In affluent societies, one observes a growing fragmentation of markets, buyers requesting more and more products adapted to their specific needs. How can we reconcile this fact with the objectives of global marketing that emphasises a strategy of standardisation of products and brands across the entire world?
Companies developing a global marketing strategy must consider its impact and influence on the company. Crucial for development of global marketing strategy is clear segmentation and positioning of product and company on the market. Advantages of global strategy could also come from using cheap local and national sources, global marketing operation, global brand name, advertising campaign and better knowledge of customer’s problems. There is a trade-off between standardisation and adaptation. The essay suggests that a company should have an optimal marketing mix to balance the increasing demand for products adapted to customers’ needs and its own global marketing objectives that emphasise standardisation.
Customer needs and markets are becoming increasingly global for many products and services. But the extent of globalisation varies considerably from market to market. Hence, a global marketing strategy and the associated marketing mix have to take into account of the following factors in the market environment: customer needs, culture, language, technology and legal factors. Culture determines customer behaviour strongly and therefore the products, branch names or advertising may have to be varied on a local basis to account for regional cultural differences. Language enables understanding in communication and for that may require local variations in packaging, labelling, brand name and advertising. The level of technology in a country or differing technological standards may require variation in products. Legal factors also play role in variations in packaging, advertising and the information of contents displayed. Global marketing strategy is primarily concerned with the global scope and coordination of marketing activities, and the extent of standardization and adaptation of products, brands, and promotion and advertising. Three steps are essential in developing a total worldwide strategy. First step is development of the core strategy as the basis of sustainable competitive advantage. It is usually developed for home country first. Second step is internationalization of the core strategy through international expansion of activities and through adaptation. The third step concerns the globalisation of the international strategy by integrating the strategy across countries. Setting strategy for a worldwide business requires making choices taking into consideration a number of strategic factors. Factor| Purely multi-domestic strategy| Purely global strategy| Marketing approach| Local| Uniform worldwide|
Market participation| No particular pattern| Significant share in major markets| Product offering| Fully customised in each country| Fully standardized worldwide| Competitive moves| Stand-alone by country| Integrated across countries| Location of value-added activities| All activities in each country| Concentrated - one activity in each different country|
Adapted from: (Yip, G., 1992)
The key drivers and forces for ongoing globalisation of the world economy are market, costs, institutional and competitive factors. For the development of an appropriate global marketing strategy it is important to take into account the position and resources of a company towards these globalisation drivers as they determine the company’s market participation, level of product standardization, its concentration of activities, the uniformity of marketing mix elements and its integration in frame of global strategy. A global strategy can be defined as one that views the world as a single, but segmented, market. Some authors of marketing literature...