INTRODUCTION TO INTERNATIONAL MARKETING
Business organizations of the modern era operate in an international environment, meaning that they are limited not only to exist in a particular market or region; instead they operate in many countries and regions across the world (Carrigan, 2005). In this assignment, an attempt has been made so as to be able to observe differences in marketing environment, present in France and Japan which management at one of the leading car manufacturers in the world – Ferrari has to face. In addition to it, the report also sheds light on entering into a new market, keeping needs of the indigenous population in mind or it should be done according to global standards.
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For companies it is of great importance that they are able to assess and evaluate the environment that they operate in, from a marketing perspective. It is a well known fact that marketing is one of the key activities that has to be carried out by authorities, because it forms the basis on which their success or failure in the market depends (Whitwell, 2001). If an organization does not carry out this task, then its very survival in the industry becomes a lot more harder and complicated process. It can be supported through fact that marketing is such a process wherein authorities advertise and promote their goods and services at market place and try to create awareness of it in minds of target customers.
Ferrari is world’s one of the leading luxury sports car manufacturer in the world, and was founded by Enzo Ferrari in the year 1929. Since its establishment the company has been one of the front runners of this market and also has contributed in great numbers to development of the industry (Brady, 2010). Its headquarter is in Italy, but its operations are spread worldwide. Although there are a lot of luxury sports car manufacturers in the world, but Ferrari is the leading one and holds a great share of the market, making it the leading firm of this sector. For management of the company, it is imperative that they identify and also evaluate the environment that they operate in, as it is crucial for making effective marketing strategies and also aiding the organization to effectively survive in the market. There are many countries that the company operates in; it includes likes of Japan, France, etc.
Marketing Environment in Japan
Japan is one of the many developed nations all across the world and also a prime location for Ferrari (Zou and Fu, 2011). This is mainly because of reason that it is a developed nation, which means that life style and also living of residents is very good and they can support the purchase of high end as well as luxurious goods. Marketing environment of the country is very good, as companies market for their goods and services in great numbers and such advertisements or marketing campaigns are well received by people. Japan is located in north of the Asian continent and is ranked as 10th in the list of best nations around the world. It is also characterized as one of the most urbanized countries across the planet, as almost 86% of the whole population lives in cities and townships.
Demographic structure of the country is also a very interesting one from marketing point of view, as majority of the population is aged between 15 & 64 years of age (Shaw, 2008). Main reason behind it is such an interesting place to market a good is that people here tend to purchase such goods that would aid them in living a luxurious and comfortable life. But there are many sections of the society which believe that people in the country do not lead such a life as they are said to be, as their income levels are very low and also that since the population is so high, in most situations there is a high scarcity of jobs in the country. According to a study by Arnold (2003) because of such high population and high unemployment rates, residents do not have a very good income capacity.
But this facet again presents very unique and interesting choices for companies who want to market their goods and/or services in the market (Cateora and Graham, 2005). The above facts and figures provide a very good view of demographic and economic situation of Japan, but if one is to evaluate and analyze complete marketing environment of a region, it is important to thoroughly analyze political and legal aspects of the country as well. Japan is a democratic nation, where government is selected by votes of residents. Thus it may not be wrong to say that operating in the country can be very beneficial as they all are welcomed by the government and various other regulatory bodies. In this context it may not be wrong to say that marketing environment of the country is a positive one and is also very much conducive to business organizations and various market players (Korey, 2006).
Marketing Environment in France
Similarly, France is another country, which for the company is another major area of operations, mainly because of reason that population growth rate is good along with that of healthy economic climate of the country. In addition to it, the nation is also experiencing a major demographic change in terms that majority members of the populace belong to young age group and also have a good earning capacity (Buckley, 2002). Literacy rate is also very high in the nation. It can be supported through fact that quality of education provided in day care centers and schools across the country has improved and that too by a great margin. Apart from this GDP of the country is also very good, thus making it 5th best country in the world in terms of economic status and situation.
In addition to it, France occupies a very large portion of the European Union, which also makes it one of the largest European nations. Paris is the biggest city of the country, as there population density is very high. Nearly 100,000 people live per square kilometer of space available in the nation. It is because of this reason that France is considered to be the apt place for marketing and such related activities (Carrigan, Marinova and Szmigin, 2005). In addition to it, people of France also keep them very much aware of new products and services that are launched by various brands in the market, especially that of luxury brands. This country over the years has been known to favor such brands a lot, primarily because people here like to lead their lives in the most luxurious and comfortable of ways.
But there are many sections of the society which opines that it is not a very good country from view point of marketing, as majority of the residents do not know any other language than that of French, thus making it very difficult for marketers to promote international brands in the region (Doole and Lowe, 2008). This essentially means that if an organization wants to market itself in the territory, then it has to converse in the local dialect and also gain thorough understanding of local cultures as well as traditions. By doing so they can very effectively create a healthy brand image of themselves in the market and get closer to the aim or objective that they want to fulfill.
