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The Role of IT in International Marketing - Essay Example

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The paper "The Role of IT in International Marketing " discusses how technology integration with marketing has changed the marketing conduct internationally, how brands are managed and customers’ relationship is sustained in global organizations today…
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The Role of IT in International Marketing
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?Table of Contents Table of Contents Introduction 2 Importance of Information for Marketing 2 IT and Its advancement 6 Effects of IT on International Marketing 8 Factors Moderating the Effect of IT on International Marketing 9 Globalisation 9 Changing Market Attributes in International Realm 10 Rate of Technology Advancement and Diversity 10 IT Revolutionised the Marketing Conduct across Borders 11 Marketing in International Domain 11 Cost Efficacy 12 Transparency and Evaluation of Global Performance 12 Benefit to Consumers/Customers 13 International Marketing, IT and Global Brands 13 Relationships with Global Customers 14 Conclusions and Recommendations 15 References 17 Introduction This assignment paper is based on international marketing. The objective of the assignment is to bring to light the role of Information Technology in international marketing; discuss the scope of information systems in international marketing activities; emphasise how the adoption and integration of IT has revolutionised the international marketing environment for marketing managers and businesses. The assignment delineates from different perspectives how information technology and systems has changed the demeanour of marketing across nations, in the global arena. The paper emphasises the fact how IT has influenced marketing from strategic planning, execution and evaluation of marketing programs to decision making; information technology has brought about drastic implications for marketing personnel, specifically for those operating internationally. The assignment also discusses the trickledown consequences of the IT assimilation with the marketing function and how it has in fact distinctly changed the way products are manufactured, marketed and distributed internationally; it has radically transformed how brands are built in a global scale and has also determined new grounds for creating long lasting and loyal end-user customer and organisational relationships in the international dome. Importance of Information for Marketing Sooner than discussing the importance of information and technology systems in marketing, it is important to first consider what an information system actually is and why it is so crucial for marketing. Marketing in general, is all about gaining information over the existing and emerging needs of the consumers that comprise the market, doing research and devising strategic plans for accumulating resources for execution of plans, production of required products, promotion and publicity, distribution of the same to ensure availability of goods and services to the market which eventually satisfies those prevailing consumer needs. Briefly marketing is that only vital business function that provides organisations the platform to get to know to and interact with the end user customers and consumers. So, marketing would be an incomplete extravagant effort without prompt, precise and continuous information flow about the market. Therefore, an information system is the part and parcel of marketing function and activities. An information system on the other hand is an organised automated program that assures timely, precise and incessant flow of information for managerial use. So, the contemporary organisations are increasingly incorporating information systems and technologies with marketing to make the most of their IT investments and marketing proficiencies for gaining command over the market needs. As a result of which diverse marketing information systems are being successfully established and executed by both local and international organisations (Doole and Lowe, 2008). Philip Kotler, the guru of marketing, considers that an integrated marketing information system is over and above a mere system of collection of data and is beyond any set of information technology or systems; a marketing information system is an enduring and cooperating structure of people, paraphernalia and procedures to draw together, arrange, study, evaluate, and disseminate relevant, timely and precise information for use by marketing decision makers to advance their marketing planning, execution, and control. Information is the most crucial systematic and simultaneous requirement of a marketing mix. Marketers require unremitting information flow for production, pricing, promotions and communications and also for distribution of products and services to the end user consumers in the market. Production processes involves planning and conception of new products; which requires sales and demand forecasting, costing and budgeting of the marketing activities, prompt material procurement, production and assembling operations, inbound logistic operations, warehousing and quality assurance operations for manufacturing and stocking of products. This entails timely coordination and exchange of information amongst production managers, suppliers, key marketing personnel and relevant information sources (Doole and Lowe, 2008). The pricing of products also requires knowledge about the price elasticity of demand for organisational products, demand trends, and price sensitivity of the targeted consumers in the market. Especially in today’s business environment where organisations are considering and practicing value based pricing and cost based pricing techniques to increase price acceptance of their products amongst consumers in random international markets; it is critical for marketing managers to seek information regarding the price ranges and pricing of not only their products but also the products of the competitors and also of the