Lauren has taught college level organizational behavior and has a master's degree in Business Administration.
Imagine a new fast food restaurant opens up down the street from where you live. Excited to try something new, you're one of the first in line on opening day. As you're browsing the menu options, you spot a promotional poster with a happy looking family eating their meal with the caption 'Eat Your Fingers Off'. Are you still hungry?
This is an actual promotional flub made by a popular American fast food chain when they entered into the Chinese market. If a company is looking to begin doing business in a new country, they need to make sure they are taking into account the vast cultural, societal and governmental differences that change the way they should promote their products and services. In this overview of global promotional tactics we will cover personal selling, global account management and selling to businesses and governments.
Personal selling is a term used to describe the team of salespeople used by a firm to build personal selling relationships with potential customers. In global promotion, the personal touch of a salesperson who has an extensive knowledge of the targeted country as well as the firm's products and services can provide the firm with a competitive advantage.
A salesperson's knowledge of local culture, business customs and language helps to forge relationships with potential customers who may prefer to do business (implicitly or explicitly) with local suppliers.
Think about it; if the fast food chain had consulted a local employee before deploying the slogan 'Eat Your Fingers Off', would they have made the same mistake? In fact, having a localized sales force is one of the most effective marketing channels available to a firm because of their personal knowledge of the market and their ability to act as an intermediary between a firm's corporate team and the customers in their country.
Global Account Management
Global account management (GAM) is a marketing strategy wherein a firm provides consistent pricing and services to customers with a multinational presence. Traditionally firms have assessed pricing models based on the cost of doing business which can vary dramatically from country to country.
GAM, on the other hand, treats a firm's customers to a 'one price fits all' scenario allowing them to capture larger sales and provide products and services to larger customers with greater buying power. By focusing on theses high impact clients, the firm hopes to have higher closing and retention rates.
While global account management can help a firm reach high potential customers within targeted markets, it also has the potential for expensive failure due to the additional resources needed to deploy a GAM strategy effectively. GAM makes pricing services competitively very difficult and creates operational challenges for the firm providing the service.
Selling to Businesses and Governments
Some firms hope to enter new countries and markets and sell directly to businesses (B2B) and governments (B2G) instead of individual customers. In this type of marketing strategy, firms hope to make larger sales with recurring customers who have a higher buying power than individuals. A potential risk for B2B and B2G selling is that customers have more influence over pricing and contracts than individuals.
It is important to truly understand the market and invest resources in research that will help a firm better understand their customers and the current competition, regulations and economic temperature of the market they wish to enter. Networking and relationship building with key players in the industry can help a firm enter a new market effectively.
Government procurement can be a tricky way to increase revenue but has the potential to be a cash cow if done well. Firms must research what types of goods and services are in demand by that government, the processes in place for procurement and have a proven track record in order to be successful.
With an increasing trend towards a global economy, more and more firms are looking to enter into new countries and tap into potential markets to increase their bottom lines. While there is potential for success, firms must develop a promotional strategy specific to the market they wish to enter and take into account the differences in local culture, language and business regulations.
Strategies for capturing a new market and working with international clients include personal selling through sales teams, global account management and selling directly to businesses (B2B) or governments (B2G) in that country.
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