Different Aspects in International Marketing
Introduction
The changes happening in the world today largely affect the global market and the economy of many countries around the world. Many business organizations tend to become more competitive to cope with these changes, specifically in the advancement of technology and the improvement of the different forms of communication. Today, due to the emergence of many companies having the technology and the means for greater expansions of market, other existing organizations are forced to innovate and develop, to continually serve and retain their customers. This is also in response to the expansion of their market internationally. This paper discusses the different aspects in international marketing, which encompasses reports in relation to the international marketing plan of a company.
Analysis of International Macro Environmental Variables
Changes in the wider macro-environment may not be as close to the marketing firm’s daily operations, but are just as important, for these macro environmental factors determine the success of a business organization internationally. The main factors comprising the macro-environmental forces include the political and legal factors, the economic factors, the social and cultural factors, and the technological factors (2006). Business organizations involved in international operations are faced with the additional dimension of international political developments, which encompasses activities such as importing, exporting, or having joint ventures or subsidiary companies abroad. In many countries, particularly in Developing countries, the domestic political and economic situation is usually less stable, so firms must be able to monitor the local political situations very carefully. Another variable is the economic factors, which are highly significant to the operation of business organizations, especially to those into international marketing, for economic factors influence the demand, costs, prices and profits of products and services. In addition, economic variables determine the rate of inflation and level of interest rates, which affect the return of investments and inhibit the adoption and diffusion of new technologies, so marketing firms must be able to monitor their economic environment. The third macro-environmental factor is the socio-cultural environment, which is the most difficult element to evaluate, for it manifest itself in changing tastes, purchasing behavior, and changing priorities. The types of products and services demanded by consumers are a function of their social conditioning, attitudes and beliefs, and are influenced by their cultural values that are perpetuated through family, the church, education and institutions of society. Consequently, marketing firms must respond efficiently to the changes happening in the socio-cultural aspect of society. Lastly, technology is a major macro-environmental variable because it influences the development of many of the products today, and several business organizations take part in this technological progress through researches that effect innovations and new applications (2006).
These four macro-environmental variables are good basis for the effective and efficient operation of a company. However, due to the changes affecting these variables, business organizations must be able and must be apt to adapt to the various changes happening in these environments. One major change is in terms of the socio-cultural aspect, wherein the cultures of many nations are being influenced by the empowerment of the female gender. Many cultures have now changed their attitudes and beliefs regarding the stature of women, who are now allowed to work and participate in the society. This change has led to an increase in the demand for convenience foods, one-stop shopping, and the widespread adoption of timesaving devices, such as microwave ovens, rice cooker, coffee maker, and many others (2006). This affects the company because this change is being influenced by the preferences of the culture, attitude and beliefs of female consumers, being more in control of purchase, and this change must be given importance by the company, strategically targeting the needs and wants of consumers. Another change important for the company is the fast-changing and dynamic technology at present, including the use of the Internet. More and more companies are now dependent on the applications and operations in the World Wide Web. This is because the use of the Internet is faster and gives companies the chance to have a wider market. This change will enable the company to expand efficiently and effectively in the global market. The third significant change is the change in the oil prices, which affects the prices of commodities in the domestic and international markets. The increase in the oil prices would also lead to the increase in the prices of the company, in response to the increase in the cost of materials used for production. This aspect must be monitored to ensure the profit of the company, but not compensating the quality of their products.
Development of Marketing Information Systems
It has been reported that a marketing information system is a continuing and interacting structure of people, equipment and procedures to gather, sort, analyze, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision makers to improve their marketing planning, implementation, and control (1997). In addition, it intends to bring together disparate items of data into a coherent body of information, and provides methods for interpreting the information the marketing information system provides ( 1997). The information involved in this system remains continuous, and due to its interactive nature, the company does better planning, control, and implementation of marketing efforts ( 1989). Each marketing information system has four main parts, namely, the internal reporting systems, the marketing research system, the marketing intelligence system, and the marketing models, and thus, is needed by the company.
