BUS615: International Marketing

The decision to expand operations on a global scale involves many factors, which can vary from country to country. Marketing in the US is very different than marketing in other nations, and companies need to explore these factors before taking steps to expand. For example, competition in one nation may be quite different from competition elsewhere. This can impact a company's marketing campaign and require them to adjust their messaging and approach for each location. Trade between countries can also impact the products and services that are sold across the globe, and rules and regulations will vary as well. In spite of the challenges that companies face when marketing on an international scale, the benefits are many, and the more knowledgeable an organization has about a country's markets, the greater its chance of success. Read this chapter and begin your exploration of the factors involved in marketing around the world.

This video gives a brief introduction to three different internationalization theories relevant to marketers when describing organizations' international expansions.

Countries that experience rapid growth and development with lower per-capita incomes and capital markets that are less mature than those in developed countries are called emerging markets. Examples of emerging markets are the BRIC countries (Brazil, Russia, India, and China) and GIPSI countries (Greece, Ireland, Portugal, Spain, and Italy). Marketing in an emerging country market is likely to be more challenging than in a developed market since marketers often face political instability, less advanced communications technology, and consumers with less disposable income. Read this chapter to learn more about developed, developing, and emerging economies.

This reading gives a good overview of the business market, where organizations sell products and services to other businesses, governments, and institutions for use in their own business operations.

Here, we consider how B2B customer interactions, typically long and complex buying processes that tend to be more relationship-based, differ from B2C interactions.

Companies involved in international marketing have to deal with taxes, duties, or tariffs on goods bought from or sold in other country markets. Being aware of multilateral and bilateral trade agreements between your country and other nations is essential since those agreements help level the playing field among countries by reducing tariffs or making it easier for businesses to import and export. Bilateral agreements are trade pacts made between two countries. Three or more nations take part in multilateral agreements, which makes them harder to negotiate. A country can be part of a multilateral trade agreement while also participating in bilateral trade agreements with many other countries. The World Trade Organization (WTO) is an important organization involved in ensuring the efficient flow of trade. The WTO works with countries to negotiate the terms of a trade agreement, and once an agreement is established, it helps enforce the agreement. Global financial institutions like the International Monetary Fund (IMF) and the World Bank also facilitate international trade. The IMF has 189 member countries and works to foster global monetary cooperation among its members. The World Bank provides loans and grants for capital projects to the governments of poorer countries. Read this chapter, which discusses the evolution of international trade.

Every country has its unique features, so foreign firms wanting to do business in new markets must take the time to understand that market's characteristics and business environment. This environment has societal forces that organizations have no control over. Still, those forces offer opportunities and threats that can affect an organization's microenvironment and its ability to carry out its operations. Smart companies conduct PESTEL analyses of their macroenvironment, particularly when starting a new business or entering a foreign market. Doing this lets the organization design strategies that take advantage of the opportunities and avoid the threats presented by external environmental forces. In this chapter, we will look at the six forces that make up the macro environment. Understanding these macro-environmental forces and how they can affect a company's operations in a new market is essential when choosing a country for international marketing. To better understand these macroenvironmental forces and the importance of undertaking a PESTEL analysis, read this chapter.

PESTEL analysis has numerous applications. Previously, we explored the role of PESTEL in the global marketplace. Now, we will take a closer look at how PESTEL can help an organization identify opportunities and strategies for success in specific global markets.

Technology has transformed the business landscape, especially since the start of the 21st century. No matter a company's size, technology has become an integral component for most organizations, particularly in the development of management and marketing information systems and company websites. Technology has been of great help to marketers in better understanding their customers' preferences, behaviors, and purchase trends, allowing them to design the most effective marketing strategy based on this intelligence. Meanwhile, the internet has resulted in the development of social media platforms like Facebook, enabling networking among consumers and with organizations that profoundly affect how marketers interact with their customers. The internet has also enabled the boom in electronic commerce (e-commerce) and the emergence of many online marketers, from Amazon to Etsy. This chapter discusses how e-commerce and e-business have increasingly become necessary components of business strategy and strong catalysts for economic development. However, technology continues to evolve, and organizations must keep pace to maintain their competitive edge.

Read this chapter, which discusses the importance of social media advertising for companies when communicating with their target markets.

