Considerations When Approaching a Foreign Market

Published: 14th March 2011
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There are some key considerations for each geographic market that a company should be thinking of. An analysis of these seven variables provides the background necessary for deciding whether or not to enter what kind of market and to what extent, if any, an individualized marketing strategy is required. A small sample of experts, preferably native to the market under consideration, often will be able to furnish sufficient information on each variable.

Is the geographical area homogeneous or heterogeneous with respect to culture? Marketing efforts are generally directed at defined geographic areas, primarily political and economic entities. Legal requirements and existing distribution channels often encourage this approach. However, it is also supported by the implicit assumption that geographical or political boundaries coincide with cultural boundaries. However, this assumption is more often than not incorrect.

Canada provides a clearer example of this. Many American firms treat the Canadian market as though it was a single cultural unit despite the fact that they must make adjustments for language differences. However, studies have found that French Canadians differ from English Canadians in attitudes toward instant foods and spending money; in spending patterns toward expensive liquors, clothing, personal care items, tobacco, soft drinks, candy, and instant coffee; in television and radio usage patterns; and in eating patterns. Thus, marketing campaigns must be developed for cultural groups, not just countries.

What can this product or a version of it fill in this culture? Most companies examine a new market with their existing product or product technology in mind. The question they must answer is what their existing or modified product can fill in terms of the needs in the particular culture involved. For example, bicycles and motorcycles serve primarily recreational needs in the United States; but they provide basic transportation in many other countries like those in Asia. And likewise, newsletter printing is cheap to other countries, while to some newsletters are just considered as giveaways.

Can enough of the group(s) needing the product afford the product? This requires an initial demographic analysis to determine the number of individuals or households that might need the product and the number that can probably afford it. In addition, the possibilities of establishing credit, obtaining a government subsidy, or making a less expensive version should be considered. For example, in order to know how many newsletters you should produce monthly, weekly or daily, you need to make a research or survey on the consumption of your customers.

What values or patterns of values are relevant to the purchase and use of this product? The value system should be investigated for influences on purchasing the product, owning the product, using the product, and disposing of the product.

In what ways can we communicate the product? This question requires an investigation into available media and who often considers each type – the needs the product fill, and the values associated with the products and its use, and the verbal and non-verbal communications systems in the culture. All aspects of the firm’s promotional mix (including packaging, non-functional product design features, personal selling techniques, and advertising) should be based on the above factors.

What are the ethical implications of marketing this product in this country? All marketing programs should be evaluated on ethical as well as financial dimensions. The ethical dimension is particularly important and complex especially when you’re marketing to Third World and developing countries.

These factors are relevant to the success of your business and must be reviewed from time to time.

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