Strategies for International Marketing
The process of penetrating and then developing an international market is a difficult one, which many companies still identify as an Achilles' heel in their global capabilities. Two aspects of the typical approach are particularly striking. First, companies often pursue this new business opportunity with a focus on minimizing risk and investmentthe complete opposite of the approach usually advocated for genuine start-up situations. Second, from a marketing perspective, many companies break the founding principle of marketingthat a firm should start by analyzing the market, and then, and only then, decide on its offer in terms of products, services, and marketing programs. In fact, it is far more common to see international markets as opportunities to increase sales of existing products and so to adopt a "sales push" rather than a market-driven approach. Given this overall approach, it is not surprising that performance is often disappointing. Profitability in international markets has lagged behind average firm profitability for much of the last two decades (the "foreign investment profitability gap"). This may well be because of what Ghemawat and Ghadar describe as "top-line obsession," a focus on revenue growth rather than profitability growth.1 This common mismatch between expectations and situational requirements stems, above all, from a failure to follow in international operations the marketing strategy process that is probably established in the core domestic business. This may be because participation in the market is indirect (i.e., via an independent local distributor or agent, rather than via a directly controlled marketing subsidiary). It also often reflects a lack of control over strategic marketing and a failure to think rigorously about how the business will develop over the course of several years. While it is true that certain distinctive characteristic of an international marketing situation demand a different approach to marketing. 1. Ghemawat & Gadar on Global Integration ≠ Global Concentration This Paper will begin by examining these unique international marketing challenges and then discuss, in turn, several phases of the process of market entry and development, including the following:
The objectives of market entry, which will have implications for the strategy and organization adopted.
The choice of market entry mode (i.e., the form of marketing organization through which the company participates in the market). Particular attention will be paid to the low-intensity modes of entry most commonly favored in market entry situations.
The marketing entry strategy, with a particular focus on the lessons learned from the strategies of western multinationals in emerging markets.
A framework for the overall evolution of an international marketing strategy. What Is Different about International Marketing?
Most executives are quite clear that international marketing is different from home-country marketing, and most multinational companies insist that their senior managers have international experience on their resumes. Despite this pragmatic recognition of the uniqueness of the international marketplace, there has been little agreement over the exact nature of this distinctiveness. Although the question has been long and inconclusively discussed by academics and business analysts, agreement has been limited to the valid but rather obvious observation that international marketing, as opposed to marketing in a single country, takes place in an environment of increased complexity and uncertainty, in areas as varied as consumer behavior and government regulation. This suggests that the differences between domestic and international marketing are differences of degree rather than underlying differences of kind. They are: A Context of Rapid Business Growth and Organizational Learning Penetration of a foreign market is a zero-base process. At the point...
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