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What is International Marketing?
Definition: International Marketing
The implementation of marketing ideas by industries in one or more countries is known as international marketing. Thanks to developments in international marketing, enterprises can now do business in practically any country on the planet.
Simply put, international marketing is the exchange of goods and services across countries. The technique for planning and executing product and service tariffs, promotions, and distribution is the same all over the world.
What are the Characteristics of International Marketing?
The following statements define the fundamental characteristics of international marketing.
Larger Market
Marketing and advertising items and services can be done on a variety of platforms. The market is open to everyone and is not restricted to a specific local market or residents of a specific location, area, or country. It can be actively participated in by people from many countries with various cultures and traditions.
Wider Expertise Required
The international market necessitates greater experience, particular managerial abilities, and broader competency to cope with a variety of settings and scenarios, such as changes in government strategies, public perception, and many other aspects.
Fierce Competition
In the international market, competition is fierce because multinational enterprises must fight with competitors both in their home nations and in other countries. Because the conflict is between rich and developing countries, with both having different standards and being unequal partners, competition is fierce.
High Risk and Difficulty
International marketing has its own set of benefits, but it also comes with its own set of risks and obstacles. Political factors, regional and cultural differences, shifting fashion trends, a sudden war situation, amendments in government rules and regulations, and communication obstacles are all examples of these challenges. Management of the international market is difficult and necessitates extensive market research.
Dominance of Transnational Corporations
Because of their global reach, multinational firms dominate international marketing. All of their company operations are run efficiently and effectively by these groups. They are in a secure position, and their global strategy allows them to fit into the international marketing environment.
Types of International Marketing
International companies who want to offer their products or services in a new country normally begin with export or licensing. Contract manufacturing, joint ventures, and foreign direct investment are some more sorts of international marketing (FID).
Let’s review them in a little more detail.
Export
The process of transporting goods straight to a foreign country is known as exporting. Exporting is frequently the first step for manufacturers trying to extend their business into new markets. Exporting has the lowest risk of any of the worldwide marketing types on this list. It also has the least impact on the human resource management of the organization.
Licensing
Licensing is a contract in which a corporation, known as the licensor, allows a foreign company to use its intellectual property. It is normally for a set period of time, and the licensor is compensated with royalties.
Throughout the United States, there are various examples of intellectual property licensing. Patents, copyrights, manufacturing methods, and trade names are examples.
Some top global licensors include Disney, Iconix Brand Group, and Warner Bros, to name a few.
Franchising
Franchising, like licensing, entails a parent company granting a foreign company permission to conduct business under its name. Franchises, on the other hand, are required to follow tougher operating requirements than licensed businesses.
For example, hotels, rental services, and restaurants use this form of foreign marketing more frequently. Licensing, on the other hand, is typically limited to the manufacturing industry.
Joint Venture
A joint venture is a collaboration between two companies from separate countries for mutual gain. It is when two or more companies work together on a project, and each company −
- Makes a financial contribution
- Somewhat owns the entity
- Assumes risk
Sony-Ericsson is perhaps the most well-known international joint venture to date. It is a collaboration between Sony, a Japanese electronics manufacturer, and Ericsson, a Swedish telecom corporation.
Foreign Direct Investment (FDI)
A corporation uses FDI to deploy a fixed asset in a foreign country to manufacture a product there. Unlike joint venture, the foreign corporation owns the subsidiary entirely. As a result, it gains effective control or significant influence over the decision-making process.
Mergers and acquisitions, retail, services, and logistics are all examples of foreign direct investment.
International Marketing vs. Global Marketing
The terms global marketing and international marketing have a lot of similarities. However, both can be viewed as two distinct stages of internationalization or worldwide corporate operations.
The following can be considered as top six differences.
Products and Services
The goal of a corporation using a global marketing strategy is to advertise the same product or service in multiple nations without changing the product or marketing message.
International marketing strategies focus on moving away from universalizing product and service offerings in order to meet the unique needs of an international market.
Marketing Employees
Companies pursuing global marketing strategies employ all their marketing employees at the company's headquarters office in its native country as there is no need to station marketing employees in international marketplaces because the marketing communications are universal.
When pursuing an international marketing strategy, corporations will either relocate marketing professionals from their headquarters to the foreign country or engage expert marketing personnel from the foreign country this strategy necessitates a thorough understanding of the target market.
Promotional Activities
Companies use global marketing to air commercials and radio ads that reach a global audience. The objective is to establish a medium with a global reach. This allows the same uniform message to be delivered to a diverse group of people in different nations.
In international marketing, however, TV advertising and radio adverts are rarely used in numerous countries. The idea is to create unique content for each country while collaborating with and utilizing media channels to communicate the custom-tailored message to a specific market.
Social Media
Although not always, but a corporation will (usually) maintain one page on each social media network in global marketing.
In international marketing, a corporation will typically create many social media accounts, each aimed at a particular market or country. This allows the organization to personalize its messages so that they are read in the relevant language with the appropriate semantics in each market.
Decision-Making Hierarchy
Because global marketing adopts a home-based strategy to marketing abroad, the marketing department in the home country makes practically all marketing-related decisions (this is often the only marketing department.)
International marketing has a decentralized decision-making structure, with overseas offices free to take marketing initiatives based on their own opinions and preferences.
Research and Development
Between international and global marketing methodologies, market research and development are vastly different. A global marketing company only needs to conduct sufficient research to ensure that there is a demand and a market for the company’s products or services in each country they target.
International marketing, however, must be extremely accurate because each region into which the company has expanded requires custom-tailored marketing messaging, in-depth study and analysis of market trends, tastes, demand, necessity, competition, and placement strategy is required.
Conclusion
International marketing at a base level, involves the firm in making one or more marketing decisions across national boundaries. At a higher level, it involves the firm in establishing manufacturing and marketing facilities overseas and coordinating marketing strategies across markets. Thus, we can say that how international marketing is defined and interpreted depends on the level of involvement of the company in the international marketplace.
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