“GLOBAL MARKETING ENVIRONMENTAL STRATEGY” : A CONSIDERATION

International Research Journal of Marketing and Economics

© Associated Asia Research Foundation (AARF)

“GLOBAL MARKETING ENVIRONMENTAL STRATEGY” : A

CONSIDERATION

Deepak Kumar Chauhan, (M.A., M.Com.) Balrampur (UP)

ABSTRACT

Global marketing is more than simply selling a product internationally. Rather, it includes

the whole process of planning, producing, placing and promoting a company’s products in a

worldwide market. Large businesses often have offices in the foreign countries they market

to; but with the expansion of the internet, even small companies can reach customers

throughout the world.

Only a few generations ago, it took months to ship products to a market in another country,

and doing so was such a difficult undertaking that only huge trading companies were able to

take the risk. Then, developments in transportation technology made it possible for people

and products to move much more quickly, and the first push towards globalization began.

More recently, information technology – and particularly the internet-has shrunk the world

even further. A business might have partners and employees half a world away, and

consumers can get products from those locations in a matter of days.

Global marketing Environment is complex term to explain because it is covering all the

issues of world that are continuously changing. To explain the true present picture of the

Environment it’s necessary to go through the most up-to-date literature and study the current changes. This chapter is giving the idea about the today’s marketing and changes &

challenges of the sub environmental forces.

A variety of environmental forces influence a company’s marketing system. Some of them are

controllable while some others are uncontrollable. It is the responsibility of the marketing

According to Philip Kotler, “A company’s marketing environment consists of the internal

factors & forces, which affect the company’s ability to develop & maintain successful transactions & relationship with the company’s target customers.”

Key Words : Market, organization, customer, company, consumer.

Introduction:

Global marketing is a firm’s ability to market to almost all countries on the planet. With extensive reach, the need for a firm’s product or services is established. The global firm retains the capability, reach, knowledge, staff, skills, insights, and expertise to deliver value to customers worldwide. The firm understands the requirement to service customers locally with global standard solutions or products, and localizes that product as required to maintain an optimal balance of cost, efficiency, customization and localization in a control-customization continuum to best local, national and global requirements to position itself against or with competitors, partners, alliances, substitutes and defend against new global and local market entrants per country, region or city. The firm will price its products appropriately worldwide, nationally and locally, and promote, deliver access and information to its customers in the most cost-effective way. The firm also needs to understand, research, measure and develop loyalty for its brand and global brand equity (stay on brand) for the long term.

At this level, global marketing and global branding are integrated. Branding involves structured process of analyzing ―soft‖ assets of a firm’s resources. The strategic analysis and development of a brand includes customer analysis (trends, motivation, unmet needs, segmentation), competitive analysis (brand image/brand identity, strengths, strategies, vulnerabilities), and self-analysis (existing brand image, brand heritage, strengths/capabilities, organizational values).

A global marketing and branding implementation system distributes marketing assets (Website, social media, Google PPC, PDFs, sales collateral, press junkets, kits, product samples, news releases, local mini-sites, flyers, posters, alliance and partner materials), affiliate programs and materials. internal communications, newsletters, investor materials, event promotions and trade shows to deliver an integrated, comprehensive and focused communication, access and value to the customers, that can be tracked to build loyalty, case studies and further establish the company’s global marketing and brand footprint.

Planning meet the opportunities and challenhes of global marketing :

In order to take advantage of global opportunities, as well as meet the challenges presented by so doing a number of concepts can be particularly useful. Every organization needs an understanding of what is involved in ―strategy‖ or else the haphazardness involved in change exporting can be accepted as the norm with all inherent dangers involved. Also potential exporters need to know what is going on in the global ―environment‖. Just as in domestic marketing ―Government‖ ―competition‖, ―social‖ and other factors need to be accounted for, such is the case in international marketing. If one can place products or services at a point on an environmental sensitivity/insensitivity continuum, one can see more clearly the need to account for differences in the marketing mix. By comparing the similarities and differences between domestic and international marketing needs and planning requirements, then the organisation is in a better position to isolate the key factors critical to success. This section examines all these concepts in brief.

Strategy:

Whatever business we are in, haphazard organisation often leads to haphazard results. In planning for international marketing organizations need a clear picture of the steps involved. ―Strategy‖ gives such a picture. Strategy is the response of the organization to the realities of shareholders and the business environment.

