It’s easy for a marketing manager to fall into the trap of forgetting about international markets, especially when the firm’s domestic market is prosperous. Why go to the trouble of looking elsewhere for opportunities?
The world is getting smaller:
Advances in communications and transportation are making it easier and cheaper for even small firms to reach international customers. And national boundaries no longer limit market opportunities. Around the world, potential customers have needs and money to spend. Ignoring these customers doesn’t make any more sense than ignoring potential customers in the same town. The real question is whether a firm can effectively use its resources to meet these customers’ needs at a profit.
Developing a competitive advantage at home and abroad:
If customers in other countries are interested in the products a firm offers – or could offer – serving them may result in even more economies of scale. Lower costs (and prices) 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. Marketing managers who are only interested in the "convenient" customers in their own backyards may be rudely surprised to find that an aggressive, low-cost foreign producer is willing to pursue those customers – even if doing it is not convenient. Many companies that thought they could avoid the struggles of international competition have learned this lesson the hard way.
Getting an early start in a new market:
A marketing manager looking for development opportunities in international markets often finds them. Different countries are at different stages of economic and technological development, and their consumers have different needs at different times. For example, prior to the unification of Germany, appliance producers in East Germany found their best market opportunities in other countries, where consumers had more money.
A company facing tough competition, thin profit margins, and slow sales growth at home may get a fresh start in another country where demand for its product is just beginning to grow. A marketing manager may be able to "transfer" marketing know-how – or some other competitive advantage – the firm has already developed.
Finding better trends in variables:
Unfavorable trends in the marketing environment at home – or favorable trends in other countries – may make international marketing particularly attractive. For example, population growth in the United States has slowed and income is leveling off. In other places in the world, population and income are increasing rapidly. Marketing managers for U.S. firms can no longer rely on the constant market growth that drove increased domestic sales during the last 40 years. For many firms, growth – and perhaps even survival – will come only by aiming at more distant customers.
The 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 exist "at home."