Many theories explore culture across the globe, but here we will take a closer look at Hofstede's Cultural Dimensions. These include power distance, uncertainty avoidance, individualism vs. collectivism, masculinity vs. femininity, long-term orientation, and indulgence vs. restraint. Read this in-depth evaluation of Hofstede's Cultural Dimensions. As you read, consider the cultural factors that define you and the markets you live and work in.

Now, we will take a closer look at organizational culture and the role culture plays in the business environment and further explore Hofstede's Cultural Dimensions. This section will also explore Shein's theory, which looks at the impact of business artifacts, such as furniture and clothing; values, which encompass what the company represents; and assumptions, which explore how people within an organization communicate, whether consciously or unconsciously. Charles Handy's theory, which continues to be relevant today, explores the power structure of an organization, the identified roles of employees, the formation of teams, and each individual's value within the company. Which of these theories do you see in action within your organizations? Where do you see your fit within the culture?

Competition in the grocery industry in Germany is fierce. There is a growing number of discount supermarket chains that are all competing for business. When Walmart entered this market, they anticipated the same kind of success they enjoyed in other countries. However, because they didn't sufficiently understand the marketplace, their efforts were a failure. There were breakdowns in communication due to language barriers. They didn't fully understand the laws and regulations in the country. They didn't understand how consumers approached their shopping trips, and there were insufficient locations available for expansion. As you read, think about how you might have approached this market entry. What steps could Walmart have taken to have an ongoing presence in Germany?

In this article, we will look at differing points of view about globalization. Many years ago, Theodore Levitt posited that global markets would accept the products sold by international organizations. However, he didn't consider the push-back from some markets based on cultural differences. In more recent times, Thomas Friedman echoed similar thoughts. He believed that several events he called "flatteners", such as distance, language, and geography, would create a unified business world. Several other economists have sought to demonstrate that these theories are not valid and that the differences in global markets prove that it is essential to understand the factors that drive business operations in different countries and cultures. The examples of Toyota, Coca-Cola, and Walmart all point to the need to understand each market into which a company is entering, and adapt products, marketing strategies, and operations, to suit cultural, political, and social characteristics and variations.

This introduction will set the foundation for the factors we will explore in this section. Pay close attention to the definitions of these strategies and think about them as you read the rest of the materials in this section.

As we've learned, marketing on an international scale requires attention to many elements beyond political and economic factors. We also need to look at social and cultural issues that define different populations. Language is one of the most important of these components. However, even within a single country, people may speak several different languages or different dialects of the same language. Colors also have different meanings among cultures. For example, it is important to avoid using white or purple on packaging in Japanese and Hispanic cultures because these are the colors of mourning and death. Customs also vary, and some things that are acceptable in one part of the world may be improper somewhere else. Read this section for a more in-depth look at the many considerations marketers must make when developing international marketing strategies.

Each side in the debate about globalization looks at the world as either a flat world, where products can be marketed the same way across the globe despite cultural differences, or as various semiglobalized or multi-domestic regions. The CAGE analysis, which encompasses Culture, Administration, Geography, and Economics, is an excellent model for studying national differences. Read these sections for an in-depth look at the intricacies involved in developing effective international marketing strategies.

Tariffs and trade agreements significantly affect international markets and how companies and countries interact for mutual benefit. This section explores the various agreements and organizations that govern and monitor international trade. These began with the GATT (General Agreement on Tariffs and Trade), which was replaced by the WTO (the World Trade Organization) in 1995. Consider these rules and regulations, what they mean to countries around the world, how they affect local markets, and their effects on fair trade.

Global market segmentation involves an analysis of various consumer characteristics, including the measurable factors of demographics and geography and the more qualitative descriptors of behavior and lifestyles. Macro-segmentation relies on measurable factors within markets to identify countries that have a demand for similar products. However, this method does not take into consideration differences between countries or even within the same country. Micro-segmentation focuses on behaviors and lifestyles that are similar among consumers in different locales. Read this section for a more in-depth look at how these factors affect marketing strategies.

This section takes a more in-depth look at demographics, which are the measurable factors we use to identify a segment of the population. We use this information to determine which group of people to focus our marketing efforts on. While this may seem like a simple way of choosing a market, studying the variations among consumers in international markets, the many factors that impact their purchase decisions, and what motivates them to make a purchase takes on a much deeper and more complex meaning. Read this section to see the many traits that differentiate a group of people in one country from the people in another country.

