Strategies for International Marketing
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
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
References: • Ghemawat, Pankaj, and Fariborz Ghadar. "Global Integration ≠ Global Concentration." Industrial and Corporate Change 15 (August 2006): pp. 595-623. • Richard Tedlow, New and Improved: The Story of Mass Marketing in America. 2nd ed. Boston: Harvard Business School Press, 1996 • Susan P. Douglas and C. Samuel Craig , International Marketing Research , 3rd Edition, John Willey & Sons, 2005 • www.newsweek.com