Marketing

This section explains Global Marketing, covering: Global Marketing Strategy and Global Localisation (Glocalisation), Different Marketing Approaches, Domestic and Ethnocentric Approach, Mixed and Geocentric Approach, International and Polycentric Approach, Transnational Approach, Adaptation of the 4Ps to Global Markets and the Application of Ansoff’s Matrix to Global Markets.

In the modern business environment, where markets are increasingly interconnected, companies must develop strategies that allow them to compete effectively on a global scale. Global marketing involves tailoring a company’s marketing activities and strategies to suit the unique characteristics of international markets while remaining consistent with the company’s overall goals and objectives. This section explores key elements of global marketing, including global marketing strategy, localisation (glocalisation), different marketing approaches, and the application of the marketing mix and Ansoff’s Matrix in global markets.

Global Marketing Strategy and Global Localisation (Glocalisation)

A global marketing strategy refers to the approach a company takes to market its products or services across multiple countries. It involves deciding how to position the brand in international markets, which may require balancing the company’s global brand identity with local market preferences. One key aspect of global marketing strategy is glocalisation, which combines the concepts of globalisation and localisation.

Glocalisation: This term refers to the strategy of adapting a company’s global brand to meet the specific needs, tastes, and cultural preferences of local markets. Rather than offering a completely uniform product or marketing message across all markets, glocalisation recognises that some level of adaptation is necessary to meet local demands.

• For example, McDonald’s uses glocalisation in its global operations by adapting its menu items to local tastes. In India, where a significant portion of the population is vegetarian, McDonald’s offers vegetarian options like the McAloo Tikki burger, while in the US, the menu features items like the Big Mac. This allows the brand to maintain a consistent global image while also meeting local market needs.
• Similarly, Coca-Cola has adapted its marketing strategies for different countries. While the core message of the brand remains focused on happiness and togetherness, Coca-Cola tailors its advertising campaigns to resonate with local values, celebrations, and social norms.

Global Standardisation vs. Localisation: Companies need to strike a balance between global standardisation (offering the same product or marketing strategy worldwide) and localisation (tailoring products or marketing to specific local markets). While standardisation can offer cost advantages, localisation allows companies to create stronger emotional connections with consumers by reflecting their local culture, language, and preferences.

Different Marketing Approaches

Companies operating internationally adopt various approaches to marketing depending on their strategic goals, resources, and the nature of the markets they are targeting. These approaches are categorised into four broad types: domestic/ethnocentric, mixed/geocentric, international/polycentric, and transnational.

Domestic and Ethnocentric Approach

The ethnocentric approach to global marketing assumes that what works in the company’s domestic market will work in other countries as well. This approach is often adopted by companies that are new to international expansion or those with a strong domestic market presence.

• Assumption: Ethnocentric companies believe that their products, services, and marketing strategies are universally acceptable without requiring significant modifications.
• Challenges: This approach may lead to cultural insensitivity or failure to address local market preferences, as companies overlook the need for localisation. For example, a product designed for Western markets might not resonate with consumers in Asia or Africa due to differences in culture, values, and consumer behaviour.

Mixed and Geocentric Approach

A geocentric approach is characterised by a blend of standardisation and localisation. It involves developing marketing strategies that incorporate both global efficiencies and local adaptability. Companies using this approach aim to find a middle ground that allows them to maintain global brand equity while adjusting to local market conditions when necessary.

• Assumption: A geocentric approach recognises that certain elements of a marketing strategy should be standardised, such as the brand image and product quality, but other elements, like advertising and pricing, may need to be adapted to local conditions.
• Example: Unilever is known for adopting a geocentric strategy by offering similar core products (e.g., soap, shampoo) in various markets, but with subtle variations in packaging, scents, and ingredients to cater to local tastes and preferences.

International and Polycentric Approach

The polycentric approach, also known as the international approach, involves treating each market as distinct and developing tailored marketing strategies for each country or region. Companies using this approach decentralise decision-making and allow local subsidiaries or partners to manage marketing activities based on the specific needs of their market.

