As a business scales and starts to conquer new markets, the question of how to most effectively promote products and services to customers in other countries becomes increasingly important. There are a number of different ways to approach international marketing, and the most effective strategy depends on the products or services being offered as well as the target market.
In this article, we’ll do a deep dive on international marketing and some examples of it in action.
What is International Marketing?
International marketing is the process of planning and executing marketing strategies in more than one country. Usually, businesses expand their operations to other countries in order to take advantage of new opportunities or to be closer to their customers. Regardless of the reason for expanding, businesses need to be aware of the cultural, political, and economic differences between countries in order to be successful.
What are the Types of International Marketing?
There are five main types of international marketing:
- Export: Businesses will sell their products or services in other countries without actually setting up operations there.
- Franchise: A business will partner with a local business in the target country that agrees to operate under your brand name and sell your products or services.
- Joint Venture: Forming a joint venture with another company in the target country in order to share resources, profit, and expertise.
- Licensing: An agreement between two businesses where the foreign firm allows the local firm to use its patents, trademarks, or other intellectual property in exchange for a fee.
- Foreign Direct Investment (FID): Setting up a subsidiary or joint venture in the target country in order to have a more permanent presence there.
International Marketing Advantages and Disadvantages
There are a number of advantages and disadvantages to consider when deciding if international marketing is right for your business.
- Access to new markets: By expanding into new territories, businesses can tap into new customer bases and potentially increase their profits.
- Increased brand awareness: Promotion in foreign countries can help businesses increase their brand awareness and visibility on a global scale.
- Improved economies of scale: When businesses expand their operations, they can often achieve economies of scale, which means they can produce their products or services at a lower cost per unit.
- High costs: Marketing internationally can be expensive, particularly if you choose to set up operations in multiple countries.
- Risk of failure: There is always the risk that your international marketing efforts will not be successful and you may end up losing money.
- Political and economic instability: Political and economic conditions in foreign countries can be unstable, which can make it difficult to do business there.
Spending money on enough research, qualified experts and reliable analytical tools is the best investment a business can make when going international.
International Marketing Tips
Tapping into new markets isn’t easy, but there are a few things businesses can do to increase their chances of success.
- Do your research: It’s important to have a strong understanding of the target market before expanding. This includes understanding the cultural differences and what type of promotion will be most effective.
- Start small: It’s often best to start with a smaller-scale operation in order to test the waters before fully committing to a new market.
- Find a partner: Partnering with a local business or another company that already has experience in the target market can be helpful in getting started.
- Be patient: Don’t expect overnight success when expanding into new territories.
Analytical Tool for International Marketing
When a business or a product enters a new market it has to be heavily promoted to build brand awareness, which requires huge financial resources. Creating the right media mix in such cases is not easy since there is no historic data on ad campaigns and business KPIs yet. To ensure that media budget is spent in the most efficient way metamodels can be used.
Metamodels are applied under the assumption that properly managed ad campaigns show similar efficiency for products with analogous readiness, business models and other factors.
Which is why to plan a budget for the new product, one can adapt a media mix model from a similar product. Such metamodel should be used to create an initial media budget plan, taking into account limitations of channel activity, and keeping the shares of KPI by channels similar to those of the referenced product’s. In the course of the marketing plan execution, the meta model parameters can be fine-tuned to better fit the predictions to the measured business KPI, while a regular media mix model still cannot be built due to the lack measurements for its statistical significance.If you are launching a new product or conquering new markets, you might be interested in tools that can build such models. Check out these three AI-based modeling solutions and shoes the one that best suits your needs.
Examples of International Marketing
Lays is a good example of a company that has been successful with export marketing. The company, which is owned by PepsiCo, sells its potato chips in over 150 countries around the world. Lays has built its brand by investing heavily in advertising and using well-known celebrities to endorse its products.
In recent years, the company has also started to tailor its products to local markets, such as introducing new flavours of chips that are popular in specific regions. We’re talking wasabi-flavoured chips in Japan, chicken tikka masala-flavoured chips in India, and cheese-flavoured chips in Mexico.
McDonald’s is one of the most successful examples of a company using franchising to expand its operations internationally. The fast food giant has over 36,000 restaurants in more than 100 countries around the world. McDonald’s has been able to achieve such widespread success by carefully selecting franchisees that are committed to adhering to the company’s high standards. The company also provides extensive training and support to its franchisees so that they can effectively operate their businesses.
For example, when McDonald’s first started expanding into China in the 1990s, the company faced a number of challenges. Chinese consumers were unfamiliar with fast food and sceptical about eating burgers and fries. To change these perceptions, McDonald’s invested heavily in advertising and opened a number of flagship restaurants in major cities.
The company also adapted its menu to appeal to Chinese customers, such as adding rice dishes and green tea. As a result of these efforts, McDonald’s is now one of the most popular fast food chains in China with over 2,000 restaurants.
International marketing can certainly open up a world of new opportunities for businesses. By carefully considering the different options and taking into account the unique factors involved with marketing in other countries, businesses can set themselves up for success there.