Global Gold: Panning for Profits in Foreign Markets

Citation

Krohmer, H. (2000), "Global Gold: Panning for Profits in Foreign Markets", Journal of Consumer Marketing, Vol. 17 No. 2, pp. 172-185. https://doi.org/10.1108/jcm.2000.17.2.172.4

The California gold rush taught people that failure was OK. And the reason was that nearly everyone failed in California – everyone, every day. One of the gold rushes of today is called globalization. As with the California gold rush, both risks and rewards are great. However, in every gold rush the rewards are only great for some. For newcomers and greenhorns hard work does not necessarily mean success. While luck certainly can lead to success, information on where to mine is essential to avoid failure. The book Global Gold, edited by Ruth Stanat, offers valuable advice on how to find gold in global markets. It provides a first orientation of where to mine, which is especially valuable for newcomers to international business in mid‐sized businesses ($200‐$800 million) who must compete and expand on a global scale. As the introduction explains:

Most business development efforts by small to mid‐size firms are a result of “knee jerk reaction” to press or media on “hot countries” or a response to your competition going global. Global gold is intended to provide you with a tool or resource book to avoid expensive trips which yield poor results or to avoid costly international business development failures. As such the book is a culmination of the contribution of over 50 experts throughout the world to give you the “tools” to avoid these costly mistakes ... What I have found is that, while firms know that they should be evaluating and entering foreign markets, there is a major “void or gap” that exists in identifying the optimum worldwide regions or countries, adaptation of their products to the local culture ... and most importantly, knowledge of “how to actually do business in the country.”

The first two chapters of the book deal with the process of expansion into international markets. Issues such as reasons to go global, international market research, and market entry are covered. These two conceptual chapters make up only 6 per cent of the book and are not the strongest chapters of the book. They are somewhat simplistic and do not cover all important facets of expansion into international markets: while there is a strong focus on market research issues, important success factors for the implementation of international expansion, such as the management of these international activities and the corresponding organizational structures, are neglected. However, this part of the book provides a valuable introduction into the topic of international expansion.

Chapters 3 to 7 deal with doing business in different regions, including Asia Pacific, Western Europe, Central and Eastern Europe, Latin America, the Middle East, and Africa. Chapter 8 is addressed to managers who want to enter the US market. These chapters are written by local country experts who can provide valuable inside information on issues related to market expansion into their countries and regions. Issues such as historical and political background information, cultural values, consumer behavior and negotiation styles are covered. There is a focus on market research which can be explained by the fact that many of the authors have a marketing research background.

Unfortunately, the issues covered as well as the structure of the chapters are somewhat heterogeneous. The quality of the sections on the different countries and regions varies by author. Also, not all of the insights are really new. To think globally but act locally in Australia may make sense, but may not be the newest insight. Overall, this part of the book is most interesting to managers who just recently have considered going global and want to get a first impression which regions and countries might be of interest to them. The value of these chapters lies in providing the big picture of the situation in the different regions, which is relevant also for those who are already acquainted with the topic. There are much more detailed country reports available, such as the Doing Business Guides of PricewaterhouseCoopers (http://www.pwcglobal.com). Each of these reports, however, costs nearly as much as the book Global Gold.

Chapter 9 deals with specific business development issues, which include bribery, copyright and patent protection, strategic alliance partnerships and the impact of the Internet. While the chapter can provide a sound overview over these issues, especially the Internet could have deserved more attention. Out of 500 pages only three pages (including one page at the end of the book with relevant Web sites) deal with the Internet. However, especially for small and mid‐size companies the Internet may offer important international business opportunities. Issues such as acquisition of business partners and customers via the Internet are not covered in the book.

The rest of the book provides an extensive international resource directory. Readers can use it to pinpoint demographic data, manufacturing facts, government sources, and business development brokers. As in the regional chapters of the book the different country reports vary in quality. While there is extensive information on China, the limited information on Germany does not reflect the economic importance of the German market. While the provision of addresses of research and consulting firms is useful, it could have been improved by structuring the consulting firms by area of competence and specialization. As an example, it may be difficult to find out which of the many consulting firms in Hong Kong might be the best choice for a specific problem. Also, some information on additional literature might have been helpful and the Internet section could have been more extensive. Overall this part helps managers to get started with more detailed market research.

Given recent dramatic changes in South‐East Asia, Eastern Europe, and Latin America, guides like this book always are in danger of becoming outdated within a short period of time. However, the basic tendencies and cultural background information discussed in the book are relatively stable. The book especially appeals to managers in small to mid‐size firms that have not yet gone global. It provides a clear description of the process of international market research and market entry as well as detailed background information on different regions and countries. For those managers who have already entered foreign markets, the book is also relevant. They can evaluate their current strategies and receive information on where additional expansion might pay off. Overall, the book can help companies to get familiar with the idea of crossing international borders and to prepare for the risks associated with it.