International Markets

The world is shrinking because of:• faster communication

• more information technology available

• faster and more efficient transportation

• more immigration to various countries

Global Marketing EnvironmentThe World Trade Organization: An international agency which encourages trade between member nations, administers global trade agreements and resolves disputes when they arise. This organization helps trade and reduces tariffs and other international trade barriers.

Regional Free Trade Zones: Groups of nations that are organized to work towards common goals in the regulation of international trade.

Multi-national Corporations:Corporations that do business all over the world.

Understanding the Global Environment

Political – Legal Environment:

• attitudes toward international buying

• government bureaucracy

• political stability or instability

• monetary regulations

• kickbacks & bribes

Cultural Environment

Sellers must examine the ways consumers in different countries think about and use products and tailor their marketing activities toward that country’s consumer preferences.

Business norms vary from country to country.

Companies that understand cultural differences can position their products for an international market

Reasons for Going Global

• some foreign markets have higher profit opportunities

• common currencies make trade easier

• company needs a larger customer base

• company needs to reduce dependency on a single market

• growth of information technology makes communicating much easier

How to Decide to Go International

• what volume of foreign sales is desired?

• what countries to market in?

• what types of countries to enter?

• does company have a competitive or comparative advantage over foreign competitors?

Which International Marketing Strategy?

Centralized Marketing Strategy•production and sale of goods from a central location •rather than utilizing specific marketing offices in each national market, centralized marketers prepare strategies that cover large geographic areas and still take cultural differences into account.•cost benefits (economies of scale) - often less expensive with much less duplication.

Decentralized Marketing Strategy•uses local production facilities, advertising & market research companies, sales reps, etc. to target international markets.•provides company with close proximity to markets, flexibility to spot and respond to trends and the ability to be sensitive to different cultural customs.

Push vs. Pull Marketing StrategyA push strategy is where businesses sell their products to retailers, importers or wholesalers but not directly to end-use consumers. •advertising and promotional efforts are towards dealers, to convince them to carry the product because they believe the product will sell itself if the consumer can access it on local store shelves. •marketers will utilize trade shows, sales agents and dealer advertising/promotions to establish the movement of products through the channels of distribution.

A pull strategy targets the consumer directly. •advertising and promotional efforts try to convince consumers that they need a product and therefore “pull” these consumers into stores to look for the brand.•typically the pull strategy is more challenging for international businesses, but can be coupled with a decentralized marketing strategy.

Why Global Marketing is Important

• internet and electronic commerce are changing the way companies operate worldwide.

• more major consumer and industrial markets today (China, Pacific Rim, European Union).

• meets needs of markets in other countries which can then create jobs and provide consumers with more diverse products and services.