WHY DO BUSINESSES GO INTERNATIONAL?
Market seeking – When a firm is looking for a considerable market for its products/offers. This can be due to saturation of domestic market or to expand the market.
Efficiency seeking – Firms that are looking for efficiency in different ways like R&D and other infrastructural effects. Efficiencies can also be achieved due to the fact that a certain industry has gathered at a place, creating a beneficial infrastructure, such as Silicon Valley, Philips, etc.
Resource seeking – Firms try to enter into countries to get access to raw materials or other crucial inputs that can provide cost reduction and lower operation costs. For example, investment by most oil companies in the Middle East or textiles and garment companies in India and Pakistan.
All the individuals and households who buy or acquire goods and services for personal consumption make consumer market. Consumers around the world vary tremendously in age, income, education level, and tastes. In today’s global world where everything is quite interdependent makes it more necessary to study the consumer behaviour around the globe.
Consumer behaviour for the global market can be studied in the five-stage buying decision process model. This five-step consumer buying procedure begins long prior to the real purchase and prolongs even after the real purchase has been completed.
1. Need recognition
The buying process starts when the buyer recognizes the “need” for attaining a product/service to reach a state they desire. This need is majorly influenced by the demographics of the consumers like include age, gender, income, race, education, household size, and marital status. The motivation to buy something or replace something old depends on several physiological and psychological factors.
2. Information search
Once the consumer recognizes the need for a product/service, comes the second stage of information search. At this stage, the consumer only concentrates on advertisements and conversations about the product. Consequently, the consumer dynamically connects these conversations and advertisements for information for different brands, models and so on. They talk to their friends and family to get reviews of the product/service, meet the salesperson and keep a check on the consumer-ratings online.
3. Evaluation of alternatives
It is only natural for every consumer to look for alternatives before making the purchase decision. They have to look for high quality products/services at low cost. However, a consumer will have definite amount of time to compare and evaluate before they actually buy the product.
This stage creates an enormous challenge for marketers in a global atmosphere, as customers may be confronted with a superfluity of different advertisements, earlier to the one that is required to attract them. At this stage, the innovative technology of customization has its benefits. Marketers/ Sellers can alter their communication for different market segments by language localization. Localization plays a very important role to efficiently communicate with the consumers, gain their trust and show your concern as a seller. Read more about localization here
4. Purchase decision
After evaluation comes this stage of purchase decision, where the consumer has decided which product/service they’re buying. This decided product/service may not be the top ranked ones because the decision is influenced by two major factors. Firstly, the behaviours of others includes best friends or community pressure, can alter a consumer’s preference ranking for a specific brand even if they inclined to purchase a different one. Secondly there might be some unanticipated situational aspects that influence the buying decision.
5. Post-purchase behaviour
Post-purchase action is segmented further into two groups – post-purchase reinforcement and post-purchase decline. The consumer is either satisfied with the purchase and wishes to buy again or they are disappointed and might not want to buy again. The marketer must value the consumers and their post-purchase decision. Sometimes, the consumers may have complains regarding the product/services which can be resolved by the retailers or the local marketers. In any case, getting a feedback from your consumer is vital for your business to be a success.
The number of businesses going International is HUGE! The pace at which internationalization is growing is directly proportional to the pace of globalization. The reasons to expand your business globally could be anything under market seeking, efficiency seeking or resource seeking; it all boils down to localizing your business for a new market. Localization supports business expansion in different geographic and demographic markets, by having communications delivered efficiently. Learn more about localization here.