Question

Assuming you were setting up a market program for a product in a foreign country, what should you take into consideration? How can international marketing benefit domestic countries?

Answer 1

Assuming you were setting up a market program for a product in a foreign country, what should you take into consideration? How can international marketing benefit domestic countries?

Answer-

If your business has done well stateside, you may be primed to expand overseas to capture additional customers and gain market exposure throughout the world.

But before you take that major step, there are some aspects to consider.

There are many nuances that drive the business decision. When pondering if international expansion is right for you, consider these four factors:

1. Culture

The cultural difference can determine whether the business is successful or not. If the product or service doesn't add value or meet the desires of the local markets, there's no need to go sailing! It is vital to have an intimate understanding about who lives in the community and what they value. Consider the following:

• Does your product or service provide a need or desire by the local consumers?
• Are there language and cultural differences? How will you overcome these?
• Can you manage the time zone difference effectively?
• Are there dietary, religious or lifestyle considerations that could affect your business?
• How are contracts or agreements negotiated?
• Is there any business attributes considered offensive or rude when engaging the local consumers
• Are there limitations over business practices?
• How will you market the product or service?
• What if your product or service doesn't translate well to the local community?

Knowing how to conduct business among the "local" markets is extremely important. Do not underestimate the effects of cultural differences. You must be willing to invest significant time and energy in order to pursue an overseas venture. Seek first to understand the culture.

2. Legal and regulatory barriers

Conducting business in foreign markets is achievable if the business is flexible enough to work within the local laws and regulation guidelines. Review aspects such as:

• Labor and employment laws
• Duties and treaties
• Restrictions (import and export laws)
• Corporate organization practices
• Investment and business procedures
• Dispute resolution
• Trademark requirements
• Customs laws and regulatory requirements
• Limitations on currency repatriation
• Tax laws on products, services and conducting business
• Producer/distributor liability provisions

When reviewing legal and regulatory commitments, it is highly advised that you seek experienced legal counsel for overseas business practices to identify hazards that may cause barriers for your business. Don't skimp on the cost of using overseas expert legal counsel, it can save you in the long run.

3. Foreign government consideration

The stability of the local government and its authority are very important when reviewing overseas business options. Aspects to consider are:

• Currency exchange rates

• Access to needed resources and materials
• Communication and transportation options
• Government assistance programs for businesses
• Access to affordable capital
• Protection policies for businesses
• Immigration and employment Laws

Government stability holds the key to contract integrity, employee security and rights, trademark and intellectual property and many other facets in conducting business. Make sure to seek "local" expertise over the political and business factors before entertaining any overseas expansion.

4. Business case

It is essential that the business case responds to the challenges, adversity and rewards of expanding overseas. Some strategies to consider are:

• Perform a market study to understand the market's personality, economic feasibility, market trends, financial cost patterns and market forecasts
• Do a financial feasibility study to determine if the move makes financial sense
• Intellectual property and trademark protection, and making sure the governmental authorities in that location recognize and protect the businesses proprietary needs
• Partnership and liaison relationship development – seek guidance and opportunity by engaging in a "local" partnership with an existing client or supplier

How can international marketing benefit domestic countries?

Answer-

The attainment of business exercises monitoring, directing and controlling the channel of a company’s products and services to its customers at the global level to earn profit and satisfy the demands internationally is the motto of international marketing.

The main benefits and advantages of international marketing to the domestic countries are discussed below −

Provides higher standard of living

International marketing ensures high standard life style & wealth to citizens of nations participating in international marketing. Goods that cannot be produced in home country due to certain geographical restrictions prevailing in the country are produced by countries which have abundance of raw material required for the production and also have no restrictions imposed towards production.

Ensures rational & optimum utilization of resources

Logical allocation of resource & ensuring their best use at the international level is one of the major advantages of international marketing. It invites all the nations to export whatever is available as surplus. For example, raw material, crude oil, consumer goods & even machinery & services.

Rapid industrial growth

Demand for new goods is created through international market. This leads to growth in industrial economy. Industrial development of a nation is guided by international marketing. For example, new job opportunities, complete utilization of natural resources, etc.

Benefits of comparative cost

International marketing ensures comparative cost benefits to all the participating countries. These countries avail the benefits of division of labor & specialization at the international level through international marketing.

International cooperation and world peace

Trade relations established through international marketing brings all the nations closer to one another and gives them the chance to sort out their differences through mutual understanding. This also encourages countries to work collaboratively with one another. This thereby designs a cycle wherein developed countries help developing countries in their developmental activities and this removes economic disparities and technological gap between the countries.

Facilitates cultural exchange

International marketing makes social & cultural exchange possible between different countries of the world. Along with the goods, the current trends and fashion followed in one nation pass to another, thereby developing cultural relation among nations. Thus, cultural integration is achieved at global level.

Better utilization of surplus production

Goods produced in surplus in one country are shipped to other countries that have the need for the goods in international marketing. Thus, foreign exchange of products between exporting country & importing countries meets the needs of each other. This is only possible if all the participating countries effectively use surplus goods, service, raw material, etc. In short, the major advantages of international marketing include effective utilization of surplus domestic production, introduction of new varieties of goods, improvement in the quality of production & promotion of mutual co-operation among countries.

Availability of foreign exchange

International marketing eases the availability of foreign exchange required for importing capital goods, modern technology & many more. Essential imports of items can be sponsored by the foreign exchange earned due to exports.

Expansion of tertiary sector

International marketing promotes exports of goods from one country to another encouraging industrial development. Infrastructure facilities are expanded through international marketing. It indirectly facilitates the use of transport, banking, and insurance in a country ensuring additional benefits to the national economy.

Special benefits at times of emergency

Whenever a country faces natural calamities like floods & famines, it is supported by other countries in the international market. The international market provides emergency supply of goods and services to meet urgent requirements of the country facing the calamity. This distribution can only be facilitated by a country which has surplus imports.

A company exporting goods to other foreign countries earns substantial profit through export operation as domestic marketing is less profitable than international marketing. The loss a company suffers in domestic marketing can be compensated from the profit earned through exports in international marketing. Foreign exchange can be earned by exporting goods to foreign countries. Thus, the profit earned can be used for the import of essential goods, new machinery, technology, etc. This would further facilitate large-scale export in future.