International
Marketing
Marketers
communicate through visuals, words, and sound to reach consumers through
integrated marketing communications. Global marketing is one way a business
expands its operations to gain additional shares of the market. China, India,
and other developing countries interest firms because of their growing
populations, economies, and industries. Many industries in these countries are
newly-developing which means the market competition may be lower than
established countries and there is potential for growth. Each country has its
own uncontrollable elements to consider before entering a market. A country’s
economic standing, political environment, and climate can impact culture.
Culture affects every aspect of a consumer’s life from every day activities to
one’s purchasing decisions. Culture influences consumers’ priorities, values,
morals, lifestyles, needs, habits, and how they satisfy these conditions
(Cateora, 2016).
Due to these differences, marketers need to adapt or
create new marketing strategies that consumers will accept because even the,
“best practices and rules of thumb cannot necessarily be generalized from one national
market to the other, no matter how successful those ideas are in either market
considered alone” (Blake et al, 2015, p. 13). An understanding of these
considerations will allow marketers to make the best decisions so that the
product’s market entry has the lowest level of resistance, so the marketer can
deliver the right product to the right consumers.
Challenges and Opportunities for the
Global Marketer
Online shopping habits are tangible and intangible
ranging from a consumer seeking information about a product to completing a
purchase on a product site. There are 6 types of e-shopping behavior including
intentional or incidental information acquisition, online of offline purchases,
the use of digital apps, and making digital purchases. These sales
opportunities may occur directly from companies, or from other consumers,
third-parties, product reviews, and pop-up advertisements (Blake et al, 2015).
For a global marketer these vehicles provide an opportunity to reach consumers
in quickly and easily, however, online consumer behavior is complex and
reaching specific segments remains a challenge.
The way consumers use online resources for shopping is a
unique experience that varies demographically and culturally. One group of
interest to companies and marketers is the Millennial generation. Overall,
Millennials have lower incomes levels and less expenditures than its
predecessors, however, Millennials purchase twenty-five percent of annual
products (Paulin, 2018). The size of this generation group means potential
growth and sales for companies. The Millennial population in China alone is 415
million equaling thirty percent of the country’s population (Kim & Chao,
2019). Both China and the United States are large in Millennial populations and
sizable e-markets. One study on Millennial e-shopping habits found many
similarities between the awareness and usage of the internet and applications
in both cultures, but there are some notable differences. These differences are
a potential challenge for marketers.
Marketers decide which trends to apply to every market
because the, “best practices and rules of thumb cannot necessarily be
generalized from one national market to the other, no matter how successful
those ideas are in either market considered alone” (Blake et al, 2015, p. 13).
Millennials in each country use some e-commerce vehicles differently or in some
instances, rarely. For the knowledge
seeking, ninety-four percent of Millennials in the United States have used a
search engine for product research, whereas only about a third of Chinese
Millennials use search engines. One-third of the U.S. Millennials use price
comparison websites, while only twenty-one percent use these sites in China. To
purchase tangible products, Millennials in the U.S. are three times likely to
buy directly from a manufacturer’s website than those in China. Unites States
Millennials are also more likely to use distributor websites. For digital
media, Millennials in the U.S. are twice as likely to use a digital media store
for their purchases and more likely to subscribe to content. The Chinese
Millennial are more likely to refer to blogs, microblogs, and slightly more
experienced with apps with the accrual of membership points (Blake et al,
2015). The use of ecommerce vehicles change frequently, which is another
challenge for marketers. The various ways for consumers to shop online makes it
more challenging for marketers to understand specific consumer behavior,
however, these vehicles are an opportunity for marketers. Once the marketer
knows the most popular and least popular platforms and activity, the marketer
can decide the best platforms to use to reach the targeted segment of
consumers.
Marketers design unique marketing plans for each country
around uncontrollable and controllable variables. The controllable elements of
the marketing strategy are price, product, promotion, and place. Many
uncontrollable impact a country’s market and consumer response to a marketing
plan such as competition, government regulations, political environment, and
natural disasters (Cateora, 2016). These uncontrollable aspects also attribute
to a consumer’s unique culture. Culture affects every aspect of a consumer’s
life from every day activities to one’s purchasing decisions. Culture
influences people’s priorities, values, lifestyles, beliefs, needs, and how
they satisfy these conditions (Cateora, 2016). Culture may also explain online
consumer purchasing behaviors. Understanding the impact of these uncontrollable
factors allows marketers to adapt the controllable aspects accordingly.
One area that may impact the Chinese consumer’s
e-shopping experience and the data in the survey is the omni-channel company
Alibaba. Alibaba became the largest e-tailer platform over Amazon by 2017.
