Internet Influence on International Marketing

Introduction

The modern world cannot exist without the Internet and international marketing. People exchange information, share their ideas, develop business relations, and sell or buy different products and services online, relying on the possibilities of international marketing (Wood 2013). Today, a person could buy an item and ask to have it delivered from different parts of the world. Though the Internet facilitates marketing strategies, there are many changes caused by the technological revolution that has to be taken into consideration.

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Nowadays, international marketing breaks all national boundaries and helps to develop marketing strategies across the whole world. Czinkota & Ronkainen (2013) introduce international marketing as “the science and the art of business” and offer to take into consideration such disciplines as economics, languages, history, and cultural studies in order to comprehend its essence (p. 4). Regarding the changes and improvements caused by the current technological progress and the process of globalisation, companies have to be ready to make fast decisions and take radical steps (Paliwoda & Thomas 2013). International marketing aims at investigating the marketing principles of different countries and creating a system that could involve different nations in the same business. It is a strategic extension that leads to innovations and success (Baack, Harris & Baack 2013).

It is not enough to be famous in order to be successful online, but it is important to stay sustainable and interesting to people. Besides, companies have to consider the needs of customers and the opportunities they have to create appropriate services and products and know-how to introduce them and prove their rights for existence (Ghauri & Cateora 2014). Today, there are many successful international companies that demonstrate powerful marketing strategies and visions, of which IKEA is a prime example. Still, one distinctive feature of the company is the possibility of using the internet to promote its sustainable strategies and the concept of eco-development. Eco-friendly sustainability is crucial for international marketing (Katsikeas et al. 2016). Therefore, this literature review aims to evaluate the main characteristics of international marketing and the possible impact of the Internet on marketing strategies of international companies. After the analysis of the chosen issues, it is possible to demonstrate how IKEA uses the Internet to succeed in international marketing.

Internet Revolution in International Marketing

Business development and international marketing

The Internet is revolutionising the ways in which people and businesses interact and business relationships develop. During the last several years, a dramatic shift towards inbound techniques has been observed (DeMers2013). For example, it is now possible to create valuable content using a variety of channels and succeed in the development of B2B marketing (Kotabe & Helsen, K 2014). International marketing could be improved with the help of different websites, journal and magazine articles, and online videos that are available 24/7 (Ivanov 2012). There are no boundaries for sharing information or the choice of content that could be appropriate for ordinary people and specialised organisations.

In addition, there is no necessity to consider the historic barriers and safety regulations imposed by different nations (Hollensen 2017). Information that is offered online can be disseminated in real-time and transferred to different countries at the same time. Many countries have already survived the financial crisis and are ready to further develop their international trade (Albaum & Duerr, E 2016). International marketing also consists of certain elements of culture such as language, education, social institutions, and customs (Keegan & Green 2015). The researchers admit that when such boundaries are broken, these elements should not be neglected because they help companies to succeed in international marketing and choose the right direction of corporate travel.

International marketing as the way to connect customers, technology, and information

International marketing sets the rules in the relations developed between customers, technologies, and information (Benady 2014). Many people cannot understand why they have to spend significant amounts of time using their computers, mobile phones, and laptops (See Figure One). Still, they want to believe that such attention to technologies and new devices could help them become professionals in international marketing (Ghauri & Cateora 2014). Besides, they try to clarify their perspectives with technological devices and elect to find more time and use as many opportunities as possible (Vizard 2015).

Web Traffic by Device.
Figure One: Web Traffic by Device.

At the same time, people cannot get rid of this habit and neglect the opportunities that become available with technologies. Real-time conversations, marketing, advertisement, and entertainment attract people’s attention, and they find it difficult to decline the chance to use them for free to get the associated benefits. The Internet creates a lot of opportunities; interaction and customisation are among them (Ivanov 2012). In the Internet era, marketing communication is not even an advantage. It is a requirement with the help of which people can send and receive information in several seconds. At the same time, Internet applications do not confuse people but help to categorise people with regard to their needs, opportunities, and expectations. International marketing gets a new operating environment with the help of advanced technologies and the Internet. Companies become free in their intentions to introduce and locate their services and products, including such important factors as portability, politics, and people.

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Essence of marketing

Marketing identifies people, their needs, wants, money, and takes account of their willingness and ability to spend money on all those needs and wants (Baack et al. 2013). However, it is necessary to understand how people could share their needs with other people and make international companies clarify what kind of service should be offered, when, and why. Regarding the components of marketing and the strategies people could use to promote marketing, the core of marketing is usually neglected or misunderstood. In fact, marketing offers the possibility to bring a product or service to markets, build communication with customers, and underline the benefits of chosen services or products to encourage people to buy them. A number of researchers and bloggers explain marketing as a story-telling process within the context of which an author could use various techniques and introduce a product or a service that could be sold (Blubaugh 2016).

