In 2014, companies in the United States made approximately $396.38 billion in retail sales. In the same year, global retail sales totaled $22.3 trillion. No matter how you look at it, that’s a lot of money. What’s more, that number is predicted to increase to $28.3 trillion by 2018. Of the retail sales that occurred in 2014, about 1.8 percent took place in the United States. In other words, there is a lot of money to be made for companies willing to expand operations and cater to international clients. In order to reach those clients, companies will need to modify and expand their marketing strategies.
What Is International Marketing?
One of the first things companies must realize when they decide to expand into new markets is that doing so is not simply a matter of finding a free program online to translate website content. Just as international markets are different from domestic markets, international marketing is a different process from domestic marketing.
On its surface, the meaning of international marketing is simple: it’s just marketing a product or service to consumers in different countries. Upon second inspection, however, it is a bit more complicated. International marketing is significantly more complex than domestic marketing, and several additional factors come into play. This includes legal differences—every country has its own separate set of laws that govern business that must be taken into account—as well as cultural differences.
In some countries, there is simply no market for certain products or services. Companies must create new strategies to appeal to broader demographics. Ambitious brands will need to draw up market penetration plans and create strategies to break language barriers. International marketing requires a lot of commitment, and it will be necessary for companies hoping to expand into international markets to invest substantial time and effort.
Deciding When to Expand
Because of the scale of the investment needed to build an international marketing program, it’s important to ensure the timing is right. How can a company know that it’s time to set sail into international waters? There are several questions executives should ask as they decide:
- Has the company built a solid foundation at home? This seems intuitive, but if the expansion spreads the company’s resources too thin and far from the intended success, the move could lead to disaster.
- How big will this expansion be? Is this international expansion a matter of opening new locations in several countries, or is it simply expanding the company’s online presence?
- Does the company have personnel in place to handle the expansion? This includes making sure that the company has employees with the required skills and the company can afford to shift those individuals into new roles or hire additional resources.
- How much money is the company able to invest in international marketing efforts and where will this money come from? Depending on how business is running in the primary market, it may be wise to divert money from domestic marketing efforts into international markets. For example, in the past few years, Netflix has diverted a significant portion of its marketing budget into international marketing with the intent to grow its audience from just over 50 countries in January of 2015 to 200 by the end of 2016. In 2014, the video streaming company spent $313.7 million on foreign markets, approximately $42.70 for each new customer added. Meanwhile, the company spent approximately $51.54 for each new domestic subscriber.
The Steps to an Effective International Marketing Plan
Once a company decides it is time to move into an international market, there are several steps to follow when creating its international marketing plan:
- Research. Determine the size of the market for the product in each country to which the company will expand. Learn the laws governing business and marketing in those countries. Ask questions, and ask them often.
- Build the infrastructure. Companies should build a robust infrastructure early on to streamline the process of international marketing. This includes activities such as registering trademarks, reserving international domain names for local language microsites, etc.
- Adapt the current marketing strategy. While creating an international marketing strategy is a lot of work, a lot of the work has already been done for the company’s domestic strategy.
- Localize the product and marketing materials. This includes translating and tailoring messages to appeal to new demographics.
- Reevaluate and adapt. Just as domestic markets are constantly changing, so are international markets. Continue to conduct market research and adapt marketing strategies.
When it comes to creating a marketing strategy, there is almost no such thing as too much research, and that goes double when dealing with international markets. It really is more than just a matter of language. Each country has its own demographics. Companies should carefully decide which questions to ask so that they can learn exactly how best to tailor their marketing efforts to each country.
Here are a few questions to keep in mind:
- How big is the market in the target country for the product or service being offered?
- Are there direct competitors in the country to the product or service being offered?
- What have those competitors done in the same arena? How did they succeed? What obstacles did they face? What would this company do differently?
- How is the target demographic in the new country different from the target demographic at home?
- Which social media tools are the most popular in the target country?
- What search engines are most effective in the target country?
- What are the most effective marketing channels in the target country? In some countries, social media may be the most effective marketing environment, while other countries may be more amenable to television, radio, or newspaper advertisements.
