Understanding What International Marketing Is, Including Its Concept And Strategies.
- 1 Understanding What International Marketing Is, Including Its Concept And Strategies.
International marketing as a business management technique, through which the company seeks to make a profit, taking advantage of the opportunities offered by foreign markets and facing international competition. It is a systematic, circular and periodic management technique.
It is systematic in the sense that it obeys a method, circular because the results of its application serve as experience for the re-elaboration of the international marketing plan and, in addition, it is prepared periodically, with different frequencies depending on the company.
International marketing, like any business strategy, has a series of controllable variables and others beyond the control of the company. Among the former are its own infrastructure and capabilities: production capacity, level of R&D, experience and marketing knowledge, financial capacity, attitudes and predisposition of managers to internationalize the company, etc.
The uncontrolled variables shape the external environment (economic, cultural, legal and political) and international competition. The characteristics and development of foreign markets as well as international competition are variables on which the company has no influence, but it can know their situation and predict future trends.
International marketing management includes a series of strategic decisions that the company must make on a scheduled basis. These are: the decision to internationalize itself, the choice of target markets, the entry form strategy and the adaptation of international marketing-mix policies in the different markets in which it is present.
THE DECISION TO GO INTERNATIONAL
The first international marketing decision consists of analysing whether or not the company should embark on international marketing activities, that is, in conquering foreign markets. It seems clear that in the new international environment, more and more companies are opting for the alternative of internationalization, there are even the so-called born global that are born already focused on international markets; In most cases, they are innovative companies linked to the digital economy sector.
The advantages that justify internationalization are many, including:
- Use all or a large part of the productive capacity: There are products whose sales are concentrated in certain seasons of the year. Selling these seasonal products in countries with opposite weather seasons (northern and southern hemispheres) will take advantage of the productive capacity and achieve greater stability in sales. An example is the mountain bikes, whose sales are concentrated in the period May-August in the northern hemisphere (EU, United States) and in November-January in the southern hemisphere (Australia, Latin America).
- Access to a broader market: Internationalization implies accessing specific market segments for each product. If it is possible to be present in a large number of countries, the life cycle of the product can be lengthened since when it is in a phase of maturity or decline in developed markets, with the export it will access other markets where the product is not yet available. known.
- Image improvement “internal and external”: From the communication perspective, the presence in several countries reinforces the image of the company both in front of its national and international clients. Having clients in several countries conveys an idea of solvency and guarantee in the products and services offered.
- Risk diversification: The company’s presence in various markets is also a means of diversifying risk, since at a certain point the negative results of countries or areas in recession will be offset by those of countries that obtain positive growth rates.
- Continuous learning: Finally, the managers of companies that go abroad are in contact with very different markets and, therefore, in the development of their work they carry out an apprenticeship in terms of innovative products, management techniques, marketing methods, actions communication, digital marketing strategies, etc. Many of these experiences and actions can be applied in the local market.
THE CHOICE OF TARGET MARKETS
Once internationalization has been chosen as the growth path, the second strategic decision is the selection of the markets that offer the greatest potential. There are more than 200 countries in the world, of which approximately 80 have high purchasing potential. The exporting company, regardless of its size and resources, must have a marketing information system that makes it easy to select target markets.
In this process, three stages can be distinguished through which the company must make decisions regarding:
- Number of countries: The double alternative of concentration (choosing a reduced number of countries to focus its commercial efforts on them) or diversification (choosing a larger number of countries even though a lower volume of sales is obtained in each of they).
- Most favorable geographical areas: Focus your efforts on certain geographical areas that cover homogeneous countries in terms of the criteria for choosing the most favorable ones. In this election, criteria such as geographical or cultural proximity, the level of development or the growth prospects of the countries in the area will prevail.
- Selection of target countries: Once the most favorable areas have been chosen, the company must choose within them those countries that offer greater accessibility and business potential, also evaluating the risks involved in penetrating them.
CHOOSING THE WAY OF ENTRY INTO THE CHOSEN MARKETS
Once the countries have been chosen, the next decision is how to enter each of them. It happens that foreign markets, unlike the national market, present barriers and access difficulties (geographical, legal, language, cultural) that make it necessary to seek help in order to reach the end customer. Thus, some ways to reach the foreign customer appear that are more numerous and different than those that exist to reach the local customer. These forms can be classified into four groups:
- Direct export: The company’s own export department addresses the end customer.
- Indirect export: Intermediaries (agents, distributors, trading companies ) are used to reach the end customer.
- Cooperation agreements: The company seeks partners in foreign markets with the idea of establishing long-term business relationships that materialize in license, franchise or joint venture agreements.
- External implantation: Finally, the company can choose to establish itself in the target market through the creation of delegations, commercial subsidiaries or production subsidiaries.
THE ADAPTATION OF THE MARKETIN G-MIX TO THE DIFFERENCES IN THE GLOBAL MARKETS
Once the target market and the entry form have been chosen, the last strategic decision has to do with adapting the commercial offer to be launched on the market, that is, the marketing mix, in terms of product, price, distribution and communication.
- Product: First of all, the adaptation to the legal regulations on the product that is required in the destination country and, above all, to the tastes and demands of customers.
- Price: The pricing policy taking into account certain differentiating variables (purchasing power, logistics costs, product positioning, etc.).
- Distribution: The choice of the most favorable channel for the commercialization of the exported product which, depending on the distribution structure, may differ from one country to another.
- Communication: The choice between offline and online communication techniques, as well as the adaptation of texts, messages and images to the particularities of each market.