Problems and benefits that multinational market groups represent for international marketers
First of all, let me give a definition on what the phrase “Multinational Market Region” means. As Cateora in 1993 stated it is “those groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers” In other words it is formed when countries neighbouring partner up so all of them could improve the performance of their economies. Now that we know that let us turn our attention to who an international marketer is. The definition given by Geoff Lancaster of what international marketing is goes like this, “all international activity. However, strictly speaking, it is a term used to describe companies whose overseas sales account for more than 20% of their total turnover; where a strategic decision has been taken to enter foreign markets; where product mix and communications mix adaptations are considered when supplying goods or services for a particular overseas market” (http://www.marketingmasters.co.uk/geoff/International%20handout.doc). In other words it is when an organization, both for-profit, and non-profit, during their decision making consider what products and services to offer to different country markets, the packaging and the manner in which it should be merchandised and also the way they shall communicate these decisions.
Usually, except for very large ones, single countries are quite small for many multinational organizations, especially when they are manufacturers, and produce goods on the basis of economies of scale. For instance, the Japanese car manufacturer Suzuki established a factory in Hungary not to supply Hungarian market alone, but all of the European Union also.
There are drawbacks of a marketer treat group of countries as one larger market. in different countries there can be very different cultures, sometimes even in neighbouring countries. For instance, marketing wine in France and Germany the same way, may result in an overwhelming success in one, and a disastrous failure in the other, given the consumption preferences in the two countries
There are some political and legal differences that an international marketer should also consider. In some countries politically and legally enforced production standards may be very different, and in some extreme cases the very same products cannot be called the same way in all the member countries in a multinational market group. The level of bureaucracy is not the same everywhere either.
Another issue of consideration is the infrastructural development from one country to another. For instance Austria has a much more motorways than Hungary does although the size of the two countries is very similar.
The economical development from one country to another can differ quite a lot too. Let us look at the example of Austria and Hungary again. A luxury car manufacturer should not expect to be able to sell just as much cars in the later country, because it is much poorer and much less people can afford to buy expensive products.
In summary, although marketing to a number of countries instead of just one saves costs and reduces risks, an international marketer should be very careful in choosing which multinational market groups it should choose.