international marketing assignment 2

Global business

Speaking Your Customer’s Language: A Complete Guide to International Marketing

Read time: 10 min

When brands aim to target multiple markets worldwide, effective international marketing allows them to seamlessly integrate with local cultures. Take, for example, Dunkin’ Donuts. In its 2013 Donut Day campaign, the company provided tailored widgets for 24 different markets, offering consumers a localized feel with unique menus and messaging adapted to each language and culture.

  View this post on Instagram   A post shared by Dunkin’ Donuts Singapore (@dunkindonuts_sg)

The campaign became so popular that the company made Donut Day an annual event. Customers worldwide now celebrate National Donut Day in their local markets, eagerly anticipating Dunkin’ Donuts’ brand festivities and exciting offers. This is just one example of how powerful international marketing can be in promoting offers within a local context. Discover how to make it work for you in our complete guide.

What is international marketing?

International marketing promotes products or services in different target markets by adapting them to local needs, preferences, and expectations.

The key objective of international marketing is to create a global brand presence while tailoring marketing strategies to each specific region’s culture, demographics, and consumer behavior.

Unlike domestic marketing, where the focus is on a single local market, international marketing involves a broader scope, requiring businesses to adapt to the diverse needs, preferences, and regulations of multiple markets.

This adaptation process is known as marketing localization and stands as the core difference between international and global marketing. More on that later.

How international marketing works

The essence of international marketing lies in its adaptability.  Companies must be agile enough to reimagine the entire marketing mix—product, price, place, and promotion—to align with local market dynamics.

• Cultural sensitivity:  Understanding local customs and values is essential for crafting campaigns that connect with local audiences. This can help you in aligning product color schemes with cultural symbolism, transcreating slogans to prevent unintended meanings or connotations, etc.
• Legal compliance:  Each country has its unique rules governing product standards, advertising ethics, and consumer rights. Therefore, businesses must become well-versed in the laws of each market they enter, often requiring collaboration with local experts to avoid fines or legal actions.

What is transcreation?

The art of balancing creativity and cultural sensitivity is key to crafting marketing messages that resonate with audiences in diverse target markets.

Explore transcreation

For example, a fast-food chain may offer a vegetarian menu in India due to religious considerations, while in the United States, the focus might be on quick, meat-based meals. Similarly, a skincare brand may offer lighter formulations for humid climates and richer products for colder regions.

How is international marketing different from global marketing?

One common misconception is that international marketing and global marketing are interchangeable terms. While both involve marketing across borders, they differ fundamentally in their approach to market adaptation.

In international marketing, the focus is on customizing the entire marketing mix to suit the specific needs and preferences of each local market.

This could mean altering the product features, adapting the advertising language and visuals, or even changing the pricing strategy to match local economic conditions. The aim is to resonate with the local consumer base while maintaining the core brand identity.

Global marketing adopts a “one-size-fits-all” approach, where the same products and marketing strategies are applied uniformly across all markets with minimal intervention.

The idea is to create a consistent brand image worldwide—capitalizing on economies of scale and scope. While this approach may work for products with universal appeal, it often overlooks the nuances of local cultures, consumer behaviors, and market conditions.

Here’s a detailed overview of the differences between international and global marketing:

For example, a global marketing strategy might involve launching a single advertising campaign worldwide, with minimal changes to the content. This could be effective for a software company selling a device with universal functionalities. However, for a food and beverage company, such a strategy could backfire if the product features flavors that aren’t universally accepted in every target market.

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Key international marketing types

Understanding the different types of international marketing is crucial for businesses looking to expand their reach beyond domestic borders.

Each type offers its own set of advantages and challenges, so the choice will often depend on the company’s resources and global expansion strategy .

Let’s take a look at some key types of international marketing.

Export marketing

The simplest form of international marketing involves exporting products to foreign markets.

This approach requires minimal investment and allows companies to test the waters before committing to more extensive strategies.

However, businesses must navigate trade regulations, tariffs, and local distribution networks.

Franchising

Franchising allows businesses to license their brand and business model to local operators in foreign countries.

This reduces the financial risk and operational burden on the parent company, but it also requires a strong, universally appealing brand that can be easily adapted to local markets.

Joint ventures and partnerships

In this model, a company collaborates with a local business to share the costs, risks, and profits of the international operation.

Joint ventures and partnerships offer the advantage of local market knowledge but may involve complex negotiations and shared decision-making.

Direct investment

Direct investment involves establishing a physical presence in the foreign market, such as opening a subsidiary, manufacturing facility, or retail store.

While this approach offers the most control, it also requires significant investment and exposes the company to higher risks, including political instability and currency fluctuations.

Licensing involves granting permission to a foreign entity to use your intellectual property, such as trademarks, patents, or technology, in exchange for royalties or fees.

It allows companies to generate revenue from their intellectual assets without the need for significant investment or direct involvement in foreign operations. However, it requires careful monitoring to protect intellectual property rights.

