AQA A-Level Business (7138)

## Learning Outcomes

- Understand what international marketing means and why it involves more than promotion alone
- Explain the difference between standardisation, adaptation and glocalisation
- Identify the main market entry methods for overseas markets and compare them by cost, risk, control and speed
- Analyse how exchange rates, tariffs and quotas affect pricing, competitiveness and profit
- Apply international marketing ideas to business contexts using clear chains of analysis and evaluation
- Structure strong evaluative answers on whether a business should adapt or standardise in overseas markets

## AQA A-Level Business (7138) Syllabus

For the AQA A-Level Business (7138), you are expected to understand international marketing, with a focus on the following syllabus points:

![International marketing decisions across product, price, promotion and place, comparing standardisation, adaptation and glocalisation in overseas markets.](https://static.pastpaperhero.com/images/aqa-a-level-business-7138-marketing-management-international-marketing_00.png)

_International marketing strategy links product, price, promotion and distribution decisions with standardisation, adaptation and glocalisation across national markets._

- Know that international marketing involves selling and marketing products in overseas markets, not just promoting them abroad
- Explain the difference between **standardisation** and **adaptation** in the marketing mix
- Understand why businesses may need to adjust product, price, promotion and distribution in different countries
- Identify methods of entering overseas markets, including exporting, licensing, franchising and joint ventures
- Analyse how exchange rate changes can affect competitiveness, sales revenue and profit
- Understand the effects of **tariffs** and **quotas** on international sales
- Assess when a business should use a global approach and when it should respond to local market differences

## Test Your Knowledge

_Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, look more closely at that area during your revision._

1. What is the difference between standardisation and adaptation in international marketing?
2. Why might a business choose exporting rather than a joint venture when entering a foreign market?
3. How can a stronger pound affect a UK exporter’s sales abroad?
4. What is the difference between a tariff and a quota?
5. Why might a business use a glocal approach rather than a fully standardised one?

## Introduction

International marketing means making marketing decisions for customers in other countries. That includes the whole marketing mix: product, price, promotion and place. In exams, students often make the mistake of treating this as only an advertising topic. It is much broader than that.

When a business enters overseas markets, it must decide how similar its offer should be across countries. Some firms keep a very similar brand and marketing mix everywhere. Others change products, prices, messages or distribution methods to suit local conditions. This choice affects sales, costs, brand image and long-term success.

> **Key Term: international marketing**
> Marketing goods or services across national borders, including decisions about product, price, promotion and distribution in overseas markets.

### Standardisation, adaptation and glocalisation

The core issue in international marketing is whether the business should sell in much the same way everywhere or change its marketing mix for each country.

> **Key Term: standardisation**
> Using the same or very similar marketing mix across countries to create consistency and reduce costs.
>
> **Key Term: adaptation**
> Changing elements of the marketing mix to suit local culture, laws, tastes, language, income levels or distribution conditions.
>
> **Key Term: glocalisation**
> A strategy in which a business keeps a standard global brand but adapts some parts of the marketing mix for local markets.

A standardised approach can bring several advantages:

- lower marketing and production costs
- economies of scale
- simpler management
- faster entry into new markets
- consistent global brand image

For example, a business such as Apple benefits from a strong global identity. A similar brand image, store style and product design can help create recognition in many countries. If the product meets broadly similar needs everywhere, standardisation may be efficient.

However, standardisation has limits. Different countries may have different:

- languages
- cultural values
- religious expectations
- legal rules
- income levels
- buying habits
- retail structures

A business that ignores these differences may damage demand. A promotion that works in one country may be unclear or offensive in another. A product size, flavour or packaging design may be unsuitable. A premium price may be too high in a lower-income market.

Adaptation aims to improve local fit. McDonald’s is a common example. It keeps a recognisable brand worldwide, but adapts menu items in some markets to reflect local tastes and religious rules. That can increase customer appeal and market share.

The drawback is cost. Adaptation may require:

- extra market research
- changes to packaging or ingredients
- new advertising campaigns
- local staff training
- more complex supply chains

This reduces economies of scale and can weaken brand consistency if taken too far.

