May 01, 2024

Advantages And Disadvantages Of International Marketing

International marketing is a process of planning, producing, promoting and selling products or services across international border. The objective of this marketing strategy is to expand market share and increase brand image and goodwill globally.


Advantages Of International Marketing


The main advantages of international marketing can be pointed out as follows:


1. Business Expansion


International marketing helps to explore new market and identify potential customers. So, it is helpful to expand business and increase market share.


2. Increased Sales And Revenue


International marketing helps to gain foreign customers that increases the sales volume. Increased sales leads to increase the revenue of the company. So, it is helpful to maximize sales and gain more profit.


3. Maximum Utilization Of Resources


Companies produce goods on large scale to sell in the international market. So, resources (technical, financial and human resources) are fully utilized to increase the quantity as well as quality of output.


4. Lower Cost Of Production


Because of large volume of production and proper utilization of resources, the cost of production will be decreased. Lower cost of production leads to increase in the profit of the company.

advantages-disadvantages-international-marketing


5. Diversify The Risk


Another advantage of international marketing is that it spreads the business risk. International traders can cover up the loss of one market from the profit of another market.


6. Economies Of Scale


A firm can gain economies of scale because of higher volume of production, lower cost of production and increased revenue.


7. Increased Brand Awareness


Global marketing increases the visibility of the brand. It helps to increase brand awareness and reputation of the company's product or service.


8. Job Opportunity


Firms engaged in foreign trade can generate job opportunity in the country. Companies need manpower to perform several production and marketing activities. It helps to minimize the unemployment problem.


9. Foreign Exchange Earnings


Exporting goods in foreign market helps to earn foreign currencies. Therefore, it is helpful to earn foreign exchange that helps in the economic development of the country.


Disadvantages Of International Marketing


The major disadvantages of international marketing are as follows:


1. Huge Setup Cost


It requires huge initial investment to develop infrastructures and perform marketing activities. So, small companies cannot adopt international marketing strategy.


2. Lengthy And Complex


It requires more time, effort and resources to conduct marketing research, to understand customer behavior, country's rules and regulations etc. So, it is complex and lengthy process.


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3. Barrier To Entry


There are several barriers such as cultural barrier, language barrier, religion barrier and restrictions like political influence, legal and economic policies. So, foreign companies may face several barriers and complications to enter the market.


4. High Competition


Business firm may face tough competition with both domestic and international companies. Big multinational companies may gain monopoly in the market. So, local industries may suffer huge loss because they cannot compete with foreign firms having higher brand value.


Pros And Cons Of International Marketing In Brief


Pros

* It provides the opportunity to expand business worldwide

* It minimizes the production costs and brings economies of scale

* It promotes cooperation and business relation between two or more nations

* It improves brand awareness and reputation

* It ensures proper utilization of resources


Cons

* It requires huge initial investment and marketing expenses

* It is complex and time consuming marketing strategy

* There are several barriers and restrictions

* It is not suitable for small companies

* There may be unhealthy competition