A World without international marketing?

A World without international marketing?

-Michael R. Czinkota

 Sometimes we only know what we lost when it has left us. I put this thought to the test it in my class of Georgetown University students. In our course “Marketing Across Borders”, we worked on the question: “What would life look like without international marketing?”. The answers offered various perspectives reflecting their interest and training in international affairs. The range was broad, addressing the impact of international marketing in the context of diversity, choices, cultural exchange, and international quality standards.

            On a personal level, students saw substantial impact of international marketing on their lives. Some mentioned that international marketing and its activities creates thousands of jobs around the world.This was seen as highly relevant to themselves, but they included their parents as well since such a change clearly involved today and the future. Some students said that without International Marketing a life would be simpler but not necessarily in a good way. International Marketing was seen to bring to life a variety of products that enrich consumers and make them more productive.

Some respondents highlighted the exposure to new thoughts and ideas that International Marketing brings to people around the world. Such exposure motivates the competition between companies to supply better quality combined with better value. This competition leads to innovation in products across different markets around the world. Without International Marketing, the high quality standards we have today would diminish due to decreasing competition.

            Companies would also feel  the absence of International Marketing. Expansion across borders will be harder and would have to rely without marketing heavily on word of mouth communication. Exports and imports will be far less than today’s value since international activities will be less profitable. Selling products to other cultures in which they are not interested will be difficult. Companies will have fewer opportunities to learn and develop from others as well. Problems will be caused by a lack of willingness to adjust or a lack of motivation to develop and compete. In consequence, the world won’t be as efficient as today.

            There was the hypothesis that International Marketing is likely to reduce poverty and increase international cooperation. These benefits would disappear when foreign direct investment decreases. Sales in foreign markets would diminish without the lubricating effect of international marketing. Less cultural awareness of others would be the consequence of a decline in intercultural communication. Companies would be less socially responsible and transparent as they won’t be inspired by other international companies who serve international communities. This would newly insert more psychic distance between cultures and countries, and reduce the attention paid to common problems and actions taken for the public good.

            Finally, we explored what students would miss most, where does the pain threshold begin: We know about the wide variety of products that are moved and brought to market thanks to marketing. So how about the loss of video games, cars, music tourism or even commercials. These items were touched on, but the core of items one would miss the most were Food, Food, and Food again.  Students were quite varied in their thinking as long as the items whose loss was deplored dealt with sustenance or alimentation. Leading among products held dear were chocolate, snacks, noodles, candies and anything else which could be eaten by chopstick. Quite a broad base from students whose parents were only introduced to new eating utensils. Food and its variety tend to give staying power to globalization and also encourage cross fertilization. Let it give new opportunity to a life with spice.

Michael Czinkota teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent. His key book (with Ilkka Ronkainen) is “International Marketing” (10th ed., CENGAGE).

TERRORISM, COMPETITIVENESS, AND INTERNATIONAL MARKETING – (3/6)

TERRORISM, COMPETITIVENESS AND INTERNATIONAL MARKETING

SEARCHING FOR CORPORATE EFFECTS

(Third in a series)

Valbona Zeneli, Marshall Center, Germany

Michael R. Czinkota , Georgetown University USA and University of Kent, UK

Gary Knight, Willamette University, USA

The scientific approach is largely driven by hypotheses  which are analyzed as to their likelihood of being acceptable, true and robust. We present thoughts on the odds and consequences of relationships between international marketing and terrorism. We suggest arms length and reliable insights which improve our contextual understanding and decision making. Here are several hypotheses which we postulate are associated with terrorism and corporate action.

First are increases in Marketing Costs, accompanied by disruptions of supply chains. Interruptions in global supply chains tend to cause shortages or delays of critical inputs, which affect corporate strategies and performance, shrink shareholder value, and reduce the  consumption of goods and services. Perhaps the entire “just in time” production processes of a firm and its supply chain may need to be reconfigured.  Increased security measures heighten the complexity of motion which increases costs. Contextual volatility raises the cost of coordination, as suppliers and distributors devote more resources to environmental scanning, information processing, and negotiating with their suppliers for synchronized responses to rapid changes within all affected organizations.

