satisfy
international demand (process technological updating) and
existence of company product differential elements (quality,
costs, material and packaging innovation, popular brand name,
patents and services offered).

(b) Selected Market Features:

Existing commercial barriers, regulations that affect the
marketing of the product, local competition structure and
behaviour in destination, dynamics in import, motivations and
other features of demand in destination, market segments and
niches detected, unsatisfied needs, among other issues to be
considered.
ii. Objectives Features:
Objectives in general have the following features:
i. There is a time limit to their completion and evaluation.
ii. They fall into the frame of the company mission
(coherence).
iii. They have to be quantified, that is, turned into goals, for
the subsequent measurement of results. If the objective
cannot be measured in numbers, there should be, at
least, a valid parameter that could permit to easily verify
its completion.
iv. They provide for an appropriate assessment of
commercial and financial risks, which implies the
development of activities for their completion.
v. They evaluate the existing restrictions in the company as
regards assigned resources quantity and quality.
vi. They consider the different alternatives for process
activities development. In practice, there is always more
than one alternative for the company’s goals.
vii. When there is conflict among several objectives,
priorities and considerations will have to be established,
and they will have to be divided into main and secondary.
viii. When multiple objectives are established, it is
important to analyze the degree of similarity,
compatibility, as well as simultaneity or chronological
arrangement.
ix. It is important to consider that some objectives can be
autonomous and others are going to be conditioned by
the previous completion of lesser objectives.

Examples of Internationalization Objectives:

Among objectives pursued by the company are:
 i. Achieving certain exports percentage (estimated upon
company total sales) for each market.
ii. Reaching a specific fixed amount of sales or certain
amount of unities per market selected.
iii. Covering a particular market share, in a particular
country.
iv. Acquiring a certain profit level (gross or after taxation) in
international operations.
v. Achieving certain profitability from external market
activities.
vi. Gaining access to particular cities or regions (submarkets).
vii. Fixing minimum or maximum amount of monthly
exports.
viii. Carrying out a specific amount of shipments.
ix. Other objectives- performing a certain amount of
promotional activities, making commercial and
distribution agreements.

c. International Commercial Mix and Marketing Channel

Design:
International marketing mix design comprises a series of
different policies (product, price, distribution, communication
policies) which are interrelated.
1. International Product Policy:
International product policy makes reference to all those
attributes, functions and differentiated features that the
product has, to satisfy international demand needs (consumers
and users).
This important policy includes the following aspects:
i. Necessary materials and components for production.
ii. Design and international registration of one or more
brands appropriate for the product line.
iii. Product colour, shape, style and aesthetic planning.
iv. Product forms of use or operating instructions.
 v. Aspects of product quality and economic life
(durability).
vi. Functional and communicational aspects related to
packaging.
vii. Technical, material and logistic aspects of export
packing.
viii. Services associated to the product (installation,
training, parts replacement, reparation, warranty, etc.).
ix. Product adaptation according to destination market
different factors- consumer purchasing power,
government regulations, consumption patterns, external
client behaviour and economic aspects, among others.

2. International Price Policy:

Price policy comprises all those components that influence the
determination of export final prices- costs, demand behaviour
and competitors’ attitude in the external market.
This policy includes the following aspects:
I. Exported product production cost (with legal, cultural,
economic or technological external market issues in
mind).
II. Financing costs.
III. Administrative costs.
IV. Marketing costs (includes distributors’ margins and
retributions of the other intermediaries that participate in
product delivery).
V. Export costs (documents, customs form3alities, carriage,
etc.).
VI. Costs of product-related services.
VII. Other commercial issues (discounts and bonuses, advance
or partial payments, etc.).

3. International Distribution Policy:

The distribution policy comprises all the commercial, logistical
and communicational issues among the different
intermediaries that make up an international distribution
channel.
I. Distribution channel structure.
II. Distribution channel coverage.
III. Functions at each distribution channel.
IV. Number of intermediaries at each channel level
(density).
V. Communication styles within the channel.
VI. Contractual issues and retributions at each distribution
channel level.
VII. Intervention of intermediaries who facilitate
international distribution (carriers, warehouses
owners, etc.).

