International Business. Marketing policies - Essay Example

International Business International Business: A study of International marketing policies and strategies that help to further Globalisation. (Write your name here) (Write the name of your college/school) if not the name of your city/state or city/country. ABSTRACT This paper focuses on the International marketing mix for the number one bank in the Netherlands called ABN AMRO. The paper is divided into two sections. The first section speaks about the essential components in a marketing mix and then goes on to compare and contrast the differences in a domestic marketing campaign with that of an international marketing campaign. The second part of the paper focuses on ABN AMRO launching itself and its credit card campaign to be more specific into the growing markets of India. As the international marketing manager in charge of this venture, I focus on the areas and topics which we research, analyse and finally decide upon before venturing into the Indian market. This write up is simple yet interesting, focussing on the differences one has to consider in launching an international campaign from that of a domestic one, and the careful planning and research that needs to be adopted on critical topics so that the launch of ABN AMRO into India would not only be popular and successful but also rewarding and provide long term benefits including that of establishing a back office, so that ABN can take advantage of the outsourcing fraternity in India in the long run ahead. International Business (Section: A) ABN AMRO BANK: The merger between ABN BANK and Amro Bank created ABN AMRO Bank on 22 September 1991 in Amsterdam. ABN may not be as popular as the Bank of America or American Express but one only has to walk down the streets of Amsterdam or Rotterdam to be surrounded by the presence of ABN in the form of advertisements, promotions and numerous ATM's located all over the city. In the Netherlands ABN is in your face wherever you may go, for its reputation and brand name is a household name. Having been the domestic marketing manager for ABN in the Netherlands for 7 years and seeing the way the Bank steadily expanded in revenue and brand name had made my role as domestic marketing manager not only remarkably challenging but also tremendously satisfying. With the steady growth and performance year after year, ABN has followed the current trend of business and now looks to spread its international presence and expand its products and services. Keeping this in mind, I was promoted to International marketing manager and asked to spearhead, plan and co-ordinate the International campaign. Marketing Mix: The task is one that is exciting and involves a lot of research and careful planning. Those who are familiar with the rudiments of general marketing theory will know that marketing is far more than selling: profitability and added shareholder value is the ultimate aim of all marketing pursuits. Marketing is a collection of activities, including advertising, public relations and sales promotions, marketing research and new product development, package design and merchandising, personal selling and after-sales service and the determination of selling prices. (R Bennett, J Blythe, H Alder, 2002). The term marketing mix is frequently used to describe the combination of marketing elements applied in a given set of circumstances (Borden, 1965). Although the whole marketing scenario is in many ways different when it comes to the International market, they are in some ways similar to that of the domestic market, because the key areas in both aspects are more or less the same but need to be implemented in a new way. Major components of the marketing mix can be listed under seven headings. (R Bennett, J Blythe, H Alder, 2002). Major Components 1. Promotion: including advertising, merchandising, public relations, and the control and deployment of sales staff; 2. Product: design and quality of output, assessment of consumer needs, choice of which products to offer for sale, after-sales service and policies for customer care; 3. Price: choice of pricing strategy, prediction of competitors responses; 4. Place: selection of distribution channels, transport arrangements; 5. People: the people who are in regular contact with the customers, and whose activities represent the company to the outside world; 6. Process: the sequence of events involved in delivering the product's benefits to the consumers; 7. Physical evidence: the tangible proof that the product has been delivered and consumed. The domestic marketing strategy is usually considered easier because ABN already understands the local/country customs and norms. The focus, then is effective marketing. International marketing on the other hand requires a much more detailed and careful approach for the simple reason that ABN is now taking a step into unchartered waters and the risk is much more greater. I list below ten key differences between domestic and international marketing. (R Bennett, J Blythe, H Alder, 2002) Domestic International 1. Research data is available in a single language and is usually easily accessed. Research data is generally in foreign languages and may be extremely difficult to obtain and interpret. 2. Business in transacted in a single currency. Many currencies are involved, with wide exchange rate fluctuations. 3. Business is conducted in a single language. Multilingual communication is required. 