Multinational Marketing

Marketing is a complicated discipline requiring the consideration of multiple variables. Multinational marketing is further complicated by the introduction of other factors, including foreign language and idiom and cultural differences. For most instances, successful multinational marketing needs to take into account the culture of the other country. Factors such as cultural, language, and market differences require different strategies. One of the keys to improving the success of multinational marketing efforts is to do market research before entering a new international market. Global marketing is an approach to marketing in which consumer similarities across national borders are emphasized and local differences are minimized. Whether this is truly a different approach to multinational marketing or merely a variation on a theme, however, is debatable.

Keywords Brand; Culture; Global Marketing; Marketing; Marketing Mix; Marketing Plan; New Product Development; Strategy

Marketing > Multinational Marketing

Overview

From a business standpoint, the advances of the late twentieth and early twenty-first centuries truly have made the world smaller. In many instances, businesses are no longer limited by geographical location or sheer physical distance in where and with whom they can do business. An increasing number of goods are produced offshore, transported, and then sold in the home country. For example, the clothes worn by many Americans may have been produced in China, while the DVD players in many living rooms may have been produced in Japan. This trend applies not only to tangible products, however. Even some services can be provided in one country and sold in another. Many hospitals, for example, have X-rays read by personnel not only outside the hospital but also outside the country. Picking up the phone for technical support with high tech products often connects one to an expert not in Austin or Salt Lake City but in Manila or Delhi.

Cultural Considerations

Marketing and selling commodities in other countries can be complicated. Not only are there language barriers to deal with in many cases, but local laws and regulations differ from those of the home country. International deals need to take these things into account. However, when trying to market manufactured goods to another country, it is also extremely important to take into account the culture of that country. This is the consciously or unconsciously held basic shared assumptions, beliefs, norms, and values held by a group of people. Part of the goal of marketing is to communicate the value of a product or service to potential customers, and an understanding of the target consumers’ culture is key to achieving this goal.

Because of these facts, one approach to international marketing is based on the assumption that these efforts need take into account the culture of the other country if they are to be successful. Factors such as cultural, language, and market differences require different strategies. In addition, this view of international marketing is based on the belief that the savings realized from using a standard campaign across national borders would be neutralized by differences in infrastructure, legal restrictions, and advertising limitations that vary from country to country.

Examples of businesses that failed to heed these warnings and failed in the international marketplace as a result are legion. Sometimes an advertising slogan that makes sense in one language or culture has a widely different effect in another. For example, a literal translation for Schweppes tonic water into Italian had to quickly be changed to Schweppes tonica because the expression il water is an Italian idiom for the bathroom. An advertising campaign for a detergent in Quebec met a similar fate when it was learned that the French expression for the really dirty parts of the wash (les parties de sale) was idiomatic for "private parts." However, language and local idiom are not the only stumbling blocks in cross-cultural marketing. Many marketing campaigns have failed because they did not understand the values of the foreign country in which they were trying to introduce their products. General Mills, for example, attempted to penetrate the breakfast cereal market in Great Britain using packaging that featured a clean-cut, freckle-faced boy who smilingly said, "Gee, kids, it's great!" The campaign was a dismal failure because the designers failed to realize that British households are not a child-centric as their American counterparts, so the packaging had little appeal. Similarly, the Campbell Soup Company's first attempt to penetrate the market in Italy advertised a soup that "tastes as good as homemade." The campaign failed to recognize the Italian emphasis on home cooking and so failed. Similarly, an advertisement for Listerine that was used in Thailand featured a young couple in a public display of affection. Such displays were objectionable in that culture, and the advertisement needed to be changed.

The Necessity of Market Research

One of the keys to avoiding such pitfalls is to perform market research before entering a new international market. Although a simple concept in theory, good market research can be tricky to design. Cross-cultural aspects can make market research even more complicated. As illustrated by the examples above, international marketing research calls for a suspension of many parochial assumptions. Although some concepts are global in nature, such as the avoidance of illness or the satisfaction of hunger, many are not. It is essential to do exploratory research to learn of the idiosyncrasies of the other culture before building a marketing strategy and concomitant campaign.

