Strategies for International Marketing (Cambridge (CIE) A Level Business): Revision Note

Globalisation, economic collaboration and marketing

• Globalisation is the increasing connection and interdependence of countries through trade, communication, transport and technology

  • It allows businesses to operate and compete in international markets more than ever before

• Economic collaboration is when countries or regions work together to support trade and economic growth

  • This includes trade agreements, shared markets, such as the EU, and international organisations, like the World Trade Organisation

Implications for marketing

The importance of international marketing

• International marketing is when a business promotes and sells its products in more than one country

• It plays a key role in helping businesses grow, increase profits and compete globally

Why international marketing is important

• Access to new customers

  • By marketing products in other countries, businesses can reach millions of new potential customers

    • E.g. Netflix expanded from the US to over 190 countries, gaining millions of new subscribers through localised marketing and content

• Spreading risk

  • Selling in different countries helps reduce risk

  • If sales fall in one country, sales in other regions may still grow

    • E.g. Toyota sells vehicles across Asia, North America and Europe, which helps balance profits even if one region performs poorly

• Taking advantage of global trends

  • International marketing allows businesses to respond quickly to global fashion, technology or lifestyle trends

    • E.g. Zara uses fast-fashion marketing strategies across global cities to catch and promote trends in real time

• Building a global brand

  • International marketing helps businesses build strong global brands that are recognised and trusted around the world

    • E.g. Samsung has become one of the world’s leading technology brands by using consistent marketing messages and high-quality advertising across Asia, Europe, and the Americas

Identifying and selecting suitable international markets

• Before entering a new country, a business must carefully research and choose the right market

• Picking the wrong market can lead to wasted investment, while choosing wisely can bring growth and long-term success

Key factors in choosing an international market

Entering international markets

• When expanding into a new country, businesses must decide how to enter and how to market their products

Strategies for entering international markets

Pan-global strategy

• A pan-global strategy is where a business uses the same product and marketing approach in all countries

  • Branding, packaging and promotion stay the same

  • This approach is best used when customer preferences are similar worldwide, such as in technology or fashion where global trends dominate

• Advantages

  • Saves money through economies of scale

    • Using the same adverts, packaging and branding worldwide reduces costs

  • Strong, consistent global brand image

    • Customers recognise and trust the brand across all markets

• Disadvantages

  • May not suit local tastes or culture

    • What appeals in one country may not work in another

  • Risk of marketing failure

    • The message might not connect with customers in certain regions

Local strategy

• A local strategy is where a business changes parts of its product or marketing to suit local tastes, culture, language or laws

• This approach is best used when markets are culturally, legally or economically different, such as in food, healthcare or personal care industries

• Advantages

  • Matches local customer needs better

    • Products and marketing can reflect local tastes, language and culture

  • More likely to connect with target market

    • Customers feel the business understands them, which can increase loyalty

• Disadvantages

  • Higher costs due to adaptation

    • Creating different versions of adverts, packaging or products for each country can be expensive

  • More complex to manage

    • Coordinating different strategies across markets requires more time, staff and control

Strategies to develop a global market

• When expanding globally, businesses must choose strategies that match their goals, resources, and the markets they are entering

• Key factors businesses consider include

  • Target market analysis

    • Businesses study customer needs, cultural values, income levels and demand

    • Helps decide whether to use a pan-global or localised marketing approach

  • Product type

    • Some products (e.g. technology, luxury goods) may work globally with little change

    • Others (e.g. food, personal care) often need local adaptation to suit customer preferences or laws

  • Resources and budget

    • Larger businesses may invest in FDI or joint ventures

    • Smaller firms may start with exporting or licensing due to lower risk and cost

  • Level of risk

    • Political stability, economic conditions and ease of doing business affect strategy choice

    • Higher-risk markets may be entered through partnerships with local businesses rather than full ownership

  • Competitive environment

    • Businesses assess the strength and number of competitors

    • In highly competitive markets, differentiation and strong branding are essential

Methods of entry into international markets

• When a business wants to expand into another country, it must decide how to enter that market

• The method chosen can affect the level of risk, cost, control and speed of entry

  • Some businesses may prefer low-risk options like exporting, while others may invest heavily to set up operations abroad

• The best choice depends on the business’s goals, resources and the nature of the market it’s entering

1. Exporting

• The product is made in the home country and sold overseas, either directly or through agents or distributors

2. Licensing

• A local business is allowed to produce and sell the product under the brand name

3. Joint ventures

• The business works with a local partner to enter the market, sharing risks, costs and local knowledge

4. Foreign direct investment (FDI)

• The business sets up its own operations in the new country by opening a factory, store, distribution facilities or offices

Evaluating each method