International Marketing Environment-A Detailed Study

Transcription

1 International Marketing Environment-A Detailed Study Nupur Kashyap Abstract: In this research study, we described the framework of international marketing environment and how it changes the marketing strategies adopted by the marketers. We described how the global marketing is different from the domestic market and how it has become important for the firm to go international to sustain in the competitive environment. We provided the detailed study on the changes taking place in the international marketing environment and the ways through which the firm can enter global marketers. The marketers have to consider the seven elements involved in marketing and advertising of products across the world. We focused on the importance of relationship between the international marketers and customers from different regions. The marketer adopts the marketing strategies to maintain stronger bond with its customers by giving them proper satisfaction. The global company has to inculcate all the necessary elements in their marketing techniques to boost up the sales and achieve higher growth rate. Keywords: Consumers, Global Marketing, International Marketing, Product I. INTRODUCTION International Marketing International Marketing means application of marketing principles by the companies across the national borders to satisfy the needs and wants of the people residing there. It refers to performing and undertaking the marketing activities in more than one country or across the nation and is also called as Global Marketing. It is a simple process of developing a market strategy in home country and introducing it to the new markets overseas. It is generally done by multinational companies who have main office in one country and other offices in other different countries. The exceptional instance is Domino's, it has prioritized menu innovation as a means of growing worldwide interest and consciousness. The joy of pizza is that bread, sauce, and cheese works fundamentally everywhere, except maybe China, where dairy wasn t a big part of their diet until lately, explains Domino s CEO J. Patrick Doyle. And it s easy to just change toppings market to market. In Asia, it s seafood and fish. It s curry in India. But half the toppings are standard offerings around the world. By making a conscious effort to gain a better understanding of the preferences of the markets it's trying to break into, Domino's is able to diverse enough to gain international attention. Other successful examples of international marketing are: McDonalds, KFC, Dunkin Donuts, Starbucks, Audi, BMW, etc. It is the foremost decision of the firm whether to go for international market or domestic market. It depends upon their willingness to accept the new culture and related rules and laws and their financial ability to cope up with the international competitive environment. Objectives 1. The main objective was to study in detail and understand the international marketing environment. 2. To discuss the differences between the global and domestic marketing and how the new firms are opting to become global. 3. To study the ways in which the firms can go for international business and marketing and how to choose the marketing strategy accordingly. 4. To emphasize on the combination of seven elements of international marketing that helps the business to grow, to gather information about the customer and to adopt marketing techniques. II. LITERATURE REVIEW The topic of international marketing interests many of the researchers and is being researched by many. International marketing refers to marketing of products beyond geographical limits. A global firm operates in both domestic and global market. International marketing established itself in 1960s and has ever since been used to denote any and all activities pertaining to marketing beyond the domestic level. (Samiee P.544). The statement was given to denote the basic meaning of the global marketing. As the companies become global, they are required to add more effort in conducting marketing research that links the management and customer expectations (Young & Javalgi, 2007). It is evident from the researches that international marketing environment is correlated with its customer s requirements. The firm has to consider what the customer desires and what type of marketing strategy is able to satisfy that desire. The firm whose business of operations is across the world has to be aware about the expectations and tastes of the different customers in different regions Page 41

