The Gantry Group Building Business Through Research

Gantry Group Newsletter Issue No. 6, November 2001

AM: While the risks involved in international marketing may seem great at the present time, you should consider the risks of adopting a wait-and-see attitude. For example:

• At least some of your competitors, particularly foreign in-country competitors, probably are not waiting to expand into YOUR territory.


• Companies in technology-based industries may lose an important technological advantage by waiting, as newer or improved technologies are introduced.


• Your customers and clients need your products and services; by being available, even in unsettled times, you are demonstrating your reliability as a supplier and strengthening your relationships.

AM: Size by itself is not a prerequisite for international marketing success. Traditionally, most companies have started by trying to establish economies of scale in domestic markets before pursuing international market opportunities. International marketing was assumed to require financial and resources that were beyond the reach of smaller firms.

Today many small and medium firms, particularly in the technology industries, do not follow this traditional model. These are firms that face the need to expand marketing activities and sales in several geographical markets simultaneously, in order to exploit technological advantages ahead of their competition, or serve international customers. Despite limited international experience and resources, these companies cannot wait for their U.S. business to mature before attempting to penetrate foreign markets.

SS: Many, if not most companies make their first foray into international markets as a result of being presented with a target of opportunity. As I mentioned earlier, your company’s management resources and strategic perspective are going to be the biggest factors determining how such happy accidents are dealt with. So long as there is product demand, an appropriate understanding of the competitive landscape, an in-house understanding of what product localization is required, and an effervescent distribution and support structure, I can see no reason for small and medium companies not to be in international markets. Add to this commitment, planning, and avoidance of trial-by-error methodologies, there is every reason to expect a profitable result.
 
 

Will traditional marketing methods work in foreign markets?

SS: It’s a given that foreign markets are different from the U.S. It is all a matter of degree. Most foreign markets are small by U.S. standards: well stratified, comparatively homogenous, and easy to access through one or two high-visibility media channels. Word-of-mouth can spread consumer awareness nationwide in short order. Assertive marketing efforts can yield big returns in such an environment.

International markets are especially effective grounds for guerrilla marketing campaigns. Often media that would not be cost-effective in the U.S. (e.g., advertising at national sporting events, radio spots, or other sponsorships) are extraordinarily affordable in foreign markets and much more effective in market penetration than high-end print media or tradeshows. Properly designed, the marketing materials used in such venues can be re-used many times over. 43^rd Parallel specializes in the design and execution of such non-traditional marketing programs.

AM: You should bear in mind that the potential for lasting negative effects from a hastily or poorly thought-out marketing program is also greater in such markets. Any marketing program should be carefully researched and based on a deep understanding of customer needs and cultural nuances before entering a new global market. We believe that Gantry Group’s online market testing and analysis services are the essential first step in global expansion planning. Companies must be careful of impulsive inspirations from well-meaning “experts” acting on gut feelings or on anecdotal information rather than in accordance with a long-term marketing plan.
 
 

In this economy, I’m not in a position to spend lots of money on foreign market research. How do I find out about international market opportunities and competitive conditions?

AM: Field research in foreign markets can indeed be expensive. However, there are other, far less expensive alternatives to sending marketing staff or consultants out into the field to research market conditions.

Once again, the Internet affords the global infrastructure to conduct online market research in a time and cost effective way. The Internet is revolutionizing the acquisition of first-hand market intelligence within a targeted world geography, whether to test a new concept, competitively position, or benchmark brand recognition.

SS: Online market research technologies, including online surveys and focus groups, can be used in foreign as well as domestic markets to help you gain valuable insight about market opportunities in a fraction of the time and cost of traditional field research and market testing. Gantry Group has been a pioneer in developing and applying these online marketing tools. These research tools are sometimes used alone as well as in combinations with traditional market research.
 
 

I have an international marketing manager. Can’t s/he handle all these issues?

SS: As one international observer dryly noted, “Only in the United States is international marketing generally conducted by one unsupervised person who has combined duties in international sales, international advertising, international tradeshows, localization, and all other global business functions on four continents. And all this for a marketplace five times the size and 40 times the diversity of the American domestic market.”

Effective and profitable international operations demand managers with exceptional cross-functional capacity. Very few domestic managers are tasked with addressing all aspects of market success in the way international managers are. If the existing international staff requires mentoring or assistance in meeting a heightened expectation for accountability, then help should be provided from either internal or external sources.

AM: A cost-effective way to overcome these obstacles, especially for small and medium firms, is through partnerships or outsourcing international marketing-related functions. 43^rd Parallel specializes in such outsourcing arrangements, which enable the client to leverage our years of hands-on international marketing management experience and worldwide network of contacts to achieve its strategic goals. If desired, we can operate a company’s international marketing program on a turnkey basis.
 
 

How should the international marketing function be integrated with the rest of the company?

AM: To succeed in international markets, your company needs to adopt a “global” outlook. This means tearing down the internal walls that divide your company into “domestic” and “international” operations and isolates elements such as sales, distribution and technical support in separate silos, in favor of a more cross-functional form of organization. Marketing planners, distributors, customer support and product development people need to communicate constantly to ensure that all are members of one team with a global mission.

SS: In addition to its cost-effectiveness as a marketing tool, the Internet can also play an important role in management control and cross-functional reporting. The people who are most involved in international matters are often separated geographically, linguistically, and frequently by several time zones, making coordination all the more difficult.

One mechanism that can assist in effective communications is a well-constructed intranet structure with filtered levels of input from various sources. Such a communication device can make corporate goals consistently clear and unambiguous to all parties, ensure accurate records of expressed opinions and facts, and be quickly reviewed by decision-makers at all levels and in all places. Likewise, contributions to the gathering and analysis of marketing data, materials, and methodologies can lead to an elevated sense of teamwork, accountability, and group association.
 
 

Any other thoughts you’d like to leave with readers?

AM: In planning and executing a successful international marketing campaign, small and medium firms in particular tend to be hampered by their lack of foreign experience as well as limited resources and capabilities. Perhaps as a result, many smaller companies assume that they cannot take a thorough approach to internationalization but must make do with unsystematic, ad hoc efforts.

Based on 43^rd Parallel’s experience with many small and medium firms, these firms are the ones that can least afford not to take a systematic, well thought-out approach to international marketing, precisely because resource constraints do not permit them to make many mistakes. They need to start their international marketing campaign with a roadmap that includes key steps such as analyzing motives and objectives, strategic planning, market research, market selection, entry mode selection, and post-entry strategy and commitment of resources.

SS: Earlier we talked about outsourcing and “turnkey” foreign marketing services. I’d like to observe that personal contact with the market and relationships are also important parts of an effective foreign marketing strategy. Sole reliance on third parties, such as agents or distributors, or consultants for that matter, can be counterproductive especially if it deprives you of direct contract with the market or fails to go beyond mere anecdotal data for making decisions. Even on “turnkey” projects, 43^rd Parallel and Gantry Group see themselves as your partners not your proxies.

About Gantry Group: Founded in 1997 and headquartered in Concord, MA, we are a full-service, custom market research and advisory firm dedicated to helping companies cost-effectively accelerate the successful market adoption of their products and services - online and offline.

The Gantry Group has been helping companies design, manage and analyze quantitative and qualitative research studies - both domestically and worldwide -- to drive successful new product and market initiatives. Using Gantry Group’s proven technologies and methodologies, our clients quickly prioritize, validate and monetize their global market opportunities. Contact us today to see how we can make a difference in your online and offline businesses worldwide.
 

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Phone: 978-371-7557 Fax:  978-287-0043 Email: info@gantrygroup.com Web: www.gantrygroup.com

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