- How expensive is airtime / advertising space in the new country?
- Are there cultural differences between the two countries that should be taken into account when creating marketing materials?
- For companies in the retail or consumer goods verticals, how will orders be fulfilled? Are there potential problems when shipping? Will the product be able to clear customs easily?
- What type of customer service is standard in the target country?
- What are the local laws governing business practices?
- How drastically does the country’s currency fluctuate over time?
These are only some of the questions to ask while building an international marketing plan for a specific region, but it’s a start. This sort of research should be done each time the company expands into a new region.
Build the infrastructure
This is where the brunt of the work in breaking into a new country can hit. Fortunately, once it’s done, maintenance is a simpler affair. Creating the infrastructure in each country early in the process will pay off exponentially down the road.
It’s wise to have a local representative in the country to help navigate unexpected obstacles and clearly explain local business terminology. Executives should be sure they fully understand the laws and legal terminology of any contracts within the country before signing them and making them legally binding.
As a best practice, companies should secure top level domains early on for their websites, such as .co, .cn, .au, and so on, to prevent squatters from reserving them and then charging a premium to turn the name over. Businesses should also register trademarks early in the company’s name.
Remember that real estate laws often work differently in other countries as well, so if the company intends to create a physical presence with brick-and-mortar locations, executives should make sure that they are clear on the local laws.
Adapt the current marketing strategy
Again, while it is important to tailor marketing content to specific regions, that does not mean that all previous marketing work is useless. Rather than throwing everything out and starting from scratch, look at the current marketing plan and see what aspects will work in the new country.
Localize the product and marketing materials
There is a popular story about the Chevrolet Motor Company’s expansion into the Latin American market. According to the story, when Chevrolet introduced their popular Nova model into countries that primarily spoke Spanish, the vehicle sold very poorly. Supposedly, this was because in Spanish, “no va” literally translates to “It doesn’t go.” And who would want to buy a car whose name proudly declared that it wouldn’t run?
While the story itself is actually untrue, there are several other examples of international marketing campaigns that were severely damaged by a poor translation. For example, in China, a mistranslation of Pepsi’s slogan, “Pepsi Brings You Back to Life” instead led to Pepsi spreading the message that “Pepsi brings your ancestors back from the grave.” Needless to say, people were not lining up to buy Pepsi products.
Branff Airlines, an American airline that closed its doors in 1982, made a similar gaffe when they decided to publicize the leather seats they featured in First Class cabins. The slogan they used was, “Fly in leather,” a relatively harmless phrase in English. In Spanish, the phrase was translated as, “Vuela en cuero.” What they didn’t realize, though, was that when spoken, “en cuero” sounds almost exactly the same as “en cueros,” which means “naked.” Needless to say, “Fly naked” was not quite the message Branff was hoping to spread.
While each of these examples is fun to laugh at, they all raise a valid point. When doing business in other countries, it is important to take the local language and culture into account in every aspect of marketing. Companies should translate website content and mobile apps clearly—not only word for word, but matched to the local manner of speaking. Brands need to make localized versions of marketing materials and even products.
– Matching the Product to the Marketplace
Even companies that seem to have standardized offerings across all markets have adapted their products to match the target demographic. For example, in the Philippines, hamburger giant McDonald’s (locally called “McDo”) offers “McSpaghetti.” The idea of ordering a plate of spaghetti at McDonald’s, served with a piece of juicy, fried chicken, seems completely alien to anyone who is familiar with the chain restaurant in the United States, but in the Philippines, it is a regular part of their menu. Other local offerings include macarons in France and the flatbread McArabia in the Middle East.
Similarly, Domino’s Pizza shifted their offerings to appeal to local tastes in their various markets. They realized that they had a solid base product that worked in most regions, but in others, it needed a bit of help. As part of their international marketing plan, they added additional toppings that would appeal to people in different regions.
