International Marketing Strategies Of Companies Marketing Essay

Inter rural argonaal market placeing Strategies Of Companies Marketing EssayI am a Marketing Executive, working in a mid-size firm, based in London. The excogitation of this study is to find out the set up of globalisation on merchandise strategies of Companies and then, convince my Manager to handle necessary steps, in locate to respond to Globalisation thereby expanding grocery and increasing net. To accomplish the stated objective, we destiny to go in-depth and analyse/understand bonks from beginning, starting from What is Globalisation?WHAT IS globalisation?It is non too long, when people from unmatched representative of the terra firma did not issue the existence of others. Peoples desire to sh are fellowship and explore the whole knowledge base led to near major exploration likes Marco Polo and Christopher Columbus, who made the connection betwixt Europe and America. Before this period, people had no scope to know near knowledge or innovations of others. It was the 16th centimeury A.D. that brought Patagonian Indians to America. During the 17th century Europeans notice Australia and by that time the whole world was recognized and was ready for arrive at and look at activity. This stack be considered to be the earliest recorded account statement of the beginning of a new era called globalization (Daniels et al., 2002). Although the idea of globalization and its relation to the communication channel world is not too old and it is lonesome(prenominal) in the last both decades that the current gallery of globalization has brought a dramatic change to the line of merchandise world (Thoumrungroje Tansuhaj, 2004).However, Globalization has been defined by Jane Fraser and Jeremy Oppenheim (1997), in the easyst terms, as a process by which the worlds economy is modify from a set of national and regional trades into a set of markets that die hard without regard to national boundaries.WHAT DRIVES IT?In mid 1980s, after facing some fast changes in cold war, East world- westmost world relation became virtually friendly. In addition, after the fall of Soviet Union, lot of emerging markets appeared in the context of world market, with an aspiration to enhance their living standard. In 1990s, West Germany and East Germany re-merged and appeared as a potential industrialist country in world market. galore(postnominal) Eastern Europe countries and transition economies countries joined in European Union. mainland China and India started exporting goods and services to large regions of the globe, particularly to the United States. The sizable economic growth of countries, resulted in enlarged local demands, traveling to deviance between provinces, discriminations in income, anxieties intimately employment, and increases in energy prices (Czinkota and Samli, 2007).The USA market took the leadership role in this current trend of globalization. Factors like decentralization, privatization, deregulating as wel l as the growth of meshing made the globalization process faster. Through decentralization, new trading markets and trading blocs generate emerged more or less(prenominal) the world. The companies are able to produce, buy or sell goods anywhere in the world and meet the local and regional fills. On the other hand, deregulation removed the trade barriers and helped to form NAFTA, LAFTA and World Trade Organization. Also, non government arrangement became involved in globalization through the process of privatization. Countries like India and China became more involved in global trade overdue cyberspace and technological improvement (Czinkota and Samli, 2007).Many authors and scholars have talked about many characteristics of globalization slightly the world. But factors like fast technological progress, the deteriorating role of the nation state, carry of industrial output signal from western countries to newly industrialising countries for cheap drive and material are make drivers of globalization (Brown, 1999).THE EFFECT OF GLOBALISATIONThe publications of globalization are spreading widely day by day. every the major industries and businesses of some(prenominal) developed and developing countries, along with individuals, are stirred by globalization (Garrette, 2000). The current business environment is more strong-growing and competitive and corporation be characterised as hypercompetitive environment (DAveni, 1994).As markets are becoming more global day by day, the trade involves more countries and economies around the world. World merchandise trade was $157 billion in 1963 and it has twist $10,159 in 2005 which is a substantial increase of $10 trillion. Also, service trade which apply to be $365 billion in 1980 has increased to $2,415 billion (Held Mcgrew, 2007).The effect of globalization brought dramatic changes in the business environment and companies are restructuring their business due to this antecedent (Jones, 2002). One of the most strategical change and significant business victimization in the new-fangled years, is the formation of co-merchandising adherences (Hwang and Burgers, 1997).Globalization does not always nonplus good outcome to all people. It has badly unnatural the job sector of the developed countries, where jobs of manufacturing sector has decreased. Other issues for developed countries take the debt obligations to world-wide