As we can see, each type of international marketing comes with its own benefits and drawbacks, so it’s advisable to choose the right mix of these strategies—tailored to the company’s capabilities and the specific needs of each target market.

For example, a restaurant chain expanding into new markets may benefit from following a joint venture, partnership, or franchise model, allowing the company to decentralize its cost burden and incorporate local management and leadership into operations within each market.

Benefits of international marketing

Marketing products and services in international markets offers many advantages that can significantly impact a company’s bottom line. Let’s review some key benefits that can make a difference for your business:

Increased market share

One of the most obvious advantages of international marketing is the expansion of the customer base. By entering new markets, companies can tap into a larger pool of potential consumers, increasing their market share, and strengthening their resilience and stability. 

Diversification

Relying solely on a domestic market can be risky, especially during economic downturns. International marketing allows for diversification, spreading the risk across multiple markets. If one market faces challenges, your business can still capitalize on opportunities in another market. 

Competitive advantage

Companies that successfully market their products internationally often enjoy a stronger brand image and recognition—which can be leveraged to gain market share even in highly competitive environments.

Because competitive advantage can be multiplied through international marketing, your business gains enhanced standing across individual markets.

Your company is then in a position to leverage a strong global position as well as strengths in each market one-on-one. 

Innovation and learning

The experience gained from international marketing can provide valuable insights into consumer behavior, market trends, and operational efficiencies. With a more robust knowledge foundation, your company is better equipped for future global expansion and operations.

Seasonal fluctuations

Seasonal fluctuations can pose challenges for businesses that rely on specific selling seasons. International marketing can help balance these fluctuations by selling products in markets with different seasonal cycles.

For example, a clothing company can sell summer wear in both the Northern and Southern Hemispheres, effectively doubling the selling season.

By mitigating the impact of seasonal fluctuations, international marketing enhances business resilience, ensuring a more consistent and predictable revenue flow.

Enhanced brand image

Successfully marketing products or services internationally can enhance a brand’s image, increasing its appeal even in the domestic market.

The perception of being an international brand adds prestige and attracts a wider customer base. A strong domestic brand reputation can extend internationally, fostering trust and reliability.

Regulatory benefits

In some cases, international markets may offer better regulatory conditions like tax breaks or reduced tariffs, which can boost profitability. Still, it’s crucial to do your homework and follow local laws to avoid legal trouble and damage to your brand.

Since differing regulations can make or break international marketing success, knowing how to handle them can give your company a competitive edge.

What makes an international marketing strategy

An international marketing strategy serves the same purpose for international expansion as a roadmap does for a journey. It’s a plan that outlines where you want to go, how you’re going to get there, what challenges you might experience along the way, and how you will address them.

And just like with journeys, it’s not impossible to get to your destination without a plan—but you’re much more likely to encounter issues along the way and arrive at your destination later than you had hoped—if you arrive there at all.

That’s why any international marketing endeavor should rest on a solid strategy from the very beginning. Creating an international marketing strategy will be different from one company to another, but it generally involves 3 stages:

• Analysis (diagnosis)
• Choice (guiding policy)
• Execution (coherent action)

Let’s break down these three stages one by one.

Stage 1: Analysis

Result: In-depth understanding of the target market and the best entry strategy.

Goal setting

Establish specific objectives and targets that will guide the development of the international marketing strategy, ensuring alignment with the company’s expansion goals.

Market research

Begin by conducting thorough market research . Gather data on market size, growth potential, customer demographics, and trends. For each target market, understand the cultural nuances and legal requirements, including language, customs, regulations, and any potential barriers to entry.

Competitive analysis

Analyze competitors in the target market. Identify their strengths, weaknesses, market share, and strategies. This will help in positioning your company effectively.

SWOT analysis

Conduct a SWOT analysis (strengths, weaknesses, opportunities, threats) to assess your company’s internal capabilities and external factors that may impact your international expansion.

Market entry assessment

Evaluate various market entry options such as exporting, licensing, joint ventures, or establishing a wholly-owned subsidiary. Select the most suitable entry strategy based on your analysis.

Stage 2: Choice

Result: Clear strategic direction, target audience, value proposition, positioning, pricing, and distribution strategy.

Target market segmentation

Define your target audience within the international market. Segment the market based on demographics, psychographics, and behavioral factors.

Value proposition

Develop a unique value proposition tailored to each target market. Highlight how your product or service meets the specific needs and preferences of the target audience.

Positioning strategy

Determine how you want your brand to be perceived in the international market. Create a market positioning strategy that sets you apart from competitors.

Pricing strategy

Establish a pricing strategy that factors in local market conditions, competitive pricing, and cost considerations. Ensure it aligns with your value proposition.

Distribution and promotion channels

Carefully select the channels for promoting your product to ensure effective reach to your target audience.This may involve partnerships with local distributors or the use of e-commerce platforms.

