This article focuses on how organizations use international marketing to gain entry into foreign markets. In order to have a successful international marketing strategy, organizations adapt, manage, and oversee marketing campaigns in foreign locales. Most organizations that choose to venture into the international market tend to have two similar characteristics. Many organizations have contemplated going into the global marketplace in order to remain competitive and increase their growth. However, this move may not be for all companies. Each organization will need to conduct a SWOT analysis to determine if it should enter this arena. As more businesses seek global opportunities, marketing research that is timely and accurate is a requisite. Marketing researchers must be able to identify creative ways to use the new technologies in order to engage in activities that will assist their organization's marketing strategies.
Keywords Computer Assisted Personal Interviewing; Computer Assisted Telephone Interviewing; Developing Countries; Expatriates; Export Management Company; Information Flow; International Marketing; International Marketing Research; Localization Services; Mixed methodology; Qualitative Research; Quantitative Research; SWOT Analysis
Marketing: International Marketing
International marketing involves attempts by businesses to sell their products and services to consumers in another country. Although the concept of marketing is the same, an organization's marketing plan can be different based on the geographic location of the target market. Issues such as price, advertising, and distribution, tend to be different across geographic locations, and the marketing team will have to address them based on the demands of the various markets. In order to have a successful international marketing strategy, organizations will need to adapt, manage, and oversee a marketing campaign in a foreign territory. Most organizations that choose to venture into the international market tend to have two similar characteristics. They tend to go abroad to market products and services that they believe have a high potential to earn money in the specified foreign markets, and they have committed themselves to make an international presence.
Many organizations have contemplated going into the global marketplace in order to remain competitive and increase their growth. However, this move may not be for all companies. Each organization will need to conduct a SWOT analysis to determine if it should enter this arena. There are many factors to consider before embarking on such an endeavor. Lisle (n.d.) has provided a guideline to assist organizations with determining whether or not international marketing is an option. Each organization should research and respond to the following questions:
- Determine if the organization has advantages as compared to other possible entrants or existing organizations.
An organization may be able to overcome barriers to entry due to its uniqueness in the market. When an organization has an advantage over other possible entrants or existing competitors, it is the best time for market entry.
- Identify an unmet market need or underserved market niche.
Organizations will need to research and identify market niches that have not been discovered or are underserved. There may be a possibility that the organization can meet the need before competitors discover that it existed.
- Find the "Goldilocks" sized market.
Organizations should take the size of the market opportunity into consideration. Sometimes, the best market is one that is not too large or too small. It's safer to go with a market that is average size.
- Growing markets are advantageous so that an organization’s success does not have to come at the expense of other organizations.
A market’s growth rate is an important factor to consider; growing markets are easier to enter than those which are overcrowded. If there are too many players in the game, organizations will be forced to steal from each other in order to survive.
- Conduct a competitive analysis of each market under consideration.
The level of competition in the industry is an important factor. A perfect market would be one that has (1) a customer base that is dependent on the industry's competitors, (2) a large number of similar suppliers to the organization and its competitors so that the customers' bargaining power is low, (3) an innovative industry with barriers to entry which lower the threat of substitute products and new competitors, and (4) enough competitors and price elasticity so that competition would not be too high.
- Identify markets that are in a state of "disequilibrium."
When a market is in disequilibrium, it means that it is experiencing some type of change or transformation. Stagnant industries tend not to welcome new entrants, whereas, an industry seeking new solutions would provide opportunities for entry.
- Seek out dissatisfied customers with low switching costs.
Customer satisfaction is a hot issue in many industries. Although many organizations spend substantial amounts of money soliciting customers, they lack the personnel to maintain quality customer service. Therefore, opportunities rise for new entrants who can market their ability to service customers after the sale has been made.
- Understand that the customers' purchase decision is essential.
Organizations will need to research the potential markets to determine what would be successful. Unfortunately, many organizations have attempted to take a product's marketing campaign and product development to foreign countries only to fail. Different markets have different preferences. For example, a French manufacturer cannot utilize the process for its French facility to produce the same product in Germany. The German customer base may have a different set of needs and standards. Therefore, it would be best to determine what those needs are versus assuming the same process can be successfully duplicated in another country.
- Choose the more profitable of two markets.
If an organization has followed all of the above-mentioned steps and found two viable markets, it should enter the market that is the most profitable.
- Observe macro-level trends.
Organizations should consider "big picture" issues as reason to justify entering a market. For example, are there any themes involving baby-boomers, education and healthcare reform, or global warming? If so, gaining entry may be easier for an organization.
- Be aware of regulatory obligations.
Identify limitations on trade (i.e. tariffs). Some countries may offer better regulatory conditions than others.
- Identify the most attractive segment or segments.
Once an organization has identified the ideal market, it will need to be specific about which segments (i.e. in terms of product type, geography and customer type) are the most attractive.
The decision to go into international marketing must be made only after careful thought has been given to its viability, and organizations should weigh the advantages against the disadvantages. Although doing business internationally can yield great profits, there are some issues which need to be considered. First, cultural and language barriers may be a problem. "Language barriers may present an obstacle when trying to communicate the benefits and advantages of a company's products and services overseas" (Khan, 2005).
Economic and political risks are two additional concerns which need to be considered prior to entering into a foreign market. Organizations will have to research and determine (1) the stability of the host country's government in order to make sure that there are no security threats, and (2) if the foreign exchange is stable and whether there is a risk of not being paid for products and services.
"Developing the required organizational processes and allocating appropriate resources to an international effort often requires creating a separate export department within an organization that is responsible for all aspects of dealing with foreign markets" (Khan, 2005). Organizations will have to decide if it is best to establish the international business function internally or externally. It is important for organizations to assess their current workforce to determine if they will need to rely on expatriates to establish a presence in the host company or whether it is more feasible to hire employees from the host country in order to minimize cultural and language barriers.
If the organization elects to start internally, it may assign a team to set the budget, ship products and develop the international marketing plan. However, this can become expensive so the organization may evaluate two other options. One option is to hire employees from the host countries. Many organizations elect this option in order to minimize cultural and language barriers and secure labor that is cheaper than its current workforce. If the organization elects to hire...
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