4.7 International Marketing
Opportunities and threats of international markets
• International marketing - the process of selling goods and services
in more than one country. It creates global opportunities for
• Opportunities
companies. Of done well it can lead to huge revenues, but on the
• larger target market
other side of the scale, it can damage brands and increase costs
• increase in sales revenue potential disposable incomes are increasing
so more money spent on goods and services
• rapid growth in sales revenue - GDP increasing at an average rate of
5.4% in developing countries, opportunity for international companies
• Methods of entry into international markets to enjoy large increases in sales revenue and profit
• Economies of scale - as a company increases its sales, the average
• Exporting cost of producing the good or service should reduce which leads to two
• simple to start, costs are low and profits are not shared with other options: reduce the selling price in an effort to gain more sales, or keep
companies the selling price to enjoy higher profit margins
• very little knowledge is gained • Spreading risk - diversifying into new markets allows companies to
• tariffs and quotas spread risk
• delivery costs can increase the price of goods and delivery times • Increased brand reputation - benefit from increased recognition within
may be long that market and the original market, customers might gain confidence in
• Agents the brand if they know it is already successful -0 they are more likely to
• the products is actively marketed to potential customers. Agents trust the product
have local knowledge of customer tastes • access to a global market - gaining entry to a market will provide new
• There is loss of brand control, commission paid to agents opportunities to the business in terms of sales, economies of scale, and
increases costs gaining access to new suppliers and a different labour force
• delivery times may be long
• Franchising • Threats
• rapid expansion is possible with limited investment • changes in external environment as identified via STEEPLE analysis, but
• loss of brand control, regular inspections may be needed these could be considered an advantage or opportunity because they
• most profits are kept by the franchisees are external
• Joint ventures • social and cultural difference
• local knowledge is gained • different languages, histories and climate means that every country
• there is financial investment from the local partner has a unique culture
• it can help overcome legal barriers concerning foreign ownership • religious beliefs can affect preferences for items such as food and
in some countries clothing
• profit ownership and control are split • cultural differences: attitude to individualism, the role of religion,
• disagreements could slow down decision making ability to control their own future, tolerance of free speech, morality
• direct investment • Legal differences
• full control is maintained, profits are not shared • product standards and trading laws vary around the world
• there are large investment costs • international trade barriers, exports may be subject to tariffs and
• lack of local partner could reduce local knowledge quotas
• strategic alliance • economic differences
• each company remains independent in terms of ownership • global incomes vary so products must be tailored to satisfy different
• after the project is realised, the strategic alliance falls apart consumer budgets
• conflict between the parties is possible as they may have different • growth rates in the developing world also raise operating costs
objectives and expectations for the alliance • shipping costs will vary depending on the distances that goods need
to be transported
International marketing strategies
Globalisation
• two models: pan-global strategy or global localisation
• pan global - using the same marketing mix for every country,
products are not tailored to meet the needs of local markets, instead • there merging of cultures and the trend towards worldwide markets for
a single brand image is presented to all global consumers, the only goods and services. This has been the result of fortunate economics and
adjustments may be for legal or language reasons. Can provide an stable political conditions, improved technology in transport and
image of authenticity. communication, and more unified legislation.
• Global localisation - goods and services are tailored to meet the • The effect of the internet
needs of local consumers. For example, McDonald’s. Can provide a • internet has revolutionised a number of industries
competitive advantage over competitors. All elements of the • the effect of television
marketing mix could potentially be updated: • television audiences are becoming globalised
• Product - products sold abroad are the same, with slight • google became accepted in the dictionary which shows the use of
adjustments made to suit local audiences, for some businesses language and sharing of terms, another example is that hoover is a
this may just be the language on the packaging. Seasonal brand but is used to describe the vacuum
differences around the world can alter times at which different • The effect of the World Trade Organisation
goods are sold. Fashion brands wont be able to delay summer • works to promote trade between countries
items from the north until the summer months arrive in the south • Objectives
as trends move on. • negotiating the reduction or elimination of obstacles to trade
• Price - adjusted to meet the needs of the local market. Incomes, • administering and monitoring the application of the WTO’s agreed
taxation rates and production costs will vary from country even if rules for trade in goods, trade in services and trade-related intellectual
the product is identical. To stop customers from exploiting this, property rights
sometimes there are legal restrictions on how much can be • Monitoring and reviewing the trade policies of members, and ensuring
brought in different countries and brought back transparency of regional and bilateral trade agreements
• Promotion - the music, actors and food shown in commercial will • settling disputes among members regarding the interpretation and
be adjusted to meet the needs and ethnic diversity of their market. application of the agreements
There may be differences in the message that is used to promote • building capacity for developing country government officials in
the product. international trade matters
• Place - distribution strategies vary greatly depending on the • assisting the process of accession of some 30 countries that are not
country. It may be that the business must operate abroad yet members of the organisation
alongside another company from that region • conducting economic research