2 and market accordingly in order to survive in the competitive market. Firm resources determine the extent to which a firm is capable of exploring opportunities and of facing the challenges posed by competitors in new markets. {Navarro et. al. (2010b, 2011)} It is important for the firm to determine its personnel and financial resources and to make an effective use of them to compete with its rivals in the global markets and explore the opportunities prevailing in the global market. III. DOMESTIC MARKETING VERSUS INTERNATIONAL MARKETING It is important to understand the basic differences between domestic and international marketing. We explained the differences on the basis of meaning, operations, risks involved, capital, government interference, control, knowledge, product and familiarity. The details of the difference are given underneath: Basis of comparison Domestic Marketing International Marketing Meaning Domestic marketing is marketing of products and services within the geographical borders of a country Operations in single country. Internet marketing refers to marketing of products and services beyond the geographical limits or across the world. Operations in more than one country Operations of Business Risks Involved Less risky and easier More risk of different nature and complex Capital Required Lesser financial resources More final resources required Government Less Interference Comparatively higher Interference Customers Single set of customers Variations in tastes and preferences of varied customers Control over Control of marketing activities is easy Lesser control over marketing activities Marketing in comparison to international due to different cultures, tastes and Knowledge required Product Mix Familiarity activities Basic Marketing knowledge is required Product Mix is decided for achieving higher sales and satisfaction Well familiarity with domestic market and local customers preferences Specific marketing knowledge and competence is required Product mix is decided according to foreign market Lack of familiarity with international market and effective research is required Ways to Enter International Market A firm who is willing to accept the new culture and laws of different countries and who wants to market its products internationally can adopt any of the following discussed ways to go international: 1. Direct Exporting Direct exporting is selling directly into the market you have chosen using in the first instance you own resources. Many companies, once they have mounted a sales program turn to retailers and/or distributors to represent them further in that market. Agents and distributors work closely with them in representing their interests. They become the face of the company and thus it is important that the choice of retailers and distributors is handled in same manner that a firm would hire a key staff person. It is the easiest way a company could enter a new market and is adopted by many companies across the world. 2. Joint Ventures The companies can go worldwide by becoming a member of arms with other country based companies with the intention to monetize their existing relationships with the local customers. In this type of strategy profits and losses are equally shared by the companies who have joined hands. In India, ICICI Prudential Life Insurance Company, TATA AIG, HDFC standard life insurance, TATA Sky are the examples of joint ventures. 3. Licensing Licensing is an arrangement where a firm transfers the rights to the use of a product or service to another firm. It is a mainly useful strategy if the purchaser of the license has an enormously large market share in the market a firm wants to enter. Licenses can be for marketing or production. For Coca Cola, licensing started for brand protection. The company licensed out the brand in order to protect against other companies launching coca cola branded products in other categories. Page 42

3 4. Franchising Franchising is another form of licensing, simply described a right to sell the products of other company. Here the organization puts together a package of the successful ingredients that made them a success in their home market and then franchise this package to overseas investors. The Franchise holder i.e. the franchisee may help out by providing training and marketing the services or product. McDonalds is a popular example of a Franchising option for expanding in international markets. KFC is also the most popular franchisor of chicken restaurant chain. 5. Greenfield Investments It is a type of foreign investment in which a parent company will build the facility and operate the business on a continuous process in the foreign market. It involves high risks and is certainly costly but it is the requirement in some counties which due to government rules and regulations, ability to access technology and transportation costs. There are certain companies who want to reach international market in order to capture larger market share and increased sales. They can choose any of the above mentioned ways depending upon their available resources and willingness. But they have to consider various technological, political, social and cultural conditions while entering the market and make marketing principles and strategies accordingly. 7 P S of International Marketing Environment This combination of 7 P s of international marketing helps the businesses and companies to decide on their product offerings. These are the important factors in international marketing environment. The first four P s were been used for a long time but the new 3 P s are include considering the services industry and how it is important for the marketers to consider them. 1. Price The price of product is something which denotes its value, it should always represent the good value for money. It is not necessarily be reasonable always. It is the most important tenet of international marketing also as it is affected by cost incurred in developing, promoting, marketing and delivering the product. A company should consider all these factors when pricing a product. A firm should price its product in a manner that it can compete in the global market andprovides profit also. 2. Product A global company can create a single product and induce variations in order to serve different markets. A product should provide value to customer and satisfy his immediate need. A firm has two options it can either produce a new different product for different market or tweak different elements in the single product produced. A product simply has to meet the customer s expectation. 3. Place It plays a vital role in marketing of products to different countries. It refers to from where the consumer will buy the product or how the product reaches to the customer. In global marketing the marketers can go for online sales of product by providing them online catalogs and delivering the product to the customer s choice of place. 4. Promotion It refers to the ways by which a firm communicates about the product to its customers. It includes advertising, sales promotion, etc. The global marketer seeks to market his product in a cost effective way. A marketer has to reduce the costs involved, employs lesser personnel and should work on effective implementation of the way of promotion. This is the major challenge to the global company. 5. Process It is a method of providing the services which are helpful the customers. An international firm has to have a thorough knowledge on whether their services are appropriate to the customers in different markets. Having a proper process helps you to ensure that the customer will purchase your product again. It also increases the efficiency and creates a good image of the firm in the global market. 6. People People refer to the customers, employees, sales staff and marketer, everyone who is involved in the process of marketing the product. A firm should focus on providing excellent services to the customers, thus creating a positive experience for them and the happy customers will spread a word for the services provided to them. Marketer has to focus on providing the training, perks and other incentives to ensure the employee satisfaction. By keeping everyone happy, a marketer can enjoy higher sales and satisfied buyers. 7. Physical Evidence It refers to essentials and everything the consumer can see while interacting with the company. It refers to the pamphlets or online catalogues, the pictures of packaging of the product, as it helps the buyers to make a decision of whether to buy a product or not. Though for a global marketer, it is not possible to Page 43

