Research paper from business class
Running Head: INTERNATIONAL MARKETING 0
Scanning the Environment for International Marketing
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Scanning the Environment for International Marketing
The progressive nature of technology has made the world increasingly interconnected, resulting in a network that covers all corners of the globe. Suddenly, businesses are no longer faced with the arduous task of overcoming barriers of distance created by bodies of water or huge expanses of land; innovations in communication technology and travel have made same-day delivery—decades ago a wild fantasy—a reality. As a result, businesses are no longer limited to customers within their region or country, and are now tasked with meeting the demands of the global consumer. In the United States, such innovations have revolutionized the world of business, forcing organizations to adapt quickly to remain competitive; though the United States sit atop the ranking board as having the largest gross domestic product, China is quickly gaining ground in becoming the largest economic power due to its efficient production processes and widespread influence; additionally, other nations such as South Korea and Japan have made great strides toward economic dominance. As a result, U.S. businesses are becoming increasingly engaged in the world market and accommodating the global consumer, achieving success through effective use of effective International Marketing. This particular branch of marketing applies all the principles established in in the field and transforms it into an organic application; the sheer number of variables that come with the world stage invariably make international marketing a complex and delicate process that could either equate to success for an organization or ultimate failure. Analysis of the difficulties of International Marketing through an environmental scan reveals that cultural dynamics, economics, and politics/regulation create complexity for marketers to address in order for their businesses to effectively penetrate the market.
Cultural diversity is at the forefront of the uncontrollable variables, chiefly because thousands upon thousands of variables influenced by social mores and religion result in an almost infinitely diverse consumer. It should be specified that international marketing differs from domestic marketing. “The only difference in the definitions of domestic marketing and international marketing is that marketing activities take place in more than one country.” (Rao and Prabhu 2011). Historically, many businesses failed because marketing programs failed to recognize the cultural differences held by their international consumers; ethnocentrism clouded views as firms attempted to impose American values, customs, symbols, and language on groups. Kerin et al. (2011) defines a society’s values as that which represent personally or socially preferable modes of conduct or states of existence that tend to persist over time. Cultural values are often a result of dominantly held religious beliefs of a country: for example, because Islam is the dominant religion in India, beef is rarely marketed due to the cow’s sacred nature. Additionally, Catholicism is the dominant religion in the Philippines, so overtly sexual advertising is frowned upon (Dawar and Goodwin 2006). From a marketer’s perspective, awareness of these values allows for careful implementation of a marketing plan. Customs are what is considered normal and expected about the way people do things in a specific country, varying significantly from country to country (Kerin et al. 201). From a marketer’s perspective customs can be both a boon and a bust depending on how they are implemented into a marketing plan. For example, in Germany it is law to not engage in activity that creates nuisance on Sunday in observance of rest and relaxation. Marketing products that promote quite comfort and enjoyment indoors would be more effective than a product that promotes active excitement; conversely the opposite would hold true in certain parts of the United States. “The uniqueness of foreign marketing comes from the range of unfamiliar problems and the verity of strategies necessary to cope with different levels of uncertainty uncounted in foreign markets.” (Rao and Prahbu 2011). Another dimension of cultural diversity that must be accounted for in International Marketing is the topic of cultural symbols, which are things that represent ideas and concepts (Kerin et al. 2011). Businesses have long recognized this, given the popularity of popular brand icons such as Nike’s swoosh or McDonald’s golden arches. From a cultural standpoint, symbols can be used to connote emotions that a marketer can take advantage of. Conversely, misuse of symbols can prove disastrous, as illustrated in Coca-Cola’s attempt to use vacation landmarks in an international ad campaign: “However, when the white marble columns in the Parthenon that crowned the Acropolis in Athens were turned into Coca-Cola bottles, the Greeks were outraged. Greeks refer to the Acropolis as the ‘holy rock,’ and that a government official said the Parthenon is an ‘international symbol of excellence’ and that ‘whoever insults the Parthenon insults international culture” (Kerin et al. 2011). Lastly, language proves to be a major challenge in the dynamics of international marketing simply because of the existence of various grammar rules, idioms, and expressions. Advertising often relies on clever wordsmith in order to create a memorable expression for a product; unfortunately, what sounds please in English may lose all creativity when translated to Japanese or Korean, which use different adjectives and verbs to describe similar objects and qualities. Case studies on effective marketing to international customers reveal that appealing to a customer in their own native tongue increases consumer receptiveness.
