The sequences of international marketing involvement do not necessarily coincide with managers’ thinking and strategic orientations. Often companies are led into international and even global markets by rapidly increasing consumer or customer demands, and planned or systematic thinking is secondary to “filling the next order”. But putting strategic thinking on the back burner has resulted in marketing failures for even the largest companies.
The consensus of the marketing experts and researchers in the area clearly shows some relatively distinctive approaches that seem to dominate systematic thinking in firms involved in international markets.
- Domestic market extension concept
- Multi-domestic market concept
- Global marketing concept
Differences in the complexity and sophistication of a company’s marketing activity depend on which orientation guides its operations. The ideas expressed in each systematic method reflect the philosophy that also should be associated with successive stages in the evolution of the international operations in a company.
The domestic company seeking sales extension of its domestic products into foreign markets illustrates this orientation to international marketing. It views its international operations as secondary to and an extension of its domestic operations; the primary motive is to market excess domestic production. Domestic business is its priority, and foreign sales are seen as a profitable extension of domestic operations. Even though foreign markets may be constantly sought after, the firm’s orientation remains basically domestic. Its attitude towards international sales is typified by the belief that if it sells in a foreign city, it will sell anywhere else in the world. If any efforts are made to adapt the marketing mix to foreign markets the firm’s line up is to market to foreign customers in the same manner in which the company markets to domestic customers. It seeks markets where demand is similar to the home market and its domestic product will be acceptable. This domestic market extension strategy can be very profitable; large and small exporting companies approach international marketing from this method. Firms with this marketing approach are classified as ethnocentric.
Multi domestic Market Orientation:
Once a company recognizes the importance of differences in overseas markets and the importance of offshore business to the organization, its orientation towards international business may shift to a multi-domestic market strategy. A company guided by this concept has a strong sense that country markets are vastly different and they may be, depending on the product and that market success require an almost independent program for each country. Firms with this system, market on a country by country basis, with separate marketing methods for each country.
Subsidiaries operate independent of one another in establishing marketing objectives and plans, and the domestic market and each of the country markets have separate marketing mixes with little interaction among them. Products are adapted for each market with little coordination with other country markets; advertising campaigns are localized as are the pricing and distribution decisions. A company with this concept does not look for similarity among elements of the marketing mix that might respond to standardized; rather it aims for adaptation to local country markets. Control is typically decentralized to reflect the belief that the uniqueness of each market requires local marketing input and control. Firms with this orientation would be classified as polycentric.
Global Market orientation:
A company guided by the global marketing orientation or philosophy is generally referred to as a global company; its marketing activity is global, and its market coverage is the world. A company employing a global marketing approach makes efforts for efficiencies developing a standardized marketing mix applicable across boundaries. Markets are still segmented, but country or region is considered side by side with a variety of other segmentation variables, such as consumer demographics (age, income, language, group), usage trends and legal hurdles. The world as a whole is viewed as the market, and the firm develops a global marketing strategy. The global marketing company would fit the geocentric classifications. Coca-Cola Company, Ford Motor Company, and Intel are among the companies that can be described as global companies.
A company’s marketing plan has a standardized product and country specific advertising, or has a standardized theme in all countries with country or culture specific appeal to unique market characteristics, or has a standardized brand or image but has adapted products to meet specific country needs and so on. In other words the marketing, planning and marketing mix are approached from a global perspective, and where ever feasible in the marketing mix, efficiencies of standardization are sought. A way of looking at the market for commonalities that can be standardized across regions or county market groups. And a global mindset can work alike for the largest companies and small companies that are aggressive towards learning.
This means operating as if all the country markets in a company’s scope of operations (including the domestic market) were approachable as a single global market and standardize the marketing mix where ever it is culturally feasible and cost effective. Depending on the product and market, other orientations may make more marketing sense.