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Opportunities in Online International Marketing
International marketing is no longer an option, but a strategic imperative. Businesses that focus primarily on their domestic markets will be left behind as their competition gains “first mover advantage” in the international marketplace. When we consider that the Unites States only represents 4 percent of the world’s population, opportunities to sell our products and services worldwide become clearly evident.
The growth of the Internet has increased competition tremendously and opened up the doors to international business. Companies have developed a web presence to keep themselves ahead or in line with their competitors internationally. In addition to gaining a competitive advantage, there are a number of additional reasons why a company’s web presence is becoming an increasingly important tool to reach global markets.
Internet Population - Internet access is increasing in regions throughout the world. According to Computer Industry Almanac, 533 million people have access to the Internet, which represents approximately 8 percent of the world’s population. Aberdeen Group predicts that by the end of 2005, 17 percent of worldwide population will have Internet access.
E-commerce Growth - According to International Data Corporation (IDC), the U.S. accounts for approximately 40 percent of all money spent online, but that percentage is expected to decrease as Western Europe and Asia increase their online spending. According to Aberdeen Group, by 2003, 66 percent of E-commerce spending will originate outside the United States.
Demand for Products and Services - Regions throughout the world are realizing the enormous information resource the Web is and are interested in content, and products and services that their own regions do not provide.
Online Payment - A barrier that blocked E-commerce growth throughout the world, particularly in Europe, was different currencies. However, adoption of the Euro is completed, phasing out local currencies and blurring borders between countries in the European Union. By enabling better price comparisons, increasing competition and improving deals for online buyers, the Euro is making it easier to conduct business in the European online market and providing better entry by non-European companies.
Marketing and Advertising - Online marketing is a popular method to gain international audiences. For example, Email has become one of the most successful channels for marketers in Europe, which means that companies interested in selling to the European online market should take advantage of this popular medium.
Increased Sales and Reduced Costs - A web site provides an avenue through which to gain access to a large audience without spending a lot of money. For example, it cuts down on paper costs associated with direct marketing and magazine or newspaper advertising.
Challenges in International Marketing
Before marketing yourself globally, it is important to ensure your business is ready to deal with challenges presented by the international environment including language and cultural barriers, foreign laws, order fulfillment, and pre/post sales support.
Language and Culture - Neither technical accuracy nor perfect translation is sufficient when considering the language you will communicate through. It is important to really understand how a language is used by the people in your target market.
Many of us have heard about the marketing blunders of respected multinational corporations - showing us those that do not do their research, no matter how large, are capable of making mistakes in the global environment.
Consider the following examples:
Regional Laws - All phases of product development are affected by regulations. For example, the product itself, such as its physical and chemical aspects, is subject to laws designed to protect consumers with respect to purity, safety or performance. Local laws also affect product features such as packaging and warranties. Advertising regulations also takes various forms. For example, in Germany it is difficult to use comparative advertising and the words ‘better’ or ‘best’. In some regions, advertising for pharmaceuticals must have prior approval from Health Ministries. Sales promotion techniques are also subject to regulations. For instance, some countries put constraints on contests, deals, premiums and other sales promotion gimmicks.
Order Fulfillment - When you market and sell through a web site you are opening the door to an international audience potentially bringing increased demand for your products or services. How will you meet this demand? How will you deliver your products? What will you do if a market you did not intend to reach is interested in buying your products? What business partners will you need to ensure smooth logistics of your product? Can you handle your shipment costs? If you cannot meet demand or ensure smooth delivery of your product, you are at risk of negatively affecting your business and its image. It is important to find and qualify potential distributors, and pay particular attention to contract negotiation and distribution management.
Pre and Post Sales Support - Communication with your customers as well as your business partners is an important consideration when marketing and selling internationally. When a customer in an international market has a problem or would like to communicate with your company, they will most likely want to speak in their own language. They will also be interested in attaining a level of customer service that is in-line with their culture and expectations. Many businesses are able to meet customer expectations through strategic alliances or foreign distributors who deal with the local customer base on their behalf.
Planning for International Marketing
If you were planning a trip you would not leave without some kind of preparation. After all, you would want to get the most out of your limited time and resources. Preparing for international marketing is a lot like planning a trip.
One of the first steps you would take to plan a trip is conduct research and evaluate your resources and knowledge based on the information you gain. For instance, you will learn about the language, entry into the country, the worth of your dollar, the attitudes and cultural diversity of the people - to name a few. Any area that will potentially affect your trip is researched and in the process you will identify the knowledge that you are lacking.
Once you learn about the country you are going to visit, you will outline your plans for the trip after all, there are reasons why you want to go to this particular location. For example, what sights do you want to see? How many days do you have to do this?
Identify Strategy and Tactics:
Once you have identified your reasons behind the trip, you will outline your strategy for attaining each one. For example, perhaps you want to see two famous sights that are miles apart from one another. What is your strategy for seeing both while you are there?