Opportunities and threats of international markets
• International marketing - the process of selling goods and services
in more than one country. It creates global opportunities for
• Opportunities
companies. Of done well it can lead to huge revenues, but on the
• larger target market
other side of the scale, it can damage brands and increase costs
• increase in sales revenue potential disposable incomes are increasing
so more money spent on goods and services
• rapid growth in sales revenue - GDP increasing at an average rate of
5.4% in developing countries, opportunity for international companies
• Methods of entry into international markets to enjoy large increases in sales revenue and profit
• Economies of scale - as a company increases its sales, the average
• Exporting cost of producing the good or service should reduce which leads to two
• simple to start, costs are low and profits are not shared with other options: reduce the selling price in an effort to gain more sales, or keep
companies the selling price to enjoy higher profit margins
• very little knowledge is gained • Spreading risk - diversifying into new markets allows companies to
• tariffs and quotas spread risk
• delivery costs can increase the price of goods and delivery times • Increased brand reputation - benefit from increased recognition within
may be long that market and the original market, customers might gain confidence in
• Agents the brand if they know it is already successful -0 they are more likely to
• the products is actively marketed to potential customers. Agents trust the product
have local knowledge of customer tastes • access to a global market - gaining entry to a market will provide new
• There is loss of brand control, commission paid to agents opportunities to the business in terms of sales, economies of scale, and
increases costs gaining access to new suppliers and a different labour force
• delivery times may be long
• Franchising • Threats
• rapid expansion is possible with limited investment • changes in external environment as identified via STEEPLE analysis, but
• loss of brand control, regular inspections may be needed these could be considered an advantage or opportunity because they
• most profits are kept by the franchisees are external
• Joint ventures • social and cultural difference
• local knowledge is gained • different languages, histories and climate means that every country
• there is financial investment from the local partner has a unique culture
• it can help overcome legal barriers concerning foreign ownership • religious beliefs can affect preferences for items such as food and
in some countries clothing
• profit ownership and control are split • cultural differences: attitude to individualism, the role of religion,
• disagreements could slow down decision making ability to control their own future, tolerance of free speech, morality
• direct investment • Legal differences
• full control is maintained, profits are not shared • product standards and trading laws vary around the world
• there are large investment costs • international trade barriers, exports may be subject to tariffs and
• lack of local partner could reduce local knowledge quotas
• strategic alliance • economic differences
• each company remains independent in terms of ownership • global incomes vary so products must be tailored to satisfy different
• after the project is realised, the strategic alliance falls apart consumer budgets
• conflict between the parties is possible as they may have different • growth rates in the developing world also raise operating costs
objectives and expectations for the alliance • shipping costs will vary depending on the distances that goods need
to be transported
International marketing strategies
Globalisation
• two models: pan-global strategy or global localisation
• pan global - using the same marketing mix for every country,
products are not tailored to meet the needs of local markets, instead • there merging of cultures and the trend towards worldwide markets for
a single brand image is presented to all global consumers, the only goods and services. This has been the result of fortunate economics and
adjustments may be for legal or language reasons. Can provide an stable political conditions, improved technology in transport and
image of authenticity. communication, and more unified legislation.
• Global localisation - goods and services are tailored to meet the • The effect of the internet
needs of local consumers. For example, McDonald’s. Can provide a • internet has revolutionised a number of industries
competitive advantage over competitors. All elements of the • the effect of television
marketing mix could potentially be updated: • television audiences are becoming globalised
• Product - products sold abroad are the same, with slight • google became accepted in the dictionary which shows the use of
adjustments made to suit local audiences, for some businesses language and sharing of terms, another example is that hoover is a
this may just be the language on the packaging. Seasonal brand but is used to describe the vacuum
differences around the world can alter times at which different • The effect of the World Trade Organisation
goods are sold. Fashion brands wont be able to delay summer • works to promote trade between countries
items from the north until the summer months arrive in the south • Objectives
as trends move on. • negotiating the reduction or elimination of obstacles to trade
• Price - adjusted to meet the needs of the local market. Incomes, • administering and monitoring the application of the WTO’s agreed
taxation rates and production costs will vary from country even if rules for trade in goods, trade in services and trade-related intellectual
the product is identical. To stop customers from exploiting this, property rights
sometimes there are legal restrictions on how much can be • Monitoring and reviewing the trade policies of members, and ensuring
brought in different countries and brought back transparency of regional and bilateral trade agreements
• Promotion - the music, actors and food shown in commercial will • settling disputes among members regarding the interpretation and
be adjusted to meet the needs and ethnic diversity of their market. application of the agreements
There may be differences in the message that is used to promote • building capacity for developing country government officials in
the product. international trade matters
• Place - distribution strategies vary greatly depending on the • assisting the process of accession of some 30 countries that are not
country. It may be that the business must operate abroad yet members of the organisation
alongside another company from that region • conducting economic research
