Topic 10: International marketing Flashcards
Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company’s international marketing decisions.
A company must understand the global marketing environment, especially the international trade system. It should assess each foreign market’s economic, political-legal, and cultural characteristics. The company can then decide whether it wants to go abroad and consider the potential risks and benefits. It must decide on the volume of international sales it wants, how many countries it wants to market in, and which specific markets it wants to enter. These decisions call for weighing the probable returns against the level of risk.
Describe three key approaches to entering international markets.
The company must decide how to enter each chosen market – whether through exporting, joint venturing, or direct investment. Many companies start as exporters, move to joint ventures, and finally make a direct investment in foreign markets. In exporting, the company enters a foreign market by sending and selling products through international marketing intermediaries (indirect exporting) or the company’s own department, branch, or sales representatives or agents (direct exporting). When establishing a joint venture, a company enters foreign markets by joining with foreign companies to produce or market a product or service. In licensing, the company enters a foreign market by contracting with a licensee in the foreign market and offering the right to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty.
Explain how companies adapt their marketing strategies and mixes for international markets.
Companies must also decide how much their marketing strategies and their products, promotion, price, and channels should be adapted for each foreign market. At one extreme, global companies use standardized global marketing worldwide. Others use adapted global marketing, in which they adjust the marketing strategy and mix to each target market, bearing more costs but hoping for a larger market share and return. However, global standardization is not an all-or-nothing proposition. It’s a matter of degree. Most international marketers suggest that companies should “think globally but act locally” – that they should seek a balance between globally standardized strategies and locally adapted marketing mix tactics.
Identify the three major forms of international marketing organization.
The company must develop an effective organization for international marketing. Most firms start with an export department and graduate to an international division. A few become global organizations, with worldwide marketing planned and managed by the top officers of the company. Global organizations view the entire world as a single, borderless market.
