Strategies for Reaching Global Markets
Many companies want to expand to the global market to increase overall market share and increase profits. In fact, some of the most successful businesses in the world have international market shares. While the product or service offering often changes to adapt to the foreign country needs or culture, the overall brand and product name remain the same.
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Franchising
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Franchising your business is a common way to expand your brand into international markets without having to invest too much money on personnel or facilities. According to Idea Marketers, franchising is typically one of the lower-risk business models that can take a domestic business to the global playing field. Franchises typically are sold to foreign investors. The home company allows the foreign investor to use their name, logo and brand, and then collects a specific percentage of the store's profits. If you are considering this type of global expansion method, be aware that your staple products may have to change to meet a foreign country's cultural needs. For example, you may sell your hamburger franchise to an Indian investor, and your franchise store will then feature vegetarian burgers.
Exporting
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Exporting offers a low-risk way to expand into global markets, but it can be quite expensive. The premise for this type of global marketing strategy is to sell your domestic products to an international market. This model typically works well for online companies with a well-known Web presence and brand. The challenge to this type of global marketing business is that shipping costs can be quite high, and the parent company often must cover many of those fees.
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Contract Manufacturing
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Contract manufacturing occurs when a domestic company moves its manufacturing processes to foreign soil. This type of global practice is commonly done with clothing, shoes and textiles. It is a popular way for domestic companies to reduce costs on both materials and personnel. By moving all the manufacturing to an offshore location, the company then markets itself to a new, global market.
Joint Venture
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Some domestic companies market themselves in the international market by creating joint ventures. A joint venture is typically when one company partners with another company. In a global sense, this may occur when a domestic company partners with a foreign company that offers a different product to the same target market. An example of this is a car manufacturer partnering with a stereo manufacturer. The two companies work together to share marketing and advertising dollars and are able to reach previously untouched target markets through their alliance.
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References
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