• Home
  • News
  • Marketing Events
    • Marketing Events Calendar
    • Submit An Event
  • Business Directories
    • Marketing Agencies
    • Advertising Agencies
    • Market Research Agencies
    • Market Research Recruitment
    • Event Management Agencies
    • Public Relations Agencies
    • Marketing Industry Associations
    • Industry Recruitment Agencies
    • Promotional Merchandise Agencies
    • Social Media Marketing Agencies
    • SEO & SEM Agencies
  • Marketing Tools
    • Marketing Plans
    • Marketing Publications
    • Marketing Jobs
    • Calculators
    • Media Research
    • Advertising Facts
  • Advertise
  • Write For Us
  • Subscribe

Marketing.com.au

Marketing news, events and resources

  • General
  • Advertising
  • Content Marketing
  • Market Research
  • Public Relations
  • SEM
  • SEO
  • Social Media

International Marketing and Market Entry

September 30, 2013 By Sally Wood

Are you lucky enough to have conquered the domestic market? Thinking about going global, taking over the world? Before you embark on world domination, have a quick read of our beginners guide to international marketing and market entry.

Here at Marketing.com.au, we find that a good old pros and cons list can be very helpful when making these big life decisions. Sometimes, you just need to simplify the situation. So, we’ve put together our own pros and cons list for international expansion.

Pros:

  • Some international markets present better profit opportunities than the domestic market
  • A bigger customer base will enable us to achieve better economies of scale
  • We will reduce our dependence on any one market
  • We will be able to counterattack some of the big, global competitors in their home markets
  • Our customers often travel abroad and require international service / presence

Cons:

  • We may not understand foreign preference fully and could fail to offer a competitively attractive product.
  • We may not fully understand the international business culture
  • We might underestimate foreign regulations and incur unexpected costs
  • We may lack managers with international experience
  • The international markets that we enter might change their commercial laws or devalue their currency or implement any number of other economic changes

The main point is, if you decide to expand into international markets, you must ensure that your products and marketing activities are consistent with the local market and local sensibilities. The best way to do this is to undertake in-depth research and analysis before committing resources to international expansion. You should research foreign culture, regulations and costs. It is also a good idea to recruit managers with international experience or to train your existing managers. This market research, recruitment and training all needs to be considered in the budget and needs to be weighed against increased profit and improved opportunities economies of scale.

So, if you’ve decided to embark on international expansion, the next decision will be which mode of entry to go with. There are five modes. We’ll go through each one in detail for you now.

  1. Indirect exporting: Usually, companies start off with indirect exporting. This involves working through an independent intermediary: domestic-based export agents buy your products and then sell them internationally, for a commission of course. Indirect exporting has two key advantages. Firstly, there is much less up-front investment required; you won’t have to develop an export department, an overseas sales force or international contacts. Secondly, there is much less risk; domestic-based export agents already have the local know-how and networks.
  2. Direct exporting: Alternatively, you might decide to handle your own exporting. Obviously, the investment and the risks are greater, but so is the potential return. There are a number of direct exporting models: domestic-based export department; overseas sales branch or subsidiary; travelling export sales representatives; and foreign-based distributers or agents. Many companies use indirect or direct exporting (or a combination of both) to test the waters before building a plant and manufacturing their products overseas.
  3. Licensing: This is the simplest way to establish a presence in an international market. If you go with this mode of entry, you would issue a licence to a foreign company to use your manufacturing process, or trademark, or trade secret for a royalty fee. You gain international market entry at little risk and the licensee gains the production expertise for a well-known product or brand. There are some obvious disadvantages though. You will have little control than over the production and sales facilities for your own product. Also, it means that you have surrendered the rights to profits and, if the licensing contract ends, you might find that you have created a competitor. To prevent this, you can supply some proprietary ingredients directly to the licensee (without giving up all your trade secrets). This is what Coke does. But the best strategy is to lead in innovation. That way, the licensee will always depend on you.
  4. Joint Ventures: You could join a local investor in a joint venture company. In this case, you would share ownership and control with the local investor. This mode of entry is popular in emerging markets, like China and India. A joint venture might be desirable for economic or political reasons. You might not have the financial, physical or managerial resources to undertake the venture alone (but the local investor does), or the foreign government may require joint ownership as a condition of entry. There are some drawbacks to joint ventures though. Partners might not always see eye-to-eye.
  5. Direct Investment: This is the ultimate form of foreign involvement. In this case you would buy part or full interest in a local company or build your own manufacturing (or service) facilities. If the market is large enough, direct investment has a wide range of advantages. First of all, you will secure cost economies, government incentives and freight savings. Secondly, your image in the host country will be strengthened because you are creating jobs. Third, you will strengthen relationships with government, customers, suppliers and distributors. This will enable you to better adapt your products to the local environment. Fourth, you retain full control over investment. With so many potential gains, you obviously open yourself up to an equal number of risks.
Thanks to Sally for sharing these great tips and insights with us on international marketing and market entry.

