CHAPTER 1: INTRODUCTION TO GLOBAL MARKETING

A look at the appropriate figures, (for example The World Development Report by the
World Bank) ill indi!ate that the orld is be!oming in!reasingly interdependent for its
e!onomi! progress" #n $%&', in the ()A, for instan!e, imports ere only one per!ent of
*+,, but in $%-' they had risen to $./" #n food !rops, hile developing !ountries trade
in !offee, !o!oa, !otton and sugar a!tually de!lined in value during the $%-.s, developing
!ountries as a group experien!ed annual export groth rates of ' to $$/ in !ategories
like pro!essed fruit and vegetables, fresh pro!essed fish produ!ts, feed stuffs and oil
seeds" 0igh value food produ!t exports in $%%. totalled approximately 1$'' billion, the
same as !rude petroleum, representing &/ of orld !ommodity trade" #n $%%., more than
tenty 2ess Developed 3ountries (2D3s) had exports of high value foods ex!eeding
1&.. million in!luding !ountries like Bra4il, 3hina, Thailand, #ndia and )enegal"
Terms su!h as 5global village5 and 5orld e!onomy5 have be!ome very fashionable"
6arketing goods and servi!es on a global s!ale !an happen in an 5engineered5 ay, but
often it is as a result of good and meti!ulous planning" 7or example, in order to stave off
potential famine, the (nited +ation8s World 7ood ,rogramme (W7,) may pur!hase
mai4e from 9imbabe and distribute it in Tan4ania, 6alai and :enya" This
5engineered5 international marketing transa!tion may benefit 9imbabe, ithout
9imbabe having to prospe!t markets" 6ost international transa!tions are not like this"
6ost are !learly planned, involving meti!ulous attention to global so!ial and e!onomi!
differen!es and;or similarities in produ!t, pri!e, promotion, distribution and
so!io;e!onomi!;legal re<uirements"
Chapter Objective
The ob=e!tives of this !hapter are>
To provide an understanding of the fa!tors hi!h have led to the groth of
internationalism and globalisation
To produ!e a des!ription of the ma=or !on!epts and themes on hi!h the sub=e!t of
global marketing is based
To des!ribe hat is involved in planning for global marketing"
!tr"ct"re O# The Chapter
The !hapter starts by looking at the evolution of a firm8s orientation from primarily a
domesti! produ!er to a global player" #t then goes on to des!ribe the ma=or fa!tors that
have led to global marketing, in!luding both e!onomi! and so!ial" 7inally the !hapter
examines the planning me!hanism ne!essary to take a!!ount of important differen!es
and;or similarities hen marketing goods and servi!es internationally"
The ev$%"ti$& $# '%$ba% (ar)eti&'
Whether an organisation markets its goods and servi!es domesti!ally or internationally,
the definition of marketing still applies" 0oever, the s!ope of marketing is broadened
hen the organisation de!ides to sell a!ross international boundaries, this being primarily
due to the numerous other dimensions hi!h the organisation has to a!!ount for" 7or
example, the organisation8s language of business may be 5?nglish5, but it may have to do
business in the 57ren!h language5" This not only re<uires a translation fa!ility, but the
7ren!h !ultural !onditions have to be a!!ounted for as ell" Doing business 5the 7ren!h
ay5 may be different from doing it 5the ?nglish ay5" This is parti!ularly true hen
doing business ith the @apanese"
2et us, firstly define 56arketing5 and then see ho, by doing marketing a!ross
multinational boundaries, differen!es, here existing, have to be a!!ounted for"
)" 3arter defines marketing as>
5The pro!ess of building lasting relationships through planning, exe!uting and !ontrolling
the !on!eption, pri!ing, promotion and distribution of ideas, goods and servi!es to !reate
mutual ex!hange that satisfy individual and organisational needs and ob=e!tives5"
The long held tenants of marketing are 5!ustomer value5, 5!ompetitive advantage5 and
5fo!us5" This means that organisations have to study the market, develop produ!ts or
servi!es that satisfy !ustomer needs and ants, develop the 5!orre!t5 marketing mix and
satisfy its on ob=e!tives as ell as giving !ustomer satisfa!tion on a !ontinuing basis"
0oever, it be!ame !lear in the $%-.s that this definition of marketing as too narro"
,reo!!upation ith the ta!ti!al orkings of the marketing mix led to negle!t of long term
produ!t development, so 5)trategi! 6arketing5 as born" The fo!us as shifted from
knoing everything about the !ustomer, to knoing the !ustomer in a !ontext hi!h
in!ludes the !ompetition, government poli!y and regulations, and the broader e!onomi!,
so!ial and politi!al ma!ro for!es that shape the evolution of markets" #n global marketing
terms this means forging allian!es (relationships) or developing netorks, orking
!losely ith home !ountry government offi!ials and industry !ompetitors to gain a!!ess
to a target market" Also the marketing ob=e!tive has !hanged from one of satisfying
organisational ob=e!tives to one of 5stakeholder5 benefits A in!luding employees, so!iety,
government and so on" ,rofit is still essential but not an end in itself"
)trategi! marketing a!!ording to Wensley ($%-B) has been defined as>
5#nitiating, negotiating and managing a!!eptable ex!hange relationships ith key interest
groups or !onstituen!ies, in the pursuit of sustainable !ompetitive advantage ithin
spe!ifi! markets, on the basis of long run !onsumer, !hannel and other stakeholder
fran!hise5"
Whether one takes the definition of 5marketing5 or 5strategi! marketing5, 5marketing5
must still be regarded as both a philosophy and a set of fun!tional a!tivities" As a
philosophy embra!ing !ustomer value (or satisfa!tion), planning and organising a!tivities
to meet individual and organisational ob=e!tives, marketing must be internalised by all
members of an organisation, be!ause ithout satisfied !ustomers the organisation ill
eventually die" As a set of operational a!tivities, marketing embra!es selling, advertising,
transporting, market resear!h and produ!t development a!tivities to name but a fe" #t is
important to note that marketing is not =ust a philosophy or one or some of the operational
a!tivities" #t is both" #n planning for marketing, the organisation has to basi!ally de!ide
hat it is going to sell, to hi!h target market and ith hat marketing mix (produ!t,
pla!e, promotion, pri!e and people)" Although these tenents of marketing planning must
apply anyhere, hen marketing a!ross national boundaries, the differen!e beteen
domesti! and international marketing lies almost entirely in the differen!es in national
environments ithin hi!h the global programme is !ondu!ted and the differen!es in the
organisation and programmes of a firm operating simultaneously in different national
markets"
#t is re!ognised that in the 5postmodern5 era of marketing, even the assumptions and long
standing tenents of marketing like the !on!epts of 5!onsumer needs5, 5!onsumer
sovereignty5, 5target markets5 and 5produ!t;market pro!esses5 are being !hallenged" The
emphasis is toards the emergen!e of the 5!ustomising !onsumer5, that is, the !ustomer
ho takes elements of the market offerings and moulds a !ustomised !onsumption
experien!e out of these" ?ven further, post modernisim, posts that the !onsumer ho is
the !onsumed, the ultimate marketable image, is also be!oming liberated from the sole
role of a !onsumer and is be!oming a produ!er" This reveals itself in the desire for the
!onsumer to be!ome part of the marketing pro!ess and to experien!e immersion into
5themati! settings5 rather than merely to en!ounter produ!ts" )o in !onsuming food
produ!ts for example, it be!omes not =ust a !ase of satisfying hunger needs, but also !an
be rendered as an image A produ!ing a!t" #n the post modern market pla!e the produ!t
does not pro=e!t images, it fills images" This is true in some foodstuffs" The !onsumption
of 5designer ater5 or 5slimming foods5 is a statement of a self image, not =ust a produ!t
!onsuming a!t"
A!!eptan!e of postmodern marketing affe!ts dis!ussions of produ!ts, pri!ing,
advertising, distribution and planning" 0oever, given the fa!t that this textbook is
primarily ritten ith developing e!onomies in mind, here the environmental
!onditions, !onsumer sophisti!ation and systems are not su!h that allo a <uantum leap
to postmodernism, it is intended to mention the !on!ept in passing" 7urther dis!ussion on
the topi! is available in the a!!ompanying list of readings"
When organisations develop into global marketing organisations, they usually evolve into
this from a relatively small export base" )ome firms never get any further than the
exporting stage" 6arketing overseas !an, therefore, be anyhere on a !ontinuum of
5foreign5 to 5global5" #t is ell to note at this stage that the ords 5international5,
5multinational5 or 5global5 are no rather outdated des!riptions" #n fa!t 5global5 has
repla!ed the other terms to all intents and purposes" 57oreign5 marketing means
marketing in an environment different from the home base, it8s basi! form being
5exporting5" Cver time, this may evolve into an operating market rather than a foreign
market" Cne su!h example is the ,referential Trade Area (,TA) in ?astern and )outhern
Afri!a here involved !ountries !an trade interAregionally under !ertain !ommon
modalities" Another example is the 3old )torage 3ompany of 9imbabe"
Cae 1*1 C$%+ !t$ra'e C$(pa&, O# -i(bab.e
The 3old )torage 3ompany (3)3) of 9imbabe, evolved in $%%&, out of the 3old
)torage 3ommission" The latter, for many years, had been the parastatal (or nationalised
!ompany) ith the mandate to market meat in 9imbabe" 0oever, the 3)3 lost its
monopoly under the 9imbabean ?!onomi! Reform ,rogramme of $%%.A%&, hi!h sa
the introdu!tion of many private abattoirs" During its monopoly years the 3)3 had built
five modern abattoirs, a number of hi!h ere up to ?uropean (nion rating" #n addition,
and as a driving for!e to the building of ?( rated abattoirs, the 3)3 had obtained a %...
