TABLE OF CONTENTS
International marketing is a subdivision of marketing in which the businesses are moving across the borders towards the global markets to spread their wing globally. International marketing satisfies the needs and wants of the individual residing across different parts of the world.
This marketing concept helps the business move a step ahead of competitors and make their footprints in the markets where they cover various customers from different regions to increase their profitability. In other words, international marketing is to undertake marketing activities in more than one part of the globe.
The other term used for international marketing is a global marketing, which combines all the marketing mix concepts to support the business in the long run. For instance, it is the mixture of core marketing concepts (Product, Price, Place, and promotions) and customizing it according to the preferences of different nation people. Through international or global marketing, business increased their economies of scale, opportunities to generate high-profit in the international markets than the domestic markets, attain colossal market share, elongated the product’s life, and exploring and untapped the global markets.
Businesses allocate international Maketing to sell their product or services in different world regions by using export or licensing. Still, some companies also go for other types of global marketing that include joint venture, Contract manufacturing, and foreign direct investment (FDI).
All these types of international marketing are used by the business to spread themselves globally. Let’s delve into all these types a little deeper.
One of the most common types of international or global marketing is export, in which a business of one country or region exports its product to another region or country. Exporting refers to shipping goods across borders to fulfill the wants and demands of people across the globe. Exports are the easiest way to enter the international markets, and they can be direct or indirect. Moreover, the businesses use indirect export, in which the trading companies facilitate both buyer and seller in a meaningful manner. On the other hand, indirect exports, the industry itself involves and manages all the trading activities.
Licensing is also considered one of the major types of international marketing commonly used by businesses to enter the global markets. Licensing is an agreement between firms. A domestic company grants a license to a foreign or across-the-border company to use its intellectual property to run the business.
It is usually based on a specific period through which a licensor company receives royalty in return. In licensing, the domestic company has less control over the licensee because the Licensor Company issues the license to give the domain authorities to the foreign company.
Franchising is similar to licensing in international marketing. Still, there is a pretty noticeable difference between both of them, like in franchising, the parent company granting permission to a foreign firm to do business under the umbrella of the parent company or by using the name of the parent company but with the proper and strict guideline provided by the parent company to run the business.
Another distinct feature of franchising is it most commonly used by services industries such as hotels, rental services providers, and restaurants, while licensing is restricted with manufacturing industries.
The joint venture is also the type of international marketing that involves the combined efforts of two similar businesses from different countries or regions to generate mutual benefits. Although usually all the aspects of business are divided equally in the case of a joint venture like the contribution of assets will be equal, owns the working entity to some degree and both have the shared risk too, through which both the business get similar profits well as equal loss. Joint ventures are commonly less considerable by business because it contains higher risk than another type of international marketing.
FOREIGN DIRECT INVESTMENT (FDI)
Foreign direct investment (FDI) is also one of the sources of international marketing. The business jumps into the international market through direct investment in companies in multiple regions of the world. The objective of the business is to earn maximum goodwill in the form of profitability by getting a higher return from the companies they are investing in, along with a considerable market share. Unlike to joint venture in foreign direct investment, the investor company wholly owns the subsidiary or either establishes effective control over the decision-making process.
All the types mentioned above are directly involved in international marketing, and through using these strategies, businesses can get easy access in the global or international markets. They can comfortably spread their wings across the borders. International marketing also reflects the countries’ economies through effectively using these marketing strategies; countries boost themselves economically. On the other hand, it also protects lands from an economic downturn.