Internal Reporting Systems – The internal information important for the company are the orders received, stockholdings, and sales invoices, for these can be used by marketing managers in generating a great deal of information ( 1997). With this information, the company can generate reports regarding their current sales and budget that would enable the company to assess their capability to engage in international sales. The internal reporting system of a company must be developed and organized to efficiently determine and generate reports regarding the budget of the company, which would help the company assess if they will be seeking external help as an additional financial support. In addition, its importance lies on the fact that it enables the company to efficiently dissipate information regarding the various aspects of production and operation. It proficiently fuels the operation of the company because through this system, the company can utilize its resources better for continuous production for its international market.
Marketing Research Systems – Marketing research is the proactive search for information to solve perceived marketing problems. This is done by collection of data in a purposeful way to address a well-defined problem, or through continuously monitoring the marketing environment ( 1997). Sources of information may include reports derived from seminars, trainings and conventions regarding international trade and market, which are useful sources of information for the company. These sources are useful because the company obtains first hand information regarding the market, which enables them to come up with strategies involving international markets.
Marketing Intelligence Systems – A marketing intelligence system is a set of procedures and data sources used by a company to sift information from the environment that they can use in their decision-making. Sources include newspapers, magazines, business journals and reports, economic forecasts, other media, interview with producers, suppliers, competitors, and customers, being an informal process of observing and conversing ( 1997). This system involves obtaining second hand information from other sources, and is also useful for the evaluation of the target market because it includes opinions from other economists or business organizations. These are useful information for the company, giving the company the chance to assess the market potential of a certain country or nation.
Marketing Models – These models or tools are the means of interpreting the information obtained through the other three components, in order to give direction to the company’s decisions. Some of these models include time series sales models, brand switching models, linear programming, elasticity models, discounted cash flows, and many others ( 1997). These mathematical, statistical, econometric and financial models are useful for the company so it can perceive the correlation and the probability of market success of their products internationally. These tools enable the company to analyze their data obtained through collection and research, which leads to evaluation of international markets and product development.
The development and the use of a marketing information system are essential for a company because it supports the whole business organization’s management decision-making process. The information involved in this type of system can be obtained internally or externally, depending on the type of information needed by the company to assess its global market. The usefulness of the development of a marketing information system lies on the fact that it enables the company to make credible and scientific decisions regarding their international markets, for these decisions are based on reliable information and timely research. This is one reason why many companies rely on their Research and Development teams, for making good marketing decisions.
Identifying Market Potential
Identifying the potential of an international market is not an easy task, for it involves tedious and long-term research that would enable the company to assess their profitability and the suitability of their products. This includes the gathering and assessment of tons of information, which will be helpful for the company to assess the potential of their target market. In identifying this aspect, international marketers need to have techniques or tools to enable them to efficiently evaluate a market’s potential. These techniques involve obtaining data from qualitative or descriptive sources or through quantitative or mathematical methods.
Quantitative methods include the marketing research, which could be investigative, or short-term, formal research, or a continuous research. An international research is usually a descriptive or observational research, and could be done through questionnaires, data collection such as mail, personal interview, telephone and observation, and sample size and collection. Through these methods, the company can assess the needs and wants of their target market, leading them to plan on producing specific products for that market (1997). Aside from the descriptive data analysis methods, qualitative methods can also be used to analyze market potential. Usual methods include univariate methods such as the use of the mean, median, mode, and standard deviation; bivariate methods include regression, correlation, and cross tabulations; and multivariate methods such as multiple regression, cluster analysis, multiple factor indices and multidimensional scaling (1997). In discussion, (1997) emphasizes that when it is difficult to obtain data, resourceful ways are needed to estimate demand, and one of these methods is analogy. Two ways are involved in analogy; one is by cross sectional comparison, the other by time series analysis. Cross sectional analysis assumes that a factor, which correlates with demand in country A, could be translated to country B, while time analysis is a similar technique but adds the time dimension, very similar to the estimate of the stage in the international life cycle. However, limitations to the analysis include whether the two countries can easily be compared, whether technical or social developments have led to a leapfrogging of the product under consideration, and whether the difference between potential and actual demand depending on price, adaptability and other factors may include analogy (1997).
