What is the global marketplace?
First, let's define a market -- or marketplace.
A market is a structure that allows people and businesses to exchange goods and services. For example, the United States is a market. China is a market. Together, the U.S., Canada, and Mexico are a market that is governed by NAFTA, the North American Free Trade Agreement.
Now, let's define a global market.
A global market is not defined as one geographic location, but allows the trade of goods and services anywhere in the world. For example, Apple is a U.S. company. It purchases supplies from several countries, and then has its products manufactured in Taiwan. Once the product has been assembled, it is transported to the U.S., Europe, Australia, and Asia.
Entering the global marketplace is a huge opportunity for a company to meet the needs of an international market, while possibly increasing sales exponentially. Of course, there are advantages and disadvantages, as with any marketing strategy. But the global market is definitely an excellent opportunity for any marketer.
How To Enter The Global Market
In order to enter into an international market, a company must have a mode of entry. There are many ways to enter the global market, but we will detail the top methods here.
2. International Agents
3. Strategic Alliances
4. Joint Ventures
5. Overseas Manufacturers
Licensing consists of three types of licensing contracts.
Licensing is when a company requires a fee for the use of its brand. Franchising is when the company (the franchiser) provides branding expertise to the franchisee. Examples include McDonald's, Subway, and Dunkin' Donuts.
Turnkey contracts are major corporate agreements to build large plants. They usually include the training of employees.
2. International Agents
Agents are often used as a way for a company to enter the global market. Agents are people or organizations that are contracted by a business to market on their behalf in a certain country. Agents don't own any of the products --they simply earn a commission on any products sold.
Agents usually represent more than on company at a time. They are inexpensive, but can be difficult to manage. If a company intends to go global, it should make sure the agent contract is revocable. It can be difficult for the marketer to work in the global market, especially in the beginning, when it is new. So setting goals and targets can be difficult at first.
Using an agent can be an easy solution for a company new to the global market, but be aware that the agent can represent a competitor at the same time. So be aware there might be conflicts of interest. They can also be costly to recruit and train, and with a global market, there can be language and cultural issues.
Distributors are another option, and they are similar to agents, except they do take ownership of the product. Ownership gives them incentive to move the product quicker, and attempt to make a profit from it. Otherwise, they have the same pros and cons as an agent.
3. Strategic Alliances
This term describes a series of different types of professional relationships that can work as an intermediary between the company and the global marketplace. Sometimes, there can be a strategic alliance between competitors.
Here are some examples of strategic alliances:
1. Shared manufacturing – An example would be two car companies sharing the same manufacturer.
2. Research and Development – This could happen when two companies decide to share R&D facilities.
3. Distribution alliances
4. Marketing alliances
These types of alliances are non-equity, so each company remains independent.
4. Joint Ventures
Joint ventures are usually equity relationships, with a new company being formed to handle the global split. There are several reasons why a company would set up a joint venture to help them enter the global market. Some of these reasons are:
1. Access to new technology
2. Just to gain entry into a foreign market
3. To gain access to new distribution channels, manufacturing, or R&D
5. Overseas Manufacturers
If a company is large enough, owning an overseas manufacturing plant might be the best choice. Investing in the plant, machinery, and labor can also be cheaper, if currency rates are working in the company's favor. This is referred to as Foreign Direct Investment (FDI).
This can be a newly built plant, or the company could acquire a current business that has acceptable facilities.
Stages of Internationalization
Now that we have discussed the ways to enter into global markets, we can address the last step, which are the stages of internationalization. Some companies will never do global business, and therefore never go through this stage.
Here are the stages:
Indirect exporting or licensing
Direct exporting via a local distributor
A business's own foreign presences
Home manufacture, and foreign assembly
Now, no one marketer agrees which is the best mode of entry. For example, some might see franchising as a stand-alone method, while others see it as a part of the licensing process. Remember that all methods of entry into international markets are valuable.
The Internet is changing the way we do business. And never has the Internet been more valuable than it is in the global marketplace. It is an excellent channel for a smaller company or a new one to the global space.
There are both direct and indirect avenues to exporting to other nations.
Direct exporting is very straightforward. Basically, the organization makes a commitment to market a product overseas on its own behalf. This gives the organization better control over its brand and overseas operations.
On the other hand, if a company uses an exporting company from heir home country, it would be considered indirect exporting. Examples of indirect exporting are:
Piggybacking – This is when a new product uses an existing distribution and logistical channel of another business.
Export Management Houses – These firms assist the export department of a company. They offer a range of services, and can be a very helpful resource, especially when a company is new to the global market.
Consortia – These are groups of small businesses that work together to market similar types of products in the international market
Trading companies – These companies go back to the original overseas colonies. Some date back to the British, French, and Spanish colonies. Today, they exist to help large businesses deal with all the logistics involved in the global market.
