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In today’s environment more and more B2B companies are became international, because they want to be compete in an increasingly global marketplace. So that will increase their profitability in ways not available to simply domestic enterprises. With addition region of operations, comes the challenge of managing business operations in multiple countries and that coordinating company’s marketing activities in more than one nation. However, for many marketers selling products and services in their own country is easy when compared to the efforts needed to gain sales in other countries. So in this essay I will discuss the unique challenges of Business 2 Business (B2B) in International marketing, which will improve the chances of success in this kind of marketing.
II. International Marketing
A company, which want to be internationally should generally be modified and adapted to foreign markets. So in each foreign nation, the company is likely to find a combination of marketing environment and target markets that are different from those of its own home country and other foreign countries. Before that we should know that marketing can defines as ‘the process of finding out what people need and want, then producing a product or service which meets those needs and wants, and doing better than the competitors’ . On the other hand, International marketing can be ‘marketing activities in which a business reduces reliance on intermediaries and establishes direct involvement in the countries in which trade takes place’ .
There are many benefits to marketing a company's products or services globally, but the decision to go international must be made carefully, because there are a lot of problems or challenges that companies can face it to be internationally. However, the advantages of being internationally are:
Increasing sales and profits with additional revenues.
Developing the International trade technology.
Reduce dependence on existing markets.
New approaching into consumer behavior.
Alternative distribution strategies.
III. Unique challenges of B2B International Marketing
Lack of face to face Liaison / Interaction
Difficult to build report (personal relationship)
World Time Zone differentials
Different working / weekend days
Increasing reliance on technology for effective global communication
Postal delays and courier cost
One of the most difficult challenges of international marketing is the distance, because companies should take care about above factors to success in their business internationally without any errors.
2. Lack of knowledge of target country
Geography of the country and distances.
Preferred agents or distributors
Countries are differing from each other and their locations are more suited than other for business.
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For example: U.S companies have been shifting their production from Asia to Mexico, because Mexico has three distinct advantages over many Asian countries as a location for value creation activities: low lobar cost, Mexico’s proximity to the large U.S. market, which reduce transportation cost and removed many trade barriers between Mexico, the United States and Canada under the North American Free Trade Agreement (NAFTA).
3. Laws, regulations and Controls
The role of the Economic department
Municipalities and Chambers of Commerce
Customs tariffs and controls
Agents right under law
Your own rights under foreign law
All countries maintain regulations relating to business on their lands. Countries have expectations that foreign marketers will follow their Laws and regulations. But the failure to abide by the rules of a country can prove to be very costly. The legal and political environment differs across national borders. So different countries have different legal policies and laws to which a company must follow when doing marketing internationally. In addition, some countries perform laws to protect consumers or to maintain a competitive environment in the marketplace.
4. Currency fluctuation and Controls
Which currency/currencies will you deal in?
How stable are they?
Recent history of currency fluctuations
Should you buy forward?
Any companies who want to be internationally must be prepared to invest both time and financial resources to see the return on their investment and the subsequent success. So, financial stability of the currency and a secure cash flow are important during the business. Companies should know the history of currency fluctuations. For example, Boeing sells a commercial plane for by US dollars worldwide; if the yen-dollar rate falls (rises), the price in yen declines (rises) but the US dollar price is unchanged. Also, oil prices, for OPEC members, are denominated in US dollars, as the US dollar falls, oil imports become less expensive to Japan.
5. Terms of payment
Which terms of payment are acceptable to both parties? Which will you use?
How will extended credit affect you cash flow?
How much trust is there on both sides?
Use of credit reference agencies
Unfamiliarity with documentation
6. Demographic and cultural differences
Is your product culturally acceptable?
Is your marketing massage culturally acceptable?
Understanding ‘the way business is done’ in your target country
Demographic preferences (eg, M-East consumers prefer spicy food; insist on air conditioners in cars).
Decisions way take longer in the Middle East.
Demographic and cultural differences take place among most nations of the world. Differences in culture are one of the most significant factors in an international company. It is very important to understand others cultures in order to market a product successfully, because culture plays an important role in the drama of international marketing. The marketing massage of the company must be culturally accepted and a good communication connection must be set between a company and its customers, suppliers, its employees, and the governments of the countries where it performs business activities. Poor communication can obviously cause various difficulties. Sometimes marketing messages can be translated incorrectly and that will affect badly on product. The marketing messages must be adapted for differences in demographic, language and environmental awareness.
For example, the very popular Marlboro advertisements which show the Marlboro man projects a strong masculine image in America and in Europe, but in Hong Kong, attempts to use this advertisement were unsuccessful, and the reason for that because the urban people did not identify with horseback riding in the countryside.
Perry, Nigel. Marketing Fundamentals, First edition. Abu Dhabi, UAE: Higher Colleges of Technology, 2001, page 4.
“International Marketing”. http://users.wbs.warwick.ac.uk/
Graham, John. And Philip. Cateora, International Marketing, 13th edition. New York, USA: McGraw-Hill International companies, 2007.