- INFORMATION SOURCES
The most important causes of failure in the international market are insufficient preparation and information.
Marketing research is "a systematic and objective approach taken in the development and acquisition of information for the decision-making process of marketing management."
The investigation must be the result of a planned and organized activity. The accumulation of information is a prerequisite for marketing research.
There are two basic sources for obtaining information: Internal and External.
INTERNAL.
Many companies build extensive internal databases: collections of information obtained from data sources within the company. Marketing managers access this information to identify marketing opportunities and problems, plan programs, and evaluate performance.
Internal information can come from many sources. The accounting department prepares financial statements and maintains detailed records of sales, costs, and cash flows. The manufacturing area reports on its production schedules, shipments and inventories. The sales force reports on the reactions of resellers and the activities of competitors. The marketing department provides demographic, psychographic, and shopping behavior information for customers, and the customer service department maintains records of customer satisfaction and service issues. Investigations conducted in one department could generate useful information for several other departments.
Access to internal databases is usually faster and cheaper than other sources of information, but they present some problems. Since the internal information was collected for other purposes, it could be incomplete or in the wrong form for marketing decisions.
EXTERNAL.
When the information we have within the company (internal sources of information) is not enough for marketing decisions, we then turn to external sources of information.
To be able to access this type of information we need to determine what information is needed, develop a plan to obtain it efficiently, and present the plan to marketing management. The plan outlines the existing data sources and the methods that will be used to obtain new data.
External sources of information can be in two ways:
- Primary data Secondary data
Secondary data.
It is data that is already available, because it was collected for some purpose other than the current problem.
The first thing researchers usually do is collect secondary data. The company's internal database is a good starting point. However, the company can also take advantage of a wide assortment of external information sources.
The secondary investigation process provides an outline of the steps to follow:
1. Understand the need for information
2. Evaluate the benefits of the research
3. Determine the objectives of the investigation
4. Determine the information requirements
5. Identify data sources
6. Evaluate the source, in quality and compatibility
7. Data collection
8. Interpret and analyze the data
9. Present research results
The main sources are the various governments (federal, state, municipal and local), newspapers and magazines, the reports available to the public from private groups such as foundations, publishers, trade associations, unions and companies. The main secondary data sources are:
- U.S. government. This government has the largest variety of data available. Many collected by the Department of Commerce, Depto. Department of Agriculture, Department of State, Department of the Treasury and US embassies abroad. In general, this information indicates both micro and macro aspects, and offers specific information services. Other governments. Many countries have a wide range of international and domestic trade data available. The data are published only in the national country and in native languages, but are available in embassies and consulates. International organizations. International organizations provide useful data for the researcher, such as: The Statistical Yearbook produced by the UN, which contains data on international trade,exports and imports by country; The World Atlas, by the World Bank; The International Monetary Fund, among others. Service organizations. They are organizations that provide information that includes banks, accounting firms, freight forwarders, airlines, and international trade consultants. Trade associations. Associations such as world trade clubs and national and international chambers of commerce provide valuable information on local markets. They frequently keep files on international trade flows and trends. Directories and newsletters. Large number of industry directories that are available locally, nationally and internationally.They serve to identify companies and provide very general critical information and some information about the company's products. The newsletters are dedicated to specific international issues such as international trade finance and customs news, they are delivered to very small audiences. Databases. There are many electronic databases that provide international marketing information, they are provided by various means, many of these information services are available for a subscription fee. Other companies. Companies appear to be more open about their international marketing activities than about the national one.They are supplied to very small audiences. Databases. There are many electronic databases that provide international marketing information, they are provided by various means, many of these information services are available for a subscription fee. Other companies. Companies appear to be more open about their international marketing activities than about the national one.They are supplied to very small audiences. Databases. There are many electronic databases that provide international marketing information, they are provided by various means, many of these information services are available for a subscription fee. Other companies. Companies appear to be more open about their international marketing activities than about the national one.
Secondary data can generally be obtained faster and at lower cost than primary data. Additionally, secondary sources sometimes provide data that an individual company could not collect on its own. Also, the necessary information may not exist; Researchers can seldom get all the data they need from secondary sources.
Primary data.
It is that information that is obtained for a specific purpose. Good information is needed to make good decisions. Researchers must take great care when collecting primary data to ensure that it is relevant, accurate, current, and objective.
Three research approaches are used to obtain the primary data: observation, surveys, and experimentation.
