The process of globalisation is moving toward a world in which barriers to cross-border trade and investment are declining; perceived distance is shrinking due to advances in transportation and telecommunications technology’ material culture is starting to look similar the world over; and national economics are merging into an interdependent, integrated global economic system. Globalization has several facets including globalization of markets and the globalization of production. (Charles, 2007) Globalisation of marketing activities is well know and widespread among marketing scholars and marketing practitioners.
The concept of global marketing is used in different contexts, but it is often applied with a variety of meanings. There is and evident disagreement on the meaning and the appropriate usage of the concept of global marketing among marketing scholars and marketing practitioners. The objective of this assignment to describe how to overcome the discrepancy between the theoretical concept of global marketing and the empirical phenomenon and application of the globalization of marketing activities. There is a discrepancy between the term global marketing and global marketing activities.
Globalisation Marketing standardised product in the same way everywhere in the world as a single entity in globalisation and involves developing marketing strategies. Globalisation organizations employ standardised products, promotional campaigns, prices and distribution channels for all markets. Globalisation requires total commitment of international marketing as world is a single entity. For example, Levi’s’ jeans, Nike trainer and Coca-Cola (C. Vignali, 2001) Globalisation refers to the shift toward a more integrated and interdependent world economy (Charles, 2007) 3. Internationalisation
Internationalisation involves customizing marketing strategies for different regions of the world accordingly to cultural, regional and national differences to serve specific targets markets and these strategies needs to group countries by social, cultural, technological, political and economic similarities for standardize marketing mix. (Vignali, 2001) 4. Global marketing The concept of global marketing is usually applied to represent different meanings: Going global… it starts with recognizing that the world has no center…. customers will differ from country to country and that they will expect you to respect those differences.
Learn this or stay at home. (Champy, 1997) Global marketing refers to coordinating and integrating across multiple countries and focuses on resources, opportunities, threats and objectives of a company act globally. According to Keegan (1989) mention two motives for the globalization of marketing strategies one is to take advantage of opportunities for growth and expansion, and the other is survival. A global approach allows companies to achieve a concentration and coordination of marketing activities, which stimulates the companies efforts for globalization.
(Dahringer and Muhlbacher, 1991) Global marketing expresses initiatives to find new markets, segments, niches; the development of buying and selling opportunities; and of marketing across international boundaries. The globalisation of marketing activities includes specific tasks such as the organization of worldwide efforts, the research of domestic and the foreign markets, the finding of new partners, the purchasing of comprehensive support services, and the managing of costs of the international transactions. (Lamont, 1996) 5. Discussion
There are a number of paradoxes in global marketing and advertising. For example, Paradoxical values are found within cultures and between cultures. Every culture has its opposing values. Markets are people, not products. There may be global products, but there are not global people. There may be global brands but there are no global motivations for buying those brands. (mooij, 1998) A multinational company can gain benefits through increased standardization of its marketing mix but also circumstances that would hurt the company.
But how can a company in country A sell its product in Country B without changing the product, promotion, price, or place and still earn a good return. (Kotler, 1986) In order to achieve homogeneity, the most important issue in marketing standardization is to address the question that to what extent the product and services to be standardised. There are many barriers to make the operations standardised, like the regulations of the host country, cultural and language difference etc.
The cultural difference is very important issue and its impact of adaptation should be central to the study of operational areas and it varies countries to countries (Jan-Benedict et al, 2002). The globalization of marketing activities emphasizes consumer similarities across geographical borders and strives for standardized marketing strategies, while minimizing local differences; furthermore, it argues that the companies that do not embrace the globalization of marketing activities will be placed at a competitive disadvantage.
Their usage of the globalization of marketing activities implies that firms strive to identify global segments that share the same psychographic characteristics. At the same time there are differences between markets (Domzal and Unger, 1987). Let’s a look at the e. g. of Daimler Chrysler, U. S. A, which came up with a new customized product ‘Smart Car’ in 2007. The distinguishing trait of that car is that it is a hybrid vehicle which integrates traditional electronic batter with traditional petrol engine.
The battery can be easily recharged in some hours which can run for adequate time. ‘Smart Car’ was launched after careful analysis of the buying trend and the growing needs of U. S. citizens. Since the citizens of U. S are very socializing and they make long distance to meet their friends, families, loved ones. Parking was another issue in the U. S. and heavy traffic makes it difficult for drivers to get parking. Also, many people who were also concerned about environmental issues, and about the fuel prices which were increasing day by day.
So this e. g.of market segmentation allowed the company to come up with a car which brought solution to all those problems that the U. S citizens were facing, since it consumes less petrol, which allows money saving and results in less pollution; and because of it’s small body size it can prove very handy in terms of parking (Daimler Chrysler). But on the other hand, if the same car was launched in Saudi Arabia or any oil producing country, then it would have been a potential flop. Since Saudi preference of cars or vehicle is subjugated by huge cars with high oil consumption.
Another feature of using big vehicle is the less concern for environment that usually dominates countries around Europe (Khaleej Times, 2008). Though, it is an important aspect which represents homogeneity of demand of huge vehicles that compliments Levitt’s (1983) claim of consumer homogeneity is the fact that consumer preferences are similar in Middle-Eastern to those in Europe and America for vehicles like Merceedez, Jaguar, etc. But this demand also wraps the concept of consumer heterogeneity by focusing on a niche market segment that is the elite class of the society.
Likewise, if we take a closer look at the automobile industry, we can witness the phenomenon “think global, act local” that seems to fit in both the processes (heterogeneity and homogeneity) with a slightly tailored version. Selling completely different models in different countries of the world can be seen in companies like Ford, Toyota, Honda and other car manufacturers (Hollesnsen, 2007). So the globalization of marketing activities must fit the products and the services to the practices and languages of different markets. (Koepfler,1989).
But as per the levitt’s definition of globalization, it says that the whole world is been driven toward a converging a commonality which is technology. People from all over the world want the same technology to be in their hands almost at the same time. He further stressed that as markets become increasingly similar and more and more global, the key to victory lie in the ability to globalize (Levitt, 1983). It is acceptable to have complete standardization in marketing, distribution, products/services etc. in the case of technology but not with products/services which has to do with cultural norms, behaviors, attitudes, motives etc.
Take an example of Microsoft, which is the worlds’ leading software developing company. Their products are standardized throughout the world and their marketing is even standardized, just because people from all over the world want the same technology to be in their hands at the same time. Increased marketing, media, easy access to communication has brought awareness to the consumers and now they keep in touch with the latest news about products/services. If Microsoft let’s say comes with a new Intel processor, then they would sell in almost every part of the world instantly (Microsoft, 2008).