One of the first steps in ensuring that marketing strategies are effective and appropriate is developing a comprehensive marketing plan. This is a complex document that becomes even more involved when addressing international markets. For example, market conditions vary from country to country. Distribution channels may be limited or not in place at all. The competitive environment is not the same in different nations, and consumers in those markets make decisions based on many different factors. Pricing structures need to be adapted to local preferences, and product needs may also be different. Read this section for details on how to write an international marketing plan. This will help you understand the complexities involved in marketing on an international scale.

This reading explores each element of the marketing plan in detail and explains how the plan is a guideline for marketing activities in any marketplace. As you read each step, consider the additional complexities that arise when applying these factors to a global market. Take the time to practice by choosing a marketplace and a product, and think about how you might create a marketing plan for that location.

Market research sets the foundation for forming appropriate and effective marketing strategies. The research process for exploring international markets is similar to within the US since the same steps apply. However, researching international markets requires additional exploration into the country of interest's unique nature. These factors can include local rules and regulations, competition, trends, import and export data, and other forces that affect market conditions. As you read, think about market research you might have been involved in and how much more complex it would have needed to be if it was for an international marketplace.

Developing an appropriate pricing strategy requires a company to consider the results of each of its decisions for the company, the marketplace, and the customers they are targeting. For example, if the strategy's goal is to attract customers based on features and benefits, then a company may choose to take a non-competitive approach. However, if customers use price as a decision-making factor, then the company will want to use a competitive pricing strategy. We must also consider the pros and cons of pricing above or below a competitor and how to price a new entry into the marketplace. New entry pricing generally relates to the demand for the item. For example, when Amazon first introduced the Kindle, its price was extremely high. It was unclear how well this new technology would be adopted, and the high price led to low sales levels. As the popularity of the Kindle grew, the price was reduced considerably, and sales increased dramatically. When applying pricing strategies to international markets, there are even more factors to consider, which we will explore later. Read this chapter for an in-depth look at global pricing strategies and the factors that can impact business decisions including currency fluctuations, governmental controls, inflation, as well as competitive forces.

For many years, product management was done on a centralized level across nations, with close collaboration across disciplines. Today's model incorporates some of these past practices but also integrates a more regional approach to generate greater efficiencies, facilitate flexibility, and utilize local expertise. Companies must evaluate the pros and cons of standardized products vs. products that have been customized to address local tastes and preferences. For example, Coca-Cola and Pepsi use the same products and ingredients in all markets. However, McDonald's varies their menus to meet cultural variations and local tastes. Read this summary and the sections for more insight into strategies taken by different organizations in global markets.

No company can satisfy their customers without getting products and services to consumers when they need them, when they want them, and where they can buy them. Known as the supply chain, activities include planning for merchandise production, purchasing and managing materials, distribution of materials, providing customer service, and many others. Effective supply chains are able to quickly respond to changing conditions, they can adapt easily as environmental issues change, and they work to ensure that all parties in the chain are aligned for optimal performance. To gain a more in-depth perspective, read this chapter and consider the many steps taken to ensure that the products you buy are available to you as a consumer and business person.

Creating an effective marketing campaign takes a great deal of time and effort. Organizational goals must be determined, advertising approaches need to be considered, and the target market must be clearly identified. Once these factors are established, advertising agencies begin creating an ad they feel will be memorable and best communicate what that product has to offer. While many ad campaigns are effective and hit this mark well, we all know that there have been many advertising disasters, too. When creating a communications strategy for global markets, each country's culture, language, habits, and behaviors must be carefully considered. Does a slogan translate correctly? Is the photo on the product suitable for that nation? Are colors used appropriately? Are religious beliefs respected? Read this summary and the sections for a closer look at the challenges of creating effective advertising messaging on the international stage.

No company can meet the needs of all consumers. This is true for products in the US and even more so in international markets. Therefore, choosing the appropriate target market takes on significant importance when expanding to other countries. Deciding which countries to enter and when is essential to success. Beyond demographics, companies must consider the formation of customer relationships, the nature of the communication mix, distribution channels, and the presence of other global and local brands. Read this section for a more detailed look at this part of the marketing strategy.

