Global Marketing

This article will focus on how organizations can position themselves for successful global marketing. When entering the global market, social, economic, political, technological, and institutional factors are added into the equation as multinational corporations develop global marketing strategies. In order to be successful in global marketing, organizations will have to integrate their marketing initiatives into different countries. Given the changes that are occurring in the way business is conducted today, marketing professionals must be prepared to create campaigns that appeal to a global clientele. Global marketing is successful when there is coordination between the marketing policies for different countries and when the marketing equation for different countries can be adapted to the local market.

Overview

There is much activity between people, products, and organizations crossing over borders, which has led to the creation and growth of new global market segments. In addition, there are many forces that are transforming markets and changing the way that business is conducted. Factors that influence marketing include the marketing environment, the types of customers, and the competition in the market. When entering the global market, social, economic, political, technological, and institutional factors are added into the equation as multinational corporations develop global marketing strategies.

In most cases, global marketing generally manifests itself in two different phases (Caslione, 2003). The first phase is usually when an organization experiences rapid growth, high sales and high profits. During this period, there tends to be an increased level of competition for limited resources. In addition, customers, suppliers and governments tend to be difficult to work with, and it is hard to develop relationships among these groups. However, "there is a specific infrastructure and unique behavioral mode of collective thinking and actions, which is referred to as the accelerated reactivity phase of globalization" (Caslione, 2003, p. 1).

The second phase occurs when an organization experiences slower economic growth, lower sales and profits, and reduced competition for limited sources. During this period, it is easier to gain access to customers, suppliers and governments. Collaboration between these three groups is positive as all are attempting to find ways to improve the situation. Unlike the first phase, this period is categorized as a "decelerated proactivity phase of globalization due to a different type of infrastructure and behavioral mode dominating" (Caslione, 2003, p. 2).

Caslione (2003) believes that successful marketing professionals will be able to recognize and master the two different phases mentioned above by:

• Measuring results within each country and region;
• Using a combination of marketing communication media;
• Using a globally centered mix of communications, marketing and advertising;
• Building the corporate brand globally, country by country; and
• Appointing an experienced, highly motivated multicultural marketing team.

Marketing professionals will be required to understand the marketing concepts and practices needed to penetrate the political, economic, and social environments of potential markets (Kahle, Marshall & Kropp, 2003). In the era of global marketing, many organizations will be challenged to keep abreast of events effecting the marketing environment if they want to survive (Lin & Kao, 2004). In order to be successful in global marketing, organizations will have to integrate their marketing initiatives into different countries.

Preparing Marketing Professionals

Given the changes that are occurring in the way business is conducted today, marketing professionals must be prepared to create campaigns that appeal to a global clientele. Globalization is reshaping business strategy, especially marketing strategy, and marketing professionals will have to transition from a domestic focus to a global focus (Caslione, 2003). It will be imperative for marketing professionals to become well versed in the profiles of different segments that their organization plans to pursue. Unfortunately, many in the field are not prepared to make the transition. In a study conducted by the Massachusetts Institute of Technology, researchers found that 29% of the organizations surveyed did not have enough global marketing leaders in their organizations, 56% of the organizations believed that they did not have sufficient numbers of global marketing leaders to take their organization to the next level, and 80% were concerned that they lacked the global marketing professionals needed to staff their global marketing initiatives (Caslione, 2003). Therefore, marketers will need to upgrade their skill set in the field in order to be competitive in the market. As the marketing professionals become equipped for the challenge, they will be tasked to deal with the issues that have arisen in the field.

Application

Global Marketing Strategies

Globalization is not a new trend (IMF, 2002). With the prospect of conducting business on a global scale, global marketing professionals should create global strategies that will allow their organizations to reap the benefits instead of getting trapped by the pitfalls. In order to be successful in global marketing, organizations will have to integrate their marketing initiatives into different countries. Reddy and Vyas (2004) created a list of advantages and disadvantages of globalization as it pertains to marketing; information that is beneficial as global marketing professionals continuously improves upon their strategies in order to stay competitive.

