Owing to the strong rivalry in the economy, most businesses are expanding their markets internationally. Marketing is now widely acknowledged as having a significant impact on a company’s operations. International marketing is the solution for organizations that have done well in their home market but wish to expand into the international market. However, not everyone is familiar with this term or how to apply it to their businesses.
Let’s look at what international marketing is and how to create an effective international marketing strategy. This will also include the types of international marketing with some examples.
Overview
International marketing has become a feasible alternative for firms as a result of developments in communication, transportation, and financial flow. Between 1951 and 2010, the volume of international commercial trade increased 33 times, according to the World Trade Organization.
People are increasingly receptive to brands and products from other countries. And this brings with it a plethora of opportunities as well as challenges. But then what exactly is international marketing?
International Marketing Definition
Simply put, international marketing is the act of buying and selling products, goods, and services to people all over the world. To put it another way, it’s any marketing effort that takes place beyond national borders. According to AMA (the American Marketing Association),
“it is a transnational process of planning and executing the development, pricing, promotion, and distribution of ideas, goods, and services to produce an exchange that satisfies individual and corporate objectives.”
It’s similar to export management in certain ways. Export management, on the other hand, is limited to overseeing the movement of goods and services from the host country to the guest country.
International marketing, on the other hand, encompasses all aspects of manufacturing, finance, and personnel. It also includes a number of post-sale activities.
Glocalizing: How You Should Approach Your Global Marketing
When discussing international or global marketing, you will come across the word ‘glocalize.’
Glocalizing is a global marketing strategy that approaches by balancing local-focused marketing with a global mindset in branding and marketing.
You can’t have a successful global marketing campaign if you can’t make your brand relatable to your customers. Each country and region has its own set of local cultural expectations and preferences in social media platforms that you may not conventionally use in your country.
Simply translating your website’s content based on your target local’s cultural and linguistic preferences can make or break global sales. 40% of users said they would not buy from websites not in their native language. International users stated that they heavily based their purchases on whether the product descriptions, product reviews, and checkout were in their native language.
In international marketing, what matters is emotionally connecting your brand to your global audience. Later on, we will discuss some global brands and their strategy in marketing to several regions across the world.
What Distinguishes International Marketing from Domestic Marketing?
International marketing incorporates all of the characteristics of modern marketing. The latter, on the other hand, tries to meet the needs of domestic customers. As a result, it occurs across national boundaries.
As a result, international marketing has its own set of traits, including:
- There are two or more countries involved.
- Marketing methods that are particular to each country
- It facilitates communication between a corporation and its international clientele.
- Decisions are made with the global business environment in mind.
But then, the primary distinction between international and domestic marketing is that international marketing takes place across multiple countries. For the most part, Marketers’ goals are the same whether they are selling items or services domestically or internationally: to make a profit by selling things or services that consumers want.
Honda, Unilever, and P&G are just a few of the international companies that have developed their own foreign marketing strategies. Dell is a typical example of a company that uses international marketing to differentiate products by offering distinct components that allow people to create their own PCs.
As you may expect, organizations that are successful at worldwide marketing have a lot of options. It does, however, come with a number of hazards and obstacles.
Let’s start with a question that’s equally relevant before we look at the advantages and problems of worldwide marketing.
What are the Types of International Marketing?
Export or licensing are usually the first steps for international enterprises wishing to offer their products or services in a new country. Contract manufacturing, joint ventures, and foreign direct investment are some more types of international marketing (FID).
Meanwhile, these types of international marketing could also serve as options to penetrate the international market.
Let’s take a closer look.
#1. Export
Exporting, as we know, is the process of transporting goods directly to a foreign country. Manufacturers who want to expand their firms into new markets generally start by exporting. This is not surprising.
Exporting has the lowest risk of any of the international marketing types on this list. It also has the least impact on the human resource management of the organization.
#2. Licensing
Licensing is a contract in which a corporation, known as the licensor, allows a foreign company to use its intellectual property. It’s usually for a set period of time, and the licensor is compensated with royalties.
Throughout the United States, there are various examples of intellectual property licensing. Patents, copyrights, industrial methods, and trade names are examples of this type of international marketing.
Some of the largest global licensors, according to statistics, include; Disney, Iconix Brand Group, and Warner Bros.
