Today marks the start of week seven in
International Business. It just hit me. We’re over half done with this class. The end is in sight! Today, we talk about International Marketing.
Probably the single most important reason why firms decide to move overseas is to grow, to expand their business, to sell more. Together with new business opportunities it generates a new set of challenges and new decisions. Marketing variables are strongly impacted when firms operate overseas. Segmentation in other countries differs from that in the US. Brazil has a large Afro-Brazilian middle class, Mexico has large families with several children, or China, has a large single child family base, or in other words, a large adult population with traditional values.
To succeed, we need to know how the marketing mix must be adapted.
Products must be adapted. McDonald's must sell veggie burgers in India, where large part of the population is vegetarian. Barbie, who has a strong American image, encounters some cultural resistance in the Middle East, or racial differences in Latin America or East Asia.
Branding must be readapted. Companies such as BP need to adapt their brand image when they establish in countries with different alphabets. Some firms can use the strong national image such as German's cars, while others need to overcome the poor image of their countries such as Indian cars.
Distribution changes: Bimbo has a very good penetration in the Mexican countryside, which differs from the retailing system in the US.
Some firms need to re-think their entire strategy: Ranbaxy exports low price generic drugs which is competitive overseas, while in India they develop and produce a wide spectrum of drugs.
Why Wal-Mart is so successful in the US and encounters difficulties when it goes overseas, such as the limited infrastructure in Mexico or the intense competition from Carrefour in Argentina is partially related to marketing.
International Marketing is a very interesting aspect of International Business Strategies, where converge cross cultural dimensions, international strategies, international trade and finance, environmental factors, and even international politics.
The goals this week are:- Evaluate which stage of structural evolution an international company has attained.
- Make recommendations towards achieving an appropriate structure (form) for an internationally-active company.
- Explain how global operations should be controlled to maximize structural efficiency and effectiveness.
- Understand why it is important for a multinational to align organizational structure with stated international goals and objectives.