Apart from this, companies or the marketing agencies also need to have good knowledge and idea about local rules and regulations, because there are a plenty of them that exist in the country. Their non-compliance can lead to very bad results for business organizations and also tarnish their image in front of the many stakeholders of company. Delving further into the topic, attention also has to be paid to developing and using logos and tag lines in French, because English as a language for means of promotions and advertisements is prohibited in the country. Those firms which are not able to follow such regulations have to face serious consequences (Fletcher and Wheeler, 2009).
Challenges of marketing in Japan
There are a lot of challenges and issues that the management at Ferrari have to face and also combat in both these nations, because of which task of marketing becomes a very difficult job. Japan is one of the countries in which marketing any good and/or service proves to be an extremely tough task (Kim and Michell, 2009). This way operations and functioning of the firm become very difficult to be carried out in a successful fashion. One major challenge that the management at Ferrari have to go through is that of language barriers and problems. It can be supported through fact that majority of members of population of the country are natives and have knowledge only about Japanese language, i.e. they can read, write, speak and comprehend their native dialect.
It is because of this very reason marketing in this region gets a lot complicated and also lot of efforts have to be put in by the management in same context. It can further be seen through fact that in Japanese language there can be different meanings (Song and Parry, 2009). Therefore it can also be said that due this very reason, the company would have to face troubles in terms of communicating with the society in general. Since language is a major barrier, the firm will have tough times in interacting and conversing with people and the community at a general level.
Apart from this, the government has made a rule – Personal Information Protection Law, wherein residents or the people have been given the freedom to restrict mails that they receive from companies in terms of their promotional activities. If companies send promotional mails who has marked as the one where such mails would be rejected, then the organization is liable to be punishable under the law and will have to face serious consequences of it (Mortanges, Rietbroek and Johns, 2006). This is so because of reason that the Japanese government pays a lot of attention to privacy and confidentiality of its people and the residents. If any infringement in this aspect is done by companies, then they are liable to be punished under the law.
In addition to the above mentioned two problems and challenges which companies have to face while marketing in the country, there is another issue in terms of how content of the marketing campaign is presented to them. People in the country do not have tendency to see small text sizes on the web, which in turn explains the small number of whitepaper downloads in the country. Further companies also cannot use webinars and podcasts to market for the designated goods, especially to the ones who work in offices, because Japanese culture does not allow people to chat or use earphones when they are the workplace. Concept behind it is that if such an activity is carried out by an individual, then others may think that he is not performing the job or tasks assigned in a proper manner (Keillor, 2007).
Challenges of marketing in France
France is another country which is a very apt place for an organization such as that of Ferrari, primarily because of reason that people in the country tend to lead a luxurious life, due to which they like products and services of such companies (Czinkota and Ronkainen, 2012). But marketing in this region can be a very big problem for the company, as it is a different and unique country, having unique cultures and traditions than which are prevalent in the firm’s home country – Italy. Thus in this context it may not be wrong to say that management at Ferrari has to take into consideration the local norms and traditions while designing and developing their marketing campaign. There are a variety of challenges that the management would have to face and combat with so as to market its products in the region.
One primary challenge can be seen in terms of language barrier. Since most of the people in country speak, read, write and understand only French, in addition to the fact that English as a medium of language for marketing is banned in the country; it creates many problems for the country (Makridakis and Wheelwright, 2007). Due to this reason it may not be wrong to say that management has to pay attention to using the right language for marketing their products, i.e. the cars, or else the firm may have to bear serious consequences. Apart from language being one of the main hurdles, there are varieties of other challenges as well that have to be faced by the firm in order to market their goods in the region. In addition to it, winning trust of the French people is another critical challenge that has to be faced by the company in order to market their good. Since it is such a tough task for the company, they have to pay a lot of attention to it.
Residents of the nation also have a tendency to very quickly react to any kind of change and/or development taking place in market, and most of the times their reaction is in negative terms (Witkowski, 2005). Due to this reason as well, the company faces a lot of troubles and problems in marketing or promoting their goods to locals and also attracting them through help of different advertisement techniques. Many studies conducted on the topic in past have stated that France is one of the most challenging places where companies can market their products and/or services. They have said this in context that convincing and attracting people is very a difficult job in this market, and also satisfying their needs and wants as well (Geniets, 2013). Another major challenge to be faced by the firm is that it has to make sure that various norms and regulations as developed by the government are followed and well taken care off. And there are a wide range of such norms and principles, non-compliance of which can lead to such situations where the firm would have to face serious consequences and also pay for damages to the government or the numerous regulatory bodies.