substitute goods available in the same market. Value based pricing involves identification of the price range for organisational products that consumers value most on the basis of the functional, emotional, quality or service benefits of a product or a brand and even a comparison of one’s product/brand against competitors’; this requires external environment investigation or mere observation of consumers’ behaviour and buying patterns. On the other hand, the most practiced cost based pricing technique involves coordination of production, R&D and finance managers to determine the cost of production and the consequent price of a product on the basis of the details of expenses to be incurred; this requires internal sharing of information. Subsequently, both internal and external information accumulation over pricing is essential for marketers (Muhlbacher, Leihs, and Dahringer, 2006). Moreover, the communication and promotion of a product/brand into the market requires exploration of information to determine the best possible channels for creating awareness, attraction, call for action, trial and purchase considerations for consumers towards one’s product/brand. This is usually the most expensive mix of marketing, therefore, communication plans must be developed and executed on firm and educated grounds of authentic information about the target audience, medium or media to be used for promotion, time and duration of a communication campaign, design and content of message, repetition of message etc. All these decisions bear specific information needs that must be met for designing and execution of an appealing communication and promotion campaign (Muhlbacher, Leihs, and Dahringer, 2006). Furthermore, the distribution of products to the end user consumers, retails or vendors requires information over the consumers’ buying behaviour; which entails the use of traditional physical retail distribution, e-marketing, catalogue distribution, telemarketing, direct distribution and personal selling, indirect channelling through intermediaries etc. All these considerations about product/services distribution requires understanding of a market’s distribution demands of consumers and cost feasibility analysis of the marketing finance managers with the sales reps or external distributors. Hence the managers are still required to accumulate information from internal and external sources for planning and execution of distribution process (Doole and Lowe, 2008). Shortly, it is evident that acquisition, handling, coordination, and correct interpretation of information are so vital for marketing function in any organisation. Therefore, the need for information systems and technologies to assist marketing and marketers is apparently valid. IT and Its advancement Information Technology has advanced the marketing operations with the encroachment, excellence and integration of information systems into marketing. Initially information flow was restricted to managers to ease monitoring, control and coordination of overall organisational activities. IT primarily became a part of a business organisation as electronic databases and management systems. Gradually the advancement of information technology and its vast application to marketing increased the effectiveness and efficiency of marketing operations, which enhanced the marketers’ demand for information systems and applications specifically tailored for diverse marketing processes and activities. Consequently, IT expanded to Marketing Information Systems-MkIS, Enterprise Resource Planning-ERP, Supply Chain Management Systems-SCMS, Customer Relationship Management-CRM, MDSS Marketing Decision Support Systems etc (Collinson and Gregson, 2003). Marketing information system facilitates structured and efficient flow of information to aid the marketing activities in an organisation. MkIS entails an extensive gamut of activities from a mere transaction handing out to multifarious marketing strategic planning and decision making. Enterprise resource planning automates and assimilates back-office operations for order processing, production, budgeting and finance, and HRM. Marketing automation system automates front office marketing activities. Supply chain management provides system applications for organisations to strengthen their supplier relationships and coordination; these integrate inventory management, auto replenishment, electronic material procurement, and other logistic operations (Harmon, 2003). Customer relationship management (CRM) is a software application that administers a customer relationship with an organisation by developing a comprehensive record of organisation interactions with customers. These applications are used to target promotions to prospective consumers, assist sales force, and deliver pre/post-sale customer services to develop lasting customer loyalty and lifetime commitment. Increasingly contemporary organisations, that use CRM for maintaining a diverse international customer base, advocates the engagement of customers to the entire value creation process i.e. customer input is solicited and addressed at any step from product manufacturing till delivery. This reinforces the relationship, exhibits organisational ownership of customer’s demands and secures his comfort and trust with the organisation. Marketing decision support system is the application of computer-based models and techniques to aid the decision making process of marketers (Hansotia, 2002). Geographical information system enables geographic identification of customers, competitors, and advertising locations and offers various applications for sales management. Data Warehouse is an electronic storage system that gathers, organise, manipulate and store data from internal and external sources, which is used for sales, cost, price, competitor, demand, product, distribution and advertising analysis etc. Cyber-marketing also refers as mobile marketing or e-marketing, which has been established with the synchronisation and alliance of the telecommunication system, internet, and information systems for the customer. It has tremendously revolutionised