A. Pricing for International Markets 5
B. International Marketing Channels 6
C. Products and Services for Customers 8
D. Cultural Dynamics in Assessing Global Markets 10
4.0 Summary and Opinions of Influential Cultural Factors 11
5.0 Conclusion 13 Work Sited 15
Highlighted Points
The purposes of practicing and aiming for international marketing are to understand how and why:
- cultural diversity has been known to influence international marketing in pricing and contractual agreements
- analyzing the roots of culture to integrate it into a global marketing plan enhances coherent business strategies for successful worldwide marketing
- the references listed at the end of the this report have been chosen because this topic is abstract where cultures and their social evolutionary changes are perceived differently by marketers and researchers over time, hence the age of the references
- the reference list is mainly for sourcing and information only; no direct quotes or lines have been borrowed, as the author preferred to elaborate on source material only and state his own perspective and opinions based on experience as will be indicated under Section 3.0 later in this report
- cultures change or remain fixated cannot be fully confirmed, but only speculated since some cultures and countries are willing to share only limited information with foreign countries and tourists
- unless tourists travel frequently and have both lived and work in foreign countries, it can be difficult to understand the marketing end of cultural practices
- Introduction
The most interesting concept about international marketing is analyzing the needs of various target audiences around the world and how they receive certain brands. The matter does not only fall upon how to present products and associated pricing themselves, but also prior understanding to the business, social and political cultures of international marketing. For global marketing to be successful and reaching out to foreign markets, understanding the factors influencing the product distribution process is a prerequisite. Every country and culture houses its own policies and procedures and wishes to retain its norm of market channelling to preserve and recognize its global marketing stance. Each culture observes its contribution to world marketing in its own unique demonstration (Kotabe & Helsen, 2004). Some constantly practice their adapted marketing procedures to reflect and display their social and cultural aspects. Hence it is equally important for any global marketer to study intensely the cultural backgrounds to acquire affirmative international relations.
The differences even between already marketed and established cultural communities provide growth attributed to changes of global economic growth. What would happen if each culture regressed and no longer required the products and services of one another? Without cultural understanding, the rate of economic growth would nearly come to a grinding halt, as production, distribution and consumption would be confined to regional territories only. It cannot be speculated how cultural regression would impact the global market. In fact, it may be impossible because culture can be as diverse as the regions around the world housing different climates, landscaping features and resources. Not one country has really historically survived economically, at least without any financial limitations. The details describing the impact and importance of cultural differences on global marketing shall be outlined.
2.0 International Influential Factors on Global Marketing
The following influential factors shall be explained as part of the global trading market, and how they are influenced by cultural and social diversity:
A. Pricing for International Markets
B. International Marketing Channels
C. Products and Services for Customers
D. Cultural Dynamics in Assessing Global Markets
Each of the first three aforementioned has been greatly shaped and destined by Factor (D), and shall describe how they are invariably connected with one another.
A. Pricing for International Markets
Because of foreign exchange rate differences among countries, the pricing varies with common influences upon the decisions of pricing, approaches to global and international pricing, and grey markets. Another important influence not extensively mentioned by economists is quality and indigenous productivity. Beneficial products may not be deemed suitable in other cultures in ways western cultures observe them. The same can be argues about affordability of products between cultures. The exporting business has been established to seemingly stabilize and offset destination market prices. However, nominal exchange rates do not always save market sharing and thus entails more risk. Especially when companies plan to export products, they often neglect the costs of manufacturing and distributing their products. Even if cost agreements can be reached between foreign parties, productivity rates within foreign countries influence pricing because of fluctuations (Rauch, 2005). For example companies learned to benefit from the decline of the American dollar since the economic crisis in 2009. While the lowered rate may benefit foreign countries, importing to the US would be expensive but at reduced rates to foreign cultures. But rates constantly fluctuate over the long-term and evidently affect company decisions to market in other countries.
