The world as you know it is more connected than it has ever been, thanks to numerous advancements in technology. Nowadays, it’s not surprising to see an ad for a product from halfway across the world and get it sent straight to your doorstep in a matter of days.
This can be attributed to international marketing, a prospect that is becoming increasingly attractive and accessible to any business. With international marketing, brands, products, and services are no longer confined to the borders of the nations they originated from.
Through reading this blog post, you can expect to learn about the definition of international marketing, its importance, its pros and cons, its types, and some important considerations for developing an international marketing strategy.
What Is International Marketing?
International marketing is the marketing and trading of products and services between individual countries. It involves two or more countries and enables foreign customers to enjoy a company’s products or services. The scope of international marketing covers planning, promotion, and distribution.
Why Is International Marketing an Important Concept To Grasp for Marketers?
With national borders being considerably more permeable due to improvements in communication and transportation technology, you might find that overseas expansion for your business has an attractive outlook. However, marketing to another country has risks in proportion to its opportunities — if you don’t fully grasp the concept of international marketing, you’ll be setting yourself up for failure instead.
Because of significant differences in culture, trends, regulations, and more, you need a unique marketing strategy for every country you plan on doing business in. For this reason, market research is essential.
Keep in mind, however, that international marketing may not be appropriate for every business. Weigh its pros and cons first to determine whether or not you should pursue international marketing.
The Pros of International Marketing
Building relationships with customers and business partners across the globe is a strong motivator for any company to attempt braving international waters. Here are some of the main pros of international marketing.
Expansion of Your Customer Base
This is the first advantage every marketer thinks of when considering international marketing. The opportunity for significant market expansion is obvious — countries like China and India have populations in the billions. Boosting your brand reputation overseas and expanding your customer base will directly lead to an increase in your profits.
Easier Due to Communication Advancements
Any business, whether big or small, has easy access to global communication channels via the internet. This makes marketing your products or services to customers in another country significantly easier than before. Years ago, the concept of international marketing may have been too expensive or risky for small businesses, but today they can take advantage of the advances in communication technology to at least try.
Protection Against Unexpected Economic Events
No one can ever truly predict the future, no matter how convenient it would be for businesses. Unforeseen economic downturns can be catastrophic for a company. While you cannot change this, you can find protection against it by expanding your business to other countries. Your profits from overseas customers can offset local downturns and help cushion your business during rough times.
One of the easiest examples to illustrate this with is movies. Take, for example, Pacific Rim (2013). It grossed around $101 million in the U.S. and Canada, which fell short of its roughly $190 million budget. However, it grossed $309 million internationally, with $114 of those earnings coming from China alone. It ended up grossing $411 million in total, which marks it as a success despite underperforming in its local market.
Efficient Utilisation of Excess Production
This benefit is especially significant for manufacturers. No one wants to see surplus raw materials, goods, or even services go to waste when there might be demand for it somewhere else. International marketing helps companies utilise their excess production by opening the doors to shipping to other countries that have a demand for it. This way, both the importer and exporter find a way to meet their needs.
If your local market is oversaturated with competition, it might feel tough to stand out in the crowd. By implementing an international marketing strategy, you will be able to access a customer base that your competitors may not have access to. Successfully expanding overseas can also boost your brand reputation locally by advertising your international renown, helping you push further ahead of the competition.
More Employment Opportunities Globally
This applies to both your business and the world at large. By expanding to another country, you will typically increase employment opportunities there — hiring managers, marketers, coordinators, consultants, translators, workers, and more. This is beneficial as it allows you to access foreign talent and expertise that can be useful for growing your business both at home and overseas.
The Cons of International Marketing
For all its advantages, international marketing also comes with a myriad of difficulties. Consider these cons carefully before embarking on any international marketing initiatives.
Dealing With Cultural Differences
Culture can vary greatly from country to country — what may be acceptable in one may not be in the other. Marketers need to understand cultural differences from top to bottom and be sensitive in their usage of symbols when creating international marketing campaigns. Furthermore, certain tried-and-tested marketing strategies may not be as effective in a foreign country, due to differences in customer preferences, habits, demographics, and so on.
Rules and Regulations From Local Government
If you want to legally do business in a foreign country, then you must abide by the regulations set by its local government, including taxes and duties. Some companies might find that these regulations are too strict or challenging to follow — they impact profits in a manner that makes future business unsustainable.
Alternatively, they may not thoroughly understand the law and have to pay fines or even face criminal charges for their actions.
Unstable Political Relations
Political tension is an unavoidable concern in international marketing. For some countries, you can usually anticipate trade to proceed smoothly, but for others, you’ll need to monitor diplomatic relations. A sudden rise in tension or war-like situations can lead to significant losses or even a shutdown of operations, and you need to protect your business against the possibility.
For example, while TikTok is highly successful globally, it was permanently banned in India in February 2021 along with many other Chinese apps, following a skirmish on the Sino-Indian border that resulted in the deaths of 20 Indian soldiers in June 2020.
