International Marketing Practices

In essence, international marketing is not too different from domestic marketing. Both rely on market research and situational analysis to develop a market segmentation strategy, identify target market segments, develop a positioning strategy, and decide on actions to execute these strategies. The four P’s of marketing strategy (product, placement, promotion, and pricing) are critical to developing a sound and well thought-out marketing plan for both domestic and international markets as well. Differences between domestic and international marketing arise largely from additional factors to consider in complex overseas markets, which adds to the risk and uncertainty of starting an international operation. Foreign environments may include unfamiliar and sometimes unfavorable political, legal, economic, and competitive factors. The nature of international distribution channels and a company’s access to them may also present added hurdles compared with domestic distribution. The level of sophistication of overseas consumers and the nature of the labor force in the foreign market may present other challenges. Lastly, cultural differences are overlooked by many firms and have caused the failure of many companies’ international ventures. Because of their importance, a section later in this chapter is dedicated to cultural factors. Stages of an International Marketing Operation The evolution of an international marketing operation can be seen in stages. First, a company may experiment with international sales by exporting its surplus product to foreign customers directly or through intermediaries. At this stage, companies do not take steps to actively cultivate a foreign customer base, and risk for the company is the lowest. Next, the company begins to actively pursue foreign markets, make conscious efforts to conform to foreign consumer preferences, and dedicate permanent production capacity and resources to foreign markets. However, the domestic market remains the primary focus of a firm in this stage. One step further, the company decides to fully immerse in a foreign market and develops tailored product options and marketing strategies. At this stage, the company may decide to engage in foreign direct investment and build production and distribution capacity in the foreign market or engage in a joint venture to build those capacities. In the last stage, which typically generates the most revenue in foreign markets, the company decides to become a truly global operation and treat the world as one market. Markets segments at this stage span different regions and countries [1]. Entering Foreign Markets The purpose of this guide is to help small to medium sized forest products firms successfully enter a foreign market, which is largely dependent upon the strategy and approach taken, including how, when, where, and on what scale [21]. This

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