Text 3 International Marketing

As technology creates leaps in communication, transportation, and financial flows, the world continues to feel smaller and smaller. It is possible for companies and consumers to conduct business in almost any country around the world thanks to advances in international trade. According to the World Trade Organization, the volume of international merchandise trade increased 33 times between 1951 and 2010.

Brands and products that originate in one country are enthusiastically accepted in others. For example, Louis Vuitton handbags, BMWs, and Columbian coffee, all foreign products, are symbols of status and quality in the United States – and many American brands, like Warner Brothers motion pictures, have similar footholds overseas.

However, globalization has created just as many challenges as opportunities for brands that venture overseas. Because consumers have so many more options for similar products, companies must ensure that their products are high in quality and affordability. Additionally, these products cannot be marketed identically across the globe. (See also Global Marketing) International marketing takes more into consideration than just language – it involves culture, market saturation, and customer behaviors. American and European companies especially have turned their international marketing efforts into something more than just exporting – they have adapted their branding to account for differences in consumers, demographics, and world markets.

Companies who have done this very well include Coca-Cola, who discovered that the word ‘Diet’ carries a negative connotation in Latin America and changed the name of their zero-calorie product to ‘Coke Lite’ for those countries. UPS, known in America for their brown trucks, issued a fleet of a different color after learning that their flagship brown trucks resembled Spanish hearses.

What is International Marketing?

International marketing is the application of marketing principles in more than one country, by companies overseas or across national borders. International marketing is based on an extension of a company’s local marketing strategy, with special attention paid to marketing identification, targeting, and decisions internationally (See also Local Marketing).

According to the American Marketing Association (AMA) " 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."

Who employs International Marketing?

Market Entry Modes: Risk vs. Reward

• Export
• Licensing
• Contract manufacturing
• Joint venture
• Direct investment

*Market entry modes are listed from lowest risk/reward to highest risk/reward

Rapid technological advances mean that geographical and cultural communication barriers are disappearing, and even smaller businesses without a physical presence in other countries can market and sell their products internationally (See also Diversity Marketing). This means that almost anyone with the desire can market internationally, but will do so with varying levels of success, depending on the thought and research that is put into the international marketing strategy.

Companies selling goods that have customs restrictions, like food and live plants, must contend with a more rigorous regulatory process before marketing their products internationally. While they may have a more difficult time setting up their international export business, they also have the opportunity to expose other countries to native products they couldn’t access otherwise.

Other types of companies that often perform well internationally include those involved in export, joint ventures, and direct investment.

Exporting is the practice of shipping goods directly to a foreign country. Prominent companies that do an excellent job of marketing their foreign exports to the United States include Fanta soft drinks, Honda, and retail giant H& M. In fact, H& M paid $3.5 million for a 30-second commercial during the 2012 Super Bowl, a marketing bonanza that has long been dominated by American brands.

Joint venture companies refer to the combined efforts of two or more businesses to their mutual benefit. One of the most famous international joint venture success stories is Sony-Ericsson, a partnership between a Japanese electronics company and a Swedish telecommunications company. Their international marketing strategy, comprised of bright colors and modern shapes, has helped make the joint venture known the world over. (See also Cooperative Marketing)

A direct investment company places a fixed asset in a foreign country with the aim of manufacturing a product, or part of a product, abroad. Dell computers, for example, is an American company with factories in many other countries that assemble personal computers from parts made all around the world. Dell then markets their computers with an exceptional emphasis on customer needs and customization – unlike other companies that sell pre-manufactured products; Dell computers are custom-assembled after customers place their orders.

What kinds of customers are effectively marketed to with International Marketing?

Depending on your brand, any foreign citizen is a potential customer. But how does a marketing team figure out how to tap into an international market? Customers who live in foreign markets have different buying habits, preferences, and priorities than the customers they're familiar with. By tracking these foreign customers through market research and cultural surveys, marketers can discover the best methods of reaching them.

Trying to market a brand to international customers without researching is just asking for trouble, as companies have proven time and time again. Careful consideration of a culture’s beliefs and prejudices is important in international marketing. For example, the Muslim culture considers dogs to be dirty animals. So, positioning a dog as “man’s best friend” in a Middle Eastern country will surely fall flat.