tonnes beef <uota in the ?(" 6ost of the meat ent out under the auspi!es of the
Botsana 6eat 3ommission" 7or many years, the <uota had been a sour!e of volume and
revenue, a sour!e hi!h is still !ontinuing" #n this ay, the 3)38s exporting of beef to the
?( is su!h that the ?( !an no longer be !onsidered as 5 7oreign5 but an 5Cperating5
market"
. #n 5global marketing5 the modus operandi is very different" Crganisations begin to
develop and run operations in the targeted !ountry or !ountries outside of the domesti!
one" #n pra!ti!e, organisations evolve and Table $"$ outlines a typology of terms hi!h
des!ribes the !hara!teristi!s of !ompanies at different stages in the pro!ess of evolving
from domesti! to global enterprises"
The #$"r ta'e are a #$%%$.:
$" Stage one: domesti! in fo!us, ith all a!tivity !on!entrated in the home market" Whilst
many organisations !an survive like this, for example ra milk marketing, solely
domesti!ally oriented organisations are probably doomed to long term failure"
B" )tage two: home fo!us, but ith exports (ethno!entri!)" ,robably believes only in
home values, but !reates an export division" (sually ripe for the taking by stage four
organisations"
D" Stage three: stage to organisations hi!h realise that they must adapt their marketing
mixes to overseas operations" The fo!us sit!hes to multinational (poly!entri!) and
adaption be!omes paramount"
'" Stage four: global organisations hi!h !reate value by extending produ!ts and
programmes and fo!us on serving emerging global markets (geo!entri!)" This involves
re!ognising that markets around the orld !onsist of similarities and differen!es and that
it is possible to develop a global strategy based on similarities to obtain s!ale e!onomies,
but also re!ognises and responds to !ost effe!tive differen!es" #ts strategies are a
!ombination of extension, adaptation and !reation" #t is unpredi!table in behaviour and
alays alert to opportunities"
There is no time limit on the evolution pro!ess" #n some industries, like horti!ulture, the
pro!ess !an be very <ui!k"
Tab%e 1*1 !ta'e $# +$(etic t$ '%$ba% ev$%"ti$&
Ma&a'e(e&t
e(phai
!ta'e $&e
D$(etic
!ta'e t.$
I&ter&ati$&a%
!ta'e three
M"%ti&ati$&a%
!ta'e #$"r
G%$ba%
7o!us Domesti! ?thno!entri! ,oly!entri! *eo!entri!
6arketing
strategy
Domesti! ?xtension Adaption ?xtension
)tru!ture Domesti! #nternational Worldide area Adaption !reation
matrix;mixed
6anagement
style
Domesti! 3entralised top
don
De!entralised
bottom up
#ntegrated
6anufa!turing
stan!e
6ainly
domesti!
6ainly domesti! 0ost !ountry 2oest !ost
orldide
#nvestment
poli!y
Domesti! Domesti! used
orldide
6ainly in ea!h
host !ountry
3ross
subsidi4ation
,erforman!e
evaluation
Domesti!
market share
Against home
!ountry market
share
?a!h host !ountry
market share
Worldide
/act$r .hich have %e+ t$ i&ter&ati$&a%iati$&
There have been many underlying for!es, !on!epts and theories hi!h have emerged as
giving politi!al explanation to the development of international trade" Remarkably,
despite the trend to orld interdependen!y, some !ountries have been less involved than
others" The ()A, for example, has a remarkably poor export re!ord" About B... ()
!ompanies only a!!ount for more than E./ of () manufa!turer8s exports" This has been
mainly due to its huge stateide domesti! market, hi!h is almost tantamount to
5international trade5, for example, 3alifornian fruit being sold three thousand kilometres
aay in +e @ersey" @apan has risen fast to dominate the export rankings, ith !ountries
of Afri!a struggling to make a signifi!ant mark, mainly be!ause of their emphasis on
exporting primary produ!ts" This se!tion ill briefly examine the for!es hi!h have been
instrumental in the development of orld trade"
The$retica% appr$ache
These in!lude the theory of !omparative advantage des!ribed in the book Wealth of
+ations (Adam )mith) and David Ri!ardo), the produ!t trade !y!le (Raymond Fernon)
and The Business Crientation (0oard ,erlmutter)"
The the$r, $# c$(parative a+va&ta'e:
The theory !an be relatively !omplex and diffi!ult to understand but stated simply this
theory is a demonstration (under assumptions) that a !ountry !an gain from trade even if
it has an absolute disadvantage in the produ!tion of all goods, or it !an gain from trade
even if it has an absolute advantage in the produ!tion of all goods" ?ven though a !ountry
has an absolute produ!tion advantage it may be better to !on!entrate on its !omparative
advantage" To !al!ulate the !omparative advantage one has to !ompare the produ!tion
ratios, and make the assumption that the one !ountry totally spe!ialises in one produ!t" To
maximise the ellbeing of both individuals and !ountries, !ountries are better off
spe!ialising in their area of !ompetitive advantage and then trading and ex!hanging ith
others in the market pla!e" Today there are a variety of spreedsheets that one !an use to
!al!ulate !omparative advantage, one su!h is that of the 7ood and Agri!ulture
Crgani4ation (7AC)" 3al!ulation of !omparative advantage is as follos>
?xample
#t may be assumed that 0olland is more effi!ient in the produ!tion of floers than :enya"
Get :enya su!!eeds in exporting thousands of tonnes of floers to ?urope every year"
:enya floer groers )ulma! and Cserian have a!hieved legendary reputations, in the
supply of fresh !ut floers to ?urope, 0oH
Take the simple to !ountry A to produ!t model of !omparative advantage" ?urope
gros apples and )outh Afri!a oranges, these are to produ!ts, both undifferentiated and
produ!ed ith produ!tion units hi!h are a mixture of land, labour and !apital" To use
the same produ!tion units )outh Afri!a !an produ!e $.. apples and no oranges, and
?urope !an produ!e -. apples and no oranges" At the other extreme )outh Afri!a !an
produ!e no apples and &. oranges and ?urope no apples and D. oranges" +o if the to
!ountries spe!ialise and trade the position is as follos>
Pr$+"ct !$"th A#rica E"r$pe
Pr$+"cti$& I(p$rt C$&"(er Pr$+"cti$& I(p$rt C$&"(er
Apples (...8s) . D. D. -. D. &.
