International marketing has become a common phenomenon particularly after the increase in economic globalization witnessed between mid 20th century and the 21st century. Majority of the firms has devised several ways of enticing foreign based consumers, who are accustomed to products from other competitors. It is worth noting that international marketing entails the overall performance of a wide range of business activities that are aimed at enhancing the penetration of certain products or services to the end consumers mainly in foreign countries (Doole & Lowe 2001; Cateora & Ghauri 1999).
The main driver of international marketing is usually the desire to maximize on profits thereby improving the shareholders value. However, it is different from global marketing which is more focused on marketing initiatives targeting specific product markets. Global marketing is usually coordinated and integrated unlike international marketing. Companies dealing in washing machines are becoming more reliant on foreign markets as their main consumers (Johansson 2000).
Nigeria offers a very viable market for manufacturing firms in Japan and Europe. On the other hand, Canada is a North American country that has enjoyed many years of economic prosperity considering its proximity to the larger United States market. This paper will compare and contrast the marketing environments for washing machines in Canada and Nigeria, and examine while giving reasons whether the strategies of local adaptation or global standardization should be preferred in each case.
Comparison of marketing environments
To start with, the marketing environment in each country is paramount in the development of the local industries as well as the adaptation of new market entrants. More importantly, the multinationals must be cautious when expanding their businesses to other territories considering the differing socioeconomic culture in various countries. The appropriate utilization of internationalization theories and the improvement of the firm competitiveness in the international market must be undertaken in order to achieve a positive result. Moreover, research must be carried out to ascertain the global marketing strategy to be employed for certain products in the various countries or specific categories of consumers (Hollenson 2008, p. 12-23).
Canada and Nigeria offer the best comparative analysis with regard to the international marketing of washing machines. Their preference is mainly due to their differing demographics, business environment and geographic location. Nigeria is the most populous country and the biggest economy in Africa while Canada boasts of its economic prosperity due to its far reaching solid economic policies in the last few decades and the influence of market dynamics in the United States of America (Government of Nigeria 2006).
The two countries share some similarities in their economic environment particularly in regard to the entry of new products such as washing machines. The economic power of the two markets can support the uptake of high worth washing equipments that offers high quality (The Economist 2009). Majority of Canadian population are affluent or enjoy above moderate lifestyles owing to the development of the job market and high end worth jobs. Although Nigeria has a low gross domestic product compared to Canada, a sizeable proportion of its population form the middle class and the affluent. The buyer power of the new high end products may not be a real threat in the marketing of the product.
The competitiveness in both markets is contained by the introduction of highly advanced products in the market (Kotler & Keller 2004). For instance, this was achieved by Sanyo introducing their technically advanced machines in the Nigerian market. The capitalization on this premise has made them bear positive results from the venture. Greater buyer power will also be bolstered by the presence of immense competition among the various competitors thereby making the consumers to prefer high quality products based on their efficiency and durability.
Competition is another factor that defines the marketing environment in the two countries. Competitiveness of the market is more in Canada than in Nigeria due to the expansiveness of the industry and the earlier switch to technology driven economy. The competitors enjoy wider networks in distribution and understand the preferences of the consumers better. The presence of more than 1000 companies directly or indirectly dealing in the production, maintenance and distribution of the washing in Canada complicates the entry of new products from other companies. The merger and acquisitions of smaller entities by larger multinationals has increased the competitiveness of the Canadian market.
On the other hand, Nigeria has experienced the domination of its washing machine business by LG, Samsung and Sanyo. The three entities control a huge chunk of the market segment (Melda 2010). For any company to make any meaningful positive impact in these countries, it must be ready to counter the other multinationals through the application of effective marketing strategies (Porter, 1980). This brings into fore the need to employ innovative ideas which have proved useful in other markets that share the same environment.
According to Brandenburger and Nalebuff (1995), the new entrant need to embark on a rigorous training program aimed at orienting them with the customer preferences in the new market. The washing company must also carry out a global marketing research in the new market and integrate its findings in the overall business strategy. This will counter the competition while endearing its products to the consumers at a speedy rate.
The demographic environment in Canadian households has some similarities with that of the Nigerians in respect to immigration and employment trends. Nigeria is among the countries in Africa that has embraced education as an integral part o fits economic revival programme. In this respect, Nigeria boasts of the most educated people in the continent thus leading to the creation of an upper class composed of educated fellows.