A balanced answer in exams is often that many successful businesses use glocalisation. They standardise the core brand but adapt selected parts of the marketing mix. This gives some cost savings while still responding to local needs.

> **Test Tip:** If the question asks you to assess standardisation versus adaptation, do not give a one-sided answer. Use a clear chain such as: standardisation lowers cost and supports a consistent brand, but adaptation may raise sales if customer needs differ significantly.

### What affects the choice in overseas markets

The choice between standardisation and adaptation depends on context. AQA rewards answers that apply ideas to the business in the question, not generic lists.

Key factors include culture and consumer tastes. If preferences vary strongly between countries, adaptation becomes more valuable. Food and clothing businesses often face this issue more than firms selling highly technical or universal products.

Legal differences also matter. Product labelling, safety rules and advertising restrictions may force changes. Even if a firm wants to standardise, law may prevent a fully identical offer.

Income levels and price sensitivity affect pricing decisions. A product positioned as premium in the UK may need a lower-priced version abroad if consumer purchasing power is lower. That change could involve product adaptation as well as price adaptation.

Distribution systems matter too. In one market, e-commerce may dominate. In another, local retailers or agents may be essential. So international marketing includes place decisions, not just promotion.

Internal business factors also shape the decision:

- finance available for market research and promotion
- staff expertise in overseas markets
- production capacity
- overall corporate objectives
- need for growth
- strength of the existing brand

A firm with limited finance may prefer exporting a fairly standard product because it is cheaper and simpler. A larger business with more resources may be able to invest in local research and tailored campaigns.

International marketing also links closely with other functions. If the business adapts products for a foreign market, operations may need different materials or processes. HR may need local recruitment and training. Finance must fund the market entry and manage the risk.

> **Key Term: market entry methods**
> The different ways a business can begin selling or operating in overseas markets.

### Market entry methods and their marketing implications

A business must also decide how to enter the foreign market. This affects the level of control it has over the marketing mix.

> **Key Term: exporting**
> Selling goods or services produced in one country to customers in another country.
>
> **Key Term: licensing**
> Giving a foreign business the right to produce or sell a product, brand or patented idea in return for a fee or royalty.
>
> **Key Term: franchising**
> Allowing a foreign operator to use a full business format and brand in return for fees and royalties.
>
> **Key Term: joint venture**
> A business arrangement in which two firms share ownership, costs, risks and profits in a separate venture or partnership.

A simple comparison helps:

- **Exporting:** usually lower cost and lower risk than setting up abroad, but less control over local distribution and marketing
- **Licensing:** fast expansion with limited capital required, but reduced control over quality and brand use
- **Franchising:** allows rapid growth and greater consistency than licensing because the full business model is used, but the franchisor still depends on franchisees maintaining standards
- **Joint venture:** gives local knowledge and shared risk, but control is shared and disagreements may arise

If a business lacks local market knowledge, alliances with local firms can be useful because they understand customer tastes, culture and distribution channels. This is one reason joint ventures can support international marketing success.

Worked application example:

A UK drinks firm wants to enter India.

- If it chooses **exporting**, it can test demand with lower initial cost.
- If it chooses **licensing**, a local producer may understand local tastes and regulations better.
- If it chooses a **joint venture**, it gains local knowledge and shares risk, but must share decision making.
- If it chooses **franchising**, this only suits the business if it has a full format that can be replicated, such as a café chain.

The best method depends on the business’s objectives. If speed and low capital cost matter most, licensing or franchising may be attractive. If brand control matters most, direct exporting or a tightly managed joint venture may be better.

Students often confuse licensing and franchising. Licensing is mainly about rights to use intellectual property, products or brands. Franchising is broader: it usually includes the whole business model, operating systems and ongoing support.

> **Test Tip:** When comparing entry methods, use four headings in your mind: cost, risk, control and speed. This gives your answer structure and helps you analyse rather than describe.

### Exchange rates, tariffs and quotas

Even a strong marketing strategy can be affected by external factors.

