GLOBAL MARKETING
Introduction
The nature of international business offers many challenges to marketers in the process of developing and implementing appropriate marketing strategies. The challenges that are faced by marketers can result to failures of the marketing strategies that are developed and implemented in the international markets. There are various reasons that can be attributed to the failures of marketing strategies in the international markets. Some of the common reasons that lead to failures of marketing strategies in the international markets include social cultural differences, economic differences, protectionism, international business ethics, competiveness factors and international legal issues (Keegan &Green 2011).
Social Cultural Differences
The social cultural differences have a significant impact on the behaviour of consumers. This implies that an understanding of social cultural differences is important for developing appropriate marketing strategies especially in international markets. International business environment is composed of individuals from different cultural backgrounds with different values, traditions, beliefs, language and religions (Oviatt & McDougall 1994). The beliefs attached to people from a particular culture can impact negatively or positively on a marketing strategy of an organization. International marketers therefore need to consider various elements of social cultural differences when designing marketing strategies. They should also consider cultural differences when designing products for international markets.
Many of the marketing strategies have failed due to failure by international marketers to recognize the difference in cultural backgrounds of the targeted customers. Customer’s preference for products can be determined by the cultural backgrounds. Marketing strategies can also be influenced by the traditions and beliefs of consumers in a particular cultural setting. For example, in Japan carrying out advertisement using images that portrays male and female intimacy are against their morals. In Saudi Arabia there is a ban of advertisement with the images of male and female intimacy. This implies that advertisement with pictures of male and female intimacy will be ineffective in Japan and Saudi Arabia hence can affect negatively the international marketing strategy of an organization.
Cultural differences can also affects the media decision in various countries. Media decisions in various countries are regulated to conform to the social and cultural background of the society (Oviatt & McDougall 1994). This implies that an organization cannot be able to apply a similar media advertisement for its products equally in international markets. This implies that media decisions for organizations should be changed from time to time to conform to the cultural and social background of a given society. For example, in Arab it is prohibited for organizations to use comparative advertisement claims. Marketing strategies that employs the use of comparative advertisement claims will therefore not be accepted in these markets. Again in Arab countries women are not allowed to appear in advertisement except for advertisement that relate to family affairs. This can impact negatively to the marketing strategies that are targeted for women. Making men appear on advertisement of products that are targeted for women can contribute to confusion and results to failure of a marketing strategy.
Different countries have exposed restriction towards the time allocated for various advertisements especially in televisions. This can affects organizations advertisement campaign since the time allocated cannot be enough to provide the information required for the advertisement. For example, in Europe the use of television advertisement is extremely limited and in some instances do not exist at all. This can make companies with interest in the European markets find it difficult to create the products awareness to their targeted consumers. Some countries such as Finland, Italy, France, Germany and Australia limit the time for television advertisements. This can hinder the marketing strategies of organizations in these countries. The media restrictions also regulate the content of the commercials. This means that international companies with interest in these countries are not at independent to control the content of their commercials and this might affect their marketing plans.
Economic Differences
The economic difference can also cause marketing strategies to fail in the international markets. The economic differences can be occasioned by the difference in various micro and macroeconomic environment of a country. Some of the major economic differences of countries that affect international marketing strategies include the currency exchange rates, income levels, inflation rates, taxation, exchange rates, and cost of doing business among others (Ghauri 2004). These economic factors determine the stability of the economic environment of a country. International markets that are unstable can affect the level of trade and results to losses for businesses. They can also lead to slow economic growth hence affects the expansion plans of international businesses.
Exchange rates, inflation rates, interest rates and taxation rates are important parameters that can determine the cost of business operations (Knight 2000). The cost of advertisements’ campaigns can also be affected by the above factors. High inflation rates in a country can raise the cost of advertisements and various marketing strategies. This can make companies unable to afford the marketing costs required for effective international marketing campaign. Instability in the foreign exchange rates can also make it difficult for international marketing managers to plan budget appropriately for an international marketing plan. It can also lead to the failure of international marketing strategy to meets its objectives due to high cost associated with the marketing plans and strategies. Government taxation policies can also affects international marketing strategies. High taxation can raise significantly the cost of doing a business in a country hence affects an organization expansion plans in the international markets.
