International Context in Marketing - Essay Example

International Context in Marketing Introduction “Business has only two functions - marketing and innovation.” (Kundera) The innovation of product must be complemented by good marketing techniques in order to make it a big success in the global market. Marketing is one of the core elements of manufacturing or service industry. Whatever the product or service offered by the manufacturer or service provider can reach the consumers only through effective marketing techniques. Without having a proper marketing team and marketing technique even the better quality products or services may fail in the market while cheap quality products may be successful through effective marketing alone. ‘Marketing is an organizational function for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. It is a management process of anticipating, identifying and satisfying customer requirements profitably.’ (Berzins) Globalization has created revolutionary changes in all over the world. Most of the organizational principles have been redefined because of globalization. Most of the organizations believe that globalization has opened up the doors of immense possibilities for them and hence they are spending millions of dollars in finding the right strategies to exploit the possibilities. For a business organization, globalization has created immense opportunities for marketing their products in international market. But for exploiting the possibilities of the modern global market, organizations need to innovate marketing strategies along with the existing ones suitable for different countries. The business world has already developed several types of new marketing techniques like telemarketing, direct marketing, marketing through ads, sensory marketing, etc apart from the conventional marketing activities. Overview of modern market Most of the big business tycoons are expanding their activities to overseas countries in order to capitalize the possibilities of globalization. Small or medium scale businesses are suffering because of the immense competition from the MNCs. It is difficult for the small business groups to operate profitably by overcoming the stiff challenges for the corporate. Big organizations always have immense resources, and facilities which they will utilize to monopolize the market. Moreover they have the better equipped Research and Development (R&D) wing to facilitate their operations by providing required data about the changing trends of consumers. The conventional marketing techniques were given way for modern methods because of the changing trends of customers and the market. Previously the companies were operated on a specific location concentrating on that specific segment of market. Now it is not possible for them to depend only a specific location for their activities because of the opportunities and challenges provided by globalization. Capturing the business at any cost was the motto for the marketing people earlier. For that purpose they were engaged in all sorts of activities irrespective of ethical or non ethical. But now relationship building is accepted as the core of every management function irrespective of whether it is marketing, production or administration. Factors affecting global marketing It is required to concentrate on global aspects of marketing in order to market the product efficiently in international market. Parker Pen company has created a blunder when the globalization first came into exist. They thought same product needs same marketing strategies everywhere. They failed to recognize the social, economical, cultural and political differences of different countries while formulating their marketing strategies. “In early 1984, the parker company has launched a global marketing campaign in which everything was to have one look, one voice, and with all planning to take place at headquarters. Everything was connected with the selling effort was to be standardized. This was a grand experiment of a widely debated concept.” ((Marketing across cultures, p.194) The cultural dimensions of international business are defined by former professor of Eastern Michigan University, David A. Victor in his famous LESCANT model of cultural variables. They are Language, Environment, Social organization, Contexting, Authority, Nonverbal behavior, and Temporal conception. (The cultural variables for development of models of culture) Language is an important entity in marketing especially in international marketing. For domestic marketing the mother tongue may be enough, but for international marketing the language of the target country must be well learned by the marketing professional. The views and opinions of each party can be communicated properly if both the parties don’t have a language barrier. Language fluency and accent can affect a business deal. Both the parties must understand clearly what others are trying to communicate or convince. A confident person can be often identified through his ways of communication. Most of the people are proficient in their mother tongue and hence most of them communicate confidently in their mother tongue except few introvert persons. But languages other than the mother tongue may be difficult for most of the people. Even then some people try to communicate through their second language confidently. But the level of self confidence often reflects in the way of one’s communication with others and hence the language proficiency often controls the self perception and also other’s perception about that person. In order to express the ideas and views formed in our mind, language is the only medium which can help us irrespective of whether we are writing something or talking something. Only a person who has enough knowledge and wisdom about a particular topic can speak fluently about that topic. But he can express his views clearly only if he is fluent enough of communicating through that language. For example it is difficult for a Chinese or Vietnamese professor to take classes for American students if he lacks proficiency in English language. The inability of this professor to communicate efficiently in English may spoil his self perception and also the perception of the students about the professor, no matter how brilliant he is in his subject and in his native language. Thus language plays a vital role in communication which is necessary for the marketing people. “Whenever two parties negotiate, the entire process