Join Doug Ladd for an in-depth discussion in this video The growing global economy, part of Marketing Foundations: International Marketing.
- Did you know that Coca-Cola gets almost 60 percent of their sales from outside of the United States? Considering that Coca-Cola's a US company, the fact that they get more than half their sales from abroad is surprising to most people, but it gets even more interesting. Intel gets roughly 84 percent of their business from abroad, and Boeing gets half of theirs, but this isn't easy, it isn't for the faint of heart. Expanding your business to international markets can be very challenging. It costs money to do it right, and sometimes the payoff can take years to be realized, so why do it, why go through all the challenges? The answer is a simple word, growth.
I'm sure you know the US is the largest economy in the world, but did you know the US population represents just 4.4 percent of all the people on earth? If you're a US based business, getting all your revenue within our borders, you're missing what some would call a big opportunity. What's more, the US economy is growing at less than three percent, but other economies such as China and India are growing three times faster or more. On the other hand, if you run a business based outside the US, you may want to take part of the almost 17 trillion dollar US economy.
Just for perspective, China's economy was just over nine trillion dollars in 2013. Certainly your competitors aren't standing still, they are likely expanding into new geographies. If they get into those new markets before you do, and establish a strong position, it makes your job only more difficult later. If you're in the marketing function at your company, one of your many responsibilities is to seek out, analyze, and make recommendations for where your company can grow.
If you're only looking for that growth in your home market, well I think you get the point. Another key part of your job is to identify new offerings, products and services that would fit within your company. Some great ideas for innovation are often found by looking at how people solve problems when they have limited resources. Cell phones were much more popular in Europe before being adopted in the US, because virtually every home had a landline, but that wasn't true in Europe.
Others come from gathering insights from different cultures. The idea for Starbucks was born out of the espresso bars in Italy. The marketing role is one of the most dynamic and interesting in any organization. Looking for opportunities to expand your business by moving to new geographic markets, and finding offerings to add to your portfolio means you have to pay attention to what's happening around the globe, and when you do chances are you'll discover a new venue to get growth for your company. What does this mean for you? As a marketer you should be looking at the growth rate for your product in your industry in your home market, and comparing that to the growth rate for your industry in your product categories in other markets.
In what countries is the demand for your product or service growing faster? Are your competitors going into those markets? Do you see innovations or substitutes that would affect the adoption of your product in these new countries? Think of how moving into other geographies can help your company or product grow even faster.
The course also investigates options for global expansion, such as exporting, licensing, joint ventures, and direct investment, and details how to put together a successful marketing mix using distribution, promotional methods, and translation. Plus, learn where to turn for more information about your specific target markets.
- The rise of the global consumer
- Learning about customers in global markets
- Accessing foreign markets
- Adapting products
- Balancing risks and rewards