There are endless reasons why Global Marketing is important today. Thinking quickly, can you imagine our world without companies marketing their products and services internationally? The first industry to enter my mind are airlines. Businesses and people would literally not be able to “take off” without international organizations…
Wait, what? [.. Sorting through the terminology]
In today’s age there are so many buzz words and terms that surround this topic. Before continuing, here a few explained that will help to understand future content:
Globalization: Trend toward greater economic, cultural, political and technological interdependence among national institutions and economies. The trend is a result of national boundaries becoming less relevant (denationalization) and different entities cooperating more actively across national boundaries (internationalization). (2)
International Trade: When a nation imports and exports goods (1)
International Business: A larger concept than international trade because it includes foreign production of goods (1)
Marketing: Is composed of the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value to customers, clients, partners and society at large. (3)
Domestic Marketing: A strategy that is based on information exclusively from domestic industry and customer demands, as well as the domestic cultural conditions (economic, technological, political, and social environments). This is the first stage in how firm marketing strategies evolve. (1)
Export Marketing: This is the second stage in which companies move toward internationalization. Companies begin by doing business and meeting needs of customers outside their usual boundaries. In this early stage they rely on other companies to assist them, while perfecting the internal conditions of their business to eventually do so independently. External factors, such as saturated domestic markets, or unsolicited inquiries from foreign customers may lead to export marketing. (1)
International Marketing: When external marketing becomes increasingly more important and successful for the business, they will begin seeking new sources of growth and profit. New countries serve as new markets, thus international marketing begins. International Marketing is approached by concentrating product and promotional strategy to a given foreign market (1).
Multidomestic Marketing: A company that has independent foreign subsidiaries in every market that operate separately, without any specific headquarters controlling overall strategy. This is a more extreme form of international marketing (1).
Multinational Marketing: A stage in global marketing in which a company operates and markets its products in MANY countries around the world. Standardization of production, planning and overall strategy comes into play it this stage (1).
So then, What is Global Marketing?
Global Marketing defined (in a few ways):
1. Global Marketing involves marketing activities by firms that do each of the following:
- Standardize their marketing programs: Allow marketing efforts to seamlessly operate across country borders. Standardization ensures products, promotions, price and channel structure cooperate together to increase opportunity and effectively meet the needs of global customers.
- Coordinate across markets: Businesses eliminate cost inefficiencies and reduce duplicate business efforts of their national/regional divisions
- Practice Global Integration: This involves playing a role in many different world markets that are relevant to the business. Integrating firm operations means some markets use the resources of others to achieve success and vice-versa. It also involves balancing responses to competitive attacks in all areas.
The Global Perspective: Know that standardizing a marketing program does not necessarily mean that all marketing efforts and marketing strategy will be the same. The Global Perspective is the idea that when firms operate in different nations, they commit to develop and change plans for the company on a country-by-country or region-by-region basis. Even though plans change, their are still common factors in strategy and practice that allow for some form of standardization.
*Note: It’s important to understand that the terms “global marketing” and “international marketing” may be used by many people and sources interchangeably. Another textbook I have read defines international marketing as:
“The performance of business activities designed to plan, price, promote and direct the flow of a company’s goods and serices to consumers or users in more than one nation for a profit” (4)
I believe the first to be more thorough, but the second a bit easier to grasp. Either way, both are relevant to future discussion.
… Why should I, or my business care?
Okay, enough with boring definitions (but I needed to get those out of the way). To summarize briefly, marketing is the balance between customers and competitors. In today’s age, that balance exists on a MUCH bigger scale, hence the increasing popularity of global marketing. In the next post I will discuss the history, causes and ideas surrounding the global marketing phenomenon.
Global Marketing Management. Kotabe and Helsen. pg 18
International Business: The Challenges of Globalization. J. Wild and K. Wild. pg 28
The American Marketing Association (http://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.aspx)
International Marketing: 14th Edition. Cateora, Gilly and Graham. pg 9