Companies can access and market their products to different parts of the world due to advanced technologies, transportation, and communications systems. One great factor drawing them to worldwide market is the possibility of increased market size and growth opportunities presented by large customer base from different regions of the world (Cadogan, 2012; Twarowska & Kakol, 2013). Markets that generate high returns on investment for companies compared to domestic markets, especially countries with incentives and relying more on exports, can easily attract international firms. The search for economies of scale presented by a wider consumer base for companies can help a company go global. There has been increasing global competitiveness that has cut into the domestic market for local businesses. This has forced the local companies to venture into the international market to counter the global competitors in their home markets (Cadogan, 2012). Location advantage, especially when a business seeks to secure favorable production factors can contribute to firms invading foreign markets.
Market Entry Strategies
Market entry modes chosen by an organization differ on business control, risk, involvement, and commitment levels (Twarowska & Kakol, 2013). The entry methods include exporting and importing, joint ventures, licensing, franchising, and strategic alliances. The low-level risk entry strategies are export or import and licensing where a company has the least control of the market. On the other hand, high-risk strategies mostly involved in direct investments like joint ventures, franchising, and strategic alliances. Exporting includes the sale of products from a producing country to another. With licensing, a business firm gives trademark rights, patent rights, copyrights, and manufacturing or processing know-how to a foreign company to produce and market products in that country while paying royalties and licensing fees. In franchising, a business company (franchisee) is allowed to use the trademark of the parent company (franchiser) to market its products and services after paying fees and royalties. When it comes to joint ventures, international company partners with a foreign firm and has equity and managerial position in the foreign firm that enables it to control market operations. The strategic alliance allows a company to gain access to an international market by entering into agreements or partnership with almost similar companies with a view of pooling resources to produce new products and services.
International Product and Communication Strategies
There are five primary product communication strategies. First, product communications extension strategy whereby a company uses a uniform communication strategy and same product while venturing into new markets (Twarowska & Kakol, 2013). This is preferred by firms with limited resources. For the second strategy, extended product-communications adaptation, the company uses different and customized marketing communications for the same product that fits different home and foreign market needs. Product adaptation-communications extension method allows for the adaptation of the product by a business to suit the usage of the conditions of a particular market. However, in this case, the communication strategy does not vary since it is standardized (Twarowska & Kakol, 2013). The fourth strategy is product adaptation-communication that necessitates a change in product and communication methods used to ensure that the market need for a particular area is met. This could be due to differences in physical and cultural environments. The final strategy is product invention where firms develop new products that meet the global common market needs.
Advantages and Disadvantage of Standardizing the Market Mix
Standardization strategy refers to the use of a unique marketing policy or homogenization of products being sold in a given region. Most international firms go for a standardized market mix in place of adaptation as it comes with advantages such as greater sales volume, reduced production cost, and higher profitability with an integrated global image (Twarowska & Kakol, 2013). However, the drawbacks include low penetration degree on the market countries with special needs and rely largely upon economies of scale such as products marketing. Lack of uniqueness in a given market leaves the company vulnerable to competitors who can use this to create tailor-made products to satisfy the needs of a specific market.
Benefits of Engaging in Cause Marketing
There is a growing public concern over social and environmental issues that have made businesses and corporations engage in cause marketing. Cause marketing can be defined as activities by a business to raise funds, awareness or consumer participation in a social and environmental state. This involvement appeals to consumers and may influence or change their perception of a given firm (Twarowska & Kakol, 2013). Some of the benefits that can be realized from this marketing include increased ability to attract and retain customers and employees, exposure to new audiences, improved sales volumes, and exchange of information between firms and consumers, which can be used to better the services being offered.
References
Cadogan, J.W. (2012). International marketing, strategic orientations, and business success: Reflections on a path ahead. International Marketing Review, 29(4).
Twarowska, K, Kakol, M. (2013). International Business Strategy: Reasons and forms of expansion into a foreign market. Maria Curie-Skłodowska University, Poland.
