4.6 Flashcards
what is international marketing?
International marketing is the marketing of a firm’s products in foreign countries. It is more challenging for business since they have to deal with new external factors
Therefore, International marketing normally requires an amended marketing mix that suits the local market.
There are various methods that business can use to enter international markets, what are they?
Internet (e-commerce) – trading via internet helps reducing costs (i.e. Amazon, eBay, Etsy)
Exporting – the firm operating in the domestic country sell the products directly to an overseas buyer (direct export). It eliminates the need to set a business abroad. Indirect export involves hiring and export intermediary or agent in the home country to market the product. A popular form of indirect export is piggybacking; where already existing domestic distribution channels are used by another overseas business.
forigne Direct Investment – this refers to a business setting up production and/or distribution facilities overseas. This companies will set their production to serve diffident regions
Joint ventures – when two or more companies invest in a shared business project sharing their resources with each being responsible for the costs, profits and losses incurred. However, the participants keep their own independent business
Franchising – when a business allows others to trade under its name in return for a fee and a royalty payment based on a predetermined share of the sales revenues
Outline Opportunities of entry into an international market?
A larger market – this provides the company with a larger market for their products (abroad), gaining higher sales and profitability.
Diversification – companies can diversify the risk by investing in other countries and not rely only in one country for revenue.
Enhanced brand image – creates greater brand prestige that can lead to brand loyalty. The business will be perceived to be more successful.
Economies of scale – with selling more products abroad the firm may reduce the average cost of production and hence make the business more competitive.
New business relationships – the firm can make new contacts with various stakeholders (i.e. suppliers, that might provide a better price)
outline threats of entry into and international markets?
Economics challenges – distribution inequality, especially in developing countries, can create problems for the firm
Political challenges – political instability may lead to constant changes in Government regulations. Global terrorism and civil unrest also have an influence in the firm’s decision to operate or leave the county
Legal challenges – different countries have different laws and businesses must follow them. Also, the firms will have to follow customer protection laws and intellectual property rights from other countries.
Social challenges – demographic differences are key for businesses
Technological challenges – Internet resources are limited in some developing countries. On top of poor infrastructure and poor communication systems. Factors which the firm need to face.