#3. Franchising
Franchising, like licensing, entails a parent company granting a foreign firm permission to conduct business in its name. Franchises, on the other hand, are normally required to follow tougher operating requirements than licensed businesses.
Service businesses, such as hotels, rental services, and restaurants, use this type of international marketing more frequently.
Licensing is usually limited to manufacture.
#4. Joint Venture
A joint venture is a partnership between two companies from different nations with the goal of mutual benefit. It is the involvement of two or more companies in a business venture in which each company:
- Contributes financial resources
- To some extent, he or she owns the entity.
- Risk is shared.
Sony-Ericsson is perhaps the most well-known worldwide joint venture to date. It’s a collaboration between Sony, a Japanese electronics manufacturer, and Ericsson, a Swedish telecom corporation.
#5. Foreign Direct Investment (FID)
A corporation uses FID to deploy a fixed asset in a foreign country in order to manufacture a product there.
In contrast to joint ventures, the foreign business owns the subsidiary entirely. As a result, it gains effective control or significant influence over the decision-making process.
Mergers and acquisitions, retail, services, and logistics are all examples of foreign direct investment.
Several American businesses employ these worldwide marketing techniques to offer their goods and services around the world. Here are a few illustrations.
What Are Some Examples of International Marketing?
When it comes to international marketing, there is no such thing as a one-size-fits-all solution. As a result, firms must typically employ a variety of international marketing techniques and strategies in order to appeal to their broad audience. To avoid lapses, it entails modifying menus, translating into multiple languages, and adapting to the social structure.
In Taiwan, Pepsi, for example, employed the tagline “Come Alive with Pepsi,” or so they thought. Pepsi, on the other hand, literally means “brings your forefathers back from the dead.”
Let’s look at five global marketing success stories: AirBnB, Nike, Coca-Cola, Apple, and Spotify.
#1. Airbnb
Brian Chesky and two other friends launched Airbnb, a San Francisco-based internet marketplace for vacation rentals, in 2008. Since then, the company has expanded to include over 1,500,000 postings in over 34,000 cities around the world.
So, what’s causing this rapid expansion?
Airbnb established a specialized localization department in order to make its website accessible to people all over the world. It also makes use of the power of local storytelling to build trust and a sense of community among hosts and visitors.
In January 2015, Airbnb, for example, started a social media campaign with the hashtag #OneLessStranger. Locals were encouraged to undertake random acts of hospitality for strangers and share their experiences on social media.
The campaign went off without a hitch!
Over three million individuals around the world were either creating material or discussing #OneLessStranger three weeks after it debuted.
#2. Nike
Through international sponsorships, Nike has been able to expand its global presence over the years. One example of its international marketing strategy is its past long-term partnership with Manchester United, an English soccer team.
Aside from foreign partnerships, Nike has a number of other tactics in place to appeal to a worldwide audience.
The NikeID co-creation platform, for example, puts the power of design in the hands of consumers. It’s a rapid solution for the firm to provide products that cater to different ethnic and stylistic preferences.
#3. Coca-Cola
Coca-Cola is one of the world’s most well-known brands and with good reason. It’s a great example of a brand with a successful international marketing strategy.
Local companies were given leeway to tweak the soda’s flavor to suit the market’s cultural preferences. Furthermore, advertising, marketing, distribution, and price are tailored to meet unique needs.
Coca-Cola emphasizes universal values like sharing and joy. However, the company also uses cultural references and endorsement arrangements with local celebrities to globalize marketing.
#4. Apple
The fundamental goal of Apple’s international marketing strategy is to keep its brand consistent across cultures.
In different parts of the world, the company’s products, advertisements, and websites all have the same clean, minimalist look. In addition, regardless of the country or language, the images on the website are the same.
To put it another way, iPhone producers are concerned with maintaining a consistent brand and consumer experience.
It’s worth noting that a one-size-fits-all approach may not be appropriate for most brands. It appears to work for Apple, though. In fact, the iPhone maker was named one of the biggest global brands in 2019 by Interbrand.
#5. Spotify
Spotify, a Swedish music streaming and media service company, was founded twelve years ago.
It now boasts 299 million active users and 17 offices across the world. Furthermore, the firm was named to Interbrand’s list of the finest worldwide businesses in 2019.
So, how did Spotify go from Sweden to the rest of the world so quickly? The solution can be found in the way it describes the product.
