INTERNATIONAL MARKETING & INDONESIA.   Term Paper ID:24120 Click to get this paper

Essay Subject: Overview of global marketing issues & application to Indonesia. Labor, communications, role of govt., keys to success.... More...

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Paper Abstract: Overview of global marketing issues & application to Indonesia. Labor, communications, role of govt., keys to success. Paper Introduction: Introduction Innovations in transportation and communications during the twentieth century have resulted in the ability of goods and services to move among nations with greater ease than at any other time in history. International business is no longer the exclusive realm of the large multinational corporation; small businesses are creating marketing niches for themselves in particular product or service areas. Because of this greater interest in the global economy, companies which are seeking to build long-term strategic plans must consider whether or not international marketing is a critical part of those long-term plans. When considering international marketing, companies must take into account their own internal structure, the role of the governments of the countri Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. [ix]Jeffrey Garten, "Big Emerging Markets," World Traders, December1994, 14-18. [viii]Indonesia Country Commercial Guide, 11. It istherefore important that any agreement is well understood by both sides. The differences in the currencies betweenthe various countries involved must also be considered, and barriers totrade (both tariff and nontariff) also need to be evaluated since thebarriers which the company needs to overcome may determine whether aparticular venture will be profitable or unprofitable. However, a foreignjoint venture can expect more rigorous enforcement of labor regulations aswell as other laws than a local firm.[v] Communications Better communications mean that companies and countries no longerexist in remote sites. Jobcreation and the alleviation of underemployment are targets of economicpolicy making. Conclusion Companies today must recognize that they compete in an internationalmarket, not merely a domestic one. The United States values close relations with Indonesia, which is theworld's fourth most populous nation and one which the Department ofCommerce has designated a "Big Emerging Market." This is in part becauseof its growing economy and markets, its strategic location near a number ofkey international straits, and its moderating influence in regional andinternational bodies such as the Asia Pacific Economic Cooperation (APEC)and the Non-Aligned Movement (NAM), which Indonesia chaired until September1995.[ix] Key Success Factors Companies considering entering foreign markets need to begin bydetermining whether a demand exists for their product, or whether theycould effectively create a demand for it. Internationalbusiness is no longer the exclusive realm of the large multinationalcorporation; small businesses are creating marketing niches for themselvesin particular product or service areas. "Business Strategies as a Market Opens." Agribusiness, May-June 1994, 259-273.Johnston, William B. "Global Work Force 2 : the New World Labor Market." Harvard Business Review, March-April 1991, 115-127.Nusbaum, David. Labor productivity in countries without anexhaustive labor supply will have to increase in order for these countriesto avoid a slowdown in economic growth; such productivity can be increasedthrough education and training programs.[iii] In Indonesia, the labor force is estimated at approximately 83million, of which 75 percent is between the ages of 15 and 34; the laborforce is growing at approximately 2.8 percent per year. They need to determine whetheran existing product can be sold as it is manufactured in the United States,or whether modifications would have to be made in the product itself, or inits name, or its marketing strategy. The government has demonstrated a commitment not only tooffering incentives to foreign investment, but also to providing companieswith a well-educated labor force. These companies must alsodetermine if they would have adequate legal protection in the foreigncountry, whether the country and its currency are stable enough to suggesta long-term relationship, and whether the economic infrastructure issufficient to provide what the company needs for success.[x] Key to success in entering the global marketplace is to establish astrong rapport with the government in the target market in order to ensurethat regulations are understood and followed, and to gain as much benefitas possible from entering the market. Indonesia is embarking on an ambitious program to expand and modernizeits telecommunications network by spring 1999; the Department of Tourism,Post and Telecommunications has set a target to install at least fivemillion lines by that time. The state-owned telecommunications companywill construct three million lines in the Jakarta and Surabaya municipalareas, while the private sector (foreign operators and local companies)will install nearly two million lines in the rest of Indonesia. Washington, DC: U.S. Increased Popularity of International Marketing Despite the difficulties associated with international marketing, anincreasing number of companies throughout the world are participating inthis activity. Aconsortium headed by U.S. Political situations must be considered, and thelabor situation in the foreign country (as well as in the domestic country)must also be taken into account. The other major reason that companies consider the internationaleconomy is the availability of markets. "Big Emerging Markets." World Traders, December 1994, 14- 18.Indonesia Country Commercial Guide. Market opportunity and growth iscertainly present in foreign countries, although purchasing power can varygreatly. Introduction Innovations in transportation and communications during the twentiethcentury have resulted in the ability of goods and services to move amongnations with greater ease than at any other time in history. [vi]Ibid., 6. Futures, April 1995, 62-65.Walters, Peter and Brian Toyne. Department of State, 1996.Harling, Kenneth F. "Product Modification and Standardization in International Markets." Columbia Journal of World Business, Winter 1989, 37-44. West was recently awarded a contract to install5 , new lines in West Java, while consortia including French andJapanese firms won contracts for the other four regions.