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Global and Multi-Domestic Marketing Approaches

Introduction

In the contemporary world, marketing is used mainly to realise sustainable growth, to survive in the local market that is much threatened by global players and also to target international markets that have increased in influence. What is always a fundamental principle in the international market is for an organisation to comprehend the underlying complexities and the dynamics of global marketing. This implies that the managers of these organisations should devise some tactics, skills and adopt some knowledge that is required for them to survive in the international market system.

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The emergence of international marketing has been necessitated by various factors including the following: the globalisation of world economy, the globalisation of consumer tastes and the introduction of advanced information and communication technology that has resulted in the enhancement of interdependency and interconnectedness of national economies all over the international system. As such, however, there is need for aggressive managers who can innovate and initiate skills that are important in navigating the pressures that affect the growth in company sizes and also to be in a position to cope with the challenges that come with the expansion into the international market.

Analysis

International marketing is fundamental due to the fact that it is a reflection of the surging global affluence and the increased economic dynamism which has resulted in various countries across the globe emerging as global economic powers like China, India and Brazil; also the increase in global wealth and the intensification of consumer demand is an indication of an increase in the number of market players and enhanced global completion among multinational companies. heThe generation Y has been identified as the world’s biggest global market and attracted the interest of global market players. The increase in global wealth has also enhanced the development of non-national consumers who defy national and personal identity in their consumption; this is evidenced in their increased driving of international cars, frequent touring foreign places and watching international TV programs.

To relatively cope with the pressure for international competitiveness, various companies are trying their best to fit into the international market and to scale up their operations through the use of various tactics like mergers, acquisitions and alliances. Unlike in the earlier times when the global markets belonged to independent states, the modern global market place has been overtaken by multinational companies and multilateral organisations which are economically powerful for their position in the global market to be ignored (Johansson, 2000, p. 147).

After the above insight of how the international market emerged, it is imperative to define international marketing; but before the international market is defined, it is imperative to, first of all, understand the meaning of marketing. Marketing is defined as the management process that is entrusted with the responsibility of identifying, expecting and satisfying the demands of the customer profitably (Doole and Lowe, 2008, p. 5). Marketing is concerned with the following:

  • It focuses on the needs and wants of the consumers.
  • Identification of the best ways of satisfying the wants of the consumer
  • Guiding various companies on the best way of satisfying the demands of the consumer and
  • Meeting the goals of the organisation.

Therefore, international marketing is defined as the situation where the marketing actions of a company or an organisation involves the interests and operations in more than a single country fand it should also have the ability to manipulate and to be in charge of marketing behaviour from outside the country where the actual goods are sold. However, this can be distinguished from either export or global marketing; global marketing involves the situation where an organisation as a whole concentrates on the collection and the utilisation of the available global opportunities, they can also marshal wealth from across the globe by trying to realise an economic advantage. Export marketing, on the other hand, is the situation where companies or organisations try to market their products across transnational and political boundaries (Doole and Lowe, 2008, p. 7).

Ways that a firm can pursue international marketing strategies

The ability of a firm to pursue international market strategies can be defined by two main categories: there are strategies for a firm that wants to maintain present market niche and strategies for a firm that seeks to enter into a new market. Maintaining an already existing market requires a firm with a lot of market opportunities and little problems and consequently a firm might look for fresh markets when they don’t experience growth in the present market and also if there is an available profitable market. These two factors may influence the firm’s decision in the choosing of marketing strategy. Consequently, understanding the consumer groups and their tastes and preferences is critical in the designing of marketing of a marketing strategy (Bennet and blithe, 2002, p. 13).

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Strategies for International Marketing

It is important first to understand that there is a thick line between international marketing and domestic marketing which might result from the variations in tastes, customs and wants of consumers in general and the scope of operation in particular. The domestic market is restricted to the local market, whereas the international market involves transactions across the globe and can cover more than one country. International marketing should be based on the following four factors; price, product, promotion and the place. These four factors are instrumental in establishing a market strategy that can be used in the international market (Anon, 2010, p. 222).

