INTERNATIONAL MARKETS: SOME DISTINCTIONS

Domestic Marketing
developing marketing activities that focus on the market in the country of origin

International Marketing
developing marketing activities across national boundaries

Multinational Marketing
developing individualized marketing activities for different world markets; a customized approach

Global Marketing
developing common marketing activities for a single world market; a standardized approach

Note that the term international marketing has little meaning. On the other hand, note the important contrast in the meaning of the terms multinational and global marketing.  A multinational strategy attempts to recognize the important differences between different countries and cultures, designing a different marketing mix for each of these different markets in order to best meet the needs of a localized market.  A global strategy, on the other hand, attempts to recognize the commonalities between different countries and cultures, designing a single marketing mix that meets the needs of all areas, thereby ensuring consistency in brand perceptions and efficiencies in production.  Neither approach is universally best in all situations.  Most textbooks are not so specific with these definitions and are sometimes very loose in interchanging these terms; I believe, however, that it is important to distinguish strategies.

The general perspective in this course is that "international" marketing is no different from "domestic" marketing.  Consider the case of a U.S. auto manufacturer who complained that U.S. sales in another country were unfairly being stifled because auto dealerships refused to sell the American made cars.  But then consider that the dealers could not sell American left-hand drive cars in a country which required right-hand cars.  This is not an issue of international marketing; it is an issue of belligerence and stupidity.  According to the notion of the marketing concept, you cannot attempt to sell things that people neither need nor want and expect to stay in business very long.

In practice, however, there are some very special problems with marketing across domestic borders which create severe barriers to entry in foreign markets.  Different languages, cultures, and political systems lead to different consumer needs and wants, different laws and regulations, and different channels for distribution and for marketing communications (promotion).

Some definitions before we continue:

importing
purchasing of products outside of the home country

exporting
selling products outside of the home country

ENTERING INTERNATIONAL MARKETS

• dumping
  selling products in another country at unfairly low prices; e.g., below costs, below domestic price

• exporting
  producing domestically, selling in another country

• direct ownership
  Setting up a division or subsidiary in another country

• contract manufacturing
  hiring a firm in another country to produce a product that is sold under the domestic firm's name.

• joint venture
  create a formal partnership between a domestic firm and a foreign firm

• strategic alliance
  create a partnership between firms which remain independent

• licensing
  allowing a foreign firm to use the domestic firm's property rights, such as trademarks, patents, technology, manufacturing processes, etc., usually in exchange for a fee, royalties, or commissions

• franchising
  licensing which allows a foreign firm to do business under the domestic company's brand name in exchange for a fee, royalties, or commissions

TRADE RESTRICTIONS

• import tariff
  tax placed on imported products

• trade quota
  limit on the amount of a product that can be imported

• embargo
  disallows import of a product

• local content laws
  requires foreign-owned firms to use locally-made components in products

SOME AGREEMENTS TO LOWER TRADE BARRIERS

• NAFTA
  North American Free Trade Agreement - Canada, Mexico, U.S.

• EU
  European Union - Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, United Kingdom

• GATT
  General Agreement on Trade and Tariffs - 117 nations

• WTO
  World Trade Organization - 140 nations

SOME PROBLEMS OF CULTURE AND LANGUAGE

From a marketing perspective the United States has been fortunate in covering a relatively large geographic expanse with a single language and, for the most part, a "melting pot" of a single culture.  Although this has led to great efficiencies in marketing and distribution, the isolation from diversity has led to a lack of understanding of marketing in places that are different in language and culture.  Consider the following situations:

A friend told me of an aspirin distributor who wanted to promote the benefits of the product to an area in his country where some people are illiterate.  Rather than use text advertising, the advertiser posted signs in stores with three pictures on a horizontal line: Going from left to right, first is a circle drawing of a sad looking face; second is a circle drawing of an aspirin; and third, a circle drawing of a happy looking face.  Why did people believe that it was strange to advertise a product which would make happy people sad?  Should you presume that prospective buyers in that culture would read the pictures from left to right?

A male sales representative from the United States visits a female client in South America.  As they are talking over the business deal, the female client moves closer to he male sales rep.  He moves back a little, and she then moves forward a little.  He once again moves back a little, and she then moves forward a little.  He then moves closer to her and she doesn't move back. Believing that she must have a personal interest that goes beyond the business deal, the male sales rep. puts his hand on the client's leg.  She immediately slaps him across the face and announces that she no longer wants to do business with his company.  In the US, if someone of the opposite gender gets "too" close to you, you might take it as a flirtatious gesture; if someone of the same gender gets "too" close to you, you might take it as a threatening gesture.  Note, however, that different cultures hold a different definition of the distance that defines "too" in our "personal space."

The first example illustrates a problem that can occur in language translation.  It is not enough to translate from one language into another; one must also have a message back translated into the first language to see if there are any unintended translation problems. 

The second example illustrates that the marketer must always be sensitive to the norms, customs, values, and mores of different cultures.  It is easy to presume that one's own customs and values are "common sense," but culture is something that is learned.  Be sure to employ someone who has knowledge of a regional culture as well as language skills when dealing outside of your own region.