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| International marketing planning model |
response to chance orders coming either from customers who are international
players or from other sources such as foreign buyers attending a domestic exhibi-
tion. Such 'passive exporting' is not international marketing, although it contributes
to international trade. It does not associate with the central principle of creating
customer value and market targeting, there i.s little assessment of critical factors
for competitive success, and it is unlikely to build a long-term market position,
Limited domestic growth and/or intense domestic competition is a key
reason why firms enter foreign markets and was a prime motivator behind the
Japanese companies' overseas expansion programme during the 1970s and
1980s. In practice, many firms quickly suspend foreign market activity when the
domestic economy improves or when they fail to make money in the overseas
operation. Finns driven to exporting because of domestic recession often fail to
anticipate the wider external constraints to doing business in a foreign market
and tend to take a short-term orientation to international marketing.3
Furthermore, companies that are struggling to survive at home are highly
unlikely to successfully take on and beat sophisticated competitors in foreign
markets. The domestic market must be secured first before going abroad and it
should be maintained thereafter. Japan's top two car manufacturers, Toyota and
Nissan, are arch rivals at home. They took this rivalry overseas and in the process
have raised the level of competitive activity to new heights in North America and
Europe, while striving to remain strong performers in their home base.
Geographic market diversification to reduce country-specific risk - that is,
the risk of operating in only one country, due to different political-economic
cycles - is a popular reason behind firms' international expansion drive. Firms
must understand that market needs may be strikingly different, even for appar-
ently similar products, and that different management skills and approaches are
needed for different country markets. So, managers must weigh the costs and
barriers to global diversification against the benefits of risk reduction.
Firms spread the costs of production over more units if output is expanded for
overseas markets. While economies of scale give firms a strong incentive to
expand into foreign markets, the firm must also take on board additional adminis-
tration, selling, distribution and marketing co.sts. A 'cost-led' approach or a 'selling
orientation' in international marketing is unlikely to lead to long-term success.
Without H marketing-led orientation, where customers' needs are identified and
satisfied, and die firm's marketing mix adapted for the foreign market, the inter-
national business activity of the firm is unlikely to flourish.
In summary, firms enter overseas markets for profits and/or survival. But
firms must not confuse exporting with international marketing. The latter is
about taking a long-term perspective of foreign market potential and relentlessly
adopting a market-led approach to identifying, anticipating and satisfying the
needs of customers in target international markets. Before going abroad,the firm
must weigh the risks and question its ability to ope rate globally. Can the company
learn to understand the preferences and buying behaviour of customers in other
country markets? Can it offer competitively attractive products? Will it be able to
adapt to other countries' business cultures and to deal effectively with foreign
nationals? Do the company's managers have the requisite international experi-
ence? Has management considered the impact of foreign regulations and political
environments? International marketing is really about exploiting market oppor-
tunities based upon sound environment and specific market analyses.
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