Stage 3: Execution

Result: Effective implementation of strategy, localization, marketing, sales, monitoring, and risk management for successful expansion.

Localization

Tailor your product, marketing materials, and communication to align seamlessly with the local culture and language. Localization is a nuanced process with many moving parts, including translating content and customizing product features if needed.

Marketing and promotion

Execute marketing campaigns tailored to the international market. This may involve digital marketing, advertising, social media, and other relevant channels.

Implement your chosen distribution strategy. Ensure your product is readily available to customers through your chosen channels.

Continuously monitor the performance of your international marketing efforts. Gather feedback, track key performance indicators (KPIs), and be prepared to make adjustments as needed.

Compliance and risk management

Stay compliant with local laws and regulations. Develop a risk management plan to address potential challenges such as currency fluctuations, political instability, or supply chain disruptions.

Dive deeper

What is localization, and why does it matter?

Find out why localization isn’t the same as translation and how it can support companies in expanding the global footprint of their business.

Explore strategies

International marketing examples to learn from

In the world of international marketing, real-life examples offer valuable lessons. By delving into both successful and unsuccessful international marketing campaigns, businesses can gain precious insights into handling the intricacies of various markets, cultures, and consumer behaviors, helping companies fine-tune their international marketing strategies and steer clear of typical pitfalls along the way.

BMW: Understanding local norms

On the flip side, BMW’s international marketing campaign in the United Arab Emirates (UAE) serves as a cautionary tale. The campaign used the market’s national anthem in a commercial, sparking local complaints and leading to the withdrawal of the campaign. The lesson here is the importance of cultural sensitivity and understanding local norms when crafting international marketing strategies.

Lay’s: Adapting to local tastes

Lay’s potato chips offer another example of successful international marketing. Known by different names like “Walkers,” “Smiths,” “Sabritas,” and “Margarita” in various parts of the world, Lay’s also adapts its flavors to local tastes. For instance, you’ll find ‘Masala’ flavored Lay’s in India and ‘Nori Seaweed’ in Japan. This adaptation to local preferences has helped Lay’s maintain a strong global presence while appealing to local tastes.

Dolce & Gabbana: Cultural sensitivity

Dolce & Gabbana faced significant backlash for a series of ads released in China that were considered culturally insensitive. The ads featured a Chinese model struggling to eat pizza and spaghetti with chopsticks, leading to public outrage and calls for a boycott of the brand. This example underscores the potential pitfalls of not adequately researching and understanding the cultural context of your target markets.

Last updated on December 20, 2023.

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2.3 The International Marketing Environment

Learning object ives.

The objectives of this section is to help students …

• Understand the factors constituting the international environment.

The social/cultural environment

The cultural environment consists of the influence of religious, family, educational, and social systems in the marketing system. Marketers who intend to market their products overseas may be very sensitive to foreign cultures. While the differences between our cultural background in the United States and those of foreign nations may seem small, marketers who ignore these differences risk failure in implementing marketing programs. Failure to consider cultural differences is one of the primary reasons for marketing failures overseas. Table 6 provides some illustrations of cultural difference around the world.

This task is not as easy as it sounds as various features of a culture can create an illusion of similarity. Even a common language does not guarantee similarity of interpretation. For example, in the US we purchase “cans” of various grocery products, but the British purchase “tins”. A number of cultural differences can cause marketers problems in attempting to market their products overseas. These include: (a) language, (b) color, (c) customs and taboos, (d) values, (e) aesthetics, (f) time, (g) business norms, (h) religion, and (i) social structures. Each is discussed in the following sections.

The importance of language differences cannot be overemphasized, as there are almost 3,000 languages in the world. Language differences cause many problems for marketers in designing advertising campaigns and product labels. Language problems become even more serious once the people of a country speak several languages. For example, in Canada, labels must be in both English and French. In India, there are over 200 different dialects, and a similar situation exists in China.

Student Example

Chevrolet created a car called the Chevy Nova. This car was very popular in the United States, but when they tried to sell them in Spanish speaking countries, they seemed to have problems because NO VA means ‘no go’ so they thought the car would not move. If companies are going to sell their products internationally, they need to think about what their name means in the countries where they want to sell them.

Lucy Fasano

Class of 2020

Colors also have different meanings in different cultures. For example, in Egypt, the country’s national color of green is considered unacceptable for packaging, because religious leaders once wore it. In Japan, black and white are colors of mourning and should not be used on a product’s package. Similarly, purple is unacceptable in Hispanic nations because it is associated with death.

The U.S is the only currency that uses the same color green for all of its money. Other countries use different colors for different values of currency but the U.S uses the same color for all denominations.

Jason Shevenko

Customs and taboos

All cultures have their own unique set of customs and taboos. It is important for marketers to learn about these customs and taboos so that they will know what is acceptable and what is not for their marketing programs.

