How Can US Companies Get Ready For Foreign Markets? Part III

Carnot Sylvestre, MS

In addition to the domestic and foreign uncontrollable elements, a company willing to enter foreign markets must be ready to make considerable adjustments to its marketing mix. Managers must also consider such critical issues as self-reference criterion and ethnocentrism, standardization versus adaptation, global orientation versus international orientation as well as segmentation, targeting and positioning.

PRODUCT
 Homologation. All products distributed in the foreign market must be in compliance with local regulations.
 Adaptation. The company must adapt the packaging, labeling, marketing and advertising of its products in a manner and language easily understood across the foreign market.
 Brand Name. It must be made easy for consumers in the foreign market to identify the company’s brand name and relate to it in their individual activities.
 Features. The features of each product offered must be clearly described on the packaging and accompanying instructions so consumers can understand precisely what the company is offering. Consumers must fully understand the benefits they get from using the company’s products.
 Packaging. All packaging must be esthetically and functionally designed to allow the consumers to easily use the products. All labeling must be written in a language and font size that can easily be read by consumers.

PRICE
Penetration pricing. To facilitate the quick diffusion of its products and make it possible for them to reach take-off points in a short time, the company must set a highly competitive MSRP for each product.

PROMOTION
 Advertising. A local advertising agency familiar with the cultural, social, economical, and political characteristics and nuances within each market should be hired to handle all integrated marketing communications.
 Personal Selling & Relationship Management. The company must have a trained sales force that will be tasked to generate and cultivate long term relationships with retailers and wholesalers as well as to service their accounts.
 Media. The company’s products must be advertised and promoted through media readily accessible by target consumers within each market.

DISTRIBUTION
 Logistics. The company must take steps to locate warehouse and distribution centers near target markets. It is preferable to have local experts handle fulfillment and distribution operations.
 Channels. The company must partner with carefully selected local wholesalers and retailers to make sure that its products are properly and satisfactorily delivered to consumers on a constant and reliable basis.

Self-reference criterion and Ethnocentrism
In addition to being able to effectively assess the impact of the uncontrollable elements on its marketing strategy, the company must also be ready to make necessary cultural adjustments and establish an appropriate frame of reference for each foreign market it wishes to enter. Managers must use the right cultural filters to interpret the foreign uncontrollable elements and avoid the temptation of measuring and assessing foreign markets based on assumptions made according to American culture. Every effort should also be made to avoid the assumption that the company’s home culture is better or that its employees know how to do things better than their counterparts in the foreign country.

Standardization versus Adaptation
While the company must ensure the standardization of product formulations, it must also adopt a degree of adaptation by packaging, labeling and marketing its products to comply with local requirements and facilitate quick adoption by local consumers.

Global orientation versus International Orientation
US companies that are trying to get a foothold in foreign markets should consider an international orientation instead of a global orientation. With an international orientation, the company can much easier adapt its marketing mix to meet the particular characteristics of a particular market and satisfy the needs of target consumers.

Segmentation
The company must make an effort to divide the intended foreign market into segments that include clearly identifiable elements with common and compatible interests. This will help managers target the right kind of consumers with the right products.
Targeting
Once the company is able to adequately segment the foreign market, its managers will be in a better position to target the right kind of consumers with the right products.
Positioning
The company must position itself as provider of superior quality and environmentally friendly products that are designed according to the highest standards and delivered to consumers at prices commensurate to the benefits they expect to receive from them. Every effort should be made to cultivate a good image for the brand and keep it top-of-mind with consumers.