Going for Global Markets

Company Objectives and resources:

Evaluation of a company’s objectives and resources is crucial in all stages of planning for international operations. Each new market can require a complete evaluation, including existing commitments, relative to the parent’s company’s objectives and resources. As markets grow increasingly competitive, as companies find new opportunities and as the cost of entering foreign markets increases, companies need such planning.

Defining objectives clarifies the orientation of the domestic and international divisions, permitting consistent policies. The lack of well defined objectives has found companies rushing into promising foreign markets only to find activities that conflict with or detract from the companies’ primary objectives.

Foreign market opportunities do not always, parallel corporate objectives, it may be necessary to change the objectives alter the scale of international plans, or abandon them. One market may offer immediate profit but have a poor long run outlook, while another may offer the reverse. Only when corporate objectives are clear can such differences be reconciled effectively.

International commitment:

The planning approach taken by an international firm affects the degree of internationalization to which management is philosophically committed. Such commitment affects the specific international strategies and decisions of the firm. After company objectives have been identified, management needs to determine whether it is prepared to make the level of commitment required for successful international operations – commitment in terms of dollars to be invested, personnel for managing the international organization, and determination to stay in the market long enough to realize a return on these investments.

The degree of commitment to an international marketing cause reflects the extent of a company’s involvement. A Company uncertain of its prospects is likely to enter a market timidly, using inefficient marketing methods, channels, or organizational forms, thus setting the stage for the failure of a venture that might have succeeded with full commitment and support by the parent company. Any long term marketing plan should be fully supported by senior management and have realistic time goals set for sales growth. Occasionally, casual market entry is successful but more often than not, market success requires long term commitment.

The planning process:

Whether a company is marketing in several countries or is entering a foreign market for the first time, planning is essential to success. The first time foreign marketer must decide what products to develop in which markets, and with what level of resource commitment. For the company that is already committed, the key decisions involve allocating effort and resources among countries and produce (s), deciding on new markets to develop or old ones to withdraw from, and determining which products to develop or drop. Guidelines and systematic procedures are necessary for evaluating international opportunities and risks and for developing strategies plans to take advantage of such opportunities.

Whether a company is new to international marketing or heavily involved an evaluation of potential markets is the first step in the planning process. A critical first step in the international planning process is deciding in which existing country market to make a market investment. A company’s strengths and weaknesses products, philosophies, and objectives must be matched with a country’s constraining factors and market potential. Emerging markets pose special problems because many have inadequate marketing infrastructures, distribution channels are underdeveloped and income level distribution vary among countries.

The next step is to establish screening criteria against which prospective countries can be evaluated. It is important to determine the reasons for entering a foreign market and the returns expected from such an investment. A company’s commitment to international business and its objectives for going international are important in establishing evaluation criteria.

Once evaluation criteria are set, a complete analysis of the environment within which a company plans to operate is made.  Although an understanding of uncontrollable environments is important in domestic market planning, the task is more complex in foreign marketing because each country under consideration presents the foreign marketer with a different set of unfamiliar environmental constraints. This stage in the planning process, more than anything else, distinguishes international from domestic marketing planning.

The results provide the marketer with the basic information necessary to evaluate the potential of a proposed country market identify problems that would eliminate the country from further consideration. Identify environmental elements that need further analysis, determine which part of the marketing mix can be standardized and how the marketing mix can be adapted to meet local market needs, and develop and implement a marketing action plan.

With the analysis in Phase I completed, the decision maker faces the more specific task of selecting country target markets and segments, identifying problems and opportunities in these markets and beginning the process of creating marketing programs.