Global Business Marketing Opportunities

Significance of International Strategy

Discuss about the Global Business Marketing Opportunities.

In the present scenario, Asian markets are witnessing higher rate of economic growth, which is creating a space for new investment opportunities within the markets therein. The well-recognised Asian companies such as Proctor & Gamble as well as Nestle have started expanding their units in the international market since the year 2000. India and China has a great potential for investment pertaining to the MNCs of the western nations. These facts reflect that the Asian countries tend a good business relation among themselves as well as with that of the foreign countries (Kazuo, 2012). Taiwan is also emerges as one of the most successful regions of Asia from the economic perspectives (Lorencowicz & Lorencowicz, 2013). The rates of economic growth in East and South Eastern Asia are quite strong, and have also witnessed a reduction in the level of poverty, which tends to bring about a rise in income, thereby leading to rise in consumption. It will lead to increase in the opportunities to set new industrial ventures, in turn facing the rising consumption demand. However, there have not been enough growth of opportunities for job in these regions, and so companies can create new job opportunities by opening their units therein. This also focuses on the need of setting new industries that will lead to emergence of BPOs along with the other industries maintaining a cordial and profitable relation among themselves (Rahman, Khatri & Brunner, 2012).

In the last 20 years, most of the nations of Asia had attained will grow at a range of 4-6 % for the next two decades (Farrington, 2007: 6). The emerging level of income of the people tends to create new demand for the products and services in the Asian nations. Asia has a countable number of developing nations with low level of research and development (R& D) facilities. These bring about the need of technology transfer with complete assistance of Foreign Direct Investment. This indeed leads to the increased productivity and growth of the Asian economy in the global genre. This implies that western companies are having an opportunity to open units in Asia and enhancing their relationship therein (Knivilla, n.d.). The micro economic policies of Asian nations have helped a lot to keep the prices at a stable condition and have thereby increased the private consumption expenditure. This has necessitated the need for investment in the fields of education, durables, health care services and automobiles. The FDI inflows are further attracted by the macroeconomic fundamentals of Asian nations. Nations such as Germany and UK are also found having a strong strategic alliance with Asian nations such as China (Xinhua, 2015). The educated work force of USA and presence of technological capabilities can be regarded as one of the benefits of the business houses therein. However, the problem of wage inequality coupled with social immobility can cause tension for smooth running of business in USA (Naranjo, 2014). The complex natures of institutional, legal and cultural structures are supposed to pose threat to the investors of USA, despite the presence of low entry barriers. Thus the relationship of business houses with USA seems to be somewhat troublesome. CNOOC, one of the giant energy companies of China withdrew the bid for the US Company Unocal after getting a threat of congressional scrutiny. The US government’s decision regarding any business deal is also largely influenced by public opinion. This deviates away the tendency of investors to invest in USA (Moran, 2012). The nations belonging to the European Union (EU) have lost the potential of FDI to less than 20%.The sovereign debt crisis have made it impossible for many European nations to attract new investments ( Vetter, 2014). Clearly, it can be revealed that Asia is a market for new opportunities, while Northern America and Europe have reached a level of saturation that is forcing investors to invest in Asian nations and build a strong base there. The companies are trying to have a first mover advantage for investments in Asia, supported by the governments. The presence of new business opportunities has increased the business alliances of companies with Asia but the same does not apply to USA and Europe.

Networks and Customer Relationship Management

The Asian nations are showing a chance of great opportunities for companies to establish long-term business relations. To establish a firm base the companies of western nations have to adequately frame effective and competitive marketing strategies for surviving into the international market. They also have to develop strategies that can help in distinguishing their companies from their rivals. The need arises to understand the economic features of a particular nation such as income and psychographics among others to know the effective penetration strategies, which in turn benefits the countries in developing their uniqueness within the global scenario. The same applies to the case of the markets of Northern America and European Union (Doole & Lowe, 2008: 34).

Networks play a very vital role in international marketing. Selection of proper networks assists in making the products of a business concern reach the consumers quickly. Selection of the proper channels of distributors, retailers, advertising agencies, call centres is some of the most effective means of a good network (Coviello & Munro, 1995: 50).

Customer relationship management (CRM) is largely connected with the maintenance of a cordial relationship with the customer that helps the organisations in creating a loyal customer base of their own. It also leads to the initiation of word-of-mouth or buzz-marketing and attracts new customers without any expenditure on promotion or advertisement (Chen & Popovic, 2003: 672).  The role of CRM also lies in the hands of the partners of the supply chain network. Efficiency of retailers, distributors, advertising agencies play a vital role in the effective penetration into a foreign market. The distributors of the existing market have a better knowledge of placing a product within the target market Besides,  they are even aware of the techniques that needs to be implemented for dealing directly with the customers and for convincing them to purchase their products/services (Chen & Popovic, 2003: 679 ). Considering the case of after-sales service, it can be said that opening a service centre operated by the parent foreign company will be costlier than as compared to the scenario if it would have been operated by an agent. It will be much tedious for a new foreign company to do various activities at a time. The advertising agencies can help the companies to make effective advertisements, without violating the cultural norms and traditions of the new market in which the company will be expanding (Croxton, Dustugue & Lambert, 2001: 14).  Most of the companies now outsource the non-core activities of advertising, distribution and logistics to the efficient companies all round the world. The customer care division of companies is also maintained by outsourcing companies that deal with the grievances of customers by means of telephonic conversations or e- mail chats. Local distributors and retailers at times provide effective pricing and promotional strategies to the foreign companies. Thus, partnership with a proper channel partner bears a vital importance in effective CRM pertaining to international marketing. The focus has now been on implementing e-partnering strategies with the network members due to the increasing importance of e-CRM (Association of Modern Technologies Professionals, 2016). One classic example of network partnering is that of Dell with the International Software Distribution Company. It has enabled Dell to increase its market immensely in South Eastern Europe (American Chamber of Commerce in Romania, 2016).