Illustrations of potential areas of misunderstanding due to differences in cultural norms

In Ireland, the evening meal is called tea, not dinner. In Asia, when a person bows to you, bow your head forward equal or lower than theirs. A nod means “no” in Bulgaria and shaking the head side-to-side means “yes”. The number 7 is considered bad luck in Kenya, good luck in the Czech Republic, and has magical connotations in Benin.

Pepsodent toothpaste was unsuccessful in Southeast Asia because it promised white teeth to a culture where black or yellow teeth are symbols of prestige. In Quebec, a canned fish manufacturer tried to promote a product by showing a woman dressed in shorts, golfing with her husband, and planning to serve canned fish for dinner. These activities violated cultural norms. Maxwell House advertised itself as the “great American coffee” in Germany. It found out that Germans have little respect for American coffee.

General Motors’ “Body by Fisher” slogan became “Corpse by Fisher” when translated into Japanese. In German, “Let Hertz Put You in the Driver’s Seat” means “Let Hertz Make You a Chauffeur”. In Cantonese, the Philip Morris name sounded the same as a phrase meaning no luck. In Hong Kong, Korea, and Taiwan, triangular shapes have a negative connotation. In Thailand, it is considered unacceptable to touch a person’s head, or pass something over it. Red is a positive color in Denmark, but represents witchcraft and death in many African countries. Americans usually smile as they shake hands. Some Germans consider smiles overly familiar from new business acquaintances. Americans should not say “Wie gehts?” (“How goes it?”) It is also too informal for first meetings.

If you offer a compliment to a Chinese-speaking person, he or she will decline it, because disagreeing is the polite way to accept praise. Do not say “Merci” (“Thanks”) to a French person’s compliment. You might be misinterpreted as making fun. Italians wave goodbye as Americans beckon someone–with palm up and fingers moving back and forth; but in Asia, waving with the palm down is not interpreted as goodbye, but rather, “come here”.

Offering gifts when you visit a home is expected in Japan, but in the Soviet Union it may be considered a bribe. In Brazil and Portugal, business people like to entertain foreigners in their homes. When it is time to go, the host may feel constrained to insist that the foreigner stay. Foreigners should politely take their leave.

Consider how the following examples could be used in development of international marketing programs:

• In Russia, it is acceptable for men to greet each other with a kiss, but this custom is not acceptable in the US. • Germans prefer their salad dressing in a tube, while Americans prefer it in a bottle. • In France, wine is served with most meals, but in America, milk, tea, water, and soft drinks are popular.

McDonalds’s Corporation has opened 20 restaurants in India. Since 80 per cent of Indians are Hindu, McDonald’s will use a nonbeef meat substitute for its traditional hamburger. The likely beef substitute will be lamb, a very popular meat in India. In anticipation of its restaurant openings, McDonald’s conducted extensive market research, site selection studies, and developed a relationship with India’s largest chicken supplier. McDonald’s has opted to market its product in India, largely because India’s population of more than 900 million represents one sixth of the world’s population.

In certain countries, a vast majority of Muslims find drinking alcohol as sinful. Therefore, marketing alcohol would not only result in lower sales but also may get the company in trouble with the people in the country who may be severely offended that alcohol is being marketed in a positive light. However, in America, beer commercials seem to be the norm and can be seen whenever you turn on the television or on ads online.

Charles DeWilde

An individual’s values arise from his/her moral or religious beliefs and are learned through experiences. For example, in America we place a very high value on material well-being, and are much more likely to purchase status symbols than people in India. Similarly, in India, the Hindu religion forbids the consumption of beef, and fast-food restaurants such as McDonald’s and Burger King would encounter tremendous difficulties without product modification. Americans spend large amounts of money on soap, deodorant, and mouthwash because of the value placed on personal cleanliness. In Italy, salespeople call on women only if their husbands are at home.

• I visited Germany in High School for a German exchange program and not only learned the language better but got first-hand insight into German etiquette. One of the most important things I learned was how important punctuality is, it means you are organized and good at time management which is very important in their culture. The interesting thing is being too early is just as detrimental as being late. Knowing little tips like this can help companies from having business deals fall through.

Melissa Huston

The term aesthetics is used to refer to the concepts of beauty and good taste. The phrase, “Beauty is in the eye of the beholder” is a very appropriate description of the differences in aesthetics that exist between cultures. For example, Americans believe that suntans are attractive, youthful, and healthy. However, the Japanese do not.

A few years ago, Cheez-it decided to edit the design on their boxes. The changes were minimal, such as a change of font and subtle changes to the layout. This exemplifies the idea of “aesthetics”, as Cheez-it did the minor changes to the design so they looked better to the common consumer. Lisa Einet, the design director at Kellog, stated that the change of design was to modernize the snack and more strongly appeal to its current consumer. She believed the font simply looked more appealing to the consumer they were aiming to attract.

