Introduction to GLOBAL MARKETING:-
International marketing (IM) or global marketing refers
to marketing carried out by companies overseas or across national
borderlines. This strategy uses an extension of the techniques used in the
home country of a firm. It refers to the firm-level marketing practices across
the border including market identification and targeting, entry mode
selection, marketing mix, and strategic decisions to compete in
international markets. According to the American Marketing Association
(AMA) "international marketing is the multinational process of planning
and executing the conception, pricing, promotion and distribution of ideas,
goods, and services to create exchanges that satisfy individual and
organizational objectives." In contrast to the definition of marketing only the
word multinational has been added. In simple words international marketing
is the application of marketing principles to across national boundaries.
However, there is a crossover between what is commonly expressed as
international marketing and global marketing, which is a similar term.
Evolution of GLOBAL MARKETING:-
Global marketing is not a revolutionary shift, it is an evolutionary process. While
the following does not apply to all companies, it does apply to most companies
that begin as domestic-only companies.
DOMESTIC MARKETING-
A marketing restricted to the political boundaries of a country, is called
"Domestic Marketing". A company marketing only within its national
boundaries only has to consider domestic competition. Even if that
competition includes companies from foreign markets, it still only has to
focus on the competition that exists in its home market. Products and
services are developed for customers in the home market without
thought of how the product or service could be used in other markets. All
marketing decisions are made at headquarters. The biggest obstacle
these marketers face is being blindsided by emerging global marketers.
Because domestic marketers do not generally focus on the changes in the
global marketplace, they may not be aware of a potential competitor
who is a market leader on three continents until they simultaneously
open 20 stores in the Northeastern U.S. These marketers can be
considered ethnocentric as they are most concerned with how they are
perceived in their home country.
INTERNATIONAL MARKETING -
If the exporting departments are becoming successful but the costs of
doing business from headquarters plus time differences, language
barriers, and cultural ignorance are hindering the company’s
competitiveness in the foreign market, then offices could be built in the
foreign countries. Sometimes companies buy firms in the foreign
countries to take advantage of relationships, storefronts, factories, and
personnel already in place. These offices still report to headquarters in
the home market but most of the marketing mix decisions are made in
the individual countries since that staff is the most knowledgeable about
the target markets. Local product development is based on the needs of
local customers. These marketers are considered polycentric because they
acknowledge that each market/country has different needs.
MULTINATIONAL MARKETING-
At the multi-national stage, the company is marketing its products and
services in many countries around the world and wants to benefit from
economies of scale. Consolidation of research, development, production,
and marketing on a regional level is the next step. An example of a region
is Western Europe with the US. But, at the multi-national stage,
consolidation, and thus product planning, does not take place across
regions; a regiocentric approach. It should be noted that most companies
that self describe their organization as multinational really are not
entirely multinational. In fact, the definition of the multinational
corporation itself is somewhat suspect. Simply calling a company a
multinational corporation is not enough. A company must make
adjustments to the ways it perceives its role in the international market
place so that it might reap the rewards the multinational environment.
Essentially there are three responses or behaviors that the multinational
corporation can use in the international market place. These three
orientations that a multinational corporation have been described as
ethnocentric, polycentric, and geocentric. In ethnocentric company the
culture of the home country pervades the organization. In the polycentric
organization the host country begins to play more of a role but the
company still treats each individual country unit as a some what disparate
group with only a very small information flow back to headquarters. In
the most mature stage of multinational development, geocentric, the
company has truly started to act globally. The company can now begin to
reap the benefits of the multinational economy. The somewhat parasitic
nature of the previous types of multinational system are now replaced
with the give and take of international relationships that involve the all
important two way communications flow.
