International Marketing

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Introduction

In the wake of a globalizing world the need for international marketing has become fever important. It is however good to note that different communities and or countries have different cultures. The American culture is not the Australian culture. Thus it is good to respect and understand our cultural backgrounds and at the same time respect those of others.

Our failure to understand each others culture or to respect them has greatly hampered the progress of international marketing. For example if the Iranians do not respect the American culture and at the same time the Americans despise the Iranian culture then this will ultimately hamper international trade between the two nations.

1. Compare differences in marketing of developing countries and developed countries

When planning marketing strategies or executing marketing plans, the most basic elements for marketers to consider about a new market, are laws, politics, economy, and competition. Then there are other significant elements such as geography, infrastructure, currency, distribution channels, state of technological development, and consumer preferences. However there are fundamental differences in each of the elements above between a developed country and a developing country.

1.1 SWOT Analysis and PEST Analysis

In a developed country, the market is much larger, matured, however sometimes saturated and highly competitive. For example, the Dow Jones Industrial Index represents thirty US companies representing each of the traditional industries. Each of the listed companies dominates the particular industry, e.g. Boeing of the aerospace industry, AT&T of the telecom industry, Citigroup of the financial industry. The point is that each existing industry in a developed country has already experienced the selection through competition. Each of the players has learned how to operate in the most efficient and profitable way to remain competitive. The high standards of these companies created a high barrier of entry for new players looking to enter and challenges for weaker players to remain in business.  When comparing to a developing country, we find that its market is smaller in size compared to developed countries but offers tremendous growth potential. Therefore the markets are much less competitive and offer lots of opportunities.  For example, when compared to China, the U.S. generates five times the GDP with one quarter of the population.  As a developing country, its markets are usually less developed, but competitive in a different way. Except for state controlled and regulated industries, there is usually not a single dominating player unlike the U.S.

1.2 Chart: 2006 GDP Ranking by Country

Ranking

Country

2006 GDP in million USD

Country Type

1

United States

13,194,700.00

Developed

2

Japan

4,366,459.00

Developed

3

Germany

2,915,867.00

Developed

4

People’s Republic of China

2,644,642 20

Developing

5

United Kingdom

2,398,946.00

Developed

6

France

2,252,213.00

Developed

7

Italy

1,852,585.00

Developed

8

Canada

1,275,273.00

Developed

9

Spain

1,225,750.00

Developed

10

Brazil

1,067,706.00

Developing

11

Russia

984,925.00

Developing

12

South Korea

888,267.00

Developing

13

India

873,659.00

Developing

14

Mexico

840,012.00

Developing

15

Australia

755,659.10

Developed

(Data source: www.wikipedia.com/GDP)

Developed countries have very sophisticated legal systems that are well tested and fair.  However there are many loopholes and imperfection in its developing legal system. Protection of intellectual property rights and copyrights are many times lacking.  For example, fines and penalties are very high for trademark violations in developed countries. However, these intellectual right laws and enforcements are not as strong in developing countries. For example, recently a Chinese businessman find a loophole in the system and successfully registered the trademark “LuYiWeiDeng”, which is the Chinese name for “Louis Vuitton”, as well as the “LV” design patterns. He has sued the LV for violation of trademark laws for selling authentic LV products in China. It may sound absurd but the man actually won the lawsuit against LV. For companies like LV, such loopholes post a potentially devastating risk for a seemingly lucrative new market.

Furthermore, developed countries have highly trained labor force that has higher productivity and efficiency but reflects higher labor costs. The consumers are often more educated with higher spending power. For developing countries on the other hand, the labor force largely consists of less skillful workers that are often uneducated that are more suitable for low added value, high labor-intensive work.

In a developing market, professional services such as legal, financial, accounting services are not as abundant. Consumers have less spending power. Financial markets and credit industry are less developed which limited the channels and the ability for businesses to raise money.

For developed countries, highly advanced technologies and various service sectors are always there to support a business. As a result, the overall economic environment is more suitable for businesses. However, the market economy will experience every phase of the business cycle, growths, booms, recessions, and depressions.  The economic cycle of a developing country is not as cyclical as a developed economy or dependent of a developed economy but possibly more volatile. For example, when the USA is in recession, China or Brazil may be in economic growth mode.  This will give business a chance to shelter from economic downtime and open new markets at the same time.

