A thorough and complete commitment is needed for International Business. The complexities of international marketing are something that is learned through experience and not in a book. International Marketing is defined as the performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit. Such elements as political and legal forces, economic climate, and competition are the three elements found in the domestic environment (uncontrollable). Geography and infrastructure, the structure of distribution, and cultural forces are part of which of the following international marketing task environment foreign environment (uncontrollable).
The key to successful international marketing is an adaptation to the environmental differences from one market to another. Adaptation is a conscious effort on the part of the international marketer to anticipate the influences of both the foreign and domestic uncontrollable factors on a marketing mix and then to adjust the marketing mix to minimize the effects. The primary obstacles to success in international marketing are a person’s self-reference criterion (SRC) and an associated ethnocentrism. SRC (self-reference criterion) is an unconscious reference to one’s own cultural values, experiences, and knowledge as a basis for decisions. Closely connected is ethnocentrism, that is, the notion that one’s own culture or company knows best how to do things. Ethnocentrism is generally a problem when managers from affluent countries work with managers and markets in less-affluent countries. Cross-cultural analysis isolates the SRC influences and to maintain a vigilance regarding ethnocentrism. However, the Global Marketing Concept can be used in some situations as a company adopts a concept wherein it views an entire set of country markets as a unit, identifying groups of prospective buyers with similar needs as global market segment and developing a marketing plan that strives for standardization wherever it is cost and culturally effective.
If there is one thing that I can take away from my experiences as being an International Business student—its’ culture. Culture is the sum of values, rituals, symbols, beliefs, and thought processes that are learned and shared by a group of people, then transmitted from generation to generation. Culture is a powerful human tool for survival, but it is a fragile phenomenon. It is constantly changing and easily lost because it exists only in our minds.
Geert Hofstede, a social scientist, is accredited with doing the most thorough, influential, and widely read work on how cultural values influence various types of business and market behavior. Nepotism is the patronage bestowed or favoritism shown on the basis of family relationships as in business and politics. Indexes are used to measure these cultural influences:
- Individualism/Collective Index refers to the preference for behavior that promotes one’s self-interest.
- Power Distance Index measures the tolerance of social inequality, power inequality between superiors and subordinates within a social system. A high PDI translates to general distrust and hierarchical.
- Uncertainty Avoidance Index measures tolerance of uncertainty and ambiguity among members of a society. A high UAI is an absolute truth. Marketers are constantly adjusting their efforts to cultural demands of the market, but they also act as agents of change, institutional restraints, symbolic, spiritual, and cultural critics. Peer groups are not a social group.
- Power Distance Index measures the tolerance of social inequality within a social system. It is very culturally sensitive.
The power of human potential is not realized in International Marketing though without respect to time orientation. Polychronic time, P-time is the simultaneous occurrence of many things, human transactions more important. On the other hand is Monochronic, M-time, where one saves time, wastes time, bides time, spends time, and loses time.
Many conflicting things can happen in International Marketing too. Bribery, or the voluntarily offered payment by someone seeking unlawful advantages, is one thing that has caused many to be arrested. Extortion is the payments that are extracted under duress by someone in authority from a person seeking only what he or she is lawfully entitled to. Lubrication is the small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by law. Subornation is giving large sums of money designed to entice an official to commit an illegal act on behalf of the one offering the bribe Electives Exclusives.
International Marketing Research is the systematic gathering, recording, and analyzing data to provide information useful to marketing decision-making. Information must be communicated across cultural boundaries. The environments within which the research tools are applied are often different in foreign markets. Research Types of information are based on needs. General information about the country, area, and/or market are necessary. Information necessary to forecast future marketing requirements is done by anticipating social, economic, consumer, and industry trends within specific markets or countries. Specific market information is then used to make a product, promotion, distribution, and price decisions and to develop marketing plans. In domestic operations, most emphasis is placed on gathering specific market information because the other data are often available from secondary sources.
Types of Information:
- Economic and demographic: data on growth in the economy, inflation, business cycle trends; profitability analysis for the division’s products, specific industry economic studies, analyses of overseas economies, key economic indicators for US and overseas, and population trends (migration, aging, and immigration).
- Cultural, sociological, and political climate: a Non-economic review of conditions affecting the division’s business. Covers ecology, safety, leisure time, and their impact on the business.
- Overview of market conditions: Analysis of market conditions the division faces by market segment including international conditions.