In the modern dynamic world, the formulation of a successful marketing strategy is considered one of the most challenging tasks. Good marketing strategy requires a lot of efforts and time to construct, and its implementation is considered at the end and more so an important part of the strategy; a marketing strategy that lacks an effective implementation plan is doomed to fail (Farrell and Hartline, 2008, p. 25).

International companies should learn how to find entry into the global markets and how to enhance international competitiveness (Onkvisit and Shaw, 2004, p. 1). The main factors that drive the international market are the size of the market, the habit of the buyers and the prevailing market practices. These factors simultaneously vary and international marketers, therefore, should carefully evaluate these factors. The desire by an international marketer to penetrate into a foreign market is by motivating various factors; others are just because of mere policy matters in order to exploit the increasing market potential and also their desire to grow, other firms venture into the international market as a reaction to capture an emerging or particular business opportunity; others are motivated by their desire for their geographical expansion (Cateora and Ghauri1999 pg 96),

Various companies in the globe pursue different marketing strategies as a measure to enlarge their global influence and to acquire their market share in the competitive global environment. A marketing strategy can be defined as the “non-specific long term plan of action that provides the procedures to be followed in accomplishing marketing objectives” (Brady, 2010, p. 322). The international market strategy dwells on the entry into the international markets, but the global marketing approach is more specific since it unravels the areas of focus in the international marketing like the choice of the country of operation, the system of operation to adopt and the standardisation of market products. Global marketing determines the target customers and the market segment (Aliber and Click, 1993, p. 240).

The following are the international marketing strategies that companies and organisations can pursue:

In choosing an international marketing strategy, a company has three main competing strategies to choose from. They are the global market strategy, the domestic marketing strategy (Mackenzie, 2009, p. 211) and the modular strategy of marketing.

The Global Strategy Approach

The global market strategy is understood to be the standard blend of marketing and can be executed with less alteration in virtually all the international markets. This mode of strategy brings to fore the principle of economies of scale in its generation of marketing actions. The global market strategy can save money due to its ability to allow large-scale production. The other importance of the global marketing strategies is that it can market particular products and services in market segments that share a similar culture, tradition and language (Gilligan and Hird, 1986, p. 82).

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Analysis of global marketing approach

The global marketing strategy is concerned with the creation of one strategy for the product service of the entire company on the global market. It aims at benefiting from some overriding commonalities between various global customers in the several markets, and any firm that may opt to pursue the global marketing approach should be ready to devise a fundamental strategy that can be applied across the global market and should be prepared to adopt flexibility due to the varying markets. This is necessitated by the fact that all markets are the same in the context of the environment they operate and also in terms of the consumer demands (Gillespie, Jeannete and Hennessey, 2010, p. 7).

Application of global marketing approach

The global marketing strategy can apply best when the products are strong with universal character (Kotaabe and Helsen, 2009, p. 1). Examples of the companies that are well suited to using the global marketing strategy in marketing their products are the MacDonald’s and other luxurious products like the Rolex watches and electronic items from Microsoft and other electronic companies. The global marketing strategy makes use of international advertising outlets like the international versions of consumer and business magazines, international telecommunication outlets and the TV channels, for example, the CNN, MTV and the CNBC which can relay a single and powerful advertising message to a lot of viewers across the globe. Global marketing strategy is of the idea that marketing can be performed similarly in one manner across the globe which is against the notion that global marketing strategy and the varying mode of conducting operations by different companies which might at times be difficult to adapt due to the dynamic global dissimilarities (Dacko, 2008, p. 232).

Goods favoured by the global marketing approach

The global marketing strategy is only effective for items and goods which are luxurious, whose demands emanate from affluent consumers. The main advantage of the global marketing strategy is that the company can incur low costs during implementation. The global marketing strategy suffers from the risk to backfire; this was witnessed in china after the quick surge in the sale of computers, where after some time the dell company’s sales reduced, especially when they compared their sales and those of their competitor HP who made a lot of sales through retailing of their products and this resulted in dell reconsidering its sales strategy (Mackenzie et al., 2009, p. 212).

