Marketing entails making products that are desired by a certain section of the target population or consumer. Marketing in special fields includes the marketing of services, agricultural marketing, and international marketing. In this context, we analyze international marketing which entails marketing across political boundaries, as well as the marketing activities of an enterprise that sells and/or manufactures goods and services within a given country when that organization is a subsidiary or is affiliated with another firm which is located in another nation. In light of this, the following paragraphs describe the various aspects of international marketing including market research, segmentation, branding and brand names, and marketing ethics.
Market research involves identifying or analyzing opportunities that are available in the marketing environment. According to Kotler, this research is performed in a view to identify customer’s needs and taste which forms a foundation for the production of an optimum marketing mix (147). From an international perspective, when analyzing the market there are some issues to be considered about the marketing environment. Forces both internal and external to the organization can affect its performance. The environments for international marketing include the political-legal, economic, social-cultural, and technological environments; also known as PEST Analysis (Bogozzi 136).
The political environment comprises laws, government bureaus, and pressure groups. Legislation of international government policy exerts much influence on the marketing activities of a firm and thus calls for a relationship between the countries. However, if there is any bad relationship between the countries involved, then problems may arise in setting up the market. The communities and unions for trading also influence the analysis of the market in several political boundaries considering the varied nature of politics in the targeted countries. E.g. The European Union and its power in European laws and regulations.
Subsequently, the imposition of trade tariffs and quotas faces marketing managers with an additional dimension of international development. The economic environment must also be analyzed because markets require purchasing power as well as people. The issues to consider here are the levels of new industrial growth, the impact of fluctuations on exchange rates, and the major economic indicators of the target country; for instance the Gross Domestic Product (GDP), inflation and employment levels. In the socio-cultural environment, the marketing managers may be challenged with the different cultural norms, language, aesthetics, attitudes, and values, religion of major importance, and socialism.
Moreover, technological laws may be different in the targeted country and thus there is a need to ensure that the firm’s technology conforms to the local laws: e.g., the software version to be used. In performing the PEST analysis, a firm needs to compare its market with those of the anticipated country; do the social, political, economic, and technological environmental requirements fit the company’s plan? According to Perner, before entering international marketing, a firm needs to take into consideration the following decisions:
- whether to go abroad – does the firm possess the economic and marketing power? The marketing managers should be well informed of the opportunities in abroad markets.
- Which markets to enter – this requires proper market research on the current growing industries in the target market, competitors, and culture.
- How to penetrate the market – a firm can opt to enter the market through exporting, joint venturing, or direct investment. This depends on the knowledge about the local market and control over it.
- On an appropriate marketing mix – this phase involves implementing the correct marketing mix including straight extension, communication adaptation, product adaptation, dual adaptation, and product invention.
- On a suitable marketing organization – a firm can be an export department, international division, or a multinational organization.
Through exercising research, information about consumer behavior in the target country can be obtained in several ways. Kotler asserts that the study of consumer behavior enables a firm to determine how consumers make decisions to spend their resources (153). Data about consumers is collected through discussions and interviews with them on a formal (use of structured questionnaire) or informal (guided interview) basis.
Such information includes customer perceptions about their needs and the likely future purchases. This can be intensive in the case of international market analysis. Another method is the focus group, in which a group of customers in a certain culture, region, age group, or education level are analyzed to come up with information about their preferences and buying behavior. However, a firm may opt to perform an observation of the target market; how the consumers behave about their buying decisions. Thus, a company can be able to enter the international market after systematic market research.
Market segmentation entails the division of a market into specific groups of consumers and their needs. This is due to buyers differing in one or more effects such as geographical location, attitudes, resources, and buying practices. In international marketing, countries are mostly seen as market segments (Perner). Bennett and Blythe comment that “Some foreign customers will be more interested in purchasing the firm’s product than others, so it is convenient to discover the type of consumer most likely to purchase the firm’s output in terms of such variables as consumer age, sex, income, family size, living standards, buying habits…” (190).
The following are the methods of segmentation:
- Demographic segmentation – this strategy arranges the market according to demographic variables such as age, education, gender, and income. It is viewed that consumer needs change with age, thus there is a need to adapt the marketing mix that caters to this. Also, there are different product lines based on sex.
- Geographic Segmentation – it divides the market into various geographical units such as cities, countries, and world regions such as South America. Factors such as language, climate, and culture must be taken into consideration in implementing this strategy. It is commonly used by global businesses.
- Psychographic segmentation – people in a particular demographic class have a variety of attitudes. This challenging strategy requires a measure of the motivations leading to a behavior.
- Behavioral group segmentation – the variables here include brand loyalty and income. Businesses need to establish the time, period, and ways in which a certain segment of customers consume products. Understanding the buying practice helps marketers segment their business (Bennett and Blythe 192).
In light of this, the benefits of market segmentation in international marketing include: the selection of a most profitable market segment, resources are concentrated on the chosen segment, sales opportunities are likely to be utilized by the staff, it may lead to an improved quality of service in terms of value and standards, and lastly it assists in identifying gaps during marketing research. However, segmenting the market may be tricky because of the different purchasing power and price rates for the various countries. The multiplicity of attitudes and preferences among consumers also tend to present some difficulties in segmentation.
