With the rise of globalisation comes the increasing demand for businesses to expand into international markets in order to stay competitive. This can create significant opportunities for organisations of all sizes, however it can also pose a great risk if approached in the wrong way.
With the rise of globalisation comes the increasing demand for businesses to expand into international markets in order to stay competitive. This can create significant opportunities for organisations of all sizes, however it can also pose a great risk if approached in the wrong way. Devising a culturally specific marketing strategy is the first step to successfully going global with a brand, but it certainly isn’t the only step.
Marketing across international borders requires a specialist approach and a sizeable investment, and adopting a ‘one size fits all’ attitude to a global strategy can be extremely damaging for an organisation’s brand and its assets. Before entering an international market, it’s essential to extensively research cultural and product demand, potential political and legal issues and market indicators. Often companies hire market research specialists from this area to undertake a full consultation before even considering a move into a new market.
Testing the waters before deploying full blown operations can save a lot of time and money in the long run, and allows a company to gain an understanding of the culture and customers’ need. Consumer behaviour differs greatly from country to country; for example, consumers in south-east Asia often prefer to shop daily from a fresh marketplace than to do a weekly shop in a supermarket chain.
Taking colloquialisms and dialects into consideration ahead of launching a brand in a new country is a key factor to successful international marketing. Several brands have even changed their trading names to appeal to different cultures. A prime example of this is global food giant McDonald’s, who celebrated its 40-year anniversary in Australia by changing several of their store names to ‘Maccas’ in line with the affectionate Australian nickname. Listening to customers’ values and preferences can greatly enhance a business’ fate in an overseas market.
Often multinational corporations are the first in line to enter an emerging market, which can have severe repercussions for local businesses that may not have the resources to compete. However, local businesses can have the upper hand when it comes to understanding the community, economy and cultural preferences far better than multinational companies.
Multinationals are fighting a new battle in the face of globalisation, and are no longer just facing competition from other multinationals, but also dominant local businesses. An example of this is when consumer goods giants Uniliver and Nestle SA entered the Chinese ice-cream market and after several years and significant investment, they owned just 7% and 5% of the market share. China Mengniu Dairy Co. Ltd owned a 14% share and Inner Mongolia Yili Industrial Group Co. Ltd owned 19% market share – both local Chinese corporations.
Even with significant resources, investment and research, it can be hard to compete against dominant local businesses that have a deep understanding of local economies and customs. Surveys have shown that 73% of executives at large multinational companies believe that local companies are more effective competitors than other multinationals in emerging markets.
An MBA Global at James Cook University (JCU) offers a contemporary alternative to the typical ‘sandstone’ programs. Designed with a global perspective in mind, it will harness an understanding of complex global markets to inform business practice.