International Marketing

Length: 3060 words

A firm’s international marketing program must generally be
modified and adapted to foreign markets. This international
marketing program uses strategies to accomplish its
marketing goals. Within each foreign nation, the firm is
likely to find a combination of marketing environment and
target markets that are different from those of its own home
country and other foreign countries. It is important that in
international marketing, product, pricing, distribution and
promotional strategies be adapted accordingly. In order for
an international firm to function properly, cultural, social,
economic, and legal forces within the country must be
clearly understood. The task of International marketing is
more difficult and risky than expected by many firms.


One of the most controlling factors of international
marketing is management. It is very important for managers
to recognize the differences as well as similarities in buyer
behavior. Many mistakes can occur if managers fail to
realize that buyers differ from country to country. It is the
international differences in buyer behavior, rather than
similarities, which cause problems in successful international
marketing. An international marketing manager is a
manager responsible for facilitating the exchange of
products between the organization and its customers or
clients. Sometimes an international marketing manager will
find difficulties in completing the exchange of products.

Many surprises in international business are undesirable
human mistakes. An international corporation must fully
understand the foreign environment before pursuing
business

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matters. Problems constantly crop up and many
times have unexpected results. Sometimes these
unexpected results are unavoidable. Other times they are
avoidable. To be sure those avoidable situations do not
occur, international marketing managers must be aware of
cultural differences.
Cultural differences take place among most nations of the
world. Differences in culture are one of the most significant
factors in an international company. All nationalities posses
unique characteristics, which are unknown to many
foreigners. Many of the top international businesses are
unaware of these cultural differences. It is very important to
understand these cultures in order to market a product
successfully. As an example, different nationalities have
different beliefs on how business matters should take place.

Where some countries prefer to work with a deadline other
countries can take this as being offensive. Many countries
feel it is an insult to be asked to work under a set time
period. A country may feel that a deadline is threatening
and may feel backed into a corner. On the other hand,
other countries try to expedite matters by setting deadlines.

To be effective in a foreign market it is necessary to
understand the local customs. Knowing what to do in a
foreign country is as important as knowing what not to do.

Failure to understand local customs can lead to serious
misunderstandings between business people. The simple
rejection of a cup of coffee can lead to total confusion. The
decline of an invite is sometimes considered an affront. To
avoid making blunders, a person must be able to discern
the difference between what is acceptable behavior and
what is not acceptable behavior. Violations of a local
custom can be insulting, and can cause uncomfortable
situations. To be a successful manager of international
marketing, one must be able to discern the differences as to
what must and must not be done. It is almost impossible to
attain complete knowledge and understanding of a foreign
culture.


As established, culture plays an important role in the drama
of international marketing. Of all the cultural aspects,
communication may be the most critical. It is certain that
communication has been involved in a number of cultural
confusion. Good communication linkages must be set
between a company and its customers, suppliers, its
employees, and the governments of the countries where it
performs business activities. Poor communication can
obviously cause various difficulties. One source of difficulty
among starting companies is that of effective
communication with potential buyers. The problem is that
there are many possible communication barriers.

Sometimes messages can be translated incorrectly,
regulations overlooked, and economic differences can be
ignored. Other times when the message does arrive, its
ineffectiveness can cause it to be of no value. Every now
and then a buyer will receive the message, but to the
companies disappointment, the message was sent incorrect.

It is normal in multinational businesses to send and receive
messages on a regular basis. Many well-known people
have incapacitated public speech introductions by using
inaccurate titles and names. Not all communication
problems are verbal. Some serious problems have
occurred as a result of non-verbal communication.

Non-verbal communication exist in numerous forms.

