International Marketing International Market - Why?

Before adventuring into an international market, it is pivotal for a business to establish a successful and stable company in their domestic market. Mull Organic Foods Ltd (MOF Ltd) are a company who have ongoing sales in their domestic market and a company who are growing. To continue this growth, the next step would be to launch into the overseas market.

The most obvious reason to do this would be to increase sales. If MOF selects the correct market to expand into, their market will grow alongside their sales. However, this does not necessarily mean they will make profits. If transportation or communication costs become too high, MOF will struggle to make any real profit, which is where the company's analysis of their chosen country must be accurate.

Another reason to expand overseas would be to potentially reduce costs. Expenses on things such as resources and labour are far greater in the UK when compared to the likes of China. The initial cost to launch the business in another country could be a daunting figure, however this can easily be reclaimed and turned into profits based upon the savings it would make. MOF would still have to ensure the quality of their product was at a high in order to gain a reputation for themselves. If they continue to grow, it would make sense to use machinery to produce high quality products as opposed to hand crafting. This would reduce labour costs however the price of machinery can also differ depending on the country.

The final reason would be the competitiveness of their domestic country, or the lack of competition in a foreign market that MOF could exploit. MOF has a relatively decent size of clientele, however a crowded market can see their profit margins become thin. By introducing an oversees area of the business, MOF can potentially find a gap in the