When you market internationally, it is important to consider the language and culture of the regions in which you like to expand your presence. When you establish your web site in an international environment, the content, language it is presented in and its “look and feel” will have an impact on its success. The challenge is determining how “localized” you should make your site. Will you translate your entire site for a particular market or simply translate the most important pages? Which languages will you localize into? You may also consider whether you will use graphics or not, which products you will sell, and determine how you will accept payments.
North American businesses are realizing the importance of localization for their online marketing success. In the past, the temptation was to assume that regions that understood the English language did not require a localized web site. However, according to a Forrester report, customers who speak English prefer to go to sites that offer their local language as well as local product selections and relevant payment options.
How much you localize your web site will depend on a number of considerations including your online objectives, the markets you would like to reach, your budget and time availability, and your products and services.
Objectives - Your online objectives can impact how much you localize your site. For instance, Forrester says that “localization turns visitors into prospects and customers”, and recommends that the more a business intends to gain actual transactions online, the more it should localize. Therefore, if your objective is to increase awareness of your business you may choose to translate only the most important pages. If you want to make sales, you may consider translating most of your site into the language of the market in which you would like to gain these sales.
Markets - The markets you choose to reach through your web presence can have an effect on the language of your site’s content, the tools you use, your payment methods, and your promotional techniques. For instance, in Europe the majority of the population understands the English language. There is also a large proportion of the population that speaks German, Spanish and French. Consequently, you may consider translating the more important pages of your site into these languages. The language factor is much more significant in the Asian market. In particular, in Japan less than 10 percent have any English-speaking ability, according to Forrester.
In a number of regions connectivity presents a challenge, which means that businesses that are engaged in online marketing should consider the tools they use on their site. For instance, if a region has slow connectivity, the web site should have fewer graphics.
Payment preferences are also a consideration when marketing and selling online. For example, Germany, France and the UK have varying payment method preferences. According to Forrester, the French prefer checks, while UK consumers prefer credit cards. Global Reach states that while credit cards are rare in Germany, many new bank customers are given a debit card, which can be used to buy online. Generally, however, Germans tend to want the option to pay by invoice.
According to DoubleClick, one of the most common promotional techniques in Western Europe is email marketing, which is used by 31 percent of marketers. UK businesses use email marketing the most at 58 percent. Targeted banners and newsletters follow close behind. The markets you are interested in accessing will impact the promotional techniques you use.
Budget and Time Availability - Translation services can be very expensive, particularly when localizing an entire site. The cost may also vary according to the language you would like to translate your site into. Continually updating a site that is completely localized becomes a time consuming and expensive task. Each time you make a change or addition you will need to translate it into the appropriate language.
Products and Services - According to Global Reach, for technical products and services, English is often sufficient. Therefore, the only pages that require translation may be short summary pages that describe the offer and then link into more detailed pages in English. The translated pages become the “hook” that gains the interest of visitors.
The general consensus is that if you want to reach global markets, you will need to translate at least past of your site. Depending on how much you want to penetrate into international markets, it may be necessary to have a separate site for each market. Ultimately, the process should be a “phased-in” approach that takes into consideration your products and services, resources, market and long-term objectives.
Promoting and Advertising Internationally
There are a number of online promotional tools you can implement to gain the attention of markets internationally including search engine placement, affiliate programs, email campaigns and newsgroups, link programs, and banner ads.
Search Engines and Directories - Potential visitors from both English-speaking and non-English-speaking countries will likely go to major search engines and type in keywords in their own language. Consequently it is recommended that you submit words that are in the language of the market you are interested in attracting to your site. When you market yourself globally you will probably have your front page translated into the language of the markets you target. To optimize your search engine results, submit key words represented on the home page and pay particular attention to the title and the keywords used in the first paragraph. It is also important to consider popular search engines used in the markets you would like to enter. For example, the French often use Voila.fr, while Germans use Web.de and Fireball.de.
Affiliate Programs - With an affiliate program you offer affiliates an incentive to perform a particular outcome, which may be to increase ‘clicks’ to your site or improve sales - from a banner ad, text link, graphic or other means. The incentive is usually a fee, provided as a flat rate or percentage depending on your affiliate program objectives. Because you are marketing yourself internationally, it will be necessary for you to sign up with affiliates in their language and arrange foreign payments to pay them their fees.
Email Campaigns and Newsgroups - Email campaigns and discussion groups in the countries you are targeting are probably the most effective online marketing techniques. Discussion groups will enable you to build your reputation, identify trends in that market, and evaluate the needs of your international customers. Your email campaign will enable you to send out targeted information. Each one provides you with an opportunity to communicate with your target markets in their language and develop relationships with them.
Link Programs - Participating in a link program internationally will involve identifying sites in the markets you would like to reach that are not direct competitors but have a similar target market. As with affiliate programs it will be important to be able to communicate with other businesses in their language.
Banner Ads - If you want to increase your company’s brand awareness, implementing banner ads are an effective direct marketing tool, particularly if they are creative and include a call-to-action. Using this technique in many countries means using different banners in the language of each of your targeted markets.