Analyzing The Factors That Encourage Firms To Get Into International Marketing

A number of factors may encourage a company to get involved in multinational marketing.  Some of these encouraging and discouraging factors include the following:

Encouraging Factors

Discouraging Factors

Saturated domestic market Tariffs
Domestic market regards product as obsolete Import quotas
Domestic government or environment becomes anti-business Other restrictive foreign government controls
Foreign market opportunities  
Foreign production opportunities  
Formation of economic communities  
GATT accords  
Language communication obstacles  

To begin with, certain considerations about the domestic market, such as market saturation, lack of new markets, or technological obsolescence, may encourage a domestic company to move into the international market.  Whatever the reason, San Jose Translation Services workers and localization consultants suggest that “A saturated domestic market may lead a firm to consider the international market as an opportunity for extending the product life cycle.”  The obsolete product could be exported into overseas markets where it may be perceived as technologically acceptable.

In addition, there may be times when either the domestic government or the business climate becomes anti-business.  In the United States, for example, there have been periods of strong pro-labor sentiment and periods of increased regulation of business that have hastened the entry of some businesses into international involvement in efforts to escape the effects of developments at home.

On the other hand, many factors encouraging world trade stem from foreign opportunities rather than domestic problems.  Quite clearly, there are companies that view overseas business the same way they view domestic business-both provide opportunities.  Such companies are drawn into international trade because they see an opportunity and wish to take advantage of it and have the language translation and other resources needed to make their efforts successful.  According to San Francisco Translation Services workers, “The opportunity may present itself in the form of market opportunities (new and untapped demand, growing market segments, etc.) or in the form of production opportunities (lower cost of labor, raw materials and transportation costs, or more productive labor facilities, and so on).”

Another major factor is the growing formation of economic communities where worldwide languages, currencies and trade laws differ.  Formation of economic communities makes for greater communality in trade among all the members of those communities and in the dealings that other nations experience with those community nations.