Cranges (...8s) &. $' DI D. $' ''
The trading pri!e is D.>$' JB"$' apples J $ orange
$'>D. J '"IE oranges J $ apple
)o in apples, )outh Afri!a has an advantage of $"B& ($..;-.) but in oranges $"IE (&.;D.)"
)o )outh Afri!a should !on!entrate on the produ!tion of oranges as its !omparative
advantage is greatest here" (nfortunately the theory assumes that produ!tion !osts remain
relatively stati!" 0oever, it is a ell knon fa!t that in!reased volumes result, usually,
in loer !osts" #ndeed, the Boston 3onsulting *roup observed this phenomenon, in the so
!alled 5experien!e !urve5 effe!t !on!ept" And it is not only 5produ!tion5 related but 5all
experien!e5 relatedK in!luding marketing" The Boston 3onsulting group observed that as
an organisation gains experien!e in produ!tion and marketing the greater the redu!tion in
!osts" The theory of !omparative advantage also ignores produ!t and programme
differentiation" 3onsumers do not buy produ!ts based only on the loest !osts of
produ!tion" #mage, <uality, reliability of delivery and other tangible and non tangible
fa!tors !ome into play" :enyans may ell be prepared to pay extra for imported 7ren!h
or )outh Afri!an ines, as the lo!ally produ!ed pa pa ine may be mu!h inferior"
The pr$+"ct tra+e c,c%e:
The model des!ribes the relationship beteen the produ!t life !y!le, trade and investment
(see figure $"$) and is attributable to Fenon
$
($%II)
The international produ!t trade !y!le model suggests that many produ!ts go through a
!y!le during hi!h highAin!ome, mass !onsumption !ountries hi!h are initial exporters,
lose their export markets and finally be!ome importers of the produ!t" At the same time
other !ountries, parti!ularly less developed but not ex!lusively so, shift from being
importers to exporters" These stages are refle!ted in figure $"$"
/i'"re 1*1 I&ter&ati$&a% pr$+"ct tra+e c,c%e
7rom a high in!ome !ountry point of vie phase $ involves exporting, based on domesti!
produ!t strength and surplusAto phase B, hen foreign produ!tion begins, to phase D hen
produ!tion in the foreign !ountry be!omes !ompetitive, to phase ' hen import
!ompetition begins" The assumption behind this !y!le is that ne produ!ts are firstly
laun!hed in high in!ome markets be!ause a) there is most potential and b) the produ!t
!an be tested best domesti!ally near its sour!e of produ!tion" Thus ne produ!ts
generally emanate from high in!ome !ountries and, over time, orders begin to be soli!ited
from loer in!ome !ountries and so a thriving export market develops" 0igh in!ome
!ountry entrepreneurs <ui!kly realise that the markets to hi!h they are selling often
have loer produ!tion !osts and so produ!tion is initiated abroad for the ne produ!ts, so
starts the se!ond stage"
#n the se!ond stage of the !y!le, foreign and high in!ome !ountry produ!tion begins to
supply the same export market" As foreign produ!ers begin to expand and gain more
experien!e, their !ompetition displa!es the high in!ome export produ!tion sour!e" At this
point high in!ome !ountries often de!ide to invest in foreign !ountries to prote!t their
share" As foreign produ!ers expand, their groing e!onomies of s!ale make them a
!ompetitive sour!e for third !ountry markets here they !ompete ith high in!ome
exporters" The final phase of the !y!le o!!urs hen the foreign produ!er a!hieves su!h a
s!ale and experien!e that it starts exporting to the original high in!ome produ!er at a
produ!tion !ost loer than its original high in!ome produ!er at a produ!tion !ost loer
than its original high in!ome supplier" 0igh in!ome produ!ers, on!e en=oying a monopoly
in their on market, no fa!e !ompetition at home"
The !y!le !ontinues as the produ!tion !apability in the produ!t extends from other
advan!ed !ountries to less developed !ountries at home, then in international trade, and
finally, in other advan!ed !ountries home markets"
Cae 1*0 UK Te1ti%e
There are numerous examples of the #nternational produ!t trade !y!le in a!tion" +on more
than the textiles industry, spe!ially !otton" #n the early and mid tentieth !entury the (:
as a ma=or produ!er of !otton textile materials, primarily based on its a!!ess to !heap
ra materials from its 3ommonealth !ountries and its relatively !heap labour" 0oever,
its former !olonies like #ndia, ,akistan and !ertain Afri!an !ountries, hi!h ere sour!es
of !otton in themselves realised that they had the labour and materials on their doorstep
!ondu!ive to domesti! produ!tion" They began to do so" )u!h as their su!!ess in
supplying their on huge markets that their produ!tion !osts dropped dramati!ally ith
groing e!onomies of s!ale"
)oon they ere able to support !loth and finished good ba!k to the (:, hi!h by no
had experien!ed groing produ!tion !osts due to rising labour !osts and failing market
share" +o the (: has little !otton materials produ!tion and it served by many !ountries
over the orld, in!luding its former !olonies and 3ommonealth !ountries"
Whilst the underlying assumption behind the #nternational ,rodu!t Trade 3y!le is that the
!y!le begins ith the export of ne produ!t ideas from high in!ome !ountries to lo
in!ome importers, then lo in!ome !ountries begin produ!tion of the produ!t et!", things
do not alays turn out as the !y!le suggests" )ometimes a high or even lo in!ome
exporter may put a produ!t into a high;lo in!ome !ountry hi!h is simply unable to
respond" #n this !ase, the Trade 3y!le !eases to be the underpinning !on!ept" This may be
due to a number of fa!tors like la!k of a!!ess to !apital to build the fa!ilities to respond to
the import, la!k of skills or that the !osts of lo!al produ!tion !annot get don to the level
of !osts of the imported produ!t" #n this !ase, produ!t substitution beteen the exporter
and importer may also take pla!e" A !lassi! example of this phenomenon is the !ase of
9imbabe )unsplash fruit =ui!e drinks"
Cae 1*2 !"&p%ah -i(bab.e
)unsplash, based in 6asvingo, 9imbabe had, sin!e $%-', pro!essed a variety of fruit
=ui!es for the 9imbabean market" When 9imbabe embarked on its World Bank
sponsored stru!tural ad=ustment programme in $%%., 9imbabe steadily moved from a
!ommand to a market e!onomy, part of hi!h alloed foreign importers"
#n a short spa!e of time, market share for )unsplash fell from $ million litres annually to a
mere '.. ... litres" Cn this redu!ed volume, !oupled ith higher transport !osts, the
!ompany simply !ould not !ompete and !losed its doors in @anuary $%%&" 0oever
redu!tion in in!ome and transport !osts ere not the only problems" ?xpenses like high
interest rates ere an inhibiting fa!tor" The !ompany needed to make the transition to
asepti! pa!kaging hi!h ould alleviate the need for !hemi!al preservations and enhan!e
unrefrigerated shelf life" The ne pa!kaging ould have greatly enhan!ed the produ!t and
generated export potential" 0oever, !ashflo !onstraints ithin the holding !ompany,
(A7D#)), !oupled ith high interest rates made the 1&,- million investment unviable"
Orie&tati$& $# (a&a'e(e&t:
,erlmutter
$
($%IE) identified distin!tive 5orientations5 of management of international
organisations" 0is 5?,R*5 s!heme identified four types of attitudes or orientations
asso!iated ith su!!essive stages in the evolution of international operations"
?thno!entrism A home !ountry orientation A exporting surplus"
,oly!entrism A host !ountry orientation A subsidiary operation"
Regio!entrism A regional orientation A orld market strategies"
