MARKETING AND INTERNATIONAL BUSINESS

Marketing and International Business

Marketing and International Business

Introduction

When discussing international services marketing, it is easy to forget that some services were international in scope long before the term “scientific management” was ever invented or the first marketing course was taught. Shipping was an essential ingredient in opening up early trade routes, with banking and insurance following and then facilitating them. In time, large companies emerged to operate international marine freight and passenger services, developing a network of agents in different ports to represent them.

Transnational Strategy

Transnational strategy involves the integration of strategy formulation and implementation across all the countries in which the company elects to do business, in contrast to a multidomestic (or “multilocal”) approach that provides for independent development and implementation of strategy by management units within each country (Hout et al., 1982; Pralahad and Doz, 1987; Yip, 1989). In its broadest form, transnational strategy becomes global in form and we speak of globalization. However, just because we can see a growing number of well-known service brand names popping up all over the world does not necessarily mean that the companies behind the brands have a truly transnational strategy. Many allegedly global strategies today are basically multidomestic in nature. For instance, even though many retail banks now have offices and even networks outside their countries of origin, in most instance, there is still little integration of strategy across countries.

Research Themes

Not all service industries lend themselves equally well to a transnational strategy on a regional or global basis. One key research theme is that globalization potential depends on industry characteristics (Porter, 1986) - and particularly on specific industry drivers - such as market forces, cost factors, technology, government policies and competitive factors (Yip, 1992). A second theme is that the use of global strategy should differ by dimension of strategy and for different elements of the value-adding chain, but this has yet to be addressed by empirical research in a services context.

Insights For Globalization From Studying Service Strategies In The UK

It is useful to recognize that some of the challenges facing managers involved in transnational marketing are an extension of those already found in large, domestic economies, but they take place on a much larger stage that presents sharper economic, cultural and political distinctions. A significant dimension of international services marketing concerns questions of scale and diversity. There are already, of course, important differences between marketing within a relatively compact domestic economy - such as (say) Ireland, Singapore, Venezuela or New Zealand - and marketing in the mega-economy of the UK.

Consider some of the statistics. Marketing at a national level in the “lower 48” states of the UK involves dealing with a population of some 265 million people and transcontinental distances that exceed 2,500 miles (4,000km). If Hawaii and Alaska are included, the nation embraces even greater distances, covering six time zones, incredible topographic variety and all climatic zones from Arctic to tropical. From a logistical standpoint, serving customers in all 50 states might seem at least as complex as ...