International Marketing:
Related pages:
Domestic vs. International Marketing
The process of Marketing internationally is basically the same as domestic, but with a few key new challenges. You are still going to focus on positioning, differentiation, and segmentation. The major differences, however, are as folllows:
Key issues to consider
1. Economic Development (see emerging markets discussion): The first thing to consider when marketing internationally is the level of Economic Development of the country. This one factor will influence the strategy, positioning, and just about everything else in the marketing mix. The level of economic development will have an effect on the countries attitude toward FDI investments, and toward foreigners, as well as their needs for "luxury" goods, etc.
2. Cultural issues are important. The trouble with culture is that its very hard to read correctly. Can you identify the changes? Do you have enough cultural IQ to even notice the changes? This is really not easy to do. Once you identify the cultural
3. Localization leads to more sales, but globalization leads to more effeciency: Will you need to adapt to the local needs? Or, can you go with a more global-strategy, and market the product the same to every customer? The more you adapt the product / marketing mix, the higher your costs will be (and so the profits will be less), but you might find that you need to localize in order to boost sales volumes. Its a trade off, and one that needs careful consideration. The product adaptation issue is one of the most important decisions that an international marketer must make. Think about which elements of the marketing mix must be changed in order to enter this new market.
3. Pricing in international markets is much more tricky because you wont be able to use pricing to directly control the profits that you earn. Other factors will get in the way, such as Currency fluctuations, interest rates, and local inflation. As well as changing regulations, tariffs, and trade barriers. The major issue for international pricing is whether or not to charge different prices to different customers in different countries? Should you have uniform pricing for all customers? What if you have a multi-national customer in many different markets...should you charge them one uniform price (based on average costs)? Probably not. More likely, you will want to keep control of local pricing and charge local customers based on their ability and willingness to pay, and you will want flexibility to adjust the price to account for varying costs, as well as different competition, and market conditions. Another key issue for you to consider in international pricing, is how much to charge international subsidiaries of Multinational corporations overseas. This " transfer pricing " is one of the more heavily regulated areas of international business.
4. Organizational challenges. As you expand internationally, you will find that the organization chart becomes much more complex. Many companies just do not have the human resource strength to compete globally. The trouble with international expansion is that it adds another dimension....rather than just focusing on functional activities such as Production and sales, R&D and advertising, you now need to add an "international group" to your company. The key question here is how do you organize your company to achieve this difficult task? Should you have a separate division that focuses just on international activities (and if you do this, how do you coordinate them?). Or, should you have your current functional areas take on the new tasks of each operating internationally? This is also difficult, but the more you are able to integrate your functions internationally, the more you will save money. There are cost efficiencies to be gained from operating similarly across countries, and that is a big motivation. But, a company that tries to integrate too much may loose the local responsiveness necessary for a Localization strategy.
5. Competing against Multinational corporations: How does a local company compete against a larger, stronger, and more modernized multinational corporation? In our discussion on international strategy, we discuss strategies such as petitioning the government for protection, to anti-dumping (counterveiling) duties. Also, they may seek local subsidies. Other strategies may include a classic flanking strategy where you focus on markets that are considered "unimportant" to the larger companies, or focus on developing local niche market that foreigners may not be able to tap into. But, dont ever discount the value of local service and understanding of local tastes, customs and culture. The foreign companies, no matter how well funded, will have a really difficult time unseating your position if you devleop a strong relationship with the local community.
6. Competing against local companies ...
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see also: international strategy , international expansion
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