When discussing the necessity of tailoring their offerings to reflect local market demands, Domino’s Pizza CEO J. Patrick Doyle said, “The joy of pizza is that bread, sauce, and cheese works fundamentally everywhere, except maybe China, where dairy wasn’t a big part of their diet until lately. . . And it’s easy to just change toppings market to market. In Asia, it’s seafood and fish. It’s curry in India. But half the toppings are standard offerings around the world.”
– Crossing the Language Barrier
Additionally, company websites need to be translated into several different languages. H&M, a multinational Swedish retail clothing company, has their online shop available in 21 different markets, while online auction giant eBay has established separate sites for 25 foreign countries. There are several options available for translation including human translation and machine translation.
Depending on need and the size of their organization, companies will likely use a combination of the options. Smaller projects may not need more than a quick run through a free translation program, followed by a brief check for errors. Short but important pieces of content may go to a human translator who can make judgment calls about word choice and sentence structure. Meanwhile, many companies use a professional management system to, not only translate, but organize content. As part of these systems, translation memory also keeps track of content that has already been translated, so when new content is added to the site, it isn’t translated a second time. This keeps the process more efficient while also cutting costs.
In order to boost SEO, companies should also make sure that search engines are able to see which languages their websites are able to handle by using hreflang or language meta tags. These bits of code will indicate in which languages the website has available content. SEO will be discussed in a bit more detail later on.
Reevaluate and adapt
Once the core plan and infrastructure have been laid out, that doesn’t mean it’s time to lean back and let everything run on autopilot. Market preferences change, and it’s important to keep up on the current trends in each market where the company has a presence. As the company’s presence becomes more established, there is a good chance that marketing plans in each country will diverge, becoming more specialized and better able to target local business.
Different forms of marketing
Depending on several factors—demographics, availability of Internet access, cost of advertising space, to name a few—it is important to figure out exactly which type of marketing to invest in for each region or country. Both digital and traditional marketing have their uses.
In many countries, digital marketing is easily the dominant method. As the Internet has become more prevalent and more and more cities have become connected, the Internet is simply the fastest way to give a brand exposure to as many people as possible.
– Social Media
Social media is an incredibly powerful tool, but it has the potential to get out of hand very quickly. Depending on the medium, it may be wise to create separate pages or accounts for each region, or it may be better to create a single, strong global presence. For example, on Facebook, there are advantages for a company creating a single global page. It is much easier to keep the messages the company is putting out consistent with a single page. Of particular importance is the fact that the number of people who “Like” the page will be shared across all regions, as will the “People Talking About This” numbers, meaning there is a higher chance of that page’s content showing up on other users’ news feeds.
On the other hand, because Twitter has the potential to be much more interactive, it is wise to have more specialized Twitter accounts for each region. The company’s representatives who are monitoring Twitter feeds can directly respond to visitors with a more localized knowledge base. Additionally, because Twitter is so frequently filled with abbreviations and slang, it makes for a better user experience to have a native speaker managing a local Twitter accounts. Different countries also focus on different social media sites, so it is important for companies to do their research and target the most prevalent networks in each country. For example, in Russia, Facebook receives 24.241 million visitors each month, and compare this to 54.605 million people each month who use VKontakte, or VK, the most popular social networking site in the country. Twitter, on the other hand, receives only 8.47 million visitors per month in Russia, though it is still growing.
When dealing with online traffic, search engine optimization is clearly a valuable tool. One of the best ways to catch a potential customer or client’s attention is to make sure the brand is very visible through organic search. How better to achieve this than by making sure that the company’s brand is among the first results in an internet search?
Google continues to dominate the search market, holding more than a 90% market share in dozens of the biggest markets worldwide. Still, there are some countries where other search engines are more prominent, such as Baidu in China (55%), Yandex in Russia (58%), and Naver in South Korea (77%). When creating SEO strategies for an international marketing plan, marketing executives cannot afford to discount these other search engines, which use different algorithms than Google.
International marketing requires companies to localize their content. This holds especially true for international SEO. The information the company provides should be suited to the local audience. In addition to creating content that applies to a broad demographic in the area, companies should include familiar references, such as local currencies and time zones. Even a website’s colors, layout, and style of humor can have a big impact on local viewership. Local contact information, such as phone numbers and addresses, will also ensure that visitors perceive the content is relevant to them..
