The end of the twentieth century has brought increased integration of the economies of the world, creating untold opportunities for companies to develop worldwide markets. Once the province only of the very large organization, companies of all sizes are now actively engaged in international marketing.
The benefits of international marketing are many:
- Exports mean additional customers. This means increased sales, which translate to higher profits.
- Exporting gives geographic diversity. When there is a decline in the domestic economy, your export markets can still enable you to maintain or grow your sales.
- Exporting often extends the life cycle of a product which may be maturing in your domestic market.
- Marketing growth abroad often exceeds that at home. Export business frequently balances domestic factory loads because demands for products in foreign markets is often countercyclical to domestic markets.
Until recently, the U.S. business community has not been internationally minded and has not competed effectively for the world’s fastest growing markets.
But, 95% of the world’s population and two-thirds of its purchasing power are located outside the United States. Since the United States suffers a trade deficit in excess of $100 billion annually, and since each $1 billion in exports is estimated to create 30,000 jobs, the federal government has become very active in promoting export business.
While large, multinational companies have the knowledge and resources to develop export markets, most mid-market and smaller companies do not. Small businesses account for 97% of the total number of establishments involved in direct merchandising activities. While these companies have usually planned strategic domestic marketing programs, much of their export activity is on a hit-or-miss, opportunistic basis. Exporting is used as an occasional fill-in when the domestic economy is slow, to temporarily utilize excess capacity, or to dispose of obsolete product. These activities do not lead to successful international marketing programs.
To succeed at developing international markets, companies should take the same planned approach that they would take to develop their domestic business. This involves assuring the customer that their products meet the needs of the market, are competitively priced, and are distributed in a manner that best suits the specific market.