*eo!entrism A orld orientation A orld market strategies"
The latter to are based on similarities and differen!es in markets, !apitalising on
similarities to obtain !ost benefits, but re!ognising differen!es"
Mar)et #$rce a&+ +eve%$p(e&t
Cver the last fe de!ades internationalism has gron be!ause of a number of market
fa!tors hi!h have been driving development forard, over and above those fa!tors
hi!h have been attempting to restrain it" These in!lude market and marketing related
variables"
6any global opportunities have arisen be!ause of the !lustering of market opportunities
orldide" Crganisations have found that similar basi! segments exist orldide and,
therefore, !an be met ith a global orientation" 3otton, as an ingredient in shirtings,
suitings, and !urtain material !an be globally marketed as natural and fashionable" Cne
!an see in the streets of +e Gork, 2ondon, :uala 2umpar or 0arare, youth ith the
same style and brand of basketball shirts or Ameri!an 7ootball shorts" 3o!a 3ola !an be
universally advertised as 5Adds 2ife5 or appeal to a basi! instin!t 5 Gou !an8t beat the
7eeling5 or 53ome alive5 as ith the !ase of ,epsi" Cne !an <uestion 5hat feelingH5, but
that is not the point" The more !ulturally unbounded the produ!t is, the more a global
!lustering !an take pla!e and the more a standardised approa!h !an be made in the design
of marketing programmes"
This standardised approa!h !an be aided and abetted ith te!hnology" Te!hnology has
been one of the single most poerful driving for!es to internationalism" Rarely is
te!hnology !ulturally bound" A ne pesti!ide is available almost globally to any
agri!ultural organisation as long as it has the means to buy it" 3omputers in agri!ulture
and other appli!ations are used universally ith #B6 and 6a!intosh be!oming household
names" The need to re!oup large !osts of resear!h and development in ne produ!ts may
for!e organisations to look at global markets to re!oup their investment" This is !ertainly
true of many veterinary produ!ts" *lobal volumes allo !ontinuing investment in R L D,
thus helping firms to improve <uality" 7arm ma!hinery, for example, re<uires volume to
generate profits for the development of ne produ!ts"
3ommuni!ations and transport are shrinking the global market pla!e" Falue added
manufa!turers like 3adbury, +estlM, :elloggs, Beyer, +orsk 0ydro, 6assey 7erguson
and #3# find themselves 5under pressure5 from the market pla!e and distributors alike to
position their brands globally" #n many !ases this may mean an adaption in advertising
appeals or messages as ell as pa!kaging and instru!tions" +estle ill not be in a hurry to
repeat its disastrous experien!e of the 5#nfant formula5 saga, hereby it failed to realise
that the ability to find, boiled ater for its preparations, !oupled ith the litera!y level to
read the instru!tions properly, ere not universal phenomenon"
6arketing globally also provides the marketer ith five types of 5leverage5 or
5advantages5, those of experien!e, s!ale, resour!e utilisation and global strategy" A multiA
produ!t global giant like +estle8, ith over N$. billion turnover annually, operates in so
many markets, buys so mu!h ra material from a variety of outgroers of different si4es,
that its international leverage is huge" #f it !onsumes a third of the orld8s !o!oa output
annually, then it is in a position to dominate terms" This also has its dangers"
The greatest lift to produ!ers of ra agri!ultural produ!ts has been the almost universal
ne!essity to !onsume their produ!e" #f one !onsiders the hole range of materials from
their ra to value added state there is hardly a market segment hi!h !annot be tapped
globally" Take, for example, oranges" +ot only are Bra4ilian, #sraeli, )outh Afri!an and
)panish oranges in demand in their ra state orldide, but their donstream
developments are e<ually in demand" Crange =ui!e, !on!entrates, segments and orange
pigments are globally demanded" #n addition the an!illary produ!ts and servi!es re<uired
to make the orange industry ork, find themselves e<ually in global demand" )o
inse!ti!ides, !hemi!als, ma!hinery, transport servi!es, finan!ial institutions, arehousing,
pa!kaging and a hole range of other produ!tion and marketing servi!es are in demand,
many provided by global organisations like Beyer, British Airays and Bar!lays Bank"
Cf !ourse, many ra materials are at the mer!y of orld pri!es, and so many developing
!ountries find themselves at the mer!y of supply and demand flu!tuations" But this
highlights one important global lesson A the need to study markets !arefully" Toba!!o
produ!ing !ountries of the orld are finding this out" With a groing trend aay from
toba!!o produ!ts in the est, ne markets or in!reasing volumes into !onsuming markets
have to be prospe!ted and developed" 6any agri!ultural !ommodities take time to
mature" An orange grove ill mature after five years" By that time another !ountry may
plant or have its trees mature" (nless these developments are pi!ked up by global
intelligen!e the plans for a big profit may be not realised as the extra volume supplied
depresses pri!es" This happened in $%%D;%' ith the 6alaian and 9imbabean toba!!o
!ompanies" The unexpe!ted release of 3hinese toba!!o depressed the toba!!o pri!e ell
belo expe!tations, leaving farms ith sto!k and large interest !arrying produ!tion loans"
A number of suppliers of agri!ultural produ!e !an take advantage of 5off season5 in other
!ountries, or the fa!t that they produ!e spe!iality produ!ts" This is the ay by hi!h
many ?ast Afri!an and )outh Ameri!an produ!ers established themselves in ?urope and
the ()A respe!tively" #n fa!t the !ase of :enya vegetables to ?urope is a !lassi!,
!overing many of the fa!tors hi!h have =ust been dis!ussedAimproved te!hnology,
emerging global segments, shrinking !ommuni!ations gaps and the drive to diversify
produ!t ranges"
Cae 1*3 Ke&,a O## !ea$& 4e'etab%e
:enya8s export of off season and spe!iality vegetables has been su!h that from $%&E to the
early $%%.s exports have gron to BI ... tonnes per annum" :enya took advantage of:
a) in!reased health !ons!iousness, in!reased affluen!e and foreign travel of West
?uropean !onsumersK
b) improved te!hnologies and distribution arrangements for fresh produ!ts in Western
?uropeK
!) the emergen!e of large immigrant populations in several ?uropean !ountries>
d) programmes of diversifi!ation by agri!ultural export !ountries and
e) in!reased uplift fa!ilities and !old store te!hnologies beteen ?urope and :enya"
?xports started in $%&E, via the 0orti!ultural 3ooperation (nion, hi!h pioneered the
?uropean 5off season5 trade by sending small !onsignments of green beans, seet
peppers, !hillies and other !ommodities to a 2ondon based broker ho sold them to up
market hotels, restaurants and department stores" 7rom these beginnings :enya has
!ontinued to give high <uality, high value !ommodities, servi!ing ni!he markets" (nder
the !olonialists, produ!tion remained small, under the misguided reasoning that :enya
as too far from ma=or markets" )o irrigation for produ!tion as limited and the markets
served ere tourists and the settlers in :enya itseff"
The $%E.s sa an in!reased trade as private investment in irrigation expanded, and air
freight spa!e in!reased, the introdu!tion of ide bodied air!raft, and trading relationships
gre ith ?uropean distributors" :enya, emerged as a ma=or supplier of high <uality