4. International Communication Policy:

Communication policy (or promotion) refers to different
transmission aspects to various recipients (consumers,
suppliers, employees and society) of different messages about
the product and the company features and attributes that allow
the building of a differentiated image of them-
i. Sales promotion.
ii. Advertising activities.
iii. Sales force.
iv. Public Relations.
v. Packaging visual features.
Every product, price, promotion and distribution policies are
intimately linked with one another. For example, a product
oriented towards a high purchasing power segment will need
high quality components, and container and product intangible
attributes will be highlighted, such as the status that promotes
consumption.
In this case, the product price will fit a high level, and its
distribution will not be massive, but exclusive of certain
channels. Besides, advertising will be carried out in certain
selected media, specialized magazines, and publications
consumed by people with a high standard of life.
This commercial mix design for international market products is
more complex than the one devised for the national market,
because most variables (product, price, promotion and
distribution) will be affected, in a greater or lesser extent, by
economic, financial, political, legal and cultural environments
differential features of each external market.
D. External Market Access Channel Selection:
International marketing channel design implies the selection of
the most adequate company structure for external market
access. When evaluating international market penetration
policy, entrepreneurs will have to consider some factors that
will affect their decision- size and knowledge of the market to
be penetrated, tariff and paratariff barriers, consumer and
competition features, type of product, segment orientation,
among others.
The main marketing channels are:
i. Sellers.
ii. Agents and distributors.
iii. Brokers.
iv. International concession.
v. Export licensing and franchising.
vi. Manufacturing contract.
vii. Administration contract.
viii. Associative strategies (exports consortia and
cooperative, joint ventures).
ix. Marketing companies.
x. Sale branches and subsidiaries.
xi. Foreign Direct Investment (FDI).
xii. Other channels (piggy backing, technology transfer
administration contracts).

Step # 2. Implementation:
In this stage, the designed strategy is put into practice and the
operationalization of all the variables involved in the strategy
(commercial mix and marketing channels) is pursued in order to
comply with the objectives. This strategic implementation will
be developed according to international market information
collected throughout the design stage and will be applied to all
the selected external markets.
It is an operative or active stage, in which the company assigns
material, human, monetary and productive resources, for the
actual completion development of the different goals set in the
previous stage. The entrepreneur transforms what has been
planned, stipulated and projected in the marketing strategy
into real, tangible activities.
An example of the activities at this stage could be: if an
internationally market accessed product has been designed
with a particular packaging to be manufactured by the
company; suppliers who may offer material of the desired
quality for that packaging will be required; meetings between
the visual designers and the manufacturers will be held,
pursuant to the set design stage stipulations. Once
manufactured, durability and functionality tests will be carried
out.

Step # 3. Control and Adjustment:

This is a fundamental stage in international activities, because
feedback from the implementation stage actions is necessary.
In this stage, information about the results of the international
marketing strategy put into practice is analyzed and these
features may be verified:
i. Degree of completion with objectives;
ii. Correct international marketing channel functioning and
structuration;
iii. Consistency and adequation of each of the marketing mix
variables.
From this analysis, it may turn out that all the objectives (fixed
in the first stage of the strategy called design) may have been
totally met, and this will allow the entrepreneur to establish
higher objectives for the next period according to the
experience gained through internationalization activities.
The fixed goals may not have been satisfied or they may have
been met partially, which leads to two subsequent analyses:
i. Evaluating whether operative activities have been
correctly carried out;
ii. Considering whether the chosen objectives are too
ambitious for this stage. In this case, the entrepreneur will
have to consider the creation of more realistic and easier
to achieve goals.
As to the marketing channel and the international commercial
mix, necessary adjustments may be detected at this stage. This
redesign may appear as a consequence of new information
accessed during the implementation stage (for example,
consumers’ reaction to the product, competitors’ reaction, etc.)
which was not available to the company during the strategic
design stage.
Usually, the enterprise gets information about its international
activities constantly, in each stage, and this information
provides various adjustments to the designed strategy. With
this in mind, marketing strategy main quality must be flexibility,
in order to produce the different modifications, according to
the entrepreneur’s results in the external market operations.