Critical analysis of global marketing approach

Global marketing strategy is founded on the grounds that all buyers in the international trade are the same and as such, any company that enjoys a favourable market in its host country may create a tendency of the company using the revenue generated to carry out advertisements aimed at reaching mass markets on the globe. The global market strategy assumes that the global market is appropriately uniform and this has prompted the reply following the developments in information and communication which have enabled the globe to enjoy similar and desirable products irrespective of the region of production. This advancement in information and communication technology has introduced some common habits among the inhabitants of the globe; it has facilitated uniform tastes and preferences (Kaynak, 1993, p. 11).

The economies of scale that is associated with the global marketing strategies may result in low-cost of production. These economies of scale may be realised through manufacturing, distribution and also advertising; an economy of scale ensures that the company’s brands will gain a stronger competitive benefit. Among the global market strategy’s challenges is the difficulty in adopting the difference that is inherent in every nation or a state, for example, the difference in languages, the existing competition at the time and also cultural differences and the products and product usage (Kaynak, 2002, p. 3). The global market strategy can be affected by several factors which might take the form of protective tariffs by some countries and other trade barriers (Kaynak, 1993, p. 11).

The global marketing approach does not put into consideration the individual country markets, but instead, it focuses on the global market and the physical location of the customers, and the product concentration together with the availability of the market; this is despite varying locations of the markets, numerous transportation problems, varying cultures and the existing laws and regulations that govern business operations around the globe. Managers of the organisations who pursue global management approach are not concerned about the differences or the similarities of the individual countries or the buyers, but their importance is attached to whether or not the customers share similar aspirations and whether they can be covered by one marketing infrastructure like the logistics involved, the channel of distribution and the regulating norms which are instrumental in the development and the application of a standardised marketing system that can meet the desires of the same customers.

Problems facing the global marketing strategy

The fundamental challenge facing global marketing is the threat of globalisation and regional strategies. The emergence of regional blocs has made international marketers rethink their marketing strategies to meet the regionally focused markets.

Another challenge is transnational strategies. Globalisation has made firms to employ immense power and resources to utilise the available marketing opportunities (Doole and Lowe, 2008, p. 143).

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Limited flexibility is also another problem facing global marketing strategy. Global marketing strategy places a firm in a straightjacket position which will diminish the firm’s ability to respond to the dynamic international market.

Rapidly changing world: The rapid wave of change that is sweeping the entire world as a result of the expanding and advancing technological change and also the ever-dynamic social realities have created complex configurations in market structure and hence posing problems to the global market strategy that can be adopted by a particular firm.

Intensified competition is also another challenge facing the global market strategy. The availability of several markets that deal with similar goods pose may render the global marketing strategy ineffective.

Advantages of global marketing approach

Several arguments have been put forward in favour of the global marketing approach strategy, but the powerful one is the tendency to benefit from the experience curve effects. Benefiting from the experience curve effect implies the chance to embrace these two dimensions; first is the enlarged efficiency as a result of the size effect and the increased effectiveness that emanates from the experience effects. This amplified efficiency is more common with large companies than the small ones since they operate in the global market rather than the local market (Keegan, 2002, p. 127). Another argument about the global market approach relates to its opportunity to search for new and more enlarged markets segments by applying the global market analysis. A company, for example, that deals with cosmetics products is not fit to operate in one country market but instead should concentrate on looking for an adequate target market that includes high income and fashion-oriented women in order to gain sufficient return on investment (Dahringer, Muhlbucher and Leihs, 2006 p. 42).

The development and the increased popularity of E-commerce are considered a win for the global marketing strategy. Internet is easy for customisation and serves the global population, especially at such a period of information technology age (Andam, 2003, p. 27).

Critique of the Global Marketing Approach

The global market approach has been heavily criticised; this is due to the myriad of problems that plague the international markets. The global marketing approach ignores the difference in the global distribution system, the cultural factors that might interfere with the product promotion and also the need for information gathering before embarking on the marketing campaign. It also underestimates the variables that need consideration in the domestic market, like the existing domestic legislation. Also, the global marketing approach positions firms in the straitjacket, this hence hindering any possibility of flexibility by the company to cope with the dynamic global market environment (Bennet and Blythe, 2002, p. 30).

Conclusion

The global marketing theory factors in the issue of consumer perspective; this is due to the fact that consumers are critical to any market strategy since marketing strategies focus on the needs and wants of consumers. The global marketing approach is considered a modern mode of marketing, but its assumption of the world economy being characterised by homogeneity is only its fundamental weakness.

