Why bother with international markets?

All countries trade to some extent—we live in an interdependent world. In general, trade expands as a country develops and industrializes. The largest traders are highly developed nations. For example, the United States, Japan, and West Germany are the largest exporters. In combination, exports from these three countries account for about 40 percent of world trade in manufactured goods. The United States exports about 20 percent of all its manufactured goods and 40 percent of all agricultural output. In addition, the United States imports about 18 percent of the goods traded among countries.

The largest changes in world trade are usually seen in rapidly developing economies. Over the past decade, for example, exports from Hong Kong, Taiwan, and Singapore have risen dramatically.

It’s easy for a marketing manager to fall into the trap of forgetting about international markets. After all, Canada is one of the most prosperous markets in the world. Why go to the trouble of looking elsewhere for opportunities?

Program for Export Market Development assists Canadian firms in the area of export promotion.

Canada-U.S. Defense Production Sharing Program and the Canada-U.S. Defense Development Sharing Program allow Canadian firms to compete alongside U.S. firms to provide defense supplies.

The Grains and Oilseeds Program offers assistance with producing and marketing oilseeds and their products.

Export Financing program assists with export financing.

Export Permits and Controls is a program designed to make exporters aware of the requirements of the export/import acts.

WIN Exports program operates a world information network designed to help Canadian trade development officers around the world match Canadian suppliers with market opportunities in their region.

Technology Development department helps to promote the export of Canadian high-tech products.

Trade Commissioner Services Abroad operates a worldwide network of trade commissions to aid companies seeking export markets. They help identify agents and provide information on market and financial conditions among other services.

Info Export provides an overall guide to all export programs and services of the federal government.

International Trade Centers provide a wide range of trade services from locations all across Canada.

Other government departments that provide export assistance include:

The Department of Regional and Industrial Expansion has marketing branches in Ottawa and regional branches throughout the country.

Export Development Corporation provides financial services to Canadian exporters and foreign buyers to develop Canadian export trade.

Canadian Commercial Corporation acts as a prime contractor when purchases of Canadian goods are made on a government-to-government basis.

Canadian International Development Agency administers and operates Canadian development assistance in over 80 countries.

Provincial governments directly assist exporters in their provinces.

Nongovernment support is available from the Canadian Exporters Association, chartered banks, the Canadian Manufacturers Association, the Canadian Chamber of Commerce, bilateral trade associations, and centers for international business studies.

The answer to that question is important. The world is getting smaller. Advances in communications and transportation are making it easier to reach international customers. Product-market opportunities are often no more limited by national boundaries than they are by provincial boundaries in Canada. Around the world there are potential customers with needs and money to spend. Ignoring those customers doesn’t make any more sense than ignoring potential customers in the same town. The real question is whether the firm can effectively use its resources to meet customers’ needs at a profit.

International expansion sometimes offers the firm a way to extend its product life cycle. You already know that profits from a product-market ultimately decline as growth slows. But the same product may be at different life cycle stages in different markets. That’s good motivation to consider potential markets in other countries, especially if the product life cycle isn’t as far along and the marketing manager can «transfer» marketing know-how—or some other competitive advantage—it has already developed. The marketing manager who carefully looks for those opportunities overseas often finds them. Different countries are at different stages of economic and technological development, and their consumers have different needs at different times.

Regardless of the life-cycle stage, if overseas customers are interested in the products a firm offers (or could offer), serving them may make it possible to lower costs by achieving better economies of scale. And that may give a firm a competitive advantage both in its home markets and abroad. This sort of competitive pressure may actually force a marketing manager to expand into international markets. A marketing manager who’s only interested in the «convenient» customers in her own backyard may be rudely surprised to find that an aggressive, low-cost foreign producer is willing to pursue those customers even if doing it isn’t convenient. Many companies that thought they could avoid the struggles of international competition have learned this lesson the hard way.

Unfavorable trends in the uncontrollable variables at home—or favorable trends in other countries—may make international marketing particularly attractive. For example, Canada’s population growth has slowed and income is also leveling off.

In most other places in the world, population is increasing rapidly and income is increasing. Marketing managers won’t be able to rely on the constant market growth that drove Canadian sales since World War II. For many firms, growth—and perhaps even survival—will come only by taking aim at more distant customers.

Our point here is basic. In today’s world, it doesn’t make sense to ignore international markets and casually assume that all of the best opportunities are at home. Careful analysis of all of the facts may lead to that conclusion. But not stop­ping to consider international opportunities can be a costly mistake.

Дата добавления: 2015-11-14