- Observation. It is the obtaining of primary data by observing relevant people, actions and situations. Observational research can be used to obtain information that people cannot or do not want to provide. In some cases, observation may be the only way to get the required information. In contrast, some things simply cannot be observed, such as emotions, attitudes and motives, or private behavior. Because of these limitations, researchers often use observation in conjunction with other information gathering methods. Surveys Survey research is obtaining primary data by asking questions about your knowledge, attitudes, preferences, and purchasing behavior. Depending on the design of the survey,it could provide information faster and at a lower cost than observational or experimental research. Although sometimes people are reluctant to speak to unknown interviewers. Experimentation. It is the obtaining of primary data by selecting equivalent groups of subjects, applying different treatments, controlling related factors and observing the differences in the responses. Experimental research tries to explain cause and effect relationships.controlling for related factors and observing differences in responses. Experimental research tries to explain cause and effect relationships.controlling for related factors and observing differences in responses. Experimental research tries to explain cause and effect relationships.
- INTERNATIONAL MARKETING
It is marketing applied to other cultures or to different realities outside our environment, and therefore it must take into account multiple factors in the development and introduction of products.
The producer must try to design and produce consumer goods that meet the consumer's needs. In order to discover what these are, the knowledge of marketing is used.
Marketing has many more functions that must be fulfilled before the production process begins; These include market research and the design, development and testing of the final product.
- INTERNATIONAL TRADE
International trade, exchange of goods and services between countries. Goods can be defined as final products, intermediate products necessary for the production of the final products, or raw materials and agricultural products. International trade allows a country to specialize in the production of the goods it manufactures more efficiently and at lower costs. Trade also allows a state to consume more than it could if it produced under conditions of autarky. Finally, international trade increases the potential market for the goods produced by a certain economy, and characterizes the relations between countries, allowing to measure the strength of their respective economies.
The importance of international trade varies according to each national economy. Certain countries only export goods in order to increase their domestic market or to help economically some depressed sectors of their economy. Others depend on international trade for foreign exchange and goods to meet domestic demand. In recent years, international trade has been considered as a means to promote the growth of a certain economy; less developed countries and international organizations are increasingly promoting this pattern of trade.
- DIFFERENCE BETWEEN INTERNATIONAL MARKETING AND INTERNATIONAL TRADE
The difference between one and the other is that international trade only includes the exchange of products and services between countries, their restrictions and tariff barriers; While international marketing includes the marketing mix, it goes beyond the simple exchange of products, it involves analyzing the tastes of consumers, it aims to establish their needs and desires and influence their behavior so that they want to acquire existing goods, so that different techniques are developed aimed at persuading consumers to purchase a certain product. Marketing activity includes planning, organizing, directing and controlling decision-making on product lines, prices, promotion, and after-sales services.In these areas, marketing is essential; in others, such as in the development of new product lines, it plays an advisory role. In addition, it is responsible for the physical distribution of the products, establishes the distribution channels to be used and supervises the transport of goods from the factory to the warehouse, and from there, to the final point of sale.
- BASIC DECISIONS OF INTERNATIONAL MARKETING
Before, American companies paid very little attention to international trade. Today, the situation is very different. Products developed in one country are finding enthusiastic acceptance in other countries. Today's global competition is intensifying. The company that stays in its country, to play it safe, could not only lose the opportunity to enter other markets, but also runs the risk of losing its national market.
A company faces six important decisions for international marketing:
1. Analyze the international marketing environment.
2. Decide whether to go outside.
3. Decide which markets to enter.
4. Decide how to enter the market.
5. Decide on the marketing program.
6. Decide on the marketing organization.
1. ANALYZE THE INTERNATIONAL MARKETING ENVIRONMENT
Before deciding whether to sell abroad, the company must thoroughly understand the global marketing environment.
Within the international trade system: the company will face various trade restrictions. The most common are the tariff (a tax), the quota (sets limits on the quantity of imported goods), embargoes (totally prohibits some types of imports), exchange controls (limits the amount of money that can be converted to foreign currency, and non-tariff trade barriers (prejudices and restrictive rules for certain products).
There are also forces that contribute to trade between countries such as free trade zones or economic communities (groups of countries that have organized to achieve common goals in order to regulate international trade).
Each country has unique characteristics that must be understood:
The economic environment.
There are two economic factors that reflect the attractiveness of a country as a market: The industrial structure and its income distribution.
- The country's industrial structure shapes its needs for products and services, income levels, and employment levels. The four types of industrial structures would be: subsistence economies (the vast majority of people are engaged in simple agriculture), commodity export economies (they are rich because they have one or several natural resources, but are poor in other ways), economies in the process of industrialization (manufacturing represents between 10 and 20% of the country's economy), and industrial economies (they are large exporters of manufactured goods and investment funds). The country's income distribution can be found between five: (1) very low family income; (2) mostly low household income; (3) very low / very high household income; (4) low / middle / high household income;(5) family income mostly average.
The legal-political environment.
