International marketing and communications

Transcription

1 International marketing and communications The official definition of international marketing is very straightforward: the exchange of goods and services with actors from more than one country involved. However, in reality, international marketing issues are particularly complex. Not only are international marketing environments different, but they are also volatile. A lack of consensus exists as to whether marketing environments around the world are converging (through globalisation) or diverging (with national cultures becoming more distinct). It could be argued that both aspects of each type of change are taking place at the same time. Your firm should take this into account when creating an international marketing strategy. Strategy and structure are inextricably linked. Your company may be able to identify what it needs to do in regards to international marketing, but implementation will depend on your company s structure. Structure determines the responsibilities of individuals and how they are motivated and rewarded. This needs to be taken into account when integrating international operations. Whatever strategy is chosen, the marketing manager will need to consider how to adapt and develop the elements of the marketing mix to take account of differences in the marketing environment. These differences are likely to affect customer and consumer behaviour. The vital first step, therefore, is to develop a well-researched export marketing plan. Building your export marketing plan Developing a plan for your overseas venture can be challenging and will require time, yet getting it right is critical to your offshore success. Overseas markets, even those that seem similar to Scotland, will require thorough research and appropriate marketing techniques will need to be developed for each market. Our overseas market report will help you get a snapshot of local market and sector opportunities from our in-country experts. Read more about our overseas market report: Your international marketing plan needs to be clear, concise and must deliver an action plan with defined responsibilities. Marketing in an overseas country is more complex than domestic marketing with more variables and different competitors. Your company must therefore consider the following: Characteristics of target market Competitor analysis Marketing objectives Promotional strategy

2 Modifications needed to your existing marketing materials or product Implementation and evaluation plan How overseas agencies will get paid Which additional skills your business will need to develop What paperwork is needed What cultural factors your business will face (and how they might affect business practices) How you intend to enter the market and how you intend to position your products How you will provide customer support What intellectual property protection will be required Variables unique to the industry sector Learn how to overcome more complex business challenges to prepare for global investment and expansion: Cultural differences Cultural differences have far-reaching implications for your branding, negotiation tactics and marketing approach. Language can be an additional barrier, so you may find it highly beneficial to employ the services of an interpreter or a translator. Familiarity with customs and etiquette in your target market (ranging from business methods, dress and diet to history and religious customs) will improve your chances of success. Before conducting business negotiations with international trading partners consider some of the following cultural differences: How do people think about time and schedules? How do people behave - is activity organised in groups? What are the shared and learned patterns of behaviour, such as the acceptance of hierarchy or power? What is the concept of public and private space? How comfortable are people in dealing with strangers or with uncertainty? How do they express emotions and deal with gender roles? In some cultures, gestures or actions that people in Scotland do not give a second thought to using may cause misunderstandings or even offence, for example: Pointing Beckoning Eating with your left hand The ok sign The thumbs up sign Showing the soles of your feet Putting your hands on your hips or in your pockets

3 Also, managers must think about the colours and imagery used on promotional materials. For example, in Japanese and Thai culture the colour white signifies purity, while in China it signifies funerals and mourning and should be avoided. GlobalScot is a worldwide network of Scottish business professionals providing local tips and practical advice to help you break into new markets. Its members can provide useful information about the do s and dont s of operating in specific countries. More about GlobalScot: When using interpreters: Speak directly to your counterpart (not the interpreter) and always use the first person. For example: say thank you rather than tell him I thank him Use full sentences. It's easier to interpret and get the correct ideas across Use simple language. This prevents misunderstandings on the interpreter's part and safeguards against misinterpretation Explain any difficult terms or concepts. An interpreter's job is to take the source language and convert it to the target language, but they usually won't add their own knowledge or understanding to explain something Pause frequently at an even pace Avoid long, complex sentences as they can make it difficult for an interpreter to remember what you have said Appreciate that interpretations may take much longer than the original speech Speak slowly and clearly, particularly if the interpreter is not used to the Scottish accent Listen to how your interpreter puts across what you have said. If you have given a lengthy explanation but the interpreter reduces it to a few words, it may be that he/she has not fully remembered or understood what was said. Check the interpreter has adequately conveyed your point to the other side Try to avoid leaving sentences unfinished. Your interpreter might find it hard to translate the meaning if you have left a sentence hanging Avoid using jargon or colloquial expressions like 'let's get the ball rolling', which when interpreted may have a different meaning Avoid jokes. Jokes often don't go down well in a different culture or when interpreted Researching the culture of the target country may reveal some tips on what negotiating styles to use. You may find that your overseas customers value haggling and the first price you put on the table is merely a starting point for negotiations. Other cultures prefer a less formal approach and may wait until after the official business meeting to make a decision. Final negotiations may take place over an evening meal or drinks. The international marketing mix Product International companies can pursue four broad strategies: Standardisation involves taking the product or service as it exists in the home country and selling it in other countries without adaptation. The benefits of standardisation are that marketers can achieve economies of scale, put across a consistent message and show the ability to penetrate common cross-cultural market segments by using globally standardised marketing programmes.

