International Marketing Coursework Example

Contemporary Issues in Leadership
Blog No.3
Submitted by:
Adham Yasser TorkyID: 122104
Faculty of Business, Economics, and Political Science
2017/2018
Word Count: 3088 words
Contents
TOC o “1-3” h z u Introduction PAGEREF _Toc509007728 h 3Literature Review (Issues and Challenges) PAGEREF _Toc509007729 h 4Application of Literature Review PAGEREF _Toc509007730 h 8Summary PAGEREF _Toc509007731 h 12Recommendations PAGEREF _Toc509007732 h 13Limitation PAGEREF _Toc509007733 h 13Suggestion for Further research PAGEREF _Toc509007734 h 14Reference PAGEREF _Toc509007735 h 15
IntroductionInternational business is increasingly becoming a big segment of the global economic activity. Current projections indicate that in the near future, the dollar value of trades across borders may be greater than dollar value trade within the global countries combined. International business is considered as one great driver of rapid growth. It has opened up large economies like Russia and China which had always locked away investors and producers.
Global expansion has become a crucial component for most fashion businesses in their growth strategy. Various factors normally prompt entrepreneurs to enter the international market (Cateora, 2014). Expanding operations overseas provides great opportunities for faster growth and development. Consequently, the domestic fashion market is more saturated. Huge markets can be identified internationally in terms of population and purchasing power. However, international marketing isn’t without pitfalls, particularly in the clothes and fashion industry.

As much as the global marketplace is becoming more accessible and interconnected, the risks involved in doing business abroad cannot be taken lightly. Opportunities in the global market abound for businesses ready to confront the obstacles with optimism (Cateora, 2014). Entrepreneurs entering the international market are faced with issues such as piracy concerns, tax, and legal issues among other challenges. Piracy becomes a challenge when others pirates one’s designs then produce substandard ones, hurting his credibility and also trust from the target market.
Over the past years, the global clothes and fashion industry has evolved. The industry is a very competitive one. Entrepreneurs across the globe are eying a stake in this space. The way of doing business is no longer the business as usual. Today, a customer may shop online and have the products delivered to their doorsteps. It is not the same case, maybe a decade ago when consumers would walk into a brick and mortar store to look for a product and perhaps couldn’t find what they were looking for. As businesses enter the international marketing, new opportunities and challenges will continue to arise. The paper will discuss various challenges issues and challenges that a business may face when entering the international marketing in a clothes and fashion industry.
Literature Review (Issues and Challenges)Consumers today have the power. This brings out the aspect of consumerism where fashion entrepreneurs are being compelled to be hypersensitive to needs and also wants of consumers (Felix, 2015). The key stage in the journey is the Omni-channel fulfillment. Mobile commerce, E-commerce, and the Amazon effects are felt across areas of the fashion and retail industry. Competition in clothes and fashion industry makes it hard for small or upcoming businesses to get “the attention of the global market” (Keegan & Green, 2010). Considering the fast fashion apparel, customers often want to see the red carpet outfit of their favourite celebrity online and in the racks within days or weeks. It means an exponential growth in product ranges and collections and packing options, creating pressure on the supply chain. It also creates complexity in planning, product development, production, and fulfillment.
Communication can also be a great challenge when entering foreign markets (Öberg, 2014). The ability to communicate with potential international customers to understand their local business practices and customs is paramount. Companies in the fashion industry need to know the languages being spoken in the chosen foreign markets. The communication pitfalls may be a great obstacle to having a significant market share. Language barrier presents a set of problems. It is also a big challenge when it comes to reputation management since managing customer relationship in foreign countries is a sensitive and vital factor in international expansion. Good communication is normally the heart of international marketing. However, communication across cultures may be a very big challenge. A marketer entering the foreign market will have to develop proper cross-cultural competency as well as communication skills to succeed in selling his/her products. Effective communication with customers, colleagues, and clients abroad is essential to succeed in international business. Communication skill is a lot more than just the language barrier. It also involves non-verbal communication which can either make or break business deals.
