Concept of International Service Marketing, Features of International Service Marketing, Need of International Service Marketing25th November 2021 0 By indiafreenotes
Kotler defines service as “Any activity or benefit that one party can offer to another which is essentially intangible and does not result in the ownership of anything”.
International services are defined as “deeds, performances, efforts, conducted across national boundaries in critical contact with foreign cultures”. Intangibility and heterogeneity become important issues to overcome in the international market. Questions like how, when and in what form, a service is offered have to be considered. In an international context, led an investigation of service firms’ entry modes. Investigated professional service firms’ foreign market entry. Other studies have dealt with the internationalization process in different industries. Identified three general entry modes:
- Client-following mode
- Market-seeking mode
- Electronic marketing mode
Lovelock (1983) identifies three categories of services:
- Possession-processing services targeted at physical objects belonging to the customer.
- People-processing services that involve each customer directly in delivery of services targeted at the customer’s physical person.
- Information-based services targeted either at customers’ minds (mental stimulus processing) or at their intangible assets (information processing).
Features of International Service Marketing
Broader market is available
A wide platform is available for marketing and advertising products and services. The market is not limited to some precise local market or for people residing in a particular place, region or country but is free for all. People from different nations sharing different cultures and traditions can actively participate in it.
Involves at least two set of uncontrollable variables
By uncontrollable variables, we mean the geographical factors, political factors prevailing in different countries. At the global level, all the companies have to face uncontrollable variables from different countries. While establishing business globally, a company has to learn to deal with these variables.
Requires broader competence
International market requires more expertise and special management skills and wider competence to deal with various circumstances and handle different situations like changes in the strategies of the government, the mindset of the people and many other such factors.
Competition is intense
Competition is very tough in international market, as the organizations at the global level have to compete with both competitors in their home countries and also in the foreign lands. Competition is high because the clash is between developed & developing countries and both have different standards and are unequal partners.
Involves high risk and challenges
International marketing with its own advantages is also prone to different and tangible risks and challenges. These challenges come in the form of political factors, regional and cultural differences, changing fashion trends, sudden war situation, revision in government rules and regulations and communication barriers
The nature of international marketing is dependent on various factors and conditions and above all, it is dependent on the policies framed by different countries which are active participants in international marketing. International marketing tends to ensure balanced import and export to all countries big or small, rich or poor, developed or developing.
Management of international market is tough and requires thorough market research. It is a predefined process which is directed towards designing and delivering products based on the demands from the overseas customers. Proper management also helps the company attain its objectives.
Domination of multinationals and developed countries
International marketing is highly dominated by multinational corporations due to their worldwide reach. These organizations apply efficient and effective business practices to all their business operations. They have a stable position and with their global approach find themselves fitting into the arena of international marketing.
The international market needs to abide by different tariff and non-tariff constraints. These constraints are regulated because different countries follow different regulations. All nations tend to rationally abide by tariff barriers. All the imports and exports between the nations participating in international marketing follow some restrictions in foreign exchange.
International marketing is highly sensitive and flexible. The demand for a product in a market is highly influenced by political and economic factors. These factors can create as well as decrease the demand for a product. In fact, use of advanced technology by a competitor or the launch of a new product by another competitor may affect the sale of a particular firm’s product worldwide.
Importance of Advanced Technology
International market is dominated by developed countries like the USA, Japan, and Germany as they use highly advanced technology in production, marketing, advertising and establishing a brand name. They provide admirable quality of products at reasonable prices. Presently, Japanese products have got substantial existence in markets around the world. The Japanese could achieve this only because of automation and effective use of advanced computer technology.
Need for specialized institutions
Marketing at global level is highly prone to risks & is very complex and knotty. It undergoes lengthy and time taking procedures & formalities. Competent expertise is required for handling various sections of international marketing.
Need for long term planning
International marketing calls for long term planning. Marketing practices differ from nation to nation influenced by social, economic & political factors.
Lengthy & Time Consuming
The activities in international marketing are very time-consuming and knotty or complex. The main cause of these difficulties are the local laws and policies enforced on different nations, issues in payment as different countries use different currencies, distance between the participating nations and time taking formalities involved therein.
The current trend of globalization does not limit companies to their national borders and invites them for marketing on a higher platform, i.e., international platform. Every nation is free to trade with any nation. New markets are indicating signs of growth and are marking signs of development in economies like China, Indonesia, India, Korea, Mexico, Chile, Brazil, Argentina, and many other economies all over the world.
Need of International Service Marketing
Services are intangible products generally delivered through interactive channels. They are offered either as primary products or as supplementary components, according to the Management Study Guide. For example, legal representation is a primary service while computer networking is complimentary. International service marketing looks to create awareness of new and existing services in the target markets and public domains of foreign countries.
International service marketing enables businesses to acknowledge cultural differences when advertising in foreign countries. For example, when the American Family Life Assurance Co. (AFLAC) introduced its famous “Duck” ad campaign in Japan it used a stuffed doll because the use of live animals in commercials was not common practice there. The campaign went on to gain iconic status when AFLAC created the Maneki Neko Duck from the combination of the Duck and Maneki Neko, a famous white cat associated with luck in some Asian countries. AFLAC’s efforts to meet the expectations of Japanese society underscored the significance of aligning service marketing to cultural sensitivities.
Service businesses that build and maintain international networks build close relationships with customers. This allows them to raise sales while expanding their market presence abroad. Taking advantage of Internet-based promotional and networking platforms, such as social media, lets them reap maximum benefits in market penetration strategies. Digital platforms are particularly useful for small and medium-size service companies engaging in international promotion because they are fairly affordable and easily accessible.
International service marketing is an important platform for brand differentiation among service companies offering similar and related products in foreign markets. Indeed, brand recognition enables service companies to stand out and remain competitive. That makes promotional campaigns that engages the audience while establishing brand awareness as critical as the investment required to operate on an international basis.