Social Aspects of International Advertising

When we consider International Advertising from the advertiser’s point of view, according to them the primary objective of advertisement is that the product or services which they are offering should be sold in the market. And in achieving the main objective of selling the product or services there are other profound consequences. Advertising puts an influence which is both persuasive and pervasive in nature. Through the selective reinforcement of certain language and values, and social goal, it acts as important force attitudes that underlie behavior not only in the market place, but also in all aspects of life. In an international marketing concern, advertising has an important social influence in a number of ways: many of the international advertising are designed to promote and introduce new products from one market to another. Often this results in sudden change in life-styles, behavior patterns of a society, stimulating for example the adoption of fast food, casual attire or hygiene and beauty products. International advertising encourages desire for products from other countries; it creates expectations about “the good life”, and establishes new areas of consumption. Advertising is thus a potent force for change, while selectively reinforcing life-styles, certain values and role models.

We can see the examples of brands like Levi’s, Adidas, Reebok, Nike, Marlboro and McDonalds which are familiar in almost every corner of the world. These brands have become an object of desire by the teen and young adults throughout the world. Even the scenes and images which have been shown in the international advertising are either in western in origin or reflect western consumption behavior and values.… Read the rest

Global Market Models and Concept Analysis

Managers must be conscious that markets, supplies, investors, locations, partners, and competitors can be anywhere in the world. Successful businesses will take advantage of opportunities wherever they are and will be prepared for downfalls. Evidently, successful managers, in this environment, need to understand the similarities and differences across national boundaries, in order to utilize the opportunities and deal with the potential downfalls. In developing appropriate global strategies, managers need to take the benefits and drawbacks of globalization into account. A global strategy must be in the context of events around the globe, as well as those at home. International strategy is the continuous and comprehensive management technique designed to help companies operate and compete effectively across national boundaries. While companies’ top managers typically develop global strategies, they rely on all levels of management in order to implement these strategies successfully. The methods companies use to accomplish the goals of these strategies take a host of forms. For example, some companies form partnerships with companies in other countries, others acquire companies in other countries, others still develop products, services, and marketing campaigns designed to appeal to customers in other countries. Some rudimentary aspects of international strategies mirror domestic strategies in that companies must determine what products or services to sell, where and how to sell them, where and how they will produce or provide them, and how they will compete with other companies in the industry in accordance with company goals. The development of international strategies entails attention to other details that seldom, if ever, come into play in the domestic market.… Read the rest

Push and Pull Factors in International Business

Companies decide to go global and enter international markets for a variety of reasons, and these different objectives at the time of entry should produce different strategies, performance goals, and even forms of market participation. However, companies often follow a standard market entry and development strategy. The most common is sometimes referred to as the “increasing commitment” method of market development, in which market entry is done via an independent local partner. As business and confidence grows, a switch to a directly controlled subsidiary is often enacted. This internationalization approach results from a desire to build a business in the country-market as quickly as possible and by an initial desire to minimize risk coupled with the need to learn about the country and market from a low base of knowledge.

International markets evolve rapidly and very often companies struggle to keep up in terms of their strategy. It is therefore reasonable to deduce that many companies’ international operations will consist of a collage of country market operations that pursue different objectives at any one time. This, in turn, suggests that most companies would adopt different entry modes for different markets. More commonly, however, is for companies to evolve a template that is followed in almost all markets. This usually starts with market entry via an indirect distribution channel, usually a local independent distributor or agent.

The factors leading to the wide acceptability of international business are:

  1. Globalization of economics: The policy of liberalization was adopted which led to the globalization of various economics including the former communist countries and socialist pattern of the society.
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The Seven Dimensions of Culture by Fons Trompenaars

Fons Trompenaars is the author who belongs to dutch he is one the author of cross cultural communications. Fons studied economics from free university of Amsterdam and he got hid PhD from Wharton school. Trompenaars and Charles hampden have developed a culture which have seven dimensions. Five of his dimensions covers the way in which people interact with each other. The seven dimensions of  culture by Trompenaars are explained below.

1. Universalism (vs. Particularism)

Universalism/particularism distinguishes societies based on the relative importance they place on rules and laws as opposed to personal relationships. The basic question is: “What is more important—rules or relationships?”

Members of universalistic societies focus more on rules, codes, values and standards and believe that they take precedence over the needs and claims of friends and other personal relationships; believe that rules or laws can be applied to everyone and should be used to determine what is right; use precisely defined agreements and contracts as the basis for conducting business; tend to define global standards for company policies and human resources practices; and believe that agreements and contracts should not be changed.

Members of more particularistic, sometimes referred to as pluralist, societies focus more on human friendships and personal relationships than on formal rules and laws; place emphasis on friendships and look at the situation to determine what is right or ethically acceptable; believe that deals are made based on friendships and that contracts can be adapted to satisfy new requirements in specific situations; and permit local variations of company and human resources policies to adapt to different requirements.… Read the rest

Hofstede’s Cultural Dimensions

Dr. Greet Hofsted had conducted a comprehensive study and explained how culture influences the values at the work place. He worked as a psychologist in IBM from 1967 to 1973. In the time of working in IBM he has collected the analyzed data from aver 100000 individual from more than forty different countries. To the above study he made some additions and he developed four dimensions and later on he added fifth dimension that is long term outlook. Geert Hofstede’s dimensions investigation can support the trade individual in enhance understanding the intercultural variance within regions.

“Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster.” – Dr. Geert Hofstede

The different dimensions of the Geert hofstede are explained below they are

  1. Power distance index (PDI)
  2. Individualism (IDV)
  3. Masculinity (MAS)
  4. Uncertainty avoidance index (UAI)
  5. Long term orientation (LTO)

Power distance index (PDI)

This dimension explains about the degree of equality or inequality between the people in the society of a nation. A high power ranking shows the inequalities of power and wealth which have been allowed to grow with in the society. The societies are mostly following a caste system which does not permits upward mobility of its citizens. Power distance is defined as “the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally”.

Individualism/collectivism (IDV)

The second dimension of hofstede is individualism/collectivism. The concept in this dimension is discussed most frequently and it is the researched concept.… Read the rest

Technology Risk in Business – Challenges of Changing Technology in Business

The changing technology environment has and still become one of the biggest challenges in international business management. Technological changes can wreak havoc on industries. In making decisions regarding technological changes, companies err in two ways. They either commit themselves to a new technology too fast and burn their fingers or wait and watch while another company comes up with a new technology that puts them out of business. The issue of when and how to react to the emergence of a new technology is a matter of judgment. However, this judgment need not be based purely on intuition. By doing a systematic structured analysis of developments in the technological environment and putting in place the necessary organizational mechanisms, technology risk in business can be considerably reduced.

How can managers identify the emergence of a disruptive technology?  Clayton Christensen’s research reveals that disruptive technologies are often developed privately by engineers working for established firms. When such technologies are presented to customers, they get a lukewarm response. So, established companies do not give much importance to these technologies. The frustrated engineers consequently join start-ups, who are prepared to look for new customers. Companies must take note when talented scientists and researchers leave them to join start-ups. Often, they do so, to work in an environment where their innovative ideas are taken more seriously.

Companies must also learn to assess the impact of a new technology. The steam engine was developed for pumping water out of flooded mines. It was years before a range of applications was developed in industries and for transportation.… Read the rest