For marketing planning, design, and organization we believe that an increase in the threat or occurrence of terrorism, makes management select its risk as a salient factor in the firm’s international marketing planning, supply chain management and organization of global distribution channels. To develop business strategies which minimize the firm’s exposure, managers tend to avoid direct investment and to require higher returns on investment.  Exports can rise but with higher cost assessments for the development of new infrastructure in terrorism-prone areas.  Terrorism also appears to depress buyer psychology and consumption.

International Experience plays a major role in the firm’s marketing planning, and the design and organization of the firm’s global distribution channels. The acquisition, interpretation and distribution of knowledge are critical for optimizing performance of global supply chains, and achieving superior resilience  and market share. Reducing the firm’s risk due to unfamiliarity with a market, also called the “liability of foreignness”, pays off by decreasing market operational uncertainties, and shrinking  surprises. It pays off to be on site,  a motto which argues for  multi-dexterity in international strategy.  Substantial experience in numerous foreign markets is greater than the sum of its parts, and becomes a strategic asset when a firm must confront terrorism in its global operations.

Organizational Resources of the firm affect its competitive advantage. They can strengthen assets such as in-house knowledge, skilled personnel, superior strategies, and financial reserves. The ability of firms to succeed in light of international business adversity is largely a function of the resources available to explore alternatives.

Resource-restricted firms face greater challenges to create a solid business foundation by researching foreign markets and potential partners.  Conversely, well-resourced firms have a greater capacity to undertake international ventures that will perform well. Therefore, we expect that firms with comparatively abundant resources will be better positioned to undertake sophisticated international marketing preparations. They can incorporate the environmentatl contingencies of terrorism into their planning, their development of supply chains, and their distribution channels, all key components of international success.

Michael Czinkota teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent. His key book (with Ilkka Ronkainen) is “International Marketing” (10th ed., CENGAGE).

 

St. Valentine’s Day – More than dates and roses

St.Valentine’s Day – more than dates and roses

Michael R. Czinkota

For centuries St. Valentine has been the patron of love and lovers, providing individuals with the nudge to move a relationship forward. International shipments of red roses have enriched the economies of Colombia, Ecuador and Kenya by hundreds of millions of dollars. This is the time to revisit Valentine’s Day as to its meaning and make plans to restructure its impact.

Valentine’s Day has already undergone significant expansion. Its celebration has grown from a small parish to half of the globe. It has become, in some of the wealthier countries, an important gift giving occasion. Gifts have become differentiated by gender. Men consistently give more than women, perhaps because they wish for a foundation, while many women see decoration. The typical gifts are jewelry, roses or dinner. As reported by the National Retail Federation of America, more than $ 810 million worth of Valentine’s Day gifts are given to pets.

The timing of Valentine’s Day has expanded as well. In Korea and Japan, romantic gifts are given on March 14, one month later than in the USA. The product pallet has become more diverse: for example in Denmark, instead of roses, one exchanges pressed white flowers. In the Philippines, on February 14 small events are increasingly supplanted by large ceremonies and mass weddings. Italians, instead of smelling the roses, listen to the reading of poetry and eat chocolate hazelnut kisses also known as baci. In South Africa the name of a beloved one is written on one’s shirt sleeves.

Some governments consider the Day as unreligious and ban its celebration. By contrast, increasingly, on Valentine’s Day one does not just recognize the one you love, but also family and friends. The Pope in Rome has been known to carry flowers with him on that special day.

In sum, Valentine’s Day has taken on a wider mission, diversified its outreach, introduced more flexibility in terms of timing, product, message, and interaction with more people. Most importantly, it has propagated quite successfully the message of interaction, proximity, hugs and love.

As next step should encourage this expansion and integrate it more with our lives as business people, policy makers or consumers. Here are some suggestions how Valentine’s Day as a widening construct can serve to incorporate present day realities and future days outlook. To nudge things along, recommendations are included  for appropriate commemorative gifts.  

For President Trump: A cake with many candles but little sugar for providing many occasions of hope, change and new perspectives.

