Login

International Market: Definition & Explanation

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Trade Agreements: Definition & Effects

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:00 What Is An…
  • 1:05 Challenges
  • 3:00 Lesson Summary
Add to Add to Add to

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Login or Sign up

Timeline
Autoplay
Autoplay
Create an account to start this course today
Try it free for 5 days!
Create An Account

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Shawn Grimsley
If you've sold a product on E-bay outside the United States, you sold your product in an international market. In this lesson, you'll learn what an international market is and explore some of its key concepts.

What Is an International Market?

A market can be defined simply or rather complexly. In the simplest terms, a market is a system of institutions, rules and procedures relating to the exchange of goods and services between persons or organizations. Markets can be defined in different ways, including by geography, customer, product or even the behavioral characteristics of consumers.

An international market is defined geographically as a market outside the international borders of a company's country of citizenship. A company, to the extent that it is a legally distinct entity from its owners like a corporation, is usually a citizen of the country where it is organized. IBM, for example, was formed in the United States. Thus, any geographic area outside the territorial boundaries of the United States where IBM conducts business is IBM's international market. The conceptual opposite of an international market is the company's domestic market, which is the geographic region within the national boundaries of a company's home country.

Challenges

International markets do provide distinct challenges to businesses. Let's take a look at some of the primary challenges.

Cultural Challenges

The preferences, needs, wants and desires of foreign consumers are often different from those of the consumers in the company's domestic market. This means marketing attributes ranging from product development, to advertisement, to distribution may have to vary not only from the domestic market to the foreign market, but even from different foreign markets. In many respects, you need to think of an international market as a group of foreign markets consisting of one or more countries.

For example, some cultures do not do their shopping in supermarkets, so you'll have to place your grocery products in numerous small grocery stores rather than two or three large grocery store chains. You'll also need to be careful with product names. In the past, companies have made embarrassing mistakes by not changing a product name that translates into a 'dirty' slang word or phrase in the foreign tongue.

Political Challenges

The political environment of countries differ. Some may be hostile to your market entrance, and some may even prevent you from entering the market. You will often have to contend with tariffs (taxes on imports), quotas (limits on imports) and other barriers to entry into a particular international market. Moreover, you may have to contend with unstable governments and societies.

Economic Challenges

To unlock this lesson you must be a Study.com Member.
Create your account

Register for a free trial

Are you a student or a teacher?
I am a teacher
What is your educational goal?
 Back

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back

Earning College Credit

Did you know… We have over 95 college courses that prepare you to earn credit by exam that is accepted by over 2,000 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it free for 5 days!
Create An Account
Support