Page 197 - Cambridge IGCSE Business Studies
P. 197
14: Marketing strategy
Problems of entering foreign markets
Although entering new markets abroad offers huge marketing opportunities,
there may also be problems for businesses entering foreign markets. Figure 14.3
identifies the main problems a business may face when making the decision to sell
its products abroad.
Differences in
language and
culture
Differences in Lack of
legal controls market
to protect knowledge
consumers Problems of
entering
foreign
markets
Social Economic
differences differences
195
Figure 14.3 Problems of entering foreign markets
Differences in language and culture
It is easy to understand the difference in language between countries, but much
more difficult to know the differences between cultures. However, both language
and cultural differences can cause problems for a business wanting to sell its goods
and services in another country.
Some words do not translate from one language to another, or may have a
KEY TERM completely different meaning in another language.
Businesses must also consider cultural differences; for example, colours,
Domestic market: the market
for goods and services in the numbers and symbols have different meanings and importance in diff erent places.
business’s own country. In some countries, for religious or other reasons, it would not be appropriate to use
certain images in advertisements.
Economic diff erences
The average income of consumers differs widely between countries. The cost of
selling goods and services abroad is often higher because of transport and other
exporting costs. This might mean that the price charged to overseas consumers is
Developed and developing higher than those in the domestic market. Consumers must have the income to
economies: see Chapter 2, be able to afford the prices charged. This problem is most noticeable when a business
page 23. in a developed economy wants to sell its goods and services into a developing
economy.
Social diff erences
In some countries social factors such as the age structure of the population, the
importance of family and the role of women all have an impact on business activity.
For example, countries where the population has a high proportion of young