occurs under two umbrella contexts, environmental and immediate. The environmental context refers to forces in the environment that are beyond the control of either party involved in the negotiations. The immediate context includes such aspects as the relative power of the negotiators and the nature of their interdependence factors over which the negotiators have influence and some measure of control.” (Phatak & Habib) Environmental characteristics different countries are different and hence the marketing people must know these differences well to conduct the business negotiation process meaningfully. The natural resources, the weather, political system, social and cultural system all will be different country to country and region to region. The working culture and environment will be different in America and China. Population size also can influence marketing immensely. Most of the industrialized countries with less population are often export driven countries like Sweden or Switzerland. (The cultural variables for development of models of culture) But China has the largest population in the world and hence their attitude towards exporting or importing can be different from that of the Americans. Social organizations can have an external influence on individuals. For example, religion is an important entity in American culture whereas in China it is less important. Class systems in America and China are entirely different. In America there are upper class, middle class and ordinary class people where as in China because of socialism only the working class is there. Family and political structure is also different in different countries. In America the democracy is followed while China communism is followed. In America everything is transparent while in China everything will be opaque. The recreational activities are more in America compared to China. The judicial system in America is more open compared to China. The marketing strategies must consider all the above mentioned aspects before implementing it. “Contexting is the amount of information transmitted and the amount of information stored.” (The cultural variables for development of models of culture) If the marketing people are able to share more knowledge, values and experience between them and the people in the countries where they are operating marketing activities will be more successful. Because of the cultural and educational differences between different countries, contexting may be less in a business negotiation process between two countries. Members of same culture can have a big amount of contexting because of their large awareness between each other. Authority is defined as the shared beliefs about the power or influence of an organization or an individual representing that organization. Power is an element of authority deals only with substantive action while leadership deals with the meaning of the action involved. (The cultural variables for development of models of culture) Authority and power are the two sides of the same coin. Leadership definitely needs power to execute their functions. Authority and leadership styles may be different for different people especially people of different countries. The knowledge about these styles and differences in functioning will enable a marketing fellow to succeed in his overseas endeavours. Nonverbal communication is the exchange of information through nonlinguistic signs. (The cultural variables for development of models of culture) In some business negotiations, the amount of nonverbal communication may exceeds the verbal communication. Our gestures, facial expressions and body language can communicate so many things to the people to whom we are dealing with. About 65% of a message is communicated through nonverbal communication. (The cultural variables for development of models of culture) The appearance, eye contacts, a warm handshake or a hug has lot of meaning in a business negotiation process. Temporal conception is a cultural variable related to Monochronic time (M-time) and Polychronic time (P-time). M-time is characterized by one thing at a time while P-time means several things happening at the same time. P-time put more emphasize on human relationship rather than a task or job alone. Also P- time concentrate more on long term relationship. For example, Chinese people are known to be polychromic in their dealings while monochronic in their approaches. Cultural Dimensions of Marketing “Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster." (Geert Hofstede) Geert Hofstedes research gives us insights into other cultures so that we can be more effective when interacting with people in other countries. In Geert Hofested’s opinion, when negotiating in Western countries, the objective is to work toward a target of mutual understanding and agreement and shake-hands when that agreement is reached - a cultural signal of the end of negotiations and the start of working together. But in Middle Eastern countries much negotiation takes place leading into the agreement, signified by shaking hands. However, the deal is not complete in the Middle Eastern culture. In fact, it is a cultural sign that serious negotiations are just beginning.  In India like countries, people use the word “Namasthe” to convey their regards while in other countries people use Good morning or Good evening like words to convey their regards. In gulf countries, the Arab people express their regards through hugging while in other countries hand shake may be used for the same purpose. Knowledge about all such nonverbal communication means will help the marketing people immensely for becoming a success in international market. Importance of relationship building in marketing “Successful businesses dont just communicate with prospects and customers for special sales. Today, making your company indispensable is a vital key to marketing success. Its a terrific way to add value, enhance your brand and position against your competition.” (Gordon) I have a friend who is a marketing fellow working in Dubai in a printing unit. He once said some of his interesting experiences in marketing related to relationship building. During the initial stages of his assignment in Dubai he has faced lot of challenges from the competitors because of his unawareness about the work culture and business environment in Dubai. Most of his competitors have employed so many false means like undercutting, bribery and commissions to capture jobs. These