Rather than focusing on a specific type of music, the streaming service encourages users to focus on a habit or way of life that people all over the world share. You may, for example, choose music for a Workout, Sleepy, or Study session.
As a result, worldwide musicians with content that fits into a given category can swiftly get attention from listeners in other nations.
What Are the Advantages of International Marketing?
International marketing can assist in the creation of larger and better business expansion opportunities. It not only expands your consumer base, but it also protects you from a potential economic downturn. Global marketing also allows for the efficient use of excess production and the development of ties with other firms all around the world. Furthermore, it creates job prospects in the host country.
The following are some of the advantages of international marketing.
#1. Expansion of the Market
Market expansion is a major benefit of global marketing. It’s a chance to grow a company’s customer base.
Marketing a product or service was too expensive for small firms two decades ago. However, thanks to modern communication channels like Google and Facebook, this is no longer the case.
Small enterprises can now reach a larger international customer base without breaking the bank. International marketing not only enhances earnings, but it also raises brand awareness.
#2. Assists in the Event of a Downturn in the Economy
Unexpected economic crises and natural disasters can devastate a company’s revenue.
However, money from selling to an international audience can help to compensate for any potential downturns. As a result, your company will be able to weather the storm and compensate for losses at home.
The Great Wall failed to recoup even a third of its $150 million budget in the United States, grossing only $45.5 million. The action film, on the other hand, was a huge smash in China, grossing $170 million.
At the international box office, it grossed a total of $289.4 million.
#3. Effective Utilization of Surplus Production
International marketing aids manufacturers in properly utilizing excessive output.
It entails transporting surplus goods from one country to another. As a result, the foreign exchange of products between importing and exporting countries can fulfill each country’s unique requirements.
To put it another way, surplus raw materials, goods, or services produced in the United States can be exported to other market locations in the international space.
#4. Gives You a Competitive Advantage
International marketing gives competitive advantages in addition to generating revenue and diversifying assets.
You can gain new clients and awareness that your competitors may not have by growing internationally. When the housing market is already overcrowded, this is especially true.
You may stay ahead of the competition by using global marketing.
#5. Opportunities for Employment
In a foreign country, global marketing expands job opportunities.
It allows brands to acquire specialized talent that isn’t always available in their own country. Marketing managers, marketing coordinators, and translators are just a few examples.
As a result, employers frequently hire individuals with specialized skills that could be valuable at home.
For example, over 71% of advertisers say that some of the best ad campaigns are being generated outside of the United States. So, employing a comparable method at home could provide a competitive edge.
What are Some of the Drawbacks of International Marketing?
Despite its advantages, global marketing has some drawbacks. Cultural differences between the home and host countries, for example, could stymie the marketing plan. Other downsides may include; Government limitations, severe competition, probable infrastructural challenges, and war in the host country.
#1. Cultural Distinctions
Various marketing issues may arise as a result of different cultures and conventions around the world. These include consumer needs and usage habits, as well as responses to marketing mix aspects.
In addition, foreign countries may have institutions that necessitate the development of an altogether new marketing approach.
Dogs, for example, are considered filthy creatures in Muslim society. As a result, a message describing a dog as “man’s best friend” will not be accepted in Middle Eastern countries.
#2. Government Constraints
International marketing necessitates adhering to a number of stringent norms and regulations imposed by the host country’s government. Common examples include high taxes, as well as import and export tariffs.
Plus, these limitations might have an impact on a company’s profitability and long-term viability. Companies may find it difficult to comply with these foreign restrictions and may be forced to leave.
#3. Conflict Situations
Tensions and warlike events between countries can have a significant impact on global marketing.
As a result, diplomatic ties affect the capacity to offer products and services in other countries. As long as these countries stay cordial, the trade will continue to flow smoothly.
Any unrest in the host country, on the other hand, might result in massive losses. It may also result in a full halt of activities in some situations.
#4. Intense competition
Brands that enter a foreign market frequently face competition from both local and international competitors. As a result, global marketing is characterized by intense competition.
Three Important Considerations in International Marketing
Marketing on a global scale is vastly different from marketing on a domestic scale. When marketing internationally, there is a slew of issues that a company doesn’t have to deal with when marketing in their own country. The following are some important factors to consider when making an international marketing decision.
