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Thursday, August 21, 2008
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Thursday, August 21, 2008
International Marketing – will it be beneficial for your Company?By: Nestler
Over the past 40 years the number of multinational corporations in the world’s fourteen richest countries has gone from 7,000 to 24,000.
While many companies have marketed internationally for years, more and more companies are looking to enter the arena of global competition.
In today’s business world, often companies simply cannot stay domestic and expect to maintain and increase their markets. A company must initially decide if it is beneficial to go international and then define its international marketing policies and objectives to create an effective promotional campaign.
The Decision Whether to Market internationally is a difficult and complex one. A global industry is defined as “an industry in which the strategic positions of competitors in major geographic or national markets are fundamentally affected by their overall global positions”.
Though some U.S. businesses would prefer to eliminate foreign competition through restrictive legislation, a more effective way to compete is to continuously improve products and to contemplate marketing abroad. There are several factors that attract more and more companies into the global marketplace, for instance, global companies that offer superior products for lower prices can threaten a domestic company’s market. This is often a force that attracts companies to enter the global marketplace.
There are several risks that must be contemplated before deciding to market internationally. For example, a company may not adequately understand foreign customer preferences and could potentially fail to offer a “competitively attractive product”. A frequently mentioned example of this type of blunder is when Hallmark cards introduced their greeting cards in France. Hallmark did not take into account that the French dislike syrupy sentiment and prefer to write their own cards. Another example is when Coca-Cola had to remove its two-liter bottles from the market in Spain after learning that few Spaniards owned refrigerators with sections large enough to accommodate the large bottle
Another risk that companies face when contemplating marketing products internationally is that the company might not adequately comprehend the foreign country’s business or social culture. This can lead to ineffective dealing with foreign nationals, which can hurt product sales. For example, in some Asian cultures it is extremely rude to touch someone on their head. In Arabic countries it is considered unacceptable to point the bottoms of one’s feet at another person. In many Latin American countries, it is proper to cultivate a friendly personal relationship before doing business. Consequently, many companies simply choose to market to neighboring countries because they understand these countries well. Therefore, it is not surprising that the United States’ largest foreign market is Canada and that Swedish companies frequently choose to expand internationally only within Scandinavia.
Despite the many challenges in the international business market, companies selling in global industries can successfully internationalize their operations if they follow a structured marketing approach.
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