Other than this, using technique of social media marketing is very difficult for the organization. It is because mainly because of reason that residents use these channels at a very extensive rate, meaning that majority of them uses all the platforms (Wood and Darling, 2003). Herein problem for the company is to identify and recognize which person uses which systems and platforms in their daily use. The main difficulty herein is to evaluate which method(s) the firm has to select so as to be able to effectively reach out to customers and try to attract them and also retain them in the organization for a long term. Through this analysis it may not be wrong to say that marketing in countries such as Japan and France is a very tricky task, mainly because of reason that there are a lot of challenges that they have to face in the market and evaluate them. Language and communication is one of the main problems that management has to face and evaluate them (Leonidas and et. al, 2010).
Determining a market entry strategy is a very critical task that has to be carried out by management of the company. Its importance for the company can be understood through fact that it lays down the foundation of success for firm in the new market and also helps in building an image of itself in the industry (Perry, 2000). There are a lot of ways through which management at Ferrari can help the company to enter the market, and also make sure that it is well accepted by target customers. But for the authorities, one very important decision which they have to take is to identify and select most appropriate strategy out of the many that are available to them. Selecting one strategy out of the many is a very difficult task, as there are a lot of aspects and concepts which have to be kept in mind by the management and relevant authorities. In this context one main decision that they have to take is to decide whether they would enter the market with a new kind of product or keep needs and wants of the local market into purview. It is a very important decision to be taken, mainly because of reason that it is the foundation stone on which firm’s success or failure depends (Best, 2013).
For the management at Ferrari, management’s decision in this context is one of the critical ones. But taking such a decision is not an easy job, mainly because of reason that there are a lot of parameters and aspects involved in it. If they decide to enter into luxury car market of Japan and France, then they can do so either by following local norms and trends or keep their product as per the global trends. Both of them have diverse effects on the company. Some sections of the society believe that modifying the product as per needs of local market is crucial and also a necessity (Welch, 2001). If authorities at the car manufacturing company decide to enter the two markets with help of strategy wherein they would identify and keep in mind the local trends and try to follow them, then it can prove to be a very good and effective source through which they can attract and also cater to needs of the customers in a much efficient and effective manner. But to be able to do so, they would have to conduct a thorough analysis into local environment and then try to spot or recognize needs and wants of local market.
It is a very good option in terms that it allows the company to much effectively cater to demands of the customers and also develop clientele base. Considering the act stated above that marketing a product into these two markets is not an easy task, if the management decides to enter through strategy of ‘local adaption’, then they would have to make sure that they have well understood the local beliefs and traditions (Geniets, 2013). But it can also prove to be a less useful option, because if the company takes a decision to develop their product as per local trends, then there are chances that it may lose sheen and also tarnish its own brand image.
Other than this, there is another strategy as well through which the company can enter the two markets as identified above. It states that firm must launch its product in market and do not consider trends that prevalent in the local market. Using this technique of market entry is a very good option when the organization is entering such markets which are developed in nature and its components, i.e. residents have purchasing capacity to afford luxury products and brands. But it may prove to be ineffective, as if this strategy is employed then target or prospective customers may perceive the organization negatively, thus affecting its brand image (Song and Parry, 2009). Through this analysis it can be said that management at Ferrari must use a mixture of both these strategies, as it would enable them to reach out to customers and deal with them in an effective manner.
To use this tactic, they would first need to do a thorough analysis of the environment, i.e. the local one and identify trends prevailing in the market in terms of needs and wants of the target customers. This means that authorities would be required to modify and develop their product (the cars) according to tastes and preferences of the locals and then launch it in market. But here in, it would have to be ensured that image of the company is maintained as it is found to be in the international arena. This means for the firm to attain success in these markets and attract customers with great efficiency, they would have to pay attention to identifying and fulfilling desires of the customers. It would of great importance to identify needs of the local markets, because of reason that through it the firm can develop an image of itself in the market and also be able to attract customers in good numbers. Further it would also have to be ensured that the company does not losses its global image in the market. For that they would have to develop and maintain quality of the goods.
Marketing is one of the most important functions that have to be performed by management of an organization as its very survival is dependent on it. During the report it was seen that for Ferrari to enter Japanese and French market, management would be required to develop its products in such a manner, wherein needs of the local market is given importance, while maintaining international image of the organization. Apart from this, the report also helped in determining that both Japanese and French markets are very difficult from a marketing point of view, mainly because of language barriers and communication issues.
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- Carrigan, M., 2005. Ethics And International Marketing: Research Background And Challenges. Emerald Group Publishing.
- Czinkota, M. and Ronkainen, I., 2012. International Marketing. 10th ed. Cengage Learning.
- Geniets, A., 2013. The Global News Challenge: Market Strategies of International Broadcasting Organizations in Developing Countries. Routledge.
- Keillor, D. B., 2007. Marketing in the 21st Century. Greenwood Publishing Group.