challenges of global marketing article i

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Challenges of Global MarketingAuthor(s): Richard C. ChristianSource: The Journal of Marketing, Vol. 25, No. 4 (Apr., 1961), pp. 72-74Published by: American Marketing AssociationStable URL: http://www.jstor.org/stable/1248998 .

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By RICHARDC. CHRISTIANMarsteller, Rickard, Gebhardt & Reed, Inc.Chicago

Challenges o f G l o b a l MarketingH OW DO WE market abroad? How

much investment will it take? Whatkind of people do we need? What are ourprofit opportunities? What are the pitfallsand problems? Do our products fit over-seas markets?These are the kinds of questions beingraised in corporate councils throughout theUnited States. A tremendous amount ofhigh-priced talent in the form of industrialcorporation boards of directors and topmanagement groups are wrestling with theopportunities of global marketing.

STATISTICS ELLTHESTORYU.S. private investment abroad is esti-mated to be more than $43 billion. During1961 another $3 billion is likely to be added.Exports of American industrial firmsincreased in 1960 over 10 per cent above1959; and 1961 probably will find an addi-tional 5 per cent increase. Sales of U.S.manufacturing companies in their foreign

subsidiaries were up some 11 per cent in1960 over 1959, and may be up even moreduring 1961.Some startling examples: General Motorswill invest $11/4 billion next year in itsoperations, with between 20 to 25 per centoverseas. Ford will spend $138 millionoverseas this year, $200 million in 1962.In 1959, the IBM World Trade Corporation,responsible for most of the firm's interna-tional business, earned $40 million on agross of nearly $300 million. It is reportedthat Chas. Pfizer & Co. and Schering Drugboth earn more than 40 per cent of theirincome abroad. Clark Equipment, whichrecently changed the location of its interna-

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tional headquarters from Havana to Brus-sels, finds its international growth consider-ably more rapid than the domestic business.

MAJOR TRENDSWith the continuing major shift of U.S.business abroad from export to broad-scaleinternational business, involving local man-ufacture and stepped-up sales and advertis-ing efforts, U.S. marketing methods morethan ever apply overseas. Basic to thesuccessful application of these methods is

the process of market auditing or the prep-aration of local, regional, and internationalmarketing plans which cover all facets ofthe development of the expansion of a com-pany's sales abroad.What is really called for is the domestica-tion of marketing abroad, or the lifting ofoverseas local standards of approach to alevel comparable with marketing develop-ments and standards in this country.This is particularly important because adistinction between domestic and foreignbusiness is ceasing to exist. More progres-sive managements are looking at all mar-kets the world over, with a global conceptof management and of marketing. Profitsin Germany, Australia, or Argentina areno less attractive than profits here. Eventhough there are questions of money trans-fer from country to country, these problemscan be overcome. To obtain profits callsfor the same level of management andmarketing approach.Jere Patterson, of Jere Patterson & As-sociates, international advertising and mar-keting counsel of New York, recently re-ported on a variety of changes and trends


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INDUSTRIALMARKETINGtaking place. Basic is his theme that U.S.companies must market abroad the waythey do here, with strategically thought-outmarketing plans which include: thoroughmarket knowledge; fitting products to cus-tomers' needs and wants; competitive pric-ing; and flexible terms and services.

SOME ESSENTIAL STEPSPatterson believes that any well-managedAmerican industrial corporation can suc-cessfully establish an international organi-zation if it carefully charts a specific courseof action. He suggests six steps as essentialprocedures:

1. Foundation-The right internationalstaff must be selected. Men, willing tomake sacrifices, to learn new languages,and to adjust to local customs and tradi-tions must be found. Advertising agen-cies and research organizations must beselected and effectively used. Properoutside organizations can help greatly tolift the level of marketing performance.2. Preparation-A marketing plan shouldbe prepared, embracing all aspects ofthe marketing activity. If basic factsare not available within the business,marketing research should be under-taken as an important factor in properpreparation. The U.S. government, manytrade associations, publications, andcounselors can help to provide essentialfacts.

