Two decades ago, the term global marketing is essent potential of a business, but even more crit business. A company which fails to go global is in longer of losing domestic business to competitors with better products and in a nutshell, more value for the customer. The importance of going global to ensure company powerful motive for many companies than the attract ion of opportunity abroad. Industries that were are dominated today by a handful of Marketing is essentially a creative corporate activity involving the planning and execution of the conception, pricing, promotion, and ideas, products, and services in an exchange that not only satisfies customers’ current needs but also at a profit. Marketing is not only much encompasses the entire c satisfaction in a compet strategy requires close attention to both customers and competitors aim of marketing is to create value for stakeholder is the customer.
Global marketing refers to marketing activit the following:
1. Reduction of cost inefficiencies and duplication of efforts among their national and regional subsidiaries
2. Opportunities for the transfer of products, brands, and other ideas across subsidiaries
3. Emergence of global customers
4. Improved linkages among national marketing infrastructures leading to the development of a global marketing infrastructure.
Although Levitt’s view that global marketing does not necessarily mean standardization of products, promotion, pricing, and distribution worldwide, but rather, it is a company’s proactive willingness to adopt a global perspective instead of a country-by-country or region-by-region perspective in developing a marketing stratergy
Evolution to Global Marketing
Global marketing is not a revolutionary shift, it is an evolutionary process. While the following does not apply to all companies, it does apply to most companies that begin as domestic-only companies.
A company marketing only within its national boundaries only has to consider domestic competition. Even if that competition includes companies from foreign markets, it still only has to focus on the competition that exists in its home market. Products and services are developed for customers in the home market without thought of how the product or service could be used in other markets. All marketing decisions are made at headquarters.
The biggest obstacle these marketers face is being blindsided by emerging global marketers. Because domestic marketers do not generally focus on the changes in the global marketplace, they may not be aware of a potential competitor who is a market leader on three continents until they simultaneously open 20 stores in the Northeastern U.S. These marketers can be considered ethnocentric as they are most concerned with how they are perceived in their home country.
Generally, companies began exporting, reluctantly, to the occasional foreign customer who sought them out. At the beginning of this stage, filling these orders was considered a burden, not an opportunity. If there was enough interest, some companies became passive or secondary exporters by hiring an export management company to deal with all the customs paperwork and language barriers. Others became direct exporters, creating exporting departments at headquarters. Product development at this stage is still focused on the needs of domestic customers. Thus, these marketers are also considered ethnocentric.
If the exporting departments are becoming successful but the costs of doing business from headquarters plus time differences, language barriers, and cultural ignorance are hindering the company’s competitiveness in the foreign market, then offices could be built in the foreign countries. Sometimes companies buy firms in the foreign countries to take advantage of relationships, storefronts, factories, and personnel already in place. These offices still report to headquarters in the home market but most of the marketing mix decisions are made in the individual countries since that staff is the most knowledgeable about the target markets. Local product development is based on the needs of local customers. These marketers are considered polycentric because they acknowledge that each market/country has different needs.
At the multi-national stage, the company is marketing its products and services in many countries around the world and wants to benefit from economies of scale. Consolidation of research, development, production, and marketing on a regional level is the next step. An example of a region is Western Europe with the US. But, at the multi-national stage, consolidation, and thus product planning, does not take place across regions; a regiocentric approach.
When a company becomes a global marketer, it views the world as one market and creates products that will only require weeks to fit into any regional marketplace. Marketing decisions are made by consulting with marketers in all the countries that will be affected. The goal is to sell the same thing the same way everywhere.
- Economies of scale in production and distribution
- Lower marketing costs
- Power and scope
- Consistency in brand image
- Ability to leverage good ideas quickly and efficiently
- Uniformity of marketing practices
- Helps to establish relationships outside of the "political arena"
- Helps to encourage ancillary industries to be set up to cater for the needs of the global player
Differences in consumer needs, wants, and usage patterns for products.