To better understand the techniques, it would be essential to apply them to a specific example. One good example is the case of Tanzanian Sisal Industry, which, due to the lack of a global intelligence facility and techniques, led to the decrease in sales. The once world leading Tanzanian Sisal Industry is a classic example of failure due to its inability of monitor market trends, through lack of an adequate intelligence system, as well as many, in-country problems, and basically failed to take account of the shrink in demand for sisal fiber in Western Europe. In addition, the decline in sisal production came in two stages, an initial stage up to 1987 and then 1990 onwards, where both internal and external factors were accounted for the decline. In the initial stage, the internal factors include the nationalization of some of the sisal estates in the late 1960′s, an overvalued exchange rate, high export taxes and a controlled single channel marketing system, while the second stage included liquidity problems, which affected sisal production. However, the external factors in both periods had the most significant effect and clearly showed the consequences of a dysfunctional intelligence system. In the initial stage, Tanzania experienced declining world prices of sisal fiber and the introduction of a cheap synthetic fiber substitute, the polypropylene twines. These factors led to low sisal replanting investment, leaf transport facilities and factory machines at the estate level. In the second stage, the collapse of the former USSR, one of the major markets for Tanzania, sisal fiber and changing world demand were the major factors. Thus, the inability of Tanzania to cope with these changes in terms of sisal demand and lack of an efficient intelligence system led to the collapse of the sisal industry (1997). In this case, the company was not able to properly and efficiently assess the potential of sisal markets in other countries. In essence, the Tanzanian Sisal Industry must have used a variety of international marketing techniques to determine the success of their business internationally, for the mentioned techniques can be used by international marketers for a careful planning of projects to focus on the needs and wants of their international market. With these techniques, international marketers can efficiently implement effective marketing strategies.
Use of an International Marketing Plan
(2006) states that, the best place to start an international marketing plan are through self-analysis, by knowing what the business is about. This includes asking questions such as: what products or services does the company offer? Why is it unique and what value does it offer customers? What are its current strengths and weaknesses, including financial, human, technological, cultural, and operational resources, and how will these affect its ability to compete in a foreign market? In essence, a company must have a clear objective of why it wishes to undertake the challenge of exporting, which would help the company with their business direction and strategy ( 2006). This step would be the most effective way to start an international marketing plan for the company must be very sure of their objectives and their target market. In this stage, the company should be able to determine the materials needed for the export, including the budget for the project, the time needed for delivery, the target market and many other aspects. In this stage, the company must also make sure that the qualities of their products are of high standard, and are suitable to their target market. The second important aspect critical to the decision-making process in an international marketing plan is market research, for research reveals the market or markets that offer the best opportunities for investment. In addition, it reveals the political, legal and regulatory, financial, cultural, competitive, consumer and marketing challenges that a business may face ( 2006). This stage is also important because through careful research and planning, the company can assess the techniques and strategies suitable for their target market. In this stage, decisions of the company regarding the price of the product or service, the demand for the product and many others are being decided. In addition, the company will also be processing their requirements regarding the export of goods, in relation to international laws and domestic regulations of their target market. This stage must be carefully and properly planned to effect a successful implementation. Finally, the third element of making an international marketing plan is the implementation of the product or service (2006). In line with this aspect is the assurance that the company has completed their requirements, and has determined the demands of their consumers. This stage focuses on the profit that will be gained by the company, so the company must make sure that they will render high quality products and services.
Conclusion
Due to the fast-changing society at present, many aspects are also continuously changing, such as the economy, politics, and culture of many individuals in the society. With this, the importance of international marketing becomes relevant to give opportunities to many countries to become successful in business and international trade. Economies must be able to promote international marketing and trade to effect progress and growth.
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