Understanding Types of Markets

The term “mass market” refers to a large (even global), undifferentiated group of businesses and consumers with widely diverse backgrounds. Products and services needed by almost every business and consumer are suited for the mass market. Marketers can advertise through a variety of media and sell items such as food, electric and gas utilities, soap, paper towels, and gasoline to mass markets, making these items mass market goods. In the case of food products, grocery stores, restaurants, and farming cooperatives satisfy the mass market’s need for food. In essence, the wherewithal of production capacity supersedes product.^iv These business entities are able to effectively operate and market on a massive scale. They effectively target their customer having generated a combination of the marketing mix that generates the sale of goods and services to very specific target markets. Ineffective marketing focuses on the product in defining markets, leading to missed sales opportunities and questionable customer satisfaction. Both types of marketing, effective and ineffective, lead to the conclusion that a market, a group of potential customers with similar needs that are willing to purchase goods and services to satisfy those needs, lies outside of the firm.

In segmenting the mass market, think of product markets versus mass markets. Product markets are “the set of products/services that can be substituted for each other within specific use situations where similar benefits are sought and the customers for whom such usages are relevant.”^v For example, some users of computer programs, applications, and IT hardware only use computing products with specific computing capabilities. Only a limited number of computer companies can compete for this market because only their specific computer products/services satisfy that consumer group’s computing needs.

Product specificity, like a computer company’s exact computer programs and/or hardware model(s), enables a firm, like yours, to focus on a specific customer demographic within the larger product market and to direct marketing efforts at that niche enabling that limited number of providers to dominate most, if not all of that market segment.

In targeting prospect countries as markets for your products and services, work to define a broad product definition than your firm’s current product market, but not one so broad that your firm could not handle the demand, if you were to generate it. In identifying your product’s target market segment, focus your product marketing effort on product type, the customer need it meets, the location of specific customer segments, and the countries in which the customers having these needs are located. Once you have defined your product markets, you are ready to continue the segmentation process to identify potential target markets.

Identifying Your Target Market

Global marketers have a number of secrets to targeting segments in international markets that are much the same as those they tap in effectively targeting domestic markets segments. Their ultimate goals are to isolate those market segments most responsive to their firm’s marketing plan (the four Ps) and do a better job of satisfying target market product and service needs. In particular, they target market segments that are easily defined and measured, large enough to justify the cost of marketing, reachable via marketing media, actionable for marketing mix programs, and competitive with high growth potential.

The secret is to approach the segmentation process from different angles. One angle is selecting prospect countries based on a single dimension (e.g., per capita Gross National Product) or a set of multiple variables determined from secondary data research sources such as the World Bank^vi, UNESCO,^vii and The Organization for Economic Co-operation and Development (OECD).^viii Should global marketers face many country traits (factors/variables) from which to choose, they “collapse” several traits to segment a market using a data reduction technique like factor analysis, a multivariate statistical approach that condenses information contained in a number of original variables (traits) into a smaller set of traits with a minimum loss of information.^ix

Still, another “secret” angle global marketers use is to determine cut-off criteria that are driven by product type/features/use, company characteristics for a predetermined product, and company thresholds they have established. They next develop micro-segments in each country or they jointly group individual segments in all of their prospect countries to directly produce cross border segments choosing from (1) universal segments—cross-border market segments that go beyond national boundaries, (2) diverse segments—local segments that differ from country to country, and (3) a mix of the two market segment types.

Actually, the biggest secret is deciding which variable to use in the segmenting task. Literally, hundreds of country traits could be used as variable inputs for factor analysis. Global marketers determine the response variables of greatest interest and then seek to find the right “ingredient list” of different country variables. It is not unusual that several segmentation criteria is either missing, inaccurate, or outdated for some of the countries to be grouped so they exercise some caution in compiling the list of variables.^x

There are different country variables global marketers commonly use to segment markets in two categories: Business to Consumer Segmentation Criteria (demographics, socioeconomic variables, political conditions, culture, purchase behavior, lifestyle, psychographic and behavior traits) and Business to Business Segmentation Criteria (demographics, psychographic, behavior, and management environment factors).^xi

Aside from these criteria, global marketers have many other country dimensions on which to identify their target markets. Their choice of criteria largely depends on the nature of the product they are marketing and the specific objectives of their marketing plan.