Companies should keep an eye out for anything that can show a search engine that the site is local to the target country or region. Some companies might host their website on a local IP, or build links using local resources. And again, optimizing for local search engines can significantly boost an international marketing website’s performance.
International pay-per-click campaigns go hand in hand with international SEO. Just like in a domestic market, companies branching into international PPC and SEO should draft an initial keyword list for each new market. This is not just a translated list of keywords from the company’s domestic PPC efforts. It would benefit the company significantly to research local search volumes for the target country, as well as which keywords have the highest search volume in that region.
It is also a best practice to tailor PPC ads to local markets. This means going a step beyond translation. In these instance, the more effective course would be to have marketing experts who speak the new language natively so that PPC ads resonate with the local audience. Once users have clicked the advertisement, it’s important that they land on a landing page that has been optimized for them in their language. Not having a landing page in the proper language can lead to a significantly lower number of conversions.
As was mentioned earlier, different types of marketing work better in some countries than in others. While in many countries digital marketing is the method of choice, that does not mean that traditional marketing can be ignored. . In some regions, the Internet is not as widely available as in others, or bandwidth is more expensive. This could severely curtail digital efforts, and so it may be wiser to invest in more traditional forms of marketing.
Print marketing is one of the oldest time-honored techniques when it comes to getting the word out about a product. Pamphlets, letters, brochures, and other forms are more familiar to certain audiences.
That does not mean, however, that there are no differences to take into account for print when developing an international marketing strategy. For example, in the United States, the standard for flyers, letters, and the like is an 8.5 x 11-inch paper. In most European countries, however, the standard paper size is A4, which is measured in metric and is 210 millimeters wide and 297 millimeters long (approximately 8.25 x 11.7 inches). A marketing communication designed for 8.5 x 11, then, will seem a bit off and stand out as different.
Printing costs also vary from country to country and should factor into marketing budgets. Other factors to take into consideration are how expensive advertising space is and the prevalence of print media.
There are several factors that impact the cost and effectiveness of television marketing in a particular region. For example, a company might consider creating a single television spot, rather than having native speakers simply dub over the voice. Or perhaps, rather than hiring a new voice actor, a brand might simply add subtitles to the video. The latter is certainly the most economic option, but marketing executives should still weigh the pros and the cons for how the local audience will receive the video.
How effective is television marketing in the target country? How many people in the country even own a TV? Dubbing over the commercial creates an obvious disconnect between the words performers are forming with their mouths and what the audience hears. How big of an effect will this have on audience reception?
A more expensive, but perhaps more effective, option would be to create a new spot specifically for the target country or region. This can reach a broader portion of the population and have a deeper positive impact on the audience. A good compromise might be to simply create one spot, but depend entirely upon voiceover work, rather than showing a spokesperson. This significantly lessens the cost of producing several spots while still providing voicework in the audience’s native tongue. If there is text on the screen, it is also important to provide translations so that the audience understands.
Another factor that executives should keep in mind is the country’s regulations on television content. Some countries are more strict than others about what can be played over a broadcast, so before putting a lot of money into a television promotion, companies should make sure that they are clear on what is permitted.
Radio considerations are similar to those for television, but significantly simpler. Without the visual element, many of the problems that arise when localizing television content are no longer a consideration. There is no video to sync up with translations. There is no text on the screen to translate and also there is no need for subtitles.
It is especially important when creating localized radio scripts to work with native speakers. Because the bulk of the piece relies on the script, it is crucial that the dialogue sounds natural and comfortable. Word choice is particularly important to ensure the message resonates with the audience.
– Direct Mail
According to the 2015 DMA Response Rate Report, direct mail response rates in the United States are several times higher than all digital channels combined. Unfortunately, its biggest detractors are the cost, the effort required to deploy, and the difficulty in tracking it, all of which are exacerbated in the context of international marketing. Depending on the country, postage rates may be higher or the reliability of the postal service may be questionable, and response rates in other countries may be higher or lower. If the company has a local base of operations, some of these problems can be mitigated, but executives should keep all of these factors in mind when deciding whether direct mail is something in which they want to invest.
