Definition: International marketing is the marketing of products or services across borders. International marketing is also known as global marketing and helps businesses reach different countries with different cultures using localized approaches.
Examples of International Marketing
- Export
- Import
- Online Strategy
- Licensing
- Franchising
- Partnership
- Direct Investment
- Takeover
Export
This is the most common and traditional example of international marketing. Here businesses can enter the international market through direct or indirect export. Export involves shipping products to another country. Export has a lower risk than other forms of business as it does not impact other countries politically.
In indirect marketing, businesses can enter through distributors or local trading agents who get buyers and facilitate sales.
In direct marketing, businesses market their product directly to the international market. They do so through:
- Setting up local units
- Shipping directly
- Appointing local sales agents
- And other strategies.
Import
Importers are opposite to exporters. They buy products or services from across the border and sell them in their country. In this arrangement, the exporter has no or little liability. The importer has to take care of the legal liability in their country.
An import to a country is an export from the other country.
Online Strategy
These days, businesses are adopting online strategies for global web presence. Here, they don’t need to be physically present in any country. They can launch the website and accept orders globally.
Once the order is placed, they can ship products from their warehouse.
Licensing
In licensing, businesses permit the use of their intellectual property to a third party for a fixed period and receive a royalty in return. Licensing can include copyrights, production process, using trade names, patents, etc.
Licensing is mostly used in manufacturing industries.
Franchising
In franchising, the company gives licenses and helps local units develop businesses meeting the organization’s quality standards. Here profit is shared and the local unit manages and runs the business with the continuous support of the organization.
Franchising terms and conditions are tougher than licensing, and parent organizations keep control of the local functioning. This marketing is used in service industries such as hotels, restaurants, etc.
Partnership
In partnership, a business partners with another company and they jointly market the product. This is also known as a joint venture. In partnership, generally, both parties have the same status.
A joint venture is a good strategy as both parties share the risk and responsibilities and use their unique capabilities to gain market share.
Direct Investment
Here businesses establish their operations in foreign countries. This strategy requires a lot of funding, understanding of local laws, and local support.
Takeover
Here businesses buy a controlling stake in local companies or take over the company completely and modify operations as per their requirements.
Usually, big businesses use this strategy to quickly gain technology, skills, and market share.
Advantages of International Marketing
- New market for business
- Possible high profit
- Protection against economic downturn
- Possibility of fewer competitors
- Access to an untapped market
- Increase brand recognition
- Utilization of surplus production
Disadvantages of International Marketing
- Unstable political conditions can affect the business
- Cultural differences can impact the operations
- Changes in government regulations
- Tough local competition
- A bad diplomatic relationship between countries can stop business completely
Summary
International marketing involves businesses in two or more countries and helps exchange products or services across borders to meet the consumers’ requirements. It helps businesses use their surplus production and grow their sales and brand recognition while increasing their responsibility. With global marketing, businesses have to take care of local customs, laws, and regulations, etc.