Furthermore, contrary to developed countries, developing countries may experience political instability at any time. Take Venezuela for example: Venezuela ranks fifth in the world in oil proven reserves and has the largest accumulation of liquid fuel in the world. With its importance as an oil country, many countries including the U.S. have expressed concerns about Venezuela’s current economic and political situation. Venezuelan President Hugo Chávez is planning a new assault on the big oil companies and threatened to potentially taking a major step toward nationalization of Venezuela’s oil industry that could hurt oil-company profits, reduce production and put further pressure on global oil prices.

Last, marketers who wish to enter a foreign developing market face the most challenge is the differences caused by culture. Consumer preferences are based on their cultural background. The elements of culture include material culture, language, aesthetics, education, attitude and value, social organization. The total understanding the Cultural difference is the key to localize marketing strategies. Many developing countries have stronger and different religious beliefs, languages, and ways of thinking. An example will be the implied thinking and communication of the Chinese that are inherited from the Confucius traditions. The following paragraphs will offer a definition of culture and explain the effects of the Culture element in the points discussed above.

2. Culture

Culture is best defined by Kluckhohn as patterned ways of thinking, feeling and reacting, acquired and transformed mainly by symbols, constituting the distinctive achievements of human groups, including their embodiments in artefacts; the essential case of culture consists of traditional ideas and especially their attached values. (Kluckhohn, textbook)

Culture is a key characteristic of international marketing because the elements that compile it affect the way consumers think. The language a population speaks, the average level of education, the prevailing religion, and other social conditions affect the priorities the inhabitants have and the way they react to different events.

As I mentioned on the above, people’s language, religious beliefs, and ways of thinking all have strong cultural influences on marketing decisions. There is a blunder that some of managers of firms operating only in the domestic market afterward they intuitively understand the culture and the impact of changing conditions of many foreign markets. Conversely, They were not raised in the country but they are trying to establish a market there, managers abroad often do not fully understand the culture and lack the accurate frame of reference. Accordingly, decisions that they would make could be radically incorrect. They will likely take a risk to making a wrong decision, unless managers of firms will put special efforts to understand the activities of cultural meanings in each foreign market.

Multinational corporations have been in the forefront of developing international brands that cut across local cultural differences. Companies such as Coca-Cola, IBM, and McDonald’s have created international brands to sell their products to large market segments worldwide. Other examples of global icons include Intel, MTV, CNN, and Disney. The advertising and marketing campaigns that built these international brands took a universalist approach, building on the tradition of assimilation. However, as culturally diverse emerging markets become more important to international marketing, campaigns targeted to specific cultures will appear more frequently.

Student Name: ZHENG Ying Ying

Student No: 0524859

3. How do Aesthetics and Values of a Society Influence the Firm’s Marketing in China and UK?

There exist various definitions of the term “aesthetics”. Most commonly aesthetics is equated with either the philosophy of art or the philosophy of beauty; “it has even been equated, on the grounds that philosophy deals only with second-order questions and consists of discourse about discourse, with the philosophy of criticism” (Beardsley 1958, p.13). Others use this term for “any kind of general inquiry into the arts, whether philosophical or scientific” or they suggest that “aesthetics should become a science” (Munro 1949, p. 85). In this paper, aesthetics is concerned as a part of philosophy that deals with the problem of existence of beautiful things and people’s response to their beauty; the problem of artistic and intellectual activities and people’s responses to them and various circumstances that surround these problems.

The notions and values that aesthetics operates by are expressed in various forms: Music, Art and Drama, Symbols, Dance, Colors, Fashion, Ergonomics, Design, etc. The fields where aesthetics finds its application are rather diverse: film, television, video, digital art, cartography, music, literature, gastronomy, etc. (MG3038 Lecture Notes, A12, ‘Aesthetics’). This paper focuses on marketing as a sphere where aesthetics influences much and which is dependent on the aesthetic values of this or that society.

Marketing as a societal process that is needed to discern consumers’ wants is closely interconnected with aesthetics. The use of aesthetics in marketing is revealed through branding of a product, its commercial representation and reputation of its producer. Marketers’ actions are aimed at tickling the consumers’ aesthetic appreciation of such elements of product consumption as sophistication, color harmony, stylishness, slogans, authenticity. The marketers’ concern is to satisfy customers’ curiosity, self gain or mental adjustment. These concepts are the driving force of marketing development.

