Challenges in going global for international marketing and

All rights reserved - Ramesh

Kumar Nanjundaiya1

Challenges in Going Global for International Marketing and Relationship Management

By Ramesh Kumar

Nanjundaiya

November 2012


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Presenter’s background

RAMESH KUMAR NANJUNDAIYA – MS (Belgium), MBA (US)

Associate Partner & Head - Finance/Business set-up and Family Office of M/s. Insta Solu Venture Consultants, LLP, Bangalore, India

Certified as “Independent Corporate Director”, by World Council For Corporate Governance, London, UK [License # WCFCG/IID/DCD/2011/1711] – 2011

Visiting Guest Faculty in “International Marketing”and “Corporate Finance” course for final year MBA students at a known institutions in Bangalore, India.

Professional overview An accomplished professional with over 32 years’ of experience in banking and the

financial sector with established credentials in Corporate Banking and Marketing, Financial Management, Venture & PE Capital sourcing, setting up JVs and with forte in Start ups to promote new commercial banks, ventures, undertaking IPO groundwork & Listing for SMEs.

Senior banker with working experience gained in known international banks as BNP, SCB, Citibank, EBIL, Barclays Bank, Banque Saudi Fransi in such diverse countries as the Middle East (GCC) region, West Europe and India.

Trainer in Corporate Banking and Credit, International Trade and Marketing and Business Consultation.


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What is the great challenge

My first day out in Brussels, Belgium at 19 years. It struck me as a bolt from blue that Cultural norms play a large part in our lives. I had grown in the Delhi and I took my norms of behavior for granted. I do not think about my reactions, preferences, and feelings. Out on the road, I quickly realized that nobody speaks English. It is either French or Dutch (Flemish). Suddenly things seemed very very different. I did not know what to do or say. I had to reinvent myself to evaluate my approach, my decisions, and actions based on how the Belgian culture might think and react to me. My first job was to learn French.

The greatest challenges of doing business overseas: This stem from attempting to deal with the distinctive and often quite different nature of the cultural, business and ethical environment.

Standard hurdles: A company looking to set up business or manufacturing facilities in a foreign country may encounter language difficulty, cultural issues, government controls, difficulties in making an effective transfer of core technologies, poorly trained local workers, financial restrictions and a lack of inputs and supplies meeting the necessary quality standards. The list can go on.

What is our objective: How do we create long term, mutually beneficial, international business partnerships?


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A practical approach - Doing business across borders – first lessons

“Change Your Mindset” - First and foremost - so that you can appreciate the new country’s culture, their language, customs and laws. Remember, going forward you will be regularly working with cross cultural teams, people with diverse nationalities face to face or virtually. the ability of the company to achieve global localisation or ‘Glocalisation’ i.e. the ability to be an insider or a local company and still reap the benefits of global operations. Think global and act local is the meaning of Glocalisation and to be successful in international marketing, companies must have the ability to think global and act local.

I call them “Environmental Factors”- These needs to be studied, researched and addressed in the home country first.

International Marketer tools - Develop global awareness and sensitivity to view the globe as the market place to do and close business successfully.


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Developing global awareness – simple steps

OBSTACLES - Be ready to confront many types of

obstacles with a degree of optimism and willingness

to learn.

KNOWLEDGE - Develop knowledge of the global

market specifically in terms of the changing social,

political and economic trends.

RELATIONSHIP - As the selected International

Manager develop the habit of networking and

relationship building in other countries.


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What have been the past stages

1970s – “standardization versus adaptation”

1980s – “global integration versus local responsiveness”

1990s – “global integration versus local responsiveness”

2000s - The trend back toward localization is caused by the new efficiencies of customization made possible by the Internet and increasingly flexible manufacturing processes.

Scenario Today - From the marketing perspective customization is always best. As global markets continue to homogenize and diversify simultaneously, the best companies will avoid the trap of focusing on country as the primary segmentation variable.


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What is Global Market Orientation

A Global company that is successful is due to the

fact that they have be able to develop marketing

plans that strives for standardisation wherever it is

cost and culturally effective. Eg: McDonald’s.

To become a successful global player, study the

common consumer characteristics and behaviour.

Then apply key segmentation variables across

countries and regions.


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Stages to start the process

Phase 1: Preliminary Analysis and Screening

– Matching Company and Country Needs.

Phase 2: Adapting the Marketing Mix to

Target Markets.

Phase 3: Developing the Marketing Plan

Phase 4: Implementation and Control


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Good trade opportunities and protectionism

International trade is good for both developed and

developing countries across the globe.

Free international markets help underdeveloped

countries become self-sufficient , that there is a lot of

talk about free trade without barriers.

Have we succeeded in this – No, but it possible with

controlled and equitable reduction in trade barriers

so that the consumer (end user) should benefit.


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Importance of culture in global marketing

Culture is the single most important aspect that a foreign marketer should consider before thinking of entering a new country and start preparing marketing plans and strategies.

Your marketing plans and strategies does not fully cover or address the country’s business customs, political situation and changing legal requirements.


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Global challenge – change your management style

Information and competition or relationship building

and transaction cost reduction.

What about environmental consideration which can

significantly affect the attitudes, behavior and out

look of the foreign businessman.

