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] 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.“[2] In contrast to the definition of marketing only the word multinational has been added.[2] 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.
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[edit] Further definitions of international marketing
As with other elements of marketing, there is no single definition of international marketing. Furthermore some authors define international marketing and global marketing differently:
- “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.“[3]
- “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.“[4]
- “International marketing is the application of marketing orientation and marketing capabilities to international business.“[5]
- “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.“[6]
- “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.“[6]
- “Global marketing refers to marketing activities coordinated and integrated across multiple country markets.“[7]
International marketing is often not as simple as marketing your product to more than one nation.[8] Companies must consider language barriers, ideals, and customs in the market they are approaching.[8] 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.[8]
[edit] Topics covering the micro-context of international marketing
According to Kotabe, the following topics covers the micro-context of international marketing.[9]
Organisational and consumer behaviour:
- organisational buying behaviour;
- international negotations;
- consumer behaviour;
- country of origin.
- initial mode of entry
- specific modes of entry
Local market expansaion: marketing mix decisions:
- global standardisation vs. local responsiveness
- Marketing mix:
-
- product policy;
- advertising;
- pricing;
- distribution.
-
- conceptual development;
- competitive advantage vs. competitive positioning;
- sources of competitive advantage and performance implications.
-
- learning and trust;
- recipes for alliance success;
- performance of different types of alliance.
-
- 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.[10] Promotional messages needs to consider numerous cultural differences between different countries.[10] 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”.[11] In Tunisia it is understood as “I’ll kill you” meanwhile for a Japan consumer it implies “money”.[11] 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:[11]
- 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:[11]
- 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.
[edit] References
- ^ Marketing, Tim McGraw-Hill
- ^ a b Onkvisit, Sak; John J. Shaw (2004). “Process of international marketing“. International marketing: analysis and strategy (4th ed.). p. 3. http://books.google.com/books?id=jvdpDo5Xr7EC&lpg=PP1&pg=PA3#v=onepage&q=&f=false. Retrieved 2009-10-11.
- ^ Doole & Lowe (2001). Note: Doole and Lowe differentiate between international marketing (simple mix changes) and global marketing (more complex and extensive).
- ^ Cateora & Ghauri (1999). Note: Cateora and Ghauri consider international marketing in the absence of global marketing.
- ^ Muhlbacher, Helmuth & Dahringer (2006). Note: Muhlbacher et al. delineate international marketing (adapted) and global marketing (standardised).
- ^ a b Keegan (2002). Note: Keegan takes a strategic, corporate overview to define the transnational nature of global marketing.
- ^ Johansson (2000). Note: Jonny K. Johansson defines global marketing as a bigger brother to international marketing i.e. more of an extension.
- ^ a b c Eagle Business (2007)
- ^ Paliwoda, Stanley J.; John K. Ryans (2008). “International business vs. international marketing“. International Marketing: Modern and Classic Papers. Peter Buckley, Kotabe (2001, p. 461-2). p. 4. http://books.google.com/books?id=dwZz2eHBCjUC&lpg=PP1&pg=PA4#v=onepage&q=&f=true. Retrieved 2009-10-22.
- ^ a b Bennett, Roger; Jim Blythe (2002). “The nature of international marketing“. International marketing: strategy planning, market entry & implementation (3rd ed.). p. 4. http://books.google.com/books?id=q58kPJgifT8C&lpg=PP1&pg=PA4#v=onepage&q=&f=false. Retrieved 2009-10-12.
- ^ a b c d Kurtz, David L. (2008). “Part 6 – Promotional decisions“. Contemporary Marketing (13rd ed.). p. 494. http://books.google.com/books?id=GqCVnz0mpdUC&lpg=PT548&pg=PT548#v=onepage&q=&f=false. Retrieved 2009-10-12.