Sometimes, the best way to understand exactly what is effective in an international marketing plan is to take a look at what has worked for other companies. What works for one company will not necessarily work for another, and viewing successful campaigns can spark new ways of thinking that can be applied to a company’s own international ventures. Here are a few examples of some particularly successful international marketing campaigns over the years:
Coca-Cola has continually attempted to keep their brand fresh and innovative while also showing that they are a part of the communities they target. Over the years, they have put forward several initiatives in an attempt to connect with people on a global and local scale.
One example of these initiatives is their “Happiness Machine.” This campaign featured several videos in which a special vending machine or delivery truck has been set up to deliver “doses of happiness.” In the first video, set on a college campus in New York, the machine begins by dispensing free 20 oz. bottles of Coke, much to the delight of the students. Gradually, it begins to diversify the “happiness” it doles out, from a bouquet of daisies (presented by an actual person reaching their hand out of the delivery slot) to 2-liter bottles of Coke, to a pizza, to sunglasses, and finally culminating in a 6-foot-long sandwich.
In another video filmed in Rio de Janeiro, Brazil, the “Happiness Machine” is a Coca-Cola delivery truck with a large red button on the back with the words “PUSH / APERTE” in big white letters. As people oblige, they are again rewarded with small bottles of Coke, which then increases to a soccer ball, sunglasses, larger bottles, and eventually beach chairs, pool toys, and even a surfboard when the truck stops next to a beach.
In each video, the machine quickly draws a crowd of smiling people, all cheering as each person receives their prize. The feeling presented is one of genuine goodwill and community that is both global and local at the same time. The people in the video are welcoming Coca-Cola into their area, and it only feels natural that the viewer of the video should, too. The overall emotion is summed up in one poignant moment in the college video where a girl who is laughing in a bemused way says, “I want to hug it!” before embracing the machine and saying, “I love you, Coke!” Each video ends with the message, “Where will happiness strike next?” being shown on the screen, hinting that there are infinite possibilities—even, perhaps, the viewer’s hometown.
– Diageo and Johnnie Walker
In 1999, the British alcoholic beverage company Diageo launched a new campaign for their Johnnie Walker whisky brand in an attempt to recover from a recent decline. Their goal was to develop a solid brand that was recognizable across the world, but that fit very well into local business needs as well. To this end, they created the “Keep Walking” campaign which grew to encompass the theme of “Walking with Giants.”
In the campaign, Johnnie Walker features the achievements and inspirational stories of icons from around the world. The campaign was built around the realization that all over the world, independent of nationality, people want to move forward in their lives. The brand galvanized its image behind the concept of progress and the slogan, “Keep Walking.”
To appeal to a broader base across 120 countries, Johnnie Walker localized the campaign for several different regions. The campaign brought in local “giants,” such as Marc Herremans in the Benelux region, a Belgian triathlete who had been paralyzed from the stomach down, but still went on to complete the Ironman of Hawaii and complete the Crocodile Trophy across Northern Australia, one of the world’s most difficult mountain bike races. The campaign also featured culturally relevant quotes that fit into the campaign, such as Laozi’s “A journey of a thousand miles begins with a single step” in China. The campaign featured more than 100 different quotes from across the world, and the campaign continued for more than 13 years. Within eight years, this campaign brought in more than $2.2 billion in retail sales for Johnnie Walker.
There is a lot of advice out there when it comes to international marketing, and much of it is even conflicting. The best way to handle this advice is always to research whenever considering launching a product into a new market. Each country is different, and even within countries, there is a lot of variation between regions. Within the United States, many successful companies use a different marketing strategy in the Pacific Northwest than they do in the deep South. The same line of thinking works in other countries.
By keeping a close eye on varying trends in different countries and regions, planning out the best course of action to meet those needs, and following through on the execution, companies can lay a strong foundation for their international marketing efforts. If brands continue to conduct solid research after the fact, they can find continued success year after year.