Introduction
Most of you have studied a marketing
course in your first and third year so you would know about all the concepts of
marketing. When discussing International
Marketing, we are looking at marketing activities done across national and
international borders.
(S. Rao, 2012) The; “extension of
marketing activities across the globe is referred to as international
marketing.”
Managers in the area of International
marketing have to coordinate the markets in differently countries efficiently,
given the fact that environmental factors differs from one country to the next.
Marketing activities in a global
environment may differ from that of domestic marketing and let us look at an
example; a standardized product in one country may not be acceptable in the
next country so when situation like this arises, marketing managers have to
look at other options such as customization of product to meet the specific
need of customers.
Standardization
vs. Customization
Globalization has brought about many
different taste and preferences and this is where the issue of standardization
and customization come into focus. Standardization is slowly being done away
with as business tends to customization of products for customers. Competition has allowed for such changes
to occur and for businesses to have competitive advantages over their
competitors.
Ethnocentric
Approach
When we look at the ethnocentric
behaviour of businesses and corporations, you will realize that they tend to
focus on the domestic operation/activities and prefer to take those with them
into foreign markets. In the case of international marketing, companies,
businesses or corporations market their products in various countries in the
same way they do domestically.
Polycentric
Approach
When we look at this approach, you will
notice that the businesses or a corporation customises the marketing mix to
meet the taste, performances and needs of the customers of each international
market.
Geocentric
Approach
Under this approach, businesses,
corporation and firms analyses the taste, preferences and needs of the
customers in all foreign markets and then adopts a standardized marketing mix
for all foreign markets. A good example would be Coca Cola. Same label and
drink marketed around the globe.
Advantages
and Disadvantages of Standardization and Customization in International
Marketing (S. Rao 2012)
Standardized
International Marketing
|
|
Advantages
|
Disadvantages
|
·
Reduces Marketing Costs
·
Facilitates centralised control of
marketing
·
Promotes efficiency in R & D
·
Results in economies of scale in
production
·
Reflects the trend toward a single
global marketplace
|
·
Ignore different conditions of product
use
·
Ignore local legal difference
·
Ignore differences in buyer behaviour
patterns
·
Inhibits local marketing initiates
·
Ignores other differences in
individual markets.
|
Customized
International Marketing
|
|
Advantages
|
Disadvantages
|
·
Reflects different conditions of
product use
·
Acknowledge local legal differences
·
Accounts for differences in buyer
behaviour patterns
·
Promote local marketing initiatives
·
Account for other differences in
individual markets
|
·
Increase marketing costs
·
Inhibits centralised control of
marketing
·
Create inefficiencies in R & D
·
Reduces economies of scale production
·
Ignores the trend toward a single
global marketplace.
|
Source:
Ricky W. Griffin and Michael W. Pustay, op. cit.,p.590
|
Let us look at the 4 Ps (Product, Price,
Place, and Promotion) and put them in the context of international marketing.
Product
|
Price
|
Place
|
Promotion
|
·
Product Development
·
Product Life Cycle
·
Branding Decisions
·
Packaging Decisions
|
·
Price Decision
·
Pricing Policies
·
Factors affecting International
Pricing
·
Price Quotations
·
Dumping
·
Counter trade
|
·
Direct Selling
·
Indirect Selling or Market
Intermediaries
|
·
Advertising
·
Personal Selling
·
Sales Promotion
·
Public Relations
|
Product
Under Product when it comes to
international market, we are looking at the following and these includes; (Product
Development, Product Life-cycle, Branding Decisions, Packaging Decisions).
Product
Development – When it comes to product
development, there are six stages;
1) Idea
Generation
2) Screening
of Ideas
3) Business
Analysis
4) Product
development in laboratory
5) Test
marketing
6) Commercial
Production
Product
Life-cycle – Generally indicates that a product
starts with a beginning or introduction and passes through different stages of;
Growth, Maturity, and Decline).
1) Introduction Stage
– Product is initially introduced into the market. At this stage, the products’
sale is low, low profit or losses, and competition is low.
2) Growth Stage
– Product gains recognition and accepted by customers. There is fast growth in
sales, increase profit, increase competitions.
3) Maturity
– Product accepted in the market and is at its peak. Competition is intensified
and profit is slowly decreasing due to severe competition
4) Extension Stage
– Introduction of updated version, new models and designs etc.
5) Decline Stage
– Development of new products, changes in the existing product design, improve
quality etc.
Branding
Decision
When discussing branding, we have to
understand what is a trademark? According to the Oxford Advanced
Learner’s Dictionary; A Trademark refers to “a name, symbol or design that a
company uses for its products and that cannot be used by anyone else.”
