Marketing on a global scale is not only a lucrative venture for organisations if done properly, but is actually becoming an existential necessity for them. However there are dangers. Effectively, what works in one country may not work in another but, conversely, there may be opportunities provided by culturally different markets that are not available in the company’s country of origin.
When internationalising an organisation, you not only have to take into account how your product or service will translate, both culturally and literally, but also the different restrictions in place in other countries.
What is internationalisation?
Broadly speaking, internationalisation is the process of expanding your business into international markets. This requires foresight and the ability of a company or entrepreneur to think globally, taking into account different cultures and, by extension, the different beliefs, values, behaviours and business strategies present in those cultures. Without this willingness to adapt, internationalisation will not be successful and can cause the original company to fail.
The effects of government policy
When a business decides to internationalise, they must take into account the various political and legal systems around the world and abide by the local rules and regulations of the countries in which they operate.
With the internet, government control over marketing and business practice has loosened a little, however countries still have the ability to regulate or strong-arm companies into abiding by their rules and regulations. Trade restrictions such as tariffs, quotas, standards and subsidies will also apply and vary depending on the relationship between countries as well as the type of company, product or service.
In terms of marketing, organisations like the International Chamber of Commerce (ICC) are there to ‘provide guidance on the ever-changing landscape of modern marketing and advertising marketing and advertising issues, promoting effective self-regulation that is harmonized to best practice around the world.’ They emphasise that their self-regulatory system based on the ICC Code has the flexibility to take into account local law and culture at the same time as regularly updating and adapting itself to new practice and technological developments.
Market entry modes
There are 4 main types of market entry mode:
- Exporting: this is the marketing and direct sale of domestically-produced goods in another country. It is a tried and true method of internationalisation and requires no investment in foreign production facilities. Most of the expenses are incurred in marketing and transit.
- Licensing: this allows a company in a different country to pay for the use of the property of the licensor. Examples include trademarks, patents and production techniques. This means that very little money needs to be spent by the licensee, meaning ROI can be substantial.
- Joint venture: this allows market entry, the sharing of the risk and the reward, the sharing of technology, conforming to local government regulations as well as access to distribution channels and possible political connections. There are, of course, downsides to this, including cultural clashes and division of profits.
- Direct investment: this when the company owns the production facilities in the target country. It provides control and potential deeper understanding of the new market but also requires deep pockets and serious commitment.
Examples of successful global marketing campaigns
Did you know that Red Bull was an Austrian company? Neither do most people, assuming that the energy is produced in America where it has not only a physical presence but a cultural one. Red Bull has made itself a worldwide brand in part by hosting extreme events all around the globe. From the Red Bull Indianapolis Grand Prix to the Red Bull Air Race here in the UK to the Red Bull Soapbox Race in Jordan, they utilise a powerful event marketing strategy that brings them recognition wherever they go.
Trainers are a fashion item that sparks intense debate and unwavering loyalty – but trends vary from country to country and creating hundreds of different lines to accommodate that is impractical and costly. Instead, Nike created NikeID, a co-creation platform that allows users to customise their sneakers. This not only means that people can apply their own cultural preferences and styles, they also end up with a unique, bespoke product that makes them feel valued and individual.
Swedish music streaming service Spotify forever changed that way the world listens to music. By pivoting from pure genres to a mixture of genres and ‘moods’ they provided a universal language that allows people all over the world to discover musicians they might never have found otherwise. The strategy clearly worked – Spotify now has offices in 17 different countries around the world.
About our Global Marketing Module
This module focuses on themes of internationalisation and issues including government policy, market entry modes and exporting. You will be able to advance your understanding of the challenges faced while operating in an international marketing environment.
To find out more about the MSc Marketing, please visit the course page.
If you want more information about studying at Ulster University’s London or Birmingham campuses, please visit our website.