You have set up a firm. Now you would like to go ahead and inform people about your offerings. Firstly, you spread awareness about your products and offerings in your own city. Then you slowly expand to other cities in the country. Congratulations! You have a multi-million dollar business. But that is not enough. Now, you want to take it a step further. You want to take your product to the world. This is where international marketing comes in.
We will be discussing all aspects in this international marketing article.
Table of contents:
- What Is International Marketing?
- What Is The First Step In The International Marketing Research Process?
- How Does International Marketing Differ From Domestic Marketing?
- What Are The Strategies to Enter an International Market?
- Digital International Marketing Strategies to Enter a New Market
- Marketing Mix Decisions In An International Context
- How Does The Cultural Environment Affect International Marketing Activities?
- Should You Hire An International Marketing Agency?
- Evaluating the Success of International Marketing Campaigns
- The Future of International Marketing
What Is International Marketing?
Many people have defined and redefined the concept of international marketing. Simply put, international marketing is the process of application of marketing principles across national boundaries.
Also, the need for international marketing arises due to a change in consumer tastes and preferences. Let us take a look at the core concepts of international marketing here.
A diverse range of activities, including international marketing research, product planning, development, and adaptation, fall under international marketing. Also, several other aspects such as packaging, communication, and branding need to be taken into account.
Long term planning
Due to the complexities involved, international marketing requires long-term planning and vision. The dynamics of international marketing are tough to navigate because of the political, economic, and social factors involved. So, one must have a high level of adaptability.
International markets are highly sensitive in nature. Changes in technology, regulation, or increased competition from local brands may lead to a sudden fall or jump in sales.
Domination of prominent international players
Your brand will have to compete against larger established entities from other parts of the world to gain a respectable market share.
These form part and parcel of international marketing. Trade barriers are man-made barriers to the movement of goods across the world. These are of two types:
- tariff barriers
- non-tariff barriers
Tariff barriers come in the form of taxes and customs duties. On the other hand, quotas and licenses are typical forms of non-tariff barriers.
Countries that follow a standard/common set of laws and regulations while trading is known as trade blocs. The EU and the NAFTA (North American Free Trade Association) are some examples of trade blocs.
Foreign exchange regulations
All countries have different currencies and exchange rates. Therefore, they also have their own set of rules governing payment and collection of foreign currency.
Bodies like the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD) lay down the framework under which international trade can be conducted.
These organizations help promote international trade. Also, they establish an environment where underdeveloped nations can enhance their export potential.
What Is The First Step In The International Marketing Research Process?
It can be easy to feel overwhelmed when it comes to international marketing research – but that’s only if you don’t know where to start. The first step is identifying what you need to do in order to get started. This will help you determine your specific needs, and help you avoid making any common mistakes. Here are the topics to guide you:
- Business needs assessment
- Market research study
- Business opportunity assessment?
What is a Business Needs Assessment?
A business needs assessment is the first step in the international marketing research process. It is a way to get a detailed understanding of your business, and what you need in order to grow.
It is a way to determine what your business needs in order to be successful. This includes everything from financial information to customer demographics.
What is a Market Research Study?
A market research study is the second step in the international marketing research process. It is a way to gather information about your target market and how they may react to your product or service.
What is a Business Opportunity Assessment?
A business opportunity assessment is the third step in the international marketing research process. It is a way to determine if your business is a good fit for the target market. This includes assessing your competitors, and determining if your product or service offers a unique solution.
How Does International Marketing Differ From Domestic Marketing?
It is no secret that the world is becoming increasingly globalized. Gone are the days when businesses operated in a vacuum and only marketed to their own country. Increasingly, businesses must operate in a world where different cultures and markets are considered.
Now more than ever, businesses must learn how to differentiate their products and services from their competitors either using domestic or international marketing.
International marketing is the marketing of products and services to consumers and businesses outside of the company’s country of origin, while domestic marketing is within the company’s country of origin.
Domestic marketing is focused on reaching a population that is already familiar with your brand or product. International marketing, on the other hand, is geared towards reaching a wider audience. This means that it takes into account the different cultural norms and preferences of those who are marketing your product or service.
What Are The Strategies to Enter an International Market?
Market entry strategies play a pivotal role in the success of your international marketing efforts. The choice of a market entry strategy depends on the marketing strategy's goals. Let us look at these strategies in this section.
