Discuss about the Global Marketing for International Market Selection.
Global marketing is that type of marketing on a global scale to reconcile and take commercial benefit of worldwide operations; their similarities and differences to meet the objectives on global scale. It is a strategy to enhance sales through advertisements and promotions in the international market. Mostly every business has a global establishment; even those companies performing activities from home can attract customers from all around the world. A global business marketing strategy should be effective and capable of understanding its target market to promote and sell their products globally (Farrell, R, 2016).
To carry business activities in another country, businesses must gain knowledge about new culture and their establishment norms and values. Understanding the culture and demand will ensure better business. Usually companies hire a trustworthy native person of that country to help with the marketing process. Different countries and cultures have different demands and preferences; a product sold in one country may not be sold in another country. Product offerings should be tailored according to the geographical conditions and make effective strategies so that the product can be accepted worldwide. Global marketing strategy ensures leverage economies of scale to the company.
Market Selection is one of the most important decisions to make to start business overseas. There are many barriers which can make the entry difficult while dealing with the political and cultural risk (Tielmann, V, 2010). Different market has various degrees of attractiveness and has different objectives. The International Marketing Process is a five step process:
We can select any country according to our requirements, so we perform country identification process; which means to understand the general concept of potential markets. It is often beneficial to choose that country where the culture and languages used is similar to our country. There must a simple match between the countries to avoid obstacles and barriers in setting up a business. Before choosing a company make sure that the country is dealing in the same trading zone.
The second step is preliminary screening and at this stage a more serious attention is given to those countries that are remaining after performing the preliminary screening. We begin with scoring, giving weights and ranking the nations in accordance to the macro-economic factors like exchange rates, level of domestic consumption and currency stability. The market entry cost is determined before making any decision. There are many countries that are facing political and economical instability, if any country makes its entry to such market it will be very difficult to avoid market risk. So the marketing manager should consider only those countries that show favourable economic market condition.
The third step is to determine that whether the country is feasible for entry or not. So it is essential to gain detail information about the target market to make the marketing decision accurate. In this step not only micro-economic factors are dealt with, but local conditions are also considered. Marketing research is conducted in relation to the product, price, promotion and place.
In step four, the final selection is made out of all the potential nations and this can be done by looking upon the goals and their match in the nations. Close competitors or any domestic company having same features can be looked to get similar cost at the time of entry. Depending upon this criteria a final scoring and weighting is done and the final decision is made.
The last stage is direct experience. The manager or marketing representatives are required to visit the nation to gain experience and knowledge regarding the countries culture and business practices. After accessing the local conditions self referencing is important. The business should be flexible and of experimental nature to attract more customers and it should always keep in mind that if they want the business to be the best avoid being judgemental.
Before taking any decision regarding which country to select out of the possible alternatives ask yourself what you have and what you would like to do. By developing this we can determine our priority section and choose a country. Small mistakes can be corrected later on but once we select a country it becomes impossible to repair this damage. So we should be systematic and realistic in selecting the perfect location.
Consider the style of operation, whether to keep it formal and elegant one or casual. Location can be decided depending upon the particular style (Lee, K& Carter, S, 2012). A traditional store must be required if the business in dealing in the retailing of goods and services. The issue related to demographics is an important angle to be looked upon. First determine the potential customers and the level of their proximity to the location, this must be a very critical task for some retailers and service providers. Make sure that the competitor company is not located nearby as they may have a competitive advantage over our business. An ordinance and zoning restrictions can also affect the business in many ways, to avoid these restrictions make sure that there is no restriction imposed by the Government to start a business in that locality. Technology is also an important factor in determining the best country to start up a business. In the present scenario customers are highly exposed to the new technologies and advancements, therefore to meet the need of the customers choose a country where technological advancement is favourable.
Presently Canada is one of the best countries to start up a business because of its attractive Governmental policies and support. Canada’s cost of living is low and provides educated workforce that makes it an attractive destination to start up a business (Gillett, R, 2014). Its inflation rate is also flat when compared with other countries. Canadian Government is being supportive and providing guidance to small entrepreneurs to start their business. The Business Development of Canada is providing venture capital, subordinate financing and long term loans to the small businesses. The Canadian Funding Portal makes it easy to understand and take government grants and many other funding options. The Canadian employees are well trained and qualified; they ensure good quality work to the business.
International Marketing aims to expand its sales overseas by introducing the products and services in new market. The financial objective of global marketing is to increase its revenues and earnings, make wider margins and enhance cash flows. Higher rate of return is expected from the capital invested. The Strategic Marketing Objective is to intent to sustainability and improvement in the strength of the organization and to gain long term market position by considering customer value in a business. A business plans to expand their activities worldwide to make bigger market share and to adapt quickly the prevailing conditions of the market as compared to their competitors. They want to offer products that have higher quality than their rivals. Provide goods and services at relatively low price and to broader the product line of the business. A business wants to provide best customer services to maintain a good position in the global market (Olsen, E, 2008).
There are many ways in which a company can plan its entry in a foreign market. One market strategy may be suitable for one business and may not be favourable for other business; it totally depends upon the goals and objectives of the business. There are a number of barriers that can influence our decision such as tariff rates, marketing cost, transportation cost and the extent of adaptation of the product. There are many options available for taking an entry in the global market such as direct exporting, licensing, franchising, joint ventures, buying a business and partnering (Spulber, D, 2007).