4.Competitors' behavior is easily predicted. Competitors' behavior is harder to observe, therefore less predictable. 5. Selling and delivery documentation is routine and easy to understand. Documentation is often diverse and complicated due to meeting different border regulations. 6. Business laws and regulations are clearly understood. Foreign laws and regulations might not be clear. 7. Promotional messages need to consider just a single national culture. Numerous cultural differences must be taken into account. 8. Business risks can usually be identified and assessed. Environments may be so unstable that it is extremely difficult to identify and assess risks. 9. Distribution and credit control are straightforward. Distribution and credit control maybe extremely complex. 10. Market segmentation occurs within a single country. Market segments might be defined across the same type of consumer in many different countries. Keeping these differences in mind, the ABN AMRO bank's international marketing campaign has to take great care in its market research strategy, for the market research will help to determine what product of the bank would be most in demand, provide an estimate of the consumers spending power, determine production and setting up costs and most of all provide an estimate of the income/expense ratio. In any business the employees play a key role in the performance and development of the company. When it comes to the banking domain this factor is even more relevant, because the skill and ability of the employee needs to be of the highest quality. In a domestic market, to hire employees of such caliber is easier. But when expanding across national borders you have to make certain that the people who you hire are of the same standard as your domestic group of employees, because they are the ones who are going to be in charge of the bulk of the international operations. Another factor while expanding and venturing into an international market is the area of communication. Yes, with the advancement of technology such as the information super highway, VOIP and wireless networks it is much easier to set up operations and keep expenditure costs down, nevertheless it is of utmost importance while marketing internationally to study carefully how ABN will communicate across national borders amongst themselves and to their customers and shareholders. Summary: Each country has its own unique laws and regulations which play a critical part in formulating marketing strategies, the language and cultural barriers are also to be considered along with the competitors and cost of infrastructure and setting up of operations, keeping in mind the change in currency as well. The domestic market is something that ABN has ventured into and proven itself, built a reputation, and has a strong customer base which makes the role of the marketing manager much easier. But when it comes to the international market, each country provides a first time experience where ABN starts from scratch. The success of each venture puts a lot of responsibility on the international marketing manager's shoulders. Nevertheless in this new role I know it will be challenging yet exciting, and I look forward in spreading ABN AMRO banks global presence and increasing sales worldwide! International Business (Section: B) ABN AMRO bank has always been waiting for the right time to expand globally and makes its presence felt internationally. The bank has various products ranging from retail banking, corporate banking, merchant banking, credit cards, mutual funds and investments and trade finance to name a few. (Hoffman, 1997) Keeping in mind that in order for product introduction to be successful, corporations must identify countries and test market cities that offer a good fit with firm's overall marketing strategy. A two stage model is presented by the author that combines the concepts of marketing strategy, the management science technique of goal programming and microcomputer technology for an efficient and effective evaluation of international markets. The top level management at ABN have decided to venture into the steadily growing economy and fast paced market of India a nation which has the second largest population on the planet. The challenge posed to me as the international marketing manager would be to take up this assignment and plan how to spread the presence of ABN into the Indian market, keep in mind that our long term goal is to join the current outsourcing trend to India and eventually shit all our back office operations over there. This requires me not only to promote the products we offer but also to spread brand name, have a strong public relations team so that when we do decide to join the outsourcing fraternity in India we have a strong image and will not have difficulty attracting the best talent to work with us since we will have a reputed image in the market. The bank would be setting up branches in the Indian market and providing retail and corporate banking up front. My main objective within the scope of products on offer would be to market the credit card division, keeping in mind that for the last few years the steady increase in purchasing power of the Indian middle class. Our goal was to target them and make readily available credit cards to both corporate employees and the regular customer. With this challenging task, but tremendous opportunity in mind I focus my interest on the following. India is a land unlike