For Kim Jong-un of North Korea : a candle signifying the love of your people and in appreciation  for not blowing up  nuclear devices;

For the U.S. Congress: A “like” card for constituents to send to their own representative; to be accompanied by a ‘’you can do better’’ card for the rest of the institution;

For the global trade community: A “tough love” card which allocates specific responsibilities for rules and tasks to be changed, accompanied by jovial if not hearty messages indicating that “we understand”;

For Prime Minister May: some non-tear tissues – to dry the eyes – we won’t  break away;

For people both domestic and foreign who were struck by natural disasters or poverty: a red envelope with a check inside;

For tax payers:  no plastic but a paper bag; their reductions are more than just crumbs;

For corporations:  a colorful map showing new investment opportunities with large benefits;

To the Twitter company: some tightly packed characters showing concern;

For media: some loosely sourced but highly emotional news stories showing respect;

To the world at large: the form of messages and hugs represent how different cultures take different approaches to love; to get there, a relationship has to come first; joint efforts will help.

To my own small world: humongous love to wife Ilona and daughter Margaret; your gift; anything you want.

TO ALL:   Happy St.Valentine’s Day!

*Michael R. Czinkota teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent , U.K. His key book (with Ilkka Ronkainen) is “International Marketing” (10th edition, CENGAGE)

Olympics VS Super Bowl. The Marketing Differences

Michael R. Czinkota  and Charles Skuba

The Super Bowl  reached viewers around the world, but Olympic advertisers will be communicating with a much broader audience from diverse cultures who will bring with them a different set of interests and emotions. To persuade such a multicultural audience, advertising will need to seek commonalities of the mind and heart.  Global advertising agencies have the expertise to create messages that work across borders and avoid the danger of leaving broad groups of viewers bewildered or, worse, offended.

We offer five winning techniques (not exclusive to each other)for creative messaging to global audiences during the Olympics in national and global media campaigns.  

 Universal human emotions come first. The best brands inspire and capture positive, if not joyful, emotion in their customers. Marketers know that emotion often trumps reason in purchase decisions. Dig deep into any customer psyche, whether of a business decision-maker or a teenage gamer, and you’ll find a bundle of emotions that are common to people across cultures.  Although there are cultural differences in what stirs emotion, some things are universal, like love stories and the pursuit of dreams.

For the 2012 London Olympic Games, P&G launched the global “Thank You Mom” campaign that celebrated the love of young Olympic athletes and their mothers. There may be no more powerful bond than the love between a mom and her child and that love is a universal emotion which is why P&G has renewed the theme for 2018.

Expansive imagery is also of major impact. The film industry has conditioned viewers across the world to crave dramatic, expansive imagery. The most successful global films create a powerful impact of sight and sound. The Olympics are a key opportunity for grand imagery. Marketers regularly use striking visuals to capture attention but the bar is being raised.

Inspiring sounds and music follow hand-in-hand with expansive imagery. Music enhances visuals for dramatic and emotional impact.  Marketers must be careful with music selection.  Coca Cola has long used “happiness” music to appeal to young people around the world. Naturally, if the music is great, people will want to share it.

Then there is symbolism. For simple communication of an idea, it’s hard to beat. Marketers often employ symbolism to enhance and distinguish their campaign and product messaging.

If you can show product advantage in advertising, your  marketing effort is working.  The trick is to get people’s attention to your message and also sell. Also, marketers would be smart to walk away from messaging that depends upon slang or references to national pop culture.  If you didn’t grow up watching American television, you might not understand a lot of pop culture references that U.S. audiences instantly absorb.

Super Bowl advertising is uniquely tuned to American audiences while that of the Olympics must be globally focused. Both will employ many of the techniques identified here.  Marketers are literally going for the global gold. For the audience, the Olympic marketing messages will be quite different from the ones of the Super Bowl but well worth waiting for.

 

Prof. Michael Czinkota researches international marketing and business issues at Georgetown University in Washington D.C. He served in trade policy positions in the George H.W. Bush and Ronald Reagan administrations. His International Marketing text is now in its 10th edition. czinkotm@georgetown.edu

 Charles Skuba teaches international business and marketing at Georgetown University. He served in the George W. Bush administration in trade policy positions in the U.S. Department of Commerce and previously was a senior executive in advertising. cjs29@georgetown.edu

TERRORISM, COMPETITIVENESS, AND INTERNATIONAL MARKETING – (2/6)

Time to Limit the Payoff for Terrorists

Valbona Zeneli, Marshall Center, Germany

Michael R. Czinkota , Georgetown University USA and University of Kent, UK

Gary Knight, Willamette University, USA

Terrorists want more “bang for their buck” by undertaking high-impact events, choosing high visibility targets and directing their violence at less well-guarded “soft targets” such as transportation systems, business and private facilities.

