Wednesday, October 9, 2019

International marketing by UK SMEs: the case of Cloudreach


1. Introduction
This paper discusses the challenge of international marketing, specifically the challenge on whether an organisation should use globalised or localised approaches to marketing. The market is strongly in favour of localisation where theorists insist that differences will always exist even in countries that appear very similar to each other (Banutu-Gomez and Rohrer, 2013). There is overwhelming evidence in research that localisation can yield good results for the organisation. However, there are also many organisations that have been known to succeed while pursuing a globalised approach to marketing. This paper considers literature evidence and uses it to critique the marketing approaches used at Cloudreach Limited, an SME based in the UK but with operations in 3 other countries.

2. Literature review
The main challenge for marketers in international marketing is the choice between localisation and globalisation approaches to marketing. Each of these choices has distinct advantages and application ought to be dependent of factors such as cost and effectiveness as explained in the sections below.

2.1 Theoretical perspectives
The choice between localisation and globalisation of marketing approaches is one that international businesses are faced with from time to time (Sayedi, Soltani and Keshavarz, 2014). In the localised approach, the organisation seeks to understand the culture of the local populations and factor it in marketing communication design. This is based on the proven positive correlation between cultural fit and the effectiveness of marketing initiatives. Cultural perceptions determine how a marketing message is perceived. For the international business, the culture distance between countries is the main determinant of the level of localisation that should be embraced (Janawade, 2013). Cultures that are similar tend to warrant the application of a uniform strategy across national boundaries. This cannot be said of cultures that are significantly different from each other. For instance, a common approach to advertisement can be applied across Western Europe and the USA, where the only modification required would be translation into the national language used in the respective countries (Janawade, 2013).

National culture is a people’s way of life and it influences how they perceive objects and messages (Kuo and Ksiao, 2013). The marketer must be able to understand such perceptions and exploit them to be effective. For instance, the West is comfortable with a materialistic culture and would consume just to feel great. But in countries like China, the tradition has for a long time been founded on Confucianism (Kuo and Ksiao, 2013). This cultural philosophy frowns upon conspicuous consumption where utility and necessity are the main factors for consumption. In fact, one of the actions taken by the Chinese government in line with enforcing their cultural philosophies has been the outlawing television advertisement for luxury products on television (Kuo and Ksiao, 2013). As a result, consumers of luxury products have been relying more on the internet as the primary source of information on luxury products. In consideration of this factor, marketers of luxury products in China would have to redefine their marketing channel design in favour of online marketing more than it would for other markets.

The main disadvantage of localisation of marketing strategies is that it tends to be more expensive (Gülsoy, Özkanli and Lynch 2013). Resources have to be invested in research, marketing campaign design and the monitoring of the impact. There is also the risk of misinterpreting the perceptions and culture of the local populations which could lead to negative results. The theory of localisation of marketing approaches can be contrasted against that of globalisation. Globalised approach to marketing is characterised by putting in place a marketing strategy that is implemented uniformly across countries where an organisation operates (Bandyopadhyay, Coleman and DeWolfe 2013). This approach is ideal in scenarios where the culture differences are low. One of the main advantages of a global approach to marketing is cost effectiveness. The fact that they do not need to modify marketing strategy for each market makes it cheaper for them.

The case for globalisation of marketing strategy is founded on the perception that there is a convergence of the global culture (Banutu-Gomez and Rohrer, 2013). This means that cultural differences are being overcome and consumers are able to relate to each other on the global platform. The other advantage is that a globalised approach helps in strengthening the global brand (Hajipour, Rahimi and Jafaryzadeh, 2013). This is where customers in different markets get to perceive the brand in a common way. With localisation, the ability of the marketer to bring out a brand image differs and could lead to a situation where one brand means different things to different markets. This leads to the recommendation that localisation should be done within certain limitations where a common theme can be projected to ensure that there is consistency in the projection of a brand image.

An additional approach is to confront known cultural perspectives with a view to introducing cultural perceptions that conform to the marketing message. This is a highly risky approach with only a few organisations being able to do it with success. Unilever has been known to carry out such a campaign in the marketing campaign done for its Dove line of products. The campaign was dubbed Real Women Got Curves, a message aimed at targeting big sized ladies by making them feel beautiful (Ostrergaard, 2011). For success in implementing this approach, one would need to position themselves in the position of an expert or activist with an aim of changing society’s perception about something specific (Hair et al, 2013). Cultural differences however continue to play a role with the desired perception likely to be more acceptable in some cultures more than others. This means that some localised approaches on how to emphasise or project a message would still be necessary.

2.2 Market trends in marketing
International marketing is a subject that has attracted immense attention in the recent past with a view to determining what would provide the greatest returns on investment. The most effective advertisements are those that conform to the cultural perspectives of the audience (Hetsroni, 2012). A number of companies have been known to excel by modifying their approach to marketing communication in each country or region.