- Differences in consumer response to marketing mix elements
- Differences in brand and product development and the competitive environment
- Differences in the legal environment, some of which may conflict with those of the home market.
- Differences in the institutions available, some of which may call for the creation of entirely new ones (e.g. infrastructure)
- Differences in administrative procedures
- Differences in product placement.
Global Marketing Environment
Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. The demographic environment is of major interest to marketers because it involves people, and people make up markets. The world population is growing at an explosive rate. It now totals more than 5.9 billion and will exceed 7.9 billion by the year 2025. The explosive world population growth has major implications for business. A growing population means growing human needs to satisfy. Depending on purchasing power,, it may also mean growing market opportunities. The world’s large and highly diverse population poses both opportunities and challenges. Thus, marketers keep close track of demographic trends and developments in their markets, both at home and abroad. They track changing age and family structures, geographic population shifts, educational characteristics, and population diversity
The economic environment consists of factors that affect consumer purchasing power and spending patterns. Nat ions vary great ly in their levels and distribution of income. Some countries have subsistence economies they consume most of their own agricultural and industrial output. These countries offer few market opportunities. At the other extreme are industrial economies, which constitute rich markets for many different kinds of goods. Marketers must pay close attention to major trends and consumer spending patterns both across and within their world markets. Marketers should pay attention to income distribution as well as average income. Income distribution in the still very poor. At the top are upper- class consumers, whose spending patterns are not affected by current economic events and who are a major market for luxury goods. There is a comfortable middle class that is some what careful about its spending but can still afford the good life some of the time. The working class must stick close to the basics of food, clothing, and shelter and must try hard to save. Finally, the poor class must count their pennies when making even the most basic purchases. Over the past three decades, the rich have grown richer, the middle class has shrunk, and the poor have remained poor.
The natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Marketers should be aware of several trends in the natural environment. The first involves growing shortages of raw materials. Air and water may seem to be infinite resources, but some group see long-run dangers. Air pollution chokes many of the world’s large cities and water shortages are already a big problem in some parts of the world. Renewable resources, such as forests and food, also have to be used wisely. Nonrenewable resources, such as oil, coal, and various minerals, pose a serious problem. Firms making resources, such as oil, coal, and various minerals, pose a serious problem. Firms making products that require these scarce resources face large cost increases, even if the materials do remain available.
The technological environment is perhaps the most dramatic force now shaping our destiny. Technology has released such wonders as antibiotics, organ transplants, computers, and the Internet. It also has released such horrors as nuclear missiles, chemical weapons, and assault rifles. It has released such mixed blessing as the automobile, television, and credit cards. New technologies create new markets and opportunities. However, every new technology replaces an older technology. Transistors hurt the vacuum-tube industry, xerography hurt the carbon-paper business, the auto hurt the railroads, and compact disks hurt phonograph records. When old industries fought or ignored new technologies, their businesses declined. Thus, marketers should watch the technological environment closely. Companies that do not keep up with technological change soon will find their products outdated. And they will miss new product and market opportunities.
Marketing decisions are strongly affected by developments in the political environment. The political environment consists of laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society. Even the most liberal advocates of free-market economies agree that the system works best with at least some regulation. Well-conceived regulation can encourage competition and ensure fair markets for goods and services. Thus, governments develop public policy to guide commerce-sets of laws and regulations that limit business for the good of society as a whole. Almost every marketing activity is subject to a wide range of laws and regulations. Legislation affecting business around the world has increased steadily over the years. The States has many laws covering issues such as competition, fair trade practices, environmental protect ion, product safety, truth in advertising, packaging and labeling, pricing, and other important areas. The European Commission has been active in establishing a new framework of laws covering competitive behavior, product standards, product liability, and commercial transact ions for the nations of the European Union.
http://www.wfanet.org/ World Federation of Advertisers
aef.com several presentations on Global Advertising given by advertising practitioners