4.7. International Marketing (HL Only)

  • International marketing
    • Sale and marketing of a firm’s products in a foreign country
    • Important in the face of globalization
      • Businesses have many opportunities to expand internationally
      • Foreign businesses will also serve as competitors
  • Methods of entry into foreign markets
    • Exporting
      • Direct selling to overseas buyers
    • Direct investment
      • Setting up additional production and distribution facilities in foreign markets
      • Relatively costly
    • E-commerce
      • Exchanges facilitated through the internet
      • Relatively lower costs and risks
    • Joint ventures
      • Two or more companies investing in a new project overseas
      • Spreads risk while sharing benefits, resources, and knowledge
    • Franchising/licensing
      • Third-parties (possibly from foreign countries) pay for an established business’ name, products and image, and in return are allowed to operate
  • Opportunities and threats of entry into foreign markets
    • Opportunities
      • Expand marketing operations into growing and emerging markets
      • Spreading overall risk between more markets, each at different stages within the economic cycle
      • Taking advantage of marketing and production economies of scale
    • Threats
      • High-barriers of entry
      • Strong competition from the well-established local industry
      • Differing consumer demands
  • Approaches to selling goods internationally
    • Pan-global
      • Standardized product across the globe
      • Treats the whole world as a single market
      • Advantages
        • Capitalize on existing strong brand
        • Economies of scale (advertising/promotion)
        • More consistency and standardization
      • Disadvantages
        • May offend local tastes and culture
        • Risky if not tailored to the local market
    • Global localization/glocalization
      • Adopting a differentiated marketing mix that meets national and regional tastes and cultures
      • Thinking global, acting local
      • Advantages
        • Caters to local tastes
        • More products (diversification)
        • Spreads risks
        • Cater to wider market
        • Avoid any issues of cultural insensitivity
      • Disadvantages
        • May lose identity of brand
        • More costly (research implications)
  • Branding in the global market
    • Strong brand adds to competitive strength of a business and allows it to penetrate overseas markets more easily
    • Successful global brands enjoy marketing economies of scale, thus achieving consistency in branding, cost savings, and brand loyalty
    • Global brands can focus on local needs by modifying or glocalizing their products but keeping core elements intact – local language and culture must be considered

Kim De Leon4.7. International Marketing (HL Only)

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