International marketing

From Wikipedia, the free encyclopedia

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
[hide]
• 1 Further definitions
• 2 Topics covering the micro-context of international marketing
• 3 Differences between domestic marketing and international marketing
• 4 Mode of engagement in foreign markets
o 4.1 Exporting
o 4.2 Joint ventures
o 4.3 Direct investment

• 5 References

[edit] Further definitions

International marketing is often not as simple as marketing your product to more than one
nation.[4] Companies must consider language barriers, ideals, and customs in the market
they are approaching.[4] Tailoring your marketing strategies to attract the specific group of
people you are attempting to sell to is highly important and can serve the number one
cause of failure or success.[4]
As with other elements of marketing, there is no single definition of international
marketing. Furthermore some authors define international marketing and global
marketing differently. It can be distinguished between different levels of international
marketing: "At its simplest level, international marketing involves the firm in making one
or more marketing mix decisions across national boundaries. At its most complex level, it
involves the firm in establishing manufacturing facilities overseas and coordinating
marketing strategies across the globe."[5] Another definition sees international marketing
as the international involvement of business activities: "International marketing is the
performance of business activities that direct the flow of a company's goods and services
to consumers or users in more than one nation for a profit."[6] It can be also defined as
"the application of marketing orientation and marketing capabilities to international
business."[7] "The international market goes beyond the export marketer and becomes
more involved in the marketing environment in the countries in which it is doing
business."[8]

Some definition refer to the term global marketing: "Global/transnational marketing

focuses upon leveraging a company's assets, experience and products globally and upon
adapting to what is truly unique and different in each country."[8] "Global marketing
refers to marketing activities coordinated and integrated across multiple country
markets."[9]

[edit] Topics covering the micro-context of international

marketing

According to Kotabe, the following topics covers the micro-context of international

marketing.[10]

Organisational and consumer behaviour:

• organisational buying behaviour;

• international negotations;
• consumer behaviour;
• country of origin.

Marketing entry decisions:

• initial mode of entry

• specific modes of entry

• exporting;
• joint ventures.

Local market expansaion: 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.[11] Promotional messages needs to consider numerous cultural
differences between different countries.[11] 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".[12] In Tunisia it is understood as
"I'll kill you" meanwhile for a Japan consumer it implies "money".[12] Even among the 74
English-speaking 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:[12]

• 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:[12]

• 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 Japanes 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 utilise 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, GPU,
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