strategies across markets. Thus, how international marketing is defined and interpreted
depends on the level of involvement of the company in the international
There-
fore , the followi ng possibilities exist:
• Domestic marketing. This involves the company manipulating a series of control-
lable variables, such as price, advertising, distribution , and the product, in a largely
uncontrollable external environment that is
up of
economic struc-
tures, competitors, cultural values, and legal infrastructure within specific political
or geographic country boundaries.
International marketing. T his involves the company operating across several mar-
kets in which not only do the uncontrollable variables differ signific antly between
m arket and another, but the controllable
in the fonn of cost and price
structures, opportunities for advertising, and distributive infrastructure are also likely
differ significantly. Degree of commitment is expressed as follows:
Export marketing. In this case the firm markets its goods and/or services
national/political boundaries.
Multinational marketing. Here the marketing
of an organization include
activities, interests, or operations in more than one country, and
there is
some kind of influence or control of marketing
from outside the coun-
try in which the goods or services will actually be sold. Each of these markets
is typically perceived to be independent and a profit center in its own right.
• Global marketing. The entire organization focuses on the selection and explo-
ration of global marketing opportunities and marshals resources around the
globe with the objective of achieving a global competitive advantage. The pri-
mary objective of the company is to achieve a synergy in the overall
tion, so that by taking
of different exchange rates, tax rate, labor
rates , skill levels, and m arket opportunities, the organization as a whole will
be greater than the sum of its parts. I
Thus Toyota Motors started out as a domestic marketer, eventually exported its cars
to a few regional
grew to become a multinational marketer, and today is a true
global marketer, building manufacturing plants in the forei gn country as well as hiring local
labor, using local ad agercies, and complying to that country's cultural mores. As it moved
from one level to the next, it also revised attitudes toward marketing and the underlying
philosophy of
Ultimately, the successful marketer is the one who is best able to manipulate the con-
tools of the marketing mix within the uncontrollable environment. The principal
reason for failure in international marketing results from a company not conducting the nec-
essary research, and as a consequence, misunderstanding the differences and nuances of
the
environment within the country that has been targeted.
STANDARDIZATION AND CUSTOMIZATION
In 1983, Harvard marketing professor Theodore Levitt wrote an article entitled, "The Glob-
ali zation of Markets," and nothing about marketing has been the same since. 2 According
to Levitt, a new economic real ity-the emergence of global consumer markets for single-
standard
triggered in part by technological developments. Worldwide
communications ensure the instant diffusion of new lifestyles and pave the way for a whole-
sale transfer of goods and services.
REASONS FOR ENTERING INTERNATIONAL MARKETS
129
Adopting this global strategy provides a competitive advantage in cost and effectiveness.
In contrast to multinational companies, standardized (global) corporations view the world
or its major regions as one entity instead of a collection of national markets. These world
marketers compete on a basis of appropriate value: i.e., an optimal combination of price,
quality, reliability, and delivery of products that are identical in design and function. Ulti-
mately, consumers tend to prefer a good price/quality ratio to a highly customized but less
cost-effective item.
Levitt distinguished
products and brands . While the global product itself is
standardized or sold with only minor modifications,ihe branding, positioning, and promotion
may have to reflect local conditions.
Critics of Levitt' s perspective suggest that his argument for global standardization is
incorrect and that each market strategy should be customized for each country. Kotler notes
that one study found that 80% of U.S. exports required one or more adaptations. FUlther-
more, the average product requires at least four to five adaptations out of a set of eleven
marketing elements: labeling, packaging, materials, colors, name, product features, adver-
tising themes, media, execution , price, and sales promotion. 3 Kotler suggests that all eleven
factors should be evaluated before standardization
considered.
To date, no one has empirically validated either perspective. While critics of Levitt
can offer thousands of anecdotes contradicting the validity of standardization, a more care-
fu l read of Levitt's ideas indicate that he offers standardization as a strategic option, not a Although global marketing has its pitfalls, it can also yield impressive advantages.
dardized products can lower operating costs. Even more important, effective coordination
can exploit a company's best product and marketing ideas .
Too often, executives view global marketing as an either/or proposition---either full
standardization or local control. But when a global approach can fall anywhere on a
spectrum-from tight worldwide coordination on programm:ng details to loose agreements
on a product ideas-there is no reason for this extreme view. In applying the global mar-
keting concept and making it work, flexibility is essential. The big issue today is not whether
to go global, but how to tailor the global marketing concept to fit each business and how
to make it work.
REASONS FOR ENTERING INTERNATIONAL MARKETS
Many marketers have found the internatiol"al
to be extremely hostile. A study
by Baker and Kynak,4 for example, found that less than 20% of firms in Texas with export
potential actually carried out business in international markets. But although many firms
view
markets with trepidation , others still make the decision to go interna-
tional. Why?
In one study, the following
factors were given for initiating overseas mar-
keting involvement (in order of importance): 5
1. Large market size
2. Stability through diversification
3. Profit potential
4. Unsolicited orders
5. Proximity of market
6.
capacity
130