Domestic and International Marketing - Case Study Example

Domestic and International Marketing Table of Contents Domestic Marketing 2 International Marketing 2 Domestic and International Markets 3 Conclusion 14 References 15 Bibliography 17 17 Introduction Every business enterprise has two essential functions, marketing and innovation. Innovation is the continuous change from the status quo. In recent times, there are changes that are taking place in a rapid way like business environment, organizations, consumer behavior, market, competition, and in products. Marketers need to respond to these changes and develop marketing strategy to compete and grow in the national as well as in the international level (Jain & Et. Al., “Marketing the Changing Face”). In recent times, internationalization of business operations has been the growing trend. There are many companies that are working in the global or regional scale rather than at a national scale. Thus, there is a change in the strategies of planning. Therefore, for marketing it is the same. International marketing managers are in the thought of coping with the new scope of operations whether it is possible for them to apply domestic strategies to international market (Wind & Et. Al., “Guidelines for Developing International Marketing Strategies”). Domestic Marketing The domestic marketing is the marketing effort designed for a single market. This single market is the firms’ domestic market. The company faces the challenges of only one set may be in terms of competition, economic and marketing issues. For example, McDonald’s is an US based company, and the US market is the domestic market for the corporation. When the company operates in markets other than the US market, it is known as international market for the corporation. McDonald’s brand is a renowned brand of the US and now it is known as an international brand due to its presence in numerous countries. International Marketing International marketing goes further than the exporting and gets involved directly in the local marketing environment in a given country. Understanding of the different economic, political and cultural environments becomes essential for success in the international market (The University of Texas, “The Developing of Global Marketing”). The scenario can be conceptualized as, Unilever with its numerous brands in different categories of personal, home care and food products have achieved success in different countries by understanding the economic strength in terms of the economic progress of the country, the cultural acceptability towards various products and the political influence upon the business regarding the export and import policy and tax rates and licensing policy to do business (Unilever, “Introduction to Unilever”). Domestic and International Markets There is a huge difference between the domestic and international market and strategies applicable to both the market are different in nature and at a different level this tools of marketing are applied. Although the two markets are diversified in terms of nature, segment, behavior and consumers; but the generic marketing principles are equally applicable in both the markets. The marketing principle and concepts are the basic foundation to the application of marketing tools and techniques no matter what the market is. The difference lies in the approach and the level as per the barriers. The marketing principles like marketing mix, market segmentation, marketing communication, market research, pricing strategy; branding, product and promotional strategy are the general concepts of marketing. The marketing principles and concepts are applicable everywhere in every market for all the organizations. The basic concepts form the base for all the marketing strategies. For every market there are different strategic approaches but with the formation of marketing basic concepts these strategy are formed. To clearly understand the similar applications of marketing concepts and principles in both the levels of marketing, let the principles in the study with examples from the company at national and international level be considered to develop an enhanced understanding. In recent times the focus of the business organization has been on market segmentation and market research analysis. Therefore, the two generic marketing principles i.e. market segmentation and market research has to be properly recognized in this context. Market segmentation depends upon various variables that segment the market and then targeting the market with different strategies for each segment becomes easy. The market segment consists of collection of consumers those who share common set of wants and needs. Both at domestic level and international level the same application is used. The similar groupings of consumers are grouped in a category. May be at domestic level the cultural variable is different but the use of concept is similar. The needs and wants at national level might differ from international level but grouping of them are done in a similar way. There are three general patterns that have been added to this concept. The clustering of similar demand is done into three patterns. These are homogeneous preferences, diffused preferences and clustered preferences. As per the concept, homogeneous preferences shows the market where all consumers have roughly the same preferences. Diffused preference may be scattered indicating consumers greatly vary in their preferences. The clustered preference reveals distinct preference cluster. These three categories of clustering are used both at domestic and international level. At domestic level the clustering is at a low level as the market is not widespread. At the international level the market is huge and clustering them in each