International Marketing Relationships

pointProblem statement: the impact of international consumer relationship marketing weighed against the impact of country image branding

Internationalization has been a striking trend for many years now, and will be a recurring one for many years to come. The only problem is, changes in every environment, be it economic, social, political, technological or legal, is an inescapable phenomenon. Strategies have to be adapted to changing environments, and when a company decides to expand internationally, the environmental change is one of two different worlds.

New parameters are added to the management decision which calls for the rethinking of organizational strategies. Marketing is no exception to this rule. It is general knowledge that marketing endeavours in the domestic country have to be adapted to the host country, but what impact does consumer relationship marketing have on your adapted strategy? Is it important to make it a main component of your expansion strategy?

Emerging marketing trends

Country specific marketing has become an ever important concept in the international marketing community, for the reason that marketing has shifted from a product-centric observation to a customer-centric one (Kumar, Sunder, & Ramaseshan, 2011:23). Companies that pursue the product-centric approach concentrate on supplying the best product for the customer or supplying new products to the market through cutting-edge products, new features, new applications etc. where on the other end of the scale, consumer-centric companies concentrate on the best solution for the customer, whether it be the level of customer satisfaction, the level of lifetime value of a customer or customer retention (Gailbraith, 2005:10).

The shift from product-centric marketing to customer-centric marketing

The swift and continuous change in the global marketplace and increased competition has lead to the realization of leadership of firms to develop new sources of sustainable competitive advantage (Sherwin, 2010). Sustainable competitive advantage is "a firm's ability to achieve and sustain a competitive advantage which is directly related to the strength of 'isolating mechanisms' that protect the firm's valuable and rare resources from imitation by rivals" (Wang, H.C., HE, J.H. and Joseph T. Mahoney, J.T. 2009). Company managers are propelled to take on different strategies if sustainable competitive advantage and apparent customer differentiation are not present (Schermerhorn, 2009). Managers/leadership of companies becomes forced to implement strategies that consist of cost reduction and the lowering of prices. Leadership of firms enters global markets to lower prices through economies of scale and lower labour costs (Heil, 2010; Hill. 2011). Furthermore, a company's decision to partake in internationalization does not only pertain to cost reduction, but also to reaching new customers and user segments. When leadership attempts to gain economies of scale through high-volume production and lower labor costs, there is a corresponding high occurrence of standardization of products. With a high degree of standardization comes a corresponding low occurrence of differentiation. High volume/low differentiation production models in the global environment lead to lower profit margins than products with a high-perceived customer value (Sherwin, 2010).

Thus, the pursuit of the product-centric strategy will not bring about the long-term benefits that the company is interested in, nor will they reach the goal of long term customer loyalty and acceptance by the host country.

To pursue the customer-centric marketing approach, the company will have to do a thorough analysis of the intended countries' target market customer. Consequently, the understanding of the changing customer of different countries is essential for successful marketing endeavours when partaking in global business ventures. Customer-knowledge brings us to the next important aspect of successful international marketing, relationship marketing.

Relationship marketing

Relationship marketing (RM) entails the development of long-term relationships between the customers and the suppliers, these relationships provide both parties involved in the cross-border endeavour benefits, which in turn creates value opposed to the product-centric goal, mass distribution and customer attraction. RM intends not only at attracting but also at retaining customers and knowing them better. (Maxim, 2009)

Another very popular definition of relationship marketing by Gronroos (2007:22) states that "the purpose relationship marketing is to identify and establish, maintain and enhance, and when necessary terminate relationships with customers (and other parties) so that objectives regarding economic and other variables of all parties are met. This is achieved through a mutual exchange and fulfillment of promises"

Customer Relationship Marketing****

The rapidly changing business environment creates a new customer-driven marketplace. According to D'Antonio (2005), firms must maintain insulated and loyal customer relationships in order to survive. Schermerhorn (2009) proposes that building and maintaining lasting relationships is paramount to success for firms entering global markets and to accomplish such an objective, the leadership of firms must radically change organizational structure to a flatter, more informal divisional structure, where focus is not on functional area or product line, but rather on customer portfolio management which is central to CRM methodology. (Sherwin, 2010).****

Many multinational firms have failed in succesfully implementing their strategies, and their "near sightedness" is most likely the cause. These firms tend to visualise stakeholders with the hsot country stakeholders as rferences, thus

Global Customer Relationship Marketing as a competitive advantage

CRM strategies have replaced economies of scale and mass marketing as the predominant factors for success in global markets. Sustainable competitive advantages that lead to loyal customers and increased profit margins according to Gaffney (2005) are achieved in global markets the same way as the emerging paradigm theories of CRM have been practiced in domestic markets. The focus of emerging CRM theory represents a shift away from traditional mass marketing in global markets and proposes the pursuit of large undifferentiated mass markets is longer a valid approach for creating sustainable competitive advantage. (Sherwin,