4 Adaptation involves changing the product or service to match the market requirements to which the product is being exported (although it may be possible to standardise the core product). Creation involves developing products or services from scratch in order to meet the needs of a range of international markets. A mixed strategy involves a combination of all of the above, especially when they are applied to other elements of the marketing mix. For example, firms may find it cost effective to have a standardised product but a locally adapted communications programme. Price Viewed broadly, there are three alternative positions a company can take toward international pricing: 1. Extension/Ethnocentric Companies set a global price with the importer absorbing any freight and import duties. Although simple, extension pricing does not respond to the competitive and market conditions of each national market and, therefore, does not maximize the company s profits in each national market. 2. Adaptation/Polycentric Subsidiary or affiliate managers establish whatever price they feel is most desirable to suit their circumstances. This approach is sensitive to local conditions, but it does present problems where disparities in local prices exceed the transportation and duty costs separating markets. 3. Invention/Geocentric This approach works on the assumption that there are unique local market factors that should be recognised in arriving at a pricing decision. When setting prices in a foreign market, businesses must take into account the additional costs of exporting and other specific in-country factors, bearing in mind that what works in one market may not work elsewhere. Relevant factors include: Place Freight and insurance Desired margins (taking the needs of channel partners into account) Translation costs Tariffs Currency fluctuations Compliance with regulations Protection of intellectual property Local income levels Desired margins Local marketing strategy and elements of the mix The American Marketing Association defines channel of distribution as: An organised network of agencies and institutions which, in combination, perform all the activities required to link producers with users to accomplish the marketing task. Distribution channels in markets around the world are among the most highly differentiated aspects of national marketing systems. For this reason, channel strategy is one of the most challenging and difficult components of an international marketing program. Smaller companies are often blocked by

5 their inability to establish effective channel arrangements while, in larger multinationals, channel strategy is the element of the marketing mix that headquarters understands the least. It s important to understand the nature of the most appropriate distribution channels. Distribution is an integral part of the total marketing campaign and must be relevant to the product, price, and promotional aspects of the total marketing programme. International marketing executives must also manage the number and nature of relationships in the distribution chain. Globalisation has also led to the application of postponement as a strategic tool. Postponement means that activities that were once done upstream in the supply chain can now be done further downstream, closer to the point of final consumption. In practical terms this means that part-finished products can be shipped from factories to local distributors, who can then add features to a product in order to make it more suitable for local customers. The extent to which your company can take advantage of such developments in logistics depends on three key factors: 1. Value density - the value of a product in relation to its weight and volume 2. Brand or technical superiority 3. Availability of raw materials and/or components Read more in our guide on market entry and distribution: Promotion Once clear about your company s export promotional objectives, you must consider which tactics will produce the best results. Whenever possible, promotional tactics should be matched with the needs of your customers. There are several reasons why promotions can vary in terms of effectiveness in different countries, for example: There may be differences in the availability of media due to economic well-being Literacy levels can impact in terms of how a message is actually presented and received Promotional costs can vary between countries Restrictions may exist on what can be advertised (although this is becoming less important with the advent of satellite television and cross-border transmissions) Global promotion strategies Companies can run the same advertising and promotion campaigns used in the home market or change them for each local market, a process called communication adaptation. Communication adaptation can occur in three ways: The message Use one message everywhere, varying only the language, name and colours (taking any cultural and media issues into account). Global theme Use the same theme globally but adapt the copy to each local market. Global pool Develop a global pool of promotional materials from which each country selects the most appropriate.

