Importance of International Marketing – SS3 Marketing Lesson Note (First Term)

International marketing is the selling of a company’s products and services in countries outside its home market.

Behavioural objectives

By the end of the lesson, students should be able to:

1. Define international marketing.
2. State the reasons why companies trade internationally.
3. State the importance of international marketing to a company.
4. Explain how international marketing benefits the home country.
5. Distinguish between domestic marketing and international marketing.

What is international marketing?

International marketing is the planning and carrying out of marketing activities to sell goods and services across national borders.

• Home market: the country where the company is based, also called the domestic market.
• Foreign market: any country outside the home country where the company sells.
• Marketing activities: product design, pricing, promotion and distribution, adjusted for each country.
• Nigerian examples: export of cocoa, cashew nuts and sesame seeds to other countries.

What is the difference between domestic and international marketing?

Domestic marketing sells within the home country, while international marketing sells in one or more foreign countries.

Why do companies trade internationally?

Companies trade internationally to find new markets, earn more profit and gain from conditions that exist in other countries.

• Saturated home market: the local or domestic market may already be saturated, so sales cannot grow there.
• Innovative world products: the company can take advantage of an innovative product that is already successful in the world market.
• Financing benefits: setting up manufacturing and assembly bases in certain overseas countries can bring financing benefits.
• Access to trading blocs: a base in one country gives access to the trading bloc to which that country belongs.
• Increased total profits: a larger market brings more sales and more profit.
• Favourable policies: the company can take advantage of favourable government and economic policies of the developed countries.
• Product success and efficiency: selling in more markets increases the chances of product success and efficiency.

Why is international marketing important?

International marketing is important because it helps a company grow, earn more and stay competitive.

• Counters slow growth: it helps a company whose industry is growing slowly at home.
• Sustains and boosts revenue: sales abroad add to the income earned at home.
• Creates synergy: it builds harmony between domestic and overseas operations, so each supports the other.
• Better use of capacity: extra orders from abroad let the company make fuller use of its productive capacity.
• Stays ahead of competitors: a company present in many countries is harder for rivals to overtake.
• Provides employment: more production and distribution create more jobs.

How does international marketing benefit the home country?

International marketing benefits the home country by bringing in income and creating work for its people.

• Foreign exchange: exports earn foreign currency for the country.
• Jobs: more production and export activity employ more workers.
• Government revenue: larger company profits can raise the taxes the government collects.
• Wider choice: trade with other countries gives consumers access to more products.

Evaluation

1. Define international marketing.
2. Give four reasons why companies trade internationally.
3. State four reasons why international marketing is important.
4. Mention two differences between domestic marketing and international marketing.

Assignment

1. List four reasons why a company may trade internationally.
2. State three ways in which international marketing benefits a company.