Different nations also have different cultural norms and values. Norms like shaking hand may influence the way one communicate in a casual and professional contexts Opportunities in the global market abound for businesses ready to confront the obstacles with optimism (Cateora, 2014). Therefore, it is vital to be aware of the acceptable etiquette abroad. It is also vital to be aware of how cultural and religious traditions may impact business. It helps in navigating the potential communication challenges that one may come across in the international marketing. Cultural difference normally affects the market demand for a product. The needs that a business meets at home may not exist overseas because of cultural difference. There are successful business brands in the US whose models were simply not viable in the overseas market. An example is the Starbucks Company that struggled in Australia. The demand for the local coffee shops and cafes outweighed the appeal of this corporate giant.
The political environment is another challenge that affects international marketing in the clothes and fashion industry. Issues like corrupt practices or unstable policies may be problematic while entering the new foreign markets. Some countries are constantly faced with political instability which cannot support successful business operations. Political changes may also bring new labour issues, tax controls and import restrictions Opportunities in the global market abound for businesses ready to confront the obstacles with optimism (Cateora, 2014). An increasing trend of economic nationalism may also make the current international political landscapes hostile towards international business. A good example is a company like Facebook that was partially “banned in China in preference for the country’s national social networks and due to regulation over internet content” (Harris, 2017). Therefore it is vital to monitor the political developments and plan accordingly to mitigate these political risks while entering the international marketing. Every nation charges its custom fees for importing goods. Businesses entering foreign markets have to know the financial burden that they are putting on consumers. Consequently, international shipments are normally subject to export laws and regulations. The requirements of export licensing vary in different nations and are based on national security concerns and foreign policy. It is vital to evaluate the political environment to determine if it can support effective business operations. Certain nations have tax systems which make it hard to operate.
Setting prices for products can be a challenge while entering the global market. As much a company may employ penetration pricing, it must consider costs in order to realize profits and remain competitive. Prices of local and direct competitors may give a benchmark for setting prices. Pricing may also depend on how a company chooses to position its brand. The prices may reflect luxury status or the low pieces may help penetrate the new market. For companies entering international marketing using e-commerce, the payment method may also be a challenge considering the emergence of international e-commerce websites that sell goods overseas (Okazaki & Taylor, 2013). Such companies will have to accept the foreign payment methods to attract customers from those countries. Accepting Bitcoin, PayPal payments and wire transfers are other options that can be considered (Felix, 2015). Accepting these payment methods also bring the challenge of currency fluctuations. It is normally a big challenge to navigate as far as international business is concerned. Major currency fluctuations may seriously affect the balance of the expenses and profit of a business. For instance, if the company pays suppliers in US dollars and sells market with unprecedented or weaker currency, then the company may end up with smaller profit margin and sometimes loss.
It is vital to note that the international expansion cost stops at shipping and other related surcharges. Currency values and taxes play a part while exporting. Some shipping providers also have additional charges on top of international rates such as dimensional weight, extended area, and fuel. The additional costs normally affect the profit margins and the viability of doing business abroad. In some cases, the dimensional weight surcharges and extended area surcharges mat exceed the product’s cost. Factoring these costs in the product leads to high prices that the majority of consumers find it relatively expensive. Hence it is vital to take note of these additional charges and how they factor in the international marketing.
Another challenge is supply chain complexity and labour exploitation risks. Managing supply chains and suppliers may be a tricky process when it comes to sourcing product or exporting products overseas (Öberg, 2014). The complexity and the length of supply chain increase the chances of working with unethical suppliers or illegal practices. There has also been a growing concern of worker exploitation. A business entering the foreign market must be ready to respond to these issues to minimise the chances of being on the wrong side of the laws. They also have an obligation to adopt ethical and sustainable business practices in their operations.
Application of Literature ReviewAdvantages of Marketing Internationally
Market Expansion
When a business goes global, it means that it will have a larger market share with more customers compared to when the business restricts its operations in the domestic market. It is an opportunity for small business to grow.
Brand Reputation
Customers normally perceive the products of business that sell internationally as of greater quality compared to those that sell locally. Therefore, the business gains the reputation when they get into international marketing.
New business partners and new customers
Expanding a business globally enables the business to gain new customers as well as new business partners which is normally an added advantage as far as business is concerned.
It opens doors for business expansion in the future
Going international enables the business to establish connections which may become useful for future expansion.