Likewise, Canada has embraced education and technology thereby most of her citizens are involved in businesses and luxurious employment. The professionals have shifted to utilizing technology to assist them in achieving maximum savings on their time. The onset of retirement for the baby boomers offers a fertile ground for exploitation by the new entrants in regard to introduction of efficient quality machines. The increased geographic shift of the population into the urban areas is also another area that might drive the demand for washing equipments (Kotler, Armstrong & Cunningham 2004, p.34).
This is bolstered by the rising number of women taking up formal employment unlike in the past when most of them acted as housewives. 48 % of the Canadian workforce is currently occupied by women while the rate is also rising in Nigeria. The demographic patterns depict that the demand for washing machines will continue to increase in the meantime thereby bringing potential for growth in the countries.
Contrast in the marketing environment
Despite the two markets having similarities, some differences are evident in the marketing environment. The differences are brought about by factors that may impact on the macro and micro environment of the washing machines industry (Kotler, Armstrong & Cunningham, 2004 p.30-40). These factors are responsible for the realignment of business models of several companies. The economic environment of a country is imperative for international companies since it reflects on the approach foreign investments are treated.
The political situation at a certain time and the expected changes has played major roles in informing the investors on which countries to make long term capital investments. Moreover, markets dynamics have considerably been influenced by the socio cultural environment. To have a better understanding of these factors, there is need to contextualize the three factors in the two countries.
Political environment has unarguably played a paramount part in all types of business regardless of their operation areas or their size (Bennet & Blythe 2002).
Moreover, it does not matter whether the business has domestic or international market share, it still gets affected by the political changes. Political leaders impose special restrictions on foreign companies’ thereby shielding the domestic companies from competition. Policies that impact on business operations have also been put in place in order to protect national interest. Canada and Nigeria have differing political environment caused by their political histories.
Nigeria has been characterized by political upheavals since their independence in 1960’s (Decker, 2008 p. 612-615). The rise and fall of undemocratic rule heralded a shift from nepotism and corruption culture. However, corruption persists and instability in the democratic rule has caused jitters in the market. On the other hand, Canada has a very stable democracy that has made it a better destination for investment. Stability and strong legal framework that inhibit introduction of restrictive policies for foreign investors has been in existence for the last few decades. International law supports the national government in enforcement of policies on the business environment. Nonetheless, the inappropriate application of this law may lead to lack o competitiveness of some markets.
Nigeria has a rather unappealing political environment compared to Canada (Ewah & Ekeng 2009). Corruption and unfairness in the award of business tenders impact negatively on prospective investments. This is compounded by the hostile political environment brought by the divisive ethnic and religious politics mainly propagated by the leaders. The unstable political environment hinders initiation of capital investment in some parts of Nigeria and disorients the population making them not to invest in long term home appliances. Entry of foreign washing companies in Canada is generally simple due to the assurances of sustained friendly political climate (Chikwe & Ehikwe 2001, p.1).
The socio cultural environment in any given situation is important for the greater achievement of marketing benefits. According to Keegan (1989, p. 1-10), culture can be defined by the utilization of several theoretical perspectives. Marketing relies on the correct understanding of the cultural needs of people in order to persuade them to use the products. The tendency of the majority of Canadians being educated is an added benefit for any country wishing to diversify its operations into the country.
Cultural diversity in the Canadian population also makes marketing and acceptability possible depending on the process applied. However, the ethnic diversity leads to polarization that destabilizes the society thereby creating unconducive business environment. Illiteracy levels are also higher in Nigeria are also at high levels thereby making marketing of washing machines a difficult task (Aslam 206, p.15-30).
It is therefore easier to penetrate the Canadian market due to its friendly socio cultural environment. International marketing calls for close scrutiny of the market environment in order to guarantee fair returns. The understanding of the socio cultural environment is paramount in the development of tailor made programs aimed at marketing. They also give the multinationals room to devise localized or globalised approach depending on the population dynamics. The population dynamics in Nigeria do not permit the utilization of globalised standards unlike in Canada. Local strategies are better placed to achieve maximum returns due to the integration of the cultural perspective in the programs (Shoham & Fredric 1998).