Global Marketing: Leveraging Product Development Strategy That Lands International Customers

Developing and adopting an innovation strategy driven by the business leadership team and its strategic visions of the business is an essential tool for product development efforts^xii that land international customers. This strategy guides the business’s product development efforts and steers resource allocation and project selection. A product development strategy must include clearly defined objectives, strategic areas of focus, and requires management’s long-term commitment.

The deficiency of not having a product development strategy will likely hamper your firm’s ability to land domestic and international customers. This strategy begins with the goals for the business’s product development effort and a clear understanding of how these goals tie into your broader corporate goals and objectives. The most popular objective is segregating a percentage of the business’s annual sales generated from new products—those that have been on the market three years or less that are visibly different to the customer from your firm’s previous offerings.

Your focus for research & development efforts—the markets, industry sectors, applications, product types, or technologies on which your business will focus its new product efforts—is at the heart of a new product strategy. Specific strategic arenas that offer new and profitable opportunities for product development are fundamental to determining the direction of your product development effort. Use a product market matrix to define new, adjacent areas that offer new product opportunities. Next, you will evaluate these arenas, selecting the battleground (size and growth of the markets) and business strength (your firm’s core competencies can be leveraged) as the two key dimensions for this evaluation. The result is the creation of a strategic map in which the upper-left quadrant targets the most promising product prospects.

The issue of how to attack each strategic arena defines the product development approach you will pursue. An understanding of the business’s core competencies and knowledge of industry success drivers will drive the selection of the appropriate attack strategy.

Any good product development strategy deals with how much to spend on product development and it should indicate the strategic priorities accorded each an arena of strategic focus. Begin by gathering data that reveals the current portfolio situation, including the current split in projects, resources, and expected sales by project type. Management can then debate on the optimal portfolio and determine strategic budgeting decisions.

A strategic product road map effectively plots a series of major initiatives in the attack plan enabling management to view the path it wants to pursue or achieve as its desired objective.^xiii Using strategic budgeting and road maps takes considerable commitment and time to execute; however, the reward is worth the sales results you will achieve in landing customers in the global markets of your strategic choice.

Pricing Your Products and Services

Pricing, the function of determining what a company will receive in exchange for its products and services, is the most critical element of the marketing mix for firms considering expanding into global markets. Above all other elements of the marketing mix (Product, Price, Placement, and Promotion), pricing is the one element that creates revenue for the firm. Pricing has three goals: (1) achieving the firm’s financial objectives, (2) mirroring the realities of the marketplace and customer buying trends, and (3) supporting product and service positioning consistent with the remaining “Ps” of the marketing mix.

As in domestic marketing, pricing in global marketing is impacted by distribution channels, promotional tactics, and the quality of the product. For example, if you distribute product through an exclusive distribution channel that includes distributors, marketing representatives, and warehousing, the cost of these factors will drive the need to increase prices higher. Higher pricing will also be needed to address the cost of innovative technologies and price increases of raw material used in manufacturing or extensive, customized advertising and promotional campaigns you execute in the targeted foreign market(s). Pricing should never be the same as that in another market. Firms entering the global marketplace must be prepared to not only address customer price expectations, but also a multitude of external factors such as the cost of production and delivery, tariff rules, competitor prices of competing products, currency exchange rates, value added taxes, distributor price mark-ups, and discounts on manufacturer list pricing.^xiv

A company’s global pricing policy may make or break its overseas expansion efforts. Given the foregoing list of factors, you will be challenged to coordinate pricing policy across different countries so it’s vitally important to get pricing policy right. A mixture of factors governs your global pricing decisions. Some of the drivers are related to the so-called 4 Cs: Company (costs, company goals), Customers (price sensitivity, segments), Competition (nature, intensity), and Channels. In addition to these elements, in many countries, pricing decisions are often influenced by host government pricing policies that affect competition in that market.

When developing a pricing strategy for your global markets, determine the goals you want to accomplish with your pricing. You may want to maximize current profits or project a premium image via price for your product. The most important pricing objectives of most companies doing business in the United States (including foreign-based firms) are (1) to achieve a satisfactory return on investment, (2) to maintain market share, and (3) to meet a specified profit goal. Initially, you may set a relatively low-market penetration price (compared to other countries). Once you are well established, you may shift your objectives and align them with the goals you have elsewhere.

