Business sustainability in the 21st Century demands an International presence irrespective of the type of product and services. In this global village, demand exists everywhere, and quality supplies can move quickly beyond borders. Internationalization of Marketing strategy is thus the critical aspect of business growth.
International Product and Service Strategies present the following four dilemmas.
- Selling as is; in international markets.
- Adapting products to specific foreign markets.
- Designing a new product for foreign markets.
- Adapt a flexible global product with local customization possibilities.
Volatility, Uncertainty, Complexity & Ambiguity VUCA is the 21st Century adage. Though the fundamentals of marketing remain the same, however, the vehicles have evolved. Marketing is taking precedence over sales owing to digital technologies. An aware consumer is a lot more demanding and shows the short-run tendency of loyalty. The switch options are numerous; thus, the market pie fight is a lot more intellectually intense. Digitalization and technology-product amalgamation has changed how a customer perceives and consumes a product or a service, and market boundaries are getting blurred by the day. When you plan and undertake travel, you also interact with technology making it tech-enabled travel, a live example of blurring the domain boundaries. We may not even be aware of this automatic adjustment to technology. The Swiss experience is an example of a Country itself being productized for a superior overall experience.
Supply chains are vital for any product or service to reach the consumer. Strategic fit of cost versus strategic objectives is the key, and the customer is now seeking agile responsiveness. Thus, distribution networks must be powered through technology for sure. Digital device-independent applications are now the given aspects of end-to-end engagement of every customer. An app is both a marketing tool as well as a complete experience of customer engagement. Apps also make experience boundaryless and enjoyable. Let us deep dive, into the digital experience of sales and marketing from an International Business perspective.
Economies of scale are a definite motive for the Internationalization of operations, and thus, products and services must thus operate across geographies. We need to understand the customer engagement process in the new world as we reorient ourselves to it. There are phases of connection that the customer now proactively engages in.
Phase I: Unconscious awareness
A customer becomes aware of a pain area and a need for an innovative product that addresses it when confronted with a difficult situation. A wish for a solution activates a seed in mind, unsure and unaware of a plausible solution.
Phase II: Active search
Digital search is triggered on the world wide web for conscious accumulation for possible decision choice. With key words getting fired, information is instantly available on the search engines. Thus, if we are not on the Internet, we are not there. Internet is today the most prominent digital real estate and an advertising medium. However, on the Internet, a customer wants empowerment through information for decision making. The consumer is just not interested in campaigns that overwhelm. Digital analysis is the preferred option. At this stage, data needs to be available transparently and authentically.
Phase III: Conscious awareness
Post the digital searches, conscious awareness of possible choices is made by the consumer. Thus, in all probability, the decision to buy a product is already made at this stage. Therefore, research says 80% plus decision is already made. The consumer has narrowed down the options before reaching out to you.
Phase IV: Active referencing
At this stage, a consumer may look at the digital pages’ pros and cons and what exiting consumers talk about. It further leads to confirmation of choices. Thus, customer engagement on social media is an essential factor today. If there is no buzz existing for your product or service, the possibility of customers engaging with you is low. Thus, the proactive driving of knowledge content is the key to create buzz. Remember, empowerment of customers with knowledge is the key to success in this new world order. Organizations must remain relevant in the digital world through conversations with the target group. Even passive consumption is a good option.
Phase VI: Empowered Action
Today’s consumers worldwide love to make empowered decisions. It is self-driven, and thus hard sales are becoming increasingly irrelevant. Marketing has never before made sales irrelevant than it is today in the digitalized world.
Phase V: Customer Advocacy
An informed decision has an element of pride in it. It is shared with the community at large, which results in Customer advocacy. Digital engagements and conversations with the customer are the keys in today’s world. Consumers share useful and bad experiences, and this sharing gives velocity to the brand.
The process of branding is an essential definer in the world today. If you are not an International Brand, the chances of sustainability are low. In International Business, Brands are created through powerful content. There are a host of mediums available for emerging as a brand with a personal touch. Personal engagement with the target consumer is the most critical aspect if organizations wish to go International. Today’s options are social media engagement pages, knowledge blogs, podcasts, web pages, apps, publications, social media adverts, and print media adverts, and the list will keep growing over time.
Print media and social media adverts combination are powerful. Print media reaches us masses while digital media touches the target group. Netizens are growing by the day; thus, the shift towards digital marketing will be a continual process.
Therefore, the Internationalization of brands and products is the key to building sustainable organizations. A firm must have a local and global presence to remain competitive. Therefore, every business must look at global strategy, which can be discussed under the head of generic and grand strategy, both being relevant.
The fundamental idea is to ensure global integration with local responsiveness. While the International strategy must standardize worldwide processes and communication to ensure uniformity of perception of being a Global Brand and Product, responsiveness customized to suit individual domestic market needs and its culture is the key.
A generic strategy of integrated cost leadership and differentiation works the best in international markets. As we accomplish the economies of scale, we can move towards cost leadership and capture the market share, differentiation of the brand, and the product is the key. A selection of product and value-added services that are global and country-specific will work the best to compete in Nations with unique business dynamics.
In terms of the grand strategy, the idea is to transfer the firm’s resources, capabilities, and core competence to markets that are new or are less efficiently catered to. A transnational strategy helps global integration with local responsiveness for a systematic diffusion of innovations and inventions. This strategy is the biggest challenge that firms encounter; however, it is critical for success. MNE’s typically use the following options to achieve the transnational objectives:
- Use of Trade Intermediaries like Export Marketing Companies.
- Branch Offices: An inexpensive proposition.
- Collaborative partnership: Non-equity complementing core competence.
- Franchising: Brand presence with standardized global systems.
- Licensing: Sales & Production with IP control.
- Joint Venture: FDI participation with a share of control.
- Strategic Business Unit: A full-scale local operation with absolute control.
- Contract Agreements: Useful for turnkey projects.
- Borderless eCommerce: Leveraging the web portals for sales and analytics.
The best option is an incremental commitment to a foreign country investment for mitigating the risk of liability of foreignness.
A product and brand must become Borderless. The critical takeaway is both the brand and product must operate effectively in an International Market and Domestic Market. Geographic Indicators are specific differentiators that can be used wherever possible. It creates a genuine affinity and helps transcend local influences. The power of digital technologies with Marketing Analytics must be harnessed to capitalize on existing and potential markets.
We live in a world of ease of availability of information and easy access to International products and services. The time has come for products and brands to be truly valued for their International quality and innovation, which will help transcend to boundaryless markets and brands.
Go ahead, build borderless products and brands to succeed in the 21st Century.
Copyright 2020 Niket Karajagi International Business Blogs Series.