International Marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
International marketing deals with the following questions:
- What are the distinct problems of international marketing?
- Why firms seek to sell overseas?
- What are the factors determining which markets to enter?
- What are different methods of entry overseas?
- What are arguments for and against using the Marketing Mix model overseas?
Definition of international marketing
International marketing means selling the business’s products in foreign markets which are other than the original domestic market. A particular application of marketing concerned with developing and managing trade across international boundaries.
In its marketing activities, a business reduces reliance on intermediaries and establishes direct involvement in the countries in which trade takes place.
The main reasons why businesses may want to sell overseas include achieving higher growth in sales, utilizing excess production capacity, benefiting from economies of scale, spreading Research and Development (R&D) costs over a larger market, finding new markets for existing products or reducing dependence on domestic market. Additionally, home market might be static, declining or too competitive for the firm to thrive.
International marketing is more difficult than domestic marketing, because a business needs to deal with many external factors and constraints that are uncontrollable. Such differences include political systems, legislation, language, cultures, etc. A lack of understanding and respect of different cultures can make it difficult to operate successfully even large businesses.
Example 1: Walmart, the world’s largest hypermarket (superstore), was not very successful in Germany due to cultural insensitivity as one of the major causes. It did not acknowledge the differences in customer behavior and culture in Germany when compared to its US customers. For example, Walmart’s friendly shop assistants were helping customers to pack shopping bags at the supermarket while German customers do not like to be assisted because they prefer to do their own search for bargains. Finally, Walmart sold its stores in Germany to local rival Metro.
So, what questions does a company need to ask when thinking of engaging in international marketing for the first time?
- Should the organization seek overseas markets?
- Which countries?
- How should it enter these markets?
- What products to sell? Do those products need to be adapted?
- How and to what extent does the Marketing Mix need to be adapted?
In short, international marketing means marketing and trading a good or service to consumers outside the company’s home country.