The second largest challenge that marketers face when appealing to the international scene concerns economic issues. “Therefore, a scan of the global marketplace should include: (1) a comparative analysis of the economic development in different countries, (2) an assessment of the economic infrastructure in these countries, (3) measurement of consumer income in different countires, and (4) recognition of a country’s currency exchange rates” (Kerin et al. 2011). Countries are designated based on their current state of economic development into two categories: developed countries and developing countries. The former consist of countries such as the United States, the United Kingdom, and Japan, where the economy is stable and made up of private businesses. In contrast, developing countries are still transitioning into an industrial country; countries such as Brazil, China, and South Africa make up this group. Characteristic of this group involve predominantly low earning power. From a marketing standpoint, firms in the United States have to determine which international ventures are worth the investment and which are not. According to Kerin et al., around 86 percent of the world’s population resides in developing countries, with 67 percent of these individuals surviving on less than $2 per day. Designing a marketing strategy that caters to this large consumer base can prove profitable if done correctly.
In addition to a country’s stage of economic development, its economic infrastructure is of vital importance in International Marketing, pertaining to its “communications, transportation, financial, and distribution systems” (Kerin et al. 2011). Each of the aforementioned items is responsible for how a marketing message is conveyed to a consumer. For example, communication networks in the United States are elaborate, relying on thousands of cell phone towers and fiber optic cables running beneath the earth. As a result, access to the Internet is almost nationally available, allowing for the instant transmission of ideas, notably advertisements. As such, marketing tactics in the United States rely on a saturation of a product in the customer mind, coming from all channels: television, the internet, the radio, and so forth. In comparison, communication is difficult in much of Africa, which lacks thousands of cell phone towers and fiber optics: in order for messages to be received, often messengers deliver messages to neighboring towns once heard on a periodic radio broadcast. Marketers must keep into account that if they wish to communicate with consumers, they must know what is available. Transportation follows a similar vein of thought: car advertisements work wonderfully in car-centric nations such as The United States and Europe, but they will find a less-receptive audience in China, where bicycling is the primary mode of transportation given the lack of developed roads and congested cities. Financial and distribution systems work hand in hand given that the country’s ability to provide financing effects degrees of distribution. Lack of a strong banking system means that business ventures are less common, resulting in fewer jobs. Distribution involves manufacturing processes. According to Kerin et al., formal operating procedures among financial institutions and the notion of private property is still limited; this is illustrated in Russia’s use of nonmonetary forms of payment for much of its commercial transactions. Lastly, currency rate exchanges round off the economic factors that influence marketing. The U.S. dollar’s strength fluctuates depending on multiple factors; valuing a product or service by American standards when marketing in the U.K., where the euro is valued slightly higher. Overlooking such a factor would negatively impact consumer perceptions. Taken as a whole, marketing to a nation with such economic factors requires different plans of execution that would have otherwise worked in the United States.
The last great hurdle of International Marketing is found in a country’s political-regulatory climate, a constantly shifting variable that can at times prove difficult to address from a business standpoint. Political stability explores a nation’s relations both within itself and with others, and often marketing to one country runs the risk of creating repercussions with another. Political turmoil in the Middle East, Gaza, and Africa all have either direct or indirect effects on a business’s effectiveness. Internal turmoil is one of the large flags that marketers must be aware of when dealing in a foreign market. Because of the nature of the conflict, businesses may unknowingly conduct business with a highly unstable government, thereby running the risk of losing product and endangering both present and future prospects. External conflict is seen as warring states. Examples of this can be seen in the Syrian Civil War and the Northern Mali conflict; markers have to be wary that nations—and subsequently consumers— often hold strong beliefs regarding international political affairs. Marketing has to be both culturally and politically sensitive of such issues if it is to be successful, especially when difficulty can arise when religious beliefs intertwine with the political climate (Nickels 2010). Another aspect of the political-regulatory climate is found in the form of trade restrictions, manifested in tariff and nontariff trade barriers. This is illustrated clearly in Japan: “Japan has some 11,000 trade regulations; Japanese car safety rules effectively require all automobile replacement parts to be Japanese and not American or European; public health issues make it illegal to sell aspirin or cold medicine without a pharmacist present” (Kerin et al. 2011). Such a restriction immediately prevents American automotive interests from entering the Japanese market when it comes to parts. Additionally, pharmaceutical companies are limited in their profits due to strict regulation of products purchased by citizens. Trade regulations are driven by many factors, economic and social reasons being at the forefront. Often, embargos and tariffs are utilized to control a foreign business’s presence in the country in order to protect their own interests. From a marketing standpoint, this proves difficult given that such restrictions are strictly enforced. Conversely, trade regulations also provide a benefit to business marketers. The European Union abides by several free trade agreements; such standardization allows for the minimization of variable factors that would otherwise make marketing tactics difficult and specific.
Understanding marketing in an international context is imperative to the success of any organization. With the potential of reaching billions of customers, recognizing the difficult challenges—culturally, economically, and politically—is of great importance to ensure that interests of the business and its stakeholders are protected.
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