1 GLOBAL MARKETING DEFINITION
Basically ‘global marketing’ consists of finding and satisfying global customer needs better than the competition, and of coordinating marketing activities within the constraints of the global environment. The form of the firm’s response to global market opportunities depends greatly on the management’s assumptions or beliefs, both conscious and unconscious, about the nature of doing business around the world. This worldview of a firm’s business activities can be described as the EPRG framework: its four orientations are summarized as follows:
- Ethnocentric: the home country is superior and the needs of the home country are most relevant. Essentially headquarters extends ways of doing business to its foreign affiliates. Controls are highly centralized and the organization and technology implemented in foreign locations will essentially be the same as in the home country.
- Polycentric (multidomestic): each country is unique and therefore should be targeted in a different way. The polycentric enterprise recognizes that there are different conditions of production and marketing in different locations and tries to adapt to those different conditions in order to maximize profits in each location. The control with affiliates is highly decentralized and communication between headquarters and affiliates is limited.
- Regiocentric: the world consists of regions (e.g. Europe, Asia, the Middle East). The firm tries to integrate and coordinate its marketing programme within regions, but not across them.
- Geocentric (global): the world is getting smaller and smaller. The firm may offer global product concepts but with local adaptation (‘think global, act local’).
The regio- and geocentric firm (in contrast to the ethnocentric and polycentric) seeks to organize and integrate production and marketing on a
2 GLOBAL MARKETING STRATEGY
Multinational companies increasingly use global marketing and have been highly successful - for example, Nestle with its common brand name applied to many products in all countries, Coca Cola with its global advertising themes, Xerox with its global leasing policies, and Dell Computer’s ‘‘sell-direct’’ strategy. But global marketing is not about standardizing the marketing process on a global basis. Although every element of the marketing process - product design, product and brand positioning, brand name, packaging, pricing, advertising strategy and execution, promotion and distribution - may be a candidate for standardization, standardization is one part of a global marketing strategy and it may or may not be used by a company, depending on the mix of the product-market conditions, stage of market development, and the inclinations of the multinational firm’s management. For instance, a marketing element can be global without being 100 percent uniform in content or coverage.
If we assume that the firm in question does not have a manufacturing facility in each of the markets it serves, then to the extent that various markets have a uniform content, and presumably similar operations, there is a requirement for coordination with manufacturing facilities elsewhere in the firm’s global network. Also, where content is not uniform, any change requirements for the non-uniform content of distribution require corresponding changes in the product and/ or packaging. Thus, a global marketing strategy requires more intimate linkages with a firm’s other functions, such as research and development, manufacturing, and finance [3, p. 101].
In other words, a global marketing strategy is but one component of a global strategy. For an analogy, you may think of a just-in-time inventory and manufacturing system that works for a single manufacturing facility to optimize production. Extend this concept now to finance and marketing, and include all
3 GLOBAL MARKETING PROGRAMMES
Assembling a global marketing program requires an analysis of how the environment will affect the four marketing mix elements: price, product, place (distribution), and promotion (communication).
- Pricing for global markets. Most companies begin pricing deliberations based on their own internal cost structure. Also of concern are country-to-country transfer costs, such as tariffs, transportation, insurance, taxes, and local channel costs.
- Global product and service strategies. The international firm will want to know whether existing products have to be adapted to certain global requirements or whether they can be shipped in their present form. Usually the firm has to sel ect the particular features its products should incorporate and to determine the desired function and performance of these features. The major elements of product design include product dimensions, design features, quality, and global standards.
- Managing global distribution channels. To be successful in the global marketplace, a company needs market acceptance among buyers and market access via distribution channels. There are two major categories of potential channel members: (1) those located in the home country and (2) those located abroad. Within a manufacturer’s home market, the types of export-related channel members could be export management company, export agent, direct exporting, and internet. Types of foreign country channel members involve import intermediaries, local wholesalers or agents, and retailers.
- Global promotion strategies. Research evidence and experience have demonstrated that the single-country/domestic communications model is applied to consumers in other countries as well.
CONCLUSION
Organizing the marketing efforts of a company across a number of countries is a difficult process. As the scope of a company’s global business changes, its organizational structure must be modified in accordance with the internal and external environments. As the number of countries in which a company is marketing increases, as product lines expand, and as objectives change, so will the organization.
The task of molding an organization to respond to the needs of a global marketplace involves building a shared vision and developing human resources. A clear vision of the purpose of the company that is shared by everyone gives meaning and direction to each manager. Managers are a company’s scarcest resource. The process of recruiting, selecting, training, and managing the human resources must help build a common vision and values.
The process of global marketing would not be able to function in a complex organization without the necessary attention to planning and controlling. The planning and controlling processes are critical parts of the marketing process that require communication and agreement from different parts of the organization. It is no surprise that the planning and controlling process lead to conflict. However, they also promote a firm’s understanding of the world market, its development of effective strategies, and its successful implementation of those strategies with excellent results.
Marketing managers who want to plot strategy with a global mindset will be challenged to process the vast amount of data they acquire in different ways. That case, we should examine the thinking and analytic routines the minds of executives have to go through as they chart global marketing strategies fr om a large set of data. We may concentrate on some of the unique marketing analytic skills, concepts, and tools that are relevant primarily in global marketing. These topics are