the communication phenomena by bestowing information system with the power of itinerant connectivity between the organisation and customers. Today an organisation as well as a customer may interact directly and instantly at anytime and anywhere. This technology advancement has induced worthwhile competence in international marketing operations and affairs; and has granted more coordination and control over global operations by linking all the information (Shaw, Subramaniam, Tan, and Welge, 2001). All of these systems and technological advancement of information applications for marketing leveraged the room for organisations to operate effectively and efficiently in international market arena across borders with relatively low cost for management of geographically dispersed operations. It has thereby reduced the cost associated with time, labour, efficiency loss, material wastage, product damage, warehousing, distribution, sales, advertising and communications etc; subsequently the overall quality of marketing operations and deliverability of final product and services has been boosted on account of advancement of information technology. This has promoted the use of IT in international marketing for global organisations (Petter, DeLone, and McLean, 2008). Effects of IT on International Marketing Marketing possesses strategic value in determining the corporate and business objectives because it provides connectivity between the internal affairs of an organisation and the external local market and environmental challenges. International marketing is an extension of marketing that leverage the understanding and the span of connection of an organisation’s local environment with the global market place and its consequent international economic, legal, political, social and technological environmental challenges. So, in a broad context the international marketing deals with greater information requirements associated with global environmental uncertainties (Prasad, Ramamurthy, and Naidu, 2001). IT and its advancement has stretched out the scope of international marketing by empowering the international marketers with process management, quality management, production management, inventory management, customer management, in/outbound logistics management, suppliers’ management, communication and networking tools and applications that widened the span of marketers’ target, reach, control, and execution of strategies across boundaries. However, there are other factors of budding globalisation, technological diversity, environmental ambiguity and social receptiveness of business community; that influence and manipulate the direct effects of IT on international marketing, and the existence of these can neither be underrated nor be disregarded (Panigyrakis and Chatzipanagiotou, 2006). Factors Moderating the Effect of IT on International Marketing Globalisation Globalisation is the phenomenon that has given birth to the international marketing. It has leveraged organisational reach to: internationally diverse markets, intensified competition locally as well as globally; human, information & technological, financial resource planning; organisational design, functionalities and orientation; distinctive competency and capability development. Everything has been challenged in terms of management and coordination in global heterogeneous markets. Additionally, globalisation has brought forward the various distant market opportunities and threats associated with the diverse international markets; it has influenced the room for local business players providing them the scope for pursuing global markets and simultaneously confronted them with wide span international competition. It has compelled the contemporary business entities to adapt to more challenging and dynamic environmental changes across borders to become more vigilant and responsive. This change receptiveness and environmental sensitivity has developed an outside in proclivity amongst organisations, consequently they have become more market driven, customer centric and capability focused. Thus, the marketing function and the relevant information requirements have now become more complex and enormous particularly for organisations operating internationally (Trainor, Rapp, Beitelspacher, and Schillewaert, 2011). Changing Market Attributes in International Realm Diverse markets have diverse consumer tastes and preferences, individualistic cultural considerations, technology structure, political environment, legal system, local competition, distinctive product requirements; promotional vehicles; unique distribution channels and idiosyncratic price sensitivities. Therefore, international marketers need to grasp additional information over all the aforementioned and other relevant marketing issues while operating in international marketing spectrum. They must have to solicit market information through research and market sensing or marketer intelligence. Thus, acquisition of information has become more and more fundamentally crucial for international marketing. This has surfaced an enormous demand for systems and technologies that aid persistent, precise and prompt information flow to develop understanding of the dynamics of international markets and their consequent business environment; to enable successful strategic planning and decision making (Zineldin, 2000). Rate of Technology Advancement and Diversity In contrast to the support of technology to international marketing, the rate of technological development and diversity has challenged the international marketing managers to decide on which technologies to invest in, risk of failure, affordability and efficiency, strategic fit, commercial worth; and determining whether a technology can be updated with time etc. Furthermore, in international marketing, marketers are serving diverse geographic customer segments which often differs in technological structure and adoption; a technology adopted in one geographic segment of consumers may not be applicable to other segment, then in such a case the investment made is underutilised which would affect the cost