Hoofdstuk 11
International marketing is important because of the economic theory of
comparative advantage. This theory states that each country has natural
advantages over others in the production of certain goods, and therefore
specialisation and the trading of surpluses will benefit everybody.
Marketing to an international audience will usually bring economies of scale in
manufacture, research and development, and marketing costs. Most
governments encourage firms to market internationally because it brings in
foreign exchange, which enables the country to buy in essential import, which are
needed to support the national economy. The downside of world trade is that it
sometimes results in the export of cultural values as well as goods and services,
so that traditional cultures become eroded.
In general, though, the accepted view is that world trade results in greater wealth
and higher standards of living for most of the world’s population; trade is
therefore regarded as beneficial in terms of its economic benefits, and
governments worldwide try to encourage it, within the limits of getting the best
deal for their own countries.
Most governments are in favour of exporting their own manufacturers’ goods but
would prefer to restrict importing if possible: this is to protect the balance of
payments.
Governments also influence or control exchange rates; this means that exporters
lose some control over prices, as the government controls the rate at which one
currency is exchanged for another.
A further reason for internationalising is that the product life cycle will vary from
one country to another. What is a mature product in one country may be at the
introduction stage in another, so that the firm gains all the advantages of
introducing new products to the market without the costs of research and
development that would result from developing new products for the domestic
market.
Cultural differences encompass religion, language, institutions, beliefs and
behaviours that are shared by the members of a society. It is as well for
marketers to take the advice of natives of the countries in which they hope to do
business, since other people’s cultural differences are not always obvious.
In general marketers need to be wary of ethnocentrism, which is the tendency to
believe that one’s own culture is the ‘right’ one and that everybody else’s is at
best a poor imitation.
It can be easier to aim for countries where there is some psychological proximity.
These are countries with some cultural aspects in common.
The political environment of the target country will also affect the entry decision.
The economic environment of the target country is more than the issue of
whether the residents can afford to buy our goods. In some cases the level of
wealth concentration is such that, although the average per capita income of the
country is low, there is a large number of millionaires.
A crucial economic issue is that of foreign exchange availability. If the target
country does not have a substantial export market for its own products, it will not
be able to import foreign products because potential importers will not be able to
pay for the goods in the appropriate currency. This has been a problem in some
countries in the Third World and in some Communist countries, and there has as
a result been a return to barter and countertrading. Countertrading is the export
of goods on the condition that the firm will import an equal value of other goods
from the same market, and in the international context can be complex.
The barriers identified were as follows:
• Psychic distance. The cultural distance between the countries involved. This
includes lack of ability to speak or understand foreign languages.
, • Practical export problems. These include shipping goods, handling paperwork,
and lack of experience in dealing with overseas customers.
• Resource constraints. Lack of finance to offer credit, lack of transportation, etc.
• Trade restrictions. Some countries impose restrictions on imports, which can
limit trade.
• Market risk. The credit risks associated with dealing with customers in other
countries, and difficulties of dealing with foreign exchange.
Transnational consumer segmentation looks at lifestyles, behaviour and
situationspecific behaviour.
Overall, a firm’s internationalisation strategy decisions will depend on the
following factors:
• The size of the firm in its domestic market.
• The firm’s strengths compared with overseas competitors.
• Management experience of dealing in other countries.
• The firm’s objectives for long-term growth.
Having decided on an approach to the promotion and product development
strategies, the firm needs to choose an entry strategy. The stages of
development model suggests that firms seeking to internationalise go through a
series of stages.
• Exporting implies the smallest commitment to the foreign market. Here the
manufacturer sells the firm’s products to a foreign importer, who then handles
the marketing of the product. The advantage of this approach is that it involves
the least cost; the disadvantage is that the exporting firm has little or no control
over the way the product is marketed or used in the foreign market. This could
lead to problems later on as the firm’s reputation may be adversely affected.
Export agents bring together buyers and sellers and are paid on commission;
export houses buy goods for export to foreign countries. Sometimes foreign
buyers will deal direct with companies, and some major foreign stores (for
example Sears of the USA) maintain buying offices in foreign capitals.
• Establishing a sales office in the foreign market might be a next stage. This is
an increased financial commitment, but also gives more control. Joint ventures
involve collaborating with a same-nationality firm that is already in the target
market, or with a foreign firm in its own country. Ajoint venture could involve a
piggy-backing arrangement, under which one firm agrees to market the other
firm’s product alongside its own. This works best if the firms have
complementary, non-competing products. Licensing agreements allow a foreign
manufacturer to use the firm’s patents. Franchising is similar; the franchisee
agrees to run the business by a specific format.
• Overseas distribution would involve establishing a warehousing and distribution
network in the foreign country. This gives major control over the marketing of the
product, but still relies on importing from the home country.
• Overseas manufacture includes warehousing and distribution, but allows the
firm to shorten the lines of supply and to adapt the product more easily for the
overseas market. In some cases the manufacturing costs are lower in the foreign
market, so there will be further economies made.
• Finally, the firm might become a true multinational marketer. The true
multinational firm manufactures and markets in those countries that offer the
best advantages. Although such a company may have originated in a particular
country, it may well employ far more foreigners than it does its own nationals,
and will think in global terms rather than national terms.
Broadly speaking a firm can decide on a globalisation strategy, by which the
company’s products and attitudes are basically standardised throughout the
world, or a customisation strategy, where the company adapts its thinking and its
marketing to each fresh market. As global barriers to trade break down, more and
International marketing is important because of the economic theory of
comparative advantage. This theory states that each country has natural
advantages over others in the production of certain goods, and therefore
specialisation and the trading of surpluses will benefit everybody.
