agree that considering cultural difference is important for international
marketing. Culture is the sum of values,
rituals, symbols, beliefs and thought process that
are learned and shared by a group of people, then transmitted from generation
to generation. When a business starts to globalize, the first thing to consider
is the cultural difference. A key to gain success in international business is
to understand the role of culture. Cultural difference will have a direct
impact on every sector being operated. For example, in western culture, bride
traditionally wear white dresses at their wedding, but in China, Korea and some other Asian countries
white represent death, mourning, and bad luck, and is traditionally worn at
funerals. So business introducing white bridal dresses in those countries definitely
would not get business revenues.
Having a diverse workforce will help companies to
easily study the cultural difference. Diversity is a mix of people within a workforce who are considered to be, in
some way, different from those in the prevailing constituency. In a workplace, diversity is an
opportunity and a challenge. Different perspectives allow work teams to discuss
more options to achieve better results.
and uncontrollable elements are important when going international. How these elements
impact international marketing?
marketing is the performance of business activities designed
to plan, price, promote, and direct the flow of a company’s goods and services
to consumers or users in more than one nation for a profit. While making
business international company needs to look at the marketing decision factors.
Marketing decision factors consists of controllable and uncontrollable elements.
Marketers can control the Controllable elements are
Elements: Such elements which are under control of marketing managers are
called controllable factors. These elements are often known as ‘marketing mix’.
It includes product, price, place, promotion, firm characteristics and research.
Elements: For International Marketing the uncontrollable elements are further
divided into domestic and foreign environments. These are the uncertainty which
can be overcome by doing evaluation and adapting the change as necessary.
Domestic environment uncontrollable include
home country elements that can have a direct effect on the success of a foreign
venture: political and legal forces, economic climate, and competition.
decision involving domestic foreign policy can have a direct effect on a firm’s
international marketing success. For example, the U.S. government placed a
total ban on trade with Libya to condemn Libyan support for terrorist attacks,
imposed restrictions on trade with South Africa to protest apartheid, and
placed a total ban on trade with Iraq, whose actions were believed to
constitute a threat to the national security of the United States and its
allies. In each case, the international marketing programs of U.S. companies, whether
IBM, Exxon, or Hawg Heaven Bait Company, were restricted by these political decisions.
The U.S. government has the constitutional right to restrict foreign trade when
such trade adversely affects the security or economy of the country or when
such trade is in conflict with U.S. foreign policy.
economic climate is another important home-based uncontrollable variable with
far-reaching effects on a company’s competitive position in foreign markets.
The capacity to invest in plants and facilities, either in domestic or foreign
markets, is to a large extent a function of domestic economic vitality. It is
generally true that capital tends to flow toward optimum use; however, capital
must be generated before it can have mobility. Furthermore, if internal
economic conditions deteriorate, restrictions against foreign investment and
purchasing may be imposed to strengthen the domestic economy.
within the home country can also have a profound effect on the international marketer’s
task. For more than a century, Eastman Kodak dominated the U.S. film market and
could depend on achieving profit goals that provided capital to invest in foreign markets.
Without having to worry about the company’s lucrative base, management had the
time and resources to devise aggressive international marketing programs.
However, the competitive structure changed when Fuji Photo Film became a
formidable competitor by lowering film prices in the United States, opening a
$300 million plant, and soon gaining 12 percent of the U.S. market. Since then,
the acceptance of digital photography, with Canon, from Japan, leading the
market, has further disrupted Kodak’s domestic business. As a result, Kodak has
had to direct energy and resources back to the United States. Competition
within its home country affects a company’s domestic as well as international plans.
Inextricably entwined with the effects of the domestic environment are the constraints
imposed by the environment of each foreign country.
In addition to uncontrollable domestic elements, a
significant source of uncertainty is foreign environment uncontrollable. A business
operating in its home country undoubtedly feels comfortable in forecasting the
business climate and adjusting business decisions to these elements. The
process of evaluating the uncontrollable elements in an international marketing
program, however, often involves substantial doses of cultural, political, and
economic shock. The more significant elements in the uncontrollable international
environment include political/legal forces, economic forces, competitive forces,
level of technology, structure of distribution, geography and infrastructure,
and cultural forces.
operating in a number of foreign countries might find polar extremes in
political stability, class structure, and economic climate critical elements in
business decisions. The dynamic upheavals in some countries further illustrate
the problems of dramatic change in cultural, political, and economic climates
over relatively short periods of time. A case in point is China, which has
moved from a communist legal system in which all business was done with the
state to a transitional period while a commercial legal system develops. In
this transitional phase, new laws are passed but left to be interpreted by
local authorities, and confusion often prevails about which rules are still in
force and which rules are no longer applicable.
commercial contracts can be entered into with a Chinese company or individual only
if that company or person is considered a “legal person.” To be a legal person
in China, the company or person must have registered as such with the Chinese
government. To complicate matters further, binding negotiations may take place
only with “legal representatives” of the “legal person.” So if your company
enters into negotiations with a Chinese company or person, you must ask for
signed legal documents establishing the right to do business. The formalities
of the signature must also be considered. Will a signature on a contract be
binding, or is it necessary to place a traditional Chinese seal on the
document? Even when all is done properly, the government still might change its
mind. Coca-Cola had won approval for its plan to build a new facility to
produce product for its increasing Chinese market share. But before
construction began, the Chinese parliament objected that Coca-Cola appeared to
be too successful in China, so negotiations continued delaying the project.
Such are the uncertainties of the uncontrollable political and legal factors of
level of technology and political/ legal forces as illustrations of the
uncontrollable nature of the foreign environment. The level of technology is an
uncontrollable element that can often be misread because of the vast
differences that may exist between developed and developing countries. A
marketer cannot assume that understanding of the concept of preventive
maintenance for machinery is the same in other countries as in the United
States. Technical expertise may not be available at a level necessary for
product support, and the general population may not have an adequate level of
technical knowledge to maintain equipment properly. In such situations, a
marketer will have to take extra steps to make sure that the importance of routine
maintenance is understood and carried out. Furthermore, if technical support is
not readily available, local people will have to be specially trained, or the
company will have to provide support.
the six types of non-tariff barriers and how it can benefit the infant
companies and international companies.