An outsider is always an outsider and his business is

always going to be foreign. Motivation and

adaptation is the key to success in a foreign soil.


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Is political environment a concern

Very much so. The foreign firm must strive to make

its activities politically acceptable or it may be

subject to a variety of politically managed

harassment.

Try selling a toothpaste made in Israel in any of the

Middle East Arab countries. Very simple, you will pay

with your like.

How to lessen political vulnerability: JV’s, Increasing

investor base, planned domestication, etc.


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International marketer to address legal issues in the host country

The varying legal system of the world and their effect on business setup and transactions can be a minefield.

Protection of intellectual property rights, enforcement of antitrust legislation.

New to the legal debacle is the internet which actually creates a new set of legal entanglements which needs to be addressed on an ongoing manner.

Solution - To run a successful marketing and business in an overseas market, one need to be equipped with a group of competent counsel from home and the host country.


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Is Market research important

Please remember that in a foreign market, seeking information about customer attitudes is culturally very different and conditioned.

While seeking information, the international marketer needs to ensure that the respondent’s privacy is not offended.

Gathering information – Many foreign markets have inadequate and/or unreliable bases of secondary date which is going to be a challenge.

Solution – Use multiple methods, triangulation, include decision makers to interact with customers in foreign land.


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Which markets to tap –developed/developing countries?

A big challenge today - In today’s ever expanding world trade with varying needs and wants one needs to grab the opportunity at the earliest.

As an International Marketer you must be able to react to market changes rapidly and to anticipate new trends within constantly evolving market segments that may not have existed in the recent past. As they say – smell an opportunity.

Marketers must focus on devising marketing plans designed to respond fully to each level of economic development. In this regard, it is best to seek new business opportunities in the so called emerging markets.


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Is Emerging Markets an answer

It is a well known fact seen since the last 15 years that fast developing markets (BRICS) are experiencing rapid industralisation and a fast growing consumer market (The Indian Middle Class).

These markets present excellent new opportunities for foreign investment. Wal Mart is very strong in China with 50 units across the country. Procter & Gamble – present all over the globe. Nestle – present in about 90 countries, Coca Cola, etc

Assessing Business potential - The International Marketer must be in a position to make an assessment of the existing level of market development and receptiveness within the chosen country.


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Global Marketing Management

Golden Rule – Expanding market opportunities come in with increased competition for all level of global marketing.

To maintain a viable position, we need to have a global perspective.

It essentially requires quality products designed to meet the ever changing customer needs and rapidly advancing technology.


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How to organise the company to face international competition

Because organizations need to reflect a wide range of company-specific characteristics, devising a standard organizational structure is difficult.

Companies are usually structured around one of three alternatives:

– Global product divisions responsible for product sales throughout the world

– Geographical divisions responsible for all products and functions within a given geographical area

– A matrix organization consisting of either of these arrangements with centralized sales and marketing run by a centralized functional staff, or a combination of area operations and global product management


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Goals for an International Marketer

International Marketers - Your goal is to find the just market for your organisation. You need to address cost containment, customer satisfaction, facing competition. This means that you need to refine your company’s international business practices.

How – By relooking at company goals, undertaking collaborative relationships, establishing strategic international business alliances, assist your company management in their strategic planning with your inputs.


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To achieve success in International Marketing

Identify alternate market entry strategies

The growing globalisation of markets that

gives rise to standardisation must be

balanced and adapted for successful

acceptance in a new marketplace.

Adaptation – key mantra


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Global marketing – Relationship Management and adaptation

Communication - Today as we know global communication and socializing forces have actually fostered a homogenization of values, needs and tastes in a significant section of the population across all cultures.

How do you view a product: Today each product must be viewed in light of how it is perceived by each culture group which it come in contact with.


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Understanding a product – prime important

Remember - What is acceptable and

comfortable within one group may be

resisted within other group.

As established product in one culture/country

may be an innovation in an other culture in

developing products for foreign markets.

The end result is “adaptation” to the needs of

the consumer in a new market.


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Is International Marketing a good profession to enter

YES - Today it is the most sought after assignment:

Advantages:

1. Excellent pay, perks and promotions

2. Opportunity to travel globally at company expense

3. NRI - Social recognisition

4. Able to develop new friends/business contacts globally

5. Makes you a “Global Coverage Expert”

6. Allows you to learn a foreign language

7. New Job opportunities - Much sought by Multinationals globally.

8. Allows you to deal with people of diverse nationality and cultures

9. Brings new business and opens new markets to the employer thereby helping the company grow globally, increase profiling and shareholder value.


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Global Expansion Challenges – quick summary

Language, culture and regulations are often difficult barriers.

Leadership must invest significant time and energy.

Note: success factors in one country may not translate globally.

How to overcome them initially:

Leverage existing customer relationships and networking.

Build on your existing intellectual property (IP).

Link up with trusted local partners. Ensure to align business objectives, incentives, expectations and ensure to create transparency and visibility between both partners.


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Challenges – Interesting, doable and outcome will be successful.

We have covered a lot of different avenues and road

blocks while initiating international marketing.

With good planning, strategy and hard work, you can

explore new marketing for business.

There is a lot of business out there for grabs.

Go and get it. Rest assured, it will be a very

rewarding and satisfying experience.

Good Luck

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