There are several issues to be considered in building an international marketing campaign. First, one must consider how best to define one's product. For example, the concept of "heavy duty detergent" varies from country to country. In Great Britain, many washing machines boil the water for the laundry, a process that kills any enzymatic agents in the detergent. Therefore, heavy duty detergents in these countries do not have enzymes. In Germany, however, enzymes are a key ingredient in many heavy duty detergents. Therefore, the characteristic "heavy duty" must change from country to country. Another concept to be considered is how the market in a foreign country is structured. For example, a survey in the 1960s found that significantly more spaghetti was eaten in Germany and France than in Italy. This finding stemmed from the fact that the survey specifically asked about packaged, branded spaghetti. In Italy, however, spaghetti is usually purchased unpackaged and unbranded. As illustrated by the examples of literal translations of advertisements for tonic water and detergent, translation can have a significant impact on how an advertisement is perceived and received. This applies not only to the words used but to the concepts used as well.

Applications

The Global Marketing Approach

Although the multinational approach discussed above has much support in the corresponding literature, not every successful approach to marketing across national lines takes this approach. Global marketing is an approach in which consumer similarities across national borders are emphasized and local differences are minimized. For example, the controversial United Colors of Benetton strategy of advertising their clothing line using graphic photos of human suffering was an attempt to rise above local culture and target consumers on global issues that are of concern to most people. In some countries, the advertisements were well-received; in others, however, there was an outcry. For example, in the US, a photograph of a priest and a nun kissing did not cause a furor as did the same ad in Vatican City. Although this example supports the need to take cultural differences into account when developing a multinational marketing strategy, in the end, the ad campaign was hugely successful. In fact, by the time the author of the controversial campaign left the company, Benetton's sales were significantly greater than when he arrived.

The philosophy of the superiority of the global marketing approach is based on three observations. First, research coming from the disciplines of psychology and anthropology supports the contention that all human beings have certain similarities regardless of their culture. This includes basic needs (e.g., the need for love or self-worth). In addition, most human beings share product-related needs as well (e.g., ergonomic design for tools; need for food and clothing). Second, most business strive to deliver the best product they can in terms of performance, quality, and value. This means that many businesses are constantly engaged in the cycle of new product development in order to stay competitive in the marketplace. However, new product development is an expensive undertaking, and many companies need to be able to market globally in order to remain competitive. Third, not having a global strategy may put an organization at a competitive disadvantage since just as overseas markets are growing, so are overseas competitors.

Whether or not these arguments are sufficient cause for a global marketing approach is debatable, as is shown by continuing discussion in literature. However, the global approach has been proven successful in some cases, just as a multinational approach is successful in others. Although foundational human needs are irrespective of national borders, this does not mean that culture is not also important. As illustrated by the United Colors of Benetton example, some approaches to advertising are just not appropriate in certain cultures due to any number of reasons. Although psychology and anthropology point out similarities among all people, they point out differences, too. In addition, although there are global strategies that work, there are often concomitant exceptions that make them more a multinational approach than a wholly global approach. More research is needed to find out when and why each approach works best.

Success in Global Marketing

Several factors for the success of global marketing have been reported in corresponding literature. The first is to implement a strategy of establishing a world brand that drives the marketing plan. Although there may be local exceptions, this brand should include a consistent name and product characteristics wherever the product is sold. For example, the red can of Coca-Cola and the golden arches of McDonald's are examples of readily recognized brands that transcend national boundaries. A strong world brand will have a consistent name, a standardized product image, and similar features wherever it is sold. Although many organizations attempt to standardize their ads across national boundaries, there are still many that find that a global strategy is best served by a local execution.