Economic Situation
To enter the international market setting, it is necessary to research the economy of the market that the company intends to target. This process basically includes; information gathering, comparison, and analysis, as well as the overall and distinct assessments of essential areas of the economy such as people’s income, social structure, market demand, financial transactions, and so on.
Capture the current scenario as well as the fluctuation trend in the business’s field and connect products from there. This would eventually contribute to starting off on the right foot and developing a framework for marketing strategies.
Culture
As previously stated, the host country’s culture and demography will have a significant impact on marketing results. This is because for the most part culture will influence;
- The nature of marketing strategy, specific techniques, and metrics.
- The choice of company sector and target market.
- Product tooling, distribution, and promotion mix.
To be effective in international marketing management, you must understand and follow the culture and regulations of the host country.
Furthermore, administrators must conduct extensive research into consumer behavior and habits. To be successful, you can adjust the packaging, the price, and come up with the right service approach.
Read Also: Global Marketing: Simplified strategy to scale any business
When McDonald’s first entered the Indian market, for example, they conducted extensive studies before creating a menu for Indian diners. The entire menu has been revamped to cater to Indian preferences. Vegetarian food accounts for 40% of the menu. In addition, to honor Indian culture, McDonald’s offers a variety of foods that exclude beef and pork from the menu.
This is a case of product localization in action. This has helped the Indian market products succeed and the brand becomes more well-known among the local populace.
Governmental Affairs
Political influences on enterprises in the international market space must be considered by global marketers. The country’s political stability is one area that requires special attention.
Political unpredictability and fast change create a perilous business climate. It’s also worth noting that the country of origin is frequently used to identify a multinational corporation. And depending on domestic and international government ties, this might be beneficial or detrimental.
Consumer goods are, in fact, more politically sensitive than industrial goods, and finished products are more politically sensitive than the materials and ingredients that go into them.
Meanwhile, in the international market space, a negative political climate will have several repercussions on the company. It may restrict the marketing program or product sales in that market. It can also make obtaining a license or returning earnings to the original firm difficult, as well as causing the boycott of a product.
Furthermore, as part of their marketing strategy, international marketers must research the political environment.
How to Create a International Marketing Strategy
After you’ve figured out what international marketing is, you’ll undoubtedly want to know how to create a flawless strategy. The following steps should give you a head-start:
#1. Examine the Marketing Environment
From the above-mentioned idea, the nature of international marketing, we can deduce that studying the international marketing environment is the first and most significant task for enterprises. This is because the marketing environment has a direct impact on each enterprise’s production and commercial activities.
As a result, for the type of market that the company wants to penetrate, it is vital to research the usage habits and tastes of international consumers. Marketing research here includes not only domestic marketing research but also the political, legal, international economy, international finance, national culture, and health concerns. Consequently, strategists must constantly assess the marketing environment, both internal and external, that is relevant to their business activities.
To do this task properly, you must first establish a foundation or a fulcrum around which the next steps can be developed.
#2. Evaluate a Company’s Capacity to Access the International Market Space
Following a thorough examination of the international marketing environment, the next step in the international marketing strategy is to evaluate a company’s ability to penetrate foreign markets. In other words, conduct an analysis and compile a list of strengths, weaknesses, opportunities, and threats (SWOT analysis).
Consider the advantages of entering the market, examine the company’s risks, and assess the market’s competition to emphasize the company’s competitive edge over competitors. Find out about the market’s commercial opportunities and prospects, as well as the earnings that can be made from it. The evaluation frequently focuses on the following topics, based on the data, assumptions, and information acquired in the first step:
- Business technology
- Product designs, models, and branding
- Product quality, quality control, and product life cycle
- The industry’s perfectionism
- Customer service is important.
- Availability of raw materials
- Price, cost, and distribution structure.
- Internal, subjective variables that can be expressed in corporate reputation, customer loyalty, corporate culture, business position, financing, effective export assistance forms, and procedures are all examples of strengths.
#3. Create a Marketing Strategy for International Markets
The following are effective steps to creating an international marketing plan.
Step 1: Choose a target market
After thoroughly researching and analyzing global marketing, the next phase in the international marketing model is to choose your target market. At this phase, the company will perform classification, refinement, and selection of the target market based on the parameters mentioned above.
