The benefits of using the Internet to exploit international markets are straightforward: Additional revenue can be generated from new international markets. Higher margins, or profits because of lower costs, since:
- less need for local agents and distributors
- less need for local fulfilment infrastructure such as shops or distribution centres
- less need for the expense of promoting services locally – this can be achieved through less costly online promotion methods such as search engine optimisation.
Before investing and committing resources to each international market – the online revenue potential should be analysed. Ask – is there a customer need?Profile – who needs it? e.g. in a B2C market:
- Demographics include age, sex, income, etc.
- Economic factors – including GDP per person and income distribution
- Cultural – including nuances and cultural idiosyncrasies
- Technological factors – the Internet ratio Access : Choose : Buy is use to build a demand estimate
- Competitor activity – what online services already exist in each country?
There are many barriers to online international trade. Here are four:
1. Psychological – worries and fears about the unknown
2. Operational – resourcing issues
3. Organisational – restructuring issues
4. Product/ market specific – the need to define a strategy
There are many other constraints that marketers have to be aware of…move onto the next screen for more.
In each international market there are many additional challenges and constraints. Here are six:
1. Cultural – the risk of misleading or offending people from other cultures
2. Economic – the levels of wealth are too low in a country to gain returns
3. Privacy laws – to protect consumer data and privacy
4. Product laws – who is liable if there is a problem with a product?
5. Advertising laws – designed to avoid misrepresentation of products
6. Taxation – eCommerce taxation varies significantly in different countries
The differences in law in each country and the speed with which legislation changes means consulting specialist lawyers is essential. Marketers have several strategic options with international online trade:
- Do nothing – stay local – refuse international orders
- Do minimum – only offer the standard product without significant changes in the marketing mix
- Tailored marketing when marketing activities are adapted for non-domestic markets
- Establish a presence in a specific export market
- Go global and seek out global segments or smaller global niches
Key strategic issues for companies using the Internet to market internationally are:
- Market selection – select markets that require your Internet Value Proposition and that also have weak competitors
- Check whether channel partners are required for order fulfilment and servicing of end customers?• Standardisation – can the product or other elements of the marketing mix such as promotion be standardised?
- Localisation – required tailoring of Website content, products and services for countries or regions with:
- different product needs
- language differences
- cultural differences
To compete in the global marketplace, marketers must:
- Understand their customers, market structures, local competition and local rules and regulations.
- In addition, marketers may have to provide:
– 24-hour customer support for order taking and customer service
– regulatory and customs-handling, including experience to ship internationally