International marketing can be defined as marketing of goods and services outside the firm’s home country. International marketing has the following two forms of marketing:
1. Multinational marketing.
2. Global marketing.
Multinational marketing is very complex as a firm engages in marketing operations in many countries. In multinational marketing, a firm visualises different countries as one market and build their brand or service according to the business environment of the foreign countries.
Global marketing indicates the integrated and coordinated marketing activities across many different markets. Taking into account the various conditions on which markets vary and depend, appropriate marketing strategies should be devised and adopted. Like, some countries prevent foreign firms from entering into its market space through protective legislation. Protectionism on the long run results in inefficiency of local firms as it is inept towards competition from foreign firms and other technological advancements. It also increases the living costs and protects inefficient domestic firms. The decision of a firm to compete internationally is strategic; it will have an effect on the firm, including its management and operations locally. The decision of a firm to compete in foreign markets has many reasons. Some firms go abroad as the result of potential opportunities to exploit the market and to grow globally. And for some it is a policy driven decision to globalise and to take advantage by pressurising competitors.
1. Segmentation
Firms that serve global markets can be segregated into several clusters based on their similarities. Each such cluster is termed as a segment. Segmentation helps the firms to serve the markets in an improved way. Markets can be segmented into nine categories, but the most common method of segmentation is on the basis of individual characteristics, which include the behavioral, psychographic, and demographic segmentations. The basis of behavioral segmentation is the general behavioral aspects of the customers. Demographic segmentation considers the factors like age, culture, income, education and gender. Psychographic segmentation takes into account: beliefs, values, attitudes, personalities, opinions, lifestyles and so on.
2. Market positioning
The next step in the marketing process is, the firms should position their product in the global market. Product positioning is the process of creating a favorable image of the product against the competitor’s products. In global markets product positioning is categorised as high-tech or high–touch positioning. The classification of high-tech and high-touch products. One challenge that firms face is to make a trade-off between adjusting their products to the specific demands of a country and gaining advantage of standardization such as the maintenance of a consistent global brand image and cost savings.
3. International product policy
Some thinkers of the industry tend to draw a distinction between conventional products and services, stressing on service characteristics such as heterogeneity, inseparability from consumption, intangibility, and perishability. Typically, products are composed of some service component like, documentation, a warranty, and distribution. These service components are an integral part of the product and its positioning. Thus, it is important to consider the findings of marketing research and determine customer’s desires, motives, and expectations in buying a product. Firms have a choice in marketing their products across markets. Many a times, firms opt for a strategy which involves customisation, through which the firm introduces a unique product in each country, believing that tastes differ so much between countries that it is necessary to create a new product for each market. Standardization proposes the marketing of one global product, with the belief that the same product can be sold in different countries without significant changes. Finally, in most cases firms will go for some kind of adaptation. Here, when moving a product between markets minor modifications are made to the product.
4. International pricing decisions
Pricing is the process of ascertaining the value for the product or service that will be offered for sale. In international markets, making pricing decisions is entangled in difficulties as it involves trade barriers, multiple currencies, additional cost considerations, and longer distribution channels. Before establishing the prices, the firm must know its target market well because when the firm is clear about the market it is serving, then it can determine the price appropriately. The pricing policy must be consistent with the firms overall objectives. Some common pricing objectives are: profit, return on investment, survival, market share, status quo, and product quality. The strategies for international pricing can be classified into the following three types:•
Market penetration:
It is the technique of selling a new product at a lower price than the current market price.
Market holding:
It is a strategy to maintain buy orders in order to maintain stability in a downward trend.•
Market skimming:
It is a pricing strategy where price of the goods are set high initially to skim the revenue from the market layer by layer. The factors that influence pricing decisions are inflation, devaluation and revaluation, nature of product or industry and competitive behaviour, market demand, and transfer pricing.
5. International advertising
International advertising is usually associated with using the same brand name all over the world. However, a firm can use different brand names for historic reasons. The acquisition of local firms by global players has resulted in a number of local brands. A firm may find it unfavorable to change those names as these local brands have their own distinctive market. Therefore, the company may want to come-up with a certain advertising approach or theme that has been developed as a result of extensive global customer research. Global advertising themes are advisable for marketing across the world with customers having similar tastes. The purpose of international advertising is to reach and communicate to target audiences in more than one country. The target audience differs from country to country in terms of the response towards humour or emotional appeals, perception or interpretation of symbols and stimuli and level of literacy. Standardization is required for products by some firms. Standardization helps to achieve economies of scale and a consistent image can be established across markets.Standardisation also assists in utilising creative talent across markets, and facilitates good ideas to be transplanted from one market to other. International advertising can be thought of as communication process that transpires in multiple cultures that vary in terms of communication styles, values, and consumption patterns. International advertising is a business activity and not just a communication process. It involves advertisers and advertising agencies that create ads and buy media in different countries. International advertising is also reckoned as a major force that mirrors both social values, and propagates certain values worldwide.
6. International promotion and distribution
Distribution of goods from manufacturer to the end user is an important aspect of business. Companies have their own ways of distribution. Some companies directly perform the distribution service by contacting others whereas a few companies take help from other companies who perform the distribution services. The distribution services include:• The purchase of goods.• The assembly of an attractive assortment of goods.• Holding stocks.• Promoting sale of goods to the customer.• The physical move
By Shayo Issah
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