Global Marketing Strategy:

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.

Today’s Marketing:

The changing behavior of customers and proliferation of marketing channels setups the new issues in the business world. In international market competition it’s becoming harder and harder to maintain the life time relation with customers. Selling quality products and service in affordable price is not enough to gain the customer loyalty there are also many other dimensions of care. These all changes make profit secondary and modify organizations to customer-focused organizations and born the new theories and approaches.

Today’s marketing has come out with the circle of 4P’s (Product, Price, Place and Promotion) and in the broader sense it is taking as an organizational functions. The modified form of marketing is to provide greater value to customer and develop and maintain a healthy relationship.

Global marketing is more than simply selling a product internationally. Rather, it includes the whole process of planning, producing, placing and promoting a company’s products in a worldwide market. Large businesses often have offices in the foreign countries they market to; but with the expansion of the internet, even small companies can reach customers throughout the world.

Only a few generations ago, it took months to ship products to a market in another country, and doing so was such a difficult undertaking that only huge trading companies were able to take the risk. Then, developments in transportation technology made it possible for people and products to move much more quickly, and the first push towards globalization began. More recently, information technology – and particularly the internet-has shrunk the world even further. A business might have partners and employees half a world away, and consumers can get products from those locations in a matter of days.

Global Marketing Environment:

A variety of environmental forces influence a company’s marketing system. Some of them are controllable while some others are uncontrollable. It is the responsibility of the marketing manager to change the company’s policies along with the changing environment.

According to Philip Kotler, ―A company’s marketing environment consists of the internal factors & forces, which affect the company’s ability to develop & maintain successful transactions & relationship with the company’s target customers.‖

A company has to prepare the policies very carefully in the stages because it has a great impact on the image of a new product. Even a minor mistake results in the premature death of a product.

a. It may spend heavily on promotion & fix high price. This meets two objectives. Firstly, heavy promotion creates large demand & high price, brings immediate profits. This strategy also helps to create brand preference in the minds of the consumer. It is normally followed when there is a great need for the product, when the product belongs to the richer class & when products are consumer specialties.

b. The second strategy is to fix high price but to spend less on promotion. This is preferred when the product has limited market, in which people have knowledge about the product & the competition is completely absent.

c. Another strategy is to charge low price & spend heavily on promotion. This is preferable when consumers are sensitive to the price & market is wide enough. This strategy brings good returns in the long run.

d. The company may charge low price & spends less on promotion. This is preferable when the consumers are informed about the product market is very large & there is no competitions for the time being.

In the introduction stage, the competitors are very cautions. They do not enter the market immediately. They study the strategies of a company & watch the reaction of the consumers. This helps them to find out the defects of the company’s strategy.

This is the stage where the marketing manager must try to reposition his product. Most of the strategies in this stage are offensive in nature. Each manufacture tries to cut down his competitor’s market share by aggressive promotion policy. The objective of marketing in this stage is to retain the present sales level.

Strategy in the Global Environment:

opportunities wherever they are and will be prepared for downfalls. Successful managers, in this environment, need to understand the similarities and differences across national boundaries, in order to utilize the opportunities and deal with the potential downfalls.

The globalization of business is easy to recognize in the spread of many brands and services throughout the world. For example, Japanese electronics and automobiles are common in Asia, Europe, and North America, while U.S. automobiles, entertainment, and financial services are also common in Asia, Europe, and North America. Moreover, companies have become transnational or multinational-that is, they are based in one country but have operations in others. For example, Japan-based automaker Honda operates the largest single factory in the United States, while U.S. based Coca-Cola operates plants in other countries including France and Belgium—with about 80 percent of that company's profits come from overseas sales.

During the early1990s, there were reasons to feel that globalization was working. The economic success of Singapore, the rapid economic growth in the Asian Tigers (as the Asian countries that grew rapidly were called), the industrializing of countries, such as Brazil and Mexico, and a variety of other positive economic events around the world suggested that the results of globalization were indeed good for development in poorer countries, as well as in richer ones. During the 1990s, the United States experienced one of its most sustained periods of growth as well, and there was much talk of a "new economy", based on globalization, which was immune to economic shocks and recession.