This is the easiest and the most commonly adopted way to enter a new market. Firms can directly sell the product they manufacture without involving agents or third parties. So this is known as direct exporting.
However, if a company is just starting in an international market, they might use a network of agents such as international distributors. Moreover, this approach works because the agents have experience in their fields, and all that the company has to do is pay them a fee.
This is another common method to break into new markets. Franchising is a model where the individual or the buyer agrees to manage a firm’s branches on their behalf. They have to pay a fee and a portion of the profits.
Franchising works well if your brand already enjoys a reputation and recognition internationally. There is a certain amount of risk as you allow other people to become a part of your business. However, it gives you a chance to earn profits while adopting the indirect management approach.
3) Joint Ventures
Some companies enter an international market by forming a partnership with other firms. Consequently, this results in a win-win situation for both of them. They minimize their risks.
Also, they stand to earn more revenue. But, there is a chance of skewed company involvement. However, proper paperwork and the establishment of processes help solve these issues.
4) Buying a Company
This one ranks right up there as one of the easiest ways to make your presence felt in an international market. Like with everything else, there are advantages and disadvantages to this approach. You have an existing market share and brand image.
Also, you get to skip most of the rules and regulations since you they treat you as a local firm. But this method is expensive. And it is challenging to maintain a cohesive brand image as the new firm has its own culture.
This is a method where a company transfers the rights to use or sell a product to another firm. However, in most cases, this is a temporary arrangement. Also, this is a preferred method if one firm has an in-demand product and the other organization has access to a large market. An example of this is comic character merchandise.
But licensing is not necessarily straightforward. You will have to convince your partner firm of the potential of your product. And then, there are legal formalities and procedures to take care of.
6) Turnkey Projects
These are generally construction or engineering projects. The term turnkey refers to the client getting a completely functional facility built from scratch and just having to turn a key to start running it. These are large, high-value, and prestigious projects. Also, these are usually government projects and could be funded in part by foreign monetary institutions.
Digital International Marketing Strategies to Enter a New Market
When we speak of marketing, can the digital media be far behind? No way!
This section looks at effective digital international marketing methods that every campaign manager or business manager must look at.
Build A Buyer Persona.
The first step is identifying the right kind of customers for your brand. For this, you need to collect data and develop engaging content for your audience. A buyer persona should consider all relevant factors like location, age, gender, industry, income, and job title.
Study The Socio-Economic Factors.
You will need to relate to the audience's mindset to sell your product. This will require studying local incomes, spending habits, customs, and culture. Using precise demographic and psychographic data in your campaigns will yield the best results.
International Search Engine Optimization (SEO).
This is a crucial peg in your international marketing strategy. People should discover your website to know about your product. Let us look at some techniques to create an SEO-friendly website.
1) Choosing An SEO-Friendly Domain.
Building a separate website will help enhance the user experience. There are two options while choosing a domain. Country Code Top Level Domain (ccTLD) ends in a country-specific code and General Top Level Domain (gTLD) that can be paired with extensions such as .com or .org. ccTLDs are seen as more trustworthy but require extensive SEO.
However, gTLDs derive their authority from the parent domain and are more beneficial in the long term.
2) Optimize For Relevant Search Engines.
Knowing the most commonly used search engine in your target market is essential. Google is the dominant search engine. But, Bing is more prevalent in some places.
Also, countries like Russia and China use homegrown search engines such as Yandex and Baidu, respectively. Different approaches must be used as all search engines have their own algorithm.
3) Using Keywords In The Target Language.
Search terms and keywords that are frequently used in the target language will help enhance search rankings. Also, you can hire people who are fluent in the local language. They will assist in keyword research and ensure that you have an optimal keyword strategy in place.
4) Use A Multi-Pronged Content Strategy.
One should have several pegs to their content strategy. This includes :
- Creating multilingual blogs will expand the reach of your brand. A blog will establish you as a thought leader and build a unique identity for your bard.
- Amplifying user-generated content – One should share user reviews, their stories, and experiences around the product. This creates a connection between the local community and the brand.
The Use Of Social Media In International Marketing
A couple of aspects need to be examined while working on a global social media strategy. One cannot simply pick up posts, translate them, and copy-paste them to their target audience.