Marketers should take into account the consumers’ senses, their appreciation of the artistic nature of the products, including their smell, taste or ambience. They intend to deal with the products that customers believe to be beautiful, that have fashionable design. The adverts should be delivered in a good taste to attract the customers’ attention. The branding should be aesthetically pleasing and customers’ experience should evoke only pleasant feelings and emotions.

All stated above is characteristic for UK marketing. The firms there investigate public opinion and make use of this knowledge. Various public opinion polls are held to learn what the British mean by beauty and what they consider to be beautiful. Inviting new clients to seminars is a common practice for UK marketers. Not only the customers’ attitudes to this or that product are estimated there but their overall understanding of beauty and various moral values. The UK marketers follow the principle that they “need to be energetic, innovative, creative and in touch with society – plus have the ability to follow through ideas. The most important asset is the ability to listen to the consumer and create change for their benefit if necessary”, “…the old cliché ‘the customer knows best’ is always true” (Estridge 2004, p.1).

The same marketing principles are implemented in developing countries. If we consider marketing in China we will observe that China is at a point in its development. The current market situation is that the Chinese people are interested in getting the products they want but don’t have available to them, and if they have multiple choices they will try different products. Thus the marketers’ objective is to attract the customers’ attention by satisfying their needs.

In order to succeed in this venture Chinese marketers as well as their British counterparts try to find a formula that taps into the Chinese psyche. To unlock the Chinese consumption base marketers resort to such a tool as the “cool factor”. Chinese consumers are extremely interested in brands they use. Therefore, they often buy products from the well-known American and British companies. Chinese customers care about the status that the trends they make use of give them, if they buy expensive goods they do it not because of the urgent necessity but because this or that thing will contribute to their personal success.

But it does not mean that Chinese customers are loyal to one brand only. Their tastes are easily modified and they are ruled by them when jumping from one brand to another. Tom Doctoroff, Greater China CEO at advertising agency JWT characterizes Chinese consumerism as follows: “There are many popular things…Nike is popular. Adidas is popular. Some luxury brands are popular. iPods are popular. Do people like trendy things? The answer is absolutely yes…There are a lot of things that are making money, but nobody has established such a loyal franchise that there is absolute loyalty to that brand. I get lots of studies that say people switch a lot” (China Marketing 2007). Therefore, Chinese marketers need to fight for the aesthetics of their products as it attracts the attention of the public.

Also, we should admit that the hunt for “cool factor” is justified when it comes to mobile phones, or MP3 players, or fashionable clothes. But for most products marketers should resort to some other ways to attract new customers and to collaborate with them during a long period. Television turns to be the most effective tool for marketing in this country, as marketers realize that visibility is connected with safety in the customers’ minds, the more safety is guaranteed the more products are bought. Online, television and print advertisements make the customers buy the things that the companies suggest and the ads do it by offering aesthetic pleasure and promoting Chinese values. And it is executives’ primary task to understand the basic nature of Chinese culture and relate their brand with them.

Thus, China and UK are similar in their approaches to marketing, both of them count on consumers’ appreciation of stylishness, craftsmanship, soothingness of the things proposed. Cultural traditions and moral values of the society are also carefully considered by the marketers, both native and foreign, that act in the countries under consideration. The only difference that UK marketing appears to be more innovative as far as this problem is concerned, whereas China marketing is apt to adopt the techniques already known in the world. Still, this is a characteristic feature of any sphere of a developing country and China is not an exception.

Student Name: Di Zhao

Student Number: 0631739

4. Main factors encourage localised advertising in a firm’s foreign markets

Along with the evolution of International Business, China becomes the biggest potential market in the world, since the 21st century, many multinational companies invest in this area. Therefore culture plays an important role in a firm’s foreign markets.

