International Marketing refers to marketing carried out by companies overseas or across national borderlines. This strategy uses an extension of the techniques used in the home country of a firm/organisation. A more formal definition of International Marketing might be:The marketing of goods, services or ideas across national boundaries; and
The marketing operations of an organisation that sells or produces within a given country when that organisation is part of or associated with an enterprise which also operates in other countries and there is some degree of control of, or influence on, that organisation’s marketing activities from outside the country in which it sells or produces. Reasons companies go for an international Expansion: Companies go international for a variety of reasons, but the goal is typically company growth or expansion.
Whether a company hires international employees or searches for new markets abroad, an international strategy can help diversify and expand a business. Growth Many companies look to international markets for growth. Introducing new products internationally can expand a company’s customer base, sales and revenue. For example, after Coca-Cola dominated the U. S. market, it expanded their business globally starting in 1926 to increase sales and profits. Employees Companies go international to find alternative sources of labour.
Some companies look to international countries for lower-cost manufacturing, technology assistance and other services in order to maintain a competitive advantage Resources Some companies go international to locate resources that are difficult to obtain in their home markets, or that can be obtained at a better price internationally. Ideas Companies go international to broaden their work force and obtain new ideas. A work force comprised of different backgrounds and cultural differences can bring fresh ideas and concepts to help a company grow.
For example, IBM actively recruits individuals from diverse backgrounds because it believes it’s a competitive advantage that drives innovation and benefits customers. Diversification Some companies go international to diversify. Selling products and services in multiple countries reduces the company’s exposure to possible economic and political instability in a single country Entering the international market is a process which should take deep thought and careful planning. It is essential to remember that international marketing is not the same as domestic marketing.
Where domestic marketing is directed exclusively in a business’s home market, international marketing reduces reliance on intermediaries and establishes direct involvement in the countries in which trade takes place. It is also necessary to be aware that international customers will frequently have different tastes, needs and customs. Marketing is a continuous activity and so is marketing planning because you can never know enough about your customers and how to meet their needs. The organisation’s success in an international field is dictated by its knowledge of the market.
Therefore the organisation’s first task is to study its potential customer base. Who are the customers? Where are they based? What factors could contribute to purchase or non-purchase of the product? Thoroughly researching the potential market helps to give a clear picture of the economic, political and cultural factors that may affect selling of a product or service. It also reduces time, money and effort by reducing exposure to unknowns. There are two main ways of collecting data for research: Secondary data is the gathering of information from published sources and is usually the first step in analysing a foreign market.
Sources of information include government publications, financial services firms, market reports, international organisations such as the UN and the internet. Secondary research helps fine-tune information needs. Depending on the source, however, secondary data can be misleading. Primary data is needed for marketers to understand consumers’ buying behaviour in the country under investigation. Primary data should uncover significant cultural characteristics before a product is launched so that the marketing strategy is appropriate for the target market. (Dibb, Simkin, Pride, Ferrell).
The next step is to devise a marketing strategy and a marketing plan. A Marketing Strategy is a summary of organisation’s products and position in relation to the competition. It should include the elements of product, people, place, promotion and distribution – a Marketing Mix. Marketing Plans are the specific actions undertaken to achieve the goals of the marketing strategy. The third step the organisation is to develop and make any necessary adjustments the products or services to meet customer needs. For example, in some markets, the taste and packaging of Coca-Cola has been adapted to suit local tastes.
The fourth step is to set prices and terms on the product or service that would be reasonable to customers while making a profit, and distributing the product or service so that they are easily available to the customers. The organisation must then advertise its product to its potential customers and market it in such a way as to attract and hold the customers’ interest. Finally, because it is new on the market, the organisation must be in a position to reassure the buyer and perform any after-sale service. 3. CZECH REPUBLIC 3. 1 Economic Factors Annual GDP growth rates:
Czech Republic does not show a steady growth, on the contrary, as seen in table 4, there is a strong fluctuation. The GDP Growth of 2003 is due to exports (growth of 6. 7%) and private consumption, (growth of 5. 4%) despite rising unemployment. Key issue here is the use of customer credit driving private consumption, as for the first time low interest rates were introduced on loan agreements. Inflation rate in 2002 fell considerably to 1. 8%, compared to previous years, where the average for 1998-2002 was 4. 6% Exchange rates: The Czech Republic joined the Euro in May 2004.
The exchange rate is 1 CZK to 0.03289 ECU 3. 2 Political Factors Although the political and financial crises following the “velvet divorce” of Czechoslovakia in 1997 eroded the country’s stability and prosperity, the Czech Republic succeeded in becoming a NATO member in 1999 and an EU member in 2004. Vaclav Klaus of the conservative Social Democratic Party succeeded Vaclav Havel, in the presidential elections in February 2003. Klausin named Stanislav Gross Prime Minister in July 2004. The government’s top priority is to strengthen the economy, as the greatest concern within the Czech economy is its greatest deficit, which in 2003 reached 12.
9% of GDP. Its intention is to increase drawing of EU funds under the 2007-2013 EU budget process although there are growing concerns that dispersion of structural and cohesion funds on which government depends could be delayed. As part of the priminster’s policy, he has outlined a plan to support SME’s as a leading source of new creation as well as making loans more accessible to local firms and to bolster farmer’s competitiveness. They also intend to provide direct investment intensive for sectors that produce higher value-added good/services
The slow legal system and the lack of transparency are common complaints and EU is raising concerns that the authorities are lagging implement of legalisation. 3. 3 Legal Factors: Planning permits for medium and large buildings are now the responsibility of the 22 city districts of Prague, with the city council now assumes the role of arbitrator of final appeals, previously dealt by the Ministry of Regional development. Opening hours are regulated by the local authorities. Typical hours are 8 AM to 6 PM Monday to Friday, with later opening on Thursday evenings.
Opening hours include Saturday mornings Income tax rate is 31%, and average salaries are 20% lower than the UK 3. 4 Micro Factors 3. 4. 1 Place: The Czech Republic has a population of 10. 3 million, and covers land area of 78,866 km2. 75% of the population lives in urban areas, with 1. 3 million living in Prague and 388 thousands living in Brno- Ostrava 324 million. Unemployment levels are low by Central European standards and in 2003 reached 7. 8%. Expected to reach 8. 4% in 2004 – mainly due to existing reconstruction of public services, which is designed to cut employment in the public sector.
3. 4. 2 Promotion: Advertising: newspapers, magazines, radio TV, posters, trade fares and exhibitions internet. TV and Radio Private media in the Czech Republic grew fast in the 1990s, and private radio and TV stations provide stiff competition for public broadcasters. Public TV broadcaster Ceska Televize (CT) operates two channels, and Czech public radio, Cesky Rozhlas (CRo), operates three national networks as well as local services. Two major private television channels broadcast nationally, and there are more than 70 private radio stations on the air across the country.