8.14 - International Marketing
The importance of international marketing for business growth
International marketing involves promoting and selling products or services across national borders. It allows businesses to access new customer bases and achieve expansion that may not be possible within their home country alone.
Key opportunities from international marketing:
- Profitable sales expansion - Businesses can increase revenue by tapping into global demand.
- Necessity for growth - Many firms must look abroad to continue growing.
- Emerging markets - Countries like those in the BRICS group (Brazil, Russia, India, China, South Africa) are developing quickly, creating attractive chances for businesses to sell goods and services.
Reasons why international marketing is important
Businesses engage in international marketing for various strategic reasons, which help them overcome domestic limitations and capitalise on global advantages.
Saturated home markets
When domestic demand stops increasing and rivalry becomes fierce, moving into less competitive foreign markets can lead to quick sales boosts.
Profit opportunities
- Combining fast sales growth with reduced operating expenses results in strong profitability.
- Firms manufacturing in areas with low expenses can sell at higher prices in wealthier nations, boosting margins.
- Affluent countries, such as those rich in oil like certain Arab states, enable sellers of high-end items to charge more than at home.
Risk spreading
Operating in multiple countries reduces reliance on any single economy or set of regulations, providing stability during local downturns.
Poor trading conditions in home market
If economic issues arise domestically, strong performance in other regions can balance this out.
Legal differences creating opportunities
Variations in rules mean products banned or restricted in one place can be marketed freely elsewhere.
The four-stage process for entering international markets
Entering a new international market requires a structured approach to ensure informed choices and reduce risks. This involves a step-by-step decision-making process.
Stages in the international market entry process:
- Identify potential suitable markets - Research factors like economic expansion rates, average income levels (indicating living standards), common languages, cultural aspects, and proximity to the home base.
- Screen potential markets - Assess elements such as government stability, reliability of the local currency, overall market potential, level of competition, shipping expenses, site advantages, and access to sales networks.
- Select the market to enter - Narrow down options to a few top choices, visit them in person, connect with possible collaborators, review how other overseas firms have fared, and base the final pick on solid evidence.
- Enter the new market - Create tailored promotional and sales tactics to launch products effectively in the chosen location.
Ethical considerations in international marketing
While international marketing offers many benefits, it raises moral questions, particularly when companies take advantage of varying rules between nations. Businesses may face criticism for selling items in countries with lax standards that would be prohibited elsewhere.