[vi] The Role of Governments Corporate policy, government intervention and the emergence ofregional economic groupings greatly affect trade patterns. Internationaltrade would be impossible if companies were not willing to take on theexpense and difficulties associated with the process. Americans, for example, purchase cars andelectronics made in Japan, ham and golf carts from Poland and shoes fromBrazil. TheUnited States played a key role in helping Indonesia win independence fromthe Netherlands in the late 194 s, and the United States maintains cordialand cooperative security arrangements today, although the two countries arenot bound in any formal security treaties. Such companies must identify thecompetition they would face from existing companies as well as fromcompanies who might imitate their product. Indonesia presents a particularly attractive emerging market becauseof its commitment to capitalism, a relatively stable political environment,and a burgeoning population which provides a strong market for goods andservices. ----------------------- [i]Joshua Aizenman, "World Integration," Canadian Journal ofEconomics, May 1994, 458. Competition comes not only from recognized industrial nations, butalso from developing nations and the former Soviet Union. Johnston, "Global Work Force 2 : The New WorldLabor Market," Harvard Business Review, March-April 1991, 118. According to aWorld Bank study, the presence of state-owned firms tends to stiflecompetition. Unemployment is roughly 3.6 percent.Less than 1 percent of the labor force is estimated to have a universityeducation, while approximately 1 percent are junior high school graduates;and another seven percent have graduated from high school. [x]Peter Walters and Brian Toyne, "Product Modification andStandardization in International Markets," Columbia Journal of WorldBusiness, Winter 1989, 38. This researchconsiders these factors, the critical factors for success in internationalmarketing, and how these characteristics affect companies consideringoperations in Indonesia. The government does play a role in the economy through state-ownedfirms and the imposition of price controls in selected industries. B. Thereare domestic regulations to consider, regulations in the destinationcountry, the logistics of moving the product to the destination country andsuccessfully building a marketing program there, and problems with foreignexchange.[vii] Indonesia has a free-market economy which is dominated by the privatesector. [iv]Indonesia Country Commercial Guide, Washington, DC: U.S.Department of State, 1996, 47. [v]Ibid. Education and human resource development remain highpriorities for the government, which has also invested significantly inbuilding the nation's infrastructure to enable telecommunications on aninternational level.[iv] In its industrial relations application, Pancasila emphasizes thetraditional Indonesian values of harmony and consultation leading toconsensus. Notes BibliographyAizenman, Joshua. Relations between Indonesia and the United States are good. Women make upapproximately 4 percent of the work force, and approximately 3 percent ofthe labor force is underemployed. Regardless of theoriginating countries, and even in today's high technology environment,expanding into the international arena is fraught with difficulty. [iii]Kenneth Harling, "Business Strategies as a Market Opens,"Agribusiness, May-June 1994, 26 . [ii]William. The choice of an Indonesian joint venture partner is also critical.The partner can be relied upon for knowledge of the local scene andcontacts, which are important for successful operations in Indonesia.Because Indonesians place great importance on personal relationships andmutual understanding, partnerships tend to be based primarily on genuineaccord, with the written contract playing a less significant role. "Trading the Wide World of Foreign Exchange. "World Integration." Canadian Journal of Economics, May 1994, 458-483.Garten, Jeffrey. Introducing and marketing products abroadincreases the company's overall market share, and is thus a competitivedecision that many companies are turning to in order to help ensure theirlong-term success.[i] The International Work Force Today, employers will seek out workers from across borders; indeed,the jet airplane has been compared to the automobile in relation to itsability to move workers not only across the country, but around theworld.[ii] Workers who are highly educated but who live in countries wherethere are no jobs are likely to relocate to countries with a demand for ahighly educated work force. However, the benefits to be realized from a stronginternational strategy are significant, and companies as diverse as Coca-Cola and small software companies have demonstrated a willingness and anability to take on the challenge. For many products and services, companies are turning to thediversification that international marketing brings. Because of this greater interestin the global economy, companies which are seeking to build long-termstrategic plans must consider whether or not international marketing is acritical part of those long-term plans. When considering international marketing, companies must take intoaccount their own internal structure, the role of the governments of thecountries considered, and the way in which the company would operate in theforeign nation (whether directly, as part of a joint venture, or throughsome licensing effort). Acontract over which there are conflicting interpretations is certain tocause future problems. Thepublic enterprise sector in Indonesia represents an estimated 15 percent ofGDP and employs about 1.2 million people (1.4 percent of the labor force).The share of the 181 state-owned firms in the economy has declinedgradually as a result of strong private sector growth. This has long-term ramifications for multinational andglobal companies. Immigration policies are likely to bereviewed, according to some analysts, as countries compete to attract thebest and brightest workers. The critical and fundamental factors of product planning, marketresearch and long-term strategies that make companies successful indomestic marketing also make companies successful in internationalmarketing, although the exact details of those plans will differ fromdomestic to international markets. For these companies who choose tocompete in the international scene, there are considerable challenges to beovercome, including finding the right labor supply, seeking an appropriatedestination country, and balancing the needs of domestic workers withinternational workers and the needs of an international pool ofstakeholders. [vii]David Nusbaum, "Trading the Wide World of Foreign Exchange,"Futures, April 1995, 63. In addition, the country has made therequisite investment in its infrastructure to support multinational andglobal investment. Some nations are strongly protectiveof their domestic industries, and establishing a close relationship withtrade offices and commerce ministries before entry is made can help acompany avoid problems down the road because of misunderstandings. There are two primary reasons why they do this:competition and markets. Countries which have pursued protectionist strategies inthe past are moving away from these strategies to take a broader view oftheir environment. However, such consensus can be difficult to achieve, andenforcement of labor regulations is a major problem. By marketing to avariety of nations, a company is not so severely affected by a downturn inany one country's economy. The number ofpersons with secondary or higher education is increasing, and thegovernment plans to make education through junior high school compulsory, atrend which will help companies considering operations in Indonesia.Although there are more job seekers than positions available, Indonesia isexperiencing shortages of managerial and professional personnel. The government also takes actionsdesigned to influence the price of a number of agricultural products,including rice, wheat, sugar and soybeans. Industries with higher public sector involvement havesignificantly higher concentration ratios, and many non-tariff barriers arefound in industries where state-owned enterprises play an importantrole.[viii] The government imposes price controls on a number of productsthat could be supplied by a competitive market, including fuels, cement,fertilizer and transport services. The competition facing companies domestically isincreasingly from foreign firms. Telephones, FAXes and computers mean that companiesand employers around the world have access to information and employees infar-off locations. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.