In today’s world, business is commonly acknowledged as international and the general expectation is for this to continue into the foreseeable future. As the world continues to venture into global markets, not limiting business transactions to domestic markets, it is important to understand the similarities and differences of conducting business in those markets. The success of businesses in domestic and international markets is dependent on the accuracy and thoroughness of the marketing within the respective markets. With that in mind, this paper will compare and contrast international and domestic marketing with the use of selected international country, Germany, versus the United States.
Domestic versus International Marketing
Analyzing domestic and international businesses within the private and public sectors, the most common objective is successfully to function in order to continue operations. Although they share the same ultimate goals, international and domestic marketing are quite different. Generally, nation-states differ in the following areas:•Unique governing systems•Laws and regulations•Currencies•Taxes and duties•CultureBusinesses venturing into the international market must understand such differences along with recognizing similarities in buyer behaviors as they differ from country to country. Specific to Germany, a successful business venture must fully comprehend the foreign environment in order to effectively market a product or service.
German vs. U.S. Culture
One of the most important factors that have a major impact on marketing in Germany is culture. Germany’s culture includes a long history of musical talent and interest which has continued even in modern culture (ThinkQuest, 1999). Germany ranks as the 5th largest market globally in music record sales and is heavily influenced by television (ThinkQuest, 1999). Germany’s television market encompasses over 34 million households and is by far the largest market in Europe (ThinkQuest, 1999). Television viewers have options for cable or satellite and can choose from a variety of free-to-view public and commercial channels (ThinkQuest, 1999). Another major aspect of German culture is sports; two of the most popular being different types of motor racing and soccer (ThinkQuest, 1999). Practicality is a very common characteristic of most Germans that would lead marketers to focus on introducing products and services with a clear purpose and value (ThinkQuest, 1999).
U.S. culture, on the other hand, is quite different from German culture. Inspired by a combination of European ideals combined with domestic originality, U.S. culture encompasses traditions, ideals, beliefs, customs, arts, and innovation (USA Study Guide, 2007). Much of U.S. culture was not uniquely derived, but imported through colonization and immigration (USA Study Guide, 2007). America has a strong focus centered on civil liberties, national holidays, U.S. sports, and innovation of arts and entertainment. National holidays such as Memorial Day, Labor Day, Independence Day, Easter, Thanksgiving, Christmas, and New Years are celebrated across the country and many different businesses take advantage of such times to offer sale prices on products and services enticing customer purchases. Some of the most favorite sports include American football, basketball, and baseball, and Americans are known to spend lost of money during these events.
The U.S. is an enormous exporter of entertainment including news, movie, and music. Different types of entertainment are communicated through a variety of venues including television which ranks as on of the top mass media of the U.S. (USA Study Guide, 2007). Statistics show that 97% of Americans own at least 1 television and most have at least three in their household (USA Study Guide, 2007). Advertising in America is much different from Germany, rather than the focus being on practicality, successful marketing in the U.S. highlights the trendiest fashions and creates an image that one just has to have a certain product. U.S. culture is ever-changing; it is not static, as the country is known as the largest melting pot in the world, and as new cultures migrate into the U.S. accepted by the majority, the culture continues to evolve.
German vs. U.S Laws and Regulations
In order to tap into the German international market, it is essential for a business to have a clarified understanding of the laws and regulations that govern marketing and advertising. Marketing and advertising in Germany is governed by very strict laws. In Germany advertising is defined by different types including:•Product Placement•Permanent Advertising Programs•Teleshopping/Radio shopping(Zitierung, 1996)For example, in Germany, the most popular television stations are “Anstalten öffentlichen Rechts,” which means that they are not allowed to receive a profit (Zitierung, 1996). Such television stations are independent; therefore, government officials cannot directly influence their decisions (Zitierung, 1996).
The top managers are appointed by councils who represent major groups within their society including popular political parties, churches, specific businesses, and unions (Zitierung, 1996). In this case, laws in place prescribe their purpose and internal structure (Zitierung, 1996). Operations are financed through monthly fees acquired from individuals who own either a radio or television (Zitierung, 1996). Financing through television or radio license fee is not permitted. Advertising is restricted to certain times of the day and never interrupts movies or news shows (Zitierung, 1996). Advertising on public television channels may not exceed 20 minutes during the workday, and on private channels may not exceed 20% of daily transmission time (Zitierung, 1996).
Marketing and advertising in the U.S., although it is governed by laws and regulations, is much easier than advertising in Germany. Although much of the communication to Americans is monitored by the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC), laws and regulations are more specific to content of ads, antitrust laws, and intellectual property including copyrights and trademarks (HG.org, 2009). In comparison to governing laws in Germany, advertising on television, for example, is done more freely and frequently in the U.S. There are no strict guidelines that dedicate a small portion of time throughout the day for advertising, thus movies, news programs, and television shows are frequently interrupted for the sole purpose of advertising (HG.org, 2009). In fact, many advertising campaigns purchase prime time spots to run commercials for their product during the most popular television shows and sports games such as during NFL games and American Idol to name a few.
German vs. U.S. Economy
Germany’s economy is one that is heavily export-oriented, the country is the world’s leading exporter of merchandise, and thus this is a key element in German macroeconomic expansion (ThinkQuest, 1999). Germany’s currency is the Euro and its monetary policy is set by the European Central Bank in Frankfurt Germany (ThinkQuest, 1999). Germany’s financial system is not driven by the stock market; in fact, it is a financial system that is bank oriented. Employment is deregulated in Germany; the unemployment rate is a continuous problem, along with bureaucracy regulations that cause burdens on new and incumbent businesses (ThinkQuest, 1999). Agriculture is extremely productive in Germany; the country domestically produces over 90% of its needed nutrition and is known for its high level of industrialization (ThinkQuest, 1999).
The U.S. economy differs greatly from the structure of the German economy. It is the largest national economy in the world maintaining a stable GDP growth rate and continued low unemployment rate (United States Department of Labor, 2009). The U.S. is one of the most significant nations in the world of international trade; the country leads the world in exports year over year while simultaneously remaining one of the top three exporters of goods (United States Department of Labor, 2009). U.S. currency is the American dollar and its banking system relies heavily on the stock market. The U.S. has major economic concerns as it related to external debt because as baby boomers are beginning to retire and collect Social Security, monies are running low (United States Department of Labor, 2009).
ConclusionIn conclusion, Germany is quite different from the United States in terms of how the country operates including the government of marketing and advertising. An individual traveling from his home country to do business in a foreign country must conduct extensive market research prior to developing a marketing and advertising plan. It is essential to understand the different aspects of the country in order to effectively position and market a product or service. Doing business in a foreign country involves many different variables and more complexity than doing business at home. Success is dependent on the accuracy of market research and the company’s ability to manage from a local perspective with the absolute correct marketing mix.
HG.org. (2009). Advertising, Marketing & Promotion Law – Guide to
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ThinkQuest (1999). German Culture. Retrieved June 15, 2009, from http://www.tlc.kherson.ua/~alex/germanculture.htm.
United States Department of Labor (2009). Economy at a Glance. Retrieved June 16, 2009 from http://www.bls.gov/eag/eag.us.htm.
USA Study Guide (2007). The international student guide to education and study in the USA. Retrieved June 15, 2009 from http://www.usastudyguide.com/americanculture.htmZitierung, Autor (1996). German Broadcast Advertising Law. Online Journal Recht. Retrieved June 16, 2009, from http://www.ojr.de/index.html?/1996/36.htm.