- Summary of the technological environment: Summary of the state of the art technology as it relates to the division’s business. Needs to be broken down by product segment.
- Competitive situation: Review of competitor’s sales revenues, methods of market segmentation, products, and apparent strategies on an international scope.
- Define the research problem and establish research objectives.
- Determine the sources of information to fulfill the research objectives.
- Consider the costs and benefits of the research.
- Gather the relevant data from secondary or primary sources or both.
- Analyze interpret, and summarize the results.
- Effectively communicate the results to decision makers.
*Variations and problems in implementation occur because of differences in cultural and economic development. See Marketing Research!
Economic Dualism: A way of conceptualizing the existence of two (sometimes more) separate but symbiotic sets of economic processes or markets within the same political or national social framework. In 3rd world societies, for example, a dual economy is formed by the coexistence of peasant subsistence agriculture and cash production of basic commodities or industrial goods for the international market. An analogous division exists in highly industrialized economies between the corporate core and peripheral firms and labor markets.
Multicultural Research: involves countries that have diff languages, economies, social structures, behavior and attitude patterns & when designing research you must take these into account. Keep in mind when designing research to be applied across cultures is to ensure comparability and equivalency of results. Different methods have varying reliabilities in different countries (thus different research methods should be applied in different countries). Example: In Latin American countries its difficult to attract consumers to participate in focus groups because of different views about commercial research & value of their time. The Japanese don’t respond to mail surveys compared to Americans. Evidence suggests that inefficient attention is paid to non-sampling errors in improperly conducted multicultural studies and the appropriateness of research measure that has not been tested in multi-cultural context
Uses for internet research – internet privacy issues (matter of personal and legal consideration): The ability to conduct primary research is one of the most exciting aspects about the internet, but bias of a sample universe composed solely of internet respondents presents severe limitations, and firms vary in their abilities to turn data collected into competitive advantages. Today the real power of the internet for international market research is the ability to easily access volumes of secondary data. Different uses for the Internet in International research. Online surveys and buyer panels-have better “branching abilities” (asking different questions based on previous answers). Online focus groups-use of bulletin boards. Web visitor tracking-auto track time visitors travel through websites. Advertising measurement-servers track links to other sites to assess their usefulness. Customer identification systems-track visits and purchases over time creating a “virtual panel”. E-mail marketing lists-sign up for direct marketing efforts via the internet. Embedded research-the internet process people go through of searching for info about products, comparison shopping, interacting w/service providers etc is the research process itself (firms that give option of custom designing products online are the ultimate in applying research for product development purposes). Observational research -chat rooms, blogs, and personal websites monitored to assess customer’s opinions about products. Vexing-irritate; annoy; provoke
2 methods for forecasting Market demand:
1) Expert opinion: experts polled for their opinions about market size and growth rates-For market estimation problems, particularly in foreign countries new to the marketer, expert opinion is advisable. Experts polled for their opinions about market size and growth rates. Key in using expert opinion to forecast demand is triangulation- comparing estimates produced by different sources.
2) Analogy: assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country; Relationship between known situation and country in question. Advanced techniques include multiple regression analysis or input-output analysis.
Qualities that the foreign market research must possess: High degree of cultural understanding of the market in which research is being conducted. Creative talent for adapting research methods. The skeptical attitude in handling primary and secondary data. Proficiency in using quantitative methods-Modeling.
Income Distribution affect increase in GDP, without standard of living
We look at Per Capita GDP
The key component in developing successful marketing strategies and avoiding major market blunders is information. If researcher interested in a general non-economic review of conditions affecting the company’s business, the best area avenue would be cultural, sociological, and a political estimate. If a company wants to gather information on it’s own market environment you should define the research problem and establish research objectives. If you gather internet annual report figures from different companies to construct cost and profit for her company she has just collected secondary data. Consulting with customers regarding research design is not a standard step in the research process. The availability and accuracy of recorded secondary data increases as the level of economic development increases. Survey questionnaires are primary data. Yes/No questions research format is quantitative research. Open-ended questions research format is qualitative research. Lack of randomness in the population is not a problem of drawing a random sample in the international environment. The language barrier is the most universal survey research problem in foreign countries. Back translation is when a researcher translates a questionnaire into another language and then another translator translates it back into the original language. Parallel translation. Analogy assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country.