International marketing as a business management technique,
through which the company intends to make a profit, taking advantage of the
opportunities offered by foreign markets and facing international competition.
It is a systematic, circular and periodic management technique. It is
systematic in the sense that it obeys a method, circulating the results of its
application serve as experience for the re-elaboration of the international
marketing plan and, in addition, it is elaborated periodically, with different
frequencies according to the company.
International marketing, like any business strategy, has a
series of controllable variables and others beyond the control of the company.
Among the first are its own infrastructure and capabilities: production capacity,
R&D level, experience and knowledge of marketing, financial capacity,
attitudes and predisposition of managers towards the internationalization of
the company, etc. . Uncontrolled variables make up the external environment
(economic, cultural, legal, and political) and international competition. The
characteristics and development of foreign markets as well as international
competition are variables over which the company has no influence, but it can
know its situation and predict future trends.
International marketing management includes a series of
strategic decisions that the company must take on a scheduled basis. These are:
the decision to internationalize itself, the choice of target markets, the
entry strategy and the adaptation of the international marketing-mix policies
in the different markets in which it is present.
THE DECISION TO GO INTERNATIONALIZED
The first international
marketing decision is to analyze whether or not the company should embark
on international marketing activities, that is, the conquest of foreign
markets. It seems evident that in the new international environment more and
more companies are opting for the internationalization alternative, there are
even the so-called born global that are born already focused on international
markets; In most cases, these are innovative companies linked to the digital
economy sector.
The advantages that justify internationalization are many,
among them:
●
Use all or a large part of the productive
capacity: there are products whose sales are concentrated in certain seasons of
the year. Selling these seasonal products in countries with opposite weather
seasons (northern and southern hemispheres) will take advantage of productive
capacity and achieve greater stability in sales. An example is mountain bikes
whose sales are concentrated in the period May-August in the northern
hemisphere (EU, United States) and in November-January in the southern
hemisphere (Australia, Latin America).
●
Access to a broader market:
internationalization implies accessing specific market segments for each
product. If it is possible to be present in a large number of countries, the
life cycle of the product can be extended since when it is in a phase of
maturity or decline in developed markets, with the export it will be possible
to access other markets where the product is not yet acquainted.
●
Image improvement (internal and external):
from the communication perspective, the presence in several countries
reinforces the image of the company both in front of its national and
international clients. Having customers in several countries transmits an idea
of solvency and guarantee in the products and services offered.
●
Risk diversification: the company's presence
in several markets is also a means of diversifying risk, since at a given
moment the negative results of countries or areas in recession will be offset
by those of countries that obtain positive growth rates.
●
Continuous learning: finally, the directors of
companies that go abroad are in contact with very different markets and,
therefore, in the development of their work they learn in terms of innovative
products, management techniques, marketing methods, actions, communication,
digital marketing strategies, etc. Many of these experiences and actions can be
applied in the local market.
THE CHOICE OF TARGET MARKETS
Once internationalization has been chosen as a growth path, the
second strategic decision is the selection of the markets that offer the
greatest potential. There are more than 200 countries in the world, of which
approximately 80 have high purchasing potential. The exporting company,
regardless of its size and resources, must have a marketing information system
that makes it easier for it to select target markets.
In this process, three stages can be distinguished through which
the company must make decisions regarding:
●
Number of countries: the double alternative of
concentration (choosing a small number of countries to focus your commercial
efforts on them) or diversification (choosing a larger number of countries even
if you obtain a lower volume of sales in each of them) is proposed here. they).
●
Most favorable geographical areas: focus your
efforts on certain geographical areas that cover homogeneous countries in terms
of the criteria for choosing the most favorable ones. In this election,
criteria such as geographical or cultural proximity, the level of development
or the growth prospects of the countries in the area will prevail.
●
Selection of target countries: once the most
favorable areas have been chosen, the company must choose within them those
countries that offer greater accessibility and business potential, also
evaluating the risks involved in penetrating them.
THE CHOICE OF THE FORM OF ENTRY IN THE CHOSEN MARKETS
Once the countries have been chosen, the next decision is the
way to enter each of them. It happens that foreign markets, unlike the national
market, present barriers and access difficulties (geographical, legal,
language, cultural) that make it necessary to seek help to reach the end
customer. Thus, there are ways to reach foreign customers that are more
numerous and different than those that exist to reach local customers. These
forms can be classified into four groups:
●
Direct export: the company's own export
department addresses the end customer.
●
Indirect export: intermediaries (agents,
distributors, trading companies) are used to reach the end customer.
●
Cooperation agreements: the company seeks
partners in foreign markets with the idea of establishing long-term business
relationships that materialize in license, franchise or joint venture
agreements.
● Establishment abroad: finally, the company can choose to establish itself in the target market through the creation of delegations, commercial subsidiaries or production subsidiaries.