bank. The amount has increased to $1 trillion which has an adverse usurpation on their economy. The privatisation sector, deregulation and currency adjustment has been affected due to this reason (Roukis, 2006).On the other hand, Held Mcgrew (2007) suggests that economic globalization could encourage economic development as well as it could be the only successful direction to global poverty reduction. During 1970, there were more than 1400 million people who used to earn less than $2 a day and during 1998, this figure came overthrow to less than 1000 mi llion.WHAT IS MARKETING STRATEGY?According to Varadarajan Clark (1994), Marketing scheme is concerned with the creation of a marketing mix that enables the business to come across its objectives in a target market. Aaker (2009 cited by Kyung Hoon Kim et al., 2012) notes that marketing dodging can involve a variety of functional area strategies including spatial relationing, determine, distribution, and global strategies.The overrule principle driving a firms marketing strategy is that, marketing strategy depends on the political partys vision for its future. This vision generally reflects where the firm expects to position itself in five to ten years-in effect, how the market perceives the firm. The development of a marketing strategy affects a basic assessment of both the firm and the market. The strategy, chosen, has to be the best at increasing the firms assets, with respect to the target market (Kyung Hoon Kim et al., 2012)Also, the key task of transnational marketi ng management is to establish a orders general international strategy which also decides the degree of international integration of the company (Ghauri Cateora, 2006).INTERNATIONAL BUSINESS AND GLOBAL MARKETINGGlobal marketing or globalization of markets is a key issue for multinational business firms. Many companies who markets global crossroadions around the world much(prenominal) as Nestle, Sony, and many others has to carefully look for opportunities in the international markets. Globalization of markets is a challenging issue for governments and political party or trade unions while business related to people or organizations encourage the initiative of open trade which connects divergent markets by going beyond the national boundary.The technological advancement of the twenty-first century has been a key factor behind global marketing. Consumers around the world wants new and innovative product even if they are creation made in the other part of the world because te chnology makes them mindful about the existence of that new product. Business firms accept this commercial realism and as result enjoy greater economies of scale in production or marketing or distribution. As a result, the globalization of business helps them to offer products at a cheaper rate and thus clear a competitive prefer among its competitors (Buzzel et al.,1995).Although global marketing strategy and globalization of markets are two interrelated areas but there is a little fight between them. Global marketing strategy is needed in order to improve the efficiency of operations while globalization of markets is occurring due to the homogeneity of demand across cultures (Ghauri Cateora, 2006).Due to the raise in globalization of markets day by day companies find they are inevitably surrounded by foreign consumers as well as their competitors and suppliers. On the other hand, distinguishable countries have to admit the limitation of their own assets and the advantage of trade activities alfresco their own boundaries. Thus engaging in international business for both firms and countries are very much essential. According to Ghauri and Cateora (2006), the following factors play an of import role in shaping of international business.Each country or economy is dependent to other economies.The formulation of free trade areas much(prenominal) as ASEAN, EU, APEC and NAFTA and the expansion of business activities in those areas.Countries having greater purchasing military force due to their improving economyThe arrival of new and potential markets with a large number of customers such as countries like India, China, Russia, Brazil, Malaysia etc. scientific advancement has been the key factor behind the improvement of transportation and communication.In order to engage in international business, companies need to have proper international marketing strategies. As international markets bring new opportunities and threats, inhibit strategies could help them to overcome possible difficulties in the international markets. Also, international companies need to respond to customer needs and wants by adapting existing product or by bringing new product to the market (Bradley, 2002).EFFECT OF GLOBALISATION ON COMPANIES MARKETING STRATEGIESAccording to Czinkota Samli (2007), Globalization enables international marketing to take place all around us, and to continuously offer new opportunities and challenges. successful economies are always driven by customer needs and wants. The bureaucratic plans do not play an important role there. On the other hand, a firm must have a strategic rejoinder to the challenges of global market. Companies which are expanding their business in domestic market need to choose an appropriate strategy suitable to their situation. Since a global company is involved in many countries economy, it brings the idea of standardizing