Instead, one needs to bring experienced translators on board. This will help avoid gaffes that could backfire and result in potential lawsuits.
Another thing to remember is to add a local flavor to your campaigns. This is the only way you will connect with your target audience. You must understand what the consumer likes, what sells, and how to sell it.
Lastly, you must know the platforms that dominate your target market. This will enable you to create a highly tailored strategy.
For instance, TikTok, Instagram, and Youtube may be prominent in the US. But WhatsApp rules the roost in India. And China has its own social media ecosystem comprising – WeChat, Tencent Weibo, QQ, and Kuaishou. Similarly, Kakaotalk is popular in Korea, and LINE is in vogue in Japan.
When it comes to Europe – France and Germany have their LinkedIn-style platforms. Viadeo and XING, respectively. Russia is another country that has its own set of social media platforms – Vkontakte, a Facebook clone, and Odnoklassniki – a video and image-sharing website.
Africa has been home to a few local platforms that failed to take off. So, one needs to use Facebook, YouTube, and Twitter to tap into the market there. Likewise, in Latin America, Sonica and Orkut were significant players before they shut down. An Argentinian platform called Taringa has a significant presence.
Emails In International Marketing
When considering email marketing while designing an international marketing campaign, one should realize that one country's click and open rates are entirely meaningless in another.
Also, the tone and content of your newsletters must be different for each country. Also, the way you build your email list will vary across regions.
Moreover, the data quality will not be consistent as well. This is due to the data collection and privacy laws in force. So, international email marketing requires a highly customized strategy.
Marketing Mix Decisions In An International Context
The P’s of marketing need to be adapted per the region one is serving. To go in with the mindset of the home country would be committing hara-kiri. In this section, let us look at how the basic elements of marketing are internationalized.
The decision of whether a product should be standardized or localized in an international market is at the crux of a brand’s strategy. McDonald's is adept at localizing its offerings as per local tastes and preferences. Product has to be the focus of any business.
For instance, the burgers will not contain beef in India as the cow is a sacred animal. Instead, they use chicken or fish. In Mexico, the burgers are served with chili sauce.
However, brands such as Nike and Apple sell the same products worldwide. This works for them as it aligns with their image of an aspirational brand.
The pricing of a product in an international market is arrived upon after looking at several factors that include:
- Transportation costs
- The prevailing Exchange rate
- Tariffs or import duties
- Income of the target market
- Mode of selling – offline or online
- Prices of competitors.
The internet has made things trickier as consumers can now compare the prices of different products online. So any firm now has to be highly thoughtful while arriving at a pricing strategy for their products.
As with the product, the most significant decision to make here is whether to localize or standardize the promotional messaging. One should be cautious here. Due to cultural differences and mindsets, the same colors, numbers, symbols, or words carry varying meanings in different places.
For instance, the color white is associated with brides in the US, UK, and China but with death and mourning in India. Also, the kind of media consumed must be taken into account – TV, radio, newspapers, or streaming services.
The place component focuses on providing the product to the consumer when and where he needs it. Goods typically move from the manufacturer to the wholesaler and finally to the retailer. But the number of intermediaries varies from one country to the next.
Japan, for example, has five different types of wholesalers involved in the distribution chain. Also, businesses need to look at transportation costs and profit margins before finalizing the distribution strategy.
How Does The Cultural Environment Affect International Marketing Activities?
Cultural norms should get their due attention in international marketing. Here we look at the various cultural aspects that need to be addressed in a foreign market.
People speak a few thousand different languages the world over. In many countries, the dialect changes every few miles. Nations like India are home to more than twenty official languages. Similarly, many languages are spoken in China as well. This is a nightmare for marketers.
There are many embarrassing instances, such as when General Motors marketed its car Nova in Latin America. The word ‘Nova’ translates to ‘it won’t go in many local languages there. Also, another interesting fact is that Russia has a negative perception in many former Soviet nations.
As discussed earlier, marketers need to know what different symbols, colors, numbers, and words mean in other countries. For instance, the number 4 is considered unlucky in China and Japan. This is similar to bad luck being associated with the number 13 in America. Firms must bring on board cultural experts to deal with such issues.
Values help determine what is acceptable and unacceptable in a society. These values influence consumer behavior in exciting ways. People in the US tend to be more individualistic whereas, in Japan, there is a focus on the group's well-being. These differences show up in advertising in these respective societies, thus making it essential for a marketer to take note of.
