M Rahman
International marketing is a very important subject for students as well as managers. It is a topic which makes us think beyond our national borders. According to Doole and Lowe (2001), international marketing, at its simplest level, involves a firm in making one or more marketing mix decisions across national boundaries. At its most complex level, it involves the firm in establishing manufacturing facilities overseas and coordinating marketing strategies across the globe.
Why international marketing?
There are a number of reasons why a company may decide to go for international marketing. Economies of scale, growth opportunities, globalisation, competition, higher profit margins, larger markets, and brand prestige are to name but a few. The discussion that follows will focus on some of these factors.
Growth: Having served the domestic market successfully, a company may engage in international marketing. This is very true with most of the multinational organisations. Tesco, McDonald’s, Subway, and many others have gone to international markets due to growth opportunities.
Competition: A firm may find its domestic market highly competitive and less attractive. Going to international markets will address this problem. However, there is no guarantee that international markets will be without competition. Therefore, a detailed research is necessary before making a decision.
Brand prestige: The more countries a company operates in, the more visible it is. Pepsi, Coca Cola, McDonald’s, Subway and many others operate in more than one hundred countries. This shows how recognised these companies are globally.
Cost effectiveness: Many U.S. and European companies manufacture their products in countries such China, India, Turkey, Mexico, Bangladesh, and Brazil. The cost of manufacturing is generally far less in those countries compared to U.S. and European Union.
Larger market: Size of some of the international markets is enormous. Consider a British company which sells its products/services in the UK only. If half of the total population is considered the qualified target market (which is unrealistic), then, the firm can sell to 32.5 million people as the total population in the UK is approximately 65 million. Now, consider the same company deciding to go to China. Once again, if half of the total population is considered the qualified target market, then, the firm can sell to 625 million people as the total population in China 1.3 billion (approximately).
In a nutshell, companies go to international markets for many reasons. However, international marketing has its advantages and disadvantages. Therefore, a detailed research is extremely important before going to international markets.
The article publication date: 12 September 2016
Further Reading/References
BPP Learning Media (2010) Marketing Principles, 2nd edition, London: BPP Learning Media Ltd
Doole, I. and Lowe, R. (2001), International Marketing Strategy – Analysis, Development and Implementation, 3rd edition, Thomson Learning
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
Joe David