Company costs set the floor in your pricing decisions. So, you want to set a price that will at least cover all relevant costs for manufacturing, marketing, and distributing your products. The most popular practice is cost-plus pricing, an approach that adds international costs and a mark-up to the domestic manufacturing cost. An alternative approach is dynamic incremental pricing, a strategy that arrives at a price after removing domestic fixed costs. Only variable costs generated by the exporting efforts and a portion of the overhead load should be recuperated. Examples of exporting-related incremental costs include manufacturing costs, shipping expense, insurance, and overseas promotional costs. Although the second approach is more acceptable from an economic perspective, be sure to avoid being accused of “dumping” product in your new market at prices below those you charge in your home market.

Consumer demand and buying power are key considerations in any pricing strategy. Consumers’ perceived value attached to your product will set a ceiling for the price. Consumer demand is a function of buying power, tastes, habits, and substitutes—all the factors that vary from country to country. One option is to go for the mass market by adjusting the product. You might even consider downsizing the product (small volume, size, fewer units per package) or lowering the product quality or charging prices in the same range as your domestic price and targeting the upper end of the foreign market.

There is no doubt about competition being a key factor in global pricing. Differences in the competitive situation across countries will usually lead to cross-border price differentials. Not surprisingly product price tends to be very low in markets where competing brands are priced low and vice versa in high-price markets. The competitive situation may vary for a number of reasons. First, the number of competitors typically varies from country to country. In some countries, you face very few competitors or even enjoy a monopoly position, whereas, in other countries, you have to combat numerous competing brands. Second, the nature of competition will differ globally versus local players, private firms versus state-owned companies. The third is the distribution channel. The pressure exercised by channels can take many forms. Variations in trade margins and the length of the channels will influence the ex-factory (Incoterms) price you charge. The power of large-scale retailers in Europe is visibly illustrated by the hundreds of hurdles that several manufacturers faced in implementing every-day-low-pricing (EDLP). With EDLP, the manufacturer offers consistently lower prices to the retailer (and the ultimate shopper) instead of promotional price discounts and trade promotions.

Last, but not least, government policies can have a direct or indirect impact on pricing policies. Factors that have a direct impact include sales tax rates (e.g., value-added taxes), tariffs, and price controls. An increase in the sales tax rate will usually lower demand. However, in some cases taxes may selectively affect imports. Another concern is price controls that either affect the whole economy (for instance, in high-inflation countries) or selective industries. Aside from direct intervention, government policies can have an indirect impact on pricing decisions. For instance, huge government deficits spur interest rates, currency volatility, and inflation. How these factors interrelate will affect product cost; and ultimately, you will have to decide what costs should be passed on to your customers.

Furthermore, global marketers must carefully position their product relative to the local competition to ensure their brand’s ultimate profitability and whether their product price signals high value and exclusivity or something in between according to cultural norms and customs of the target market. As you can see, there is much to consider in arriving at pricing policy. Learn as much as possible about your target market(s) and be smart about pricing. It affects your bottom line success.

Promoting Your Products and Services

Sales promotion refers to the collection of short-term incentive tools that lead to quicker and/or larger sales of a particular product by consumers or the trade,^xv with the objective of stimulating consumer trial and cementing a long-term relationship with a retailer in the target market. How your firm chooses to promote its products and services can have a direct and substantial impact on its sales. As a result, marketing staff may use a mix of tools that include advertising, public relations, personal selling, direct marketing, and positioning to achieve its marketing objectives.

But first, start with cross-cultural literacy to ensure you clearly understand the differences or barriers between your own culture and the culture of your target market and how differently business is conducted there. Since many have proposed a definition of culture, it might be best to examine how Hofstede^xvi views culture. Culture, according to Hofstede, is a system of values (abstract ideas and beliefs about what is good, right, and desirable) and norms (the social rules and guidelines) that people share and that when taken together suggest appropriate behavior in particular situations. Considering this definition should prompt you to think about your own country’s cultural values, norms, and demographics, geographical regions stimulating you to compare your national differences to those of your target foreign markets so you can effectively localize your product to your customer’s specific needs and your brand’s message.

