Join Doug Ladd for an in-depth discussion in this video E is for "economic", part of Marketing Foundations: International Marketing.
- How many dollars will a gallon of gasoline cost you in Germany? To figure that out, you need to convert the currency in the European Zone from euros to dollars, and they sell it by the liter in Germany, so you have to do some more math, but we won't tackle the metric system right now. An important step in determining where and how to enter new markets is to understand the different economic structures, currencies, and markets and other geographies. Performing an Economic Analysis of another country is a two-step process.
The first can be done in the comfort of your own home or office. You start by reading the reports made available by the Organization of Economic Cooperation and Development at oecd.org. Check out the tab entitled Countries to look up the country of interest. If you want to dive really deep, you can check out the Statistics tab. Websites such as cia.gov and buyusa.gov are also good sources of information. What you're looking for on these sites is information about how the economy in the new market is structured.
I'd suggest you create a table where you can track some key points that will be important to your plan, such as the type of currency used, the value of that currency relative to your own, how this exchange rate has moved over the last several years, what is forecasted to happen in the coming years, the growth rate of the economy and your particular industry, and, of course, the tax situation. Are there tariffs, duties, or quotas on products coming from your country into the new market? The key to this exercise is to look at the data to determine if there are any important trends or facts that warrant closer inspection.
For example, if the currency in your home market is very strong, meaning people using your currency have more purchasing power in your home country than those using the currency in the new market, your product is likely going to be more expensive when exported, as compared to those produced locally. For the past several years, the U.S. dollar has been weak compared to the currency of the European Union. So companies that make their products in the U.S. have been able to price their products competitive relative to those in the EU.
When you've gathered this information, you will have a better view of the pricing options available to you. Think about how you will put this information to work, and keep in mind, you may not be able to offer your product at a competitive price in all markets.
The course also investigates options for global expansion, such as exporting, licensing, joint ventures, and direct investment, and details how to put together a successful marketing mix using distribution, promotional methods, and translation. Plus, learn where to turn for more information about your specific target markets.
- The rise of the global consumer
- Learning about customers in global markets
- Accessing foreign markets
- Adapting products
- Balancing risks and rewards