Nicolai Wilson

Americans seem to be fanatical about time when compared to other cultures. Punctuality and deadlines are routine business practices in the US. However, salespeople who set definite appointments for sales calls in the Middle East and Latin America will have a lot of time on their hands, as business people from both of these cultures are far less bound by time constraints. To many of these cultures, setting a deadline such as “I have to know next week” is considered pushy and rude.

Business norms

The norms of conducting business also vary from one country to the next. Here are several examples of foreign business behavior that differ from US business behavior:

• In France, wholesalers do not like to promote products. They are mainly interested in supplying retailers with the products they need.

• In Russia, plans of any kind must be approved by a seemingly endless string of committees. As a result, business negotiations may take years.

• South Americans like to talk business “nose to nose”. This desire for close physical proximity causes American businesspeople to back away from the constantly forward-moving South Americans.

• In Japan, business people have mastered the tactic of silence in negotiations. Americans are not prepared for this, and they panic because they think something has gone wrong. The result is that Americans become impatient, push for closure, and often make business concessions they later regret. These norms are reflected in the difficulty of introducing the Web into Europe (see the next “Integrated marketing”).

Religious beliefs

A person’s religious beliefs can affect shopping patterns and products purchased in addition to his/her values, as discussed earlier. In the United States and other Christian nations, Christmas time is a major sales period. But for other religions, religious holidays do not serve as popular times for purchasing products. Women do not participate in household buying decisions in countries in which religion serves as opposition to women’s rights movements.

Every culture has a social structure, but some seem less widely defined than others. That is, it is more difficult to move upward in a social structure that is rigid. For example, in the US, the two-wage earner family has led to the development of a more affluent set of consumers. But in other cultures, it is considered unacceptable for women to work outside the home.

Integrated Marketing

Hooking up in europe.

Everyone in Europe vacations in August, and business is booming at Internet Train, the perhaps inappropriately named chain of Internet cafes in Florence, Italy. Just over the Ponte Vechio, the old bridge joining the Uffizi art gallery with Pallazo Pitti, there is a small storefront with 20 personal computers. Inside, people from around the world peck away at their email, communicating with friends and acquaintances from more than a hundred countries–for just ITL 6,000 (about USD 3) per half hour.

Thousands of kilometers away in London, near Victoria Station, the scene is much the same. Stelio’s Haij-Joannu, a Greek shipping tycoon and Internet entrepreneur, has created Easy Everything, which he claims are the world’s largest Internet cafes. Haij-Joannu boasts nine Internet cafes with 3,900 PCs ready and available. “Easy Everything (easyeverything.com) is wonderful,” reports Reade Fahs, CEO of London based First Tuesday, a global Internet networking organization. “You call it an Internet cafe, but it’s much more. Most Internet cafes are about the coffee with computers on the side. This is about 400 thin-screen computers in this very cool environment with a little coffee on the side.”

Of course, the story in Europe goes far beyond email and Internet cafes. They are just the top of the innovation revolution sweeping Europe from the North to the South. Consider easyGroup, which owns easyEverything: easyGroup includes easyJet.com and easyRentacar.com (all properties controlled by Haij-Joannu). EasyJet.com bills itself as the “Web’s favorite airline” and markets itself as it discount airline with steep incentives for buyers to transact online. EasyRentacar.com is “the world’s first Internet-only rent-a-car company,” he adds. He also plans to start easyMoney.com, offering discount mortgages online. Still, the challenges of European Internet marketing are legion. Putting a B2C (business-toconsumer) or a B2B (business-to-business) site up in Europe is much more difficult than in the United States. Among the many complexities facing pan-European websites are the following:

(a) developing a site for multiple languages (b) developing a site for multiple currencies (c) providing multilingual customer service (d) shipping across borders in Europe (e) handling the value-added tax (VAT) (f) coping with strict government regulatory issues (g) recruiting and retaining people in markets that prohibit or curtail stock options and other economic incentives (22)

The political/legal environment

The political/legal environment abroad is quite different from that of the US. Most nations desire to become self-reliant and to raise their status in the eyes of the rest of the world. This is the essence of nationalism. The nationalistic spirit that exists in many nations has led them to engage in practices that have been very damaging to other countries’ marketing organizations.

For example, foreign governments can intervene in marketing programs in the following ways: • contracts for the supply and delivery of goods and services • the registration and enforcement of trademarks, brand names, and labeling • patents • marketing communications • pricing • product safety, acceptability, and environmental issues

Political stability

Business activity tends to grow and thrive when a nation is politically stable. When a nation is politically unstable, multinational firms can still conduct business profitably. Their strategies will be affected however. Most firms probably prefer to engage in the export business rather than invest considerable sums of money in investments in foreign subsidiaries. Inventories will be low and currency will be converted rapidly. The result is that consumers in the foreign nation pay high prices, get less satisfactory products, and have fewer jobs.