The way of conducting business varies starkly from country to country. For example, everyone on the team is invited to air their views in a meeting in the US. However, in Japan, the seniormost colleagues are expected to lead the discussion with little contribution from junior colleagues.
Even the greetings are different. In Asian societies such as Japan and India, a respectful bow or the traditional namaste is the preferred business greeting, whereas a handshake is preferred in the US.
This is one of the strong influencers of the consumption habits of people. Also, they influence when people indulge in shopping. Festive seasons differ all over the world. In the West, Thanksgiving and Christmas are celebrated towards the end of the year.
However, the festivities for Chinese New Year happen in February or March. Eid is celebrated in April or May. Religion also shapes a region’s food habits. Eating meat is forbidden amongst the Jain community in India.
Likewise, alcohol is prohibited in Islam. It is essential to take note of religious sensitivities to prevent a completely avoidable PR disaster for the brand.
Should You Hire An International Marketing Agency?
When you hire an international marketing agency, they will help you increase your exposure by creating strategic marketing plans and campaigns that will target specific global markets. This will help you reach a wider audience and reach new heights.
Here are some other pros of hiring an international marketing agency:
Pros of Hiring An International Marketing Agency:
- Reduced Time and Effort: An international marketing agency will take care of all the marketing tasks for you, from branding and logo design to online marketing and social media campaigns. This will free up your time to focus on other business tasks that are more important.
- Greater capability to develop and execute marketing plans: As they will probably have local teams, they will know better the audience and resources needed.
- Better flexibility: If you’re like most business owners, you want to be as flexible as possible when it comes to your marketing strategy. An international marketing agency can help you achieve this by catering to your specific needs and preferences.
Cons of Hiring An International Marketing Agency:
- Time-consuming process.
- It’s often expensive: Hiring an international marketing agency can be expensive, especially if you need them to develop a comprehensive global marketing plan.
- Lack of knowledge of your product or brand: An international marketing agency may not have the same level of expertise as you do when it comes to marketing your business overseas.
Evaluating the Success of International Marketing Campaigns
You have an international marketing strategy in place. You have decided on your mode of entry, digital marketing efforts, and product mix. Awesome! Now it is time to measure the success of your work. This depends on several factors that are discussed here:
Firstly, it is necessary to have well-defined goals. This will help you have a benchmark against which you can measure yourself. Also, it is essential to break down these goals into the following:
- Short-term (1 year)
- Medium-term (1-3 years)
- Long Term (5 years +)
Your short-term goal can be to establish a brand presence in your target market. After completing the initial research, you work on creating a presence that ensures that your brand has a top-of-the-mind recall.
Also, the focus has to be on building a loyal community of users that can give you word-of-mouth publicity. A medium-term goal can be to be one of the top four players in the market. And a long-term goal can be to be the number 1 player in the chosen market.
Most importantly, you need goals to give direction to your marketing strategy. Moreover, you can reorient your approach depending on your progress.
Local market context
Each international market is at a different stage in terms of income, penetration of digital media, and so on.
For instance, a developed market like France is already in the advanced stage of mobile phone adoption. So they are less likely to try new apps. However, in markets like Brazil, smartphone use is on the rise. This presents an excellent opportunity for marketers to acquire customers at a lower cost.
The lesson here is that collecting accurate local data across different markets is a must for the success of your international marketing efforts.
Test your localization strategy
You have collected data. Excellent. Now you want to go and adjust your marketing mix as per the local market. Before a complete rollout, it is always advisable to test the localized marketing mix with smaller sample size. This way, you can quickly understand the market's response, experiment, and, most importantly, course-correct.
In the end, the success of your international marketing strategy comes down to numbers like customers acquired, churn rate, repeat customers, average sale size, and overall sales.
The Future of International Marketing
The progress of international marketing depends on how the brand can ultimately benefit society. Besides providing convenience to customers or allowing them to lead better lives. Can it also uplift the lives of the local communities? Brands also need to look for partnerships with local creative agencies to market their product better.
Also, in a world where data privacy is gaining momentum every day, they need to rethink their digital advertising strategies. Brands that are expanding internationally need to focus on providing the ultimate online, in-store, and after-sales experience to gain the trust of their customers.