Advertising

To overcome culture’s impact in advertising language and how advertisements relate to culturally sensitive issues like religion and politics, it pays to involve local advertising agencies in the development of your promotional campaign to ensure your audience responds positively. Of course, retaining local advertising agencies presumes there are no money issues financing a promotional campaign. To ensure financing is adequately addressed, make budget decisions on a regional level where each regional manager’s budget proposal is approved by the home office. International marketers must also be concerned about media decisions. Acquaint yourself with the best media channels in the target market, their availability, and cost. It is also crucial to thoroughly understand foreign regulations governing the limits of how, when, and why you advertise in a specific country before you develop a campaign to avoid legal implications and waste valuable time and money.

Public Relations

Retain and work with an international public relations (PR) firm that uses translators who can test the meaning of short, meaningful phrases to be used in marketing campaigns you plan to run in the target market. Doing so will ensure the phrases used are the most effective means of drawing attention to one or more aspects of your product. You will also want to avoid using colloquial language, slang, or jargon that may prove to be embarrassing or convey an unintended meaning that could cost you dearly. Your public relations firm will also need to work with international news outlets to control the news cycle. It may even be worthwhile to travel with a translator to make every business meeting you attend go smoothly. Working with a PR firm will thus enable you to create effective marketing content that takes the local culture and language subtleties and nuances into account for your foreign marketing campaign’s new channels and methods.

Personal Selling

Personal selling is a great promotional approach to take in marketplaces where staffing salaries tend to be less costly; however, as a new arrival to the market, your firm will have to invest in recruiting, motivating, organizing, and training a local sales force that knows the product, language and culture, location of the target market, and its purchase behavior. Should you elect to staff with expatriates, you will have to train them in what to expect in selling to a different culture. Many opportunities have been lost and allies been alienated for having assumed that American marketers spontaneously know more and better than the local sales force.

Direct Marketing

Direct marketing is an attractive instrument for foreign market entry and international customer communication that that involves making direct contact with the intended customer through phone calls, e-mails, offers through newspapers and magazines, etc. Each country has its own set of direct marketing agencies, mailing list providers and brokers, letter shops, and fulfillment providers.^xvii These operations should understand your campaign needs and demands enabling them to not only identify mailing lists but also advise you on postal regulations, currency differences, and the best time to circulate mailers.

Positioning

Positioning is what the customer believes about your product’s value, features, and benefits; it is a comparison of your product to the other available alternatives offered by the competition. These beliefs tend to be based on customer experiences and evidence, rather than awareness created by advertising or promotion. Position your product by the following:

1. Its attribute(s);

2. Use or application;

3. User;

4. Product or service class;

5. Competitor; and

6. Price or quality.

Managing your product positioning requires your knowing your customer and understanding the competition acquired through market research, not what you think is true.^xviii Product promotion in international marketing, as you can see is multifaceted. Be careful and be successful in reaching your global customer.

Finding Your Global Customers

In 2016 worldwide retail commerce was projected to reach $22.049 trillion. Of that total, worldwide retail e-commerce for products and services was projected to reach $1.915 trillion, accounting for 8.7% of total retail spending worldwide. Today, with more than 3 billion people connected to the Internet,^xix and more to come in the future, worldwide retail e-commerce is projected in 2020 to reach $4.058 trillion with the Asia-Pacific region remaining the largest of retail e-commerce.^xx This global interconnectedness offers a tremendous potential customer base and has made marketing products and services abroad a low-cost alternative to traditional international marketing. Firms of all sizes worldwide are migrating their marketing programs online to seek new business in regions and countries they had previously thought were beyond their reach. Regardless of the form, a firm’s web presence takes, small- and medium-sized companies, like yours, can broaden their market presence internationally by adopting e-commerce or electronic business practices that are user friendly for non-English-speaking users. If you have not built a website on the Internet, mobile optimized to engage effectively with customers, it is high time you did. A company’s web presence (a mobile phone application [mobile app], a transactional website^xxi transactional website, an information delivery website^xxii information delivery website, or an e-marketplace^xxiii website), becomes a valuable tool for building customer awareness and sales. As a result, with your company’s web presence, you need not incur the significant marketing expenses you would otherwise incur by investing in “brick and mortar” marketing processes used by businesses serving customers face-to-face at a traditional storefront.

Companies, like yours, can broaden their market presence internationally by adopting e-commerce or electronic business practices that are user friendly.

