Two approaches to smarter international marketing: Centralized vs. Decentralized

10/11/2014

international marketing

international marketingRecently I was analyzing an international software company’s marketing program. The company had been steadily growing and entering new international markets. But when I examined its marketing program, it was clear the company’s marketing tactics, programs, partners, etc. were inconsistent.

In some places, the local distributor or sales office had marketing responsibilities, while in others the responsibility rested with the headquarters’ marketing department. There was lots of confusion about who should be doing what, and lots of wasted resources. It was very disjointed and hard for marketing staff to manage, not to mention inefficient and far from optimized.

It’s like adding rooms onto a house every time there’s a new family member instead of working from a master plan. Your marketing framework needs to be both sustainable – a program your current and future resources can maintain AND scalable – a program that still works as you continue to expand in new and current markets. Without a framework, the marketing house eventually crumbles… along with the company.

What this company needs is a framework for their international marketing that can grow with them in both new and existing markets.

One of the biggest choices that a company should make is: centralized or decentralized marketing. Here’s how to decide which one best fits your company:

Centralized approach to international marketing

In a centralized marketing program, the marketing team at headquarters makes most of the marketing decisions and they plan and execute most marketing programs. This approach
makes the most sense when: CentralizedMKTG

  • Your marketing department is highly competent and has experience working with international markets
  • You can find country experts to help your marketing team localize materials to the right levels
  • You sell most of your products through direct exporting or your own in-country subsidiaries
  • Your marketing materials require little or no localization. This is the case for highly globalized markets, like scientific products or certain types of software
  • Your product and company carries a positive Country of Origin Effect. For instance, German engineered products have a positive COE for quality and longevity.

If your approach is centralized, then you’ll want to focus on developing in-house marketing capabilities and scalable processes. This will ensure you have much more control over the marketing and sales cycle, and should be used to your company’s advantage (shortening sales cycles and increasing win rates). Manage the marketing talent carefully and hire great professionals.

Centralized marketing can be a slower growth path, so be sure to remove any growth barriers.

Travel costs can be heavy, so combine trips and eliminate any unnecessary travel. Lastly, be sure to have a strong communication channel between marketing and sales staff who are directly interacting with the market and product development.

Decentralized approach to international marketing

De-CentralizedMKTGIn a decentralized marketing program, marketing functions and decision-making are primarily pushed out into the field. You may have a small army of independent distributors or representatives.

Another option is to rely on your own local in-country sales offices. This approach works best when:

  • Your products are in heavily regulated industries
  • Your products need to be significantly localized in order to sell them in other markets
  • There is a strong market bias toward local language and local sales connections
  • There is a strong NEGATIVE Country of Origin Effect
  • Your company’s marketing is not highly trained and has very limited resources

The focus of a decentralized approach is to support and motivate the local marketing staff and representatives. Marketing materials are often produced as a template that a local marketer or representative can use as a starting point for localization and translation. If this is your approach, then developing and maintaining close working relationships with the in-country reps and marketing staff is KEY to your success.

Decentralized marketing gives up some control over how your brand is represented.

There are risks related to corruption, so be upfront about what you can and cannot accept under the laws of your home country.

Localized marketing and reps can cost upwards of 25-30 percent of the total product price, so the supporting marketing department back at headquarters must run very lean in terms of staff and budget.

The reason for choosing a single approach is this: if you do both, then you are paying to manage a program centrally but not getting the benefits of control or efficiency. If you essentially do neither (rare, but I’ve seen it), then you undercut your abilities to reach your markets.

I hope you found this article helpful. For more information about international marketing, please visit: The International Entrepreneur Website.

 Disclaimer: The opinions expressed in this article are those of the contributing author, and do not necessarily reflect those of the Forum for International Trade Training.

About the author

Becky DeStigter, FIBP|CITP

Author: Becky DeStigter, FIBP|CITP

Becky DeStigter is an International Business Consultant focused on helping B2B technology and professional services companies to become more globally competitive. She seeks practical solutions for growing companies’ international marketing and operational issues. Becky is based in Scottsdale, USA and works with companies worldwide.

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