Will a well-written international marketing plan increase your business’s odds of success in a foreign market?

My Answer: Definitely not.

Then why waste the time and effort in developing such lengthy documents?

An international business plan will force you to answer specific questions – it will provide you with the opportunity to go and gather high quality research (including primary research) to back-up your answers. Jotting down a plan on paper… or on your hard-drive… will allow you to share ideas with colleagues and create an organized implementation plan (based on research). (Remember, the goal is to mitigate risks that come with international business. Research will help, but always have contingency plans)

So, what’s the difference between a marketing plan and an international marketing plan.

My Answer: Your market choice rationale along with strong research on the target market. I have heard many global SME’s mention that they wished they had done more research before they had entered certain foreign market.

For example, we hear a lot about opportunities in emerging markets. Sure the BRICM countries are lucrative economies, but are they right markets for your particular product/service? Is your product/service appealing to the cultures? Will it require modification or re-positioning to become more appealing? (The common example being, McDonalds in India where veggie burgers replace their famous hamburgers in order to better connect with the largely vegetarian population), Is there a demand for your product/service? Is the market already saturated? What are your competitive advantages?, etc…

I will be providing excerpts from an international marketing plan I developed and provided consulting on for an existing marketing/advertising firm. Below you will find parts of the Market Rationale section.

Now let’s call the company [X Company] for now.

A bit about the domestic firm: [X Company] is a marketing/advertising firm. They provide a range of marketing/advertising tools; from print media, web development (site maintenance, HTML programming, Macromedia Dreamweaver, Macromedia Flash MX ), corporate identity (product design), and advertising campaigns.

Market of Interest: California, United States of America

Excerpt

Market Entry Rationale

Since [X Company] is a relatively new firm there is still room for more experience and it lacks a large network of potential clients. Considering the timing and the age of the firm, [X Company] should expand to the United States of America. However, the U.S., on a whole, is a significantly segmented market. The population of the country is 291 million and it is broken-down into many environmental differences and different customer profiles, therefore, creating a separate international marketing plan for each region would be most practical. To start, [X Company] will first expand to California. Exporting [X Company]’s  marketing/advertising services to the U.S., from Ontario, Canada, will not require much product/service modification due to many similarities between the markets, such as language and culture. Fewer modifications and close proximity to the market will help keep costs low.

Also, expanding to the United States will help develop international business skills for the future when expanding to other countries which will require more skills, costs, and time. Exporting to California, from Canada, will be a comparatively less complex endeavor as the U.S. highly values foreign investment, possess’ a stable currency, has a solid political structure, is Canada’s neighboring country, and there are many similarities in culture; therefore, [X Company] should use this as a learning experience while working to achieve the highest market share. 

The U.S. has the highest expenditures in the world in adverting while Canada takes eighth position according to Zenith Media. Advertising plays an important role in the U.S. culture. California is also well-known for its many larger companies such as Walt Disney Co (spend 1260.4 million $ for worldwide advertising in 2001), and Hewlett-Packard (spent 618.4 million $ for worldwide advertising in 2001). California contains a massive clientele base which ultimately leads to more potential for increased revenue.

Important grounds in which California selected as the first international market is due to the relatively low risks associated with doing business in the state. Since going international can be costly endeavor taking appropriate precautions and avoid risks at all times is the ideal way [X Company] should carry out their business. California’s stable political structure and currency help alleviate risks involved.

The proximity and cultural similarities of California will have a positive impact on [X Company] ability to do business. The primary risks which may affect a business negatively are: currency risks, collections of goods, and political factors in the targeted market. Fortunately, [X Company] will not have to be concerned with these factors since the U.S. dollar continues to remain strong, and stable, collections of goods will not have to be a concern since they are exporting no tangible goods, and the U.S. is a politically stable country.   (Copyright © Esha Abrol, Canada. 2006)

Copyright © Esha Abrol, Canada. 2010