Internet in marketing

The viability of the internet could be defined as the way to internationalisation and the possibility to support export marketing in a variety of ways (Sinkovics et al. 2013). Therefore, marketers have to be sure that all social media content looks good and conveys the required information and effects on people. When people get access to the Internet, they cannot help but use the opportunity to read what is offered, what could be bought, and what could be shared with others. Nowadays, the Internet improves international marketing with the help of numerous software programs including Facebook, Whatsapp, Skype, Twitter, Viber, and Instagram (See Figure Two).

Social Platforms in International Marketing.
Figure Two: Social Platforms in International Marketing.

The peculiar feature of such platforms is the possibility of combining personal needs with professional goals. First, people use the platforms to share their personal information, introduce some news, and observe the current changes in the market (The Economist 2015). However, as soon as people enter the World Wide Web, they become absorbed with the idea of finding out interesting facts, discovering new products and services, and making decisions on whether to buy or not to buy something. Nowadays, a number of companies like to use such platforms to attract people’s attention and explain how they could benefit from using the Internet and try international marketing. Some companies are ready to explain why they use social media in their work, and some companies do not even understand what kind of benefit they could gain. Still, there is one certain fact that cannot be ignored: companies want to use the Internet and succeed in international marketing and benefit with the technologies the world offers to them (Paliwoda & Thomas 2013).

IKEA and its Place in International Marketing

IKEA history and background

IKEA implements its strategic business at the domestic and international levels (Harapiak 2013). Nowadays, IKEA is known as a global retailer of furniture. The success of the company could be explained by its retail experience, the ability to differentiate products, and effective leadership. At the same time, IKEA develops a successful strategic business across a number of European and Asian countries, North America, and Russia, who are still defined as the main natural resource exporters (World Trade Organisation 2016).

There are 375 stores open in 47 countries (Forbes 2016). Approximately 15,500 employees work at IKEA. More than $36 billion are earned annually (Forbes 2016). People are eager to use its services because of the perfect combination of price and quality (Harapiak 2013). Finally, IKEA is a company that promotes the importance of ecological issues that could be used to improve the quality of life. The company is famous due to its concept that all people deserve the right to buy goods that are safe, of high quality, and not too expensive. This concept touches upon many crucial issues and helps people live a better and safer life at home (The IKEA concept n.d).

Internationalisation of IKEA

The process of globalisation leads many international companies to take steps that can help improve the current state of economic affairs. Financial globalisation influences the development of the financial systems of countries considerably (Schmukler 2004). The question of IKEA’s internationalisation remains open during the last several years. Internationalisation is the process that makes firms think about their business networks and segments (Alcacer et al.). IKEA group tries to expand its production and selling processes by means of market globalisation. The authors admit that internationalisation of IKEA consists of a number of steps including its integration strategies, brand development, innovative ideas, and high quality of goods (IKEA Group 2015).

In fact, the internationalisation process of the company began in the late 1950s when its developer, Kamprad, searched for new companies to cooperate with and to develop successful relations with suppliers. IKEA chooses its suppliers according to a number of principles such as learning effects, location economies, and the interests of people. In the beginning, Swedish customers demonstrated their interests in buying IKEA furniture. So that Kamprad wanted to support the choices of the customers and tried to find suppliers with low costs because he believed that long-term perspectives could promote the company’s growth and help to avoid the dependence on financial institutions (About the IKEA group 2016).

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IKEA in international marketing

IKEA could use international marketing as a chance to make their ideas available to the whole world. Its international employees admit that the main strength of the company is the ability to stay different and develop the skills that could allow staying in the comfort zone and achieving progress (IKEA Group 2015). The low price approach is a considerable benefit to the company that could be used against local and international competition. Besides, it helps to explain that IKEA services have a definite target audience, which includes people of all ages, without the necessity to differentiate customers with regard to their incomes or education levels (Czinkota & Ronkainen 2013).

International marketing is a chance for IKEA to tell its story and improve human lives by offering the best services and products at affordable prices. IKEA makes decisions relying on its customers’ real-life experiences and expectations promote new approaches and potentially improves the quality of life for ordinary people.

Theoretical approach to IKEA business

There are many ways to investigate the achievements of international companies and their success in international business. IKEA is an international company, the development of which could be explained in terms of two theories: a new trade theory (Lambertini 2013) and a national competitive advantage theory (Li 2013). Each theory has its own impact on the company’s development and the evaluation of its achievements and possible improvements.

On the one hand, there is a new trade theory that symbolises a kind of blessing for consumers to get a variety of goods at affordable prices (Lambertini 2013). Its developers suggest that international patterns of trade have to be properly determined and developed to gain control over network effects and economies of scale. According to this theory, companies could gain the required portion of sustainable economies of scale in cases where they introduce themselves as new entrants and possible dominants in the market. IKEA enters new countries as soon as it is confident in its current situation and the potential to increase returns in a short period of time.