The method used to select the target market is determined by the goods that the company intends to sell in the international market. The company must evaluate a variety of aspects when selecting a target market, including the needs of that market, the size of the market, the market’s development, the competitive position in the market, risk considerations, and so on.
Companies select potential markets that they believe are the most dominating and likely to succeed based on all of these variables.
Step 2: Select a Market Entry Strategy
It is an important job and an essential component of the worldwide marketing strategy since it demonstrates the types of penetration that the most powerful corporations can employ. You have the option of selecting one of the following options:
- Association of Exporters
- Investing directly
Step 3: Create an International Marketing Strategy and Set Objectives
This entails establishing marketing objectives and international marketing programs such as market research content, product positioning, and marketing factor-mix establishment. this includes;
Setting long, medium, and short-term marketing goals for each category, product, and market:
Based on steps 1 and 2, the company will define long, medium, and short-term marketing goals for each category, product, and market. There is a flexible modification of these goals depending on the time; it is unnecessary to apply these goals too rigidly because opportunities in foreign markets do not always go hand in hand with the previously defined aims.
International marketing planning:
Similar to the domestic marketing mix, the global marketing mix is defined by four factors: product, pricing, distribution, and sale promotion. These four factors have been established equally to be connected with foreign markets, and they all serve and support other operations in international marketing.
Organize the implementation, testing, and evaluation of the global marketing plan’s performance:
This is the final and most important step in the international marketing activities model. The process of addressing the questions “Who?” “Where?” “When?” and “How?” is known as implementation organization.
Companies typically perform global marketing in one of three ways: establishing an export sales department, establishing an international branch, or establishing a global organization.
The Export Sales Department is in charge of coordinating and exporting the company’s products to international markets. The export department will then be able to increase its export marketing services.
The company’s worldwide operations are managed by the international branch. These branches have marketing, research production, finance, planning, and human resources professionals on staff.
Step 4: Evaluation and Testing
The following three types of tests can be used to assess how well the global marketing plan is being implemented:
- Examine the annual strategy.
- Profitability should be tested.
- Controlling the quality
The test topic could include product implementation, profitability, the effectiveness of marketing mix efforts in the first year, and the foundation for future international marketing strategy. Basically, sales data, market share analysis on markets, cost analysis, financial analysis, and customer response can all be used as test bases.
In the international marketing model, all of these processes must be completed. Any firm operating in a competitive environment must recognize that one thing that determines whether it succeeds or fails: its marketing strategy and execution. The more sophisticated a company’s foreign marketing model, the more likely it is to do business and compete successfully in the market.
What Are Benefits of International Marketing?
In short, the main benefits of international marketing are that it makes good use of excess domestic production, brings in new types of goods, improves the quality of production, and encourages countries to work together.
What Is the Future of International Marketing?
When trying to promote a product, it’s a good idea for companies to team up with regional advertising firms. They also need to reevaluate their digital advertising approaches in a world where data privacy is gaining traction daily.
What Are the Stages of International Marketing?
Different stages in Global Advertising
- Domestic marketing.
- International marketing.
- Export marketing.
- Multinational marketing
- Global marketing.
What Is the Role of International Marketing?
Prominent roles in international marketing include the following;
- To encourage cross-national social and cultural exchange.
- To aid developing countries in their economic and industrial development by allowing them access to the international market, closing the gap between developed and developing countries.
- Finally, to ensure that global resource management is sustainable.
What Is International Marketing and Its Importance?
People prefer to buy items that are generally available. As a result, international marketing is pretty much important because it enhances brand recognition globally.
What Are International Marketing Examples?
Some examples of companies that practice international marketing include; AirBnB, Nike, Coca-Cola, Apple, and Spotify.
What Are the Nature of International Marketing?
Foreign marketing, as defined by Terpstra and Sorathy, “consists of finding and serving global customer demands better than the competition, both local and international, and of coordinating marketing operations within the restrictions of the global environment.”
Conclusion
In the international marketing climate, building a strong market is a difficult task. As a result, a smart marketing manager must analyze and understand the importance of focusing on what they can control rather than reaching out.
Consequently, marketers must accept challenging circumstances in order to get a competitive advantage in the international market. It is both a challenge and an opportunity for marketers who wish to get experience in a different setting.
Hopefully, with the knowledge about international marketing and how to plan international marketing that you have gained, you will be able to identify the right path to success for your company.
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