The Value & Challenges of International Marketing (AQA A Level Business): Revision Note

Purpose and value of international marketing

• International marketing refers to the activities a business undertakes to promote and sell its products in markets outside its home country

  • It requires careful consideration of how to adapt or maintain the marketing mix for customers in different countries and cultures

Purpose and value of international marketing

Access to larger markets

• A business's home market is finite

  • Selling internationally opens up millions of additional potential customers and significantly increases the potential to earn revenue and achieve growth

• For example, a UK business selling only domestically is limited to a population of 67 million

  • Selling across Europe or globally gives it access to billions more

Spreading risk

• Relying on a single market is risky

  • If the domestic economy slows down, sales fall with it

• Operating in multiple markets means a downturn in one country can be offset by stronger performance in another

  • For example, many UK businesses that suffered during the domestic recession of 2008–09 were helped by stronger sales in growing Asian markets

Extending the product life cycle

• A product that is reaching the decline stage in its home market may still be in the growth stage in a less developed or less saturated market

  • For example, some technology products and fast food formats that are well established in Western markets are still in strong growth phases across parts of Africa, Southeast Asia and South America

Economies of scale

• Producing for multiple markets increases total output, which can reduce the cost per unit, making the business more efficient and improving profit margins

• Global brands such as Apple and Nike benefit from enormous economies of scale that domestic-only competitors cannot match

Building a stronger brand

• International presence can enhance a brand's prestige and credibility

• A brand known and respected globally often commands more trust and a higher price than one only known locally

  • Premium brands such as Burberry and Rolls-Royce are partly valued because of their international recognition

First-mover advantage in emerging markets

• Entering a growing market early, before competitors, allows a business to establish brand loyalty, build distribution networks and shape customer expectations before rivals arrive

  • For example, Western fast food and retail brands that entered China and India in the 1990s built dominant positions that later entrants have found difficult to challenge

Challenges of marketing internationally

Cultural differences

• Every market has its own values, customs, humour and social norms

• What works brilliantly in one culture can fall completely flat or cause serious offence in another

• McDonald's is one of the most successful examples of cultural adaptation

• Without these adaptations, the brand would struggle to appeal to local consumers

  • The McAloo Tikki (a spiced potato burger) in India, where beef is not eaten by much of the population

  • The Teriyaki burger in Japan, reflecting local taste preferences

Examples of cultural errors

• Pepsi's slogan "Come alive with the Pepsi Generation" was reportedly translated into Chinese as "Pepsi brings your ancestors back from the dead"

  • This illustrates the danger of direct translation without cultural understanding.

• Gerber, the US baby food brand, famously used packaging featuring a smiling baby, as it does in the US, when entering other markets

  • In regions with lower literacy levels, some consumers expected the jar's contents to be pictured on the label; for some people, this caused confusion

Language barriers

• Translation is about far more than converting words from one language to another - tone, connotation and meaning can all be lost or distorted

• Many brand names or slogans that work well in English have unfortunate meanings in other languages

  • Businesses, therefore, have to choose entirely different names for different markets

Examples of language errors

• HSBC's global campaign, built around the slogan "Assume Nothing", was mistranslated in several countries as "Do Nothing"

• This was so damaging that the bank eventually rebranded the campaign entirely at high cost

Legal and regulatory differences

• Every country has its own rules on advertising, data protection, product labelling, pricing and what can and cannot be said to consumers.

• Advertising restrictions for alcohol, gambling and high-fat foods vary significantly across Europe

  • A campaign legal in the UK may be prohibited in France or Sweden.

• Data protection laws differ around the world

  • UK GDPR applies in Britain, but businesses marketing in the US, China or Brazil must comply with entirely different data regulations, adding cost and complexity.

• Some countries require product labels to be in the local language, and specific nutritional or safety information may need to meet local standards rather than those of the home market

Economic differences

• Consumers in different countries have vastly different levels of income and purchasing power, which affects what price points are viable and what products are appropriate

• Unilever recognised that consumers in lower-income markets in South Asia and Africa could not afford standard-sized bottles of shampoo or washing powder

  • It responded by developing single-use sachets sold for just a few pence - an entirely different product format made viable by understanding the economic reality of the target market

• Luxury brands such as Louis Vuitton and Rolex deliberately price products consistently across markets, even where this makes them extremely expensive relative to local incomes

  • This protects their premium positioning and exclusivity

Political instability and trade barriers

• Political decisions can create sudden and significant obstacles to international marketing

  • Brexit introduced new tariffs, customs checks and regulatory requirements for UK businesses selling into the EU markets, many of which had been treated as seamlessly as domestic ones

    • Many businesses had to restructure their distribution and pricing strategies as a result

    • Some businesses withdrew from EU markets entirely

  • Trade disputes between major economies, such as the US–China trade war that escalated in the late 2010s, can disrupt supply chains

    • This makes pricing unpredictable for businesses caught in the middle

Different consumer behaviour and media habits

• The channels through which consumers discover and buy products vary significantly between countries

• In China, platforms such as WeChat, Weibo, and Douyin (the Chinese version of TikTok) dominate digital marketing

  • Instagram, Facebook, and Google are all blocked

  • A business planning to enter the Chinese market cannot simply replicate its UK digital marketing strategy; it must build an entirely different presence on different platforms

• In some markets, consumers rely heavily on personal recommendations and relationships with local sellers

  • In others, e-commerce and direct-to-consumer channels are dominant

• Understanding these differences is essential to choosing the right distribution and promotional approach

Competition from local brands

• Established local businesses often have significant advantages

  • They often have deeper cultural understanding, existing customer loyalty, stronger distribution relationships and a lower-cost base

• Walmart's expansion into Germany in the late 1990s is widely regarded as a failure

  • German consumers had strong loyalty to established local supermarkets, and Walmart's American retail culture, including practices such as staff smiling at customers and greeters at the door, was perceived as strange and uncomfortable rather than friendly

  • The business eventually withdrew from the German market entirely

Standardisation versus adaptation

• One of the central decisions in international marketing is how much to standardise the marketing mix across all markets versus adapting it for each one

• Standardisation involves keeping the same product, branding and messaging globally

  • It is cheaper and delivers a consistent brand identity

  • E.g. Apple uses broadly the same product design, pricing strategy and advertising style worldwide, reinforcing its premium global brand

• Adaptation means tailoring the marketing mix to each local market

  • It is more expensive but can deliver significantly better results where cultural, economic or legal differences are significant

  • E.g. KFC is enormously successful in China partly because it has adapted its menu to include local flavours, porridge breakfasts and rice dishes alongside its core chicken products