In the past, small businesses and startups were generally restricted to domestic markets. Depending on the sector, it would take companies years or decades before they could even consider selling directly to buyers in international markets.
Thankfully, however, those days are now long gone. With the power of modern technology, small businesses can scale quickly and sometimes even market their products from the get-go to global customers.
Of course, this comes with its own set of problems, not only in terms of supply chain and business structure, but in the way that you market your product. Therefore, having a thorough understanding of the differences between domestic and international marketing is essential in this context.
Domestic vs International Marketing: The Basics
At first glance, the distinction between domestic and overseas marketing may not seem obvious; both involve the same basic objective of creating a connection between your products or services, and the prospective buyers whose needs and wants can be fulfilled by them.
There are key differences, though. For one thing, be it in terms of area covered, growth potential, resources required, and overall complexity, domestic marketing is dwarfed by international marketing.
They both have significant advantages and disadvantages, too. Since it is restricted to only one country, domestic marketing has limited growth opportunities. On the plus side, managing operations is much easier due to the smaller area covered, and a relatively homogenous customer base.
International marketing, meanwhile, gives you access to lucrative new revenue sources and almost limitless growth opportunities. But all this comes at a high cost, both in terms of finance, technology, human resources, and expertise.
These costs – whether incurred financially or otherwise – directly translate into a much higher element of risk involved, too. Due to the inherently complex nature of international business, and your inevitable unfamiliarity with foreign markets, you should tread carefully when considering your global expansion strategy.
To better illustrate the difference between domestic and international marketing, let's consider the following two factors:
The Role of Government and Politics
The role of government is always a significant factor in any business. In domestic markets, you have to be wary of regulations and the impact changes in government policies may have on your sector, especially in terms of taxes, labour laws, the environment, and interest rates.
However, government policies can also play a pivotal role in international marketing, too. National governments tend to have a protectionist attitude towards domestic businesses, and when you make a foray into a new foreign market, this can create several considerable hurdles.
Tariffs, investment controls, and other forms of government intervention are quite common obstacles, and can significantly affect your marketing operations. Instead of worrying about just one set of rules and regulations, you have to take into account the local laws in all your foreign markets, too.
Compliance is also a major headache whenever you enter this field, especially as a small business. For example, the product safety standards in your domestic market may be lower, especially if you are outside the European Union (EU). If you plan to expand to EU markets, you will have to change your production and marketing standards if you want to succeed.
Finally, international politics can play a significant role, often to the detriment of business. The best example of this is the ongoing trade war between the US and China, with both nations imposing tariffs and affecting countless third parties all across the globe. Consumer goods manufacturer Huawei has suffered in this regard, with their reputation and their subsequent marketing efforts taking a massive hit in the US market.
The Significance of Language and Culture
The second issue is more of a cultural one, but can have consequences that are just as serious. For instance, English may be the dominant language in terms of the number of speakers across the globe, but there are only five nations in the world with a majority of native speakers. When marketing your product in a foreign market, the local language can present a formidable barrier – a limitation that is largely absent in domestic marketing.
Of course, notable exceptions do exist, often in the form of large, multi-linguistic nations such as India. But, by and large, this is a viable concern: the Chinese, Spanish, and Arab markets are littered with examples of marketing mistakes, usually committed by brands from the US and Europe.
For example, when Pepsi used its marketing slogan "Come Alive" in China, translation errors left Chinese buyers with the message: "Pepsi brings your ancestors back from the dead!" In a similar faux pas, the Coors beer tagline "Turn It Loose" became "Suffer From Diarrhea" in its campaigns for Spanish-speaking markets.
Apart from language, cultural sensibilities can also pose challenges to businesses in international marketing. For example, in many Arab countries such as the United Arab Emirates, feet are generally considered dirty or unclean. Putting the national flag on footwear can therefore come across as a great insult, as Puma found out when they released a special edition shoe to mark the 40th foundation day of the UAE.
Market research is always important in business, be it domestic or international. But in the latter, it has even more significance, due to a total lack of familiarity with the local language and especially the target country's customs. A lack of due diligence can significantly hamper your marketing efforts and may even create a negative long-term impact on your brand image and credibility.
Which Is More Important for Business?
It is not really possible to draw a direct comparison between domestic and international marketing in this regard; after all, growth is the primary long-term goal for any business. Therefore, you cannot rule out the possibility of international expansion at some point in the future, especially if you work in a sector which has the potential for foreign market entry.
There is no doubt that the Internet (and other digital technologies) have made global markets more accessible than ever before. But significant challenges remain, and small businesses must carefully weigh the pros and cons before committing to a global marketing campaign.
Unless you work exclusively in an export-oriented market, focusing more on your domestic market is preferable from both a practical and safety perspective. However, business is a dynamic environment and opportunities for foreign expansion may arise. Therefore, it is highly beneficial for small business owners to understand the core differences between domestic and international marketing, and to plan for them accordingly if you do indeed take the plunge overseas.
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