International marketing – the issues 619
Where do you want to be?
There are differences between companies as to
whether they perceive foreign market entry as:
1 A strategic or tactical option, i.e. whether they
see entry into the target market as being of
potential value in the medium to long term or
whether it is a spoiling tactic undertaken by
multinationals as they pursue their global quest
for global market share.
2 Whether in terms of motivation and behaviour
it is opportunity-seeking or problem-solving
behaviour that is being reflected. Foreign
market entry may be motivated by a desire to
reduce current excess capacity. Alternatively,
there may be a genuine desire to continue to
service the target market in question. The
underlying motivation is an important factor as
it determines the company’s degree of
commitment to foreign markets as well.
What do you need to know?
It has often been said that knowledge is power.
Well, no more so than in international markets,
where your company is at the disadvantage of
competing with local companies which pre-
sumably know the market conditions better.
Knowing market conditions allows a company
to fine-tune a technological advantage and turn
it into a marketing advantage. Panasonic
became the best known brand in Poland shortly
after it became a market economy in 1990 for
the simple reason that Panasonic had studied
the Polish market situation and saw that
voltage surges were common. A high-voltage
surge would knock out most equipment, but
what Panasonic did was brilliant and yet so
basic. They simply incorporated resistors into
television sets for Poland and became known as
a manufacturer that made television sets espe-
cially for the Polish market. The Polish tele-
vision market had belonged to the Russians
and there were many foreign competitors now,
but Panasonic’s action saw off the competition.
Knowledge of market conditions is important.
Today, licensing is seldom found without
the sale also of know-how, which may simply
be the transferral of production experience and
so training or updating to a new licensee of the
most modern production methods. However, it
is with franchising that we see the sale of
marketing know-how embodied in a successful
branded product or service and encapsulated in
a livery, logo or design so as to make it
universally recognizable. In recognition there is
market power.Market research comprises hard
and soft facts
The purpose, process and limitations of market
research are discussed elsewhere in this book.
However, in reviewing environmental scan-
ning, Brownlie (1999) commented on the lack of
empiricism and hard science, a point which has
to be echoed here, especially with regard to: Culture, e.g. language, dress.
Traditions that are important within the
society and have their own rationale.
Social customs, e.g. forms of communication,
addressing hierarchies, perhaps even the need
to have a drinking partner on the negotiating
team. In some countries, it was the case that
you could not do business unless you had been
out with the client and got drunk with them.
That achieved an important social
breakthrough and, after that point, it would be
possible to converse on a friendlier basis as
you had shared something together. Some
companies have actually employed individuals
for foreign business and particularly negotiating
teams because the most important asset that
they could offer was a cast iron liver! The
requirement to imbibe in volume remains in
certain cultures and it is not just impolite to
refuse, to decline means simply that you lose
all prospect of doing business there.Information empowers, but where it is missing,
as a study by Birgelen et al. (2000) showed,
incomplete information will not be ignored but