What is International Marketing Strategy?
Marketing can simply be defined as an organizational function and a set of processes for creating, communicating and delivering the value to the customers and managing the customer relationships in such a way that is beneficial for both the customers as well as the stakeholders. At international level, marketing can simply be defined as the process of finding out the needs of customers in foreign countries and then providing them the required entities at right place and at right price.
The basic concept of marketing is the same even at international level, but some modifications are always required. Only a few multinational organizations are lucky enough to use the same marketing strategy in the whole world, for example—a pen manufacturing organization that uses a marketing slogan “finest writing in the world” will not be required to change its marketing slogan in any part of world. But a majority of multinational organizations need to modify or specifically formulate their marketing strategy at the international level.
Formulation of strategy
For formulating its international marketing strategy every organization follows a five step procedure. This includes market assessment, product strategy, price strategy, place strategy and promotion strategy. The last four segments of strategy formulation are the popular 4 P’s of marketing but the first segment—market assessment—is a new factor to be considered while formulating an international marketing strategy. Now we will briefly discuss about each segment.
The market assessment includes a five step screening procedure-
First screening-The first screening includes the basic identification of the customers’ needs in the potential markets of the world. Here, an organization prepares a list of various countries where it can sell its goods and services.
Second screening-The second screening includes the shortening of the list prepared in first screening on the basis of financial and economic analysis of various potential markets. Under financial analysis, organizations consider the fiscal policy, monetary policy, prevailing interest rates, inflation rates etc., and under economic analysis, organizations scan the markets for the size, intensity and growth potential. In this way, organizations exclude all unfavorable countries from their list.
Third screening- Under the third screening, the organization considers the legal and political forces of various potential markets. This is a very important step because, before entering a country, an organization must ensure that the host country’s laws will protect their patents, copyrights and other intellectual rights. Choosing a politically unstable nation like Pakistan, Iran etc will always be detrimental for the organization’s success.
Fourth Screening- Under the fourth screening, organizations consider the socio-cultural forces of potential markets. In some countries like India, culture and moral values don’t allow men and women to use intoxicants, so those organizations that produce intoxicants should be defensive for such markets. Moreover, religious factors are also very important to consider, for example, in India, the Hindu religion doesn’t allow its followers to eat beef, so when Mc Donald’s entered India they removed beef from their menu list, which otherwise is the highest selling product in the USA for Mc Donald’s.
Fifth Screening- If after four screenings, the organization finds a choice between two or more nations, and then at the fifth stage they should consider the competitive environments in all the potential markets. Now, some organizations prefer to choose those markets where the competitors are less in number. On the other hand, some organizations prefer to choose those markets where the level of competition is very high; such organizations believe that the cutting edge competition will also boost their performance. This choice entirely depends upon the specific philosophy followed by the organizations.
Final selection- After making all the screenings, organizations will opt for the final selection. This step includes field trips–organizations send their executives to the actual locations for practical evaluation. Such field trips are very common and can do a great deal to supplement the currently available information. Sometimes, these trips take the form of a trade mission. Based on the outcome of the screening and the supplemental data, an MNE will make a choice regarding the goods and services to be offered overseas.
Product strategies will vary, depending on the specific good and the customers. Some products can be sold in all countries without any modifications but some products and their marketing strategy are required to be changed according to specific requirements of the market.
No modification required- There are some products that don’t require any modification with the change in the country, for example—pens. A pen-manufacturing company will not be required to modify their products when launching into a new country. In fact, a company that is using a slogan like “finest writing in the world” will not be required to change even their marketing strategy.
Modification required- On the other hand, some organizations are required to modify their products. This modification depends upon many factors like economy, culture, local laws etc; for example, in the USA, chewing gum packages often contain 10 to 20 sticks, because the USA is a highly intensive market and people in that country have a high purchasing power. But in many other countries, weak purchasing power of the customers limits the packaging of the gum to only 5 sticks. Similarly, other modifications are required with the change in the country.
Promotion is the process of stimulating demand for a company’s goods and services. Multinational enterprises promote their goods and services in different countries through advertisement and personal selling. Depending upon the product and the customers, organizations adopt one of following strategies of promotion-
Same product same promotion message
Same product different promotion message
Different product same promotion message
Different product different promotion message
Multinational enterprises price their products depending upon the specific market. Pricing of a product depends upon many limiting factors like government regulations, price escalating factors, legal forces etc, for example, in some countries governments fix the maximum and minimum selling price of a product.
Multinational organizations should always sell their products at a place that is most convenient for the customers. Organizations should fix distribution channels according to the affordability and convenience of the customers in the host country.