Businesses face many complications when venturing into international marketing: they have to adapt their marketing mix to different cultures, different legislations, different languages and so on.
E-commerce - Worldwide access to the e-commerce platform of a business provides the opportunity to access international markets without investing into infrastructure in the foreign nation.
Direct Investment - Refers to the business setting up overseas production and/or distribution facilities.
Exporting - Selling products directly to a foreign buyer while still operating in its domestic country.
Joint Ventures - To gain entry into a foreign market, businesses can partner with foreign organisations in a joint venture, whereby they invest in a shared project, pooling their resources to form a separate legal entity. This enables the business to gain entry into the foreign market with the aid of a local organisation who understands the culture.
Strategic Alliances - Like a joint venture, businesses seeking entry into a foreign market can partner with foreign organisations in a strategic alliance, where they pool resources and invest in a shared project.
Franchising - Selling franchise licenses to foreign nationals to set up a franchise in their local country will enable the business to gain access into a foreign market without having to invest into infrastructure and with the cultural awareness of a local.
Mergers - Merging with a foreign business will grant both businesses access into each other’s markets.
Acquisitions - Purchasing a majority stake of a foreign company will enable the parent company direct access into its local market.
Increased Customer Base - As market development strategies go, the business will gain access to a larger customer base with entry into a new market. This promises the potential for greater sales and higher market share for the business, and could serve as an extension strategy for product life cycles.
Spread Risks - By operating in a diverse range of markets, the business lowers its reliance on any singular market for survival or prosperity. Therefore, the business will be less vulnerable to changes in consumer tastes or a recession in a certain market. Similarly, businesses who are impacted by seasonal or cyclical variations in market demand, they can even out sales by entering international markets with different or counter-cyclical variations.
Increase Brand Recognition - A greater customer base across the world will increase the international recognition of the brand, leading to improved brand loyalty, greater influence in the market, and increased sales revenue.
Economies of Scale - Expanding into a new market will increase the scale of operations of the organisation, who can benefit from reduced unit costs of production due to economies of scale.
Legal Issues - The business must be conscientious about adapting its operations and practices to a different legal system. Government trade restrictions, employee protection legislation, environmental legislation, competitive legislation are all potential pitfalls for lawsuits if businesses do not adapt.
Language and Cultural Differences - Management must be aware of how differences in language and culture will impact their marketing strategies, and the perception of their current product by the local market.
Infrastructure - The state of a country’s transportation and communications networks and technologies will have a significant impact on business operations. Poor internet access, costly transportation of exported or imported goods, and the availability of public transportation systems are conditions to consider.
Cultural Sensitivity is essential for success in international marketing. Marketers must not assume that people overseas behave in the same way that they are accustomed to, and marketing strategies must be adapted to individual cultures and ways of life. Business etiquette in one country may be very different from what is expected overseas. Therefore, recognising differences in cultures when entering the international market is imperative to avoid misunderstandings between the business and its customers.
Cultural Exports, or the commercial transfer of ideas and values from one country to another, must be carefully managed and adapted to fit local cultures. American fast food, Japanese ramen, Bollywood, Kpop, are all cultural exports from their countries of origin and have spread across the world.
In all cultural exports, marketers need to consider local preferences when formulating their marketing strategies. For example, McDonald’s in China has a more chicken-based menu, whereas McDonald’s in India offer more vegetarian options.
Effective Communication is imperative for the promotion of the business, brand, or product to a new market. However, there is a risk of promotional messages getting ‘lost in translation’.
Language barriers that may hinder communications between a business and a foreign market must be overcome in a professional manner; improper translation will make the business appear to be of low-quality and may damage its reputation.