Of course, the type of website you and your business need to grow your global markets depends on the nature of your business and the goals you have for going “online” with a website. Once you choose the general type of site you want, you need to decide what features you will offer. The choices are almost unlimited. But, before deciding on the type of website you need, examine competitor sites at home and abroad and position yours accordingly. Next, you need to register a domain name, your business’s address on the Internet, and the uniform resource locator (URL). It is important that your domain name is short, descriptive, and memorable—like “37signals,” “Twitter,” “YouTube,” and “Flickr,” a domain name—like your company’s name - that targets your audience’s preferences. Consider registering several domain names to ensure your customers do not mistakenly go to a competitor’s website.

The website you build must be stored on a computer that has a reliable, secure connection to the Internet. Hosting a website means providing the technical resources needed to make your website available to your customers. You can either host your own website or hire a web hosting company to host your website. There are advantages and disadvantages to both approaches and many web hosting companies that will host your website, store, and secure your data.

Someone must design the look of your website, create the images, and write the programming code. Determine whether or not you should do it yourself or hire a web designer and developer. The decision boils down to a few factors: tools and templates, necessary in-house to website design skills, and how much you can budget for its development. Many customers will use an Internet search engine to find you, so making your website “search engine friendly” is extremely important. To do this, first identify keywords that describe your business and use as many keywords as possible on the main page of your website.

Once you have built your website, test every aspect ensuring it is user friendly for non-English-speaking users before opening it up for business. Make sure you accommodate the native tongue of your target market using a translation service, if necessary, to ensure it is “translation perfect.” This way you ensure there is no misunderstanding about your offerings in the mind of the customer. Make sure all the text, spelling, images, colors, and page layouts are correct. If you have an e-commerce component, get out your credit card and order something so payments and transfers are handled securely and quickly, especially when transactions are of high monetary value. Ensure the confidentiality of your customer data is secure. If there are any problems, discover them before your customers do by visiting the Payment Card Industry (PCI) Security Standards Council’s payment security educational resources^xxiv for access to all the information about transaction security you need. A thorough assessment of your payment system from a company like Security Metrics^xxv should tie up any loose ends. This company is somewhat similar to the analysis that the PCI council will perform, but is a bit more exhaustive in its approach. Once you are satisfied that everything works properly, put your website online! Congratulate yourself, but do not stop there! Track statistics critical to improving your business, including how many unique visitors came to your website, what they looked at, how many just browsed, how many bought something, how many are repeat customers, and how effective your advertising and marketing campaigns are. To get this data, install web analysis software, for example, StatCounter or the more sophisticated Google Analytics, so long as it offers detailed analysis reports as a form of customer feedback. See the Google Analytics Help Center tutorial “report and analyze page^xxvi” for more information in this regard.

At this point, you have put a lot of work into building your website. It is tempting to sit back and watch it run, but you cannot afford to do that. Running a successful site also means updating it regularly. You do not have to completely redo your site every month, but freshen it up periodically. A website that looks the same and has the same product information month after month becomes stagnant. Your customers may lose interest and drift away. Frequently change a few colors, replace your key graphics, change your greeting, or add the latest news about your company. Keep on top of your sales data, your web statistics, customer feedback, and what your competitors are doing. Use this information to substantively improve the structure of your website as well as the products and services you offer.

Your firm’s e-business presence on the Internet must include target market development to either advertise through high-traffic Internet search engines keyed to particular search terms or focus on a specific demographic. For a large marketing campaign, possibly use an advertising network like Apple’s Quattro and Google’s AdMob that deliver advertising to smartphones such as the iPhone. Such networks bring an inventory of unsold advertising to specific audiences then execute the targeting, optimization to a network of websites, and reporting on the campaign or a media exchange like Yahoo’s Right Media Exchange. These market development options are available domestically and internationally in English or the language of your target market.

An alternate growth strategy for making global business-to-consumer (B2C), even business-to-business (B2B) sales, aside from developing a web presence for your firm, is selling through online marketplaces, in particular, Alibaba,^xxvii Amazon,^xxviii and eBay^xxix. By 2020, global online B2B retail sales will be more than double that of consumer retail, according to growth experts Frost & Sullivan, accounting for $6.7 trillion of revenue.^xxx E-marketplaces are creating a new era for the B2B market. The same trends propelling consumer retail online are impacting the purchasing practices of business buyers. By removing the complexity of purchasing, e-marketplaces in B2B space are filling a business need transferring the experience of consumer shopping to the context of B2B. As a consequence, they are providing SMEs, like yours, an opportunity to sell across new geographical borders. You and other SMEs should consider using e-marketplaces to run important parts of your business where it makes sense.