Challenges of foreign markets are real, and for a business in clothes and fashion industry to succeed in such markets, it has to take realistic approaches. Managers have to leave their preconceived notions of how marketing should be conducted at home. Various foreign businesses in clothes and fashion industry are thriving in foreign markets, but these successes have been achieved through cultural understanding patience and perseverance. It is vital to know the target customers, their preferences and also values in any market. People in various nations place diverse values and priorities on various products. Some consumers may prefer to buy goods online whiles others prefer the traditional marketplace. For instance, a survey carried out by Pitney Bowes found out that while most people in foreign market prefer to buy footwear and apparel in person, Chinese customers are more likely to purchase them online (Papadopoulos & Martín, 2011). A good move for a business entering the international marketing is to first carry out a study with regards to the values and priorities of the target consumers. It will help overcome the challenge of cultural complexities that may arise when selling overseas.
It is essential to understand where customers are buying and also how much the consumers are willing to spend. For example, online retail sales are normally highest in Finland, South Korea, U.K, Denmark, and Norway. Therefore, if one intends to expand to these markets, he should consider selling on online platforms because this is the norm in those markets.
Expanding into these countries would likely be most profitable for businesses. Equally important, businesses need to know how much consumers are willing to pay for each product, in order to stay competitive in local markets (Keegan & Green, 2010). Consumers in various nations also prefer varied payment methods. For instance, in Japan, over half the population prefer making credit card payments when purchasing goods online. However, in Germany, about 70 percent prefer bank wire transfer or direct debit. Businesses expanding to foreign nations may consider the option of coordinating with service providers who may tackle the cultural challenges and assess the strengths of the market in every country. They should be able to point out where customers want to buy, where they want to buy, the amount they are willing to pay and how they prefer to pay (Katsikeas, 2014). As much as there are certain challenges associated with international marketing, there are still several reasons why companies should still consider going global. There are online service providers who may assist a global retail business. The fashion products may be posted on their website for a fee which makes selling internationally easier. Therefore, an entrepreneur who intends to enter the international marketing in the clothes and fashion industry needs to be optimistic and navigate the challenges along the way.
It is essential to acknowledge that young fashion customers readily employ the use of digital platforms to get information regarding trends, compare prices and to exchange experiences. Social media plays key roles in the journey of these customers. About 35% of consumers rely on suggestions from social networks which is why Adidas, for instance, has equipped its several European stores with interactive mirrors (Thompson, 2017). Digital channels do not only serve the purpose of providing pre-purchase information. They have currently become standalone platforms for transactions. Fashion customers expect seamless shopping experiences which present a challenge for retailers (Felix, 2015). As a result of mobile devices, international online clothing retailing is growing at a relatively higher rate. It presents an opportunity for a business entering the global space. They may exploit this opportunity for growth into unprecedented markets in spite of the challenges associated with them. Embracing the online retailing would provide valuable data that can be used to predict the type, time and the scope a customer’s next purchase. Making good use of this data may be helpful yielding diverse methods of personalizing new customer interactions, advertising, and product offering. However, it is vital to note that there is the challenge of processing the huge volumes of data, more so, in real time.
A fashion company, entering the global market will need to come up with a new pattern for growth and success. Considering the aspect of cultural complexity and diversity, the business must live up to expectations and needs of diverse cultures. It requires aligning its offering to various classes. Even in a nation, there are normally big differences in customer preferences and purchasing power (Keegan & Green, 2010). It is the reason Gucci, for instance, opted to align its products in China to different urban classes. Applying this strategy brings about the business presence in various segments which gradually leads to market penetration and increase in the customer base (Keegan & Green, 2010). Some of the primary goals of business entering the international marketing in the cloth and fashion industry are to deliver commercial success, support online sales and serve as brand ambassador. In order to achieve this, the business must be ready to deliver unique consumer experience. The greater access to markets abroad motivates various companies to expand globally despite the challenges. Although there are real challenges while entering the global market, businesses may use various strategies to navigate them and attain success.
