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A key part of selling products and services is the development of comprehensive marketing strategies. Marketing is the process of developing these strategies around key points such as what to sell, pricing, determining to whom the product or service will be sold, and how it will be sold. Marketing requires an in-depth understanding of the target market, market participants, and also any specific opportunities and threats. When considering expansion into international markets, the same principles apply with added layers of information and complexity.

Why Companies Expand Into International Markets

Companies expand into international markets for many reasons. Clearly, the primary reason is to increase; however, there are underlying drivers for expansion that propel the development of the marketing strategy. Some specific reasons include the following:

Comparative advantage: A company has identified a specific advantage in terms of resources, skills, or cost that creates an opportunity.
Similar needs: A company has identified one or more countries that have similar market needs.
Product/service lifecycle: A product or service has reached maturity or decline in its home market, and a company is trying to reinvigorate the product or service.
Understanding the drivers for expansion, marketing specialists can identify host countries and develop plans to penetrate these markets.

How Marketing Internationally Differs From Domestic Marketing

Marketing in the international setting involves a broadening of the scope of research to determine in which specific markets to participate. In the domestic setting, marketers deal with one general market. As a part of positioning a product or service, they segment the market based on factors such as gender, age, and income or the size of a business and the sector of the economy in which it operates.

When expanding internationally, marketers must first identify criteria for market selection and then relate it to the specifics based on new, often complex, international markets. The specific criteria may include the level of economic development and level of technology adoption. Initial target market research may reveal that it may not have the technical infrastructure, communications, or network to support the proposed product or service. Also, the market's level of economic development may be such that it is not ready to adopt the new product. Depending on the product or service, either of these cases may lead to the decision not to pursue opportunities in these markets.

Special Considerations of Culture, Religion, and Politics

Once a company has selected potential target markets, it has to conduct an in-depth market study. An understanding of the target country's culture, potential impact of the religion, and state of politics is critical to the acceptance and promotion of a product and service.

Culture includes the values, attitudes, and perceptions of people in a society. It shapes how people interact with one another and how people perceive the world. It is important to understand a country's culture to avoid costly errors that may result in rejection of a product and service by market participants. Religion is closely tied to culture. Religious beliefs and taboos can also have an impact on market acceptance and on how a company shapes the marketing mix. Finally, companies must be aware of the local political system and the power of participants such as local companies and specific interest groups that may be impacted. It is important to identify whether competitors and/or interest groups have strong political influence and whether there are political conflicts between the company's home country and the target country.

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