The Greatest Challenges Facing Marketers as they Enter International Markets - Essay Example

Introduction In the age of technology and rapid globalization, marketing has become hugely complex and requires highly creative input to gain leverage and establish niche market position. In the fast transforming environment of international business paradigms, the firms are continuously faced with huge challenges to compete and maintain competitive advantage. Marketers’ main focus is to meet the changing demands of the customers (Kotler & Keller, 2009). In the current times, the emerging markets offer huge potential for expanding business across the globe. Indeed, within new business equations, marketing strategy is significantly influenced by a myriad of macro-environment factors and global issues that tend to impact market and the psychology of consumers. Hence, the various challenges faced by marketers can be evaluated as below. 2 Macro-environment Macro environment factors are very important elements of market strategies, especially when the firm is entering international market and expanding its interest across the globe. The main macro-environmental elements like economic; demographic trend; changing socio-cultural paradigm; developing new environmental compulsions; advancing technology; and political environment of the region strongly influence the performance of the market (Kotler & Armstrong, 2010). 2.1 Economic Consumer buying decisions are intrinsically linked to the economic conditions that influence the buying power of the consumers. Thus, organizations entering such market would need to be cost sensitive and introduce quality goods at affordable prices. 2.2 Demographic Kotler et al. (2007) affirm strongly that demographic compulsions have emerged as powerful elements in the changing global scenario, which impact market position and need to be incorporated within the company’s market strategy. The fast changing demographic imperatives like population size, age distribution, gender ratio, income group etc. have become strong agents of change in the transforming societies that are increasingly impacting the consumption pattern and evolving new trends. Consequently, segmented market strategy and brand creation become hugely critical to construct or develop need and satisfy the changing requirements of customers. Changing lifestyle pattern and keeping abreast with social changes is the key motivating factor that helps segmented marketing. 2.3 Socio-cultural paradigms The rapid globalization has created a pluralistic society with diverse needs and requirement. Ennis (2009) believes that socio-cultural imperatives have become the decisive factor in the consumption of goods and services. Indeed, the market strategy must respond to the new culturally diverse system rather than focus only on the product. It is for this reason that firms need to promote their goods and services within a culturally sensitive environment. Nokia advertisements are prime examples which include diversity in their advertisements that are instant hit across the globe. McDonald’s includes the taste of the local population in its burgers and customizes it to cater to the changing demands of its consumers. 2.4 New environment compulsions and sustainable development In the contemporary times, environment conservation and sustainable business practice have emerged as key components of competitive advantage (Slack & Lewis, 2002). The companies entering new markets must become proactive participants in the conservation and preservation of environment and promote sustainable business practices. Hybrid cars by General Motors and Suzuki are increasingly becoming popular because of their environment friendly features. Bodyshop uses raw materials obtained through sustainable business practices etc. and highlights the need for sustainable development. 2.5 Technology Technology has greatly facilitated business growth with its application in various arenas of business and provided it with flexibility and speed to meet the fast changing preferences of the customers. While it has helped new product development and expedited the business processes, it has, at the same time, redefined the communication with its far reaching implications. It is important to exploit huge potential of cyber technology and e-commerce so as to penetrate new tech savvy market and gain advantage. But sustainability of technology based products and processes need also be taken into considerations. Fuller (2004) strongly claims that ergonomically designed products contribute towards sustainable development and therefore, technology needs to be efficiently used to manufacturing such products. Therefore, various features like product life cycle, green design with biodegradable aspects, recycling, waste management, carbon footprints etc. must be incorporated to make technology environment friendly (Pujari, 2006). 2.6 Political and legal components In international markets, the political and legal paradigms play a hugely critical role in establishing a credible market for the firms. Baron (1995) believes that these factors impact various stakeholders’ interests and must be dealt with innate sensitivity because of market volatility and high market potential of emerging new economies. The firms must comply with the rules and regulations of the host country and plan its market strategy within the broader framework of its socio-political and legal imperatives. Using local resources, providing safe working conditions and promoting cross cultural understanding are very important considerations that must be encouraged and conformed to promote trust and relation building. 3. B2B marketing Forging business alliances and creating networking help to expand across wider geographical areas without incurring huge financial burden. In the present recessive environment, B2B marketing provides firms with essential leverage to penetrate new market by using technology and new logistic approach in the global economy. B2B marketing encourages expansion of business interests across the globe through creation of distribution outlets and helps to improve business prospects. The firms are able to take their products directly to doorsteps of their customers, and at the same time, able to target that segment of market, which would otherwise be difficult to access without huge financial input. Most importantly, B2B marketing and network relationships also provide products with necessary value addition features to maintain a competitive advantage against its rival product in the segment market (Barnett, 2004). 4. Quality control In the international market, constant endeavour to improve quality and productivity facilitates in maintaining competitive advantage (Mannan & Ferdousi, 2007). The marketers that foray into international markets need therefore be responsive to the changing needs of the customers and constantly strive for improvement initiatives through various tools like TQM, Six sigma, benchmarking, etc. This not only enhances efficiency and quality but also provides the firm with enviable credibility amongst its various stakeholders. 5. Strong communication In the global business environment, effective and strong communication must be an intrinsic part of effective market strategy. Though strong brand equity provides the firms with credibility, advertisements serve as one of the most powerful tools of communication. They create need and also act as catalyst to the process of buying by influencing their decisions to purchase. Hearn (2008) says that advertisements endorse the concept of self branding and reconstruct the image of self as per the desired model or social construction of new idea. This aspect is increasingly being exploited by the marketers. In new market, especially the emerging economies, advertisements serve to escalate the need for “foreign goods” and help create perceived value for the brand that could add value to one’s lifestyle. Most pertinently, if the advertisements are able to deliver the promised satisfaction, the firm is easily able to establish its unique position in the international market. 6. Conclusion Fast advancing technology and globalization have become critical elements for marketers as they are intrinsically linked to growth as well as empowerment for consumers across the geographical boundary. The needs of consumers are increasing being influenced by various external factors which not only influence their purchase decisions but also force the marketers to innovate and adopt flexible approach to meet their changing preferences. It is believed that marketing is increasingly being conceptualized as an organizational philosophy or “an approach to doing business” (Wilson & Gilligan, 2003). As a result, consumer not only expects more from the product and companies but the company also needs to conform to their changing requirements vis-a-vis macro-environment factors and strengthen their position through effective communication techniques. These are major challenges that help the firms to strengthen their market position when they expand globally. References Barnett, T.P.M. (2004). The Pentagon’s new map: War and peace in the twenty-first century. New York: Putnam. Baron, D.E. (1995). Integrated strategy: Market and non-market components. California Management Review, 37(2), 47-65. Ennis, S. (2009). Marketing management. NY: University of Strathclyde Business School. Fuller, D.A., & Ottman, J.A. (2004). Moderating unintended pollution: The role of sustainable product design. Journal of Business Research. Hearn, A.. (2008). Meat, mask, burden: Probing the contours of the branded self. Journal of Consumer Culture, 8, 197. Kotler, P., & Armstrong, G. (2010). 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