many; there is a mixture of religions, cultures, castes and languages. You cannot afford to take lightly any one of these aspects as you might in another country, to do so could prove fatal as the values and customs of the Indian society are very dear to the people. Launching any marketing campaigns, advertisements or promotional activities without carefully studying them could be disastrous. The marketing strategy would be to first to start in a small way and then expand upon seeing the results. Apart from opening up a retail branch, ABN would also be setting up back office operations so that all transactions in regards to credit cards, retail and corporate banking could be processed in India as well. My focus on taking the credit card products offered by ABN into the Indian market will be mainly focused on these areas. Market Research: (Perner, Lars) Primary vs. secondary research. There are two kinds of market research: Primary research refers to the research that a firm conducts for its own needs (e.g., focus groups, surveys, interviews, or observation) while secondary research involves finding information compiled by someone else. ABN considers India an important part of their global plans and hence we will be taking into consideration both primary as well as secondary research statistics. The primary research will be conducted by a special group of ABN AMRO's senior marketing team who will be traveling to India for an extensive period of time, while the secondary data is going to be collected primarily from other banks that have links and tie ups with ABN. The market research collected from these studies will provide us with the following information, which will then in turn enable us to move ahead with our plans and implementation. Location: India consists of numerous states and there is extreme variety in each state in regards to the number of productive workers, use of the English language and the cost of living. ABN intends to target one of the four metropolitan cities at the start and may be either the capital Delhi, or bollywoods own Mumbai, the hub if outsourcing Bangalore or Chennai. The statistics gathered from our group of market researchers will enable ABN to make the final decision as which city will be the first for ABN to venture into. The location will also decide our public relations and promotional strategies. Measuring Country Wealth: In the banking world money is its lifeblood. India's economy as of late has been in the news with the Sensex and the Nifty hitting all time record highs. The middle class within the country have enlarged and so has their purchasing power. Outsourcing to India has caused an increase in the number of jobs and also a boost to the economy, Indians are now willing to spend more, since they earn more. This is vital to the credit card division of ABN, and focus will be given to see which parts of the country earn the most because, it is there that the power of the consumer will be the most and in turn provide the most juiciest market for ABN to introduce its new range of credit cards. Culture: One has to just venture into India to find out just how drastically different it is to the western world, with its people, loud colours and vibrant life. (Perner, Lars ) When observing a culture, one must be careful not to over-generalize about traits that one sees. Culture is a problematic issue for many marketers since it is inherently nebulous and often difficult to understand. Knowing that Indians are big on culture and values, ABN will invest time and money to understand the Indian culture so that we can kick off our products in the right way, not just to meet our customer's needs but also to suit them as well. Competitors: ABN AMRO bank is already aware that there is stiff competition in the financial sector in India already coming from nationalised as well as other multi national banks in the country. Pricing of our products and customising them to suit our customers needs will be done keeping in mind our biggest competitors in the market and what products they offer. Income & Expenditure: Budgeting and calculating estimated sales, profits and infrastructure and operational costs will be of high importance. Senior financial analysts from the bank will be working with a team of Indian economists and financial planners to come up with these figures. The feed back from this team plays a vital role in the international marketing manager's decisions and strategies. Conclusion: Once we have our research in these key areas we will go ahead in our decision making process and decide which city will be chosen to launch ABN's new credit cards. The budgeting will help us to decide our advertising campaign, promotional deals, building brand reputation and finally the awaited launch of the ABN AMRO gold, silver and corporate credit cards. From an international marketing managers point of view this whole challenge is exciting, intimidating, rewarding and most of all life changing!! References: Bennett, R, Blythe, J, Alder, H, (2002) International Marketing: Strategy Planning, Market Entry & Implementation. Kogan Page Limited. Border, N H (1965) 'The concept of the marketing mix' in Science and Marketing, ed G Schwartz Wiley. Hoffman, J. (1997) 'A Two Stage Model for the Introduction of Product into International Markets', Journal of Global Marketing. 65-86. Perner, Lars 'International Marketing: The Global Marketplace' http://www.consumerpsychologist.com/international.htm Read More