seet peppers, !ourgettes and 7ren!h beans and a ma=or supplier of 5Asian5 vegetables
(okra, !hillies et!") to the (: groing immigrant population" :enya as favoured
be!ause of its ability to supply all year round A a !ompetitive edge over other suppliers"
Whilst the (: dominated, :enya began supplying to other ?uropean markets"
:enya8s !omparative advantage as based on its lo labour !osts, the !ountry8s lo!ation
and its diverse agroAe!ologi!al !onditions" These fa!ilitated the development of a
diversified produ!t range, all year round supply and better <ualities due to labour intensity
at harvest time" :enya8s airfreight !osts ere kept lo due to government intervention,
but loer !osts of produ!tion ere not its strength"
This lay in its ability for !ontinuan!e of supply, better <uality and :enyan knoledge of
the ?uropean immigrant population" :enya8s rapidly groing tourist trade also
a!!elerated its !anning industry and as able to take surplus produ!tion"
#n the $%-.8s :enya had its ups and dons" Whilst losing out on temperature vegetables
(!ourgettes et!) to loer !ost 6editerranean !ountries, it in!reased its share in 7ren!h
beans and other spe!iality vegetables signifi!antly getting dire!t entry into the
supermarket !hains and also :enya broke into tropi!al fruits and !ut floers A a ma=or
su!!ess" With the development and organisation or many small 5outgroers5, !hannelled
into the export market and thus idening the export base, the industry no provides an
important sour!e of in!ome and employment" #t also has a highly developed information
system, !oordinated though the :enya 0orti!ultural 3rops Development Authority"
:enya is thus a !lassi! !ase in its export vegetable industry of taking advantage of global
market for!es" 0oever, ft has to look to its laurels as 9imbabe is rapidly beginning to
develop as another sour!e of floers and vegetables, parti!ularly the former"
Whilst the for!es, market and otherise, have been overhelming in their push to
globalisation, there remain a number of negatives" 6any organisations have been put off
or have not bothered going into global industry due to a variety of fa!tors" )ome have
found the need to adapt the marketing mix, espe!ially in many !ulture bound produ!ts,
too daunting" )imilarly brands ith a strong lo!al history may not easily transfer to other
markets" +ational Breeries of 9imbabe, for example, may not find their 3hibuku
brand of beer (breed espe!ially for the lo!als) an easy transboundary traveller" 6ore
often than not sheer management myopia may set in and management may fail to sei4e
the export opportunity although produ!ts may be likely !andidates" )imilarly
organisations may refuse to devolve a!tivities to lo!al subsidiaries"
Cther negative for!es may be !reated by *overnments" )imply by !reating barriers to
entry, lo!al enterprises may be prote!ted from international !ompetition as ell as the
lo!al market" This is typi!al of many developing !ountries, anxious to get their fledging
industries off the ground"
The i&ter&ati$&a% ec$&$(ic ,te(
)everal fa!tors have !ontributed to the groth of the international e!onomy post World
War ##" The prin!ipal for!es have been the development of e!onomi! blo!s like the
?uropean (nion (?() and then the 5e!onomi! pillars5A the World Bank (or #nternational
Bank for Re!onstru!tion and Development to give its full name), the #nternational
6onetary 7und (#67) and the evolution of the World Trade Crganisation from the
original *eneral Agreement on Tariffs and Trade (*ATT)"
(ntil $%I% the orld e!onomy traded on a gold and foreign ex!hange base" This affe!ted
li<uidity drasti!ally" After $%I% li<uidity as eased by the agreement that member
nations to the #67 a!!ept the )pe!ial Draing Rights ()DR) in settling reserve
transa!tions" +o an international reserve fa!ility is available" Re!ently, the World Bank
has taken a very a!tive role in the re!onstru!tion and development of developing !ountry
e!onomies, a point hi!h ill be expanded on later"
(ntil the *eneral Agreement on Tariffs and Trade (*ATT) after World War ##, the orld
trading system had been restri!ted by dis!riminating trade pra!ti!es" *ATT had the
intention of produ!ing a set of rules and prin!iples to liberalise trade" The most favoured
nation !on!ept (67+), hereby ea!h !ountry agrees to extend to all !ountries the most
favourable terms that it negotiates ith any !ountry, helped redu!e barriers" The 5round5
of talks began ith :ennedy in the I.s and Tokyo of the E.s" The latest round, (ruguay,
as re!ently !on!luded in April $%%' and ratified by most !ountries in early $%%&"
Despite these trade agreements, non tariff barriers like ex!lusion deals, standards and
administrative delays are more diffi!ult to deal ith" A similar system exists ith the
?uropean (nion, A the 2omM !onvention" (nder this deal, Afri!an and 3aribbean
!ountries en=oy favoured status ith ?( member !ountries"
Relative global pea!e has engendered !onfiden!e in orld trade" ?n!ouraged by this and
the availability of finan!e, global !orporations have been able to expand into many
markets" The break up of the former )oviet (nion has opened up vast opportunities to
investors, aided by the World Bank and the ?uropean Development Bank" This
atmosphere of pea!e has also alloed the steady upard trend of domesti! groth and
again opened up market opportunities domesti!ally to foreign firms" ,ea!e in
6o4ambi<ue, the 5normalisation5 of )outh Afri!a, and pea!e in Fietnam as examples
have opened up the ay for domesti! groth and also, therefore, foreign investment" The
liberation of e!onomies under World Bank sponsored stru!tural ad=ustment programmes
have also given opportunities" This is very true of !ountries like 9ambia and 9imbabe,
here in the latter, for example, over 91B"- billion of foreign investment in the sto!k
ex!hange and mining pro=e!ts have o!!urred in the early $%%.s"
)ometimes, market opportunities open up through 5A!ts of *od5" The great drought of
$%%B in )outhern Afri!a, ne!essitated a large influx of foreign produ!e, espe!ially yello
mai4e from the ()A and )outh Ameri!a"
+ot only did this give a market for mai4e only, but opened up opportunities for transport
businesses and servi!es to serve the drought stri!ken areas" )peedy !ommuni!ations like
air transportation and ele!troni! data transmission and te!hnology have 5shrunk5 the
orld" 3osts and time have redu!ed enormously and ith the advent of television, people
!an see hat is happening elsehere and this !an !ause desire levels to rise dramati!ally"
Cnly re!ently has television been introdu!ed into Tan4ania, for example, and this has
brought the orld and its markets, !loser to the average Tan4anian"
+o doubt a great impetus to global trade as brought about by the development of
e!onomi! blo!s, and, !onversely, by the !ollapse of others" Blo!s like the ?uropean
(nion (?(), A)?A+, the +orth Ameri!an 7ree Trade Agreement (+A7TA) ith the
()A, 3anada and 6exi!o has !reated market opportunities and !hallenges" +e
!ountries are trying to =oin these blo!s all the time, be!ause of the e!onomi!, so!ial and
other advantages they bring" )imilarly, the !ollapse of the old !ommunist blo!s have
given rise to opportunities for organisations as they strive to get into the ne market
based e!onomies rising from the ruins" This is !ertainly the !ase ith the former )oviet
blo!"