SummaryThe today’s digital space enables businesses and consumers to interact, buy and sell beyond their borders. Entering the global market may provide a business with exciting opportunities for growth. The international marketplace opens up other growth-oriented consumer markets. However, there are challenges and risks associated with international marketing. If it were easy, everyone would be doing it. Some of the challenges that have been discussed above include communication challenges (language barrier, legal issues, cultural complexities, political problems, supply chain complexity and tax issues and policies among other issues. Other challenges include stiff competition in the clothes and fashion industry and different lifestyles. The above factors will shape the expansion strategies of the business. For a business entering this space to succeed, it must be ready to face these challenges and navigate them to achieve growth and success. Understanding and embracing these challenges and uncertainties will help a fashion business to identify the optimal strategies before jumping into international marketing. An entrepreneur who intends to enter the international marketing in the clothes and fashion industry needs to be optimistic and navigate the challenges along the way.
RecommendationsBefore entering a global market, conducting proper due diligence is critical. It is vital to know target customers, their preferences and also values in any market. In order to navigate the legal complexities of international marketing, I would recommend obtaining proper legal advice otherwise the business might be subject to penalties and fines. It calls for good international lawyers with a firm understanding of the laws regarding their home countries. As a result of today’s digital space, I would recommend the business to consider selling online as one of the strategies for entering the global marketing. The Internet gives opportunities to target a vast number of consumers. It may involve developing innovative videos that feature videos of one’s fashion endeavours or presenting fashion shows, featuring the business’s clothing line. To deal with cultural complexities, I would recommend the development of cross-cultural competency as well as communication skills to succeed in the global market. I would also recommend evaluating the political environment of a country to determine if it can support effective business operations.
LimitationOne of the emerging concerns in business entering new markets in the global space is the ethical issue (Carrigan, Marinova & Szmigin, 2015). The ethical issue is one area that hasn’t been addressed adequately in the paper. In some countries, illegal payments to secure business seam to customary. If a company involved in such activities, it encourages the corruption in the local system which is unethical behaviour. The other limitation is the social responsibility and sustainability aspect. In the today’s global space, brands need to be seen undertaking some kinds of sustainability strategy because consumers are hyper-aware of how brands operate concerning their waste labour practices and safety standards.
Suggestion for Further research“Black Friday” is one of the marketing strategies which is known to many consumers across the world. Recently, it has been regarded as the beginning of shopping season during holidays. Retailers normally offer huge discounts on a variety of things. However, there has been a limited study on the significance of Black Friday as a marketing tool for the fashion industry. Therefore, I would suggest this for further research because it is becoming more vital in the clothes and fashion industry. It is one strategy that revolves around the customer promotions and deal and is currently available in the global space.
References
Carrigan, M., Marinova, S., & Szmigin, I. (2015). Ethics and international marketing. International Marketing Review, 22(5), 481-493. http://dx.doi.org/10.1108/02651330510624345Cateora, P. (2012). International Marketing. 16th Edition. New York: McGraw Hill.
Felix, E. (2015). Marketing Challenges of Satisfying Consumers Changing Expectations and Preferences in a Competitive Market. International Journal Of Marketing Studies, 7(5). http://dx.doi.org/10.5539/ijms.v7n5p41
Harris, H. (2017). Overseas Expansion & the Fashion Industry, 2(1). Retrieved from http://smallbusiness.chron.com/overseas-expansion-fashion-industry-77356.html
Katsikeas, C. (2014). Journal of International Marketing: Objectives, Challenges, and the Way Forward. Journal Of International Marketing, 22(1), 1-4. http://dx.doi.org/10.1509/jim.22.1.editorial
Keegan, W.J. and Green, M.C. (2010). Global Marketing. Imported Edition. Upper Saddle River: Patience Hall.
Öberg, C. (2014). Customer relationship challenges following international acquisitions. International Marketing Review, 31(3), 259-282. http://dx.doi.org/10.1108/imr-10-2012-0166
Okazaki, S., & Taylor, C. (2013). Social media and international advertising: theoretical challenges and future directions. International Marketing Review, 30(1), 56-71. http://dx.doi.org/10.1108/02651331311298573
Papadopoulos, N., & Martín, O. (2011). International market selection and segmentation: perspectives and challenges. International Marketing Review, 28(3). http://dx.doi.org/10.1108/imr.2011.03628caa.001
Thompson, V. (2017). What Are Some Challenges That Firms Face for International Marketing?, 2(1). Retrieved from http://smallbusiness.chron.com/challenges-firms-face-international-marketing-3356.html