On the other hand, there is a national competitive advantage theory, also known as Porter’s Diamond model, that examines the secrets of how a company could achieve success in a certain industry (Li 2013). Advanced factors, including communication infrastructure, technologies, skilled labour, and governments are all relevant. Finally, a company’s strategies and structures with regard to existing supporting industries should be taken into consideration (Li 2013). Each component should be properly evaluated to explain if IKEA makes correct decisions and chooses the right directions. For example, its factor conditions such as suppliers and technologies turn out to be favourable indeed (Brouthers et al. 2016).

The strategy and structure of the company are also properly identified. IKEA tries to promote its low price strategy and prove that low cost is possible in its chosen industry. Besides, the company has low bureaucracy levels and faces little competition, particularly in Britain and Germany. Demand conditions are also favourable for the company because its services and products are suitable for middle-class customers, which include billions of people. Finally, supporting industries help the company to develop its services and meet various government policies to achieve a successful entry into different countries, in which the company often benefits from a low-cost labour force.

In general, IKEA has proved itself as a powerful organisation in the furniture field. Its achievements and incomes are impressive indeed. Each year is a new opportunity and a significant goal (See Figure Three).

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IKEA Turnover.
Figure Three: IKEA Turnover.

Impact of the Internet on IKEA

IKEA and new channels of international marketing

In addition to its achieved goals and worldwide recognition, IKEA defines itself as a company that could develop its eco-friendly ideas and make people happier and safer by purchasing IKEA products. The Internet promotes the development of a new and fast channel in international marketing, and IKEA should use this chance. Benadi (2014) underlines that marketing has to be concerned with understanding customers’ motivations and promotion of campaigns and brands that could make people buy new products and share their experiences with each other. At the same time, the technologies including the Internet and a variety of devices could be used to achieve good results.

Though the Internet is an opportunity to find as many sources as possible and make comparisons of products and services (Benadi 2014), technologies could also be used to build loyalty and emotional attachment (Ou et al. 2016). The Internet is a chance for IKEA to introduce its ideas, spread its power over millions of people, and prove that low price policy could be effective and available to all people regardless of their age, income level, or other factors. International marketing makes it possible to introduce new services to people from different countries, while not imposing new cultural issues and principles, but offering a new vision of the same issue (Czinkota & Ronkainen 2013).

IKEA organisational culture

The Internet changes the strategies and organisational culture of the company (Usunier & Lee 2013). However, IKEA is a company with a properly developed culture and a number of successful strategies that lead to the fact that approximately €32 billion sales were reported in 2015 (IKEA group 2015). Approximately 2 billion visits to IKEA’s official website were registered in 2015 (IKEA group 2015). The reasons why people want to do business with such companies like IKEA could vary. Still, its employees and regular customers believe that the roots and culture of the company are the main reasons for people’s decisions. An impressive landscape of Smaland in Sweden, the company’s heritage, and the culture of enthusiasm and honesty drive the company and make its management executives believe that their intentions to create a better everyday life are justified (IKEA group 2015).

Internet as IKEA’s chance to spread information

The Internet spreads information about the company, its goals, and possible impacts on people. The more people visit the site of the company and make online purchases, the more fresh ideas and motivation they get to improve their lives. The Internet is a chance to introduce IKEA to prospective new customers. It is not enough to make regular customers visit the site and make purchases. It is more important to attract the attention of new customers and show that the company has a number of interesting ideas and services to offer to different people (Baack et al. 2013). This is the essence of true international marketing that could be used by such companies as IKEA.

Digital revolution in IKEA

Technologies change markets considerably (Czinkota & Ronkainen 2013). The digital revolution can have positive and negative effects on the company and its abilities in the international market. Though IKEA has a number of successful strategic ideas and visions, the Internet revolution makes companies reconsider their strategies and think about the role of possible international competitors. The current digital revolution should not be a threat for IKEA provided its leaders and employees understand how to use the connections and possibilities that open up to them in order to offer a high-quality life to people at affordable prices. The Internet is the means for the company to share its eco-friendly living principles with a global customer base (Katsikeas et al. 2016).

Conclusion

In general, international marketing has been dramatically changed by common usage of the Internet. A number of companies had to re-evaluate their strategies, approaches, and cultures. IKEA has already proved its abilities in domestic and international marketing. It is used by billions of people, and the number of its customers increases annually. The impact of the Internet could be characterised by a number of positive and negative issues in companies like IKEA. Still, there is one truth that cannot be ignored; that the creation of a better life is possible with IKEA and the Internet.

Reference List

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