#n the late $%-.s and early %.s, the (nited )tates, along ith @apan, have been playing an
in!reasingly influential role in orld affairs, espe!ially ith the !ollapse of the former
())R" Whilst on the one hand this is good, as the ()A is !ommitted to orld elfare
development, it !an be at a pri!e" The *ulf War !oalition of the %.s, primarily put
together by the ()A as the leading player, as an example of the pri!e"
I(pet" t$ '%$ba% (ar)eti&' i&v$%ve(e&t
#ndividuals or organisations may get involved in #nternational 6arketing in a rather
unplanned ay hi!h gives the impetus to more formal and larger operations" This may
happen in a number of ays>
/$rei'& c"t$(er
(nsoli!ited en<uiries through ord of mouth, visits, exhibitions, and experien!e through
others may result in orders" This is often typi!al of small s!ale organisations"
I(p$rter
#mporters may be looking for produ!ts unavailable in domesti! markets, for example,
mangoes in the (:, or produ!ts hi!h !an be imported on more favourable terms" An
example of these is floers from :enya to 0olland"
I&ter(e+iarie
These may be of four types A domesti! based export mer!hants, domesti! based export
agents, export management !ompanies or !ooperative organisations" These ill be
expanded on later in this text" )ometimes an intermediary may provide export servi!es in
an attempt to redu!e their on !osts on the export of their on produ!e by a!ting as a
representative for other organisations" This is !alled 5piggyba!king5"
Other $"rce
These may in!lude banks, export organisations like 9#6TRAD?, parastatals like the
:enyan 0orti!ultural 3rop Development Authority or even individual exe!utives"
Attit"+e a prec"r$r t$ '%$ba% i&v$%ve(e&t
3avusgil
D
($%-') developed a three stage model of export involvement, based on the fa!t
that the opportunity to export may arise long before exporting behaviours be!ame
manifest" )ee figure $"B"
/i'"re 1*0 Cav"'i%5 three ta'e ($+e% $# e1p$rt i&v$%ve(e&t
A!!ording to 3avusgil attitudes are determined by the operating style of the organisation
and !ultural norms hi!h prevail in the domesti! market" An organisation8s style may be
defensive or prospe!tive" The latter type of organisation may systemati!ally, or in an ad
ho! manner, sear!h out international opportunities"
3ulture plays a vital part in the internationalisation pro!ess" 0akansson et al
'
" ($%-B)
demonstrated that *erman and )edish firms internationalise mu!h earlier in their
!orporate history than do 7ren!h or British !ompanies" Afri!an !ulture is not littered ith
international marketers of note" This may be due to !olonialisation late into the tentieth
!entury"
Behavi$"r a a '%$ba% (ar)eti&' i(pet"
We sa earlier in the internationalisation pro!ess that organisations may evolve from
exporting surplus or serving ad ho! en<uiries to a more !ommitted global strategy" This
gradual !hange may involve moving from geographi!ally ad=a!ent markets to another,
say, for example from the )outhern Afri!an Development 3onferen!e ()AD3) to ?urope"
0oever, not all globalisation takes pla!e like this" #n the !ase of fresh !ut floers, these
may go to ma=or, developed !ountry !onsumer !entres, for example from 0arare to
2ondon or Amsterdam and 7rankfurt" 2usaka or +airobi may never see 9imbabe
floers" #n analysing behaviour one has not to generalise" What is !ertain, is that in all
stages, the balan!e of opportunity and risk is !onsidered"
The c$&te1t $# i&ter&ati$&a%iati$&
#t is essential to see in hat !ontext individual organisations vie internationalisation"
The existing situation of the firm ill affe!t its interest in and ability to internationalise"
)u!h may be the lo domesti! <uality and organisation that a firm !ould never export" #t
may not have the resour!es or the ill"
I&ter&ati$&a%iati$& i&#ratr"ct"re
@ohanson and 6attison
&
($%-') have explored the notion of differen!es in tasks fa!ing
organisations hi!h internationalise" #n lo and high infrastru!ture situations" 5?arly
starters5 are likely to experiment or depend on !onta!ts ith experien!ed organisations
hi!h kno the pro!ess" 52ate starters5 may use existing !onta!ts as a 5bridge5 to ne
opportunities" They may also be pressurised by !ustomers, supplies or !ompetitors to get
into =oint venturing" @oint venturing, ith its added infrastru!ture, may lead to rapid
progress" #f the organisation fa!es intense !ompetition then it may be for!ed to up the
pa!e and s!ale of foreign investment" Rising prote!tionism in re!ent years has given
impetus to late starters to establish produ!tion fa!ilities in target markets" #nfrastru!ture
for foreign operations may also !hange (firms also redu!e their investment as ell as
invest)" When this happens the per!eived risk !hanges also"
This dis!ussion on international infrastru!ture !on!ludes the fa!tors hi!h have led to
internationalisation" #t is a !omplex fo!us of internal and external fa!tors and looking
!arefully at risk versus opportunities"
P%a&&i&' t$ (eet the $pp$rt"&itie a&+ cha%%e&'e $# '%$ba% (ar)eti&'
#n order to take advantage of global opportunities, as ell as meet the !hallenges
presented by so doing a number of !on!epts !an be parti!ularly useful" ?very
organisation needs an understanding of hat is involved in 5strategy5, or else the
haphar4ardness involved in !han!e exporting !an be a!!epted as the norm ith all
inherent dangers involved" Also potential exporters need to kno hat is going on in the
global 5environment5" @ust as in domesti! marketing 5*overnment5 5!ompetition5,
5so!ial5 and other fa!tors need to be a!!ounted for, su!h is the !ase in international
marketing" #f one !an pla!e produ!ts or servi!es at a point on an environmental
sensitivity;insensitivity !ontinuum, one !an see more !learly the need to a!!ount for
differen!es in the marketing mix" By !omparing the similarities and differen!es beteen
domesti! and international marketing needs and planning re<uirements, then the
organisation is in a better position to isolate the key fa!tors !riti!al to su!!ess" This
se!tion examines all these !on!epts in brief"
!trate',
Whatever business e are in, hapha4ard organisation often leads to hapha4ard results" #n
planning for international marketing organisations need a !lear pi!ture of the steps
involved" 5)trategy5 gives su!h a pi!ture" )trategy is the response of the organisation to
the realities of shareholders and the business environment" The phases in the strategy
formulation pro!ess are given on figure $"D"
/i'"re 1*2 !trate', #$r("%ati$&
The '%$ba% e&vir$&(e&t
Cf all the steps in formulating strategy, no one step is as important as the ability to assess
the 5environmental5 fa!tors in international marketing" Taking a!!ount of !ultural,
e!onomi! and politi!al differen!es is a must hen dealing ith different markets" 6ore
ill be said on these fa!tors in later !hapters" ?nvironmental analysis allos the
organisation to !luster markets a!!ording to similarities and differen!es, based on the
environmental 5un!ontrollable5 fa!tors" The international 5un!ontrollables5 are in
addition to the organisation8s domesti! 5un!ontrollables5 so need to be treated ith extra
!are" 7igure $"' shos the ma=or environmental fa!tors to be !onsidered" #t must be noted