Since production is considered cheap in foreign countries, these countries may only provide products and the quality as their economy would allow. Most perceive lower volume products having the ability for lower production costs, but larger products are also greatly influenced by costs if produces in foreign countries. Vehicle manufactures constructed on foreign soil to accommodate local buyers may suffer financial losses if not priced to reflect economic changes within the parent market (initializing country producing units for export). Sometimes rates need to be drastically reduced in order for international consumers willing to pay for exported products (Deari, Viktoria, & Lopez, 1988). When prices cannot be met, buyers need to take their business to other sources with affordable prices. The issue to distribute products must be filtered through government policy and taxation that may also determine product affordability. Transference of products may fall at the mercy of cultural diversity because cultures prefer to consult with companies influenced by similar cultures of social and political similarities.
B. International Marketing Channels
Product availability and accessibility need to be associated with the proper marketing channels toward global markets. Marketers specializing in international strategy and relations are usually faced with critical challenges of establishing marketing campaigns. They may spend years of studying multicultural policies. However, their studies are usually confined within multicultural countries in North America, for example. Preparing for international marketing is actually an immense and intensified step. Some migrating cultures may eventually adapt to North American marketing policies while marketing strategy preparation for foreign countries becomes forgotten. Therefore, marketing strategists require knowledge and understanding of cultural affairs in countries intended to build international relations if they plan to open business channels.
Only when the background of international markets is unfolded may the delivery of products may be undertaken. The barriers of political and social cultures would be lowered, leaving differences set aside for marketing negotiation. Regardless of the country or market in question, products and services still need to traverse through a distribution channel. They include the handling of products and the passage of ownership, followed by negotiations between the buyers and sellers. When marketing exchanges occur between countries, factoring cultural exchanges are mandatory. Therefore providing a middleperson possessing the characteristics of the market and cultural exchanges can make a difference. The middleperson’s responsibilities reflect on the competition and the characteristics of global marketing resulting in cultural factors (Cateora, Gilly, & Graham, 2005). When difficulties arise between cultural differences, hiring a middleperson to compromise negotiations is a reliable tool to bring both parties on the negotiating table to understand each other cultural as well as corporately. Future structural changes to a market would benefit only when diverse cultures can come to an agreement.
Throughout the short term of distribution, each country has its own industrial policies network in which they have choices on how to channel their productivity. Some cultures are very rigid in altering their policies or acquiring new ones. Even for a middleperson or a talented marketer of international relations can find complexities to infiltrate multiple distribution layers. Hence, the assumption of domestic practice to operate in equally in foreign countries shall be eliminated and evolve to thought patterns of foreign cultures and policies. Alternative distribution channels need to be sought by capturing the size patterns and direct marketing. Once these are captured, finding solutions to resistance to changes are the next step.
The advantage of multicultural countries is respective cultural communities are enabled to import specialized products through channels which otherwise cannot be achieved by the parent country. For example exotic food products may only be imported into North America if a local cultural community is willing to promote their distribution. Allowing import opens up channels for product importation from other countries. Renowned cultures from Italy and India have speciality products only provided by their cultures and prefer distribution of their products if they are the sole marketers and handlers of such products. The reason being is because they have their own respective productivity protocols to prohibit alterations of their products. When it comes to product authenticity, foreign cultures wish to achieve sole privileges to imported products and establish their own channels. Surely they must seek approval by customs and international marketing affair boards, but for the purposes of retain popular trading reputation, the importing country requires accommodation to diverse cultures residing on their soil.
C. Products and Services for Customers
When preparing any type of global market, be it importing or exporting, a detailed plan with the right personnel needs to be in place. Simply handing out products without understanding the needs and taste of particular cultures in question would not favour cultures receiving products. One factor to solve product reception issue is to modify products based on the needs of foreign countries targeted for sales. Marketers need to carefully analyze the needs of the international market when developing products. Not only are some products unsuitable to foreign countries, but may not be allowed by foreign customs. Sometimes certain product components or ingredients cannot be allowed through custom barriers because they may be prohibited to enter the country. To establish a multitude of sales branches externally, companies may still promote their own local products, but shall predominantly cater to the policies of the foreign market. Companies may then profit significantly because products are manufactured and accepted according to various cultural preferences.
