Section A: Global Marketing Management
Global Marketing Management: An Old Debate and a New View:
The approaches to global marketing have revolved over the decades. The following trends have been observed:
▪ 1970’s: “standardization vs. adaptation”
▪ 1980’s: “globalization vs. localization”
▪ 1990’s: “global integration vs. local responsiveness” ▪ 2000’s: mixture of global, localization
The recent trend of mixture of global and localization is caused by the new efficiencies of customization made possible by the Internet and increasing flexible manufacturing processes. For example, one of the largest computer manufacturers of the world, Dell Computer Corporation maintains no inventory and builds each computer after order.
Another crucial reason behind this global/local mixture is the apparent rejection of the logic of globalism by trade unionists, environmentalists and consumers. That’s why Coca-Cola is maintaining two brands in India – Coke and Thumps Up.
The Nestle Way: Evolution Not Revolution:
The global food giant is not bothered about the debate on standardization vs. adaptation. From the very beginning, Nestle was international. The ‘Nestle Way’ is to dominate its markets. Its overall strategy is:
✓ Think and plan long term
✓ Stick to what you know
✓ Adapt to local tastes
To see how Nestle operates, considering the example of Poland.
After breaking up of Soviet Union, Poland emerged as a big market for the food items. The Nestle executives decided that it would take too long to build plants there and create brand awareness. Instead they acquired the 2nd largest chocolate maker of the country, Goplana and adjusted the end product by small changes every two months over a two-year period until it measured up to Nestlé’s standards. These efforts along with all-out marketing put the company very close to the market leader. Nestle also purchased a milk operation and trained the Polish farmers so that they could improve the quantity and quality of milk. This is a perfect example of Nestle Motto: “Evolution Not Revolution”. Benefits of Global Marketing:
Following are the major benefits of global marketing approach:
▪ With large market segments, economies of scale in production and marketing can be realized. ▪ Transfer of experience and improved coordination and integration of marketing activities can take place. ▪ Allows companies’ access to tough customers for testing and re-inventing. ▪ Diversity of markets provides financial benefits
- The more diversified the portfolio of markets, the better risk is spread out when economic down-turns occur or political changes, etc.
A Balanced Approach to Global Marketing Strategy – 3M Corporation:
A Balanced Approach to Global Marketing is more advantageous than one centered on domestic markets. A global strategy with marketing activities (branding, distributing, etc.) is more beneficial than one for each market segments (i.e. country markets). The example of 3M Corporation can illustrate this phenomenon.
In the 1980s, 3M Corporation faced sever competition and was losing market shares. Then 3M conducted several market studies and it revealed some interesting points. The customers can better distinguish a brand from another if homogenous packaging used and the trends in electronics marketplace are consistent across national boundaries.
3M then developed a global strategy and introduced a global brand identity and packaging for the entire line of products in all country markets. The advertising strategy was developed in global perspective with just necessary tailoring for national tastes.
The result of this global effort was very astonishing:
▪ 3M achieved its goals in all three major markets; it recovered the leading position in Europe and North America and dramatically increased market share in...