4.6

• International marketing


  The marketing of a firm's goods and/or services in foreign countries
• International marketing can be challenging for businesses as they need to deal with external factors and constraints such as differences in political systems, legislation, language, and cultures
• International marketing usually requires an amended marketing mix to suit local markets
• A lack of understanding of different cultures can prove problematic for even large businesses
• Opportunities

  External factors that create business prospects or openings for a firm's growth and development in international markets
• Threats

  External factors that create challenges and obstacles for businesses wanting to expand and operate in overseas markets
• Opportunities of entering and operating internationally

  • Increased customer base
  • Economies of scale
  • Increase brand recognition
  • Spread risks
  • Wider distribution channels
  • Extend the product life cycle
  • Gain more profit
• Increased customer base can lead to greater sales revenue and possibly higher market share for the business
• Economies of scale


  Cost saving benefits of larger scale operations
• By operating on a larger and international scale, a business is likely to benefit from economies of scale
• Businesses can benefit from lower production costs by operating in overseas markets, such as access to cheaper labour and raw materials costs
• Having a standardised marketing strategy across the world can lead to greater international recognition of a brand
• Operating in various international markets allows a business to be less exposed to the risk in one particular country
• Having a wider distribution channel increases the potential number of foreign buyers
• Developments in e-commerce have reduced costs and risks of international marketing while broadening distribution channels
• A business might find the domestic market for its product is saturated or in decline
• By marketing the product overseas, the business can expand its life cycle to generate higher sales revenue
• Overseas markets provide significantly larger sources of revenue, so can be financially lucrative
• The legal, political, social and economic issues surrounding international marketing can pose both opportunities and threats to businesses
• Legal issues


  • Legislation
  • Trade barriers
  • Intellectual property rights
  • Differences in consumer protection laws
• Trade barriers

  International trade barriers set up by governments to protect domestic industries
• Types of trade barriers

  • Tariffs
  • Quotas
  • Embargoes
  • Administrative barriers
  • Subsidies
• Tariffs


  Import taxes that increase the price of imports
• Quotas


  Quantitative restrictions on imported goods
• Embargoes


  Outright bans on certain products entering a country
• Administrative barriers


  Bureaucratic obstacles such as safety regulations, licences, and employment visas
• Subsidies


  Financial assistance given by the domestic government to domestic businesses
• Businesses need to adhere to intellectual property rights and comply with copyright, trademark, and patent legislation
• Businesses must observe differences in consumer protection laws across countries
• The degree of political stability within a country can have a major impact on whether international marketers succeed in overseas markets
• Countries with a stable political climate tend to be less risky and more receptive to foreign businesses
• Different socio-economic and demographic conditions mean that businesses may need to reconsider aspects of their international marketing
• Demographic changes will have a direct impact on international marketing
• Businesses must consider societal norms regarding business etiquette in different regions
• Business etiquette

  The mannerisms and customs by which business is conducted in different parts of the world
• A key argument for more and freer international trade is that it enables people to have a greater choice of products at more competitive prices
• International marketing increases the degree of competition in the marketplace
• Transportation costs, exchange rate fluctuations, interest rates and communication costs are further economic issues that need to be considered when marketing products overseas