In direct exporting we intend to sell the products directly into the chosen market. Once the sales program is established, it is explained to the agents and retailers so that they can deal according to the set program (Brady, D, 2014). The retailers and agents becomes the face of the company so it is extremely important to select staffs that are confident and experienced to make such deals. A sophisticated arrangement, which the company can transfer the right to utilise the products and services to another company. It is an important strategy as a license purchaser can expand its market share. To expand the market rapidly, franchising is the correct strategy. It is beneficial for a firm that has a repeatable business model. But the model should be completely unique from other models and should posses a good brand image in the international market. Partnering is necessary when a business is supposed to make an entry in a country having highly diversified culture and language. Joint venture is that type of partnership in which two countries agree to work together as a third company (Peng, M, 2016).
Segmentation means to find out the potential customers and their needs. This will help in developing the approach to fulfil the needs and wants of different groups cost effectively. There are different ways for market segmentation, they are: demographic, psychographic, behavioural and geographic (Cant, M, Strydom, J& Jooste, C, 2009). The demographic approach covers the personal attitude like age, gender, education, occupation, marital status and sexuality. Psychographic deals with the personality and lifestyle of the consumers. The behavioural approach deals with the benefits that the consumer expects and how loyal the customers are. The geographical approach is concerned with the country, region, state and city.
Target Marketing deals with the size of the market and the expected growth. It is beneficial to target that market where there are limited competitors available because low rivals equals to attractive market. Cost to reach the market is calculated and decision is made accordingly. Target that market where competition is limited and customers are willing to purchase the product that the company will be dealing in (Hopps, J, 2008).
The final stage is positioning, it means to implement the chosen image and to make appeal in the selected market. To have knowledge about the current position in the market conduct a market research and identify the most important product class attributes and where improvement is necessary (Doole, I& Lowe, R, 2005).
The generic strategy of Michael Porter can be applied in all industries of any size. Porter termed the generic strategy as:
Cost Leadership: It means to eliminate unwanted services to reduce the cost of a product so that the sales can be increased. This way the company can gain competitive advantage over the rival companies (Faulkner, D, 2002).
Differentiation: It means to create desirable products and services uniquely (Robbins, S, Bergman, R, Stagg, I& Coulter, M, 2014). The company offers product that has unique feature and is capable of attracting more customers.
Focus: To offer specialized and outstanding services in the niche market. The focus part is further divided into two parts- Cost Focus and Differentiation Focus. The company that uses focus strategy develops low cost and specified products for the market, as they tend to serve the market uniquely by building strong relationship with the customers and creating a good brand image. The focus strategy deals in a narrow segment and due to this it becomes difficult to attract more customers (Goldman, G& Nieuwenhuizen, 2006).
Conclusion
Global Marketing is the new era in the business world. Many organizations have started to expand their business in the global world to increase their profitability. A business should expand its business in that country where the cultural and social environment shows favourable condition. A country having limited Government pressure and regulation will be the best to start a business. Global marketing also helps in building up good brand reputation in the market. Expanding a business helps in opening the door for itself for future opportunities. Different countries have diversified culture and languages, it is important to make an entry in those countries where people are ready to accept the culture of other country; and are willing to use the product and services offered by our company. Make sure that the country you choose does not involve operational risk otherwise it could ruin everything. The employees may go on strike due to non compliance of employment or corporation laws according as prescribed by the Government of that country. Therefore, we can conclude by saying that; choose that country where all the establishment conditions are favourable and Government is willing to show financial help.
References
Adekola, A & Sergi, B. (2007). Global Business Management: A Cross-cultural Perspective. Ashgate Publishing Ltd.
Brady, D. (2014). Essentials of International Marketing. Routledge.
Cant, M, Strydom, J& Jooste, C. (2009). Marketing Management. Juta and Company Ltd.
Doole, I& Lowe, R. (2005). Strategic Marketing Decisions in Global Markets. Cengage Learning EMEA.
Farrell, R. (2016). Advantages & Disadvantages of a Global Strategy, Viewed 24 September 2016 from https://smallbusiness.chron.com/advantages-disadvantages-global-strategy-11664.html
Faulkner, D. (2002). Strategy: Critical Perspectives on Business and Management. Taylor & Francis.
Gillett, R. (2014). The Five Best Places In The World To Start A Company, Viewed 24 September 2016 from https://www.fastcompany.com/3033589/hit-the-ground-running/the-five-best-places-in-the-world-to-start-a-company-infographic done
Goldman, G, Nieuwenhuizen. (2006). Strategy: Sustaining Competitive Advantage in a Globalised Context. Juta and Company Ltd.
Hopps, J. (2008). Target Market Selection Segmentation and Positioning, Viewed 24 September 2016 from https://blog.demandmetric.com/2008/08/06/target-market-selection-segmentation-and-positioning
Lee, K& Carter, S. (2012). Global Marketing Management. OUP Oxford.
Olsen, E. (2008). Objectives and Goal Setting, Viewed 24 September 2016 from https://onstrategyhq.com/resources/objectives-and-goal-setting
Peng, M. (2016). Global Business. Cengage Learning.
Robbins, S, Bergman, R, Stagg, I& Coulter, M. (2014). Management. Pearson Australia.
Spulber, D. (2007). Global Competitive Strategy. Cambridge University Strategy.
Thompson, V. (2016). Things to Do When Doing Business in Other Countries, Viewed 24 September 2016 from https://smallbusiness.chron.com/things-doing-business-other-countries-64768.html
Tielmann, V. (2010). Market Entry Strategies: International Marketing Management. GRIN Verlag.
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