4.1 Traditional Concept

China contains a long history which has 5000 years civilization, apprehensible it will be difficult to change people’s thinking because some concepts are already inveteracy in their mind. Which means a multinational company could not use his host country advert in his foreign market that will not be acceptable. Since the feudal society, people regard men as superior to women, value sons and belittle daughters. Illustrational, when Johnson & Johnson expanded their market in UK, customer’s feedback was 98% positive, and then the company enter China market. For selling baby diaper, initially they use the same advert which they have applied in UK, Johnson & Johnson use two different colours for packaging, the blue one for boy’s diaper, and rose one for girl’s diaper. But they didn’t recognize that in Chinese tradition is that they prefer boys than girls, if a family gets a girl, which is a degrading thing for them. They will be embarrassed to buy girl’s diaper. This caused a big problem with the amount of distribution for Johnson & Johnson Company. Three month later, this company promoted the same products by using same packaging, and just indicated for boys or girls at the back of packaging. This small difference made a big change of company situation, the feedback has gone up to 99% from customers.

4.2 Social Psychology

Different culture makes people’s different psychology, some cases will demonstrate this point of view. In China, people consider that the white skin is beauty for women, however in UK women prefer the bronze-coloured because they think that is the healthy colour. If a skincare company will sell the whitening cream in UK, they will have a small group of buyers, in British mind, white skin represents unhealthy. Otherwise, if this company sell the bronze-coloured products in China, even the company made an amazing advertising, people will also not buy it. This is a common customer’s psychology, the common view of the society will influence customer conception. If we have a conflict with the standard of beauty, only way we can do is to change the image in the advert. Social psychology reflects directly people’s needs in that society, to make a global advertising for the multinational company, they should use the localised advertising for some special markets, which can adapt consumer psychology.

4.3 Language Barrier

Language is an important intermediary in localized advertising, some companies add the adages and stories into their advertising to make people easily understand by through a few images, which must be feasible in the host country. If the company use the same advert in foreign market, people will not understand what they mean because of the differences of cultural background. Therefore an advertiser should have a well understanding of the diversity languages in order to avoid ambiguity which will be able to affect advertising effectiveness. For example, McDonald’s nowadays is the biggest fast food producer, to enlarge the global market, they used 23 different slogans in the world. In UK, McDonald’s slogan is “I’m lovin’ it”, a short sentence but make a leisure feeling to people. And in China, they use “Every time a good time” to remind people to enjoy every second with your family, because in China, family is the most important thing that people will think, so it is much more adapting people’s conception.

4.4 People’s Attitude

As generally understanding, Chinese emphasizes the importance of the family, the hierarchical structure of social life, the cultivation of morality and self- restraint. And the British culture encourages the devotion of individuals and advocates the power of hero, they pay attention for the freedom, consumption encouragement and personalization. For instance, the TV adverts of LUX Company in China are quite different from the one in UK. In China, LUX Company used this TV advert: the mother helps his naughty boy to have a shower, and the father brings LUX shower product to his family, this advert emphasizes the comfortable and warm of family. And in UK, we can see that LUX Company always chooses a sexy woman in the TV advert, which makes people to have expectancy to buy the shower products. Therefore, the major difference is that Chinese culture is collectivism and the British’s is individualism, and which leads to the very distinguishes for their values and attitudes when consumed. The advertiser should aim at local people’s attitude to make a localized advertising that will be able to attract the customers in the foreign market.

Conclusion

It is undeniable that indeed there are cultural differences that exist between nations. For example language is part of our culture. The language we speak and how we speak it may be a hindrance to international marketing and trade. as I have pointed out above there are various ways of overcoming our cultural differences and furthering international marketing. For example many people nowadays are busy studying another international language in order to overcome these cultural differences.

Reference

China Marketing: Cracking the Code’, BusinessWeek, viewed 18 December 2007,

Beardsley, M. C., 1958, Aesthetics: Problems in the Philosophy of Criticism, Harcourt, Brace, New York.

Estridge, B.  2004, ‘If the Customer Is Satisfied, So Am I; Marketing Is One of the Boom Careers of the 21st Century – but What Exactly Does It Involve? Bonnie Estridge Met One of the Leaders in the Field’, The Evening Standard, 17 June, p.1.

Marilyn, A. S., 2004, International Strategic Marketing: A[N] European Perspective, Routledge.

Munro, T., 1994, The Arts and Their Interrelations, Liberal Arts Press, New York.

MG3038 Lecture Notes, A12, ‘Aesthetics’.

Mooij De Marieke, 1994, Advertising Worldwide 2nd edition, UK: Prentice Hall International

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