What is International Marketing – Distribution Channel (With

Types and Relation to Promotion)
Export management, after making product planning decisions,
must plan the export channels of distribution. An export
channel of distribution is the chain of marketing agencies
linking the producer with the final buyers in the target market.
Distribution channels negotiate sales transactions, and they
direct the physical movement and storage of the product in
order to place the product in the hands of the final buyers,
where, when, and in the quantities they want. The agencies
comprising a given channel of distribution may be agencies
owned by the producer or independent middlemen, and they
may be many or few in number.

The type of distribution channels used will depend on many

factors, including availability, type of product, the desired
degree of penetration into the foreign market, and the
evolutionary level of retail trading in the particular country.

The ability of an exporter to attain reasonably full and efficient

distribution of his product is almost directly proportional to the
degree of development of modern retailing methods in the
foreign markets. The basic problem is adjusting to foreign
distribution methods; trading efficiencies in foreign countries
have not reached the levels found in the United States, and
many foreign countries are years behind our present structure
of product distribution.
Further, no two countries are alike in terms of the development
of distribution channels. Even in Western Europe, differing
rates of growth are noticeable, with the stores of the United
Kingdom and France still ranking behind German and Swiss
stores in average size and turnover. Italy’s growth has been
slow, and Spain is just beginning to develop efficient
distribution channels.

Types of Distribution Channels:

Different types of distribution channels are called for in market-
ing different types of products in foreign markets. Product
distributors are independent merchant dealers, export houses,
commission or commercial agents, or wholly owned
subsidiaries and branches. In foreign markets, channels of
distribution range from direct sale through single or multiple
distributors or wholesalers, to a combination distributor-
retailer.
Larger companies exporting several product lines may use their
foreign distribution subsidiaries or affiliates, while smaller
companies generally set up one distributor for numerous
retailers. Some companies which have limited capital, or which
have little, if any, opportunity in a world market, may work
through export houses which buy a firm’s products outright
and then distribute them through their own channels.
We will not attempt to cover in depth the many types of chan-
nels that exist, but we will describe the functions that may be
performed by these channels. These descriptions will give help
in evaluating the suitability of each of the channels. In
reviewing these functions the exporter can note the different
factors which he must consider if he is to succeed in the foreign
market.

1. Physical Distribution:
The first function of the distribution channels is the physical
distribution of the product. Physical distribution involves the
physical movement of the exporter’s product and, when neces-
sary, its storage at appropriate places.
Physical distribution, however, does not involve transportation
alone. There are other factors which should be considered in
relation to foreign consumers – How much of the product do
they buy at one time? How often do they buy? What services
will they need?
To illustrate, foreign distribution channels are generally charac-
terized by their relative smallness as compared to distribution
channels in the United States. Expressed in terms of sales per
retail store, overseas sales are much smaller. In the United
Kingdom the average retail store does about one-third the
volume of business done by the average American store. We
are talking in terms of averages.
While there are stores in Britain which probably do an annual
volume of business as large as that of some of their American
counterparts, there are a great many small retail stores which
exist on very small annual sales. In general, as an economy
grows, the volume of business transacted per retail unit also
grows. One history of retailing in the United States reveals that,
although the total number of retail stores has declined, the
total volume of retail sales per store has risen. This aspect of
evolution is found in all markets.

2. Service:
Another aspect of retailing evolution is the provision of service.
Before the innovation of supermarkets, the grocer dealt
personally with his customers, packaging many of the items he
sold. Since the self-service supermarket first appeared, self-
service has become a widespread, acceptable form of service in
most of developed nations.
In most retailing institutions in other parts of the world we still
find that the relationship between buyer and seller is personal,
but it is probable that self-service will become the method of
retailing in most other countries as they become more
industrialized.