The 4Ps (also known as the marketing mix) represent the most basic of marketing concepts. The individual elements – Product, Price, Place, and Promotion – must all work together to ensure success in a global market. But, when the differences between the home country and the international market are greater, creating an effective marketing mix becomes more difficult. While some companies like Coca-Cola and Visa take a global approach to branding, they must still consider the impact of language, color, values, and norms when appealing to consumers in international markets. Read this chapter for more insight into creating an integrated marketing communications strategy.

As the marketing function has taken on a more consumer-centric approach, new elements have been added to it in the form of the 4Cs. These include customer solutions, communication, convenience, and cost. The integration of these concepts fits well with the 4Ps and enables marketers to better formulate strategies for services that provide solutions for customers. Besides providing more insight into the 4Ps, this section explores the 4Cs and how their categories work together to formulate effective strategies.

The value chain encompasses the internal factors that affect a product's cost, from its inception to the hands of the end-user (the consumer). While these functions are not evident to the consumer, they all affect the ultimate selling price. For example, research and development ensure that the right products are being explored. Product or service design ensures functionality and sales/marketing communicates what the product has to offer. When a value chain has been properly identified, a company can then use it to target its customers effectively on a global scale. Read this article for a more in-depth analysis that explores how the steps in the chain work together.

The value chain encompasses the internal factors that affect a product's cost, from its inception to the hands of the end-user (the consumer). While these functions are not evident to the consumer, they all affect the ultimate selling price. For example, research and development ensure that the right products are being explored. Product or service design ensures functionality and sales/marketing communicates what the product has to offer. When a value chain has been properly identified, a company can then use it to target its customers effectively on a global scale. Read this information article for a more in-depth analysis that explores how the steps in the chain work together.

Unlike the value chain, which is an internal function that focuses on operations, the value proposition is the external messaging that communicates what the product has to offer to the customer. Customers are always interested in the benefits a product or service will provide for them. They will be asking, "what's in it for me?". The answer to this question gives the consumer a reason to buy one product over another. When a company understands what is important to their customer, no matter where they are in the world, it can better formulate messaging that will be meaningful. An effective value proposition will be clear and concise, persuasive, and will differentiate the product from the competition. Consider the value propositions from Target – "Expect More, Pay Less" – and Walmart – "Save Money, Live Better". While they convey similar messages, the differences are evident but no less meaningful and effective. This section will explore the intricacies of the value proposition and how companies can formulate effective messages for their international marketplaces.

Now that we have identified the elements in the value chain and understand the formulation of the value proposition, we can look at the role the customer plays in marketing strategy development and how they define value. Because this changes all the time, companies must also revise, update, and adapt their strategies to ensure that customers receive the value they actually want and not just what the company believes they want. For example, consumers may value a particular product but may change their choices based on new entries into a marketplace. New social and cultural factors may influence customer decisions, which can also change how they view a particular product. Consumer needs may also change due to economic, political, and other outside influences. Read this chapter to see how consumers can affect value messaging.

Information is the key to effective decision-making. Knowing your customers, the marketplace you are operating in, the competitive environment, technology, legislation, trends, and so on can enable a business to make decisions that are appropriate for the company, their products, and the markets they have a presence in. Marketing research is how this information is collected and analyzed. For example, if you were considering opening a chain of cheese shops across Europe, you would want to know about consumers in each city, what kind of competition you might be facing, the price points you should consider, and local trends in the cheese industry. This is the marketing intelligence you need to make decisions. The marketing research process defines how you will obtain this information. Read this chapter for an in-depth look at the marketing research process and its resulting marketing intelligence. This resource also explores specific case studies that show how research enables companies to make effective decisions.

When companies explore global expansion, they need a great deal of information before making decisions with significant implications for their stakeholders. They need to conduct extensive research to ensure that their decisions are appropriate. Think back to the example of an international chain of cheese shops. You can see the many areas where information would be needed: what the competition looks like in each marketplace; what trade barriers exist, if any; challenges related to public relations, ethics, local staffing; and so on. Another decision that needs to be made is whether or not marketing standardization would be appropriate or whether marketing strategies and product development would need to be customized for each market. All of these considerations are the role of marketing research.