• Assumption: This approach assumes that each country is unique and that a one-size-fits-all marketing strategy will not be effective across multiple markets.
• Example: Companies like Nestlé often adopt a polycentric approach, where local managers are given the autonomy to adjust products, pricing, and marketing campaigns to suit the cultural, economic, and regulatory conditions of each market.

Transnational Approach

A transnational approach combines elements of both global standardisation and local adaptation. Companies using this approach aim to leverage global efficiencies while also being responsive to local market conditions. This approach is particularly effective for companies operating in diverse and highly competitive international markets.

• Assumption: A transnational strategy allows for global integration in some areas (e.g., global branding or supply chain management) while allowing for local responsiveness in others (e.g., product features or marketing messages).
• Example: Toyota uses a transnational approach, maintaining a consistent global brand image while tailoring vehicles to meet specific regional needs and preferences (e.g., offering smaller, fuel-efficient cars in European markets while focusing on larger vehicles in the US).

Application and Adaptation of the Marketing Mix (4Ps) and Ansoff’s Matrix to Global Markets

The marketing mix (also known as the 4Ps) refers to the key elements businesses must consider when marketing their products: Product, Price, Place, and Promotion. When expanding into international markets, companies must adapt their marketing mix to local conditions to optimise effectiveness.

Adaptation of the 4Ps to Global Markets

1. Product: Companies may need to adapt their product offerings for international markets. This includes changing features, designs, packaging, or even the product itself to cater to local tastes, preferences, and cultural differences. For example, a KFC in India serves vegetarian options like the Paneer Zinger burger to cater to local dietary preferences.
2. Price: Pricing strategies must account for local economic conditions, income levels, and consumer purchasing power. Companies may adopt penetration pricing (setting a low price to gain market share), skimming pricing (setting a high price for premium products), or competitive pricing (setting a price based on competitor prices). For example, Apple adjusts the price of its products based on local market demand, taxes, and currency fluctuations.
3. Place: Distribution strategies must be adapted to the infrastructure and consumer behaviours of the target market. This includes deciding whether to sell products through direct retail channels, distributors, or online platforms. For example, Amazon tailors its distribution methods to each country, offering different shipping times, packaging, and fulfilment centres depending on the region.
4. Promotion: Promotional strategies must be adapted to local cultures, languages, and communication preferences. Companies may choose to use different advertising campaigns, media channels, or sales promotions in various markets. Coca-Cola tailors its advertisements to reflect local customs, holidays, and celebrations, while maintaining a consistent brand image worldwide.

Application of Ansoff’s Matrix to Global Markets

The Ansoff Matrix is a strategic tool used to determine a company’s product and market growth strategy. It includes four growth strategies: Market Penetration, Market Development, Product Development, and Diversification.

1. Market Penetration: In the global context, market penetration involves increasing market share in existing international markets. This can be done through aggressive marketing, competitive pricing, or enhancing distribution. For example, Nike focuses on increasing its market share in emerging markets like China through brand awareness campaigns and new retail outlets.
2. Market Development: This strategy involves entering new international markets with existing products. Companies using this strategy look for new geographical areas to expand their market presence. For instance, Starbucks expanded into international markets, such as China, with its standard coffee offerings tailored to local tastes.
3. Product Development: Product development involves introducing new products into existing markets. Global companies may adapt existing products or create entirely new products to meet local needs. For example, Procter & Gamble introduces new personal care products specifically designed for different skin types or hair types in various regions.
4. Diversification: Diversification involves entering new markets with new products. This is a riskier strategy but may be pursued by companies looking for higher growth opportunities. Samsung is an example of a company that has diversified both in terms of products and markets, offering everything from smartphones to home appliances in diverse global markets.

Summary

Global marketing is a complex and multifaceted process that requires careful consideration of local and global factors. Companies need to develop global marketing strategies that balance the benefits of standardisation with the need for local adaptation (glocalisation). By adopting the right marketing approach and adapting the marketing mix and Ansoff’s Matrix, businesses can improve their competitive advantage and successfully expand into international markets. The ability to tailor strategies to meet the unique needs of global consumers while maintaining a consistent brand message is key to achieving long-term success in the global marketplace.