Another factor to ensure products to customers is the pricing. One fallacy flooding international marketing is a country’s financial status, although pricing is also reflected upon culture. Some cultures regard financing and affordability as a purchasing and deciding factor. Cultures in underdeveloped countries require product modification for affordability. Modifications are also practiced to reflect the cultural attitudes. But other cultures prefer to regard acquiring the products as mandatory where affordability is not a factor. These cultures prefer the quality and the necessity of the product instead of thinking about the extravagance of the products. This is why advertising has to be carefully fabricated to appeal to diverse cultures in order to develop emotional anticipation and the benefits of the products when pricing becomes a factor.
Legal issues and policies usually become intertwined in the global marketing mix which influences product promotion by cultural diversity. Each country practices its own advertising and promotional activities. Product consumption is often influenced by cultures who regulate a country’s standardized global option in receiving goods and services (Osland & Taylor, 2001). They also decide who they shall export their products to or provide the privilege of who shall sell products in foreign countries on their behalf. For example, if a start-up business in Australia plans to import products from South East Asia, the business planners must experience a sophisticated careening process to abide by policies put forward by South East Asia. The political and social policies in South East Asia do differ greatly in Australia in spite of their close proximity and frequent trade of other products because of cultural differences. However, with the initiation of importing products native only to South East Asia, an entirely new foreign trade policy needs to be established because of the idea of importing foreign products from another country. Trade routes, transport of products and customs policies may need to be practiced in order to favour South East Asian policy and how exporting their own products would benefit them.
D. Cultural Dynamics in Assessing Global Markets
For all aspects of international marketing, for some, cultural references are the most deciding factors to formulate business relations between countries. What international marketers learn to appreciate is how cultures change and react to innovative ideas. Customer acceptance normally varies across cultures. One important feature is to be aware of the extent to which cultures learn and borrow ideas from other cultures. Most cultures prefer to retain their integrity and marketing principles. It is then left up to marketing strategists to be a party of marketing products from one culture to another (Srinivas, 2010). Most cultures outside of North America are known to be resistant to change, although trading and foreign policies have been altered to open the gates of global marketing in the last few years and welcome other cultures. Yet many cultures change gradually if the products offered to them are suitable and beneficial to their needs. Still they prefer not to change their cultural practices to obtain what they necessarily need.
In order for world marketers to be accepted by diverse cultures, they must be a student of cultures. It is already understood how culture impacts several marketing activities such as pricing, promotion, distribution channels, and product representation. The marketer shall use cultural knowledge to seek opportunities to standardize a marketing program. If a marketer is well traveled and has developed many contacts within cultures, this can be a stepping-stone in closing cultural gaps toward successful international marketing campaigns. Learning to speak the language may impress upon cultures in question providing better intuition for international relations. Learning new languages has actually become mandatory for positions in foreign trade affairs.
A helpful tool to enhance cultural relations and exchanges is to understand exactly what foreign cultures want and to be shown how to acquire it. This can be a major element in international market sharing. Marketers’ efforts and economic conditions are analyzed by cultures and gain the confidence of marketers from other countries and practicing policies not familiar with potential cultures. Marketers can then be consistent in adjusting to the demands of a newly acquired international partner. At the same time the marketers becomes their own agents of change in global marketing and cultural changes. Cultural acceptance steps forward when presentation of something new on the market is introduced. Both sides of the negotiating table come to a beneficial conclusion when changes in products to reflect cultural needs. Marketers become recognized and remembered for influencing cultural changes as a result of meeting cultural demands.
