Global marketing refers to marketing activities coordinated and integrated across multiple country markets. The concept of this involves the creation of a single or standardized strategy for a product, service or a company (Johansson, 2006). Those markets are not only defined within country boarders, but are also defined by buyer preferences that are similar across countries. Recently, going global becomes a trend. As Crespy (1986) indicated, firms should turn themselves into global corporations otherwise they will lose out to the new wave. Therefore, not only big sized business, even the smallest businesses have already extended their businesses to foreign markets. One of the best examples is Coca Cola which is the champion of “Best Global Brand” in last ten years. Its brand promise of fun, freedom, spirit and refreshment resonate the world over and it excels at keeping the brand fresh and always evolving. It produces standardized products of coke and similar message of fun and freedom in its worldwide promotion to gain customer loyalty and enlarge its business share. Many businesses also use internet marketing to expand their business such as online shopping, e-commerce and social networking (Arora and Gambardella, 2005). For example, Starbucks developed a Facebook page to promote its brand and allow its customers to share their experience and photo in this platform. The reason of the firms go global is because there are many opportunities of practicing global marketing and the above example gain benefits in this practice successfully. In this article, I will focus on three aspects which are extension of product life cycle, cost effectiveness and reduction of market risks. When a global firm can enjoy many advantages, however, it also needs to overcome many challenges and drawbacks, including selection an appropriate market, implement and sustaining the business in the market. Similarly, I will deeply discuss some aspects of each part Opportunities
Extend product life cycle
Product line cycle which depicts how the sales of a product category progress over time is a main concern of a firm since if the product leaves as is to continue to the decline stage, the firm needs to develop new product which is difficult to estimate demand and the development costs may not be covered by the sale (Gupta, Ramachandran, 2009). Therefore, many firms will spend many resources to extend the product life cycle. One of the solutions is foreign expansions that there may be new potential and demanding from other foreign markets. This is because stage of product life cycle of a product can be different across different country markets. The firm can enter those markets which may not be saturated that there are not many substitutes or the product is still highly demanded and capture the demands to keep sales, increase profits and enhance its market share. Cost effectiveness
One of the global marketing strategies is to standardize the product which is suitable to a global market. The benefit of standardization is that resources and manufacturing process are same which the firm can enjoy economy of scales since narrow materials are needed. When the manufacturing process is standardize, advance technology can be used across a whole product line which reduce development costs and overhead costs. In global marketing, the firm also needs to standardize its global brand which is known as umbrella positioning. According to Erdem’s study (1998), a consistent branding can help to reduce consumer risks if the brand has good reputation because it can provide confidence to consumers and they can base on their experience of the same brand to make purchasing decision. Therefore, the firm does not need to spend many resources on promotion to build up consumer confidence in foreign regions. On the other hand, the costs of materials, capitals and labors in developing countries are much lower than developed. The globalized firms can enter those...
Please join StudyMode to read the full document