One remarkable marketing campaign was the Axe Call Me Campaign, which was designed to bring out the theme of attraction between men and women in a manner that respects the dominant cultures in Asia (Lim, 2008). In this campaign, features of Western romance which involve kissing were replaced by culturally acceptable practices such as exchanging phone contacts to facilitate further meetings. This modification was very suitable in reflecting on the Asian culture and the result was the campaign being ranked as among the most effective marketing campaigns by an international company in the region (Lim, 2008). An important factor that must be observed is the need to ensure that the same theme is projected irrespective of the modification of approach. In the Axe Call Me Campaign, the theme is the same as the one projected by cosmetics marketers in the West where attraction to the opposite sex is an important factor.

The Real Women Got Curves was a marketing campaign launched for Dove, a product of Unilever (Ostrergaard, 2011). This campaign sought to challenge the concept of beauty in the society. It was targeted at cultures that do not conform to the Western perception of beauty where a lady was required to be lean (Naeryani, 2009). It also targeted women in the Western countries who may have been trying to lose weight with little success. It was therefore standardised even though delivery of the message varied to project models that represent the specific cultures.

The extent to which standardisation is done can also apply to the choice of marketing channels to be used. The marketer must understand the media consumption habits of the target market (Hetsroni, 2012). This should then be translated into marketing strategies with emphasis on preferred communication channels. An example to quote from is the disparity in the access to the internet between developing and developed countries. While internet access in the developed countries is near saturation, developing countries still have considerably low levels of access to the internet (Carroll, 2013). Standardisation in marketing channel design is therefore likely to be counterproductive. Studies indicate that there exist little pure standardisation or localisation strategies. A marketing strategy can be said to be either standardised or localised depending on the degree of modification. Most companies will often retain the basic theme when localising. Similarly, a standardisation approach is likely to retain the main message and narrative while using different pictures tuned to suit different markets.

In Apple’s Think Different marketing campaign, the campaign carried the same message across the world (Mackinnon, 2011). It was a message that inspired the target market to seek to be different and aspire to stand out in the society. This creative marketing campaign was highly standardised. However, there was a minimum level of localisation where the historical icons that were displayed varied between regions. For instance, the American advertisements featured the likes of Martin Luther King Jr. while those displayed in China and the Asian region featured images of Mahatma Gandhi and Dalai Lama among others (Mackinnon, 2011). This minimal level of localisation helped in building Apple as a leading global brand perceived the same way by customers across the world. Its effectiveness was enhanced by their ability to use messages that each region could identify with.

As a safety precaution, brands outsource their marketing functions to marketing agencies (Carroll, 2013). These are seasoned practitioners in the field of marketing and are versed with experience in different markets after having engaged in a wide range of marketing projects. They are therefore well equipped to know which marketing strategies would be appropriate for specific markets (Carroll, 2013). Besides, they are able to enjoy economies of scale where they represent a sizable number of customers. This means that they provide organisations with innovative ideas and cost effectiveness hence increasing the rate of return on investments made in marketing.

2.3 Summary
The examples quoted in the literature review above are a demonstration that the success of marketing can be achieved whether a standardisation or localisation approach is followed. Where standardisation is embraced, care should be taken to ensure that minimal modifications are done to factor in the differences in customers in different markets. On the other hand, localisation should be done within limits with an emphasis on projecting a common brand image across different markets. While marketing theorists find strongly in favour of localisation approaches to marketing communication, there are no guarantees that such an approach would yield greater fruits. In fact, localisation comes with the risk of misunderstanding the local culture. This could not only reduce effectiveness but even yield negative results.

3. International marketing at Cloudreach
3.1 Company overview
Cloudreach is a provider of information technology (IT) solutions to businesses (Cloudreach, 2014). Its aim is to ensure that its clients are able to exploit IT to be more competitive in their respective markets and industries. The aim is to provide businesses with cloud computing capabilities where they are able to store all their information with ease. The capability is also aimed at ensuring that data is easily stored and retrieved. It also provides reliable data security features insulating the client organisations from data theft and other cybercrimes (Cloudreach, 2014). Some of the strategic partners working with Cloudreach are well known including Amazon and Google (Hawke, 2014). The company’s international growth process is highly aggressive. By the end of 2013, it was operating from different countries within the European region and the USA including Edinburgh, New York, Amsterdam, Munich and Paris (Cloudreach, 2014). This brings out the question of effective international marketing.