Marketing to an international audience will usually bring economies of scale in
manufacture, research and development, and marketing costs. Most
governments encourage firms to market internationally because it brings in
foreign exchange, which enables the country to buy in essential import, which are
needed to support the national economy. The downside of world trade is that it
sometimes results in the export of cultural values as well as goods and services,
so that traditional cultures become eroded.
In general, though, the accepted view is that world trade results in greater wealth
and higher standards of living for most of the world’s population; trade is
therefore regarded as beneficial in terms of its economic benefits, and
governments worldwide try to encourage it, within the limits of getting the best
deal for their own countries.
Most governments are in favour of exporting their own manufacturers’ goods but
would prefer to restrict importing if possible: this is to protect the balance of
payments.
Governments also influence or control exchange rates; this means that exporters
lose some control over prices, as the government controls the rate at which one
currency is exchanged for another.
A further reason for internationalising is that the product life cycle will vary from
one country to another. What is a mature product in one country may be at the
introduction stage in another, so that the firm gains all the advantages of
introducing new products to the market without the costs of research and
development that would result from developing new products for the domestic
market.
Cultural differences encompass religion, language, institutions, beliefs and
behaviours that are shared by the members of a society. It is as well for
marketers to take the advice of natives of the countries in which they hope to do
business, since other people’s cultural differences are not always obvious.
In general marketers need to be wary of ethnocentrism, which is the tendency to
believe that one’s own culture is the ‘right’ one and that everybody else’s is at
best a poor imitation.
It can be easier to aim for countries where there is some psychological proximity.
These are countries with some cultural aspects in common.
The political environment of the target country will also affect the entry decision.
The economic environment of the target country is more than the issue of
whether the residents can afford to buy our goods. In some cases the level of
wealth concentration is such that, although the average per capita income of the
country is low, there is a large number of millionaires.
A crucial economic issue is that of foreign exchange availability. If the target
country does not have a substantial export market for its own products, it will not
be able to import foreign products because potential importers will not be able to
pay for the goods in the appropriate currency. This has been a problem in some
countries in the Third World and in some Communist countries, and there has as
a result been a return to barter and countertrading. Countertrading is the export
of goods on the condition that the firm will import an equal value of other goods
from the same market, and in the international context can be complex.
The barriers identified were as follows:
• Psychic distance. The cultural distance between the countries involved. This
includes lack of ability to speak or understand foreign languages.
, • Practical export problems. These include shipping goods, handling paperwork,
and lack of experience in dealing with overseas customers.
• Resource constraints. Lack of finance to offer credit, lack of transportation, etc.
• Trade restrictions. Some countries impose restrictions on imports, which can
limit trade.
• Market risk. The credit risks associated with dealing with customers in other
countries, and difficulties of dealing with foreign exchange.
Transnational consumer segmentation looks at lifestyles, behaviour and
situationspecific behaviour.
Overall, a firm’s internationalisation strategy decisions will depend on the
following factors:
• The size of the firm in its domestic market.
• The firm’s strengths compared with overseas competitors.
• Management experience of dealing in other countries.
• The firm’s objectives for long-term growth.
Having decided on an approach to the promotion and product development
strategies, the firm needs to choose an entry strategy. The stages of
development model suggests that firms seeking to internationalise go through a
series of stages.
• Exporting implies the smallest commitment to the foreign market. Here the
manufacturer sells the firm’s products to a foreign importer, who then handles
the marketing of the product. The advantage of this approach is that it involves
the least cost; the disadvantage is that the exporting firm has little or no control
over the way the product is marketed or used in the foreign market. This could
lead to problems later on as the firm’s reputation may be adversely affected.
Export agents bring together buyers and sellers and are paid on commission;
export houses buy goods for export to foreign countries. Sometimes foreign
buyers will deal direct with companies, and some major foreign stores (for
example Sears of the USA) maintain buying offices in foreign capitals.
• Establishing a sales office in the foreign market might be a next stage. This is
an increased financial commitment, but also gives more control. Joint ventures
involve collaborating with a same-nationality firm that is already in the target
market, or with a foreign firm in its own country. Ajoint venture could involve a
piggy-backing arrangement, under which one firm agrees to market the other
firm’s product alongside its own. This works best if the firms have
complementary, non-competing products. Licensing agreements allow a foreign
manufacturer to use the firm’s patents. Franchising is similar; the franchisee
agrees to run the business by a specific format.
• Overseas distribution would involve establishing a warehousing and distribution
network in the foreign country. This gives major control over the marketing of the
product, but still relies on importing from the home country.
• Overseas manufacture includes warehousing and distribution, but allows the
firm to shorten the lines of supply and to adapt the product more easily for the
overseas market. In some cases the manufacturing costs are lower in the foreign
market, so there will be further economies made.
• Finally, the firm might become a true multinational marketer. The true
multinational firm manufactures and markets in those countries that offer the
best advantages. Although such a company may have originated in a particular
country, it may well employ far more foreigners than it does its own nationals,
and will think in global terms rather than national terms.
Broadly speaking a firm can decide on a globalisation strategy, by which the
company’s products and attitudes are basically standardised throughout the
world, or a customisation strategy, where the company adapts its thinking and its
marketing to each fresh market. As global barriers to trade break down, more and
