OpEd, Politics

Causes of Business Failure in International Marketing

By Dr. Moyi Harry Ruben


International marketing is seen as a multinational process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy national and international individual and organizational objectives.

It is a function of culture and marketing practices in countries that are culturally dependent on each other because of the assumption that what works in one country may not work in the other country.

International marketing activities are shaped by the environment in which they operate. If a firm wants to adopt a certain product for a target market, it is essential for the product to meet the regional specifications and standards, to be in balance with the local environment, and also to satisfy the requirements of the local consumers; otherwise, the marketing of the product will not be sustainable.

The country’s marketing environment differs in four main areas: 1. In their economic systems; 2. political and legal systems; 3. level of economic growth and development; 4. financial situation; and 5. cultural influences on the marketplace.

The main reasons why people venture into international marketing are 1. opportunities in foreign markets; 2. opportunities for growth; 3. creating an international brand; 4. the opportunity to dispose of large stocks of goods; and 5. the opportunity to increase profits.

These are coupled with the risks associated with them: (a). The cost of the customization of the market mix is high; (b). the risk of currency instability; (c). the difficulty of understanding local cultures, customs, values, and norms’ (d). Risks of Government Instability; (e). Difficulties of entering local distribution channels and difficulties of entry requirements, standards, and legislation and regulations in a foreign country.

When faced with decisions to trade internationally, one of the most important issues in international marketing is the collection and analysis of market-related situational information and the ability to use and interpret this data.

In international marketing, marketers are faced with the dilemma of having too much data and too little information about the marketplace or what to market, to whom, or where, in order to sustain profits. The strategy of research is lacking. This strategy refers to the set of ideas through which the study of the market intends to proceed in the direction of answering the marketing questions.

Generally, directions for tackling these dilemmas in most cases have been an assumption that has no empirical test factors or is not provided by the literature, which includes qualitative strategy, quantitative strategy, or a combination of both. This article intends to identify some of the causes of international business failures that have affected the global marketplace.

After conducting research on business failure, I found substantial evidence that suggests that some of these factors contributed to the collapse of the majority of economies, like in South Sudan, where toilet flash businesses are operated.

  1. Cultural difference influences sustaining international marketing; for example, a soft drink was introduced into Arab countries with an attractive label that had six-pointed stars on it. The Arabs interpreted this as pro-Israel and refused to buy. Other labels were printed in ten languages, one of which was in Hebrew, which the Arabs did not buy. So, the study of the cultural environment in business is an important factor in business success.
  2. Differences in Physical Environment: This would refer to the differences in physical features of the people in different countries; for example, the type of hair care and cosmetic products needed in Poland would be different from those needed in South Sudan, and the structures and somatotype of polish hair would not work in South Sudan villages. Therefore, another marketing style would be carefully initiated to change those types.
  3. Climate differences: this could include meteorological conditions like the degree of rain and temperature range in the targeted foreign market. For example, the portfolio of chocolate production in Japan is higher than in the Malta Islands because of the higher degree of temperature per year. This has also had a remarkable influence on decisions to trade in one of these countries if you intend to trade in the chocolate business.
  4. Economic Differences: the level of economic development in the market can affect the desired properties of a product and, in this way, can inspire a company to adapt its products in order to meet the needs of the local market;
  5. Religious Differences: Religion has many impacts on some products, more particularly on the ingredients that constitute them. For example, in Slovakia on Christmas Day, December 24th, no meat meals were offered, but in Africa, meat meals were offered by most families. Therefore, the region has a remarkable influence on business profits.
  6. Historical Differences: Historical differences help explain facts such as the playing of cricket in England as opposed to games of ice hockey in Czech or Slovak. These differences have slowly evolved over time but have a propensity to affect consumer behaviors.
  7. Language differences, Inappropriate use of language could result in a loss of market apart from forming a cross-cultural blunder. For example, USA and Britain negotiators found themselves at a standstill when the American company proposed that table, with particular key points. In the USA Tabling, a motion means not to discuss it, while the same phrase in Great Britain means to bring it to the table for discussion. Such implications complicate business activities.
  8. Differences in actual and political target groups: in countries like England and Germany, it is possible to do national sampling, i.e., small towns and villages can be included in the sample, because distances are not great in other countries. Interviews can be included only in cities with a population of over 100,000 people, as the cost of interviewing people in towns and villages is prohibitively high. So, such businesses in this area could be affected by the implications.
  9. Capacity of business volume; for example, 1. A well-known drinks company tried to introduce a two-liter drink bottle into the market but found it hard to enter the market. They soon discovered this was because few people had fridge doors large enough to accommodate the large bottle.
  10. When Pepsi cola advertised Pepsi” in Taiwan, with the “Ad Come Alive with Pepsi” they had no idea that it could be translated into Chinese as Pepsi brings your ancestors back from the dead, which affected the sale of Pepsi Business in Taiwan”. Therefore, understanding the political, socio-cultural, and economic environment is seen as an important element of international trade and marketing.

The most successful business marketer understands the cultural, political, and economic diversity of the marketing environment and focuses on constant learning about the ever-changing international marketing environment. In many cases, we are faced with the dilemma of how to make decisions about going international or domestic, but assessing the risks and opportunities can lead us to better international trade and marketing.

Dr Moyi Harry Ruben

PhD. Corporate Finance

Professor of Financial Economics

Contact: 211922442554. WHATSAPP 211923875000

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