competitors often delivered poor quality stuff to the customers because of the influence they made upon the ad agency people through bribery. The ad agency people often entered in troubles because of the poor quality of stuff they received from these people. But my friend never adopted such strategies. He has visited every advertising agency in Dubai and has learned a lot about the functioning of it and has established strong relationships with most of the production managers. Initially he got small jobs from the agencies which he tried to deliver with good quality in time. He has developed gradually a big name in Dubai market regarding the timely delivery of goods with a reasonable quality. Now the jobs are pouring in and the organization in which he is working has established 4 more printing units in Dubai in order to fulfil the commitments. Relationship building is the core of marketing which can be attained only through the services you are providing to the customer. Ways for building relationship Kim Gordon has formulated seven strategies for effective relationship building; Communicate frequently, Offer customer rewards, Hold special events, Build two-way communication, Enhance your customer service, Launch multicultural programs, Visit the trenches. (Gordon) Communication with the customer is the core of every marketing activity. Only through communication it is possible to identify the requirement of the customer. The marketing people should have the better understanding of the customer requirements in order to successfully execute the project and communication is the only way to realize it. Another way of building relationship is by offering rewards to the customers. Most of the organizations offering rewards to their customers like buy one get one free offers, cash points or bonus points for every purchase which can be later used to purchase more, lucky dip facilities which offering opportunity to win prices etc. Customer will be attracted to the organizations which provide such offers and they will establish strong relationship with such organizations. Some organizations conduct special events like holiday package for the regular customers, special service campaigns for the products they sold out, exhibitions etc for the customers. Some airline tour operators offering special discounts to the regular passengers based on the air miles they travelled. Relationship building is successful only when the two way communication exists between the organization and the customers. One way communication is not enough for the fruitful relationship building. The marketing fellow should have immense patience in hearing the requirement of the customer. Even if the customer says rubbish things the marketing fellow must patiently listen all such feedbacks from the customer in order to make the communication two way which is required for relationship building. Customer service is another way of building relationship with the organization. Some organizations offers warranty on their products and after the warranty period they will not service their product which will make the customer dissatisfied with the service. On the other hand if an organization make conscious attempt to service their product even after the warranty period, the customers will definitely value such conscious efforts from the organization to build relationship. Multi cultural programs are essential to build relationship especially in the globalized business environment. Some organizations offer tickets to the customers for the cultural activities organized by them. “For many entrepreneurs, particularly those selling products and services to other businesses, its important to go beyond standard sales calls and off-the-shelf marketing tools in order to build relationships with top customers or clients.” (Gordon) Media theories and market segmentation “Market segmentation is the process of dividing the target market into groups to better understands their current behaviors, evaluating each segment and selecting target segment(s) and then developing an appropriate marketing mix for those segments which includes developing messages and tailoring programs to meet their specific needs. Segmenting target markets helps us to group those with commonalities as well as gain a better understanding their specific wants, needs, barriers and behaviors” (Jones, et al, p.145) Market is not homogeneous. Even in the same country the market may be different at different regions. For example, India is a secular country which is having more than 10 religions and languages with around 25 states. Moreover some of the regions of India especially the states like Bihar, Madhya Pradesh etc consist of illiterate people while states like Kerala and Mizoram have more literacy compared to other regions. So based on these differences in regional, cultural and local peculiarities, the market must be divided into different segments in order to formulate effective marketing strategies especially through media. The marketing campaign must be custom made for each market segments. For example, Mumbai is a place where film personalities and cricketers are adorned by the public and hence any marketing campaign with the help of these celebrities will be a success there. On the other hand in regions like Assam, Kerala, or Mizoram needs some other marketing campaigns based on the people’ s interest in those states. Four basic categories of variables: geographic, demographic psychographic and behavioral theories are considered while implementing market segmentation. (Jones, et al, p.145) The four requirements most commonly accepted as necessary for effective segmentation are Measurability, Accessibility (or reachability): Substantiality (or segment size): Actionability (including organizational capabilities): (Jones, et al, p.145) The requirements of the market must be measured properly before implementing the segmentation. For example, the Indian car manufacturer Tata group recently marketed their new product Nano car which they claimed as the world’s cheapest car ($ 2000 only). This car is intended for the ordinary people, not for the richest. Tata has estimated around 1 million car sale in the year 2009 itself after studying the Indian and global market. Based on these calculations they have segmented the Indian and global market. Another important criterion, required for the segmentation process is the accessibility. In the above example of Nano car the Tata group first of all required to