6 The following three points are important in managing a global promotional campaign, particularly a multilingual campaign: 1. The consistency with which the concept and message are presented in different markets 2. The flexibility with which adaptations can be made to local differences 3. Control to ensure that there is no change in content, style or tone of voice Branding Choosing the best brand strategy can prove complicated. Branding is more than just a logo or trademark - it represents the core values of your business, your reputation and how customers perceive and respond to your business. When defining international brand values, companies must therefore think about their overseas customers what do they want? Language and culture represent unique challenges for the creation and marketing of brands. Organisations must carefully research a brand name before launching it into the market and check that the colours and imagery used do not have any significance in the local culture. Similarly, the irreverent branding style often used in the Scottish market may not translate well into other cultures. Brand image can be influenced by consumers perceptions of the country of origin which, in many cases, has been found to be more important in affecting product quality assessments than price and product information. Companies have to decide whether, and how, to use national identity to enhance brand values. Similarly, standardising brands allows organisations to send a consistent, worldwide message by taking greater advantage of growing global media opportunities. The benefits of global branding are that it: Adds value for customers Reduces costs for the marketer Enables cross-border learning Provides cultural benefits for the company Despite these benefits, two major pitfalls exist with building global brands: Excessive standardisation of the different elements of the marketing mix can occur Headquarters may impose excessive control Trade shows Attending trade shows can help you gauge the level of interest in your products and services; develop leads and make sales. Success is likely to develop with regular year-on-year attendance at the same shows. Potential customers may read regular attendance as an indicator of your credibility, stability and longterm intention. However, it may take several years of attendance at the same show before these businesses start to develop stronger interest in your company. Skilful planning and execution, before, during and after the trade show, is essential to achieve the desired results. SDI can provide funding and assistance to companies wishing to exhibit at international tradeshows follow the link below to find out how SDI can help you. Support to help you visit potential markets:

7 E-Marketing Before Twitter, if you had a disgruntled customer, they were hidden in your call centre queue. Now they have a voice that anyone can hear." Rod Drury, CEO of Xero It is predicted that spending on social media marketing in the US alone will quadruple from $716 million in 2009 to $3.113 billion in With this in mind, business leaders must ask themselves: What is being said online about my business? What are my risk minimisation strategies for dealing with social media? What additional resources are required for social media? Do I have an open culture that listens and responds to customers? Social media applications like Twitter provide cost-effective opportunities to market products and services. They not only build engagement with customers online but also provide opportunities to gain customers feedback and suggestions. However, you need to be careful about what you say so that you don t do any damage to your brand image. Similarly, once a member of a network, it s vital that your company takes the time to make regular updates and join relevant groups. Web promotion With a vast reach, a website could potentially be your company s most versatile offshore promotional tool. Many businesses overcome language barriers by having their website content translated into the target market's relevant language. If budget is a factor, consider producing a translated version of the website which only contains key information. A great website is useless if people can't find it so firms must ensure that their website appears on the first page when clients do a Google search. If customers can buy direct from the website, the company needs to make sure it can enforce the terms and conditions against the customer and that it can determine where and when the contract is made. Points to consider when considering web promotions include: Website terms and conditions Access to, and use of, the website Purchase of products Acceptable methods of payment The delivery process Warranties Security Limit on liability Governing law How to ensure the terms are effective Privacy policy If you have any questions about your e-commerce strategy, SDI can arrange for an export communications review. More details about the export communications review:

8 Contact us For more information or to speak with our Smart Exporter advisers call or