A second factor that is important to successful global marketing is the ability to segment markets on the basis of consumer similarities rather than geographic differences. For example, an organization could develop one set of advertising for Western countries and another for countries in the Middle East that take into account the cultural sensibilities of each. This approach looks at cultural differences rather than merely looking at geopolitical borders. For example, it is easy to imagine a marketing approach for a product that would be successful in both the United States and Canada — and Great Britain or other Western countries — even those these countries are different geopolitical entities. This strategy would be based on cultural similarities. Missing from this list are countries in Asia, the Middle East, South America, and sub-Saharan Africa, which have decidedly different cultures. For many products, although separate marketing approaches would not be necessary for each country, it might be productive for separate marketing approaches for each cultural grouping. Some theorists posit that the multinational approach necessitates a different marketing mix for each distinct country. A global approach, on the other hand, suggests that the marketing mix can be the same for larger, cultural groupings.

Another factor that may affect the development of a successful global marketing strategy is whether or not the product being introduced is high tech or "high touch." Literature suggests that developing a world brand is more feasible when the product is either high tech or high touch. High tech products are technical in nature with an emphasis on their technical aspects. Successful advertising for such products tends to be informative rather than persuasive (e.g., if one is considering the purchase of a new computer, a sales pitch emphasizing the machine's features is more likely to be successful than an approach that tries to sell the product through emotional appeals). High tech products are typically targeted toward specific transnational segments. For example, it would probably be more productive to target small businesses in several nations with a marketing strategy to buy a new computer application software package than to target all potential consumers within one country. In high touch products, on the other hand, the marketing emphasis is on the image of the product rather than on its features. High touch products are non-technical in nature and are best marketed using emotional advertising as opposed to informative advertising.

High Tech Products vs. High Touch Products

There are three types of high tech products: those that are purely technical in nature, those that appeal to special interests, and those that are demonstrable. High tech products tend to do well with special interest audiences that share a common language—for instance, technical computer jargon. One of the reasons that high tech products can be marketed globally is because of this common language. A gigabyte is a gigabyte, and there is often little to translate in an ad for a high tech product. Examples of technical products include computers, video equipment, and photography equipment. Special interest products, the second category of high tech products, are somewhat less technical, but, once again, have a common language known by their users that transcends national boundaries. These products tend to be oriented toward recreation and leisure activities, including sports and hobby equipment. Finally, products that demonstrate are also considered to be high tech products. This approach, for example, has been successfully used by Polaroid.

There are also three types of high touch products: those that solve a common problem, global village products, and universal theme products. These products tend to touch a more visceral — albeit international — response and are more image-oriented rather than technology-oriented. Items such as jewelry, fashion, and fragrance fall into this category. Some high touch products are also high tech. Luxury automobiles, for example, have components of both. Similarly, Apple's iPod may be high tech, but it is also high touch, coming in a variety of styles and emphasizing storage capacity not in terms of bytes but in terms of the number of songs that it can store. Products that solve a common problem can also be marketed globally. For example, a super-strong glue has been variously demonstrated by gluing a coin to the street and encouraging people to try to pick it up or gluing a hard hat to an I-beam and demonstrating a construction worker holding on to the hat while his feet dangle off the ground. Another example of a product that solves a common problem is illustrated in any one of a number of beverage commercials that show people drinking a product on a hot summer day. Global village products appeal to a pan-national cosmopolitan market segment. Examples include designer fashions and fragrances. Although these are often high-quality or high-priced items, an increasingly universal desire for bottled water, pizza, and ice cream demonstrates that this philosophy can be applied to lower priced items as well. Finally, products with universal themes can be marketed globally. Some universal themes include materialism (which can be advertised through images related to physical well-being or status), heroism (which can be advertised though images and symbols related to altruism and self-sacrifice), play (which can be marketed through images and symbols related to leisure and creativity), and procreation (which can be marketed through images related to sex, courtship, and romance).

Terms & Concepts

Brand: A trademark or distinctive name that is identified with particular a product, service, or organization that makes it publicly and easily distinguishable from other products, services, or concepts. A brand may include a name, logo, slogan, or design scheme associated with the product, service, or organization.

Culture: The basic shared assumptions, beliefs, norms, and values held by a group of people. These may be either consciously or unconsciously held.

Global Marketing: A marketing approach in which consumer similarities are emphasized and local differences are minimized.