4 provide much on physical evidence but by providing them with online catalogues and advertisements he can market the product. IV. CHANGES IN INTERNATIONAL MARKETING ENVIRONMENT International Marketing Factors are related to the world economy. The principle worldwide International marketing factors are demographic factors, economic factors, social and cultural factors, competitive factors, technological factors, political and legal factors, and institutional factors. To develop effective marketing programs it is necessary to apprehend the changes in these factors. 1. Demographic Change Demography is the study of population in terms of size, locations, gender, race, occupation, and etc. Demographic environment is of foremost interest for marketers because it involves people, and those make up markets. Changes within the international demographic environment have major implications for global companies. Thus, entrepreneurs keep a close eye on demographic developments in their markets. Entrepreneurs should look at the demographic environment along with the converting age shape of populations, the geographic shifts in the populace, and the range of the populace due to the fact when a company market a product they need to promote it to the proper customers and target market in that specific region. 2. Economic Change Economic surrounding includes monetary elements that have an effect on consumer buying energy and spending sample. Marketers ought to pay close attention to important tendencies and consumer spending patterns both across and within their world markets. Marketers have to pay intently attention inside the monetary surroundings such the client spending, income distribution because those have a huge impact on the marketplace because of the purchaser buying behavior. 3. Social and Cultural Change Social and Cultural factors are essential to take into consideration while developing and imposing worldwide marketing strategies. Social thing consists of reference organizations, family, position, and standing within the society. Culture is the sum of values, rituals, symbols, ideals, and notion procedure which might be found out, shared with the aid of a collection of people, and transmitted to generations to generations. Marketers should closely monitor the cultural and social differences while formulating the marketing strategies. International Marketing and Customer Relationship Management Customer relationship management (CRM) is an approach to managing a company's interaction with current and potential customers. It uses data analysis about customers' history with a company and to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth. It is crucial for a firm to establish strong relationship with its customers to increase its sales and to sustain in any market. A global marketer can use internet marketing to provide services to the customers beyond geographical limits. Being a global company, it is important on the part of marketer to develop a bond with its different customers. Since the direct face to face contact is not possible in such global markets, a marketer can develop the relationship by sending s to its current customers for getting their valuable feedback. He can also create a grievances resolving forum to provide the customers better post purchase experience. This will help to build an image in the customer s mind and a positive word will be spread by the satisfied customers to the potential customers. They can also develop strong relations with the potential customers by sending them catalogues via s, through their franchisee operating in that country by sending the sales representative to the groups of potential customers. Tracking every potential customer and sales lead is essential for a global companies success. Establishing the customer relationship management strategy is time-consuming but it will provide long-term benefits to the marketers and also provides them with valuable tool that will boost up the sales and growth of the company in international marketing environment. V. CONCLUSION Our main objective was to focus to international marketing environment. We defined the global marketing environment in the broadest sense and discussed the various ways through which a firm can enter the international market. We differentiated the domestic and global marketing and explained how the changes are taking places in international marketing environment. We also elaborated the seven elements of the international marketing and their importance in formulation of marketing strategies. The companies going for international trade and marketing are required to develop strong relationship with the customers they are serving. They have to create an image in the minds of the customers so that purchase their products again and again and spread a positive word about them to their potential customers. Page 44

5 Considering all the above discussed factors would help the global companies to achieve higher success rates and major sales in the competitive market. VI. REFERENCES [1] [2] [3] Philip Kotler& Keller (2005) Marketing Management, 12th edition Page 45