segment might be equivalent to the overall segment of a domestic market. The level of segmentation at the domestic level is not that difficult as it deals with a limited market zone and limited consumers. But in the international market, there exists a huge zone of operation and the numbers of consumers are huge. The levels of segmentation at both the level are different but the bases for segmentation are similar. The difficulties faced while segmentation in the market at both levels are different. The domestic market faces the barriers at local level which are not intense and complicated. But at the international level, the barriers faced are complex and dividing the consumers in the category becomes difficult. Even being difficult at different level the application of the concept of market segmentation is applied by companies at both the levels. The market segmentation is based upon concepts and is different at domestic and international level. The concept application is similar but the level of application is varied. McDonald’s segmentation is different as they operate in international level. But if the domestic level food chain business is considered then their segmentation is different. Both segments are different as consumers are different. For McDonald’s the consumers segmentation is based upon global consumer and then at regional level. But a domestic level food chain will segment the market only to the local level. Both the levels are different but the process and the use of marketing segmentation tools are similar. But if McDonald’s and Dominos are both considered then it can be seen that they operate at international level and the level of segmentation is similar in use and application. The consumer behavior, consumer type and industrial growth rate have huge effect upon the domestic and international market. McDonald’s and Dominos operates in food supply chain; and operating in the international market, industry growth rate must be positive for growth of the companies. If the growth rate is declining, the companies will experience a negative impact upon the performance. The size of the market or consumers concentration rate affects the business of the companies at both domestic and international level. The increase in flow of consumers will increase the demand and decrease in the flow of consumers will affect the consumption of the products. The nature and characteristics of McDonald’s and local level of food chain are different and area of operations are different but the use of marketing concept is similar but at different levels. Different markets behave in diverse ways. The reason behind this is the culture and consumer behavior. The consumer behavior and culture differs in domestic market and international market. The range of diversification is greater in international market. McDonald’s products that are available in US are not found in other places as consumers behave in different manner in terms of taste and preferences (McDonald’s, “Home”). Consumer behavior towards the products increases or decreases the consumption pattern. This affects the level of sales in both the markets. The domestic market analysis about consumer behavior and culture is not that difficult but the technique in application is similar. The segmentation for finding the pattern of behavior and culture; social, demographic and psychological factors forms the base in segmentation. McDonald’s and domestic companies use these variables in segmenting the market to know the cultural differences and behavior of the market to target the exact market. McDonald’s use these variables for segmentation in both the market to know the target market. The segmentation at an international level is huge and its effect is greater as compared to domestic level. There is a scope of segmentation of market in international market and if it is properly executed, then huge consumers are feasible in contributing towards the business. At a domestic level, the market is not as huge as international market, thus the effect is diverse. The concept of marketing research is known to be the most effective tool in marketing management to understand the consumer’s potential, future plans, opinions and habits. It is used for determining the demographic characteristics of customers and the geographic area of a business (Ohio State University, “Conducting Market Research”). This is a systematic designed approach. The collection, analysis as well as reporting of data are highly organized. Moreover, it reveals to a specific marketing situations that is faced by an organization (Alvandi, “Marketing research & Information System”). According to the marketing experts they have provided certain processes in marketing research. The defining of the problem and the research objective is the preliminary stage. Then the research plan is developed and implemented and later it is interpreted and findings are done. Accordingly, the companies act to the marketing situation. The international market is huge and in the market research process they are at times compared to the domestic market consumers. The process is the same in both the market and the companies follow the same procedure for marketing research. Unilever Global, the UK based company operates internationally and has launched several products in different categories. But all the products that are available in the UK are not available worldwide. The research done by Unilever has shown different preferences in different regions (Unilever, “Our Plan for Sustainable Living”). Considering the domestic market company in UK it is noticed that they deal with the products that are customized as per UK taste and preferences. The research is done only for the UK market and products are launched as per the findings. The effect of the