Market Globalization

Topics: Globalization, International trade, World Trade Organization Pages: 9 (3036 words) Published: July 26, 2012
According to the Levin Institute (2001), the term globalization refers to the increasing connections people, companies and states are forming around the world. The process of forming social and economic ties across vast distances is nothing new historically; however, technological improvements and liberal trade agreements have increased these connections greatly in contemporary times. One of the primary drivers of globalization has been in respect to market forces, whereby many consumer goods and services are now universally available, no matter one's geographic location or social setting. As a result of international marketing campaigns and corporate brand promotions, consumer desires and lifestyles around the world are increasingly converging. Marketing globalization is a synergistic term combining the promotion and selling of goods and services with an increasingly interdependent and integrated global economy. It makes companies stateless, without walls, with the Internet an integral marketing and cultural tool. Understanding consumer needs within target countries helps formerly ethnocentric companies build a global marketing mix where product, price, place and promotion are geared toward specific country needs (Levin, 2001). Market globalization has led to many economic globalization aspects. Economic globalization refers to increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, service, technology and capital. Whereas globalization is centered around the diminution of international trade regulations as well as tariffs, taxes, and other impediments that suppresses global trade, economic globalization is the process of increasing economic integration between countries, leading to the emergence of a global marketplace or a single world market. Depending on the paradigm, economic globalization can be viewed as either a positive or a negative phenomenon (Roger, 2010). Economic globalization comprises the globalization of production, markets, competition, technology, and corporations and industries. Current globalization trends can be largely accounted for by developed economies integrating with less developed economies, by means of foreign direct investment, the reduction of trade barriers as well as other economic reforms and, in many cases, immigration (Roger, 2010). Economic liberals generally argue that higher degrees of political and economic freedom in the form of free trade in the developed world are ends in themselves, produce higher levels of overall material wealth. Globalization is seen as the beneficial spread of liberty and capitalism. Jagdish Bhagwati (2001) , a former adviser to the U.N. on globalization, holds that, although there are obvious problems with overly rapid development, globalization is a very positive force that lifts countries out of poverty by causing a virtuous economic cycle associated with faster economic growth. Economist Paul Krugman (2006) is another staunch supporter of globalization and free trade with a record of disagreeing with many critics of globalization. He argues that many of them lack a basic understanding of comparative advantage and its importance in today's world (Krugmann, 2006). Aside from market drivers, globalization can be attributed to other causes, including cost drivers, such as innovations in information technology and transportation; government drivers, whereby many governments have reduced trade tariffs and have embraced free trade agreements; and competitive drivers, which have seen corporations and businesses increasingly compete for market share around the world (Kevin, 2001).

Nowhere is marketing globalization felt more than in the stock market. Stocks rise and plummet on the "news" that a product or service is not faring well in some part of the world. Take crude oil as an example. If the cost per barrel rises, prompting gas prices to shoot through the roof, some stocks will...
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