research about the accessibility of reachability of Nano in global market. For example, it may not be possible for Tata to send their product to more distant markets or markets with specific conditions. The size of the market segment also has to be carefully designed based on the special features of the market such as the economic, cultural and social aspects. The fourth requirement for segmentation is the organizational capabilities or actionability. The sales target is achievable only through specific marketing campaigns suitable for the market segment and hence the organization of such events must be possible in the target markets. For example, in Arab countries like Saudi Arabia, where religion plays a vital role in all the aspects of social life, marketing campaigns must strictly adhere with the moral standards of Saudi Arabia. It may not be possible to organize a fashion show or something like that as a marketing campaign of a product. Based on such market segmentations explained above media theories also must be considered in details while formulating marketing strategies. Not only the groups, even the individuals are different. But it is difficult to target each individual based on his traits and personalities. Internet is mainly used to reach individual customers and it is possible to make custom made e-mails to specific groups and individuals up to certain extent. “Individual differences theory recognizes that media influences society one person at a time and that the media’s influence differs by people. It is based on the psychological basis of behavior. It is committed to the experimental method to test how media effects differ by individuals. According to individual theory, how media influences society is determined by peoples: Personalities, Cognitive structures, Affectors, Motivators, and Inheritance.” (Linda)The role of media in marketing activities cannot be underestimated in a global marketing strategy. Media can influence people in many ways. The marketing campaigns need to be formulated based on the local community interests. In some community or region film personalities or politicians may be more popular compared to others and hence they should be utilized for the marketing purposes in that region. The Football crazy people of England can be utilized effectively for the marketing of consumer goods by selecting the football legends for the advertising purposes. Consider a case in which a cricket player of India, Sachin Tendulkar, utilized as a brand ambassador for ‘Gillette’ marketing campaign in a country like Somalia where nobody knows anything about either cricket or Sachin. Personality and cognitive structure of individual may vary according to heredity and environment. Some personalities may have introvert nature and others may have extrovert natures. Moreover an advertisement which is attractive to a customer may not be that much effective to another customer. The advertisement which may be attractive to the children may not be attractive to the elders. For some specific cultures or community some kind of advertising will motivate them. For Arab people, the word ‘Halal’ will be more motivational while for others that may not be effective. Inheritance explains why people’s tendency to be influenced by Evolution, Intelligence and Socialization (Linda) Conclusions Marketing is an art which requires lot of skills like communication, organizing, innovations etc. The ability to tackle multicultural environment is essential for international marketing. The knowledge about different countries and their languages, cultural differences, social differences, economical differences, political differences, environmental differences etc are essential for an international marketing fellow. Relationship building is the core component of marketing activities in the globalized market. Conventional methods may not be suitable enough for convincing the consumers or customers of the modern century. Mere selling of a product may bring short term benefits to the marketing fellow. But building relationship with the customers will bring long term benefits. Better communication skills and organizational abilities are required for marketing person to build relationship with the customer. The communication must be two way. One way communication will never help in building the relationship Market segmentation is the core of modern marketing activities. No two individuals are alike. Same way no two communities or countries also may not be similar and hence each country or state or the region must be carefully segmented in order to tailor made the marketing strategies for that region. Through segmentation only custom made marketing activities can be implemented in the market. Works Cited 1. The Cultural Variables for Development of Models of Culture, Retrieved on April 23, 2009 from http://72.14.235.132/search?q=cache:sXmyWj1jutoJ:www.tulips.tsukuba.ac.jp/limedio/dlam/B16/B1698740/5.pdf+7+cultural+variables+from+Lescant&hl=en&ct=clnk&cd=3 2. Phatak Arvind V. , Habib Mohammed M. (1996), The Dynamics of Iinternational Business Negotiations, Retrieved on April 23, 2009 from http://findarticles.com/p/articles/mi_m1038/is_n3_v39/ai_18348264 3. Linda, How Media Influences Society And Market Segmentation, Part 1, Retrieved on April 23, 2009 from http://www.strategicmarketsegmentation.com/blog/how-media-influences-society-and-market-segmentation-part-1/ 4. Geert Hofstede, Cultural Dimensions, Retrieved on April 23, 2009 from http://www.geert-hofstede.com/ 5. Kundera Milan , 1929- Marketing Quotes, Retrieved on April 23, 2009 from http://thinkexist.com/quotations/marketing/ 6. Berzins Gundars - Motivation For Marketing in Universities Retrieved on April 23, 2009 from http://209.85.175.132/search?q=cache:Ec1v-dYHAJUJ:bsrun.utu.fi/tiedostot/Riga_Marketing/Motivation-for-marketing-in-universities.ppt+motivation+in+marketing&hl=en&ct=clnk&cd=11 7. Marketing Across Cultures,(n.d) Retrieved on April 23, 2009 from http://www.sam.sdu.dk/undervis/90434.E04/Spoergsmaal_til_Case_Tekst_Parker_Pen.pdf 8. Gordon Kim T. 7 Relationship-Building Strategies for Your Business, Retrieved on April 23, 2009 from http://www.entrepreneur.com/marketing/marketingcolumnistkimtgordon/article66228.html 9. Jones S. C., L. Rees, D. Hall, A. Tang, Using Market Segmentation Theory to Select Target Markets for Sun Protection Campaigns, Retrieved on April 23, 2009 from http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1072&context=hbspapers Read More