3. Class Structure:
Management should be aware of the stratification of retail out-
lets overseas a factor related to the stronger class structure
that exists in most foreign countries. For management the basic
significance of the class concept in foreign markets points out
that product markets and consumers’ shopping habits and
preferences should be researched and analyzed.
During the market survey the exporter must exercise care in
gathering material that will help him understand the nature of
the channel structure in the foreign market he is investigating.
The exporter must make a decision as to the extent of market
penetration he intends to achieve, and he must determine the
distribution channels do not provide blanket coverage of a
market, the exporter may have to switch channels in order to
achieve his plan. If a company is planning a major marketing
effort, it may be best for the company to establish its own sales
organization, especially for the distribution of industrial goods.
Also, because of the relatively small size of most overseas chan-
nel units, financing problems will arise, particularly with respect
to inventory and payment. The limited capital structure of
many channel units may require the exporting firm to deal
more liberally with channel members overseas than it does
with its domestic distributors. Thus credit in foreign countries
may have to be extended over substantially longer periods than
is usual in the domestic country.

4. Controlling Channel Performance:

Market intelligence merits consideration in foreign markets. In
American distribution channels, when intermediaries deal
directly with the target consumers, they report on what they
learn. Thus American manufacturers utilize their distribution
channels to obtain feedback on consume acceptance. In some
cases they organize advisory committees made up of channel
representatives.
However, consume information is clearly understood only in
the most advanced economies, in economies characterized by a
sellers’ market there is an attitude of scorn toward consumers,
despite the fact that the distributor’s livelihood depends on
them. The exporter must, therefore, educate channel members
with respect to their role in obtaining consumer information.
This will not be easy, because a strong feeling of secretiveness
is a cultural characteristic in many foreign markets.
Such secrecy reflects the age-old conflict between buyer
interests and seller interests, and it often causes businessmen
to refuse to give information to their suppliers, or they may
give misleading information. For this reason, the exporter may
have to rely on market research for feedback—at least until he
can establish more satisfactory communication with his
distribution channels.
Distribution Channels in Relation to Promotion:
Distribution channels perform an important promotion function
for a manufacturer, but few generalizations can be made with
respect to overseas markets. The role played by promotion is
directly related to the degree of competition; in a buyers’
market, for instance, impersonal promotional activities,
particularly with respect to the products of oligopolistic
industries, are of considerable importance.
In less developed economies the role of impersonal promotion
is reduced, with personal selling playing a critical role in the
promotion function. Also, cultural attitudes toward promotion
differ considerably in foreign markets. In many countries both
the people and the government have a negative attitude
toward advertising, which may limit is effectiveness and, there-
fore, its use by channels. However, these cultural attitudes are
subject to change if the rewards of promotion are clearly
understood.

Distribution policy decisions stem from the identification of

market targets and from a thorough appreciation of the role
delayed by channels of distribution in a particular market. The
role performed by the various channels will help determine the
role played by distribution in the marketing mix.
The exporter will have to make a decision with respect to the
levels of distribution that will be utilized. Will distribution go
through all channels? Will sales be made direct to users or
tailors? Will sales be made to intermediary distributors? If roles
are made to interim diary distributors, the extent of
distribution will have to be decided upon. To a certain degree
case decisions will be determined by the types of outlet
available and by the services they can perform for the exporter.
Exporters should establish a distribution control system. Man-
ufacturers should develop feedback devices and build a
satisfactory relationship with channel members if they want to
low what is going on in the channels. By analyzing channels by
acting in the interest of all the members, the manufacturer can
influence his channels. Because distance is a significant variable
in the overseas distribution pattern, the exporter take great
care when directing the behaviour of channel members who
have their own interests and outlooks.

What is International Marketing – Major Decisions: Looking at

the Global Marketing Environment, Deciding Whether to go
Abroad and a Few Others
Marketing is the art of finding the needs and wants of the
customers, then to provide the required product or service in
order to satisfy the customer as well as the company. When
this process of satisfaction and business activities expands from
one country to another countries it takes the shape of
international marketing.
International marketing is going global.
Major Decisions in International Marketing:

1. Looking at the Global Marketing Environment:

A company looking abroad must start by understanding the
international trade system.
(a) Economic Environment:
Two economic factors reflect the country’s attractiveness as a
market:
(i) The country’s industrial structure
(ii) Its income distribution.
Types of Industrial Structures:
(i) Subsistence Economies:
a. Agricultural economies consume most of what they produce
and barter the rest for simple goods and services.
b. Offer few market opportunities
(ii) Raw Material Exporting Economies:
These economies are rich in one or more natural resources but
poor in other ways.
(iii) Industrialising Economies:
a. Manufacturing accounts for 10-20% of the economy.
b. Needs more raw material imports but less of foreign goods.
c. Gives rise to new rich and middle class who need more
imported goods.
(iv) Industrial Economies:
Major exporters of manufactured goods and invest funds.
Income Distribution:
Countries with subsistence economies may have little surplus
income, hence reduced buying capability. Industrial economies
have much more surplus funds to spend.
(b) Political / Legal Environment:
Political / Legal factors to be considered in deciding whether to
do business in a given country include:
i. Attitude towards international buying – Some nations are
receptive others are hostile.
ii. Government bureaucracy:
iii. The extent to which the host government runs an efficient
system for helping foreign company.
iv. Political stability – Changing governments may mean
change in policies.
v. Monetary regulations – Sellers want to take their profits
in a currency of value to them.

(c) Cultural Environment:

I. Each country has its own folkways, norms and taboos.
II. The seller must examine the ways consumers in different
countries think about and use certain products before
planning a marketing program
III. Business norms and behaviour also vary from country to
country.

2. Deciding Whether to go Abroad:

Problems in Global Marketing:
(a) Learning new laws
(b) Learning new language
(c) Dealing with volatile currencies.
(d) Facing political and legal uncertainties.
(e) Redesigning their products to suit different customer needs
and expectations.

Factors that Attract Companies to Go International:

(a) Counterattack on global firms in their home market to
counter their attack in our market.
(b) High profit opportunities are available in some countries.
(c) To get a larger customer base to achieve economies of scale.
(d) To reduce its dependency on one market
(e) If company’s customers are going abroad and require
international servicing.

Risks in going abroad:

(a) Failure to understand the preferences of foreign customers.
(b) Failure to offer a competitively attractive product.
(c) Failure to understand the foreign country’s business culture
or know how to deal effectively with
foreign nationals.
(d) The company might underestimate foreign regulations and
incur unexpected costs.
(e) Lack of managers with international experience
(f) The foreign country might change its laws etc. or there may
be a political change etc.

Challenges in International Marketing:

(a) Huge foreign indebtness (May lead to unstability of political
environment and may lead to nationalisation or limits on
profit).
(b) Unstable Government.
(c) Foreign exchange problems.
(d) Foreign Government entry requirements and bureaucracy.
(e) Tariffs and other trade barriers.
(f) Corruption.
(g) Technological pirating.
(h) High cost of production and communication adaptation.

3. Deciding which Market to Enter:

Decisions that must be taken are:
(a) What proportion of foreign to total sales will it seek?
(b) Whether to market in a few countries or many countries.
(c) How fast to expand.
(d) Types of countries to enter.
Generally speaking it makes sense to operate in fewer
countries with a deeper commitment and penetration in each.
Companies should enter fewer countries when:
(i) Market entry and market control costs are high
(ii) Product and communication adaptation costs are high.
(iii) Population and income size and growth are high in the
initial countries chosen.
(iv) Dominant foreign firms can establish high barriers to entry.

4. Deciding How to Enter the Market:

Modes of Entry into Foreign Markets:
(a) Indirect export
(b) Direct export
(c) Licensing
(d) Joint ventures
(e) Direct investment
(f) Contract manufacturing
(g) Management contracting
(h) Joint ownerships
(a) Indirect Export:
(i) Occasional exporting is a passive level of involvement in
which the company exports from time to time either on its own
initiative or as a response to unsolicited orders from abroad.
(ii) Active exporting takes place when the company makes a
commitment to expand its exports to a particular market.
(iii) Indirect exporting i.e. they work through independent
intermediaries to export their product.

(b) Direct Export:

Companies handle their own export.
A company can carry on direct exporting in several ways:
(i) Domestic based export department or division.
(ii) Overseas sales branch or subsidiary.
(iii) Travelling export sales representatives.
(iv) Foreign based distributors or agents – They have exclusive
rights to represent the company in that country or only limited
rights.

