International and Domestic Marketing Are Term Paper
- Length: 12 pages
- Sources: 20
- Subject: Business - Advertising
- Type: Term Paper
- Paper: #30330395
Excerpt from Term Paper :
Notwithstanding these similarities in the marketing function, there are some important differences that must also be considered. For example, even enormous countries in geographic and population terms that have relatively homogeneous populations may require more straightforward domestic marketing techniques and small city-states will require more elaborate international marketing techniques. For example, as Rao (2000) points out, "Given its strong tourism base and an open economy, Singapore has modern international retailing and other marketing institutions, making this country a truly global or international city, while India represents primarily a traditional, domestic marketing environment with considerable isolation from international markets" (p. 188).
According to Hills (1994), the ecological model shown in Figure 1 below indicates that there is no single, successful ongoing or steady-state strategy for small companies involved in international marketing initiatives. This author emphasizes that, "Standardization vs. local differentiation is the single most important issue in ongoing international marketing strategy. One may hypothesize that a maker of high-technology equipment and products for industrial customers has the best chance of pursuing a standardized strategy across a variety of cultures" (p. 256).
Figure 1. Ecological Model of Entrepreneurial Firms with International Marketing Component.
Source: Hills, 1994 at p. 257.
In addition, identifying appropriate countries for international marketing efforts is particularly important because of the difficulties inherent in attempting entry into all 192 nation states of the world today (Alon, 2004). In this regard, Reynolds, Simintiras and Diamantopoulos (2003) note that, "There are at least two levels of sampling in an international context: sampling of countries (and/or cultures) and sampling of the individual respondents from within each country or culture" (p. 80).
Based on the findings of these investigations, in many cases, companies may find that it is possible to identify other countries with sufficiently comparable demographic and congruent cultural compositions that existing domestic marketing efforts can be used in a wholesale fashion. According to Reynolds et al. (2003), "Between-country comparability can be achieved by matching the samples or by statistical control. Matching involves making the samples from different national/cultural groups as similar as possible in terms of their sociodemographic characteristics (such as age, education, income), and is generally achieved by nonprobability approaches (such as quota or judgmental sampling)" (p. 81). It should be pointed out, though, that it would make little sense for companies to attempt any type of aggressive international marketing efforts in those countries where the market potential simply does not exist, even if the between-country similarities are highly congruent. In this regard, Alon (2004) emphases that, "Companies, therefore, need to carefully choose where to expend their efforts and limited resources" (p. 25).
In their study, "The Internationalization Process of Small and Medium-Sized Enterprises: An Evaluation of Stage Theory," Gankema, Snuif and Zwart (2000) also conceptualize the extension of a company's marketing function from a domestic market to the international sphere as existing along a continuum that comprises five separate stages: (a) a domestic marketing stage, (b) a pre-export stage, - an experimental involvement stage, (d) an active involvement stage, and (e) a committed involvement stage. This model would suggest that rather than being completely different or separate marketing functions, international marketing represents an extension or expansion of a company's existing domestic marketing techniques.
Certainly, there are some profound challenges involved in international marketing efforts that may not be encountered in a domestic marketing setting that must be taken into account. For example, as Andrews, Chompusri, and Obe (2003) point out, significant cultural differences between a company's home country and the international arena may introduce some obstacles that are not easily overcome without careful preparation. In this regard, Andrews and his colleagues note that this "evident lack of understanding is well illustrated by the failure of expatriate marketing personnel to appreciate the strength and ability of indigenous competitors. Local firms are often the most dangerous competitors owing to their speed, knowledge and comprehension of their native environments" (p. 199).
Companies seeking to expand their domestic marketing function into the international sphere must therefore compete with companies that possess intimate knowledge concerning what customers want and need. According to Andrews et al., "Their inbred familiarity and experience with the local environment equips them with information which would otherwise prove both elusive and extremely costly to a foreign entrant, especially in a region where the indigenous traditions and practices are so different from those in the West" (2003 p. 199). This point is also made by Hou, Ichimura, Naya, Werin and Young (1995) who report that barriers to the international marketing function range from economic subsystems (e.g., Japan's keiretsu and domestic marketing system) to significant cultural and ethnic differences. These authors add that, "In some cases -- e.g. In China -property rights are not well defined and the 'rules of the games' are vague. In these circumstances, regionally attuned traders and investors have an advantage in minimizing the transactions costs necessary for business success" (p. 15).
As Hart and Tzokas (1999) emphasize, though, the majority of the research to date concerning the nature of marketing information and its relationship to business performance has been directed at the relationship between domestic markets and domestic marketing. These authors point out that, "In international marketing, it has been argued that the increased uncertainty posed by extending business to an unfamiliar market with unfamiliar environmental conditions intensifies the need for marketing information" (p. 63). Likewise, as Birley and Macmillan (1997) point out, some companies attempt to compete in domestic marketplaces that are highly controlled while also attempting to compete in international markets that are highly competitive, with some predictably mixed results.
For the purposes of gaining as much timely market data as possible, Styles and Ambler (2000) recommend that companies seeking to expand their domestic marketing operations into the international sphere should pay more attention at first to gathering market data experientially rather than relying solely on objective sources. Whatever approach is used, though, the same fundamental processes involved in the marketing function would appear to apply equally to domestic and international markets: identifying what customers want and need, and how and when they go about formulating a purchase decision.
Many companies in the United States today, it would seem, find themselves caught between an increasingly diverse domestic market and an international marketplace where opportunities abound. Indeed, it is becoming abundantly clear that even companies that did not anticipate expansion into the international marketplace must consider what is taking place in their respective markets and appreciate the impact of globalization on their operations today. In this regard, Whigham-Desir (1997) emphasizes that, "What businesses must understand is that soon they will no longer have a choice about whether to go international or not, because international is coming to them. We need to start thinking global because our neighborhood is the world. And the sooner you're ready, the more likely you'll win" (p. 62).
Likewise, as Alon (2004) points out, the traditional step-stage models of the international marketing expansion process that many companies experience described above are being increasingly challenged by a wide range of emerging patterns for small- to medium-sized enterprises (SMEs). In many cases, these companies are being forced into international marketing in response to international business influences, opportunities, threats, and imperatives: "Increasingly, the SMEs' competitors, customers, suppliers, and employees have come from overseas. Thus, an international orientation has become a necessity rather than an option for many companies" (Alon, 2004, p. 26). Taken together, the foregoing suggests that many companies will be compelled to expand their domestic marketing function into the international arena whether they want to or not, and country selection and market segmentation will assume new importance in the future.
The research showed that domestic marketing is generally defined as marketing in a company's home country while international marketing, of course, refers to marketing beyond a company's home borders. Notwithstanding this fundamental difference, though, the research also showed that domestic marketing in a large, multicultural country involved many of the same techniques as international marketing in many cases, while some international marketing techniques can be applied wholesale to countries with sufficiently comparable demographic and cultural compositions. The key element in any of these marketing approaches, though, was a basic recognition that marketing involves far more than just advertising, and segmenting a market according to what customers want and need and how and when they go about purchasing it remained an important ingredient in developing a successful marketing initiative in any environment. In the final analysis, it would appear reasonable to posit that domestic and international marketing are comparable, but require significantly different approaches in those cases where cultural diversity, governmental regulations and the competitive environment introduce new requirements for information and marketing techniques that will likely differ from those used in the domestic market.
Alon, Ilan. (2004). "International Market Selection for a Small Enterprise: A Case Study in International Entrepreneurship." SAM Advanced Management…