Another viable option is direct e-mail marketing, the online version of direct mail. Let’s say you identify a new foreign market that appears, based on your research, to be very receptive to your product. Since the cost of advertising to this market may be prohibitively expensive and your advertising couldn’t appear for six months anyway, using direct e-mail promotes and enhances Internet presence to quickly test this market at a reasonable cost and convincing certitude. Note there are regulations affecting direct e-mail communications. In the United States, electronic mail messages are subject to the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003^xxxi the (CANSPAM) that affects “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service.” Globally, e-mail regulations are a bit more complicated than those of the United States. The specifics of general anti-spam legislation can vary from country to country so be sure to investigate the laws of your target market(s) and comply.

Having done your homework reviewing CANSPAM and e-mail regulations associated with your target market, you might also consider using an e-mail marketing service, one that provides all the software and tools needed to create and execute e-mail marketing campaigns. The data and statistics provided by e-mail marketing services make it simple to determine the success of a campaign. The top ten 2016 e-mail marketing services are reviewed at Top Ten Reviews.^xxxii

Last, with regard to digital channels, it is encouraging that SMEs, like yours, are broadening their market presence in global markets at a far lower cost than ever before. SMEs are now seeking new businesses and consumers in regions and countries they had previously thought were beyond their reach. By adopting e-commerce^xxxiii and m-commerce,^xxxiv cheaper international delivery, and streamlined digital store platforms, they are connecting to more than 3 billion people connected to the Internet. This global interconnectedness has increased competition to the extent that SMEs now need to focus on improving the end-user experience on mobile devices, providing a strong technology infrastructure via cutting-edge mobile applications. Their biggest challenge is to stand out with a stunning and interactive mobile application (app) that engages and retains buyers at every level everywhere.

With this in mind, Scott Gerber^xxxv has a good list of some essential features that will keep your e-commerce mobile app competitive and user friendly.

1. Feedback system – give users the ability to report technical issues, offer suggestions, even criticism.

2. Usability – mimic widely used apps like Facebook, Instagram, and Twitter.

3. Customization – be able to adjust settings aligned to user needs and preferences.

4. Remember its core function – it is a phone.

5. Use a single sign-on technology that allows social media logins and password retrieval.

6. Maintain relevancy – provide relevant information and deliver hassle-free use.

7. Push notification – inspire immediate user response to time-sensitive promotions and offers

8. Analytics – obtain key data about user behavior.

9. Eliminate clicks – simplify sign-up effort by seeking only essential information.

10. Don’t change! – preserve the same features of your browser-based system on your mobile app.

11. Offline capabilities – include features that are wireless.

12. Gamification – make using the app fun!

13. Prioritize speed – a slow app will quickly lose users and sales.

Having researched the global marketplace, identifying the most promising markets for your products and services, and creating a marketing plan, you will have developed a strategy to enter those markets. Your strategy may involve selling directly to customers or distributors to reach the end user, using a business-to-business (b2b) or business-to-consumer (b2c) commerce platform, or a combination of these approaches. Whichever of these strategies you select to find customers, you can make it more effective by taking advantage of the private and public sources that offer help in locating customers, evaluating trade shows, missions, and generating sales. Generally, the sources fall into two categories: private and government. We’ll examine government sources later, but first here are some private approaches to searching for international sales help:^xxxvi

• Search LinkedIn and other professional social networks to find contacts and ask questions in the country or region desired.

• Locate associations and people by doing a Google search within your industry and country.

• Search the desired countries’ biggest publications for relevant articles and the people behind them.

• Research local (target country) executive recruiters, local and niche job boards, and local newspapers to learn more about how talent in a particular region finds the best employers.

• Visit the country to conduct interviews with potential partners and meet with association leaders in your industry and prospective hires for sales positions.

In using an online sales approach to generating sales, you still need to learn about making overseas shipping, how to collect foreign taxes, duties, and customs laws, and dealing with foreign currencies (look into facilitating acceptance of different currencies using PayPal). Also use your website to target new foreign markets by translating key parts (product description, pricing, and payment) into other languages using translation software, and free Internet tools, such as Babel Fish,^xxxvii or human-based translation services. Employing someone fluent in the language of the foreign market minimizes the risk of misunderstandings, even offending the prospective customers you are promoting your product and services to.