Sometimes a person’s appearance can convey a stronger
message than intended. Untidy attire, for example, can be
more offensive in some nations than in others. The local
people often are willing to overlook most of the mistakes
made by tourist. On the other hand, locals are less tolerant
of the errors of business people. It is very important to be
able to interpret the different means of communication in
international marketing.
In America, we sometimes take for granted the display of
products on the market. However, in other nations such
product array and selection do not always exist. It is
important to understand that even if local customers can
afford a certain product, they may not always want it. If by
chance are interested, it may be only if it is substantially
modified to fit their local preferences and taste. These
adaptations exist in the form of product and package. The
alteration of a material product is sometimes required to
match the product to local taste and conditions. Adaptation
of the package is often needed to attract customers to the
product. Many times adaptation is also used to maintain a
product’s righteousness in a unique environment. A firm is
occasionally forced to modify both the product and the
package to create an appropriate product for the new
market. Some products may require more technical
modification than others may. Measurement systems vary
between countries, and often components need to be
adjusted to cleave to local standards. The need for product
adaptation has existed for many years. In 1857 England’s
East India Company possibly lost control of India because
it failed to modify a product it provided. A product may be
well acceptable in markets, but may not sell if housed in an
inappropriate package. Packages promote the product and
they protect it. International packaging must be able to
withstand the journey. Some countries have exported their
products only to witness the return of crushed and
half-empty containers. Packaging can sometimes bring
embarrassment to a company. Medical containers made in
the U.S. drew unwanted attention because they carried the
instructions “Take off top and push in bottom.” These
messages was harmless here in America, but were sexual
and humorous connotations to the British. Often the choice
of package and product is difficult. Sometimes companies
have failed to sell their products overseas because of the
packaging of a product. Each firm must determine the area
most appropriate for its product. Determining the region
where it is most appropriate to market a product is not an
easy task. Wherever the location of these places, they must
be found because market testing is essential in international
marketing.


Many countries maintain regulations concerning their
products and packages. Countries have expectations that
foreign marketers will adhere to the rules. Failure to abide
by the rules of a country can prove to be very costly. The
legal and political atmosphere varies across national
borders. Different countries have different legal policies.

There are laws to which a marketer must abide by when
marketing internationally. Some countries enact laws to
protect consumers or to preserve a competitive
atmosphere in the marketplace. Since many countries
maintain regulations concerning their products and
packages, the wording or color of a package can create
difficulties. In some countries giving gifts to authorities is a
standard business procedure. In other countries, such as
the United States, these gifts would be considered as
bribes or payoffs and are strictly illegal. If an error occurs it
can be costly, but with the appropriate alterations it can be
corrected. The General Agreement on Tariffs and Trade
(GATT) reforms imposes on national governments the
obligation to sacrifice local and state laws that protect
customers, and the environment. Plans were developed in
the mid-1980s to broaden GATT’s mandate by extending
its police powers to the areas of foreign investment and
trade in services. If such reforms are enacted, GATT will
have the authority to remove barriers to foreign investment
and to override or knock out local laws for protecting a
nation’s insurance, brokerage, an banking businesses.

Removing local laws can definitely make the international
work place easier, when it comes to the legal aspect.
In the field of marketing, a product promotion can be the
most difficult. Timing is the most critical element in the
launching of a new product. Most firms understand this and
also perceive that varied peoples hold different conceptions
of time. Since some nationalities are more conscious of time
factors than others, extra time must often be allocated to
guarantee that everything is completed as schedule. An
international marketer can adopt several strategies
regarding its product and promotion. Marketing a product
internationally through a single promotional message
worldwide can be effective for products that have
standardized appeal for the majority of the people. Most
times this could be the least expensive strategy. When it is
hard to translate promotional messages or to adapt an
overall promotion to local customs, companies market one
product. This promotion is designed to market one product
but vary its promotions. Some products are well known
among the nation and need little advertising. The
advertisement can be on American influence located in
China. If a theme works exceedingly well in one country,
then it naturally becomes very tempting for a firm to want to
use it in another country. There is a big risk involved in
doing this, because admirable themes are culturally
oriented. For example, consider the very popular Marlboro
advertisements. The Marlboro man projects a strong
masculine image in America and in Europe. In Hong Kong,
attempts to use this advertisement were unsuccessful
because the urban people did not identify with horseback
riding in the countryside. Several firms have tried to use
old, reliable promotional methods in countries where they
simply do not work. Billboard advertisements, for example,
are perfectly legal in most parts of the Middle East, but it
does not mean one should use them. In some cases
companies have been know to advertise in the wrong
language. Such mistakes can cause major problems.
It is often the promotional strategy that creates mistakes.