Unfortunately, this rapid growth was not without consequences. The Seattle meetings of the World Trade Organization turned into a fiasco, with anti-globalization groups demonstrating against globalization on all fronts—from animal rights to environmental concerns, poverty alleviation, and jobs for Americans. The anti-globalization forces have not coalesced into a coherent whole because they represent such diverse and often contradictory views. The vehemence of their protests, however, make it clear that globalization is not a panacea for the world's problems. In addition, the Asian Tigers suffered major economic setbacks in the late 1990s. In 2002, Argentina's economy, which had been one of the stars of the 1990s, crashed, when the country could no longer maintain its currency at par with the U.S. dollar.

affected by the economic situation in the Triad. The terrorist attacks in the United States in September, 2001, exacerbated this already negative economic situation.

In developing appropriate global strategies, managers need to take the benefits and drawbacks of globalization into account. A global strategy must be in the context of events around the globe, as well as those at home.

Analysis of Two International Strategies:

In the late 1990s after a significant amount of globalization had taken place, business analysts began to examine the success of various strategies for doing business in other countries. This examination led to the distinction between various orientations of international strategies. The main distinction was between multi-domestic (also called multi-local) international strategies and global strategies. Multi-domestic international strategies refer to those that address competition in each country or region on an individual basis, whereas global strategy refers to addressing competition in an integrated and holistic manner across country and regional boundaries. Hence, multi-domestic international strategies attempt to appeal to the needs of customers in different countries or regions, while global strategies attempt to standardize products and marketing to work across boundaries. Instead of relying on one of these strategies, multinational companies might adopt a different strategy for different products or services. For example, a company might use a global strategy for its electronics and a multi-domestic strategy for its appliances.

Critics of the standardization approach argue that it makes two questionable assumptions: that consumers' needs are becoming more homogenous throughout the world and that consumers prefer high quality and low prices over advanced features and functions. Nevertheless, standardized global strategies have some significant benefits. Companies can reduce their marketing expenditures, for example, if they use the same ads in all their markets. PepsiCo, for example, uses the same televisions ads in all of its national markets, saving an estimated $10 million a year. Besides marketing savings, global strategies can lead to other kinds of benefits and advantages in areas such as design, packaging, manufacturing, distribution, customer service, and software development.

Japanese consumers and customize its operations in Japan. Consequently, KFC introduced smaller pieces of foods to cater to a Japanese preference, and located restaurants in crowded areas along with other restaurants, moving away from independent sites. As a result of these changes, the fast-food restaurant experienced stronger demand in Japan.

The development of regional trading blocs has promoted an emphasis regional strategies as companies develop plans to take advantage of the conditions within various trading blocs such as the North American Free Trade Agreement (NAFTA), the European Union, the Asia-Pacific Economic Cooperation (APEC) and the Association of Southeast Asian Nations (ASEAN). In addition, the United States has signed 16 different trade agreements with South American countries, creating a foundation for a trading bloc consisting of all North and South American countries. Consequently, companies have been establishing regional strategies designed around these trading blocs. Nike, for example, established central warehouses for its European distribution, just as it has a central warehouse for its U.S. distribution. This strategy has enabled Nike to reduce its inventory, cut down on redundancy, reduce costs, and enhance availability. In addition, News Corporation originally relied on a global strategy with its STAR-TV satellite television network; attempting to provide the same television shows across Asia in English. The company quickly switched to a multi-domestic strategy, providing programming in local languages after receiving low ratings and advertising dollars with its first approach.

Strategic marketing according to Wensley has been defied as :

―Initiating, negotiating and managing acceptable exchange relationship with key interest groups or constituencies in the pursuit of sustainable competitive advantage within specific

markets, on the basis of long run consumer, channel and other stakeholder franchise‖.

References & Further Reading

1. Vemon, R ―International Investment and International Trade in the Product Cycle‖. 2. Perlmutter, H.J. ―Social Architectural Problems of the Multinational Firm ‖.

3. Firat A.F., Dholakia N., Venkatesh A., ―IMarketing in a Postmodern World. European‖. 4. Keegan, W.J. ―Global Marketing Management‖.

5. Kotler, P. ―Marketing Management, Analysis, Planning, Implementation and Control‖. 6. Bartlett, C.A. and S. Ghoshal. "What is a Global Manager?"

8 Florini, A. "Business and Global Governance."

9. Gupta, A.K., and V. Gorindarajan. Global Strategy and the Organization.