that a!!ording to the 5relationship5 marketing s!hool of thought, the so !alled
5in!ontrollables5 !an be made more 5!ontrollable5 by building relationships ith the
influen!es of these fa!tors" 7or example, if an exporter of horti!ultural produ!e ishes to
be able to anti!ipate !hanges in the politi!al environment, it may build a relationship ith
!ertain politi!ians ho may have intimate knoledge of the politi!al system" This should
not, of !ourse, be mis!onstrued as 5insider information5" 0oever, having made this
!aveat, this text ill treat the 5in!ontrollables5 in the !onventional ay"
/i'"re 1*6 /$rei'& 7"&c$&tr$%%ab%e78i& the '%$ba% (acr$e&vir$&(e&t
I&ter&ati$&a% e&vir$&(e&t
An analysis of the environmental un!ontrollables allos the potential marketers to pla!e
produ!ts on a !ontinuum of environmental sensitivity" At the one end are environmentally
insensitive produ!ts and at the other end, those more sensitive to e!onomi!, so!io!ultural,
physi!al and other fa!tors" The greater the sensitivity, the greater the need for the
organisation to learn the ay the produ!t intera!ts ith the environment" An example is
given belo (figure $"&)"
/i'"re 1*3 E&vir$&(e&ta% e&itivit,
/ra(e.$r) #$r i&ter&ati$&a% a&a%,i
#n order to put together the task of finding the differen!es and similarities in
environmental and market analysis, a frameork needs to be devised" Where unifying
influen!es are found then the marketer is able to develop more standardised plans" When
there are a large number of differen!es, then plans have to be designed adapted to
!ir!umstan!es" 7igure $"I gives a frameork for the pro!ess of identifying similarities
and differen!es"
/i'"re 1*9 A C$&cept"a% #ra(e.$r) #$r ("%ti&ati$&a% (ar)eti&': Nati$&a% (ar)et
ver" $ther &ati$&
Cn!e having identified the unifying and differentiating influen!es and ansered many
<uestions about here one !ould or !ould not standardise the marketing planning pro!ess
then a !on!eptual frameork for multinational marketing planning !an be developed"
Cne su!h !on!eptual frameork is given in figure $"E"
/i'"re 1*: A c$&cept"a% #ra(e.$r) #$r ("%ti&ati$&a% (ar)eti&' i& c$&trai&t
ec$&$(ie
:ey <uestions for analysis, planning and !ontrol of marketing in !onstraint e!onomies"
a) ,rin!iple !onstraint analysis
i) *overnment8s attitude to employment, foreign intervention, foreign ex!hange,
indebtedness and poli!ies
ii) *overnment8s poli!y of e!onomi! development, foreign ex!hange, barter deals, e<uity
arrangements, remittan!e of funds, state intervention, private se!tor development and
import substitutionH
iii) *overnment8s so!ial ob=e!tives in!luding indegenisation, subsidies, population and
so!ialisationH
iv) 2as, tariffs, duties, trade regulations, balan!e of payments, li!ensing and labour
lasH

2eading to an e!onomi! analysis

*athering of appropriate data on>

b) Appropriate environmental variable data
i) 6arket !hara!teristi!sAphysi!al, !ultural, si4e, groth rate, stage of developmentH
ii) 6arket institutions A distribution, media, resear!h, servi!esH
iii) #ndustry !onditionsA si4e, pra!ti!es, development stage, appropriate te!hnologyH
iv) Resour!esA manpoer and moneyH
P%a&&i&'
!)Target !ountry experts or generalist staff to plan operationsH
d) What are the authorised target markets and the produ!t appropriatenessH
e) 6arket si4eH
f) What is the stage of development and strenght of !ompetition both state and privateH
g) What is the appropriate produ!t;market te!hnologyH
h) What is the ne!essary adaptaton of the marketing mixH
i) 0o do the goverment and !ompany ob=e!tives !oin!ideH
=) What is the trading riskH
k) What goverment;organisation interfa!e is re<uiredH 0o are li!en!ies agreed and
obtainedH Who are the prin!iple !hara!tersH
!tr"ct"re
l) 0o does the !ompany have to be stru!tured to meet the government, e!onomi! and
so!ial ob=e!tives as ell as !ompany ob=e!tives
P%a& i(p%e(e&tati$&
m) *iven the goverment8s poli!ies, attitudes and e!onomi! and so!ial ob=e!tives ho is an
effe!tive marketing plan designed, resou!ed and implementedH hat degree of adaptation
and !ooperation is re<uired at all levelsH (*overnment marketing institutions and
fun!tion)H Who ill be responsible for ea!h level5H
C$&tr$%%i&' the (ar)et pr$'ra(
n) Who is responsible and ho is the plan performan!e measured and monitoredH
o) What !ontrols, other than profit are re<uiredH Are employment and other su!h
ob=e!tives ne!essaryH
p) 0as the !ompany the ability and authority to alter the parameters to bring a!tual results
into line ith desiredH
<) What are the prin!ipal !ontrol parametersH 3an they be easily ad=usted at allH
This frameork is parti!ularly relevant to developing e!onomies here government
!onstraints and !ontrols tend to be more intensive than developed e!onomies"
Pr$+"ct %i#e;(ar)et %i#e c,c%e
@ust as in domesti! marketing the !on!ept of the ,rodu!t 2ife 3y!le has often been !ited
as a useful (but often malignedO) planning !on!ept, so it !an be useful in international
marketing" 7igure $"- gives an outline of the 6arket 2ife 3y!le a!ross international
boundaries"
/i'"re 1*< The pr$+"ct;(ar)et %i#e c,c%e
The traditional four stage life !y!le A introdu!tion, groth, maturity, de!line A is a ell
do!umented phenomenon" Attempts are made in the maturity stage to extend the !y!le"
The market life !y!le is very similar and hat global marketers have to be ary of is that
not all markets are at the same stage globally" #t may be appropriate to have tra!tor
mounted dit!hers and diggers in Afri!a or the (: here labour is not too plentiful, but in
#ndia, they may be the last thing re<uired here labour is plentiful and very !heap" )o the
appropriate marketing strategy ill be different for ea!h market"
#t ould be very easy to dis!uss the global marketing de!ision as a !ase of de!iding
hether to export or standardise or adapt your produ!t;market offering" This is far from
the !ase" ?ven the smallest nuan!e of !hange in the global environment !an ruin a
!ampaign or plan" Whilst the above dis!ussion has tended to be theoreti!al in nature,
most of it, if not all of it, is essential in pra!ti!e" #n food marketing systems many
transa!tions and dis!ussions take pla!e a!ross international boundaries" This involves a
!lose look at all the ne!essary environmental fa!tors" #f one !onsiders food marketing as
the physi!al and e!onomi! bridge linking ra materials produ!tion and !onsumer
pur!hases then a hole series of interdependent de!isions, institutions, resour!e flos
and physi!al and business a!tivities take pla!e" 7ood marketing stimulates and supports
ra material produ!tion, balan!es !ommodity supply and demand and stimulates end
demand and enhan!es !onsumer elfare" This pro!ess often trans!ends several different
industries and markets, many of them !rossing international boundaries" The produ!t may
!hange form, be graded, pa!ked, transported and ne!essitate information flos, finan!ial
resour!es, invoi!e and retailing or holesaling fun!tions" #n addition, <uality standards
designed for produ!ers and transporters may apply as may produ!t improvements" #n
other ords, the bridge may involve a hole set of utilities afforded to the end user (time,