Alibaba’s online businesses include online and offline sales, videos, browsers,
and maps. One million out of six million local stores signed up for the
e-commerce platform (Leverenz, 2018). Like Amazon changed the consumer shopping
experience in the United States, Alibaba impacts the way consumers shop and
businesses sell products. Not all the effects are positive. The boom of the
local Chinese e-tailing business saw a rise in counterfeit good, low-quality
products, and falsely advertised items. To combat these problems, China
introduced the Comprehensive E-commerce Law in 2019 to protect consumers and
investors from fraudulent and misleading business practices. Alibaba was one of
the businesses targeted for its sales of contraband and poor quality products
(Mizner, 2019). The regulations and protections may present several reasons why
the consumer usage data in the United States differs from China in some
categories.
Framework of Analysis
The first step of framework analysis for international
marketing is to identify the problem in one’s home country and then define the
problem in the foreign country. Next a researcher needs to identify possible
self-referencing-criterion (SRC) influence on the problem and redefine the
business goal (Cateora, 2016). The study’s purpose was to understand the
shopping habits of educated Millennials in China and the United States. The
study defines the ages of the groups surveyed, the shopping category options,
and the term e-shopping to avoid SRC. The study’s framework provides a good
overview of possible consumer behavior trends, but a larger sample would
provide a better reflection of the entire Millennial group.
The case study consists of only 776 participants from two
schools, which is not representative of the population. The article notates
that this is a starting point for understanding Millennial e-shopping behaviors, not intended to
represent the population (Blake et al, 2015). To represent the Millennial
target segment in each country, researchers can conduct a larger survey. For
the purpose of sales, some of the categories could be removed such as browsing
and price comparison searches. While this information is important for
funneling consumers to a site for purchase, it does not provide enough insight
into where the final purchase happens. The study divides the products into
tangible goods and digital purchases, but there is no knowledge of the types of
products purchased. Depending on the industry one is marketing for, this data
may not apply. For example if the collected data is for college text books,
then this may not apply to clothing or another market.
The U.S. Bureau of Labor Statistics conducted a thorough
study on purchasing habits of Millennials in the United States from 2014
through 2016. Researchers collected data through weekly diary surveys and
quarterly interviews quarterly for an entire year. In each visit, Millennials
recorded their expenses for the previous quarter, while the Millennials
participating in Diary Surveys completed it each week. The quarterly visits asked
about large expenditure items while the Diary Surveys covered smaller purchases
like food. The study also compared the results of the Millennials to four other
generations for comparison. Some notable results are that Millennials have
lower incomes that other generational groups, yet purchases 23 percent of
products. Millennials spend up to nine percent of their income on food at home
and up to 6 percent at restaurants. Less Millennials own homes than other
generations (Paulin, 2018). The study also uses statistical analysis to compare
two groups. While this is not a study on
online purchasing habits, a framework such as this example would provide a more
thorough understanding of consumer online purchasing behaviors.
Cultural Differences and Marketing Plans
Culture is an important consideration for international
marketers because it effects marketing strategy decisions "in pricing,
research, promotion, channels of distribution, product, packaging, and
styling" (Cateora, 2016, p. 98). The success of a marketing plan depends
on the ability to mesh within a culture. For marketing efforts to be successful
every element of the marketing strategy should be adapted to fit into a
country’s culture seamlessly. Alternatively, some products and companies entry
into the market can change that culture, but product’s that have the least
resistance are often adopted quicker by consumers.
The Cultural differences between the United States and
China require marketers to design different marketing strategies for each country.
To avoid bias it important to note that there are exceptions to overall
generalizations, but there are notable differences between the countries. One
difference is that the United States favors individualism, while China is
collectivistic. China places importance on familiarity and friendships. Family
comes first in business matters and outsiders have less importance (Cateora,
2016). While business decisions from those in the United States can make
business decisions more analytically without familiarity. Most of the
population of China come from a Chinese heritage and there are fifty-five
minority groups within the population, but the United States has many mixed
ethnicities due to immigration. The United States has over 1000 religions,
while the majority of China believe in Confucianism, Daoism, and Buddhism
(Encyclopaedia Britannica, n.d.). The diets of each country are different. The
eastern diet is based upon protein and vegetables, while animal fats and
processed foods are a large part of the western diet. The Chinese practice Feng
shui to increase the flow of chi which brings good luck and health, while
Americans may consider a practice like this as merely superstition (Cateora,
2016). The difference between the two cultures are numerous and different
subcultures exist within each country.
Pricing is an area of marketing affected by culture. Even
psychological pricing can differ in each country. For example, in the United
States a fairly standard pricing is to end the item price with ninety-nine instead
of rounding up to the next dollar (Cateora, 2016). This pricing strategy makes
consumers perceive the price as lower. In China, the number eight is used
because the Chinese consider eight to be a lucky number and a symbol pf
prosperity, therefore consumers would respond more positively to a price ending
in eighty-eight (Cateora, 2016). Marketers need to consider various differences
to create the best marketing strategy for each country.
