|
|
In the international arena, trade has been experiencing remarkable increases over the years as a result of efforts by the World Trade Organisation in promoting globalization and trade liberalization. Hence, the number of multinational corporations (MNCs) has been growing speedily, with the advent of faster and more reliable communication and transportation systems, and increased financial flows since the 1960’s.
Phillip Kotler in his book, “Principles of Marketing” notes that foreign firms are bombarding the international markets with aggressive expansion. Firms have been expanding into new markets internationally as a result of the intensity of competition in the global arena, and the need to capitalize on economies of scale; thereby, they have been successful at achieving their corporate goals and objectives.
“Firms are now being prompted to increase [their] activities abroad,” [Marketing Basics for the Caribbean; pg. 384]. Companies like, National Commercial Bank (NCB) have crossed the borders of their home country to enter the Cayman market, contributing to the rise in the number of offshore banks on the island.
National Commercial Bank, Cayman is an owned subsidiary of the National Commercial Bank Jamaica Limited. NCB has the largest range of local, affinity, private label, co-branded and international credit cards. The Cayman economy is dominated by financial services and tourism, and is also a leading member of the Caribbean Financial Action Task Force (CFATF). Cayman has for some time promoted itself as one of the world’s leading international financial centres; this is so, as the government welcomes offshore business activities.
There are some key issues companies must consider before deciding to enter a foreign market. National Commercial Bank, before entering the Cayman market to offer its financial services, had to first look at the marketing environment. Examining the marketing environment is a necessary action, as marketers are faced with a, “complex environment of agreements, institutions, competitors, trade flow systems, investment issues and a variety of market conditions” [Marketing Basics for the Caribbean; pg 390]. Some of other key issues that a company must examine are the political-legal and cultural environment, as well as economic and financial factors.
Culture is an important factor in international marketing that must be understood and considered before entering a foreign market. Cultures are defined by the country’s borders; therefore, NCB had to, prior to entry in the Cayman market, obtain knowledge of the culture that existed in the island, and ways in which marketing efforts could impact on the culture, which in turn shapes consumer buying behaviour/patterns.
Obtaining such knowledge is important, as domestic markets differ from international markets in many aspects; primarily, the international market has diverse national prices, various purchasing habits and rules that are also changeable and unclear as opposed to those of the domestic market. Cultures are learned characteristics that people share. An individual is acculturated from as early as their teenage years, which then shapes thier buying habits to conform to his/her cultural value set.
Thus, NCB had to make sure that they did not overlook any cultural differences in Cayman, regardless of the fact that they are still operating in a Caribbean market, and incorporate what they have gleaned into their marketing planning process. Oversights and uncertainty of one’s culture can result in embarrassing mistakes, which can result in unneeded and costly adaptations to the marketing mix. However, being clear about the cultural differences of the host country can enable the business to capitalise on cross-cultural opportunities, as it is a great source for competitive advantage.
Language is an important aspect of one’s culture that NCB had to pay much attention to. The NCB marketers had to be knowledgeable, “of subcultures created by intranational language or dialect differences” [Global Marketing; pg. 128].
It is important that marketers study the economy of the country they wish to do business in. This is so as they are normally involved with certain aspects of business that have an impact on the bottom line; this includes pricing in the international marketplace. Balance of trade can affect exchange rates and the flow of currency in the economy; which in turn, impacts foreign direct investment decisions to enter the Cayman market over that of Haiti, or any other Caribbean island in the case of NCB. This is so because Cayman’s economic well being in terms of GDP per capita is above that of Haiti, as they are the poorest in the hemisphere in terms of the majority of families living at the poverty line. This does not suggest to a marketer wishing to do business in a foreign country that this is a viable place to at least maintain profit at an acceptable level.
Another factor is that Cayman is well known for its financial services; therefore, Cayman presents itself as a suitable market to compete for market share. Since many Caribbean nation's economies are unstable, the Directors of NCB had to make sure that they penetrated one that was stable, as volatility in one’s economic climate can be a serious retardant to profit. According to Kotler, two economic factors draw attention to a country as a viable market: income distribution and its industrial economy (structure which shapes income and employment level, and product/ service needs).
|
Tags
You must be logged in to add tags.
|
Writer Profile
Jae
This user has not written anything in his panorama profile yet.
|
Comments
Good Work!! Jaevion Nelson | Apr 10th, 2006
Very good work ... really like this essay.
You must be a TakingITGlobal member to post a comment. Sign up for free or login.
|
|
