Discuss various Barriers to International Marketing of Services.
Various barriers to international marketing of services grouped into following:
- Legal barriers.
- Cultural barriers.
Legal Barriers:
Legal environment of foreign markets is different from that of the domestic. Legal barriers may be classified into following groups:
Quantitative and Qualitative Restrictions: The most common legal barrier to international marketing is in the form of quantitative restrictions (quotas) and qualitative restrictions (taxes). Many countries have prohibited the entry of banks and insurance firms. Many countries have the system of work permits to restrict the marketing of services.
Provisions Discriminating Against Foreign Firms: A number of countries have laws and regulations to restrict the operations of foreign firms.
Subsidies to Local Firms: Another approach to protect domestic firms is to provide direct and indirect subsidies to domestic firms and workers.
Infringement of International Copyright: Many countries do not have any law to prevent the copying or misuse of intellectual property and innovations.
Cultural Barriers:
Cultural barriers arise out of cultural differences and diversity. Following elements of culture serve as cultural barriers to international marketing.
Social Institutions:
Social groups and organizations include the caste system, joint family system, marriage, role of men and women, etc. Since social groups and organizations determine the pattern of living and interpersonal relationship of people in a society, a manager of firm involved in international business operation should take serious note of social groups and organizations prevailing in different countries.
Attitudes and Values:
Attitudes and values are no longer rigid. They are flexible. Attitudes and values determine the consumption level, material possessions, risk taking and ability to change. For example, Western societies are modern and liberal and people are more receptive to new products. On the other hand, in Muslim countries, people prefer what is traditional.
New products are not accepted without the approval of religious or political heads. A business firm aiming at capturing markets for its products has to be careful about the attitudes and values of different countries.
Education:
Education is the most important ingredient of the socio-cultural environment. Education may be defined as any process, formal or informal, through which a person learns skills, ideas and attitudes. Education makes people more sophisticated, discriminating and receptive to new products and ideas.
Education level of a country determines the availability of educated manpower like skilled labor, technicians, professionals. Its literacy rates are high, conventional form of printed communications can be used widely. It means that a company can use newspapers, magazines and periodicals for advertising its products. The conventional forms of printed communications do not work in countries where literacy rates are low.
Religions and superstitions:
Different people have their own religious conviction, beliefs, customs, sentiments, rituals, etc. The cost of ignoring certain religious aspects could be very high.
Sometimes even fatal, in international business. Religion may also influence the attitude towards work and welth. Religion may also play a role in deciding the weekly holiday, other holidays and working hours. In several countries, religious festival times are great busiess times. People buy new clothes, exchange gifts. spend a lot on food, etc.
Companies doing heavy promotions including discounts and other incentive schemes have become very common in India. Many religious groups consider certain days of the week or certain period auspicious for launching new ventures and certain days and periods are regarded bad. Many business decision’s in India and in several other countries are based on astrological advice’s. The customs of marriage, naming ceremony of the child, festivals etc, vary significantly between religions.
Language:
Differences in the language is a very important problem area in international business. Most countries are multi-linguistics and many of them have a large number of ethnic groups and languages. An international firm should have a thorough knowledge and understanding of the language of the foreign market. Even some of the same words of a language have different meanings.
The meaning of the same of the English words and idioms differ between U.K. and U.S.A. Problems caused by languages include those related to brand names and other names and marketing communication. The Arabic language is read from right to left and many Arabians sequence things from right to left.
Aesthetics:
Aesthetics means sense of beauty and good taste. Aesthetics is expressed in arts, drama, music, folklore, dance, etc. Aesthetics are of special interest to international business firms because aesthetics are helpful in correctly interpreting the artistic expressions, colors, shapes, forms and symbols in a particular culture.
Taste and preferences for food and drink. For example, represent learned responses that are highly variable from culture to culture. Preference for color is culturally influenced as well. For example, green is considered good color in Muslim countries while white is considered good color in West.
Material Culture:
Material culture consists of the tangible products of culture. Material culture is reflected by what people own and how people use material possessions, such as cars, houses, clothes and furniture. Material culture varies around the world. For example, most Mexicans own small refrigerators and have limited incomes which limit the amount of groceries they can purchase at one time.