3.2 Marketing strategies and implementation
The marketing strategy for Cloudreach is designed to project the company as a partner for helping them become more competitive in the market (Pinsan, 2012). They project themselves as the experts in the field as partners capable of understanding both the client organisations and their clients with the goal of helping them generate the solutions that they need. Their marketing strategies are implemented in line with the need to project this image. The company therefore doesn’t engage in push strategies that are most common among organisations. Instead, they focus on providing important insights that client companies can exploit to their advantage (Hawke, 2014). Naturally, the expectation is that a company that finds some insights positive would contract them to provide them with the services.

The focus on being partners for competitiveness is at the heart of their marketing initiatives. Firstly, the company uses minimal television advertisements (Cloudreach, 2014). Instead, it focuses on business strategy magazines, newsprint, and online communication forums. These are platforms that are commonly used by decision makers within organisations. Business managers are expected to be keen on learning about market developments and be keen to take note of business solutions that can make their organisations perform better. Using these channels is therefore very strategic for Cloudreach.

Online communication is an important part of the company’s marketing communication strategy (Cloudreach, 2014). It uses its official website to inform the market about the services offered as well as important developments within the market and the company. Event marketing and publicity mostly take the form of trainings where business executives are provided with training on the capabilities of cloud computing and how businesses can exploit them to become more competitive in the market. Some of the planned trainings include one in Paris on 1st July 2014; 26th June 2014 in Munich; and one in New York in 10th July 2014 (Cloudreach, 2014a).

Cloudreach also relies on word of mouth where they expect that customers who are very satisfied with their services will provide referrals and recommend them to organisations within their spheres of influence. Relationship marketing is also very important where they focus on deepening their relationship with existing clients (Cloudreach, 2014). They do this by learning more about the organisation and its clients and providing regular updates on new solutions that can be created to keep their clients competitive.

The level of standardisation is very high. The marketing approaches are very similar across the different markets and modifications are very slight to accommodate the differences in cost in exploiting the different marketing communication channels (Cloudreach, 2014, Cloudreach, 2014a; Cloudreach, 2013; Hawke, 2014). This is informed by the fact that the company views the market needs as being similar across markets being served. The company also presides on its own marketing strategies and does not outsource any elements of it. The level of centralisation is extremely high with decisions on marketing planning and employee recruitment being done entirely at the headquarters in London (Cloudreach, 2014). The impact of this globalised approach is evaluated in the section below.

3.3 Critique of marketing approaches
The presence of Cloudreach is symbolised by the presence of its offices in Edinburgh, New York, Amsterdam, Munich and Paris (Cloudreach, 2014). These are markets that can be summed up as the Western cultures. The culture distance between these markets is quite low. This means that a globalised strategy is feasible. This approach is useful in building a global brand. The company can benefit significantly by exploiting the close economic ties within the region occupied to establish a strong brand and be able to grow its market share.

The company’s adoption of a globalised strategy can be justified by the fact that there is a low risk of failure as there are few cultural differences that would warrant misunderstandings (Ferrell and Hartline, 2011). The markets are almost equally competitive with each client organisation likely to seek innovative ways through which they can be more competitive. The company can therefore uniformly focus on these needs and channel its resources into implementing a common strategy. The use of the television is minimised and this is probably due to cost factors and the view that the company would like to avoid push strategies in marketing. However, it is important to appreciate that the television continues to play an important role in each of the markets occupied (Carroll, 2013).

The approach to event marketing and training is likely to yield fruit for the company. Irrespective of the level of standardisations, activities such as trainings are interactive in nature and a good trainer should be able to satisfy the students through their approaches. The same factor applies to communications through the internet and the social media. However, it is important for the organisation to focus more closely on the need to adopt certain levels of localisation. There is little evidence of the organisation conducting any market researches to identify the unique needs of the market in different countries served. Their approach is focused on developing a strong message based on their capabilities and marketing it to prospective customers. This is based on the understanding that all the markets occupied are likely to be very similar to the UK. Such an assumption can be very risky and likely to make Cloudreach less successful in the market. This forms the basis of recommendations as detailed below.

4 Conclusion and recommendations
Cloudreach implements a highly standardised approach to marketing communications in the markets served which include France, UK and USA. These countries are considered to have similar cultures and macro-economic factors. As has been noted from 2.1 above, the standardisation can only yield success if the culture distance is low. However, it is important to ensure that decisions made on marketing strategy are founded on market research and not on generalisations. This leads to the following recommendations.
1. Market research needs to be done regularly in different markets to establish if there is need to embrace localisation of the marketing strategies.
2. Direct marketing approaches should be included in the promotional mix of the company. The findings of the recommendation 1 above would then play a role in determining whether localisation should be done in the direct marketing strategy.
3. Trainings and events must be localised. Irrespective of the low culture distance between the markets served, it is expected that subtle differences in learning methodologies are likely to impact the success of such activities.


References
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