This resource from the US Department of Commerce's International Trade Administration includes information about researching specific countries, trade agreements, and international trade opportunities and includes several experts' suggestions. This material can provide insight into which markets are most attractive for global expansion and what challenges might exist in those marketplaces.

So far, we have explored the steps of the marketing research process. Now, we will discuss gathering research and how data can help us meet our research objectives. First, we will look at primary sources of information. These contain new, original information that has not been published previously. Secondary sources are materials that have been published previously and are readily available. No matter what sources you use, the source must be reliable, applicable, and scholarly. If you use secondary research, there are several questions you should ask. Is it current enough to meet your needs? Does it answer the important questions related to your issue? If not, then primary research might be necessary. This section explores the criteria for determining if a source is applicable to your needs.

Research data can be used to evaluate internal factors, such as core competencies and the business model, or external factors, such as Porter's 5 Forces and competitors. These factors all affect how a company will want to implement the marketing research process. This video looks at the role of primary and secondary research in the overall marketing research process.

When conducting international marketing research, a company must find out as much about the market as possible before determining what kinds of research would be most effective in meeting its research goals. This video discusses the importance of analyzing market size, market segmentation, market share, and how these elements relate to the marketing research process.

Digital primary research requires identifying online consumers and determining how to connect with them. Examples include surveys and focus groups. Digital secondary research involves finding where data has been collected and evaluating its applicability to your specific issue. Pew Research is a high-quality source of secondary data. As you watch this video, think about the research methods available to marketers and the challenges they might face in international markets where culture and values vary.

Before entering an international market, understanding that country's culture and values is essential for organizational success. Cultural issues can be explicit – things we can see or perceive – or implicit – values and attitudes. These variations can affect the kinds of research methods that are appropriate and acceptable in a given nation. This section gives some insight into the challenges companies face when researching in a host country.

This video gives a brief overview of traditional marketing outlets and some of the newer ways marketers have embraced technology in their promotional efforts. Think about the marketing methods you notice. Are your demographics being properly targeted? Could there be other ways to better connect with you?

Traditional media has a long history, from the early days of print to radio, television, and the internet. Digital media outlets have changed the face of media and how we get our news and information. In addition to promoting goods and services, new media also promotes political candidates. This was first evident in Barack Obama's presidential campaign, which embraced social media to connect with voters. Today this might seem common, but at the time it was a new and innovative approach. This section gives a brief history of traditional media, how the public learns about various products and events, and how digital media's growth has affected traditional media outlets.

Technology has significantly affected marketing strategies since the advent of printing in the 15th and 16th centuries and print ads from newspapers in 17th-century London. When we think about today's marketing environment, it is hard to imagine a world without digital platforms. The widespread use of the internet has made it possible for companies to reach people everywhere. This section explores the impact technology and the internet have had on marketing, from consumer interactions to customer relationship management, social media, and mobile marketing.

Today, companies need to have an online presence. What online strategies are most effective? That depends on the kind of business, but even more importantly, the content itself. If a company can put the time into keeping their websites and social media platforms up-to-date, they can enjoy a competitive advantage. Watch this video for a look at the benefits of having an online strategy.

Digital marketing encompasses a wide range of outlets, including social media, websites, text messages, email, display ads, mobile ads, and more. These activities give marketers immediate access to customers and potential customers, but also have drawbacks. Privacy issues continue to be a concern, as does the intrusive nature of some strategies. This section explores how companies use social media marketing to target specific segments of the population, how customer engagement enhances a company's integrated communications strategy, and how to use push and pull strategies.

Should we use traditional marketing or digital marketing? This question is top-of-mind for all marketers. The decision to use one platform or outlet can mean the difference between success or failure. Evaluating each option is time-consuming but essential for forming a cohesive, meaningful marketing effort. This section looks at a variety of traditional media activities, including advertising, public relations, sales promotions, and direct marketing. It also explores digital marketing, including websites, interactive tools, content marketing, SEO (search engine optimization), and other strategies. As you read, consider the criteria you might need to use when determining which strategies are right for your organization and offerings.

As we have seen, marketing on a global scale has numerous constraints, including differences in culture, language, and values. When it comes to specific marketing activities, geography and time can also have a significant effect. Using digital platforms for global marketing activities eliminates these limitations and enables marketers to reach wider audiences more easily. In addition to ease of access, many online tools can help companies identify their international audiences' demographics in a way that makes it easier to target specific campaigns and marketing messages. This section discusses the benefits of digital marketing on the international level.