Advantages

• Globalization leads to more economic growth. Economic growth is important to every country because it makes them feel strong, safe and secure. Effective marketing approaches will lead to economic growth. Therefore, marketing is essential for economic growth and development (Reddy, 1996), and a major reason for globalization for multinationals, governments, and United Nation agencies.
• Globalization causes rapid technology transfer. Rapid technology transfers from one country to another are a result of increased globalization. Once there is a transfer of an organization's management and logistic expertise, there is potential for improvement in efficiency and reduction of costs for products and services across the world.
• Globalization is becoming effective as a result of more countries becoming democracies. There were many communist countries seeking a democratic state after the fall of the Soviet Union. In a globalized economy, democratization became easier than in a closed communist world where the information flow is restricted.
• The rapid spread of free enterprise system. Capitalism has been key in the success of the United States and western countries, and many countries desired to pursue their model in order to own and operate business corporations.
• Unification of culture, living norms, and work ethic. Values and work ethics are becoming homogenous as a result of globalization, which has led to improved marketing effectiveness.
• Globalization will flourish as a result of increased communication through the Internet and other media. The Internet has provided many organizations with the ability to transmit media files quickly, which allows them to operate on an international level. Corporations can share who they are, what they market and how customers may obtain their product.
• Instant news worldwide. Satellite and Internet communications, such as CNN and MSNBC, allows everyone to see news 24 hours in several languages. International media eliminates barriers to information flow.
• Worldwide improvement of health and living conditions. Globalization has brought improved quality of life throughout the world. Many products and services can be shared across the world with a mutual exchange of information.
• People are living longer. Life expectancy rates have increased across the world due to medical breakthroughs and new products that encourage health benefits. Globalization provides this type of information to an international audience.
• Multinational corporations are the greatest beneficiaries of the globalization trend. Corporations have the ability to use the same advertising themes and customize them for different countries by using marketing and distribution strategies to transfer the same message throughout the world.

Disadvantages

• Increasing unemployment in developed countries. Globalization has caused the unemployment rate to rise in developed countries because corporations outsource and manufacture their products outside of their countries. According to Cateora (2002), there has been an increase in protests against global organizations such as WTO and IMF because there is a perception that "globalization creates global worker exploitation, cultural extinction, higher oil prices, and diminished sovereignty of nations" (p. 51).
• Increasing trade deficit in developed countries. Increased imports of manufactured goods and services from other nations have led to trade deficits.
• Terrorism. Since people are able to migrate between countries so freely, there has been an increase in terrorism from other countries.
• Loss of competitiveness in developed nations. Technology transfer has allowed underdeveloped countries to go from traditional manufacturing to modern manufacturing, which brings underdeveloped countries to the same level as the developed countries that provided them with the technology.
• Poorer nations feel that they are being taken advantage of by advanced nations. Poor countries have limitations in education, healthcare, and transportation, which keep them in a poor state (Kenny, 2002). Pirages (2000) believes that there are other issues (such as weakening of political authority without substitutions, increase of economic maladies, and destruction of culture) that create problems for poorer countries.
• Increasing economic gap between the rich and poor nations. Many poor countries believe that globalization has given the Western world more control over their economies. Rich countries tend to use cheap labor to get richer and do not help the poorer countries.
• Tradition and religion based countries feel that their norms and religious practices are violated. Some citizens believe that corporations will do anything to make a profit, even if it means violating some of their cultural practices and values.
• Comparison with rich nations makes poorer nations unhappy. With the increased use of satellites, citizens of the poorer countries have the opportunity to see the quality of living in the countries where corporations reside. When comparing the two ways of living, the citizens of the poorer countries perceive that they are being exploited in order to make the corporations and quality of life for their countries richer.
• Increasing pollution through manufacturing and transport worldwide. When corporations grow, there is an increase in manufacturing and traffic, which results in an increase in pollution. As a result, the pollution spreads globally.
• The spread of Aids, West Nile virus, various kinds of flu and other diseases. Globalization increases the rate of diseases.
• As organizations develop their global marketing strategies, they will need to be mindful of the above-mentioned advantages and disadvantages of globalization as they relate to the countries that have been identified as their target markets.

Overseas Expansion

Licensing, franchises and joint ventures that are undertaken overseas are sometimes refered to as global marketing.

• Licensing. Licensing occurs when a target country grants the right to manufacture and distribute a product under the licenser's trade name in a target country. The licensee pays a fee in exchange for the rights. Small and medium-sized companies tend to grant licenses more often than large companies. Since there is little investment required, licensing has the potential to provide a large return on investment. However, it is seen as the least profitable way to enter the market because most companies use licensing to supplement manufacturing and exporting. Licensing tends to be a viable option to enter a the market when the exporter does not have sufficient capital, when foreign government import restrictions forbid other ways to enter the market or when a host country is not comfortable with foreign ownership.
• Franchises. According to Edwards (2006), there are a number of reasons why a franchise may consider going global, and some of these reasons include opportunities to: "Build more brand and shareholder value, Add revenue sources and growth markets, Reduce dependence on the company's home market, Leverage existing corporate technology, supply chains, know-how and intellectual property, and Award more franchises in the home country by being global."
• Joint Ventures. Joint ventures occur when an organization enters a foreign market via a partnership with one or more companies already established in the host country. In most cases, the local company provides the expertise on the target market while the exporting company manages and markets the product. A joint venture arrangement allows organizations with limited capital to expand into international markets, and provides the marketers with access to its partner's distribution channels. According to QuickMBA.com, "Key issues in a joint venture are ownership, control, length of agreement, pricing, technology transfer, local firm capabilities and resources, and government intentions. Potential problems include conflict over new investments, mistrust over proprietary knowledge, how to split the pie, lack of parent company support, cultural clashes, and when and how to terminate the relationship" if it is necessary to take such action (2007).