Branding and Brand Names
Marketers state that “branding is the art and foundation of marketing”. A brand is a term or a symbol that is used to identify the products of a firm and to distinguish them from those of competitors. It is important in international marketing, for instance, Nike, Adidas, Tommy Hilfiger, Nivea, and Toyota are some of the international brand names that act as trademarks of the manufactures of their respective products. The brand name is also viewed as a method of differentiation in global marketing.
According to Kotler, the benefits of branding for different markets can be experienced from various perspectives (68). To the seller: the brand name enables the company to process orders and track down problems easily, it provides lawful security of unique product features which can be imitated by a competitor, it offers a chance to attract a loyal and profitable set of customers and it enhances the companies corporate image. To the distributor: it makes the product easier to handle, helps in supplier identification, helps in holding production to a certain quality, and increases buyer preferences. To consumers: it helps them identify the product, for example, Puma can be easily identified as a sports ware product, the brand name also helps them identify quality differences and hence shop effectively.
A company may choose to brand or not to brand, the brand name decisions include individual brand names for a single product, family brand, separate family names for all goods, and company trade names combined with individual product names.
Therefore, the desirable qualities of a good international brand name include 1. it ought to imply something regarding the product’s benefits. For example, Nike, which is a brand name that means ‘Victory’, product is in line with sports which its ultimate goal is victory, Puma and Jaguar means speed. 2. It should be simple to pronounce, identify and memorize. Brands such as CIF and JIF are confusing and difficult to remember, Puma is easy to pronounce. 3. It should be distinctive in its market position. 4. It should avoid improper implications in other nations and languages.
In ensuring that their products and services are well received by customers, firms ought to consider the ethical norms that direct various cultures. In the previous paragraphs, we analyzed the consumer behaviors which lead us to a conclusion that proper research on various consumer buying decisions must be adhered to in any international marketing. The differing demands of several stakeholders, like customers, workers, shareholders, and community makes business firms across several political boundaries face many ethical dilemmas. In addition to profit-making, companies need to ensure that the environmental standards are adhered to and that their auxiliaries do not defy the human rights of their workers. Thus, numerous ethical issues surround each marketing mix element.
In distribution policy decisions, one organization within the channel may be holding the highest degree of control; this can be a manufacturer, wholesaler, or retailer; this power may be misused (Schlegelmilch 97). Producers may sideline small retailers, or even the powerful retail chains might take advantage of manufacturers. For instance, the slotting allowances are in favor of retailers due to their purchasing power in demanding the allowance from the manufacturers. From an ethical view, this allowance has been heavily criticized as ‘ransom’ or ‘extortion allowances’ as it transfers ownership of the product.
Another aspect of distribution that presents ethical issues is direct marketing. The increase of electronic media usages, such as online information systems and direct mails leads to questions regarding privacy, confidentiality, and intrusion. Also, the grey markets, selling through unauthorized distribution channels or rather parallel importing violates the marketing code of conduct. This can induce a consumer to purchase a non-essential commodity because of its availability.
In promotion policy decisions, ethical issues are profound because consumers around the world are exposed to thousands of advertisements and promotions daily; this component is the most visible. The criticism given to these advertisements varies by culture.
For instance, the use of persuading messages, the use of misleading messages, the direction of advertising to child audiences, or advertising of illegal practices like gambling presents different ethical dimensions; it is seen as persuading consumers to wrong products. There are also celebrity and political endorsements. Do these prominent figures use the product they are advertising? Therefore, both legal and ethical issues associated with promotion decisions must be examined by international marketers.
In product and price decisions, different prices of products may vary across the various countries. This implies that due to the market environment, some consumers may feel undermined according to the varying prices in different places. However, most companies have invented a corporate code of ethics that acts as a guiding principle. For example, a company may state its code of conduct about customer response as, “our integrity in the marketplace and with each other must never be compromised. Our conduct must be socially responsible. We are committed to equal opportunities for all individuals” (Schlegelmilch 117). Other ethical issues include child labor, extended working hours, and poor working safety. These undermine the individual’s rights to fair treatment.
In this paper, we have discussed the various marketing elements in international marketing. Starting with market research as the basis for entering into an international market, companies need to make proper decisions on whether to go abroad, how to enter markets, appropriate marketing mix, and a suitable marketing organization. There is also the need to appreciate consumer behavior in various markets. To target strategies, proper analysis of the target country’s market opportunity must be put in place to ensure the right market segmentation and proper product branding is followed. In light of this, there is also the adaptability of ethical norms in the marketing perspective; this enables marketers to gain a competitive advantage in their marketing mix.
Bennett, Roger and Blythe, Jim. International Marketing. London, UK: Kogan Page Publishers, 2002.
Bogozzi, R.P. Principles of Marketing Management. NY; Macmillan Publishers, 1991.
Kotler, Philip. Marketing Management. Millennium Edition NY: Prentice Hall, 2003
Perner, Lars. International Marketing. 2009. Web.
Schlegelmilch, Bodo, B. Marketing Ethics: An International Perspective. UK: Cengage Learning EMEA, 1998.