Language Difference
Effective marketing strategy requires marketers to convey messages that are understood by the targeted audience. The information passed to the targeted audience should be able to convey the intended message hence ensure that the marketing strategy meets its objectives (Doole & Lowe 2008). Language differences can be a major barrier to a marketing strategy. It is one of the common noises of effective communication in international markets. International markets are characterized with different languages. In most cases, countries within the global market use different languages and cannot be able to understand effectively the language used by others. Again interpretation of the languages used in marketing strategies can result to misinformation hence affects the effectiveness of the marketing strategies. For example, the advertisement that is done using Chinese language cannot be understood to majority of consumers in Western countries. This makes an advertisement done using Chinese language to be less effective in Western Countries such as United States, United Kingdom or Germany. Again most of Chinese cannot be able to understand other foreign languages such as Spanish, English and French among others. This can make them to fail to understand advertisement message carried out using languages other than Chinese language.
The language barrier in different countries can also results to a number of consequences such as failure of the message to reach the targeted audience and failure of the message to be understood by the targeted audience (Rosenbloom & Larsen 2003). There is a possibility that the message can reach the targeted audience but may be misunderstood or not understood at all. It is also possible that the message that reaches the targeted audience may not induce the audience targeted to take appropriate action. There are various examples where advertisement campaigns for different companies have been able to be misunderstood and misinterpreted by the targeted audience due to the language barrier. One of the examples of advertisement campaigns that have been interpreted by the targeted audience as a result of language differences is the Pepsi advertisement in Asia. Pepsi advertisement in Asia that reads as ‘’Come Alive’’ was misinterpreted by the targeted audience as aimed at asking the dead ancestors to come and live again. This affected the sales of Pepsi in the market hence resulted to inefficiency of the international marketing strategy of Pepsi in Asia. Another example is the Citicorp’s advertisement in China that reads “Citi Never Sleeps” which was misinterpreted to mean that citi was affected by sleeping disorder. These examples of the misrepresentation of the information of advertisement campaigns as a result of language barrier contribute to the ineffective of marketing strategies in the international markets.
Language differences that exist around the globe can also make it impossible for organizations to conduct effectively global marketing research (Kumar 2000). Global marketing research is an important component of an international marketing strategies hence failure to conduct global marketing research effectively can results to failure in international marketing strategies. This is because the global marketing research can provide inaccurate and reliable data due to language misinterpretations. Inaccurate and unreliable data can therefore lead to poor and ineffective marketing strategies.
Legal and Regulatory Differences
Laws and policies as well as their interpretations differ from one country to another. Some countries have laws that encourage foreign direct investments while other countries have laws that discourage foreign direct investments and international trade (Zahra et al 2000). Legislation systems and the role of courts also differ in various countries. For example, some countries might prefer alternate dispute resolution while other might prefer litigation system. Organizations engaging in international businesses are often exposed to various laws and regulation. The presence of various laws and regulation can directly hinder the international marketing strategy. This is because any international strategy must be able to comply with laws and regulation of a given country. For example, a marketing strategy that is aimed for Islamic countries must be able to adhere to the Sharia Laws so as to be allowed in those countries. It is against the principles of the Islamic religion to conduct marketing strategies that portrays elements of interest earnings as the case with interest earned on savings in banks. This is because Muslim communities do not believe on the principle of interest earned from income. Hence marketing campaigns for financial institution and other investments companies are regulated in accordance to Sharial Law in Islamic countries. This affects some of the financial institutions marketing campaigns in these markets that are aimed at attracting investors with interest in saving with the sole purpose of earning interest.
Laws and policies in different countries also determine the type of marketing strategy to be employed. The laws and regulations can determine the contents to be included in advertisements (Muhlbacher et al 2006). In Islamic countries it is against their Sharia Law for women to participate in any form of advertisement campaign. This implies that all the commercials that are targeted to the Islamic community should not include pictures of women except on the advertisement that are related to the family affairs. Some governments also regulates the time of running advertisements in television in various countries. A number of countries such as France, Germany and Finland provide the maximum time that is allocated for television advertisement in their respective countries. For example, in Finland the maximum time allowed for television advertisement is 12 minutes while in Italy the maximum time allowed for television advertisement is 80 minutes. This offers international marketing managers a major challenge as they must adhere to the allocated advertisement time in these countries. Failure to comply with the advertisement regulations can lead to fines and penalties that can affect the reputation, performance and marketing plan of organizations. In Greece it is mandatory that all the store names should be in Greek. This means that all companies that are having interest in Greece must be able to change their original store names to conform to the regulations of the country. This can reduce the branding of the company and affects its marketing strategy. Another example is that it is not allowed for supermarkets in Italy to have gas pumps. This can reduce the marketing strategies of the supermarkets interested in operating in the country as it will reduce the variety of their product portfolio.