Export Management Houses
Competing in the global marketplace
Whether the company is large or small, any company can have a global presence. If a company doesn't currently have a global strategy, it probably will have one soon. Companies are not asking if they should expand, the question is when. A global presence for a business brings tremendous benefits to a company, especially if the expansion is planned well.
The Internet has changed markets all over the world, and has made it very easy for even small companies to compete on a global scale. More than 95 percent of the world's consumers live outside of the U.S.; global expansion gives a company a broader marker to increase sales. In addition, having a global presence can lower costs if less expensive suppliers and employees can be used.
Of course, expanding to a new market is not without risks, but here are some ideas to keep in mind:
1. Focus on the customer
Yes, this sounds easy. But as a marketer, you know the customer relationship is key. Not all customers want the same thing. They all have different needs and wants, and the marketer must address those needs moving into the global market.
Make sure time is spent with new customers, and get to know them, just as you would with a domestic customer. Understand their needs, their environment, and most importantly, their challenges.
2. Have a great staff
The four P's rear their ugly head again! And here the key word is people. Every person in your company, and the international chain, must be experienced and have the company's objectives in mind. New global employees should know the global market well, and be able to assist with any language or cultural issue that arises. A company can work with international trade associations to find suitable people. Remember to network!
3. Understand different cultures.
In the global marketplace a company must expect to work with many different people, who often speak different languages and have different cultural ideas. Knowing this ahead of time is the best way to form trusting relationships. If possible, learn the local language, or at least some key words. Become knowledgeable about the local culture. It will help show that you have a commitment to them.
4. Act Local!
Even if the business is U.S. based, find opportunities to act local. A promotion campaign in the U.S. won't work in another country. Some languages don't translate easily, like English and Japanese. So be sure to work with locals to help you bridge these cultural divides.
Creating a Marketing Plan
Creating the marketing plan
A marketing plan is the full beginning-to-end strategy used to bring a product to market, and get it in the hands of the consumer. It requires planning and excellent organizational skills. The marketer wants to understand the consumer insight, and meet those needs with the product and marketing plan.
Small businesses will obviously have a smaller plan than a large corporation, and it's important the marketer doesn't over-do it. Small businesses should have a marketing plan that is around 15 pages or less.
Before the plan can be written, the following information should be available:
The company's latest financial statements, as well as sales figures broken down by product and location
A list of each product or service the company offers, including the markets they target
A table that breaks down the organization, especially if it is a large company
A written statement from the marketing team detailing their understanding of the marketplace
Statements from each employee involved in the marketing process that detail what they think must be included in the new marketing plan
When beginning, the marketer will want to focus on three items:
1. Completion date – The marketer must set a date for when the plan should be completed. It can be a long process, involving many people and departments. So it is key the marketer has a goal end-date.
2. Who is responsible – Each member of the marketing team should have a defined role, which they should clearly understand and be prepared for. They must be responsible for their part; otherwise the plan will never come together.
3. The budget – A marketing plan can cost a lot of money, so establish a budget and stick to it. You don't want to end up with no money, and have to finish the marketing plan without funds.
Once the marketer has considered the above, it is time to write the marketing plan.
Here are the steps the marketer should take to write a marketing plan.
1. Set Objectives
2. Do Research
3. Define Strategies
4. Outline Tactics
5. Build in Measurements
6. Develop the Plan (And Stick To It!)
7. Implement the Plan
1. Set Objectives
The first step to writing the plan is to determine the objectives you are seeking to meet. What are the goals? Does the company want more customers? Does the company need additional revenue? Does the company want a great market share? Is the company considering a new product launch? This is the time to define those objectives and goals.
One of the easiest ways to define objectives is to create a vision statement. A vision statement is the long-term vision for the company.
Every company has its own brand, so start to imagine what attributes the product has that helps to further that brand, and how it can be positioned for the long term.
When setting objectives, SWOT analysis can be very helpful. It allows the company to identify its strengths and weakness, and it's opportunities and threats. This analysis will provide important insights and help planning for the upcoming three to five years.
Don't forget about SWOT, it is a central theme for marketers
Up until now you have learned all about the P's of marketing. Now it is time to learn some Cs.
The five Cs are:
Once you have identified all of the above, it is easier to understand the market and where any opportunities are.
The five C's
Once the marketer has the vision, and a better understanding of the threats facing the business, they can use the SMARTsystem to set objectives.
Using SMART will assist the marketer define goals, such as market share or increased revenue. It is important to be honest and realistic.
2. Do Research
Research is the heart of a marketing plan. Companies, even small ones, must do market research and analysis. Not having this research will result in a failed marketing strategy. Research is needed to understand who the customer is, and to define which segments the company should target.
Remember how important segmentation is, along with the market environments. Market research allows the marketer to find the exact market he is searching for, which will provide a much better experience for the consumer.