Monetary circumstances

The exchange rate of a particular nation’s currency represents the value of that currency in relation to that of another country. Governments set some exchange rates independently of the forces of supply and demand. The forces of supply and demand set others. If a country’s exchange rate is low compared to other countries, that country’s consumers must pay higher prices on imported goods. While the concept of exchange rates appears relatively simple, these rates fluctuate widely and often, thus creating high risks for exporters and importers.

Trading blocs and agreements

US companies make one-third of their revenues from products marketed abroad, in places such as Asia and Latin America. The North American Free Trade Agreement (NAFTA) further boosts export sales by enabling companies to sell goods at lower prices because of reduced tariffs.

Regional trading blocs represent a group of nations that join together and formally agree to reduce trade barriers among themselves. The Association of Southeast Asian Nations (ASEAN) is an example of a regional trading block. The organization is compromised of 10 independent member nations, including Indonesia, Malaysia, Thailand, and the Philippines. A free trade agreement within ASEAN member nation allows for the free exchange of trade, service, labor and capital. However, universal implementation of these standards is scheduled for 2020. In addition, ASEAN promotes regional integration of transportation and energy infrastructure.

One of the potentially interesting results of trade agreements like ASEAN or NAFTA is that many products previously restricted by dumping laws, laws designed to keep out foreign products, would be allowed to be marketed. The practice of dumping involves a company selling products in overseas markets at very low prices, one intention being to steal business from local competitors. These laws were designed to prevent pricing practices that could seriously harm local competition. The laws were designed to prevent large producers from flooding markets. In 2007, about 60 nations had anti-dumping legislation. Those in favor of agreements argue that anti-dumping laws penalize those companies who are capable of competing in favor of those companies that are not competitive.

Almost all the countries in the Western hemisphere have entered into one or more regional trade agreements. Such agreements are designed to facilitate trade through the establishment of a free trade area, customs union or customs market. Free trade areas and customs unions eliminate trade barriers between member countries while maintaining trade barriers with nonmember countries. Customs unions maintain common tariffs and rates for nonmember countries. A common market provides for harmonious fiscal and monetary policies while free trade areas and customs unions do not. Trade agreements are becoming a growing force for trade liberalization; the development of such agreements provides for tremendous opportunities for companies with global operations.

The creation of the single European market in 1992 was expected to change the way marketing is done worldwide. It meant the birth of a market that was larger than the United States, and the introduction of European Currency Units (Euros) in place of the individual currencies of member nations. Experience in multilingual marketing would help non-European companies succeed in this gigantic market. With new technologies such as multilingual processing programs, it would be possible to target potential customers anywhere in Europe, in any language, and in the same marketing campaign.

Progress toward European unification has been slow-many doubt that complete unification will ever be achieved. However, on 1 January 1999, 11 of the 15 member nations took a significant step toward unification by adopting the Euro as the common currency. These 11 nations represent 290 million people and a USD 6.5 trillion markets. Still, with 14 different languages and distinctive national customs, it is unlikely that the European Union (EU) will ever become the “United States of Europe”.

Most nations encourage free trade by inviting firms to invest and to conduct business there while encouraging domestic firms to engage in overseas business. These nations do not usually try to strictly regulate imports or discriminate against foreign-based firms. There are, however, some governments that openly oppose free trade. For example, many Communist nations desire self-sufficiency. Therefore, they restrict trade with non-Communist nations. But these restrictions vary with East-West relations.

The most common form of restriction of trade is the tariff, a tax placed on imported goods. Protective tariffs are established in order to protect domestic manufacturers against competitors by raising the prices of imported goods. Not surprisingly, US companies with a strong business tradition in a foreign country may support tariffs to discourage entry by other US competitors.

While I was studying abroad in Switzerland, I experienced the effects of tariffs when trying to purchase meats such as beef. Switzerland does not produce much of its own meat, this is exacerbated by the fact that they also have very high standards for meat as well. So, the only way for Swiss people to enjoy meat is to import it. The majority of cattle in Switzerland is used for milk production and not meat production. There was nearly a 20% decrease in price simply by crossing the border into Germany or Austria, and sometimes the tariff applied in Switzerland was double the original price according to a study by the World Trade Organization. Furthermore, according to a study by Swiss Info, Switzerland’s meat prices are also 142% more expensive than the global average, ouch!

Eric Simpson

Expropriation

All multinational firms face the risk of expropriation. That is, the foreign government takes ownership of plants, sometimes without compensating the owners. However, in many expropriations there has been payment, and it is often equitable. Many of these facilities end up as private rather than government organizations. Because of the risk of expropriation, multinational firms are at the mercy of foreign governments, which are sometimes unstable, and which can change the laws they enforce at any point in time to meet their needs.

