International Entering Foreign Markets International

International

Entering Foreign Markets

International marketing occurs when a business moves its products and services toward consumers in a country other than the one in which they are currently situated. Frequent marketing concerns such as input costs, price, advertising, and distribution are likely to be radically different in the countries in which a firm elects to sell its goods or services. Business consultants feel that the key to successful international marketing for any business whether a multinational corporation or a small entrepreneurial undertaking is the ability to adapt, manage, and coordinate an clever plan in an unfamiliar and sometimes unstable foreign atmosphere (International Marketing, 2010).

There are generally a number of reasons that businesses decide to explore foreign markets. In some cases, firms start foreign market examination in response to unsolicited orders from consumers that are in those markets. Many others seek to set up a business in order to absorb overhead costs at home, expand their corporate holdings, take advantage of domestic or international political or economic changes, or strike into new or growing markets. The leading factor that encourages international marketing efforts is to make money. Systems that make up the global economy have become ever more interconnected and many companies have recognized that international opportunities can ultimately mean the difference between success and failure (International Marketing, 2010).

There are several major advantages to moving into foreign markets. One of these reasons is increased sales and profits. Selling goods and services in a market in which a company has never been before often raises sales and revenues. Extra foreign sales over the long-term, once export development costs have been met, work to increase overall profitability. Another advantage is that of improved domestic competitiveness. Most companies work to obtain success in the domestic market before they venture in the international arena. Being viable in the domestic market helps companies to attain some strategies that can help them in the international arena (Advantages and Challenges of Exporting, 2010).

On the other hand there are many disadvantages to moving into foreign markets as well. One disadvantage is in regards to extra costs. Because it takes more time to develop extra markets, and the pay back periods are longer, the up-front costs for developing new promotional materials, allocating personnel to travel and other administrative costs associated to market the product can strain the meager financial resources of small size companies. Another disadvantage is product modification. When exporting, companies often need to modify their products in order to meet foreign country safety and security codes along with other import limitations. At a minimum, alteration is often necessary in order to satisfy the importing country's labeling or packaging necessities. A third disadvantage is that of financial risk. Collection of payments using techniques like open-account, prepayment, consignment, documentary collection and letter of credit are time-consuming and more complex (Advantages and Challenges of Exporting, 2010).