This report is a base on the ways companies add value to consumers in international markets. It draws examples from different international companies and the way they add value to their good when entering a new market.
Marketing is defined as an organizational function and a set process for creating, communicating, and delivering value to customers also managing customer relationship in a ways that benefit the organization and it stake holders and in doing this Product, Price, Promotion and Place need to be put into consideration. However a lot of emphasis has been put on Place lately due to the increased power of the value added as a potential means of differentiation. The power of the brand has declined in many markets and customers are willing to accept substitutes. This has made is difficult for products to maintain a competitive edge through the product alone , therefore value added to the product provides the competitive edge of one product over another.
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The creation of value is key in marketing (Anderson 1982) Indeed, the role of marketing is to assist the firm to create value for its customers that is superior to competition (Tzokas & Saren, 1999) If this takes place the firm arguably deliver superior value to its shareholders (Doyle 2000). This is key because customers who are satisfied with a firms goods or services that offer them value remain loyal to that firm and place their future purchases with that firm (Bolton& Drew, 1991)
Kotler argues that customers estimate which offer will deliver the most value, and that they will buy from the firm they perceive offers the highest customer-delivered value. he defines value as follows: Total customer value: the bundle of benefits customers expect from a given good or service (e.g. good, services, personnel, and image value);Total customer cost: the bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the good or service (e.g. monetary, time energy, and physic costs); Customer-delivered value: the difference between total customer value and total customer costs Delivered value can be measured as a difference, or in so-called value price ratios (Kotler 2000).
The importance of value added cannot be over- emphasized due to the changing nature of the market. The consumers in todays market are more demanding than that of 20-30 years ago. There have more expectations and expect higher level of value of service. The power of the Brand is also diminishing due to the convergence of the technologies of competing products therefore making product differences difficult to perceive by the average consumer.
Demographic, physical, political, economic, social and cultural and legal environment these are the major key to international marketing, for any international marketing to very successful these key aspect have to be studied and well understood by the marketer any short coming from any of the above factor may lead to set back in globalizing in its the marketing strategies .
In order for an international marketing to function properly, cultural, social- economic factor, and legal forces within the country must be clearly studied and understood any short of one of the factor may lead to a setback in the international marketing strategy.
VALUE ADDED TO INTERNATIONAL CUSTOMER
Value added is considered to be an important element of relationship marketing in international marketing and the ability of a company to provide superior value to its customers is regarded as one of the most successful strategies for the 1990s. This ability has become a means of differentiation and a key to the riddle of how to find a sustainable competitive advantage (Nilson 1992).
An example of vales added to international customers Caterpillar. The company guarantees to provide 48 hours availability on its parts but to local or international customer even if you are in a remote location in a third world country you are guaranteed of 48 hours availability of parts. This is a very important value added to its products due to kind of industries their products are being used and which cost of down- time can be important. This is being achieved through close partnership with its worldwide network of dealers and distributor. Another way it achieves it aim is by advance inventory and information management systems. It also offers different levels of customer service.
The aim of any company in an international market is to create a marketing program that adapts products to national environments by adding value added services to suit local market
International marketing must generally be modified and adapted to foreign markets. This must consist of strategies to accomplish its marketing goals. Within each foreign nation, the firm is likely to find a combination of marketing environment and target markets that are different from those of its own home country and other foreign countries. It is important that in international marketing, product, pricing, distribution and promotional strategies be adapted accordingly.
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Another way international companies add value to their goods is by choice of a local name example of this Chinese characters used to represent the name Coca-cola means ¿½taste good and makes you happy¿½. Most companies invest substantial resources in brand name creation in an international market. Most times companies tend to select names that are built on familiar words because consumers already have positive notions about such words.
Customer service is another avenue in which company add value to the goods. The provision of 24hours call centers, service centers, after sales support and availability of goods all add values to goods. Example of this is Toyota which has clearly identified policy toward customer service to suit the requirement of any international market. It places high priority on delivery of superior customer service. The aim of customer service is to provide place and time utility in the transfer of goods and services between buyer and seller.
Another way of adding value to goods is by companies¿½ distribution services. Companies strive for their finished goods to get into the hands of their international consumers. This is due to the logic that finished goods in the hands of consumers are of more value than that in the warehouse. Delivery reliability and consistency are also factors that add value to international consumers. Example of this Hawes and Curtis which is a shirt company that just started delivery to Nigeria. It deliveries its shirts to its customers within 7 days and its services are very reliable and consistent.
IKEA is a very good example of adding value to international customer. It goes about its international marketing strategies to suit customers in a different culture from the country of its origin. It combines its international marketing strategy with local culture-based marketing activities. The company entered into that Chinese market through Shanghai in 1998 during the next 9 years it took time getting to know the Chinese customers. IKEA¿½s convince customers to carry out part of the traditionally internalized value activities (selecting, packing, transporting and assembling) are renowned. (Dyer 1996).
It offered customer an added value which when far beyond low price they off division of labor they give the customer the opportunity to carry out a traditional task which is normally done by the manufacturers and retailers the customer are allow to assemble the produce and the product will be delivered to the customers homes for a very low price .IKEA design it business to make it easy for customer to take on a role. For example, Free strollers, supervised child care, and playgrounds are available for children, as well as wheelchairs for the disabled and elderly. There are caf¿½s and restaurants so customers can get a quick bite to eat. The goal is to make IKEA not just a furniture store but a family outing destination.
The level of customer value that is delivered in a chosen market determines the success or failure of a product or company. Customer value can be defined as the difference between the perceived benefits that flow from a purchase or a relationship and the total cost incurred. (Martin Christopher). Cost reduction although a good way of retention of customers, it should not be achieved at the expense of value creation. According to Theodore Levitt, who first said that people don¿½t buy products they buy benefit. International Marketers should not just think of value in terms of low price but values offered to customers in terms of emotional and functional benefits, consumers today are not just buying on low price but by added value you offer and this kind of value you represent. In conduction international marketing low prices should not be your only goal value added offered to customer is term of functional and emotional benefit should be taken into consideration consumer to need this kind of value added to differciate your company and product for others in a highly competitive market ,
Usunier points out that in today¿½s increasingly interdependent world, barriers to trade and international exchanges are constantly diminishing. However, the dimension of culture remains the single most enduring feature that is necessary to be integrated in marketing strategies and in their implementation, especially when they focus on international markets (Usunier 2000).
Value added in international can also be negative For example; a good core value of a machine can be decreased or even destroyed by untimely deliveries, delayed service, etc. The additional services do not add a positive value, instead they subtract from the basic core value, and i.e. they provide a negative added value. The objective of a successful relational marketing strategy should be to provide a customer with additional services supporting the core of the offering that minimizes the indirect and psychological relationship costs. The total offering should be designed so that it does not create unnecessary direct relationship costs.
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