International marketing strategy is significant in formulating global business strategy in three different ways. First, what should be the global configuration of marketing activities? That is, where should such activities as new product development, advertising, sales promotion, channel selection, marketing research, etc., be performed? Second, how should global marketing activities performed in different countries be coordinated? Third, how should marketing activities be linked with other activities of the firm? Each of these aspects is examined below.

Configuration of Marketing Activities Marketing activities, unlike those in other functional areas of a business, must be dispersed in each host country to make an adequate response to local environments. Although this configuration is valuable in being customer oriented, not all marketing activities need to be performed on a dispersed basis. In many cases, competitive advantage is gained in the form of lower cost or enhanced differentiation if selected activities are performed centrally as a result of technological changes, buyer shifts, and evolution of marketing media. These activities comprise production of promotional materials, sales force, service support organization, training, and advertising. The centralized production of advertisements, sales promotion materials, and user manuals can lead to a variety of benefits. Economies of scale can be reaped in both development and production. For example, experienced art directors and producers can be hired to create better ads at a greater speed or lower cost. The use of centralized printing permits the latest technology to be adopted. On the other hand, excessive transportation costs and cultural differences among nations may make the production of some materials (e.g., user manuals) impractical. Sales force, at least for some businesses, can be centralized in one location. Alternatively, highly skilled sales specialists can be stationed at the headquarters or in a regional office to provide sales support in different countries. Centralization of the sales force is most effective when the complexity of the selling task is very high and the products being sold are high-ticket items purchased infrequently.

Like sales force, high-skilled service specialists can be located at world or regional headquarters. They can visit different subsidiaries to provide nonroutine service. Along the same lines, service facilities (service center, repair shop) can be regionalized at a few locations, especially for complex jobs. Such centralization should permit the use of state-of-the-art facilities and qualified service people, resulting in better service at lower cost. Training of marketing personnel can be effectively centralized and lead to economies of scale in production and delivery of training programs, faster accumulated learning (brought by people with varied experiences assembled in one place), and increased uniformity around the world in implementing marketing programs. Training centralization, however, must be weighed against travel time and cost. Although cultural differences between nations require advertising to be tailored to each country, in many ways global advertising is gaining acceptance. First, a company may select one ad agency to handle its global campaign, economizing in campaign development, seeking better coordination between the parent and subsidiaries, and facilitating a consistent advertising approach worldwide. For example, British Airways uses one agency worldwide. Second, many companies advertise in the global media, for example, in The Economist, in certain trade magazines, or at international sports events seen by viewers around the world, such as at U.S. Open tennis matches. Finally, many media (e.g., airport billboards, and airline and hotel magazines) have a decidedly international reach. For these reasons, centralization of advertising makes sense. Yet government rules and regulations relative to advertising, distinct national habits, language differences, and lack of media outlets may require dispersion of advertising to different countries.

International Marketing Coordination

International marketing activities dispersed in different countries should be properly coordinated to gain competitive advantage. Such coordination can be achieved in the following ways:

1. Performing marketing activities using similar methods across countries This form of coordination implies standardizing activities across nations. Some strategies, including brand name, product positioning, service standards, warranties, and advertising theme, are easier to coordinate than are other marketing strategies. On the other hand, distribution, personal selling, sales training, pricing, and media selection are difficult to coordinate across nations.

2. Transferring marketing know-how and skills from country to country For example, a market entry strategy successfully tried in one country can be transferred and applied in another country. Likewise, customer and market information can be transferred for use by other subsidiaries. Such information may relate to shifts in buyer purchasing patterns, recent trends in technology, lifestyle changes, successful new product or feature introductions, new promotion ideas, and early market signals by competitors.

3. Sequencing of marketing programs across countries For example, new products or new marketing practices may be introduced in various countries in a planned sequence. In this way, programs developed by one subsidiary can be shared by others to their mutual advantage and, thus, should result in substantial cost savings. To reap the benefits of sequencing, a company must create organizational mechanisms to manage the product line from a worldwide perspective and to overcome manager resistance to change in all participating countries.

4. Integrating the efforts of various marketing groups in different countries Perhaps the most common form of such integration is managing relationships with important multinational customers, often called international account management. International account management systems are commonly used in service firms. For example, Citibank handles some accounts on a worldwide basis. It has account officers responsible for coordinating services to its large corporate customers anywhere in the world. Competitive advantage can result from international account management systems in a variety of ways. They can lead to economies in the utilization of the sales force if duplication of selling effort is avoided. They can allow a company to differentiate itself from its competitors by offering a single contact for international buyers. They can also leverage the skills of top salespersons by giving them more influence over the entire relationship with major customers. Some of the potential impediments to using international account management include increased travel time, language barriers, and cultural differences in how business is conducted. Dealing with a major customer through a single coordinator may also heighten the customer’s awareness of its bargaining power. Integration of effort across countries can lead to competitive advantage in other areas as well; for example, after-sale service. Some international companies have come to realize that the availability of after-sale service is often as important as the product itself, especially when a multinational customer has operations in remote areas of the world or when the customer moves from country to country.

Marketing’s Linkage to Nonmarketing Activities Aglobal view of international marketing permits linking marketing functions to upstream and support activities of the firm, which can lead to advantage in various ways. For example, marketing can unlock economies of scale and learning in production and/or research and development by (a) supporting the development of universal products by providing the information necessary to develop a physical product design that can be sold worldwide; (b) creating demand for more universal products even if historical demand has been for more varied products in different countries; (c) identifying and penetrating segments in many countries to allow the sale of universal products; and (d) providing services and/or local accessories that effectively tailor the standard physical product.