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Potential problems faced by businesses that trade internationally when entering new markets

What Are Some Challenges That Firms Face for International Marketing?

The markets are huge in terms of population, in countries such as China and India. The purchasing power of consumers and businesses in many countries is also significant enough for American firms to want to compete in these markets.

However, international marketing is not without pitfalls, and U. Identifying a True Market Need A key to success in business is offering products and services for which customers have a compelling need. The customer has a problem that needs to be solved, and the product or service provides the solution in such an effective way that its benefits are not difficult to communicate.

Identifying the true needs of large numbers of people in a foreign country is not easy. Not having lived in their culture experiencing their day-to-day lives, American marketing executives can err by assuming that what people in other countries want or need exactly matches the wants and needs of American consumers. The American companies can be perceived as attempting to take over the position long held by local companies, causing resentment.

Cultural Nuance Consumers are influenced to purchase products by marketing messages delivered through the media, including print media such as magazines.

Humor is often used in commercial messages to get the consumer to pay attention. But what is considered extremely funny in one culture can be perceived as confusing or insulting in another.

To produce effective advertising requires more than accurate translation of the message from one language to another. It requires a deep understanding of the culture, customs, morals and even religious views that predominate in that country.

  • These workers will make water heaters and refrigerators that had been produced overseas Isidore, 2011;
  • Communication Style Business executives from different countries can encounter several barriers to effective communication besides obvious language differences;
  • Or will low prices help you to penetrate a new market?
  • If a firm is completely dependent on one country, negative events in that country could ruin the firm;
  • The traditional pace of business negotiations can be different.

What motivates consumers to buy products varies from country to country. Communication Style Business executives from different countries can encounter several barriers to effective communication besides obvious language differences. The traditional pace of business negotiations can be different. Americans sometimes want to hurry negotiations along, whereas in some other countries emphasis is placed on building relationships before a business deal is seriously considered.

Executives from other countries may place a higher value on things such as facial expression instead of just the words that are being said.

  • As the research team continues to bring their findings to light, developing and supporting ethical and sustainable business practices remains a focus in the Hult classroom;
  • Blunders in international business.

Distance and Time Even with technologies such as video conferencing, executives in other countries may prefer to establish relationships on a personal level. For a smaller American company, this can mean a significant investment in travel costs and having key executives out of the office for extended periods.

2. Legal protection

Time zone differences can make it difficult to coordinate projects where collaboration is required. Executives on the West Coast of the U.

  1. By relocating production for the Chinese market and using more locally sourced materials, the company was able to successfully cut prices to better reflect its brand and boost sales among target consumers. The threats include political risk, economic risk, and cultural risk.
  2. However, communicating across cultures can be a very real challenge. For a smaller American company, this can mean a significant investment in travel costs and having key executives out of the office for extended periods.
  3. Overseas jobs come home.
  4. If currency exchange rates were to change such that the euro became weaker relative to the South Korean won, this would make a Kia more expensive for European buyers. Depending on the volume and destination of your shipments, will you send by land, sea, air, or a combination?

They hire sales reps based in those countries. They may engage local marketing and public relations firms to assist them. Because the American firm might have no prior experience in that country, finding people who are trustworthy and competent can be a challenge.