Last, it is also important to understand the code of conduct expected for electronic merchants in overseas markets. The United States and 28 other countries have developed guidelines that stipulate firms doing business online internationally should do the following:

• Engage in fair business practices involving the presentation of “truthful, accurate and complete” advertising and marketing information to consumers.

• Disclose information about the company and the products you offer so that international consumers know “who they’re dealing with and what they’re buying.” This includes your home and local office addresses, e-mail addresses, and telephone numbers.

• Be upfront about the costs involved in the transaction (most importantly, the currency being used), as well as the terms and conditions of the sale, including any warranties and guarantees.

In selling to emerging markets, act like a local sales and marketing representative by doing the following:

• Getting on the ground, that is, direct sales with a presence in-country.

• Cultivating relationships and establishing representation and distributor agreements with well-connected and respected partners.

• Recruiting and developing in-country resources with needed skills and abilities.

Global interconnectedness offered by the Internet today offers you and your firm the opportunity to develop a tremendous potential customer base making marketing your products and services the low-cost alternative to traditional international marketing. Broaden your firm’s market presence worldwide by adopting e-commerce and electronic business practices that are user friendly for non-English-speaking users. Ensure the translation, color, and features of the message you want to be delivered to your customers are accurate. To do that, recruit the services of a bilingual native of your target market(s) and grow your global business!

Here’s a Quick Way to Understand Distribution and Carve Out a Strategy

Being successful as a global marketer demands your firm’s products and services be available and accessible to customers where and when they need them so generating and executing a distribution strategy that achieves this essential goal is essential to surviving in international markets. Thus, it is important to understand that distribution includes the physical flow of storage, warehousing, and movement of your product, the passage of title (ownership), and importantly, the buying and selection negotiations that take place between your firm and its middlemen and between middlemen and your ultimate customers.^xxxviii Recognize each target market has a distribution structure composed of middlemen, your channel partners and their competition, which include the agents, distributors, wholesalers, retailers, and direct sales forces that will deliver your product and associated services.

In product distribution, the greatest hazards and risks include loss or damage to shipment, inattention, and non-payment, so your careful evaluation and choice of channel partners are essential. Awareness about overseas markets, unannounced visits, sales force deployment, and detailed analysis of physical distribution cost and hurdles will enable you to simplify the international distribution of your product and offer unexpected customer service.

Recognize that in committing to using any channel partner, you and your firm are bound over the long term to the effects of cost, flexibility, control, and reputation, so consider your firm’s distribution choices carefully to ultimately ensure you establish a competitive advantage building the most efficient and effective channel.

In distribution, never assume the target market’s distribution system is the same as your own. Retail size patterns, direct marketing, and internal system resistance to change affect composition of the target market’s system. In some markets, companies sell to large, dominant retailers directly establishing a good business relationship with them. In other markets you distribute product through small retailers and in each circumstance large or small, you will have determined the costs of either retail avenue. You may consider retaining a local distributor capable of collecting debt, should that be needed. Direct marketing, in which customers are approached through the mail, telephone, and even door-to-door sales, may be the best approach for some marketers and markets. You may even decide to sell a product online, but realize there can be issues with international freight, even lost shipments, so insuring shipments can be cost effective and worth the expense.

In choosing your middleman, you can take total control using your own domestic sales team trained in the culture or depend on many different channel partners that know the culture and sales practices of the marketplace. In doing so, select channel partners that are reputable, practical, cost effective, and geared to your firm’s marketing objectives selecting among three types: home-country middlemen, foreign-country middlemen, target market government-affiliated middlemen. Prior to deciding on any channel of distribution or middlemen, determine the specific market you are targeting; your goals in terms of volume, market share, and profit margin; your financial and organizational commitments to international distribution, and how you can control the length of your channel, its characteristics—depth of market coverage, and competitive practices. Determine the terms of sale, legal requirements of the target market and cost of overall channel ownership.

After selecting any channel partner, it is best to reach a written agreement detailing the scope of commitment, its effective date and duration, description of sales territory, discounts and commissions, and determination of when and how it is paid. You must also address responsibility for protection of in-country patents and trademarks you have filed, assignability or non-assignability of the agreement, the country and state of contract jurisdiction in case a dispute arises. Given the above, it is best to consult legal counsel through the local bar association.