> **Key Term: exchange rate**
> The price of one currency in terms of another.
>
> **Key Term: tariff**
> A tax placed on imports.
>
> **Key Term: quota**
> A limit on the quantity of imports allowed.

Exchange rates affect overseas selling prices, costs and profit. Suppose a UK business exports to the USA.

If **£1 = $1.25**, a product priced at **£80** costs the US customer:

- Selling price in dollars = £80 × 1.25
- Selling price in dollars = **$100**

Now suppose the pound strengthens to **£1 = $1.40**.

- New selling price in dollars = £80 × 1.40
- New selling price in dollars = **$112**

The same UK product now looks more expensive to US customers. If demand is price elastic, sales may fall. Lower sales may reduce market share and profit.

If the pound weakens to **£1 = $1.10**:

- New selling price in dollars = £80 × 1.10
- New selling price in dollars = **$88**

Now the product is cheaper in dollar terms, so it may become more competitive.

However, do not assume a weaker pound is always good for UK exporters. If the business imports materials or components, costs may rise. So the gain from stronger overseas demand may be partly cancelled out by higher input costs.

Tariffs raise the price of imports. If a country places a tariff on UK goods, the exporter may have to:

- raise prices and risk lower demand
- accept lower profit margins
- move production closer to the market
- switch to licensing or direct investment

Harley-Davidson is a useful business example of how tariffs can change international strategy. Higher tariffs can make exporting much less attractive and may push a firm to produce in other countries instead.

Quotas are different. A quota limits the quantity that can be imported. Even if demand is strong, the business cannot sell beyond the allowed amount. This restricts growth and may reduce economies of scale.

The impact of tariffs and quotas depends on:

- price elasticity of demand
- brand loyalty
- availability of substitutes
- whether the business can produce locally
- how profitable that market is

A premium brand with loyal customers may absorb some tariff impact more easily than a mass-market brand competing mainly on price.

### How to structure an evaluative answer

Many higher-mark questions on international marketing require evaluation, not just explanation. A strong structure is:

- on the one hand
- on the other hand
- it depends on
- justified judgement

For example, on the one hand, standardisation may lower costs and strengthen brand consistency. This is especially useful if the product has universal appeal and the business wants economies of scale.

On the other hand, adaptation may increase demand if tastes, laws and incomes differ sharply between countries. That can be more important than cost savings, especially in food, fashion or services.

Your judgement should depend on factors such as:

- the type of product
- the size and finance of the business
- cultural distance between home and target market
- importance of brand consistency
- strength of local competition
- need for speed of entry
- likely exchange-rate or trade barrier risk

Use both financial and non-financial evidence where possible. Financial points include marketing cost, margins, likely sales growth and impact on profit. Non-financial points include brand reputation, cultural fit, local knowledge and control over quality.

A good judgement is specific. For example: a small UK business entering one nearby market may benefit from exporting a mostly standardised product first, because finance is limited and risk must be controlled. A large food chain entering a culturally different market is more likely to need adaptation and local partnership support.

## Key Point Checklist

_This article has covered the following key knowledge points:_

- International marketing includes product, price, promotion and distribution decisions across national borders
- Standardisation means using the same or similar marketing mix across countries
- Adaptation means changing the marketing mix to suit local conditions
- Glocalisation combines a standard global brand with selected local changes
- Standardisation can lower costs, simplify management and support a consistent brand image
- Adaptation can improve local fit, demand and competitiveness, but usually increases cost and complexity
- The best approach depends on product type, culture, laws, income levels, competition and finance available
- Common market entry methods include exporting, licensing, franchising and joint ventures
- Exporting is often lower cost but gives less control than some other methods
- Exchange rate changes affect overseas prices, competitiveness, costs and profit
- Tariffs are taxes on imports, while quotas limit the amount that can be imported
- Strong exam answers compare both sides and reach a judgement based on the business context

## Key Terms and Concepts

- international marketing
- standardisation
- adaptation
- glocalisation
- market entry methods
- exporting
- licensing
- franchising
- joint venture
- exchange rate
- tariff
- quota


Marketing management - International marketing