Terrorism in the firm’s external environment is designed to create organizational confusion and contextual volatility, which refers to discontinous changes and requires firms to make frequent, abrupt, unexpected, and untested adjustments to their business strategies and operations. There also tends to be a perhaps misleading belief that terrorism responsive decisions must always be made swiftly.

Terrorists deliberately target non-combatants and insufficiently protected physical facilities. The globalization of commerce, travel, and information flows have enhanced the ease with which terrorism can be carried out, and increased the visibility and availability of potential terrorist targets. Port facilities, industrial clusters, shopping centers and financial districts are among numerous assets susceptible to terrorism via low-tech approaches. The threat is especially salient to firms with business facilities and infrastructure in multiple and diverse locations abroad, each one of which may need tailor-made protective measures. When evil doers make multiple-tap asynchronous attacks, losses can exceed worst-case scenario planning. Institutions and firms of industrialized nations are most vulnerable when they operate in emerging countries. MNE supply chains are vulnerable to potential long-term harm, particularly with firms whose first and second tier suppliers stretch around the world, in and out of risky environments. Any physical movement of goods introduces risk, disruptions and delays, but in developing nations more so.

Perceptions of threats from terrorism reduce the likelihood that firms will expend assets abroad, particularly in emerging economies that might become terrorism-prone areas in future. Companies spend billions annually to manage terrorism-induced risk and comply with terrorism-related government procedures and regulations.

Uncertainty is an attribute of marketing environments, particularly in international markets. Marketing activity is vulnerable to terrorism through disrupted international logistics, supply chain and distribution activities, insufficient information flows, and growing global demand for industrial and consumer goods. The complexity formed by linkages among terrorists, producers, buyers, and public actors reflects how with only 3-4 alternatives for each option, terrorism quickly represents hard to control and large number of scenarios. Furthermore, terrorism can trigger imposition of new regulations and procedures, which can hamper corporate activities. Security can reduce but not eliminate terrorism or fully insulate the firm from attacks. Government regulations aimed at preventing terrorism generate delays and increase the cost of business transactions, affecting company competitiveness.

The marketing organization comprises a bundle of strategic resources. Abundant material and effective alternative capabilities are traditionally associated with superior performance in international marketing ventures. The payoff from strategic resource stock piles is only realized when management activates situation specific organizational responses and behaviors, aligning them with clear and present changes in the corporate environment, not before.

The resource-based view (RBV) helps explain how firms develop and leverage organizational capabilities. Management structures, bundles, and leveraged resources determine the efficiency and effectiveness of company operations and organizational performance and robustness. The allocation of available marketing resources and the creation of new types of marketing tools are fundamental to the creation and maintenance of sustainable competitive advantages. Our research has found that many firms remain ill prepared to cope with terrorism, especially those operating in emerging markets. Firms often still respond passively or only reactively to the outslaught of terrorism. By contrast, we encourage firms to create proactive and innovative solutions for the management of terrorism threat.  This is what corporate innovation should be all about.

Such innovation must permeate organizational culture and be supported by new knowledge and technology enabling responsiveness to new, outwardly unexpected capabilities. Indeed, strongly innovative firms have highly developed and elaborated knowledge-creation routines and learning regimes.  A strong innovative culture supports the firm in developing responses tailor made for rapid deployment with new organizational capabilities. Rather than pursue just unidimensional thinking, ready for one action, firms need to deploy ambidextrous strategies and reinvent the situation specificity of their operations. Thus, management, which possesses a strong innovative culture and substantive awareness of even marginal threats of terrorism, might emerge less scathed from attack from that firms which are focused but limited in their outlook.

 

Michael Czinkota teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent. His key book (with Ilkka Ronkainen) is “International Marketing” (10th ed., CENGAGE).