Global Marketing: The Knowhow of Business
rendering precise deﬁnitions
Global marketing is expansive, extensive, and complex. It can be seen as both a business strategy and an operation, as a force for good and/or as the ‘new imperialism’. It can be embodied in companies or perceived as a phenomenon (e.g. business globalization, the internet, etc.). One view of global marketing is as a giant supply chain management system or an added value system. Global giants such as Toyota, VW, and DaimlerChrysler source their raw materials, semi-processed and processed materials, ﬁnance, and human inputs from all over the world and deliver the results of the combination of these, i.e. vehicles, to numerous market segments, adding value as they do so. Deﬁning terms in the global marketing arena is a complex issue. Marketing across political and cultural boundaries raises many questions, problems, and juxtapositions, rendering precise deﬁnitions difﬁcult. Typical issues center on the standardization–adaptation argument; locus of control—central or devolved; and when exactly a multinational corporation focus becomes a global one. How does global marketing differ from domestic and international marketing? While there are no universal deﬁnitions, the following are those that we will talk about them in Maadico.
What is Domestic marketing?
The focus of domestic marketing is primarily marketing carried out within a deﬁned national or geographic boundary where the marketer is relatively free to plan, implement, and control marketing plans, including decisions on the marketing mix within a relatively known and easily researchable marketing environment. Over time, the marketer learns to anticipate the needs and wants of his/her market. There is little need to attend to the demands of the across-boundary markets, other than to monitor and meet the threat of imports. Focus and control are ﬁrmly on the domestic market.
International marketing takes place when the marketer explores markets outside the national boundaries of the domestic market. This often begins with direct or indirect exporting to a neighboring country. The focus is to ﬁnd markets that have needs similar to those in the domestic market and can be satisﬁed with similar products and services. Typical of these are standard product parts and computers. While the marketing environment may be different and some adjustments may have to be made to the marketing mix elements, exporting in economic terms is basically the movement of surplus production overseas. Once again, planning, implementation, and control of the marketing mix are based in the exporting organization.
When organizations begin operating across a number of national/political boundaries, they need a more cohesive and constructive approach to their engagement with their international markets. As they progress in their internationalization, organizations would increasingly recognize the importance of accounting for country-to-country differences in their international marketing planning decisions. Because they value these differences, there is the recognition that there are many distinct marketing systems, leading to the notion that international marketing can be viewed as a collection of more or less coordinated domestic marketing’s (Perry, 1999: 45). In this sense, the characteristics of international operations are the differing effects of, and the emphases on, the uncontrollable marketing elements and hence the need for differing marketing mixes to address those differences. However, international operators may wish to minimize the effect of these differences by operating a standardized marketing mix policy by appealing to global market segments. The emphasis may still be on central production, planning, implementation, and control, with deference paid to different market conditions. When organizations begin to produce in different countries and market according to the demands of local or regional markets, with the resultant devolution of production, planning, implementation, and control (think global, act local), then they are evolving into a multinational. Despite this devolution, most multinationals have a corporate base from which to operate through a network of subsidiaries. The media company BSkyB (www.sky.com) is a typical example. In Maadico we will help you to think big and overseas, for more information you can contact us.
More information about global marketing
The concept of global marketing begins with the notion that the world has no center. The ‘borderless’ global marketplace encompasses the participation of all countries not only the industrialized and the newly industrialized nations but also the emergent economies such as China and India in international competition. This new market internationalism is coupled with more integrative global structures, including free trade areas, common markets, and multilateral agreements (e.g. World Trade Organization) which link international markets more closely, even though protectionism and conﬂicts coexist with it. It rests upon ‘the dynamic premise that consumer preferences can be, and are, constantly being reshaped by common exogenous (rather than endogenous) forces, resulting in the convergence of many consumers’ wants and desires’ (Perry, 1999: 48). The growing availability and spread of communication and transportation technologies are making consumers more homogeneous and foreign markets more accessible. National borders are no longer effective barriers against external inﬂuences. For instance, the internet has made it possible for foreign companies to get around local advertising restrictions. Global marketing organizations would strive exclusively to ‘maximize standardization, homogenization, similarity, concentration, dependence, synchronization, and integration of marketing activities across markets’ (Svensson, 2002: 581). On the other hand, truly global marketing organizations would also have an enlightened recognition that global consumers differ in their consumption behavior from culture to culture. Markets are about people, not products. There may be global products, but there are no global people. There may be global brands but there are no global motivations for buying those brands (De Mooij, 1998). The global organization seeks to lever its resources across political and cultural boundaries to maximize opportunities and exploit market similarities and differences in search of competitive advantage. There is a proactive willingness to adopt a global perspective instead of a country-to-country or region-by-region perspective in the development of a marketing strategy. It will move its resources from country to country to achieve its goals and maximize markets.
How Companies Become Global
For most companies, domestic marketing, export marketing, and international marketing are the precursors of global marketing. In fact, early internationalization theory, the so-called Uppsala school, predicted an incremental commitment to internationalization subject to increased knowledge of foreign market operations. initially, companies typically focus exclusively on the home market. This is followed by export marketing, where a given product or service is sold abroad with few necessary adaptations. Next, international marketing develops business in other countries but pays little attention to obtaining cross-country coordination and integration. Finally, global marketing leverages assets, experience, and products globally, while still adapting to what is unique in each region. In practice, this stepwise developmental trajectory is often fuzzy. On the one hand, there are some ﬁrms described as born globals, i.e., mostly small- and medium-sized ﬁrms that internationalize rapidly from their inception. On the other hand, there is increasing evidence that many companies reach their optimal scale at a regional rather than a global level, and consequently are better off pursuing separate regional strategies, such as a European, USA, or Asian strategy.
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