(c) Licensing:
Licensing is a method of entering a foreign market

in which the company enters into an agreement with a

licensee in the foreign market offering the right to use a
marketing process, trademark, patent, trade secret, or other
item of value for a fee or royalty.

(d) Joint Venture:

Entering foreign markets by joining with foreign companies to
produce or market a product or service.
Joint venture differs from exporting in that the company joins
with a host country partner to sell or market abroad.

(e) Direct Investment:

Entering a foreign market by developing foreign based
assembly or manufacturing facilities.
(f) Contract Manufacturing:
A joint venture in which a company enters into contracts with
manufacturers in a foreign market to produce the product.

(g) Management Contracting:

A joint venture in which the domestic firm supplies the market
knows how to a foreign company that supplies the capital. The
domestic firm exports management services rather than
products.

(h) Joint Ownership:

A joint venture in which a company joins investors in a foreign
market to create a local business in which the company shares
joint ownership and control.

5. Deciding on the Global Marketing Programme:

Companies that operate in one or more foreign markets must
decide how much, if at all, to adapt their marketing mixes to
local conditions.
At one extreme are global companies that use:

(a) Standardised Marketing Mix:

An international marketing strategy for using basically the same
product, advertising, distribution channel and other elements
of the marketing mix in all the international markets.
At the other extreme are:
(i) Adapted Marketing Mix:
An international marketing strategy for adjusting the marketing
mix elements to each international target market bearing more
cost but hoping for a larger market share and return.
(ii) Global marketing Mix:

Product and Promotion:

(b) International Product and Promotion Strategies:
(i) Straight extension – Marketing a product in a foreign market
without any change.
(ii) Communication adaptation – A global communication
strategy of fully adapting advertising messages to local
markets.
(iii) Product adaptation – Adapting a product to meet local
conditions or wants in foreign markets.
(iv) Dual acceptance – Adapting the existing product and also
the promotion strategies to meet the requirements of the
specific foreign market. Such adaptations would differ from
market to market.
(v) Product invention – Creating new products or services for
foreign markets.

Price:
(a) Companies have to set their international prices.
(b) Foreign prices mostly will be higher than their domestic
prices due to addition of tariffs, importer margin, wholesaler
margin, and retailer margin to its factory price.

Distribution Channels:

The international company must take a whole channel view of

the problem of distributing products to final consumers.
Whole Channel View:
Designing international channels that take into account all the
necessary links in distributing the seller’s products to final
buyers including the seller’s headquarters organization,
channels among nations and channels within nations.

6. Deciding on the Global Marketing Organization:

Companies manage their international marketing activities in at
least three different ways:
(a) Most companies first organise an export departments.
(b) Then create an international division.
(c) Finally become a global organization.

What is International Marketing – Trade Barriers/Restriction:

Host Government, Home Government Trade Restriction,
Formal and Informal Restriction and a Few Others
The national boundary is a single and most important element
that separates domestic trade from International trade.
No country applies the same degree of restrictions within its
domestic boundaries as it does when dealing with international
business firm. Each nations, approach to their domestic and
foreign markets is dictated by its needs and requirements.
The following are some trade barriers faced by the business
firms while operating its business activities internationally:

1. Host Government Trade Barriers:

The host Government can impose various trade barriers in the
way of export business.
The following barriers can be imposed by the host
governments:
(i) Import tariffs – This is a form of taxation and also a source of
income to host government. It may be levied in the form of
custom duty etc. as to control the inflow of foreign goods to its
boundaries. It may restrict the entry of certain products
completely as to safeguard the interests of certain domestic
products.
(ii) Import Licensing – The import license is a function to be
performed by the government. The product should be licensed
by the importer’s government and a fee is paid by the importer.
It is used to control those involved in both sides of transactions.
(iii) Environmental Control – The host Government protect its
boundaries from environmental factors.
Some restrictions can be imposed on foreign exporter before
granting them license to trade in their country. It may be
restrictions on product, product contents and pollution control
etc. No such permission is granted to those exporters who are
not meeting the minimum norms fixed for the goods or
services.
(iv) Technology Transfer – The host government may put the
condition of transfer of technology if certain product is being
sold by the exporters, within their boundaries. This type of
condition of technology transfer is levied mostly by the
developing nation as to equip themself with the latest and new
technology with having least expenditure to have it.

