Sale and marketing of a firm’s products in a foreign country
Important in the face of globalization
Businesses have many opportunities to expand internationally
Foreign businesses will also serve as competitors
Methods of entry into foreign markets
Exporting
Direct selling to overseas buyers
Direct investment
Setting up additional production and distribution facilities in foreign markets
Relatively costly
E-commerce
Exchanges facilitated through the internet
Relatively lower costs and risks
Joint ventures
Two or more companies investing in a new project overseas
Spreads risk while sharing benefits, resources, and knowledge
Franchising/licensing
Third-parties (possibly from foreign countries) pay for an established business’ name, products and image, and in return are allowed to operate
Opportunities and threats of entry into foreign markets
Opportunities
Expand marketing operations into growing and emerging markets
Spreading overall risk between more markets, each at different stages within the economic cycle
Taking advantage of marketing and production economies of scale
Threats
High-barriers of entry
Strong competition from the well-established local industry
Differing consumer demands
Approaches to selling goods internationally
Pan-global
Standardized product across the globe
Treats the whole world as a single market
Advantages
Capitalize on existing strong brand
Economies of scale (advertising/promotion)
More consistency and standardization
Disadvantages
May offend local tastes and culture
Risky if not tailored to the local market
Global localization/glocalization
Adopting a differentiated marketing mix that meets national and regional tastes and cultures
Thinking global, acting local
Advantages
Caters to local tastes
More products (diversification)
Spreads risks
Cater to wider market
Avoid any issues of cultural insensitivity
Disadvantages
May lose identity of brand
More costly (research implications)
Branding in the global market
Strong brand adds to competitive strength of a business and allows it to penetrate overseas markets more easily
Successful global brands enjoy marketing economies of scale, thus achieving consistency in branding, cost savings, and brand loyalty
Global brands can focus on local needs by modifying or glocalizing their products but keeping core elements intact – local language and culture must be considered
Comments 1
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