 The key areas for effective CRM in the overseas market includes finding efficient supply chain management by means of local partnerships. The companies need to select the right dealers, distribution and channel network that will be appropriate for making the product available to the end users. The company has to decide whether to sell the product by a zero, two, three or four level channel. This depends on the nature of the goods and size of the market. Renowned and efficient dealers can efficiently make a new product reach the end users within a very short span of time. In case of overseas market the case of after-sales service should also be implemented to keep the customers satisfied. The next key area in case of overseas CRM is pricing policy and advertising. The pricing should be done at par with the purchasing power of the people. The selection of proper marketing channel will help in proper promotion of the product. In order to sustain in the market, the company has to understand the culture, beliefs and traditions of the local people and design the product as per their needs. An effective market research is the first thing that a company must do before entering a market. It must analyse whether the demand for its products exists within the market or not, and whether the political, legal, social and ecological factors are in favour of the business and its product (Tradestart, n.d.).

Calleija is one of the most reputed jewellery companies in the global market owing to its origin in Australia and founded by John Calleija. It produces unimaginable jewellery that reveals the excellent craftsmanship of the company (NewsLifeMedia, 2016). Aston Martin is a leading automobile manufacturer of Britain that was founded in the year 1914 by Lionel Martin, though its actual origin traces back to 1913 (Aston Martin, 2016). Calleija had made a partnership with Aston Martin to make outstanding collections of jewellery. The craftsmanship of the new partnership was supposed to be based on the One-77 car of Aston Martin. As the name suggests the car is made available only in 77 pieces and so the new pieces of jewellery is also made available in 77 pieces. The design of the jewellery is based on the extraordinary designs of the One -77 car, and these pieces were designed by John Calleija and the guidance was provided by the director of Aston Martin Marek Reichman that led to the design of a new gemstone called ASTAR (Calleija, 2016).

However, despite such extraordinary efforts put on Calleija, it has faced problems in getting an effective hold of the market in United Kingdom. Callejia had also developed its market in UAE along with a physical store at the Old Bond Street of Mayfair in London. Online marketing techniques assisted by the traditional ways enabled Callejia to maintain a good relationship with its customers, and bring about an increment in their sale. However, the rules, regulations and laws of the nation were largely different from that of Australia. Callejia had to find out what was permissible as per the norms of UK. There was a system of red tape prevalent in the UK and it was difficult for the jewellery company to make a proper network (Fletcher & Crawford, 2013). In response to this Callejia made contact with Austrade, which is an Australian government association to help the exporters of the nation help develop market outside. This body gave contacts of well known lawyers, business developers and accountants within the boundaries of the UK. The company faced problems in creating awareness of its brand, and therefore it was believed that marketing is an ever-ending process that completed half of the business. It made contacts with a PR company that assisted Callejia in making ads on magazines, brochures and also on organized PR campaigns. Despite this the competition in the UK jewellery market appeared as hurdle to Callejia, and most of the jewellers had their shop at Old Bond Street, some as old as 150 years (Fletcher & Crawford, 2013).

One fact is that people of diverse cultures visited London, and some preferred to purchase British products as a sign of heritage and others preferred to buy products of multiple origins. In this way, the large nature of London’s market appeared as complex and challenging to Callejia. The presence of immense number of jewellery companies had made the market of London reach a saturation level. Callejia tried to make brand awareness of its products especially the pink diamonds. Again, the company came to know about the country of origin effect that was prevalent in UK at that time. People of UK preferred only those products, which were produced in UK. The people of UK had a disliking for Australian jewellery and technology (Fletcher & Crawford, 2013: 666).Callejia tried to overcome this hurdle by stressing on the ethical manner by which the sourcing of gems are done, and used PR campaigns such as print media advertisements to overcome the issue and make brand awareness (Fletcher & Crawford, 2013: 667).

Country of origin effect is connected with the perception that customers have after knowing the country, where a particular product has been made. Customers may develop a positive liking for a product after hearing about the country of origin or may develop a disliking for the same perspective. The concepts have gained popularity with the advent of globalisation over a period of 30 years. The emergence of the concept of country of origin effect can be traced back to World War I. The defeated nations such as Germany were forced to add a symbol of country of origin (COO) on the products that were made there (Rezvani, Dehkordi, Rahman, Fouladivanda, Habibi & Eghtebasi, 2012: 206). The SME jewellery company such as Calleija had to suffer due to this effect. They were not accepted by the people as they preferred only products of British origin. After a hard PR campaign of ethical sourcing of its gems, Calleija was able to create an awareness of its products at least to some extent (Fletcher & Crawford, 2013: 667).

Figure: Pink Diamonds of Calleija

(Source: Calleija, 2016)

References

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