3. Presentation-The marketing plan, welldocumented and thoughtfully workedout as to objectives, strategy, tactics,etc.-all with profit goals-should bepresented to management in properform and fully discussed. This willmarshal needed support for all market-ing, advertising, and other related ef-forts. Goals might first be establishedat international headquarters, thoughtthrough regionally, and then plans de-veloped locally to meet targets. Theplans should then be subject to regionaland headquarters review before finaladoption.4. Integration-The program must be in-tegrated in terms of proper timing ofall marketing activities-for example,

advertising in terms of product distri-bution, and promotion and publicity inconcert with advertising. Integrationis not just an external matter but alsoan internal matter. There must beintegration of marketing activitieswithin the company, both in terms offunctions and departments, and interms of geography.5. Co-ordination-International marketingrequires co-ordination, especially as tocorporate image, name, trade marks,dealer-distributor identification, and ad-vertising and promotion materials.There are various techniques of co-ordination, such as regional committees,travel abroad, standards of procedure,definition of budget categories, standardbudget categories, and basic productclassifications. Sometimes the forma-tion of separate marketing companiesat international, regional, and locallevels can prove to be an important co-ordinating tool.6. Education-Inherent in all this newlevel of marketing activity is education.This implies education of local top man-agement, marketing management, andadvertising management, and then ed-ucation of regional management. Thisis perhaps the single greatest responsi-bility of present-day marketing man-agement that is global in scope.The business of doing business abroadis profoundly changing. New levels ofmarketing performance are called for.

Local and regional factors must be takeninto account. The international image ofthe business and its products must beassiduously built. A global concept of busi-ness is called for, a concept that will breakdown artificial distinctions between domes-tic and foreign marketing.SUGGESTED READINGSA good first step in "getting the ballrolling," internationally speaking, is to re-view some of the excellent literature avail-able. Here is a suggested reading list:C. K. Campbell,"Sales and MarketingPoli-cies," Case Studies in Foreign Operations,InternationalManagementAssociation,Spe-cial Report No. 1, 1957.

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JOURNAL OF MARKETINGEdward de Robert, "Advertising in OverseasOperations," The Challenge of a New Envi-ronment, International Management Asso-ciation, Series Number 2, 1956.Frank Montgomery Dunbaugh, Marketingin Latin America (New York: Printers'Ink Book Company, 1960).John Fayerweather, Management of Inter-national Operations (New York: McGraw-Hill Book Company, Inc., 1960).William B. B. Fergusson, "Effective Mar-ket Research Abroad," The Challenge of aNew Environment, International Manage-ment Association, Series Number 2, 1956."Fight for Survival," booklet published bySteel magazine, (Cleveland, Penton Publish-ing Co.). An analysis by Steel editors ofU.S. Metalworking's competitive position inthe new world market. Compiled from Sep-tember 5, 1960 issue."Financial and Tax Considerations in Or-ganizing for Foreign Operations," Increas-ing Profits from Foreign Operations, PartThree, International Management Associa-tion, Special Report No. 3, 1957.

Edward T. Krieger, "Defining and Measur-ing the International Market," IncreasingProfits from Foreign Operations, Interna-tional Management Association, Special Re-port No. 3, 1957.R. D. McManigal, "Sales Policy and Opera-tions," Case Studies in Foreign Operations,International Management Association, Spe-cial Report No. 1, 1957.Albert F. Watters, "Patterns of ForeignDistribution," The Challenge of a New En-vironment, International Management Asso-ciation, Series Number 2, 1956.Harvey Williams, "New Dimensions forAmerican Foreign Operations," IncreasingProfits from Foreign Operations, Interna-tional Management Association, Special Re-port No. 3, 1957.

For additional information, write:McGraw-Hill International Corporation, 330W. 42nd Street, New York 36, New York.World Trade Information Service, Divisionof Commercial Intelligence, Bureau of For-eign Commerce, Washington, D.C.Foreign Commerce Department of the U.S.Chamber of Commerce, Washington, D.C.

MARKETING MEMOMen Don't Live by Sense!

Man lives in an environment of symbols, and it is extremelyimportant to understand something about the symbol-makingprocess because symbols are the raw material of human thoughtand all communication. Superficially we think that words are theonly form of communication, because we live in such a highlyverbal atmosphere. Yet in actuality there is a far greater amountof nonverbal communication going on all the time through theuse of other symbols than words. And though we believe thatall thinking must be logical and intellectual, there is an entirelydifferent mode of thinking also used by the brain, which has adifferent order and a different way of conveying meaning thanintellection, hinging on a different kind of symbol-the non-verbal symbol. -Pierre Martineau, Motivation in Ad-vertising, (New York: McGraw-HillBook Co., Inc., 1957), p. 133.

DO NOT BIND VOLUME 25 UNTIL YOU HAVE RECEIVEDBOTH JULY, 1961, AND OCTOBER, 1961, ISSUES. VOLUME25 WILL HAVE SIX ISSUES (July, 1960, through October, 1961.)

74 April, 1961

challenges of global marketing article i

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