Marketing Online

A company that masters only its domestic market will eventually lose
it. Strong foreign competitors will inevitably come in and challenge
your company. It is now business without borders.

 

 

 

One of the best growth paths for a business is to go regional or
global. But most companies hesitate to go abroad. They see obstacles
and risks stemming from tariffs, language differences, cultural differences,
devaluation and exchange control risk, and bribery.
But there are also gains. By going abroad, companies actually
diversify their risks by not depending on only one country’s market.

 

In fact, the market for their products and services may be mature at
home and growing abroad. Furthermore, these companies will be
stimulated to improve their products as they compete in new situations
against new competitors.
But companies must adapt their products and marketing mix
when they go abroad. Asea Brown Boveri (ABB) uses the slogan:
“We are a global firm local everywhere.” Royal Ahold, the giant
Dutch food retailer, has the brand philosophy, “Everything the customer
sees we localize. Everything they don’t see, we globalize.”
When naming its new products, a company must make sure its
name will travel internationally. Chevrolet named its new car Nova,
not realizing that in Latin America no va means “doesn’t go.”
Companies usually evolve globally through five stages: (1) passively
exporting, (2) actively exporting using distributors, (3) opening
sales offices abroad, (4) setting up factories abroad, and (5)
establishing regional headquarters abroad.
In expanding abroad, companies tend to exercise loose administrative
controls initially, preferring to put their faith in their entrepreneurial
country managers. Later they start imposing some
strategic controls aimed at standardizing global planning and decision
processes.
Companies must choose foreign distributors carefully. They
need to define distributor performance very clearly and be aware of
host country laws regarding distributor treatment. The distributors
need to be given adequate incentives to grow the market as
fast as possible.
Companies succeed best when they recognize a large target
market whose needs are not being met by the current sellers. By inventing
new values for this target market that are difficult to replicate
and by building a strong company culture to serve this market, the
company has a good chance to succeed.