Another characteristic of culture is that it is
constantly changing. Sometimes these changes occur slowly while others happen
rapidly. The introduction of a new product can potentially change a culture,
but resistance to change is a challenge for marketers. International marketers
consider how different cultures adopt or reject change to understand how to
present a new product to that market. The best strategy for marketers is to
research what resistance to acceptance the product may face in the foreign
market and create a marketing strategy that will accelerate its acceptance
(Cateora, 2016).
Legal Considerations
One legal aspect for marketers to consider are the
guidelines and regulations each country places on businesses and their
practices. In some countries several agencies that monitor businesses. For
example, in China the State Administration Bureau for Industry and Commerce
(SABIC) regulates the marketing mix. The SABIC has authority from the state and
local governments to regulate most trade practices including protecting
consumers, preventing unfair trade, maintaining order within the market, and
promoting competition. SABIC is one of the largest Chinese government agencies
with authority over Chinese business laws such as the Contract Act, Trademark
Act, and the Enterprise and Business Registration Act. Corporations or
individuals are required to register and license the business before conducting
any business operations. Any business practices that may impact the environment
must obtain approval from the State Environment Protection Bureau. A business
or owner must show a bank credit certificate or other financial information to
demonstrate financial stability. Some industries are restricted and require a
special license. A company that fails to abide by these guidelines may receive
penalties such as fines. Any business that violates the Trademark Laws may lose
their business registration (Guoqun, & Saunders, 1994).
SABIC regulates marketing guidelines through the
Advertising Administration Rules. Under these guidelines all claims in
advertisements must be clear and substantiated by facts. The Rules also
prohibit most alcohol, cigarette, and anti-government advertisements. If an
advertisement is deemed offensive or illegal, SABIC can impose penalties such
as a fine for less serious offences to annulling a business license for more
serious offences. Each year SABIC sponsors a three hour television event in
which consumers can call in and file business complaints. Then the agency
investigates these complaints (Guoqun, & Saunders, 1994). Most countries,
like the United States has similar guidelines, but it is important for
businesses and marketers to understand each country’s specific laws to operate
within its legal limits.
Conclusion
International marketers cannot introduce a product into
the market without adapting it to that market and expect the product to be
successful. An international marketer considers how to adapt every aspect of
the marketing strategy and communication to that market. The communicated
material and visuals need to mesh with the culture for quick adoption. Quick
technological advances are also a challenge. As the case study shows there are
multiple ways for consumers to purchase products offline and online and even
these behaviors differ between cultures. The more information a marketer knows
about a culture: its history, its current events, and how the people lives, the
more of an advantage a marketer has in that country’s market. Even further, an
international marketer views different cultured without bias to gain knowledge,
and knows to expects and account for changes.
References
Blake,
B., LaRosa, R., Luming, Y., Neuendorf, K., & Hudzinski,K. (2015). A look at
the e-shopping habits of U.S. and the Chinese millennials. Quirks Media. https://www.quirks.com/articles/a-look-at-the-e-shopping-habits-of-u-s-and-chinese-millennials
Cateora, P. (2016). International marketing (17th ed.). Retrieved from https://redshelf.com/
Encyclopaedia Britannica, Inc.. (n.d.).
Britannica.com. Retrieved on May 10, 2020 from
https://www.britannica.com/place/China
Guoqun, F. & Saunders, J. (1994). China’s
regulated marketing mix: The role of the State Administration Bureau for
Industry and Commerce. Journal of
Marketing Management, 10(7),655-666.
DOI: 10.1080/0267257X.1994.9964312
Kim,
R. & Chao, Y. (2019). Effects of brand experience, brand image and brand
trust on brand building process: The case of Chinese Millennial generation
consumers. Journal of International
Studies, 12(3), 9-21. http://eds.b.ebscohost.com.proxy-library.ashford.edu/eds/pdfviewer/pdfviewer?vid=8&sid=5c7b4159-4e13-4abc-8a3e-a987e203d7a3%40sessionmgr101
Leverenz,
J. (2018, November 15). The future of e-commerce and retail will be written in
China. Forbes.
https://www.forbes.com/sites/oppenheimerfunds/2018/11/15/the-future-of-e-commerce-and-retail-will-be-written-in-china/#e7b4992115f7
Mizner,
D. (2019, October 7). China’s newfound regulatory zeal targets retail. Forbes. https://www.forbes.com/sites/dennismitzner/2019/10/07/chinas-newfound-regulatory-zeal-targets-retail/#121669b350e3
Paulin,
G. (2018). Fun facts about Millennials: Comparing expenditure patterns for the
latest through the greatest generation. Monthly
Labor Review, 1-49. DOI: 10.21916/mlr.2018.9.
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