research at both the market provided benefit to the company. According to the research done the products are made available at domestic and international market that helps the product of the companies to get acceptance and success at both the market. But the research done and findings generated are based upon the concept and process of marketing research. Any company cannot do the research work for understanding the market without missing a step in the research work. The concepts provided by marketing philosophers form the foundation of the marketing research for companies despite the size and operation of the companies. The cultural differences and the consumer’s behavior tend the company to formulate different customized offerings in different market. The marketing decision involves problem that ranges from basic shifting in the position of a business or decisions to enter a new market. In order to prepare a comprehensive analysis for entering into a new market, research concerning the market is performed (Aaker & Et. Al., “Marketing Research”). The level of research activity in the international market is huge compared to domestic market. For entering in the international market the research provides a positive feedback of the market and accordingly the companies can react to the research. This will help in reduction of cost and risk. Unilever advertisements are different in different countries and are made as per the consumers’ behaviors and tastes. The market research helps in identifying the behavioral pattern in diversified region (Unilever, “Our Advertising”). The operations, the products and the advertisements get changed in different countries but the process in this development is the same in both the markets. Unilever operates worldwide but the research regarding the market in both the markets is conducted by applying the concept of marketing research. In domestic market that is in UK, Unilever conducts its market research based upon the concepts, process and philosophy that are provided by marketing philosophers. This similar concept and process are followed when Unilever operates in the international market in a broader way. This helps the company in generating a positive response for the products that are customized according to the domestic market and international market. This helps in developing the brand equity in the international market and it also affects the domestic market in achieving higher share of the market. The tools like quantitative or qualitative approach differ in the way of application for data collection and analysis. The approach in doing the research might be different but the basic assumptions and concepts are similar and based upon this philosophy the company does its research work related to market. The process followed is similar in both the market to understand the target audience. The time taken in both the market differs as the area of operation varies and the international market looks more complicated in the overall process. Marketing managers face the problem when the company goes from domestic to international arena. There is a myth about the international markets that the application of marketing concepts in the domestic market gets obsolete in the international market. The application tends to be valueless in the operations. Different approaches and concepts are required to analyze the foreign market. But this is not true, as markets are different in nature, and also in terms of characteristics and variables but the application of the concept is the same. The approach becomes broader and the time consumed in the research is more. There are certain tools in the research that does not work in the foreign market. At certain point of time customized methods or hybrid tools are to be used. The new or customized or hybrid tools are developed with the help of the concepts that are present in marketing management fundamentals. Manager’s view is a new techniques operated in international market and not in domestic market. Based upon the market size and behavior of the market tools are been developed that also form the fundamental marketing concepts. In case of the entry level strategy in new market when a company operates in domestic market and goes international several problems are faced. As the marketing managers are not that certain of the foreign market they tend to develop certain philosophies that block the thought process in application of market research and tend to forget the basic assumptions and concepts. McDonald’s, watching Disney movie snip, playing Reese’s Puffs Mini golf with them or feeding pets General cereal; in this unique form of interactive product placement advertisers pay to become part of the brand Neopet environment. In this way, they get increased exposure to their products and services and data on their target markets’ consumer behavior. From this example, it is understood that the approaches might be different; application, strategy might be diversified but the concept is the same. The marketing research fundamental is similar for analysis of the target market. The concept of market research is applied in this scenario too with systematic following of steps in the research process. The difference lies in the standardization of the application of the concepts and techniques and tools for market segmentation and market research. Mostly the international operating companies like McDonald’s, Unilever, Barclays, HSBC, and Wal-Mart operate internationally and have a standard form of conducting the market segmentation and market research work. The standardization of the companies differs from each other as they are internal in nature and also differ from the domestic companies. This way the companies operating in the international market have greater benefits