Protectionism and Trade Barriers
Governments of different countries have exposed various trade barriers that affect the level of international trade. Many countries are still holding to the principle of protectionism despite the effort by the international business community to reduce trade barriers and encourage the level of trade in different countries (Jeannet 2000). Governments of various countries are also constantly developing ways of ensuring that local companies are protected from foreign organizations. These measures by the governments that are aimed at protecting local companies against the foreign organization contribute to the protectionism and trade barrier. The presence of protectionism in countries can therefore affect the level of international trade and international marketing strategy. Import quotas and tariffs are some of the measures that most governments use to protect their local industries. The Government can raise the tariffs associated with international trade hence reduce the level of international trade in a country. This can affect the international marketing strategies of organizations in such countries. It is also possible for the governments to introduce import quotas so that it limits the value of imports in a country. This again can impact negatively to the international marketing strategies of organizations as they will be unable to access the market as per their marketing plan.
Competitive Differences
Competitive difference can be illustrated using various elements such as price, technological advancement, production cost, availability of raw materials and labour cost. The competitive difference can significantly affects the international marketing strategy of organizations (Johansson 2002). Price is one of the competitive factors that majority of organizations use to gain competitive advantage in the market. The price of organizations products can determine the effectiveness of its international marketing strategies in the global market. Many customers are in most cases base their purchasing decision on the price of the products. If there is a close substitute product with low price, then customers will likely to switch their demand in favour of the cheap substitute product. For example, Mercedes Benz has been able to reduce its price as a result of the introduction of Toyota Lexus at a lower cost. This was aimed at ensuring that its international marketing strategies are improved. The introduction of Toyota Lexus at low price affected adversely the international marketing strategy of the Mercedes Benz. This illustrates the effects of competitive factors towards international marketing strategy.
Another competitive factor that can affect international marketing strategy is the level of technological advancement. Some countries have poor technological advancement that cannot support various international marketing strategies for organizations (Leidner & Kayworth 2006). Some countries are having poor infrastructures that cannot support some forms of advertisements such as the use of internet and televisions. Most of the underdeveloped countries around the world are not in access to internet services hence organizations intending to enter such markets cannot use online marketing techniques to create the products awareness (Jarvenpaa & Ives 1994). Using online advertisements in such countries can result to failure in the marketing strategy of the company and this can affects its performance in the global market. In poor countries such as majority of African countries, there is low penetration of the television networks especially in rural areas. This implies that companies using television advertisements as a means of creating customers awareness can likely to fail in meeting their marketing objectives.
International Business Ethics
International business ethics can also contribute to the failure of international marketing strategy. International business ethics is composed of various ethical standards that are applied in different countries. Some of the issues that are concerned with international business ethics include bribery, corporate governance, corruption, working conditions and targeted audience (Hollensen 2011). Currently there is an increased emphasis for organization to engage in corporate social responsibility in their programs. The involvement of organizations in corporate social responsibilities can determine the effectiveness of their marketing strategies. Organizations which fail to incorporate corporate social responsibility in their marketing strategies can fail especially in developed markets where there is significant emphasis towards the social corporate responsibilities.
Again the target market for advertisement can also be a source of business ethics (Wei 2000). Some countries impose a ban on advertisements that are targeted to children. This implies that it will be difficult for managers to develop and implement appropriate marketing strategies that are aimed at children. For example, marketing strategies that are meant for children products such as toys cannot be conducted effectively in countries which ban advertisements aimed at children. Corruption is also another ethical issue that can contribute to the failure of a marketing strategy in foreign country. Some countries are having high level of corruption that can make it difficult for organization to conduct their marketing strategies effectively. They can ask for bribes that might push the advertisement cost high and make it unaffordable and ineffective.
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