The perception of the product characteristics plays an
important role in the international marketing strategy. One
must realize that the importance’s of a certain product traits
vary from country to country. Multinational corporations,
therefore, must consider varying promotional tactics.

Adapting the product but using the same promotional mix is
a strategy used when a product will not appeal to different
local tastes. For example an American cheese company
may need to use different ingredients when making cream
cheese for the markets of different countries. The most
expensive strategy is adapting to both the product and its
promotion. This strategy may be required when neither the
existing product nor its promotion would appeal to foreign
markets. In some cases, the international firm may develop
a completely new product for a foreign market. It can be
very costly to create a new product line for a foreign
market. The distribution strategy used sometimes depends
on the firm’s international organization. It does not matter if
it is licensing, exporting, or manufacturing in the host
country. International marketers use existing distribution
channels for the most part. Distribution channels link the
producer of a product to the consumer or industrial user.

This international marketing channel is sequence of
marketing organizations from nation to nation that directs
the flow of products. Most industrial products use shorter
channels.


One of the most basic levels of international marketing is
licensing. A license is a contractual agreement in which one
firm permits another to produce and market its product and
use its brand name in return for a royalty or other
compensation. This grant may be in the form of a direct
sale of rights or be limited to a certain period of time.

International licensing can be tied to joint ventures between
the parent and the subsidiary. For example, an American
candy manufacturer might enter into a licensing arrangement
with a British firm. The British producer would be entitled
to use the American firm’s candy formula, and packaging
to advertise the candy as though it were its own. The
advantage of licensing is that it provides a simple method of
expanding into a foreign market with no investment.

However, if the licensee does not maintain the licensor’s
product standards, the product’s image may be damaged.

Another disadvantage is that a licensing arrangement does
not usually provide the original producer with any foreign
marketing experience. Technology licensing is a
conceivable alternative to the exportation of finished
products through intermediaries or to the different types of
capital involvement, which could be chosen as an
international strategy. Many companies use intercompany
licenses to protect the intellectual property of the parent
company that is held by the subsidiary, and to allow for
payments by the subsidiary to the parent of certain license
fees. Licensing is also dependent upon product
characteristics. Products subject to rapid technological
change are also good licensing candidates. For most large
companies licensing is designed as a means to enter
secondary markets. The potential licensor must look at
legal and financial considerations. Many times the decision
to license has been made since the company has no other
alternative because the government restricts direct
investment through controls on foreign ownership or
because it restricts the development of marketing network
by a number of tariff barriers. Licensing allows the licensor
to enter into foreign markets with a low financial risk. The
decision to license is a complex one. Many licensing
relationships do not succeed because the parties fail to
understand each other’s agenda.
The creation of joint ventures sometimes prevents all the
problems encountered by a company when going overseas
from occurring. With the combined expertise and efforts of
local and foreign firms, many problems will be eliminated.

A joint venture is a partnership that is formed to achieve a
specific goal or to operate for a specific period of time.

International corporations may enter into joint ventures.

Most joint ventures were formed to share the extremely
high cost of exploring for offshore products. A company
should create a joint venture only after giving it some
consideration. Many problems occur when company’s fail
to thoroughly investigate potential partners. Licensing
decisions are as difficult to analyze as those decisions
involving the creation of a joint venture. Failure to make the
correct decisions at the right time can result in the loss of
substantial long-range business prospects and profits.
A firm can also manufacture its products in its home
country and export them for sale in foreign markets. Like
licensing, exporting can be a relatively low-risk method of
entering foreign markets. Unlike licensing, it is not an easy
task. Exporting opens up several levels of involvement to
the exporting firm. On the basic level, the exporting firm
may sill its products to an export/import merchant. This
merchant assumes all the risks of product ownership,
distribution, and sale. It may purchase the good’s in the
producer’s home country and assume responsibility for
exporting the product. The exporting firm may also ship its
products to an export/import agent. The export/import
agent arranges the sale of the products of foreign
intermediaries for a commission or fee. The agent is an
independent firm that sells and may perform other
marketing functions for the exporter. The exporter retains
title to the products during shipment and until they are sold.

