Differentiate internationalization in the market space and market place using real world

examples [25]
Neil Kokemuller (2017) defined a market place as a distinct group of potential customers that a
company could target with its products and services. At the marketplace, the seller and buyer
meet each other individually and share information. Thereafter, negotiations take place and
exchange of product or service occurs. Examples of marketplace are retail stores, outlets,
supermarkets. A marketplace would have a physical address and the buyers may routinely visit a
marketplace to have a look around of what’s in store. Internationalization is the process where a
firm seeks to extend the existence of its product in different borders.

A firm can make use of various entries into the market place through licensing which includes
franchising and contract manufacturing. Franchising involves the organization (franchiser)
providing branding, concepts, expertise, and in fact most facets that are needed to operate in an
overseas market, to the franchisee. Management tends to be controlled by the franchiser.
Examples include Domino’s Pizza, Coffee Republic and McDonald’s Restaurants. This has
enabled internationalization in the market place where a firm sets up something in the same
geographic location so that they are in touch with their customers

Another form of internationalization in the market place is when a firm makes use of
international agents and distributors. Agents are often an early step into international marketing.
Put simply, agents are individuals or organizations that are contracted to your business, and
market on your behalf in a particular country. They rarely take ownership of products, and more
commonly take a commission on goods sold. Agents usually represent more than one
organization. Agents are more common in the cosmetics industry for example Avon Inc. was
started by David McConnell in California, America. The company, through distributers grew to
countries like UK, South Africa and Zimbabwe. Design Essentials is another cosmetics company
that has distributers who have situated themselves in the market place to ensure that products are
well sold in foreign markets. They also embark on personal selling where they explain in detail
the products to a customer.

Moreover, foreign direct investment is another mode of internationalization in the market place.
This is when a firm decides to go and invest in another country like in the case of multinational

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companies. This a way of tapping into untapped markets and increase visibility. For example,
Volkswagen opened manufacturing of its cars in Rwanda starting with 1000 cars annually
designed for the African market.

On the other hand, market space eliminates the traditional market place transactions are
eliminated. Market space encompasses the various forces at work in various industries. This
includes competitive dynamics, actions of power players in the industry and the types of
solutions being offered in that market that is the growth and driving forces that shape that
particular space. Marketspace can be defined as the information and communication technology
based electronic or online exchange environment. Physical boundaries do not possess any
interference for such transactions. The buyers and sellers interact and transact in a virtual
environment where direct physical communication is not required. The sellers may exhibit their
products on their own websites or dedicated sales engines such as eBay while buyers can
perform a targeted search query to find their relevant requirements.

W.Chan Kim et-al says that for internationalization in the market space to be effective, a firm
should create blue oceans that is the untapped market where the demand is low rather than fight
for space. It advisable for firms to avoid red oceans where they fight for market space but rather
make competition irrelevant. This means that on the market space, internationalization is made
possible by using online tools like ecommerce platforms to ensure selling. On the market space,
information is made globally available hence increased competition and the demand for quality
goods to ensure perpetual life of brands within the online environment.

Market spaces help to cut the long chain between the buyer and seller. The owners of the channel
for example Google are paid for the intermediation services that they perform ie to link the
customer to the service provider. There is little investment needed to operate an e-commerce site
since both selling and advertising can be done all on one dynamic site. This makes it easier and
affordable for firms to go international on a market space due to reduced costs that come from
having a long chain from the time goods are purchased to the time they get to the consumer.

Firms that desire to go international on the market space should carefully consider the pricing
scheme that they need to adopt. For example, Apple has set the price for their products high and
attract a niche market of people who want their products. Customization is vital in the market
space as it creates brand loyalty by the customer through the making of tailor made products that

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suit their needs. Internationalization in the market space should cater for customization to avoid
death of dotcoms.

Use of digital tools in market space helps internationalization to be effective. These tools include
use of search engine optimization techniques. SEO results in your website getting found when
people search for products or services you offer. If key search engines such as Google, Yahoo or
Bing cannot see you then it is difficult for customers to find you. Employing such techniques are
important in the market space as they make internationalization possible.

In conclusion at the marketplace, the seller and buyer meet each other individually and share
information where limitations can be determined by geographical boundaries and market entry is
achieved through licensing and franchising. In a marketspace information and communication is
based on technology and transactions are done on an online environment. Physical boundaries do
not possess any interference for such transactions. The buyers and sellers interact and transact in
a virtual environment where direct physical communication is not required.

References
1. Rayport and Sviokla (1994), Managing in the marketplace, Harvard Business Review: pg 141-
150.
2. W. Chan Kim & Renée Mauborgne (2015) Blue Ocean Strategy,
3.Fox Business, (2014), Tips for taking your e-commerce business global, Link:
http://www.foxbusiness.com/features/2014/02/20/6-tips-for-taking-your-e-commerce-business-
global.html (Accessed: 25/03/2016)
4.NiBusiness Info, (2013), Benefits of Joint Ventures, Link:
https://www.nibusinessinfo.co.uk/content/joint-venture-benefits-and-risks (Accessed:
24/03/2016)