(v) Quotas – Quota is a non-tariff barrier imposed by the host

government as to restrict the quantities of imports to their
country. This process can also be used as to protect the
domestic product from the imported products.

(vi) Anti-Dumping Laws – Anti-dumping law is confined to

present foreign exporters to sell their product at very low
prices. Sometime the aim of such business firm is to drive out
the local manufacturer or other foreign exporters from the
market. Such types of legislation can be used only by those
nations, who are having sophisticated commercial law.

2. Home Government Trade Restrictions:

It is rare for a country to stop its local companies from
exporting.
It is true in case of import laws that all export requirements are
not written down in all countries and it is always subject to
negotiation and arbitrary enforcement.
(i) Issues related to the National Security – The Countries may
restrict the entry to trade in those sectors which are considered
to be reserved from national security point of view. These may
include nuclear materials, strategic minerals, defence strategic
material, etc.

(ii) Export Tariffs – Export tariffs are primarily considered to be

a source of revenue for the government. These are used as a
means of promoting certain trades or to discourage certain
industries. In many countries a separate export processing
zones have been established for the foreign manufacturers.
These export processing zones are promoting investment in the
country and are helpful in protecting domestic manufacturers
from direct competition.

(iii) Anti-Rerouting Measures – Some time when the export

restrictions like quotas are strictly applicable, the exporters try
to change the “Country of origin” to some comfortable areas.
The exporters reroute their product by this tactics. In case it
has been caught by the home country, the firm may be in a big
trouble with his home country and can be punished severely.

3. Formal and Informal Restrictions:

The formal restrictions, the governments control the marketing
decisions of their domestic products as well as that of foreign
companies. As far as informal barriers are concerned, they are
more difficult to detect and, in many cases, harder to overcome
than their more official counter parts.

Some of the informal restrictions are listed below:

(i) Religion and Cultural – Religion and Cultural factors play an
important role in international business. The religious and
cultural restrictions carry such an emotional impact, that a
factual presentation will do only a very little to get your product
on the right track.

(ii) Social restrictions – It is observed that many times the social

structure do not accept the product in their society. It may be
because of their tare or other societal restrictions. Sometime
the industries are not bound to promote their product in the
foreign market, because of their societal constraints.

(iii) Environmental – If there is any ill effect of the product

being produced by the business firms, they can expect a big
market resistance. Such ill effects are including water pollution,
global warming, environmental pollution etc. Once such effects
are brought in to the light, the business firm will be in a big
trouble. They are to follow all such standard norms fixed by the
concerned authority.

(iv) Educational – Many sections of the world are still illiterate.

Big informal barrier is the educational level of the large sections
of the target market population. Therefore training should be a
part of marketing plan when educational level is the key for the
acceptance of the product.

4. Trading Blocs:
The trading blocs essentially restrain foreign traders from
assailing the weaker members by protecting them with
strength. Those who join such trading blocs have recognized
the inter dependence of trade among their immediate
neighbours and use the blocs to prevent outside marketers
from regional free flow. The trading blocs work as to control
and sometimes eliminate trade in certain products or sectors.
Some of the major trade organizations are listed below:
(i) AFTA – (Asean Free Trade Association)
(ii) ASEAN – (Association of Southeast Asian Nations)
(iii) APEC – (Asia-Pacific Economic Co-Operation)
(iv) EU – (European Union)
(v) NAFTA – (North American Free Trade Agreement)
(vi) OPEC – (Organization of Petroleum Exporting Countries)
(vii) SAARC – (South Asian Association for Regional Co-
operation)

5. WTO and International Interventions:

WTO is one of the most influential international body to affect

international marketing mix. World Trade Organisation and its
enforcement arm, the world court has been established as to
rule on International trade dispute. The companies or those
countries, involved in unfair trading practices can be brought
before the court and the decision of the court is ruled strictly.
It is pertinent to mention here that every country cannot be a
member of world trade organizations. There are certain
guidelines and conditions which must be satisfied prior to the
membership. The main objective of the organization is the
eventual removal of all export/import tariffs among member
countries. The members and their companies must comply with
Generally Accepted Accountancy Principles as laid down by the
world trade organization. It is helpful to compare their books
with other members and their Companies.