Other international marketing approaches are:

Multi-domestic Marketing Approach

Besides the global marketing theory, there is the multi-domestic marketing strategy which assumes the distinction that exists between the characteristic of the market and the degree of competition; these are the two factors that states advise firms and companies to customise their marketing tactics which will place them in a position to capture entity markets (Mackenzie et al., 2009, p. 212).

Analysis

There is also the sub-global (modular) strategy. This is the kind of marketing that involves module by module as opposed to trying to cover the whole world at only one time. Module, in this case, can take the form of a country, a target group, one region or one kind of a product. A module can also take the form a particular geographic, cultural, and demographic or an economic sphere. The mandatory demand for this type of strategy is that it should be small and well defined so as to meet personal demands and are founded on the principle of thinking globally and acting locally. This strategy furthermore lumps together the entire multiple and the dynamic markets that the country has operations in by devising criteria for classification based on the above factors.

Critical analysis

The above theory has been rendered to be unrealistic and also considered unsuccessful in the modern world due to the enhanced and growing uniformity among the different nations and states of the globe. Another factor that makes the modular marketing strategy unrealistic and unsuccessful is the high degree of cultural convergence that is frequently taking a toll in the world. This cultural convergence has enhanced the development of products with global brand nature which is predicted to increase with the emergence of the high-powered satellite TV channels which have considerably reduced all cultural barriers that existed in the ancient times (Kaynak, 1993, p. 11).

Conclusion

The strategy is always considered a critical part in the formulation of any business operation or idea. It is often considered an instrument of competition in the global world. Therefore, every company should be in a position to devise its own strategy as a matter of principle in order to enable it remains relevant and competitive in the international market. The strategy is the secret weapon in business that can be used as the vehicle to realise the business objective. The ability of the global marketing approach to be able to reach several markets by the use of one strategy is the best option since it will save on costs while facilitating the economies of scale in business operation.

References

Aliber, R and Click, R. (1993) Readings in International Business: a decision approach. New York, NY: MIT Press.

Andam, Z. (2003) e-Commerce and e-Business. Online. Web.

Anon. (2010) International marketing, 20th edition. New York: Routledge.

Bennet, R and Blythe, J. (2002) International marketing: strategy planning, market entry & implementation 3rd ed. New York, NY: Kogan Page Publishers.

Brady, D. (2010) Essentials of International Marketing. New York: M.E. Sharpe.

Cateora, P and Ghauri, P. (1999) International Marketing. London, UK: McGraw-Hill Publishing Company.

Dacko, S. (2008) The advanced dictionary of marketing: putting theory to use. Oxford, UK: Oxford University Press.

Dahringer, L., Muhlbucher, L and Leihs, H. (2006) International Marketing – A Global Perspective 3rd Ed, Thomson. New York, NY: Cengage Learning.

Doole, I and Lowe, R. (2008) International marketing strategy: analysis, development and implementation 4th Ed. New York, NY: Thompson learning.

Farrell, O.C and Hartline, M. (2008) Marketing Strategy 4th ed. New York, NY: Cengage Learning.

Gillespie, K., Jeannet, J and Hennessy, D. (2010) Global Marketing.3rd ed. New York, NY: Cengage Learning.

Gilligan, C and Hird, M. (1986) International marketing: strategy and management. New York, NY: Taylor & Francis.

Johansson, J. (2000) Global Marketing – Foreign Entry, Local Marketing, and Global Management. New York, NY: Thompson learning.

Kaynak, E. (1993) The Global business: four key marketing strategies. New York: Routledge.

Kaynak, E. (2002) Strategic global marketing: issues and trends. New York: Routledge.

Keegan, W. (2002) Global Marketing Management. New York, NY: Prentice Hall.

Kotaabe, M and Helsen, K. (2009) The SAGE handbook of international marketing. New York: SAGE Publications Ltd.

Mackenzie et al. (2009) Contemporary Marketing. New York: Cengage Learning.

Onkvisit, A and Shaw, J. (2004) International market 4th Ed. New York, NY: Routledge.

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