Globalization: Globalization is the process of businesses or technologies spreading across the world. This creates an interconnected, global marketplace operating outside constraints of time zone or national boundary. Although globalization means an expanded marketplace, products are typically adapted to fit the specific needs of each locality or culture to which they are marketed.

Marketing: According to the American Marketing Association, marketing is "an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders" (http://www.marketingpower.com/content24159.php).

Marketing Mix: The combination of product, price, place, and promotion that is used to get a product into the hands of the consumer. One of the primary tasks of marketing is to optimize the mix to best position the product for success in the marketplace.

Marketing Plan: A plan that specifies the actions the organization intends to take to obtain customers for its proffered goods or services. The marketing plan includes the organization's marketing strategy, including such things as pricing, budget, specification of target markets, and intelligence about competitors.

Need: A condition in which an organism experiences the deprivation of something necessary for physiological or psychological fulfillment.

New Product Development: The application of systematic methods to all processes necessary to bring a new product to the marketplace from conceptualization through marketing. New products can be improvements on existing products or total innovations.

Strategy: In business, a strategy is a plan of action to help the organization reach its goals and objectives. A good business strategy is based on the rigorous analysis of empirical data, including market needs and trends, competitor capabilities and offerings, and the organization's resources and abilities.

Bibliography

Barela, M. J. (2003). Executive insights: United colors of Benetton — from sweaters to success: An examination of the triumphs and controversies of a multinational clothing company. Journal of International Marketing, 11, 113–128. Retrieved June 14, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=11857470&site=ehost-live

Cavusgil, S. S., & Cavusgil, E. (2012). Reflections on international marketing: Destructive regeneration and multinational firms. Journal of the Academy of Marketing Science, 40, 202–217. Retrieved November 22, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=71672986

Domzal, T. & Unger, L. (1987). Emerging positioning strategies in global marketing. Journal of Consumer Marketing, 4, 23–40. Retrieved June 14, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5337363&site=ehost-live

Grewal, R., Kumar, A., Mallapragada, G., & Saini, A. (2013). Marketing channels in foreign markets: Control mechanisms and the moderating role of multinational corporation headquarters-subsidiary relationship. Journal of Marketing Research (JMR), 50, 378–398. Retrieved November 22, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=87734971 ..FT.Kumar, V., Sharma, A., Shah, R., & Rajan, B. (2013). Establishing profitable customer loyalty for multinational companies in the emerging economies: A conceptual framework. Journal of International Marketing, 21, 57–80. Retrieved November 22, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=85872955

Mayer, C. S. (1978). The lessons of multinational marketing research. Business Horizons, 21, 7–13. Retrieved June 14, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4530313&site=ehost-live

Suggested Reading

Ayal, I. & Jehiel, Z. (1978). Competitive market choice strategies in multinational marketing. Columbia Journal of World Business, 13, 72–81. Retrieved June 14, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5546187&site=ehost-live

Ayal, I. & Jehiel, Z. (1979). Market expansion strategies in multinational marketing. Journal of Marketing, 43, 84–94. Retrieved June 14, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4999863&site=ehost-live

Buckley, P., & Casson, M. (2011). Marketing and the multinational: Extending internalisation theory. Journal of the Academy of Marketing Science, 39, 492–508. Retrieved November 22, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=63899549

Cannon, T. (1980). Managing international and export marketing. European Journal of Marketing, 14, 34–49. Retrieved June 14, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5122045&site=ehost-live

Sheth, J. N. (1978). Strategies of advertising transferability in multinational marketing. Current Issues & Research in Advertising, 1, 131–141. Retrieved June14, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=7572088&site=ehost-live

Wind, Y. & Perlmutter, H. (1977). On the identification of frontier issues in multinational marketing. Columbia Journal of World Business, 12, 131–139. Retrieved June14, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5542899&site=ehost-live

Wu, J. (2013). Marketing capabilities, institutional development, and the performance of emerging market firms: A multinational study. International Journal of Research in Marketing, 30, 36–45. Retrieved November 22, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=85250283