What is International Marketing – Present Scenario: Bilateral

Trade Agreement and Multilateral Trade Agreement
When we look at the current international marketing scenario,
the following points attract our attention:
(i) Free trade at the global level is the ideal situation and is
beneficial to all countries. However, at present, various types of
restrictions (tariff and non-tariff) are imposed on international
trade by all countries developed and developing.

(ii) The GATT (now WTO) and other international organisations

have failed to introduce new international economic order
under which international trade will be free and fair to all
participants.

General Agreement on Tariffs and Trade (GATT) –

(iii) Regional trade blocs (regional groupings) exist in the field of

international marketing. Such blocs (e.g., EEC, EFTA, ASEAN,
etc.) may be useful to members of the blocs but they create
obstacles in the free movement of goods at the global level.
Such blocs are harmful to less developed countries. There is
growing trend for such regional groupings among less
developed countries of the world.

(iv) In spite of trade restrictions, trade blocs and other

obstacles, world trade is growing. World merchandise trade
volume rose by eight per cent in 1995 and value of trade in
goods and services over $6,000 billion for the first time as per
the report of WTO.
(v) Rich and developed countries dominate present
international marketing scene. They put pressure on less
developed countries to accept certain decisions which are not a
favourable but actually harmful to less developed countries.

(vi) The US is the world’s leading single goods exporter and also
the top importer followed by members of the European Union.

(vii) International marketing is rapidly becoming global

marketing. The countries of the world are coming closer under
global village. This tendency will lead to integration of
economies of different countries. As a result, rapid expansion
will take place in the field of export marketing.

(viii) Efforts are urgently required (under the leadership of

WTO) for the creation of new international economic order in
which free trade in the world will be a reality and just and fair
treatment will be given to all countries of the world irrespective
of political and economic factors.

(ix) The domination of MNCs on export marketing is fast

increasing. These corporations are making huge profits by
planning their marketing activities to the global level. MNCs
and TNCs are also creating many problems for developing
countries as regards their export marketing plans and
programmes.

(x) The setting up of the World Trade Organisation (WTO)

would see a major shift in the style of the world trade ushering
in a new era in which countries would be bound by common
rules.

Bilateral Trade Agreement:

When two countries make agreement for mutual trade and
commercial benefits their agreement is called bilateral trade
agreement. The agreement contains all aspects governing
import-export transaction and the measures to solve dispute
arising therefrom if any. The developing countries do make
such agreements.
Their agreement may be with another developing country or
even with the advance country which may be of capitalist or
socialist ideology. These agreements depend upon mutual trust
and political relationship.
India, has entered into bilateral trade agreements with many
countries in the world. India being the developing country still,
she needs these agreements to meet the increasing demands
of her industrialisation and economic development. India and
Russia, India and Germany, India and South Africa are some of
the best examples of bilateral trade agreements.
Multilateral Trade Agreement:
When more than two countries enter into trading agreement
for the common benefit, the agreement is called multilateral
trade agreement. After Second World War, multilateral trade
agreements have been entered into to resolve the problems
arising out of their trading relationships.
Maximisation of world welfare, uniform trading pattern and
reduction in the duty so as to benefit more to the developing
countries and related matters are the objectives of multilateral
trade agreements. Multilateral trading agreements are also
entered into to ease but the customs and non-tariff barriers
which made free trade difficult.
The post war period is fast becoming a global village.
Advancement in technology and transport vis-a-vis
international communication have facilitated international
trade. Restrictions once imposed by governments (communist
governments) upon imports and exports have been relaxed, as
a result of multilateral trade agreements.
Two important multilateral trading agreements are- General
Agreement on Tariffs and Trade (GATT), and United National
Conference on Trade and Development (UNCTAD).

[Link]
international-marketing/what-is-international-marketing/
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Figure 21.
[Link]
international_pricing_strategies

Psalm 23:4
Yes, though I walk through the valley of the shadow of death, I
will fear no evil: for You are with me; Your rod and Your staff
they comfort me.