and return on investments. All these strategic decisions are concerned with technology and international marketing requires futuristic vision, which determines the effects of IT over international marketing returns. Moreover, with the advancement of technology societies have become more active, demanding and educated which escalated the call for accountability and transparency of marketing actions internationally and arouse social responsiveness amongst the international consumer, labour, and business community. Therefore, the technology has brought forward both the opportunities and threats to affect the international marketing operations. The implication for international marketer is that they must circumspectly design their strategies around the interest of the target markets in a manner which justifies organisational profitability whilst benefiting the society as a whole (Palvia, 1997). IT Revolutionised the Marketing Conduct across Borders Marketing in International Domain IT has revolutionised the way marketing has conducted internationally. It has empowered the marketers with systems, tools and applications that has granted worldwide connectivity, information access, database warehousing, knowledge storage and sharing mechanisms, decision support systems, simulation techniques and modules, effective communication, information linking and profiling applications, resources planning systems, information bundling and classification tools, error and holdup indicating mechanisms etc; all these technologies have contributed a lot to marketing by accumulating, handling, interpreting and coordinating vast volume of information and data, pertaining to all marketing mix across borders, that a marketer can never handle all by himself (Javalgi and White, 2002). Cost Efficacy With IT systems and applications products are now marketed over internet, which enables global reach to market targets through mobile devices like laptops, notebooks, cell phones. Now marketers stay connected 24/7 with consumers across borders without the restriction of time, cost, and physical presence. Thus, modern era of international marketing has laid foundations of e-marketing. Technology has provided international marketing with an array of channels, options and choices for communication, advertising, sales, distribution and promotions. From traditional high cost communication and distribution techniques to modern cost effective channels of distribution and communique; international marketers can now design a better effective marketing campaign that target the right segment with a perfect message pursuing with greater appeal, which bring about superior results (Hamill, 1997). Transparency and Evaluation of Global Performance IT has made operations transparent for organisations, thereby, enabling them to identify performance gaps, ease planning and execution with collective and collaborative information systems and applications, and has also tremendously facilitated the evaluation of performance against the objectives set. Every aspect of performance has become translucent for organisation which has increased the efficiency level and decision making of marketers even for operations held across borders (Constantinides and Fountain, 2008). Benefit to Consumers/Customers IT development has shifted power from marketers to consumers by enhancing their reach to global products and services, extending their knowledge base about the products, how they are manufactured and distributed globally. Customers can order from an assortment of options which has increased the bargaining power of consumers with the marketers. Now the competition is even tougher for marketers in international markets, the customer and the competitor are there just a click away. So the international marketing assumes greater responsibility and pressure of retaining existing and attracting new customers across geographic boundaries. The idea for international marketing is to deploy technology into marketing in a manner that would create a consistent image and reputation of products or brands globally so that the customers may not divert to the competitors for any reason (Pae and Hyun, 2002). International Marketing, IT and Global Brands It is crucially important for international marketers to leverage the brands internationally so that the organisation would achieve economies of scale and maximise the return on technological and marketing investments. Creating a globally consistent brand image is a difficult job but managing that brand reputation over time is even tougher. The international marketers are using information technology to strike a balance for managing the discrepancies between local and global market requirements. Today international marketing focus on identifying the similarity in diverse market segments regarding how the consumers want a brand to be seen, communicated, distributed, and for what price. With technology orientation and enhanced access to market information and consumer data, once similarities and dissimilarities have been identified, the marketers develop knowledge based strategies to leverage the existing brand equity, marketing infrastructure and programs to discrete geographic markets. This entails choice of communication media and distribution channels that could deliver consistent brand image across all geographic segments. Here, the international marketing managers, on the basis of market intelligence and research, must first determine which communication and distribution techniques are acceptable and suitable to the local customers in foreign market segments; making sure that the channels to be used must deliver on to the strategic goals (Palumbo and Herbig, 1998). Marketing research is the most important domain for leveraging global brands in international marketing. The IT infrastructure is contributing most to the marketing research and expanding the span of marketing intelligence of international marketing managers through MDSS and data warehousing applications. These technologies are enabling international marketing managers to take educated and justified branding