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).

Innovation and Diversity: Earnings, Creativity, and the Global Economy

A Cultural Movement

In this recent interview between Forbes’ Ekaterina Walter and Progressive’s Neil Lenane, they discuss the concept of workplace diversity as a cultural shift, rather than just a strategic initiative.

“We view diversity not as a program but a cultural movement,” says Lenane. “While gains can be slow moving and measurement less clear than other business metrics, we find the key is keeping the momentum going every single day. Ultimately it ends up as not something we check off a list but a cultural attribute we use to help us achieve our operational goals.” Top-tier companies have shown tangible innovation benefits to developing an ‘all-inclusive’ approach to fleshing out their workforce, which allows them to deal with cultural challenges and language barriers more effectively than businesses that don’t actively drive diversity. Additionally, the myriad backgrounds and perspectives that shape how employees ideate and innovate is extremely valuable, providing expanded insight for global interactions and strategies, as well as internal challenges.

Lenane suggests the following advice for decision-makers: “Due to the constant pace of change, increase your desire and ability to be agile. This will help in not only weathering change but proactively adapting to it. And, obviously, look at diversity as a business success imperative.” According to HBR, employees at companies with greater diversity are “45% likelier to report that their firm’s market share grew over the previous year and 70% likelier to report that the firm captured a new market.” As companies compete on a global scale, it’s imperative to acknowledge that a variety of voices not only encourages collaboration, innovation, and change, but that diversification promotes competitive differentiation.

Listen Up, Leaders

Although initiating culture changes in your organization is key to driving innovation through greater diversity, it still must be treated like any business goal. From EY: “Leaders must first cultivate the insight to recognize and understand differences and their power to bring about profound cultural shifts in organizations. This mental transformation is critical to developing transformational leadership capabilities. It is the single most important step toward becoming a successful player in the global arena.”

Strengthening the employee pipeline and retaining top talent typically rests squarely on the shoulders of company leaders, as does catalyzing innovation for overall success. A lot of this probably sounds pretty obvious, but that doesn’t mean it’s easy. According to a recent white paper from Forbes Insights, ”Organizations still face external and internal challenges in implementing these policies and procedures. Internally, companies are still struggling with negative attitudes about diversity among their rank-and-file, while externally, a rocky economic recovery has impeded many companies’ hiring efforts.”

While that may be true, the evidence supporting a global need for diversity in the workplace — and its positive influence on innovation — is overwhelming. Studies show that diverse teams often out-perform teams with less diversity and higher-level skill sets. Research from Donald Fan shows that, when dealing with a problem, “we encode our perspectives and then apply our particular heuristics to explore new and better resolutions. Diverse teams often outperform teams composed of the very best individuals, because this diversity of perspective and problem-solving approach trumps individual ability.” And, EBIT margins at highly diverse companies are generally about 14 percent higher than those of the least diverse. Furthermore, HBR notes that without diverse leadership, “women are 20% less likely than straight white men to win endorsement for their ideas; people of color are 24% less likely; and LGBTs are 21% less likely.”

This data should be a powerful motivator for businesses; research has solidly established the incredible role that diversity plays in innovation and all-around market relevance, differentiation, and advantage. Check out this infographic for more information.

By , Published February 8, 2014
Read more at http://www.business2community.com                                                              Image: http://media.rusbase.com/blogs/innovation-world.jpg

Export Promotion Rationale Continued – Part 2

In each one of these stages, firms have different concerns. For example, at the
awareness level, firms worry mainly about information on foreign markets and
customers. At the interest stage, firms become concerned about the mechanics of
exporting such as packaging or shipping. During the export tryout, communication,
supply chain management, and the sales effort become key considerations. At
evaluation time, regulations and financing take on greater importance. In the
adaptation stage, service delivery and control are major issues.

As a firm moves through these stages, unusual things can happen to both risk and
profit. Management’s perception of risk exposure grows. During domestic
expansion, the firm has become more familiar with the market, and has seen its
risk decline. During international expansion, the firm encounters new factors such as currency exchange rates,, greater distances, new modes of transportation, new government regulations, new legal and financial systems, new languages, and cultural diversity. As a result, the firm’s actual risk increases. At the same time, due to the investment needs of the exporting effort, in areas such as information acquisition, market research, and trade financing, the immediate profit performance may deteriorate. Even though eventually international market familiarity and diversification effects will reduce the risk and increase profitability, in the short and medium term, managers may face an unusual and perhaps unacceptable situation: rising risk accompanied by decreasing profitability. In light of this reality, and not knowing whether there will be a pot of gold at the end of the rainbow, many executives either
do not initiate export activities or discontinue them. Therefore, a temporary gap in the working of market forces exists. Government export assistance can help firms over this rough patch to the point where profits increase and risk heads downward. Bridging this short-term market gap, which lasts typically for 2 to 3 years, is the key role of export assistance, and the major justification for public sector involvement.