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Going global - international marketing

Overview:

Are you thinking about growing your business overseas? Here are a few tips on what you should be doing before you make the move.Globe

The following article covers some critical aspects to international marketing and business. Any comments or feedback of your experiences is always welcomed.

  1. Building a global presence
  2. SME’s and growth strategy
  3. Multi-nationals - a different approach
  4. International Market Research – a process to follow and a warning to heed!
  5. Market scanning
  6. Secondary Research
  7. Primary research
  8. Assessing market attractiveness
  9. Getting around these problems


Building a global presence…


Deciding whether to start selling overseas is a big decision and is one that should not be taken lightly. The market conditions may not be particularly favorable in the UK, and with the £Sterling devalued against the Euro, expanding into overseas markets could make a lot of sense for your business.

It’s not a decision to be taken lightly, however, as the investment needed can be vast. Moving into selling products or services overseas has its own varied and diverse marketing issues and makes it a really interesting subject area to discuss and work in.

The role of culture

One of the most influential themes in international marketing is the role culture plays in the success and failure of an organisations attempts to move overseas.

Hofstede’s cultural considerations which take account of high and low context cultures – and his 4 variables - are intriguing and you should look at them if you haven't already come across them.

Language is probably the most obvious cultural issue, as is economic development rates and distance from home markets. Of course the global digital revolution is changing the way many markets and cultures are now developing.


SME’s and growth strategy


If you work in an SME, it’s more than likely that your budgets are moderate and resources are not endless like they can seem to be in some large multi-nationals. This is why most SMEs will grow through a process known commonly as “discrete step changes” rather than overwhelming .

If you think about where your business is at the moment, there’s a progression where involvement with each market grows until you are doing business properly. Stages range from Passive – you are not actively looking for business, but doing business if someone contacts you, perhaps through your internet site. At the other end of the spectrum is the full-blown Active marketing campaigns with fully

There are many options through which to grow – and increasing market involvement is perfectly entwined with levels of risk you are prepared to accept.

Investing in a factory in a new country without adequate due diligence will obviously get you into a lot of trouble if it goes wrong, however, it’s even small things like knowing what type of agent to use, where to find the best contacts and which type of place to locate an office is all important.

Standardising or adapting product lines and your marketing mix (the 7 P’s) are all areas to think around as you’ll want to streamline and be as efficient as possible in everything you do. I’ll talk about these in another article.


Multi-nationals – their approach


If we were going to consider companies like L’Oreal or Unilever, we’d know that their approach to launching into new markets will be considerably different to an SME. With the appropriate resources behind you, you can accomplish incredibly sophisticated and effective marketing programmes across the world.

Tesco, for example will consider specific markets for years before they make any approach at all. Even so, moving into somewhere like the US has been difficult for Tesco with the Fresh&Easy chain struggling mainly because of the economic conditions. Something that was very hard to predict.


International Marketing Research


The areas that you will need to cover at some stage in the market research process.

  1. Scanning
  2. Desk research
  3. Primary research

1. What is scanning?

Scanning is the process of monitoring the macro and micro environment in order source important bits of information as to whether an overseas market is going to yield potential, or not. Information is there to help us manage the risk in the decisions we make and the better and more accurate it is, the better we can manage our risk.

Knowing which markets to scan. You should narrow down countries according to criteria before you can really start to be effective at this. One of the most critical decisions to make is establishing the potential market size. - How many people are there in this market that will fall into a segment we can target? - How much desire do people have to own/use our product in these segments? - Can they readily pay for it?

The elements of the PESTLE framework should all be considered when choosing which countries to scan.

  1. Political
  2. Economic
  3. Social
  4. Technological
  5. Legal
  6. Environmental

Typical resources to use? The resources through which to do this are wide and varied and you should be looking in publications or journals like the FT.com and the Economist.com. The Economist Intelligence Unit is a great place to start.

The Economist, I have to just mention, is absolutely fantastic for picking up on new ideas and identifying potential growth markets a couple of years down the line. Or even for products that may be coming to the end of their life cycle and thus helping you avoid making costly investment decisions.

Markets can be classified into 3 areas: existing, incipient and latent. Existing means that there is currently a market, incipient means that a market is in its infancy and latent means there is potential – but not just yet. Certain indicators need to be reached before active business can be pursued e.g. there’s no distribution infrastructure or GNP is not at such a level to support demand.

2. Desk research/secondary research

This is where your scanning will identified something of interest and you will want to look at it in more detail. The resources are almost endless and I’ll cover a few in the useful links (link to useful links) section as opposed to re-writing them here.

If you are satisfied that the market really does offer you opportunity, then you can move onto Primary data collection.

3. Primary data collection


A major decision here is whether you do it yourselves, or you get an agency to do it for you. There’s no simple answer and it will all matter on the context of the business and the environment in which you work.

If you are an British expat working in Singapore and you want to research the UK market, it’s safe to say you’ll probably have an understanding of the cultural considerations you’ll need to take into account for the UK.

If you have no knowledge of a specific culture then you’ll really need to do your homework. There are plenty of agencies out there to use and I’ll cover some of the important issues in this area another time.

Research tools to help you predict an areas potential growth can include surveys, questionnaires, face-to-face interview, observation, direct-measurement.

Dangers with secondary data collection largely falls into 3 areas.

  1. Comparability - if we are comparing countries, can we compare the data from each?

  2. Reliability – can we trust the data we are getting? Who commissioned the survey for example?

  3. Accuracy and timeliness – to what extent is this accurate information? When was it collected?

Dangers with primary data collection are mostly the effects of cultural influence.

  1. Cultural attitudes to responding to market research? Is it normal to give away personal information to people you don't know very well or have just met on the street?

  2. Misunderstanding of language. Did we translate or interpret properly to avoid language confusion?

  3. Non-response on certain subjects (what’s taboo in their culture, and what’s not?)

  4. Interviewer manipulation (is the interviewer properly trained to Western market research standards?)


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