As we continue to look at the various digital and traditional marketing channels that are available, this reading takes a closer look at how marketing strategies evolve into the selection of specific marketing activities. Feel free to read this entire chapter, placing particular attention on digital technology, the evolution of m-commerce, and what this evolution means to selecting appropriate marketing channels for effectively reaching consumers.

So far, we've looked at marketing strategies from the perspective of specific marketing activities across all industries and businesses. However, it can help to be more specific. Read this section on the global forest industry, which gives a much more detailed look at how the industry operates and formulates its marketing strategies. This section covers the forest industry in specific markets in Europe, including a case study of a sawmill that shifted its focus from one aspect of its business to another. This section gives an in-depth look at its strategic planning process and how that process led to choosing specific marketing efforts.

This video introduces the factors that are important to evaluate when considering foreign market entry. An organization must determine the long-run profit potential of a market, which relates to the competitiveness of its economy and the value the company can create for that marketplace. This video explores the pros and cons of being an early or late entrant into the market and whether a company should invest on a large or small scale. Some of the modes of entry into a foreign market include licensing, franchises, and strategic alliances. We will explore this topic in more detail later.

This page some of the factors used to evaluate the attractiveness of an international market. Some factors will be specific to one business or industry, while others may relate to the market itself. Regulations, logistics, and culture all play a role. Before entering a market, it is essential to pick a mode of entry that integrates these elements into the process.

One of the first steps in deciding on entry into a foreign market is to evaluate its internal and external factors. Internal factors can include the size of the market, the organization's experience, and product differentiation. External factors relate to consumer demographics and demand, trade barriers, and competition. Companies need to determine their acceptable risk, level of desired control, and flexibility to choose between entry modes, such as by creating a subsidiary or using an agent. Watch this video for a closer look at these criteria.

Export, buy a franchise, or form a strategic alliance? These are some of the modes of entry into a foreign market a company can choose from. This section explores the advantages and disadvantages of each, including fast entry but low control, low risk but adherence to regulatory requirements, or known entities but high cost. As you review, think about the different industries you have experience in, and consider which mode of entry might be most suitable for a business in that field.

Indirect market entry makes use of third parties to gain a presence in a foreign market. Some of these methods include piggybacking, trading companies, export management companies, and countertrades. Direct sales allow an organization to sell directly into a country, either independently or through an agent or subsidiary. This section describes the various options available to businesses.

When deciding whether to sell directly or indirectly in a foreign market, a company must consider many factors, including its level of resources, its size, and the business and political conditions in the nation. This section explores the different approaches to exporting.

Direct selling can give an organization greater control over the sales process and more flexibility in revising or changing strategies. This section explores direct selling opportunities in greater depth and the various elements that come into play when making decisions about exporting strategies. While this page is based on Canadian business practices, its concepts and content can be applied to all companies considering global expansion.

Measuring an advertising campaign's success can be challenging, especially when some elements are intangible, such as brand awareness, sales potential, or consumer knowledge. However, marketing evaluation is an essential part of any campaign and should be measurable and applicable to all marketing roles and departments. Companies can use specific metrics to determine how well the campaign is reaching its goals, if any changes are needed in the marketing mix, and whether the offerings meet customers' needs. This section explores metrics and how companies use them to devise more effective strategies.

Once an organization understands the role marketing measurement metrics play in the overall process, the next step is to identify the measurement methods used to determine campaign success. This can vary from campaign to campaign, product to product, and market to market. By evaluating the identified goals, an organization can then explore those measurements to determine whether its goals have been met. This section explores several objectives, including sales and revenue generation, market share, innovation, customer reach, and engagement. It also goes into detail about the case of Citizen Watches and how they measured the effectiveness of their social media efforts on Facebook.

Once an advertising campaign has been implemented and evaluated, the company needs to determine how to best use the information to see if changes are required. Some of the data used to evaluate performance-based advertising campaigns include the cost of reach, click-through rates, and cost-per-click. If the data isn't aligned with goals, changes are needed. Read this section for a closer look at how companies can use data to develop more effective strategies.