3.0 Summary and Opinions of Influential Cultural Factors
A. Pricing for International Markets
The pricing of products in other countries does not only vary with countries but also diverse cultures within countries. Prior to accepting products from foreign manufacturers, each internal culture may need to reach an agreement. If an agreement between local cultures cannot be reached, chances the country in question may not be willing to enter into a global market. For some countries and cultures, negotiations to welcome new countries into global plan can take years. Others wish to only purchase products instead of entering the global business stream to test the market for themselves.
B. International Marketing Channels
When a business plan is formulated in one country and has the potential to expand worldwide, sometimes a business plan has to be drastically altered to meets the cultural and political requirements of a target audience in other countries. For example, Market America, a product brokerage firm established in North Carolina, USA, has now established partnerships in Canada, Australia, Hong Kong, Tawain, and The Philippines. These partnerships do not form overnight or all at once. Market America has been around for 23 years and its partner list is still limited because not every country accepts this type of marketing or sees the benefits for its cultural citizens. Yet, although The USA has impressed upon its copyrighted career manual plan that must be followed, each of these partnered countries have a slightly revised copyrighted plan which suits them for their own needs.
C. Products and Services for Customers
Although a base country with a global plan has a vast array of products, they may not all be available or permitted in other countries. Some products must be channelled through customs before acceptance. A good practice would be to source a vast array of products for the base country instead of only a single product line. The reason being is in case only a limited product line is permitted in foreign countries, these countries have the opportunity to flourish with these products permitted.
D. Cultural Dynamics in Assessing Global Markets
Reading and studying cultures from printed material does not practically help understand cultural diversity. It may only help prepare an introductory greeting to other cultures. Otherwise speaking languages and travelling to visit other cultures is an expedient method to observe the way of life from the marketer’s perspective. This can also be achieved by dispatching an experienced traveller to a foreign country with marketing background. Visiting a country leisurely does not assist in assessing global markets as most travellers prefer only to frequent certain destinations. But for marketing spending time with cultures in interim locations are more practical for marketing scholars to understand how and why cultures function the way they do.
4.0 Conclusion
Changes in marketing and cultural diversity are often met with resistance as most think of fear and challenge. However, if given devoted time and efforts to understand how cultural societies function, global marketers then conclude that many similarities override the differences. Unfortunately too many view the differences that can either bring success or failure to international relations. But it shall be understood that global marketing and cultural differences cannot be separated, where each country and their respective cultures become interdependent. It is an expedient method to form a conglomerate of marketing around the world to equivocate all countries in terms of needs and resources to flourish (Bala & Long, 2005). Global marketing with the talent of possessing cultural understanding can help understand why people globally function the way they do, domestically and internationally.
The products are created by a visionary from distant territory with personal tastes and may only be observed with the success of proper international relations and cultural diversity. Global marketing has proven to present more than bringing cultures together, but also to perceive how particular products and practices appeal to other cultures and how existing products may benefit other cultures. However, the purpose of studying other cultures for global marketing is not only to set aside differences, as these differences are the foundation of cultural understanding. The purpose is to also discern the similarities among cultures to undergo stability in the global market and to continue research to find solutions to increasing issues to diverse protocols.
Work Cited
Kotabe, M. & Helsen, K. “Global Marketing Management”. 3rd edition, John Wiley & Sons, 2004.
Bala, V. & Long, N.G. “International Trade and Cultural Diversity with Preference Selection”. European Journal of Political Economy. 19 June 2005.
Cateora, P.R., Gilly, M.C., & Graham, J.L. “International Marketing”. 14th Edition. New York: Mcgraw-Hill Irwin, 2009.
Srinivas. “Cultural Differences and Global Marketing”. World Class Tutor Vista. 06 December 2010.
Rauch, J.E., “Neckties In the Tropics: A Model of International and Cultural Diversity”. National Bureau of Economic Diversity. December 2005.
Deari, H., Viktoria, K. & Lopez, P. “Effects of Cultural Differences in International Business and Price Negotiations”. International Marketing Strategy. 02 September 1988.
Osland, G. & Taylor, C. “Selecting International Modes of Entry and Expansion”. Marketing Intelligent & Planning. 27 February 2001.
