International marketing

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Jump to: navigation, search International marketing (IM) or global marketing refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an extension of the techniques used in the home country of a firm.[1] It refers to the firm-level marketing practices across the border including market identification and targeting, entry mode selection, marketing mix, and strategic decisions to compete in international markets.[2] According to the American Marketing Association (AMA) "international marketing is the multinational process of planning and executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives."[3] In contrast to the definition of marketing only the word multinational has been added.[3] In simple words international marketing is the application of marketing principles to across national boundaries. However, there is a crossover between what is commonly expressed as international marketing and global marketing, which is a similar term. The intersection is the result of the process of internationalization. Many American and European authors see international marketing as a simple extension of exporting, whereby the marketing mix 4P's is simply adapted in some way to take into account differences in consumers and segments. It then follows that global marketing takes a more standardised approach to world markets and focuses upon sameness, in other words the similarities in consumers and segments.

Contents

1 Topics covering the micro-context of international marketing 2 Differences between domestic marketing and international marketing 3 Mode of engagement in foreign markets o 3.1 Exporting o 3.2 Joint ventures o 3.3 Direct investment 4 References

[edit] Topics covering the micro-context of international marketing

According to Kotabe, the following topics covers the micro-context of international marketing.[4] Organisational and consumer behaviour:

organisational buying behaviour; international negotiations;

consumer behaviour; country of origin.

Marketing entry decisions:

initial mode of entry specific modes of entry

exporting; joint ventures.

Local market expansion: marketing mix decisions:

global standardisation vs. local responsiveness Marketing mix:

product policy; advertising; pricing; distribution.

Global strategy:

Competitive strategy: conceptual development; competitive advantage vs. competitive positioning; sources of competitive advantage and performance implications.

Strategic alliances:

learning and trust; recipes for alliance success; performance of different types of alliance.

Global sourcing:

global sourcing in a service context; benefits of global sourcing; country of origin issues in global sourcing.

Multinational performance:

determinants of performance; a different interpretation of performance.

Analytical techniques in cross-national research:

measuerment issues; reliability and validity issues.

[edit] Differences between domestic marketing and international marketing

There are various differences between domestic marketing and international marketing. Due to a language barrier it is more difficult to obtain and interpret research data in international marketing.[5] Promotional messages needs to consider numerous cultural differences between different countries.[5] This includes the differences in languages, expressions, habits, gestures, ideologies and more. For example, in the United States the round O sign made with thumb and first finger means "okay" while in Mediterranean countries the same gesture means "zero" or "the worst".[6] In Tunisia it is understood as "I'll kill you" meanwhile for a Japan consumer it implies "money".[6] Even among the 74 Englishspeaking nations a word with the same meaning can differ greatly from the English which is spoken in the United States as the following example shows:[6]

Police: bobby (Britain), garda (Ireland), Mountie (Canada), police wallah (South Africa) Porch: stoep (South Africa), gallery (Caribbean) Bar: pub (Britain), hotel (Australia), boozer (Australia, Britain, New Zealand) Bathroom: loo (Britain), dunny (Australia) Ghost or monster: wendigo (Canada), duppy (Caribbean), taniwha (New Zealand) Barbecue: braai (South Africa), barbie (Australia) Truck: lorry (Britain and Australia) Festival: feis (Ireland) Sweater: jumper (England) French fries: chips (Britain) Soccer: football (the rest of the world) Soccer field: pitch (England)

Three recent international examples of misinterpretation are:[6]

On a sign in a Bucharest hotel lobby: The lift is being fixed for the next day. During that time, we regret that you will be unbearable. From a Japanese information booklet about using a hotel air conditioner: Cooles and Heates: If you want just condition of warmin your room, please control yourself.

In an Acapulco hotel: The manager has personally passed all the water served here.

[edit] Mode of engagement in foreign markets

After the decision to invest has been made, the exact mode of operation has to be determined. The risks concerning operating in foreign markets is often dependent on the level of control a firm has, coupled with the level of capital expenditure outlayed. The principal modes of engagement are listed below:

Exporting (which is further divided into direct and indirect exporting) Joint ventures Direct investment (split into assembly and manufacturing)

[edit] Exporting
Direct exporting involves a firm shipping goods directly to a foreign market. A firm employing indirect exporting would utilize a channel/intermediary, who in turn would disseminate the product in the foreign market. From a company's standpoint, exporting consists of the least risk. This is so since no capital expenditure, or outlay of company finances on new non-current assets, has necessarily taken place. Thus, the likelihood of sunk costs, or general barriers to exit, is slim. Conversely, a company may possess less control when exporting into a foreign market, due to not control the supply of the good within the foreign market.

[edit] Joint ventures

A joint venture is a combined effort between two or more business entities, with the aim of mutual benefit from a given economic activity. Some countries often mandate that all foreign investment within it should be via joint ventures (such as India and the People's Republic of China). By comparison with exporting, more control is exerted, however the level of risk is also increased.

[edit] Direct investment

In this mode of engagement, a company would directly construct a fixed/non-current asset within a foreign country, with the aim of manufacturing a product within the overseas market.

Assembly denotes the literal assembly of completed parts, to build a completed product. An example of this is the Dell Corporation. Dell possesses plants in countries external to the United States of America, however it assembles personal computers and does not manufacture them from scratch. In other words, it attains parts from other firms, and assembles a personal computer's constituent parts (such as a motherboard, monitor, CPU, RAM, wireless card, modem, sound card, etc.) within its factories. Manufacturing concerns the actual forging of a product from scratch. Car manufacturers often construct all parts within their plants. Direct investment has the most control and the most risk attached. As with any capital expenditure, the return on investment (defined by the payback period, Net Present Value, Internal Rate of Return, etc.) has to be ascertained, in addition to appreciating any related sunk costs with the capital expenditure

INTERNATIONAL MARKETING RESEARCH PROCESS Four Steps of International Marketing Research Framework for international marketing research: Marketing research are the formal studies of specific situations. As discussed in the earlier lectures major issue in decision making is that managers often fail to appropriately understand the issues or problems and hence end up making right decisions for wrong problems. Since international markets are often foreign to a marketer there are even more chances that the marker mat miss-understand the problems / issues. To avoid such scenarios it is beneficial first to conduct exploratory research for understanding the issues / situation better. A business research process consists of four steps; Step 1: Defining the problem (the decision for which info. is needed) and research objectives along with:

market structure size of market, stage of development etc.

product concept meaning of product in a particular environment Marketing research project may have one of the three types of objectives; Exploratory research - is to gather preliminary information that will help define the problem and suggest hypothesis Descriptive research - is to describe things such as market potential for a product, demographics, or attitudes of customers Causal research - is to test hypothesis about cause-and-effect relationships

Step 2: Once research objectives are properly defined the marketer / researcher should then develop the detailed plan for conducting the research. A detailed research plan should include the following five aspects; Developing the research plan

Determining specific information needs

research objectives must be translated into specific information needs

Plan for gathering secondary information

information that already exists somewhere, having been collected for another purpose relevant, current, impartial (objectively collected & reported)

Primary data collection plan

information collected for the specific purpose at hand - research approaches : observation, Page 55 survey, experiment

Deciding contact method

mail, telephone, personal

Detailing the sampling plan

sampling unit, sample size, sampling procedure Step 3: Implementing the research plan data collection phase is generally the most expensive & most subject to error - wrong implementation, problems in contacting respondents, biased or dishonest answers, problems with interviewers (mistakes or short-cuts) Step 4: Interpreting and reporting the findings both researchers & managers must work together at this stage - researchers know methodology better while managers understand problems and possible management solutions better