Market research doesn't always have to cost a lot. There is an unlimited amount of information available online, using sources such as trade and business groups. And focus groups should always be considered. They are incredibly valuable and great way to get honest and current research.
3. Define Strategies
The strategies are how you will take action with the plan. This is when you answer the following questions:
How will the company be positioned against other companies?
Which markets should be targeted to achieve objectives?
- What pricing strategies will be used to meet goals?
The strategies should be wide enough to incorporate several different tactics, while still keeping objectives front and center.
4. Outline Tactics
The tactics will answer the "what's" in the marketing plan. What should the company do to meet their goals and objectives? Begin with the small changes, and move up to larger issues.
With each tactic, determine how it fits in the plan and how it will meet the objectives. A tactic could be for a company to reduce shipping times in order to improve customer service.
5. Built in Measurements
A marketing plan needs thorough tactics, with extreme attention to detail. As always, the devil is in the details. With defined tactics, the marketer is able to measure execution and success, especially as the launch date gets nearer.
Measuring is how the marketer determines which tactics are working, and which are not. Units of measurement could be online analytics or an increase in sales. Anything that can be measured is valuable to the marketing plan.
6. Develop the Plan
Now is the time to write the plan. When writing the plan, imagine how you will implement it as it is being written. Assign employees to help with implementation. If the marketing plan involves advertising or promotions, ask the vendors if they are willing to help. Often small companies are willing to barter for services.
7. Implement the Plan
It is time to put the plan to work. Remember that the objectives you stated in the start of this process may not happen as planned. It is important to be flexible. Many different variables could come into play so be prepared for changes.
Writing and implementing the plan is the key to setting and meeting marketing goals. It is important all the energy put into the marketing plan it not for naught. So, here are some additional tips to create the best marketing plan possible. Remember to keep the online market as a part of the marketing plan; it is one of the easiest ways to broadcast a brand.
1. Focus on the Story Behind the Brand
Everyone loves to hear stories. So, tell the story of your brand. It is a way to personalize the brand, and a great way to grow the company. A company's brand is different than the brand of a competitor -- so play up whatever makes your brand different than others. It is a great way to develop personal connections with consumers.
With the advent of social media, it is easier than ever to tell a story. In fact, most companies use social media as the first line of defense.
The brand can discuss your background, or how the company came to being. The story just has to be real, as if it isn't, it could hurt your brand. Be honest, and you will find that consumers like the personal connection gained from such a relationship. This is the best way to get loyal and repeat customers.
2. Work on the Business Website
What does the business website look like? Has it been months since it was last redesigned? Imagine how the business website should look. Use strategic thinking to imagine what the website should offer the consumer. How is one website similar to others? Does anything make one particular website stick out more than others?
A company's website is an easy place to have an impact on a company's bottom line. A website should lead potential customers to a conversion, so the website shouldn't have too many options or distractions.
3. Personalize to Boost SEO
SEO is an area of business that must be taken seriously. As search engines become more and more sophisticated, a marketing plan can use the information to differentiate between demographics.
What keywords are website visitors using? A company can use those keywords to better guide consumers to their website, and increase conversions.
4. Listen to Social Media!
Social media is nothing new to marketers, and is an important part of the marketing plan. The marketer must find ways to incorporate social media into other aspects of the business.
A great way to use social media is to use it for customer service. If a customer is upset and tweets about it, use the service to engage with the customer. It will appease the customer, and other users will see the exchange.
Also, keep an eye out for mentions. Are people talking about a brand? If so, again, engage. It is a great way to communicate with customers in a very personal way.
5. Don't Forget About Mobile!
More and more promotion is being done on mobile phones and tablets. In fact, Internet usage on phones and other mobile devices is higher than the usage on desktop computers.
In this day and age, almost everyone has a cellular smart phone. A good marketing plan should consider advertising on mobile devices, as often users don't see it as advertising.
Make sure the website has a mobile version, so customers can access the website on any device.
6. Don't Discount E-mail Marketing!
E-mail marketing is one of the oldest forms of online marketing, but it continues to thrive and be a successful marketing plan. The goal is to write e-mails that will get the attention of the customer and help lead to a sale.
E-mail lists can be segmented, just like other methods, so a business can have one e-mail for people with high incomes, and one for people with low incomes.
7. Keep An Eye On Your Online Reputation
No matter what kind of business, a good online reputation is essential. Bad reviews can lead customers to a competitor. Sites like Yelp enable anyone to leave reviews, and poor reviews can seriously hurt a brand.
Keep an eye out for any mentions on social media and review sites. Good reviews can become testimonials on your website. If you get bad reviews, take them to heart, and see if they are true. In most cases you can leave a comment under the bad review, and address the concerns of the customer, and detail how you plan on fixing the situation.