 

About Sally Wood

Having worked in marketing, communications and public relations roles for over ten years, Sally’s past life includes a plethora of activities, some of which even she can’t believe she was lucky enough to try her hand at. There was the development and implementation of internal communication programs for burly construction contractors; PR campaigns to launch The Simpson’s products (which just happened to involve carting life-sized Simpson figures around the country); people (and media) wrangling at Flemington’s birdcage for high-profile clients during the Melbourne Cup Carnival; CSR program design, implementation and GRI-accredited reporting; and, most recently, copywriting and internal stakeholder relations in a most serious corporate environment. Somehow, in the midst of all that, she also managed to get stuck into some study, undertaking a Bachelor of Arts / Law, completing a Postgraduate Bachelor of Letters in Public Relations and Journalism and recently starting an MBA.

 

  • About
  • Latest Posts

Sally Wood

Editor at Marketing.com.au
Sally has worked in marketing, communications, and PR for over 15 years. She is the Chief Wordsmith at Wordly: a copywriting and content marketing agency that works predominantly with WordPress powered websites.

Latest posts by Sally Wood (see all)

  • 6 Free Marketing Plan Templates - July 22, 2018
  • The Ultimate Guide to Instagram Advertising - June 23, 2018
  • Q&A with Amy Cockerell, Marketing Coordinator at the TAC - October 6, 2016

Other Related Marketing.com.au Articles:

  • Popular SEO strategies being utilised in 2018
    What Is The "Helpful Content" Update According To Google?
  • 2022 online marketing events
    Marketing Events – October 2022
  • 2022 online marketing events
    Marketing Events – September 2022
  • 2022 online marketing events
    Marketing Events – August 2022
  • 2022 online marketing events
    Marketing Events – December 2022
  • 2022 online marketing events
    Marketing Events – November 2022
  • must-do-stratgies-to-boost-traffic
    The Art Of Building Organic Growth Strategies: Tips…
  • Practical Ways to Elevate Your Offline Events with Digital Marketing
    Marketing Events – February 2024

Filed Under: Latest News Tagged With: cons, direct exporting, direct investment, export, guide, import, indirect exporting, international marketing, join ventures, licensing, market entry, marketing, marketing activities, markets, product, pros, Sally Wood, service, world

Recent Posts

  • Marketing Events – August 2025
  • Top 9 Effective Book Promotion Ideas For Authors
  • Marketing Events – July 2025
  • Step By Step Process For Opening Your Own PR Agency
  • Hotels and Influencer Marketing

Join Our Newsletter

For free updates on upcoming Australian events, articles and resources.

CONNECT WITH US

  • Facebook
  • Twitter

MAIN MENU

  • Advertise with Us
  • Write For Us
  • Submit An Event
  • List Your Business
  • Marketing Events
  • Business Directories
  • About Us
  • Contact Us

SEARCH BY CATEGORY

  • Advertising
  • Content Marketing
  • General
  • Market Research
  • Public Relations
  • Search Engine Marketing (SEM)
  • Search Engine Optimisation (SEO)
  • Social Media

Join Our Newsletter

For free updates on upcoming Australian events, articles and resources.

Copyright © 2025 Marketing.com.au · Terms & Conditions · Privacy Policy

  • Home
  • News
  • Marketing Events
    ▼
    • Marketing Events Calendar
    • Submit An Event
  • Business Directories
    ▼
    • Marketing Agencies
    • Advertising Agencies
    • Market Research Agencies
    • Market Research Recruitment
    • Event Management Agencies
    • Public Relations Agencies
    • Marketing Industry Associations
    • Industry Recruitment Agencies
    • Promotional Merchandise Agencies
    • Social Media Marketing Agencies
    • SEO & SEM Agencies
  • Marketing Tools
    ▼
    • Marketing Plans
    • Marketing Publications
    • Marketing Jobs
    • Calculators
    • Media Research
    • Advertising Facts
  • Advertise
  • Write For Us
  • Subscribe