The technological environment

The level of technological development of a nation affects the attractiveness of doing business there, as well as the type of operations that are possible. Marketers in developed nations cannot take many technological advances for granted. They may not be available in lesser developed nations. Consider some of the following technologically related problems that firms may encounter in doing business overseas:

• Foreign workers must be trained to operate unfamiliar equipment. • Poor transportation systems increase production and physical distribution costs. • Maintenance standards vary from one nation to the next. • Poor communication facilities hinder advertising through the mass media. • Lack of data processing facilities makes the tasks of planning, implementing, and controlling marketing strategy more difficult.

The economic environment

A nation’s economic situation represents its current and potential capacity to produce goods and services. The key to understanding market opportunities lies in the evaluation of the stage of a nation’s economic growth.

A way of classifying the economic growth of countries is to divide them into three groups: (a) industrialized, (b) developing, and (c) less-developed nations. The industrialized nations are generally considered to be the United States, Japan, Canada, Russia, Australia and most of Western Europe The economies of these nations are characterized by private enterprise and a consumer orientation. They have high literacy, modem technology, and higher per capita incomes.

Developing nations are those that are making the transition from economies based on agricultural and raw materials production to industrial economies. Many Latin American nations fit into this category, and they exhibit rising levels of education, technology, and per capita incomes,

Finally, there are many less developed nations in today’s world. These nations have low standards of living, literacy rates are low, and technology is very limited.

Usually, the most significant marketing opportunities exist among the industrialized nations, as they have high levels of income, one of the necessary ingredients for the formation of markets. However, most industrialized nations also have stable population bases, and market saturation for many products already exists. The developing nations, on the other hand, have growing population bases, and although they currently import limited goods and services, the long-run potential for growth in these nations exists. Dependent societies seek products that satisfy basic needs–food, clothing, housing, medical care, and education. Marketers in such nations must be educators, emphasizing information in their market programs. As the degree of economic development increases, so does the sophistication of the marketing effort focused on the countries.

The competitive environment

Entering an international market is similar to doing so in a domestic market, in that a firm seeks to gain a differential advantage by investing resources in that market. Often local firms will adopt imitation strategies, sometimes successfully. When they are successful, their own nation’s economy receives a good boost. When they are not successful, the multinational firm often buys them out.

Japanese marketers have developed an approach to managing product costs that has given them a competitive advantage over US competitors. A typical American company will design a new product, then calculate the cost. If the estimated cost is too high, the product will be taken back to the drawing board. In Japan, a company typically starts with a target cost based on the price that it estimates the market is most willing to accept. Product designers and engineers are then directed to meet the cost target. This approach also encourages managers to worry less about product costs and more about the role it should play in gaining market share. Briefly, at Japanese companies like Nippon Electric Company (NEC), Nissan, Sharp, and Toyota, a team charged with bringing a product idea to market estimates the price at which the product is most likely to appeal to the market. From this first important judgement, all else follows. After deducting the required profit margin from the selling price, planners develop estimates of each element that make up the product’s cost: engineering, manufacturing sales, and marketing. US firms tend to build products, figure how much it costs to build the product, and then ask whether the product can be sold at a profitable price. US companies tend not to assess what the market will be willing to pay.

Marketing objectives

Having identified stakeholder expectations, carried out a detailed situation analysis, and made an evaluation of the capabilities of the company, the overall marketing goals can be set. It is important to stress that there is a need for realism in this, as only too frequently corporate plans are determined more by the desire for short-term credibility with shareholders than with the likelihood that they will be achieved.

The process adopted for determining long-term and short-term objectives is important and varies significantly, depending on the size of the business, the nature of the market and the abilities and motivation of managers in different markets. At an operational level, the national managers need to have an achievable and detailed plan for each country, which will take account of the local situation, explain what is expected of them and how their performance will be measured. Examples of objectives might be:

• financial performance, including return on investment and profitability; • market penetration, including sales (by volume and value), market share by product category; • customer growth, by volume and profitability; • distribution, including strength in supply chain, number of outlets; • brand awareness and value; • new product introductions and diffusion; • company image, including quality and added value (or service).

The Wall Street Journal

In practice.

International markets offer organizations market expansion and profit opportunities. However, entering international markets poses risks and valid reasons to avoid entering these markets. International marketing plans must identify the benefits and risks involved with international expansion, and detail the options for entry into the foreign market.

Deciding whether or not to adjust its domestic marketing program is a critical issue for any organization planning to expand internationally. Organizations must understand the various environmental factors affecting international marketing to determine whether a standardized or customized marketing mix will be the best strategy.

The Interactive Journal provides extensive information about world business. On the Front Section, select World-Wide from the main page. World-Wide focuses on international news and events. You will find information about trade agreements, international governing organizations, and regional conflicts in this section. Under the Asia, Europe, and The Americas headings, you will find information specific to these regions. General news stories, financial markets activity, and technology issues are all discussed as they pertain to the specific region. For country specific information, page down to Country News in any of the regional sections. Using the drop down menu, you will find links to recent news and business articles.

