Difficulties of International Marketing

The successful manager designs a marketing program for any adjustment to the uncertainty of the business climate. This represents the area under control of the marketing manager.  Taking into consideration the necessary overall firm’s resources, infrastructure and strengths that can limit or promote, the marketing manager blends price, product, promotion, channels of distribution and research activities to take advantage of anticipated demand. The elements can be changed in the long run and usually, in the short run to adjust to changing market conditions, consumer tastes, or corporate objectives.

The marketing decision factors represent the levels of unbelief  that are made by the domestic and foreign market places. Although  the marketer can blend a marketing mix from possible products, the  factors which are not possible for a marketing mix the marketer must actively evaluate any new use or purpose. That evaluation and putting the products which originally were not complying to form a marketing mix, the marketing factors and the marketer’s ability determines the outcomes of the marketing company.

The appearance and quality in the domestic markets of the products that are beyond the control of companies, these include home country requirements that can have a direct effect on the success of a foreign company: political and legal forces, financial environment and competition.

A political decision involving domestic foreign policy can have a direct effect on a firm’s international marketing success.

The 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 its foreign policy.

Positive changes take place when there are changes in the foreign policy and offer friendly nations a favoured treatment. Another case was when South Africa abolished apartheid the embargo was lifted and trade relations were restored to normal. The US government decided to uncouple human rights issues from foreign trade policy and grant normal trade status to China, facilitating the way for entry into the World Trade Organization (WTO). In both cases, opportunities were created for US companies.

Companies  can exercise some degree of influence over such legislation in the United States. Indeed, in the case of  China, companies with substantial interests there, such as Boeing  and Motorola  canvassed hard for  the easing of trade restrictions.

The domestic economic climate is another important  aspect 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 financial strength. It is generally true that  capital tends to flow towards optimum use; however, capital  must be generated before it  can have mobility. If domestic financial conditions go bad to worse restrictions against foreign investment and purchasing may be imposed to strengthen the domestic economy.

Competition within the domestic market will also have a difficult effect on the international marketer’s task.

Take the case of Kodak, for about 100 years or so without having to worry about the company’s profitable base, management had the time  and resources to design competitive international  marketing programs. However, the competitive structure changed when Fuji Photo Film became a matching competitor by lowering film prices in the United States, opening a plant and gaining 12 per cent of the US market. 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. Apart from competition in the domestic market there are also the constraints imposed by the environment of each foreign  country.

For example, 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. Binding negotiations may take place only with legal representatives of the legal entity. A company entering into negotiations with a Chinese company, signed legal documents establishing the right to do business as required. The formalities of the signature must also  be considered.

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 continue.  Such are the uncertainties which cannot be controlled in international business.

The more predominant the  uncontrollable international business  include political / legal forces; economic forces; competitive forces, level of technology, distribution geography and infrastructure and cultural forces. There is no certainty in international business.

  • Benj

    Then finding the right local partner who has intensive knowledge about market environment will help companies reduce the impact of uncontrollable factors.