pla!e and form), and add value at ea!h stage of the transa!tion" This system involves
numerous independent and interdependent players and a!tivities" To shift a perishable
like straberries E...km from 0arare, 9imbabe to the (: re<uires an extraordinary
!omplex series of a!tivities, involving perfe!t timing" The detail involved in this intri!ate
transa!tion ill be explained in later !hapters"
With !ommodities, physi!al, *overnment and e!onomi! environmental fa!tors playing a
ma=or role in international marketing" )o does pri!e and <uality differentiation" #n later
years the enormous su!!ess of the Bra4ilian fro4en !on!entrated orange =ui!e industry has
been attributable not only to poor !limati! !onditions prevailing in its !ompetitive
!ountries, but the fa!t that its investment in large produ!tion e!onomies of s!ale, bulk
transport and storage te!hnologies !onsiderably redu!ed international transport !osts and
fa!ilitated improved distribution of the =ui!e to, and ithin, importing !ountries" 7rom a
!ottage industry in $%E., it gre to a!!ount for -./ of orld trade by the early $%%.8s"
#ts su!!ess, therefore, has been based on pri!e and added value <uality differentiation"
#nternational marketing is, therefore, <uite a !omplex operation, involving both an
understanding of the theoreti!al and pra!ti!al aspe!ts involved" ,res!riptions are totally
inappropriate"
This !on!ludes the dis!ussion on the reasoning hy internationalism has gron and the
next !hapters8 took more !losely at the environmental fa!tors hi!h have to be taken into
a!!ount hen !onsidering to market internationally"
Chapter !"((ar,
The development of global marketing has been brought about by a number of variables
both exogenous and endogenous" The evolution of global marketing has been in a series
of four stages from exporting to truly global operations" These stages have been termed
5domesti!5 in fo!us to 5ethno!entri!5, 5poly!entri!5 and 5geo!entri!5" When planning to
do global marketing, a number of 5environmental5 fa!tors have to be !onsidered but
generally one is looking for 5unifying5 or 5differentiating5 influen!es hi!h ill di!tate a
5standard or 5adapted5 planning approa!h" 7inally, a number of !on!epts and te!hni<ues,
in!luding the #nternational ,rodu!t 2ife 3y!le, !an give insight and a guide to global
planning"
Ke, Ter(
Absolute advantage *lobal environment 6arketing
3omparative advantage *lobal evolution ,oly!entrism
?thno!entrism *lobal marketing Regio!entrism
*eo!entrism #nternational produ!t life !y!le
Revie. ="eti$&
7rom your knoledge of the material in this !hapter, give brief ansers to the folloing
<uestions belo"
$" What are the prin!ipal differen!es beteen marketing domesti!ally and internationally
or globallyH
B" What fa!tors have led to the groth of 5#nternationalism5 sin!e World War ##H Dis!uss
hi!h you think are the most important and hy"
D" Whi!h !on!epts and te!hni<ues are available to aid marketers isolate differen!es and
similarities in domesti! and international marketing in order for them to plan appropriate
marketing strategiesH
Revie. ="eti$& A&.er
$" ?ssentially there is no differen!e beteen the to" Both re<uire the identifi!ation of
produ!t;market ob=e!tives, an analysis of the internal and external environment and the
organising, planning, implementation and !ontrol of an effe!tive marketing strategy" The
differen!es lie in the degree of market similarities and differen!es, and the extent to
hi!h the produ!t to be marketed is environmentally sensitive or insensitive"
B" 7a!tors in!lude>
Theoreti! A !omparative advantage, the ,rodu!t Trade 3y!le and ,erlmutter8s business
orientation"
6arket for!es A market !lusters, te!hnology, !ost;volume !onsiderations, shrinking of
transport and !ommuni!ation gaps, international leverage"
The #nternational )ystem A development of e!onomi! blo!s, groth in domesti!
e!onomies, the #nternational 6onetary 7rameork, global pea!e, !ommuni!ation and
transport te!hnology, global !orporation groth, *ATT"
Cthers A impetus through global experien!e, attitudes (3avusgil), behaviour, !ontext
and the international infrastru!ture"
D" 3on!epts and te!hni<ues available in!lude>
)trategy formulation
*lobal environmental s!anning
7rameork for isolating similarities and differen!es
3on!eptual frameorks
,rodu!t;market life !y!les
)tudents should be en!ouraged to give examples of the !on!epts, te!hni<ues and fa!tors
here appropriate"
E1ercie 1*1 -a(be>i &"t
9ambe4i nuts as a small agri!ultural !ooperative, re!ently developed in the 9ambe4i
Falley in 9imbabe" #n previous years mu!h time had been spent sele!ting and !learing a
site and putting in !ashe nut trees and a servi!e road" The trees had no rea!hed
maturity" Although the domesti! market as attra!tive, the !ost of produ!tion and the
<uality of the nuts meant that far higher returns !ould be gained by selling the nuts on the
international market"
The !ooperative provided employment for about tenty small s!ale groers ith a
he!tare ea!h" #rrigation as in pla!e" The !oop itself had !olle!tion, grading and bulk
pa!king fa!ilities but no pa!kaging fa!ilities" #t employed ten orkers, a supervisor and
general manager" #t had to one tonne tru!ks hi!h !olle!ted from farms and distributed
from the !oop" The !ompany had no experien!e at all in selling its produ!e overseas"
Ta)
What should 9ambe4i nuts !onsider before de!iding on an exporting operationH
Re#ere&ce
$" Fernon, R" 5#nternational #nvestment and #nternational Trade in the ,rodu!t
3y!le"5 Quarterly Journal of Economics, 6ay $%II, pp $%. AB.E"
B" ,erlmutter, 0"@" 5)o!ial Ar!hite!tural ,roblems of the 6ultinational 7irm"5 Quarterly
Journal of AISEC International. Fol" D, +o" D, August $%IE"
D" 3avusgil, )" T" 5Differen!es among ?xporting 7irms based on Degree of
#nternationalisation5" Journal of Business esearch, Fol" $B,$%-'"
'" 7irat A" 7", Dholakia +", Fenkatesh A", 56arketing in a ,ostmodern World"
?uropean5 Journal of !ar"eting Fol B% +o" $ $%%& pp '.A&I
&" 0akansson, 0" (ed), 5#nternational 6arketing and ,ur!hasing of #ndustrial *oods"5
#6, ,ro=e!t *roup, @ohn Wiley and )ons, $%-B"
I" @affee )" 5?xporting high value food !ommodities"5 World Bank Dis!ussion ,aper +o"
$%-" The World Bank $%%D"
E" @ohanson, @ and 6attison, 2"*" 5#nternationalisation in #ndustrial )ystems A A +etork
Approa!h"5 ,aper prepared for the ,rin!e Bertil )ymposium on )trategies in *lobal
3ompetition" )to!kholm )!hool of ?!onomies, $%-'"
-" :eegan, W" @" 5*lobal 6arketing 6anagement5 'th ?dition" ,renti!e 0all
#nternational ?dition $%-%"
%" :otler, ,"5 6arketing 6anagement, Analysis, ,lanning, #mplementation and 3ontrol5,
Ith ?dition" ,renti!e 0all #nternational ?dition, $%--"
$." Wensley @"R"3" 5,#6) and B3* +e 0ori4ons5 or #alse $awns Strategic
!anagement Journal %o. D April;@une $%-B"
$$" 3arter, )" 56ultinational and #nternational 6arketing in 3onstraint ?!onomies"5 The
Puarterly Revie of 6arketing, )ummer $%--, pp $DA$-"
$B" )mith, ," 5#nternational 6arketing"5 (niversity of 0ull, 6BA +otes, $%%."
$D" Terpstra, F" 5#nternational 6arketing5, 'th ed" The Dryden Press, 1987.
14. "The Business Herald " (Zimbabwe) January 19, 199