Do we brand or not? These are the two
questions that company and business ask themselves when it comes to branding
decision.
Generic
or No Brand - The trend towards non-branding
products is increasing worldwide and the scale of non-branded products is
increasing particularly in retail stores. (S. Rao, 2012). Why increase in non-branded
products. According to S. Rao, the increase in demand for non-branded
products is due to the availability of these products at fewer prices, In
addition, non-brand products are available in a number of sizes and models.
Branded
Products – Students will realized that most MNCs
goes for branding given the fact that most customers in different countries
easily identify with branded products and are aware of the ingredients and
utilities of the branded products. Example of international branded products;
Colgate-Palmolive, Pepsi and Coke etc. Global companies can get better price
and profit through well known brands.
International
Market Intelligence
When discussing international market
intelligence, you are looking at issues such as the business environment in
order to access the marketing opportunities and marketing situation in various
foreign markets based on customer incomes, needs, product competitions, price,
promotion, and consumer’s buying behaviours etc.
In order to get such information, International
businesses obtain such information through questionnaires and surveys from
various sources through internet, reports etc.
Information
Required
Markets
Within a particular market,
international business marketing will find the following factors;
·
Day to day changes in
demand due to competitors’ products’ promotional programmes, shift in
government policies, changes in consumers’ income, change in technology and
other changes.
·
Consumers Behaviour –
Shift in consumer behaviour caused due to cultural variations, shifts in social
institutions and other factors.
·
Products – Product
features, product uses, development of new products, introduction of new
products and changes to the existing products of competitors.
·
Marketing Channels –
Shifts in the preference over channels in the consumer preferences, and uses by
competitors.
·
Communication Media
Availability – International marketing managers need the data and information
about the availability and intensity of communication media.
·
Market Responsiveness –
Information is needed regarding the responsiveness of different parties in the
market regarding the product, price, promotion and channels of distribution of
the international firm.
Customer
Groups
International business needs information
regarding the customer groups based on; age, sex, education qualifications,
occupation/professions, income, ethnicity groupings, religion, behaviour
pattern etc.
Once you understand the customer, you
may be able to understand their buying characteristics. Example; Repetitive
buyers.
Market
Intermediaries
Market intermediaries are important
because they bridge the gaps between producers and consumers.
·
Categories
of Market Intermediaries - (wholesalers,
retailers, agents, distributers etc.) International firms have to have some
understanding of the different intermediaries if you are to use them as part of
your distribution channels
·
Cost of Intermediaries
– (Commission etc)
·
Function of Services
Provided
·
Range of
Products/Services
Competition
International business requires information
regarding current and possible future competition and competitors.
·
Level
and intensity of competition – This enables the
firm to design appropriate competitive strategies.
Foreign exchange is important to businesses
(both domestic and international) because of its bearing upon business costs,
price of products to customers, profits, interest rates etc.
Prescriptive Information refers to
information relating to law particularly business law, regulations concerning
taxes, dividends etc.
Resources
Information
Resources information refers to the
availability of human resources, their skill level and behaviour patterns,
material resources, quality, costs, terms and conditions of supply etc, needed
to formulate international marketing strategies.
General
Business Environment
When you look at the general business
environment, you are looking at the social, cultural, economic, technological,
political as well as the natural environment of a country.
International
Marketing Information System
International marketing information
system (IMIS) is an integrated and comprehensive network of information
relating to all areas of international business having a direct or indirect
bearing on marketing. Businesses may use any of the following as part of the
broader management information system;
·
Automated system.
·
System Design.
Characteristics
of Sound International Marketing Information System
·
User oriented,
expandable, comprehensive, flexible, integrated,, efficient, cost effective,
reliable, timely and controllable.
·
Systematic and
self-perpetuating
·
Continuously audited,
evaluated and updated
·
Receive global
information
·
Time independent
·
Incorporate other
characters such as standardization, uniformity, flexibility and integration
·
Should incorporate
cultural knowledge and linguistic capability
·
Should allow for a
degree of flexibility
Marketing
Research
Involves the systematic gathering,
recording and analysing of data about problems relating to the marketing of
goods and services. (Rao, 2012)
·
Scope of Marketing
Research
·
Process of Marketing
Research
·
Definition of Research
Problem
·
Research design and sampling
·
Market survey Method
·
Other Methods
·
Data Collection methods.
Measurement
and Data Analysis
Presentation
of Report
Sources:
International Business Environment by
Francis Cherunilam, (2009) Himalaya Publishing House.
International Business by P Subba Rao,
(2012) Himalaya Publishing House.
Business Ethics by Andrew Crane, Dick
Matten, (2007) Oxford University Press or other related text books and
materials.
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