Countries which have less diversity and are more ethnically homogenous than the US will enable IKEA to expand relatively easily. In German culture, birthdays should be celebrated only every 25 years What served as the main issue in managing Canadian stores? There are other types of discrimination that impact marketing decisions too, such as price discrimination.
High tax rates on goods sold, like those in the USA, can make it hard for a business to stay on the right side of that fine line between profit and loss. In another case study presented it was highlighted, that some cultures associate the price of a product with the quality of the product.
Your business and your international marketing team must be aware of any quotas a particular country may have in place when you are deciding where to market your goods and services internationally. Licensing and Permits There is a chance that the only way you can do business in a foreign country is to give out an expensive permit or license of another business in that country to manufacture and sell your product for you.
Relevant Class Structure When you are marketing your product or service internationally you must also take into consideration class structure because it varies widely from country to country.
Laws There are laws in some countries that will greatly affect your ability to do business in them or prohibit it altogether. The following are some key things to consider when making any international marketing decision. There have been some embarrassing mistakes in international advertising that most likely did not help companies sell their product.
When these types of events happen, they can wipe out your entire customer base in a country or halt their purchasing power for extended periods of time, drastically impacting your business.
Your company is probably not going to want to market laptops to senior citizens in a third world country where there is very little internet and where a large percentage of the citizens over 60 are computer illiterate.
If you have your money tied up in a foreign currency and economic events fall just right, your company could stand to lose millions.
IKEA broke several of the rules of international retailing. If you were to invest in marketing products or services in a country such as Egypt now, you would run the risk of losing your customer base if a war breaks out because of the current political instability in the country.
IKEA ultimately recognized their mistakes, for example Ikea tried to impose their European standard bed, which were longer and thinner, while selling American standardize bed sheets to the American customers. These types of language problems are funny to an outsider but can spell financial disaster for your international business if you are not careful.
You must be aware of laws like this if part of your product marketing strategy includes manufacturing or distributing your wares in a foreign target market country. They also had their own people working alongside the manufactures to give technical tips and to find the better quality or lower cost materials.
In many Middle Eastern countries women are not allowed to wear makeup, so if your business is cosmetic sales, then that would be a big marketing factor. Retailing expansions can be difficult, because of differences in culture in the global market. However, in there early expansion to the United States they faced many hurdles as they failed to adapt there strategies to the American culture and instead of imposed their own.
Political and Legal Factors A. IKEA soon redesigned its American product range which immediately increased there sales. CONCLUSION As technology gets more and more advanced and the world continues to become smaller and smaller because of it; those companies that market their product or service effectively internationally will take advantage of the huge growth potential that international markets now offer them.
Hibbert, Edgar ; The retailing difficulties are not only limited to merchandising and promotion but the cross-over of store brands and brand images.
In expanding to global markets retaining corporations will have to take into consideration the import, duties and taxes, and also government rules and regulations. Financial Transactions and Banking Considering how you will get paid for the products and services you market and sell internationally is important too.Some cultural factors that make expansion abroad in retailing difficult is the necessity to adopt a multi-domestic market approach due to cultural differences in terms of their preferences.
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Some of the cultural factors that make international retailing expansion difficult include: religion, language, education and customs/manner (Caterora & Gilly, ).
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