decision. E-marketing is the most effective competency of organisations that assist international marketing in directly promoting the brand identity, meaning, response and relationship in a more reliable manner (Paliwoda, 1999). Relationships with Global Customers International marketing fused with information technology systems and applications has changed the way in which organisations interact with and develop relations with the customers. With e-marketing the scope of establishing and maintaining relationships with customers has been terrifically increased. The e-marketing and technology orientation amongst international marketing has open doors to many marketing approaches for promoting sustainable relations with distant and local customers alike. One to one marketing, social media marketing, post sale marketing, relationship marketing etc; all are built to deliver high customer value in cost effective, promptly and astute manner. The planning and execution of these vast customer tailored marketing programs is made possible due to the assistance of marketing featured IT applications which have enabled marketers to make use of customer sensitivities and value considerations of distant customers (Zineldin, 2000). The CRM application has contributed greatly to international marketing in developing profiles of customers which maintains a complete history of customers’ concerns, complains, feedbacks, interactions, transactions, means of contact, credibility, loyalty and commitment with the organisation’s products/services/brands. On the basis of such comprehensive data international marketers develop tailored marketing loyalty programs that are more accurate and appealing to the diverse base of customers. This transfers value to customers individually and help organisations to foster reliable and strong relationships with customers, which in the long run serves as edge against the competition. In recent times CRM doesn’t merely provide a communication and interaction platform for customers to register their queries and complains rather it has enlarged its span of relation with customers by providing them a space to engage into the value creation process of the organisation (Zineldin, 2000). Conclusions and Recommendations This assignment shed light over the role of IT in international marketing regarding how technology integration with marketing has changed the marketing conduct internationally, how brands are managed and customers’ relationship is sustained in global organisations today. Besides all the contributions and support of IT to international marketing, it should be noted that technology always remains the means to the end; however, the success depends upon the strategic planning, execution and decision making, which lies with the vision and leadership of the international marketing personnel. Nonetheless, excellence in technology often serves as distinctive capability for organisations; yet for gaining global operational efficiency; the international marketing managers must integrate information technology and marketing insight with the corresponding organs of an organisation. References Collinson, S. and Gregson, G. (2003). Knowledge networks for new technology–based firms: an international comparison of local entrepreneurship promotion. R&D Management, vol. 33, no. 2, pp. 189–208. Constantinides, E., and Fountain, S. (2008). Web 2.0: conceptual foundations and marketing issues. Journal of Direct, Data, and Digital Marketing Practice, vol. 9, pp. 231-244 Doole, I., and Lowe, R. (2008). International Marketing Strategy: analysis, development, and implementation. London: South-Western Cengage Learning Hamill, J. (1997). The Internet and international marketing. International Marketing Review, vol. 14, no. 5, pp. 300 – 323 Hansotia, B. (2002). Gearing up for CRM: antecedents to successful implementation. Journal of Database Marketing, vol. 10, pp. 121-132 Harmon, R. (2003). Marketing Information Systems. Encyclopedia of Information Systems, vol. 3, pp. 137-151. Javalgi, R., and White, D. (2002). Strategic challenges for the marketing of services internationally. International Marketing Review, vol. 19, no. 6, pp. 563 – 581 Muhlbacher, H., Leihs, H., and Dahringer, L. (2006). International Marketing: a global perspective. London: Thomson Learning Pae, J. H. and Hyun, J. S. (2002). The impact of technology advancement strategies on consumers' patronage decisions. Journal of Product Innovation Management, vol. 19, no. 5, pp. 375–383 Paliwoda, S. (1999). International marketing: an assessment. International Marketing Review, vol. 16, no. 1, pp. 8 – 17 Palumbo, F., and Herbig, P. (1998). International marketing tool: the Internet. Emerald, vol. 98. Palvia, P. (1997). Developing a model of the global and strategic impact of information technology.  Information and Management, vol. 32, no. 5, pp. 229-244 Panigyrakis, G., and Chatzipanagiotou, K. (2006). The Impact Of Design Characteristics And Support Services On The Effectiveness Of Marketing Information Systems: An Empirical Investigation. Review of Business Information Systems, vol. 10, no. 2. Petter, S., DeLone, W., and McLean, E. (2008). Measuring information systems success: models, dimensions, measures, and interrelationships. European Journal of Information Systems, vol. 17, pp. 236-263 Prasad, V., Ramamurthy, K, and Naidu, G. (2001). The influence of internet marketing integration on marketing competencies and export performance. Journal of International Marketing, vol. 9, no. 4, pp. 82-110 Shaw, M., Subramaniam, C., Tan, G., and Welge, M. (2001). Knowledge management and data mining for marketing. Decision Support Systems, vol. 31, no. 1, pp. 127-137 Trainor, K., Rapp, A., Beitelspacher, L., and Schillewaert, N. (2011). Integrating information technology and marketing: an examination of the drivers and outcomes of e-marketing capability. Industrial Marketing Management, vol. 40, pp. 162-174 Zineldin, M. (2000). Beyond relationship marketing: technologicalship marketing. Marketing Intelligence & Planning, vol. 18, no. 1, pp. 9 – 23 Read More
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