as compared to domestic market operating companies. The domestic companies do not follow the standardized form of application for market. As they operate in the domestic level they create their own standard form that is not at par the international companies set standards. The concept application is the same at both the levels but the standardization differs. This difference makes the thought processes vary in terms of domestic and international company. People perceive these approaches in different manner and it is up to certain extent true but the underline concepts are related. The marketing activities normally vary from company to company and it depends upon the level of operations they undertake. The marketing activity of the company depends upon the market they are operating and it hugely depends upon market research and segmentation. The level of activities varies from a domestic operating company to global operating company. KFC is the world’s major fast-food chicken chain, originated in US and now its presence is everywhere. KFC operate in the US market as per the research and segmentation. The activities levels were similar for the US market. But problem started when they entered in the Japanese market. Japanese people believe in different pattern of food items. Therefore, KFC changed their marketing strategy in order to attract the Japanese people. The campaign was successful and in less than eight years KFC was able to expand to more locations in Japan. From the KFC study it is understood that, certain activities need to be changed in other market to gain success. But the change activities are also based upon the same concepts and philosophies of marketing. This success was also seen in the Chinese market. The level of activities undergo changes, the standards are altered as per the markets and consumers. Then the implementation is made. The changes are made with the basic marketing knowledge that are accepted and utilized by the marketing managers. The concepts are similar but with the twist in it in implementation and activities as per the market diversification. This has been proved with KFC, McDonald’s, and Unilever that the activities and standards are altered in the diversified market with the same concepts and theories that are provided by the marketing management gurus. These companies have been successful in the operations at both the markets and are now renowned brands of the world. The entry strategies of all these companies have faced problems but they did not fail. With the same concepts of marketing by changing the level and standards they have implemented them and achieved success in the international market. From this it is clear that no matter what the size, nature or characteristics of the market is, the application of marketing strategy in all phases of marketing depends hugely upon the philosophy provided. International companies make strategy to adopt their marketing strategy to domestic level conditions when they enter a new market as per the local marketing conditions they alter. At other extremes there are companies that use a globally standardized marketing mix. And at the similar point, domestic companies adopt global standardized marketing mix to operate worldwide. In both the cases they try to adopt but both the companies use the same concepts of marketing and tools of marketing. For this particular approach, the companies at international and domestic level by applying the similar concepts and philosophies of marketing, gain competitive advantage through the application of different marketing strategy from both market environments. Conclusion Although domestic and international markets differ in nature and characteristic, generic marketing principles are equally applicable in both contexts. From the exposure of McDonald’s, KFC’s, and Unilever’s marketing activities in the international market, it has been proved that operating in the domestic or international market regardless of the size of the company and operational activity, they apply the same concept of marketing at different levels with customization as per the consumers’ behavior and various factors’ involvement in the domestic and international market. This proves that even though the domestic and international market differs in nature and character, the generic marketing principles are equally applicable in domestic and international market and there is no difference. The activities that McDonald’s, KFC, Unilever perform at the domestic and international market, shows that the companies have been applying the same concepts of marketing in both the markets and have been successful in the operations. From the brand image and success of the brands this proves the application of the concepts of marketing at international and domestic level. References Alvandi, Mehdi. “Marketing Research & Information System”. November 30, 2010. Sharif University, No Date. Aaker, David A. & Et. Al. “Marketing Research”. November 30, 2010. Concept Book Summary, 2003. Jain, Dipak. & Et. Al. “Marketing the Changing Face”. November 30, 2010. ISB, 2010. McDonald’s, “Home”. November 30, 2010. The McRib Returns, 2010. Ohio State University. “Conducting Market Research”. November 30, 2010. Fact Sheet, No Date. The University of Texas. “The Developing of Global Marketing”. November 30, 2010. Chapter One, No Date. Unilever, “Our Plan for Sustainable Living”. November 30, 2010. Home, 2010. Unilever, “Our Advertising”. November 30, 2010. Our Brands, 2010. Unilever, “Introduction to Unilever”. November 30, 2010. About us. Wind, Yoram. & Et. Al. “Guidelines for developing International Marketing Strategies”. November 30, 2010. University of Pennsylvania, 1973. Bibliography Webb, John. “Marketing Research”. November 30, 2010. Introduction, No Date. Read More