Viewpoint

Fair Trade Marketing

Fair trade marketing provides consumers with the opportunity to pay higher prices for imported goods so that producers in developing countries can have a decent standard of living (Witkowski, 2005). Supporters of this philosophy believe that prices need to be high enough so that multinational corporations in developing countries can have a living wage, safe working conditions and human dignity. In addition, there is a belief that trading has become unfair because the cost for developing global commodities has been undervalued when compared to commodities imported from industrialized countries.

When reviewing the concept of fair trade, it is important to analyze various ideological viewpoints. One could compare fair trade to antiglobalization; marketing management, ethical sourcing and ethical consumerism in order evaluate the different opinions and arguments on the topic. Witkowski (2005) has summarized some of the views by comparing and contrasting the positions.

Conclusion

Organizations that conduct business on a global level realize that it tends to be more complex, competitive, and difficult to manage. When entering the global market, social, economic, political, technological, and institutional factors are added into the equation as multinational corporations develop global marketing strategies. The companies that successfully master these challenges tend to be recognized for their best practices and excel in global marketing (Caslione, 2003).

Globalization is reshaping business strategy, especially marketing strategy, and marketing professionals will have to transition from a domestic focus to a global focus (Caslione, 2003). Unfortunately, many in the field are not prepared to make the transition. Therefore, marketers will need to upgrade their skill set in the field in order to be competitive in the market. As the marketing professionals become equipped for the challenge, they will be tasked to deal with the issues that have arisen in the field.

The Fair Trade Movement promotes trading partnerships, and there are organizations that work to make this effort successful. Common themes among these organizations include helping disadvantaged producers; promoting gender equity, transparent relations, and economic and environmental sustainability; reforming conventional international trade relationships; and creating consumer awareness of these issues (Witkowski, 2005, p. 24).

Witkowski (2005) presented the principles and goals of fair trade as defined by three organizations, and the results are listed below.

Terms & Concepts

Branding: Working to associate a feeling or awareness to a product or service through the application and use of a name and logo; aimed at increasing a product or service's visibility.

Fair Trade Marketing: A philosophy that supports the marketing and sale of products at greater than fair trade prices.

Franchises: Branches of a main company or business which are run and owned by individual entrepreneurs in the manner of the Authorization granted to someone to sell or distribute a company's goods or services in a certain area.

Global Marketing: International efforts undertaken by corporations, mostly in the form of licensing, franchises and joint ventures, to expand their product and service offerings overseas.

Globalization: The movement away from solely regional or local phenomena to those that are worldwide in scope. Globalization has been facilitated by vast improvements in technology.

Information Flow: Refers to the way in which data is collected, processed and reported throughout an organization.

Joint Ventures: A partnership or conglomerate, formed often to share risk or expertise.

Multinational Corporations: Refers to a business organization which operates within more than one country.

Bibliography

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Edwards, W. (2006). Why go global? Franchising World, 38(12), 38-40. Retrieved May 22, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=23508136&site=ehost-live

Ersun, A., & Karabulut, A. (2013). Innovation management and marketing in global enterprises. International Journal of Business & Management, 8(20), 76-86. Retrieved November 15, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=91583049&site=ehost-live

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Lin, C., & Kao, D. (2004). The impacts of country-of-origin on brand equity. Journal of American Academy of Business, Cambridge, 5(1/2), 37-40. Retrieved May 22, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=13200704&site=ehost-live

Pirages, D. (2000). Globalization: A cautionary note. Retrieved on May 24, 2007, from http://www.aaas.org/spp/yearbook/wooo/ch9.pdf.

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Steenkamp, J.-B. (2014). How global brands create firm value: The 4V model. International Marketing Review, 31(1), 5–29. Retrieved November 17, 2014, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=94622236

Witkowski, T. (2005). Fair trade marketing: An alternative system for globalization and development. Journal of Marketing Theory & Practice, 13(4), 22-33. Retrieved May 22, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=21031867&site=ehost-live

Suggested Reading

Field, A. (2007). Breaking down barriers. Journal of Commerce, 8(16), 28-28. Retrieved May 22, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=24872329&site=ehost-live

Hult, G., Cavusgil, S., Kiyak, T., Deligonul, S., & Lagerström, K. (2007). What drives performance in globally focused marketing organizations? A three-country study. Journal of International Marketing, 15(2), 58-85. Retrieved May 22, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=25020790&site=ehost-live

Laser, R. (2007). BP takes global branding role away from marketing. Marketing Week, 30(5), 3-3. Retrieved May 22, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=24013433&site=ehost-live

Yung K. C. & Schellhase, R. (2014). Exploring globalization and marketing performance at the 2012 Global Marketing Conference in Seoul. Journal of Business Research, 67(10), 2053–5. Retrieved November 17, 2014, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=97173453