Final answer:
Companies using excess marketing capacity to distribute additional product lines internationally engage in complementary marketing. This strategy benefits from economies of scale, and improved efficiency through the splitting of the value chain. The relocation of U.S. clothing factories to China exemplifies a shift in manufacturing to countries with lower production costs.
Step-by-step explanation:
The formal name for the type of marketing where companies with excess marketing capacity in different countries take on additional product lines for international distribution is called complementary marketing. This strategy allows businesses to utilize their established distribution channels to offer more products, potentially increasing their market share and profits while maintaining competition and variety for consumers. An example of this can be seen in national brands which have developed reputations and protect their brands from fraudulent activities by ensuring consistency in their product offerings across various markets.
Economies of Scale and International Trade
International trade allows small economies to benefit from economies of scale and competition. As companies specialize in different stages of production, they can produce goods more efficiently and cost-effectively. This specialization and division of the production process among different economies contribute to the fine splitting known as the value chain.
Shift in Manufacturing
Many clothing corporations have shut down their U.S. factories and relocated to China, demonstrating a shift in manufacturing bases to leverage lower production costs. This is an example of companies seeking competitive advantages in the global market through strategic international partnerships and cost-saving measures.