When you attempt to enter a foreign market, you will definitely face competition from both local and international companies. You must be prepared to deal with a high degree of competition, so work on defining your niche and boosting your brand reputation.
Types of International Marketing
Strategies for entering a foreign market can differ from business to business, and what works for someone else might not work for you. International marketing can take many forms, so consider each of these types carefully when developing a marketing strategy for your company:
Exporting is the simplest, lowest-risk, and least resource-intensive form of international marketing. It simply requires selling your product or service directly to foreign customers. It allows you to enter a new market without having to rebuild your strategy from the ground up. As long as you can handle the marketing and shipping (if your product is physical) costs, you can begin exporting.
China is the biggest exporter of goods in the world, with prominent goods being consumer electronics, clothing and other textiles, data processing technologies, medical equipment, and optical gear. If you take a moment to browse the tags of any products within your reach, there’s a good chance it says “Made In China.”
Franchising is a common strategy for companies selling a service, such as hotels and restaurants. One of the most well-known examples of a successful franchise is McDonald’s — the largest restaurant franchise in the world with over 37,000 locations in 120 countries.
Franchising involves a parent company (franchisor) selling the opportunity to do business on their behalf to a foreign company (franchisee). The franchisor still holds ownership over the business itself and determines the rules and regulations that the franchisee must follow in order to maintain the quality of their products and services.
Licensing is similar to franchising, but it typically deals with products or manufacturing instead. It allows a foreign company the right to use a business’ (licensor’s) intellectual property in exchange for paying royalties to the licensor, typically for a specific period.
Intellectual property can range from copyrights, patents, manufacturing processes, and trade names. An excellent example of a good licensing strategy is Coca-Cola — it licenses the rights to local manufacturers, who are allowed to tweak the soda’s taste to suit local preferences, such as the amount of sugar.
Piggybacking is another viable international marketing strategy for small to medium-sized businesses. It involves allowing a larger business to sell your products as part of their inventory. Ideally, both businesses' products are both non-competing and complementary. It requires a significant amount of trust as the larger company will have more control over how the products are marketed.
A joining venture is the product of two companies from different companies coming together for their mutual benefit, typically creating a unique product or service in the process. It carries the most risk of all types of international marketing, but also the greatest potential for returns. Each company contributes assets and shares the risk.
An example of a successful joint venture is the streaming service Hulu, which was originally conceived from a partnership between News Corporation, NBC Universal, Providence Equity Partners, and Disney. Currently, it has over 4.3 million subscribers.
Foreign Direct Investment
Foreign Direct Investment or FID, a company places an investment a foreign country to do business. This can take the form of mergers or acquisitions, facilities, manufacturing, retail, logistics, sales offices, administration, or services.
Unlike other forms of international marketing like joint ventures or piggybacking, the parent company has more direct control over the decision-making process of marketing their product or services.
What To Account for When Setting Up an International Marketing Strategy
When you’re developing your international marketing strategy, you want to ensure you’ve covered all your bases. You can use these four questions as a general checklist for things to account for when setting up an international marketing strategy.
1. What Country Are You Targeting?
If it’s your first time expanding internationally, you’ll want to start with countries with a low barrier to entry. Here are some of the criteria that you can look at:
Minimal language barrier
Close physical proximity (for shipping and logistics)
Similar customer demographics
2. Have You Done Your Market Research?
When you’ve decided what countries you’re targeting, in-depth market research is necessary to formulate a strong international marketing strategy. Some factors you will want to consider are:
Economy: The state of the current market, e.g. Are they on the brink of recession? Has there been a recent economic boom? How will this affect your business?
Culture: Will there be any cultural, religious, or societal conflicts between your brand message and the average consumer?
Regulations: Are there any legal barriers to entry for your particular industry?
Competition: Are your direct competitors involved in the market? Is there a reason they are or are not?
3. Can You Handle the Costs Associated With International Marketing?
Even if international marketing is now more accessible than ever before, that doesn’t necessarily mean it will be cheap. Take into account these costs when developing your marketing strategy and ask yourself if the expense is worth doing business abroad instead of at home:
Foreign taxes and duties
Legal expenses, including registration, licensing, contracts, etc.
New employees and business partners
4. How Will You Be Using Social Media?
Social media is a powerful tool for reaching international audiences, which is why it has a place of prominence in international marketing. This is especially relevant for smaller businesses, which can easily use social media for marketing without massive expenses. Here are four considerations for your international marketing strategy:
Creating multiple accounts for each country vs keeping one account
Take advantage of cross-posting and diversifying your content
Follow the correct time-zones for peak posting times
Companies can now conduct business anywhere in the world — being able to capitalise on the opportunity can be the start of meteoric growth.
Creating a successful international marketing strategy is a challenge for any marketer because the challenges of marketing in an entirely different country can sometimes prove insurmountable. This is why you need to leverage the tools you have at your disposal. Your main weapon is, of course, intensive research — in-depth knowledge of the market is what will allow you to make sound business decisions.
Book a demo with us today at Dalim Software to learn more about how we can help you automate your content marketing operations with our collaborative software.