International Company arena Marketing

International Company arena Marketing

International Company arena Marketing

Introduction…

When a company enters the international arena, marketers increasingly feel that they have to do business in different cultures and across national borders. International marketing differs from domestic marketing in the following ways:

■ Cultural differences mean that communication tools need to be adapted and sometimes radically changed.

■ Market segmentation issues tend to be more geographic.

■ The remoteness of markets makes it difficult to monitor and control.

■ In some remote markets, both physical distribution (logistics) and location decisions are affected by differences in infrastructure.

International marketing is important in connection with the theory of comparative advantage. According to this theory, each country has a natural advantage over others in the production of certain goods, so everyone benefits from specialization and trade in surplus products. For example, while it is possible to grow tomatoes in greenhouses in the Netherlands, it is easier and cheaper to grow them in Spain, so it makes economic sense for the Dutch to buy tomatoes in Spain and sell chemicals to the Spaniards that are more convenient to produce in the Netherlands.

The pressure of internationalization cannot be explained solely by comparative advantage: Japanese, American, and British multinational corporations have had great influence in overseas markets without any clear natural advantage over their overseas competitors. In some cases, this phenomenon can be attributed to economies of scale, in others to the development of expertise in the firm or historical reasons.

Goals

  • After reading this chapter, you will be able to:
  • ■ explain the benefits of international marketing;
  • ■ describe ways of internationalizing the firm’s activities;
  • ■ develop strategic plans in an international context;
  • ■ know the main barriers to transnational business;
  • ■ Explain some issues related to business globalization.

World Trade Initiatives

When marketing to an international audience, as a rule, there are economies of scale (economy due to growth of scale), which reduces the costs associated with production, research and development, as well as marketing costs. In most countries, the government encourages firms to enter the international arena because it provides an influx of foreign exchange, which allows the country to acquire critical imports (such as aluminum ore or oil) needed to support the national economy.

There is also a downside to world trade. In some cases, cultural values ​​are also exported along with goods and services, and this is fraught with the erosion of traditional cultures. There are facts indicating that internationalization has led to the loss of positions of Latin America and Africa in terms of their share in the turnover of the world market [1]. Sometimes firms begin to compete in the international market with themselves, which leads to negative economic consequences associated with an increase in the scale of their activities (the result is the opposite of economies of scale).

In general, however, there is an opinion that international trade leads to an increase in the welfare and standard of living of the majority of the world’s population. Therefore, trade is considered to be beneficial in terms of economic benefits, and governments around the world seek to encourage it, taking into account the interests of their own countries. In table. Figure 11.1 shows some of the most important recent initiatives to stimulate world trade.

The governments of most countries support the export of goods by their producers, but prefer to limit imports whenever possible in an effort to maintain a balance of payments. If more foreign currency enters a country than leaves it (a positive balance of payments), then this allows the government to keep interest rates low and inflation under control (a detailed explanation of the mechanisms at work here is beyond the scope of this book; a list of additional readings is given at the end of the chapter) . This means that negotiations to lower tariff barriers tend to drag on as each government seeks to gain access https://www.edulane.ng/

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