At least four legal-political factors should be studied:
- The attitude towards international purchases. Some countries are very welcoming to foreign companies, but others are quite hostile. Political stability. Governments change. The assets of the foreign company can be seized, its monetary possessions blocked or new quotas for imports or tariffs can be set. The changing situation will affect the way business and financial affairs are handled. The monetary regulations. Most of the international trade is done with monetary transactions. However, many countries have very little liquidity, which has led to counter-trade, which takes various forms: swap (direct exchange of goods and services), compensation (the equipment seller accepts payment with the resulting products),counter-acquisition (the seller receives the full payment in money, but agrees to spend part of that money in the country, in a specified time). The government bureaucracy. The extent to which the host government helps foreign companies through efficient customs management, good market information, etc.
The cultural environment.
Each country has its own customs, norms and taboos. The marketer should study consumer thinking, as well as their use of certain products, before planning a marketing program.
2. THE DECISION TO GO ABROAD
Not all companies must venture into foreign markets to survive, companies operating in global industries must think and act globally.
There are several factors that could lead a company into the international arena. Global competitors could attack the company's domestic market, offering higher-quality products or lower prices. The company could find foreign markets that offer the possibility of obtaining higher profits. The company's domestic market may be shrinking.
3. THE DECISION TO ENTER CERTAIN MARKETS
Before going abroad, the company should try to define its marketing objectives and policies: decide what sales volume it wants to achieve abroad; choose how many countries will make up your market; decide what types of country you will enter.
4. THE DECISION ON HOW TO ENTER THE MARKET
When the company has decided that it will sell in another country, it must determine the best way to enter it. Your options are: exports, joint ventures, and direct investment.
The exports.
You can passively export your surpluses from time to time, or you can take an active stance to expand. The company produces all its goods in its country and can modify them for the export market or not.
- Indirect exports. Working through independent international intermediaries for commercialization. Direct exports. Managing your own exports.
Joint ventures.
It means joining foreign companies to produce or market products or services. The company joins a partner to sell or market abroad. There are four types of joint ventures:
- Licenses. It allows the manufacturer to enter international markets without complications. The company signs a contract with a licensee in a foreign market. The licensee, in exchange for a fee or royalty, acquires the right to use the production process, the trademark, the patent, the trade secret or any other value of the company. Contract production. The company hires manufacturers from the foreign market to manufacture its product or offer its service. The contract for the administration. The national company provides the administration and the technique to the foreign company that contributes the capital. Joint ventures. Those where a company joins forces with foreign investors to establish a local company, sharing with them the domain and control of the business.
Direct investment.
It is the development of a group or production facilities in the foreign country.
5. HOW TO CHOOSE THE PROGRAM FOR A GLOBAL MARKETING
A decision must be made as to whether or not the marketing mixes will be adapted to local conditions. A standard marketing mix can be used for everyone (thus reducing production, distribution, marketing and administration costs). Or the tailored marketing mix in which the producer adapts the elements of the marketing mix to each of the markets it is targeting (generating higher costs, but in the hope of gaining a greater share of the market, thus as performance).
The product.
There are three strategies to adapt products to a foreign market:
- The simple extension of the product. The product is sold on the foreign market without any change. The adaptation of the product. It involves making changes to the product so that it meets local conditions or wishes. The invention of the product. It consists of creating something new for the foreign market.
The promotion.
Companies can adopt the same promotion strategy that they used in the national market or they can change it for each local market. Other companies adapt their advertising messages to local markets. The means must also be adapted, due to availability.
The price.
Businesses also have a lot of problems when you set their international prices. It could set a uniform price for everyone, but it could be very high for poor countries and very high for the rich. You could charge what the consumers in each country bear, but this strategy would not take into account the real costs between countries. The company could apply a standard surcharge on its costs everywhere, but stay out of the competitor's market.
If the company charges the subsidiary too little, it can be accused of dumping. International companies try to avoid gray markets, raising prices for distributors who have lower costs and eliminating those who cheat or alter the product in different countries.
Distribution channels.
The international company can adopt the vision of a whole channel when faced with the problem of product distribution for end consumers.
Country distribution channels vary greatly from one country to another. There are the differences in the number and type of intermediaries that cover each foreign market. Another difference lies in the size and character of the overseas retail units. If income is low, people buy small amounts every day.
6. HOW TO CHOOSE THE TYPE OF ORGANIZATION FOR WORLDWIDE MARKETING
Companies manage their international marketing activities in at least three ways:
The export department.
The company enters the international market simply by sending its goods abroad. If its international sales increase, the company forms an export department, with a sales manager and a few assistants.
The international division.
A company can export to one country, license another, form a joint venture in a third, and establish a subsidiary in a fourth. An international division or subsidiary will then be created to handle all of your international activities.
The global organization.
They stop considering themselves national marketers that sell abroad and begin to see themselves as global marketers. They report directly to the top executive or executive committee of the organization and not to the director of the international division.
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