Unit 1: Introduction to International Marketing
Whether you are an entrepreneur or work for a company of any size, what happens in the world affects your business. Even personal services like hairdressers or manicurists are affected by international products, cosmetics, and supplies. In this unit, we will learn about these dynamics and the conceptual models we can use to analyze global markets and their entry barriers. We will also assess the differences between global and international marketing and analyze their political, economic, social, technological, legal, and environmental dynamics. Understanding these will help you, as an international marketer, make better decisions and communicate them across your company. For a real-world example, consider that over 80% of Walmart's "everyday low price" products come from China. Most cotton shirts or skirts you buy today use cotton grown in Texas, milled in China, sewn in Bangladesh, and shipped to distribution centers across the world. In the process, that one article of clothing could have been shipped through nearly 50 different countries. Discarded cotton clothing is often shrink-wrapped and shipped to African countries via a system known as "mitumba". More than 30 African countries have banned mitumba or implemented bureaucratic requirements like health certifications, inspections, and import tariffs to delay or eliminate the market for discarded clothing. These kinds of dynamics play out for imported products across the world in nearly every industry.
Completing this unit should take you approximately 8 hours.
Upon successful completion of this unit, you will be able to:
- identify current trends in global and international marketing;
- outline the decision sequence that marketers go through when deciding to move into an international market;
- classify a given country's economy as a developed, emerging, or developing market;
- describe the role of international organizations and trade agreements in international marketing;
- use the PESTEL business thinking model to assess global marketing environments for short and long-term decision-making; and
- assess how changing technology influences international marketing.
1.1: Comparing Global and International Marketing
The decision to expand operations on a global scale involves many factors, which can vary from country to country. Marketing in the US is very different than marketing in other nations, and companies need to explore these factors before taking steps to expand. For example, competition in one nation may be quite different from competition elsewhere. This can impact a company's marketing campaign and require them to adjust their messaging and approach for each location. Trade between countries can also impact the products and services that are sold across the globe, and rules and regulations will vary as well. In spite of the challenges that companies face when marketing on an international scale, the benefits are many, and the more knowledgeable an organization has about a country's markets, the greater its chance of success. Read this chapter and begin your exploration of the factors involved in marketing around the world.
This video gives a brief introduction to three different internationalization theories relevant to marketers when describing organizations' international expansions.
1.2: Marketing in Developed and Emerging Markets
Countries that experience rapid growth and development with lower per-capita incomes and capital markets that are less mature than those in developed countries are called emerging markets. Examples of emerging markets are the BRIC countries (Brazil, Russia, India, and China) and GIPSI countries (Greece, Ireland, Portugal, Spain, and Italy). Marketing in an emerging country market is likely to be more challenging than in a developed market since marketers often face political instability, less advanced communications technology, and consumers with less disposable income. Read this chapter to learn more about developed, developing, and emerging economies.
This reading gives a good overview of the business market, where organizations sell products and services to other businesses, governments, and institutions for use in their own business operations.
Here, we consider how B2B customer interactions, typically long and complex buying processes that tend to be more relationship-based, differ from B2C interactions.
1.3: Multilateral Trade Bodies and International Marketing
Companies involved in international marketing have to deal with taxes, duties, or tariffs on goods bought from or sold in other country markets. Being aware of multilateral and bilateral trade agreements between your country and other nations is essential since those agreements help level the playing field among countries by reducing tariffs or making it easier for businesses to import and export. Bilateral agreements are trade pacts made between two countries. Three or more nations take part in multilateral agreements, which makes them harder to negotiate. A country can be part of a multilateral trade agreement while also participating in bilateral trade agreements with many other countries. The World Trade Organization (WTO) is an important organization involved in ensuring the efficient flow of trade. The WTO works with countries to negotiate the terms of a trade agreement, and once an agreement is established, it helps enforce the agreement. Global financial institutions like the International Monetary Fund (IMF) and the World Bank also facilitate international trade. The IMF has 189 member countries and works to foster global monetary cooperation among its members. The World Bank provides loans and grants for capital projects to the governments of poorer countries. Read this chapter, which discusses the evolution of international trade.
1.4: The PESTEL Model
Every country has its unique features, so foreign firms wanting to do business in new markets must take the time to understand that market's characteristics and business environment. This environment has societal forces that organizations have no control over. Still, those forces offer opportunities and threats that can affect an organization's microenvironment and its ability to carry out its operations. Smart companies conduct PESTEL analyses of their macroenvironment, particularly when starting a new business or entering a foreign market. Doing this lets the organization design strategies that take advantage of the opportunities and avoid the threats presented by external environmental forces. In this chapter, we will look at the six forces that make up the macro environment. Understanding these macro-environmental forces and how they can affect a company's operations in a new market is essential when choosing a country for international marketing. To better understand these macroenvironmental forces and the importance of undertaking a PESTEL analysis, read this chapter.
PESTEL analysis has numerous applications. Previously, we explored the role of PESTEL in the global marketplace. Now, we will take a closer look at how PESTEL can help an organization identify opportunities and strategies for success in specific global markets.
1.5: The Role of Technology in Marketing
Technology has transformed the business landscape, especially since the start of the 21st century. No matter a company's size, technology has become an integral component for most organizations, particularly in the development of management and marketing information systems and company websites. Technology has been of great help to marketers in better understanding their customers' preferences, behaviors, and purchase trends, allowing them to design the most effective marketing strategy based on this intelligence. Meanwhile, the internet has resulted in the development of social media platforms like Facebook, enabling networking among consumers and with organizations that profoundly affect how marketers interact with their customers. The internet has also enabled the boom in electronic commerce (e-commerce) and the emergence of many online marketers, from Amazon to Etsy. This chapter discusses how e-commerce and e-business have increasingly become necessary components of business strategy and strong catalysts for economic development. However, technology continues to evolve, and organizations must keep pace to maintain their competitive edge.
Read this chapter, which discusses the importance of social media advertising for companies when communicating with their target markets.
Unit 1 Assessment
- Receive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.