It is hard to understate the relevance of international marketing in 2016, as international markets impact nearly every business decision and are constantly highlighted in the media. Major financial and strategic business decisions impact more than just businesses’ ROI but also their brands appearances to external publics. For example, the U.S. is facing a divisive election with two candidates heavily focusing on trade and relations abroad. This particular election has not only the attention of national news oulets, but also other major news outlets across the globe. There is also a plethora of seismic international events like the Brexit and first Olympic games in South America that are a part of the everyday news cycle.
The ability to think strategically about companies and consumers is at a premium and the key international trends below will enable you and your students to frame questions and solutions in real world context.
Social media for business
The importance of social media continues to accelerate and the sportswear industry is a prime example. In the 2012 Olympics Adidas utilized marketing & merchandising as the games’ lead sponsor. These efforts netted the brand a 7% jump in sales. Meanwhile, Nike, the world’s leading sports brand, saw a 19% growth rate in the games’ host country, the UK, despite not paying for any official sponsorship. Nike achieved this through savvy marketing via multiple channels, even though it could not directly associate with the games.
While Nike did not pass on the opportunity to sponsor the 2016 games, this does not mean that they have bucked social media either. Nike has more than 50 million followers on Instagram alone, 50 times that of their rival Adidas. Further, with almost a billion more internet users projected in 2016 compared to 2012 (according to Euromonitor International), it easy to see why every company needs to appeal to consumers through social media and multiple channels.
Evolution & Employment
Manufacturing and other industries are moving towards automation at a time at a time when a large portion of the world’s workforce is becoming more educated and looking to move into the middle class. This movement is creating a world where people are feeling the pressure to compete for work .
In the future, many businesses will continue to face marketing challenges such as what type of consumer to target- ranging from the bottom of the pyramid to the super wealthy. Additionally, given the different operational environments of given countries it will be even more important to understand which countries present opportunities for growth or savings throughout the supply and value chains.
Bottom of the Pyramid
It is easy to focus on the glamourous aspectsof marketing to high-end consumers or the rising middle class, but there are still significant opportunities to serve low-income consumers across the globe. The bottom of the pyramid is a growing segment of the global population with more 850 million households with less than $25,000 in disposable income.
One major point of emphasis for marketing to low income earners is understanding that this population is not a unitary block. By doing research and utilizing data, it is easy to see as much diversity in preferences and purchasing patterns in any market segment or type. In a previous blog post, Euromonitor International’s Income & Expenditure Manager, An Hodgson highlighted an example of preferences and purchasing patterns in various countries such as Nigeria and Vietnam. Both countries have a similar number of households with disposable income below $10,000, but there are stark contrasts in the availability of services and household conveniences for these consumers as demonstrated in the chart below.
“New Consumerism” is a term coined by Euromonitor International in reference to how consumers are reassessing their priorities and values. This reassessment has led to significant shifts in consumer markets. Many preferences have changed from possession to experience, sharing instead of owning and various levels of innovation. For example, home goods retailers have benefited from the Do-It-Yourself movement, but have also had to adapt to changing demand for items that are used infrequently and easy to share, such as power tools.
In 2016, there are clearly more than four broad topics that influence international and domestic markets. Still, it’s always helpful to take a fresh glimpse of the breadth of challenges facing businesses, workers and consumers.