An exporting firm may also establish its own sales offices in
foreign countries. These installations are international
extensions of the firm’s distribution system. The exporting
firm maintains control over sales, and it gains both
experience and knowledge of foreign markets. Eventually,
the firm may develop its own sales force to operate in
conjunction with foreign sales offices or branches.
Pricing is a very important factor in international business.

The pricing system more common in international marketing
is cost-based pricing. Cost-based pricing is not as popular
in domestic marketing as it is in international marketing.

Using this simple method of pricing, the seller first
determines the total cost of producing or purchasing one
unit of the product. The seller then adds the amount to
cover additional cost and profit. The cost added is called
the markup. The total cost of the markup is the selling price
of the product. Many smaller firms calculate the markup as
a percentage of their total cost. Markup pricing is easy to
apply, and it is used by most businesses. However, it has
two major flaws. The first is the difficulty of determining an
effective markup percentage. If this percentages too costly,
the product may be overpriced for its market. On the other
hand, if the markup percentage is too low, the seller is
“giving away” profit that could have earned simply by
assigning a higher price. In other words, the markup
percentage needs to be set to account for the working of
the market, and that is very difficult to do. The second
problem with markup pricing is that it separates pricing
from other business functions. The product is priced after
production quantities are decided upon, after cost are
incurred, and almost without regard for the market or the
marketing mix. To be effective, the various business
functions should be integrated.


The different types of pricing can vary in international
marketing. Geographic pricing strategies deal with delivery
cost. The seller may assume all delivery cost, no matter
where the buyer is located. The seller may share
transportation cost with the buyer to pay the greatest part
of delivery cost. When a foreign product enters a country,
there is a tax added to the cost. Import duties are designed
to protect specific domestic industries by raising the prices
of competing imported products. The importer first pays
most of the import duties. After the importer pays the price
it is then passed on to the customers through higher prices.

These higher prices are usually less competitive. The cost
of shipping and complying with other various regulations
can also add to the pricing method. Prices are also effected
by exchange rates, especially by changes in these rates.

Financial limitations are normally imposed through
exchange rates. It is required to convert local currency to
foreign currency at government-imposed exchange rates.

Because of the added cost and uncertainties in the
exchange rate, prices tend to be higher in foreign markets
than in domestic markets.
An important economic consideration is the distribution of
income. The distribution of income, especially discretionary
income, can widely vary from nation to nation.

Discretionary income is of particular interest to marketers
because consumers have more input in the spending of it.

Income creates purchasing power. International marketers
tend to concentrate on higher income countries as either
personal, disposable, or discretionary. For obvious
reasons, marketers tend to concentrate on higher income
countries. Some producers have found that their products
are more likely to sell in countries with low income. As in
domestic marketing, the determining factor is how well the
product satisfies its target market.


International marketing encompasses all business activities
that involve exchanges across national boundaries. A firm
may enter the international market for many reasons.

Whatever the reason international marketing can provide
and efficient way of entering the market. A firm’s marketing
program must be adapted to foreign markets to account for
differences in the business environment and target markets
form nation to nation. The marketing mix may require the
modification of cultural, social, economic, and legal
differences. Foreign marketing requires the understanding
of various additional costs, which tend to increase the
prices of exported goods. The marketing program of an
international company must adapt to the necessities of a
foreign market. The strategies it uses to accomplish a firm’s
marketing goal should be the main priority of the marketing
program. False assumptions frequently cause expensive
mistakes in the market. The importance of international
marketing

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