Another factor that is affects marketing environment is economic environment in the country. The globalization of economies was achieved through the conglomeration of several countries to form a strong regional unit that can push for trade agreements with other economic blocks. Economic policies implemented across the regional blocks and nations have direct effect on the businesses. Fiscal policies, licensing procedures and taxation measures are the man stumbling blocks for new market entrants. Economic environment also affects the spending powers of the consumers and also influences the buying power (Onkvisit & Shaw 2004).
For instance, the economic growth witnessed in Canada for the last few decades has meant that consumer buying power has improved and is expected to be sustained at high levels. On the other hand, Nigeria has seen the decline in its consumers buying power mainly due to the years of economic down turn and over reliance on natural resources. The economic policies binding Nigeria to the ECOWAS give preferences to country members thereby disadvantaging global companies. In this respect, rebates on Nigerian products and increased taxation on imported products is one of the factors that can failed marketing in the country unlike in the liberal Canadian economy (Competition in Africa, 2001)..
Strategies of local adaptation or global standardization
Marketers have strived to employ the most effective strategies in order to achieve positive impact on the foreign markets. Global standardization and local adaptation have found opponents and proponents in equal measure in the business arena. Global standardization generally advocates the use of standardized products in all the markets that the company has set its foot. The identical strategies are believed to cut the costs for the multinational corporations while bring high profit margins. However, some expert s belief that local adaptation proposes the production of products that meet the needs of the consumers by taking into consideration their preferences, tastes culture and socioeconomic power (O’Donnell & Jeong, 2000).
Local adaptation is against the opinion that marketing is a technology or a tool that can find relevance in another market without modification. The localized strategy is generally premised on several differences that arise across countries. Characteristics defining the buyer behavior play a major role in the uptake of commodities. The socioeconomic aspects and the development of marketing infrastructure must be taken into account particularly in the Nigerian market. Localization also helps the products to weather down the competition in the market.
Local adaptation strategies should be preferred in Nigeria market. Competition in the high end market of washing machines in Nigeria makes it vital for innovative products that meet the needs of the users (Melda 2010). The only to endear the customers is to ensure that their socio cultural values are observed. The introduction of high technology equipments will enhance the embracement of the equipments especially if they offer better service than the competitors.
The socioeconomic aspects in the Nigerian market are skewed in favor of the educated urban population. The introduction of localized marketing that upholds their social status is the first step in endearing them to the equipments. Price considerations must also be made in order to make the equipments affordable to this cadre of professionals. Local adaptation will help improve the quality of the equipment thereby impacting positively on the buyer power considering the expected competition in the market.
This strategy is vital in the Nigerian market since modifications can be achieved in the shortest time possible to counter the competitors’ moves (Kotler & Keller 2004). More importantly, the market would perhaps be enjoying another line of product from the company. The reputation set by the other products is imperative in taking the business forward in the Nigerian market.
On the other hand, washing machines are better marketed through global standardization since it is a developed market that where stiff competition thrives. The market also has a very large customer base buoyed by the strength of the economy and the high rate of employment in well paying jobs. The demographics that entail cultural diversity due to high number of immigrants may work in favor of standardized products.
The penetration of technology advanced washing machines from the large United States market into Canada makes it among the few countries enjoying efficient systems. Penetration based on a global brand is the only way to weather down the competition. Localization in such a cultural background is difficult since taking the different perspectives into consideration when developing a marketing strategy may prove tricky.
The global standardization is advantageous due to its cost saving brought by the scale of economies and the benefits that come with product standardization. The strategy also benefits from leverage that comes with the product and system shift. This is compounded by the strong and advanced technology that ensures the development of high end products. Global standardization can then be referred to as the avenue of heterogenizing businesses environment in the world (Jarillo & Martíanez 2000 pp. 502-512).
International marketing has become a common phenomenon that will continue to shape the business environment in the world. Washing machine business is no exception in this trend particularly in Canada and Nigeria. The demographics and competitiveness of the market are the two main things that shape the marketing environment in the two countries. However, socio cultural aspects coupled with the economic environment have differing effects to the marketing environment.
Political environment shapes economic policies that impact on the marketing. Global standardization is better applied in Canada while local strategy may prove useful in Nigeria. The effective application of one of the strategies is therefore important in the achievement of positive results in international marketing.
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