In the Economy section, you will find an International Calendar of Economic Events. On the Front Section, select Economy from the left menu. In this section you will also find articles about noteworthy economic developments in various countries. Travel news is found in the Business Fare section of Marketplace. Here you will find a Currency Converter as well as travel related business articles.

Deliverable Select one major headline in the Asia, Europe, and The Americas sections. Use the Country News menu to select the specific countries discussed and to look for additional information about the articles you have chosen. Review the articles and write a one-paragraph synopsis of each.

Most American firms have discovered that many opportunities exist in international marketing, as evidenced by the vast amount of goods exported by US-based firms. There are many reasons why US firms choose to engage in international marketing. Perhaps the most attractive reasons are the market expansion and profit opportunities afforded by foreign markets.

Basic principles of domestic marketing apply to international marketing. However, there are some differences, many of which are centered on environmental factors which affect international marketing: (a) the economic environment, (b) the competitive environment, (c) the cultural environment, (d) the political/legal environment, and (e) technological environment and the ethical environment.

Once a firm has decided to enter a particular foreign market, it must decide upon the best way to enter that market. A firm has five basic foreign market entry options, the selection of which depends largely on the degree of control that the firms wishes to maintain over its marketing program. When a firm chooses to market its products internationally, it must decide whether to adjust its domestic marketing program. Some firms choose to customize their market programs, adjusting their marketing mix to meet the needs of each target market. Others use a standardized marketing mix. In making the decision to customize or standardize, there is a wide range of possibilities for adapting a firm’s product, price, promotion, and distribution strategies.

The international marketing environment includes concern for: a. the social/cultural environment b. the political/legal environment c. the technological environment d. the economic environment e. the competitive environment

(1): Isobel Doole, Robin Lowe, and Chris Phillips, International Marketing Strategy, International Thompson Business Press: London, 1999, pp. 14-15.

(2): Theodore Levitt. “The Globalization of Markets.” Harvard Business Review. May-June 1983, pp. 92-102.

(3): Philip Kotler, “Global Standardization-Courting Danger,” Journal of Consumer Marketing, Vol. 3, No.2, Spring, 1986, pp. 13-20.

(4): S. Barker and E. Kaynak, “An Empirical Investigation of the Differences Between Initiating and Continuing Exporters,” European Journal of Marketers, Vol. 26, No.3, 1992.

(6): Anne Chen and Malt Hicks, “Going Glob Avoid Culture Clashes,” PC Week, April 3, 2000, pp. 68-69.

(7): Barker and Kaynak, op. cit.

(8): Eileen Cassidy Imbach, “US Commercial Centers: The Future of Doing Business Abroad,” Business America, November, 1994, pp.25-26.

(9): Michael Selz, “More Small Firms Are Turning to Trade Intermediaries,” The Wall Street Journal, February 2, 1995, p. B2.

(10): Julia Flunn and R A. Melcher, “Heineken’s Battle to Stay Top Bottle,” Business Week, August 1, 1998, pp. 60-62.

(11): Warren J. Keegan, “Conceptual Framework for Multinational Marketing,” Columbia Journal of World Business, Vol. 7, November 1973, p.67.

(12): TT Nagle, The Strategies and Tactics of Pricing, Prentice-Han, Inc. Englewood Cliffs, N.J., 1999.

(20): Nell Chowdury, “Dell Cracks China,” Fortune, June 21,1999, pp. 120-129; Normandy Madden, “OM’s Buick Rides Luxury into China,” Advertising Age, June 24,1999, p. 16; Carolyn Edy, “The Olympics of Marketing,” American Demographics, June 1999, p. 47.

(21): Dom DelPrete, “Winning Strategies Lead to Global Marketing Success,” Marketing News, August 18, 1997 pp. 1-2; Frank Rose, “Think Globally, Script Locally,” Fortune, Nov. 8, 1999, pp. 157-161; Lambeth Hochwald, “Are You Smart Enough to Sell Globally?” Sales and Marketing Management. July 1998, pp. 53-55; Erica Rasmusson, “Global Warning,” Sales and Marketing Management, Nov. 2000, p. 17.

(22): Henry Heilbrunn, “Interactive Marketing in Europe,” Direct Marketing, March 1998, pp. 98-101 Michael Krauss, “Europe Forges Ahead with Web Innovations,” Marketing News, August 14, 2000, p. 8;

(23): Suzanne Bedlake, “Birth of a Global Brand,” Ad Age International, March 1997, p. 126; Rainer Hengst, “Plotting Your Global Strategy.” Direct Marketing, August 2000, pp. 52-55; Eileen P. Moran, “Include Overseas Markets the Right Way.” Marketing News. April 24, 2000, pp. 47-48.

Michael Plogell and Felix Hofer, “No-nos in Europe,” Promo, April 2000, pp. 23-24.

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