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International Marketing |
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The modern world is a global market place. Advances in information technology during the last ten years, both in the design and specifications of computer hardware and software, coupled with the emergence of the internet has resulted in a truly integrated global marketplace. An integrated marketplace can be defined as a seamless union of technology and good old fashioned buying and selling, why attempt to enter one national market? when you can enter the global marketplace?. THE ORIGINS OF INTERNATIONAL COMMERCE International trade can be traced back as far as the start of civilization. Looking at the development of trade, we can say that at first there were small communities living on their own and supporting themselves from the environment around themselves (robinson crusoe theory). As society developed, we saw the emergence of bartering, where one person exchanged one good with someone else for another good. Then came the monetary systems, mercantilism, physiocracy, the invisible hand theory, through to modern day capitalism (apologies to fellow economists for elaborating too much). Modern day capitalism is based on the logic that as every nation on the planet exchanges goods and services with other nations for their goods, services, money, that it will thereby attain a competitive advantage in one or more fields of expertise. For example Japan excels in motor cars and technology based products, India and Pakistan excel in cotton production, South Africa in fruit and jewels, etc. The logic is that by achieving competitive advantage certain fields, other nations will always come to your nation for goods and services in which you have a competitive advantage. However since the 1970's onwards, we have seen a continuous change in national competitive advantages, nations such as Japan, USA UK have seen other nations from around the world taking over some of their competitive advantages. In the global free trade marketplace there will always be winners and losers, often the winners will be nations with high levels of expertise, which merely results in other nations generating barriers to allow their own industries to compete. Prior to the emergence of the internet, the logic behind establishing a product in the global marketplace, was one of using marketing and sales to promote product identity in each individual marketplace, and developing distribution channels to get the products to the marketplace. Hindrances against the development of global products were the high cost of running sales and marketing campaigns in each national market. In addition to this national governments would often request manufacturers to set up companies in their countries to generate employment. If manufacturers did not set up companies in other nations they were often faced with obstacles such as trade barriers, prior to the 1990's cracking the global marketplace was only for an elite group of companies which had the resources to enter each national market and set up companies in each nation. EXAMPLES OF TRULY INTERNATIONAL PRODUCTS
These products have been successful as a result of standardised design, price, quality, reliability. These manufacturers simply adopt a common business ideology, and apply a standardised business group design to their operations in different international marketplaces, thereby becoming truly global business organisations. The internet has opened up a whole new business concept. Why waste time and money on setting up different national plants/factories, when you could operate a global business from a single computer?. Use a single plant to manufacture your products whilst the world wide web can be your selling machine globally. All you need in the internet age is to simply have the correct distribution channels in place. The global market place is open for all businesses to flourish and not for an elite few. Our web/wap section, discusses how to develop a internet strategy for your business. HOW TO ENTER GLOBAL MARKETS WITHOUT SETTING UP INTERNATIONAL MANUFACTURING PLANTS
Michael Porter (1986) best describes the strategic role of marketing as encompassing:
In an ever competitive global economy, there will always be and elite and prosperous group. The rise of the internet, will certainly reduce the difference as people will be able to supply goods and services to anyone across the globe very easily behind a computer screen. However do expect national governments to start bringing in legislation to reduce the power of the internet business, this is because there will be a conflict in interests between international and national business based on different national legal, social an political features. If your business chooses to develop a web strategy to enter into new markets we wish you success, however there are other ways to enter international markets as discussed by Porter (1986). Back to Marketing Main Menu |
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