the marketing activities.The recent trend in globalization encourages the companies a s well as countries to engage more in world trade activities. World exports were three times high in 1998 than 1950 match to a WTO estimate, in 2001 this ratio was 29 per cent and in 2005 it was 27 per cent comparing to 12.5 per cent in 1970 and 17 per cent in 1990. In spite of 11 September endeavour in the USA the world economy is still achieving a rapid growth (Held Mcgrew, 2007).Also, Czinkota and Samli (2007) suggest that the base of globalization has two dimensions. The first one deal with deregulation, decentralization, the development of electronic data transfer and the other is characterised by capital flow, information and technological development. These features accelerate globalization, which enable companies to engage in international trade activity. Thus globalization provides a powerful pes for international marketing to make progress.CO-MARKETING ALLIANCESAccording to Hewang and Burgers (1997, cited by Thoumrungroje and Tansuhaj, 2004), one of the recent trends to overcome the globalization effects has been the formation of marketing alliances. As companies around the world are restructuring their business to meet the global threats co-marketing alliances can bring greater success in the international marketing performances.In simple words, Anderson and Narus (1990, cited by Louis P. Bucklin Sanjit Sengupta, 1993) defines Co-marketing alliances as a form of working partnership with usual recognition and understanding that the success of all(prenominal) firm depends in part on the other firm. Its a contractual alliance between the two firms, whose respective products acts as complimentary products, in the market. The purpose of such relationship is to intensify and/or build awareness, about benefits of such complementarities. The co-ordination between firms can be extended into product development, product and even research development.Also, according to Hoskisson et al. (2004, cited by Thoumrungroje and Tansuhaj, 2004), co-marketing al liances are a particular type of strategic alliance which is a business level competitive strategy. The primary focus of such alliance is to create a competitive advantage in the international market. It is also called horizontal complementary strategic alliance. The main objective of such alliance formation is to maximize the companies profit by utilizing their resources and capabilities. Co-marketing alliances also helps firms to gain better market position through increasing sales and market share. The following figure explains the relationship between co-marketing alliance, globalization effects and international marketing performance. Global Competitive environmentGlobal Market incredulityCooperation in Co-Marketing AllianceInternational Marketing PerformanceGlobal MarketOpportunitiesConceptual relationship of globalization effects, cooperation and performance. Source Adapted from (Thoumrungroje and Tansuhaj ,2004).However, Co-marketing alliance does have significant manageme nt challenges, in spite of its potential contribution. There are chances of disagreement between partners, as they often tend to compete with each other in terms of product lines and occasionally, even those covered by co-marketing agreement. In fact, there is a high possibility of opportunism as one of the partners may use the other to gain market position only or may be to build technological skills from the knowledge of the others intellectual property. (Louis P. Bucklin Sanjit Sengupta, 1993)STANDARDISATION VERSUS ADAPTATIONIts been a long time, since the two fence international marketing strategies have been debated upon standardisation versus reading of products. Standardization gist selling essentially the very(prenominal) product in all markets. The advantage of standardisation is low costs, as designing, manufacturing and distributing same product across countries involves less of investment. However, selling identical products across borders may be undesirable due to differences in the legal environments, distribution channels, climates, topography, levels of market and technological development, and competitive and ethnic factors. As customers of distinguishable countries have different requirements, a standardised product might not be able to satisfy all customers. (Roger J. Calantone et al. 2004)On the other hand, product interlingual rendition refers to the degree to which the physical characteristics or attributes of a product and its packaging differs across national markets (Cavusgil et al., 1993 cited by Roger J. Calantone et al. 2004). Though customising products for different markets increases cost, the adapted products are more likely to fit the needs of the change range of customers of different countries and become more acceptable but would didactics higher margins, generating greater revenues. For example, Procter Gambles (PG) Oil of Olay skin moisturizer has different type of product in different countries, based on researc h of the need of customers in those countries instead of just changing the language on the bottle of the same product.Doole and Lowe (1999) suggests within the elements of marketing management products or service image or marketing objective and strategies can be standardised easily than pricing or distribution.Pricing DifferentiationDistributiongross revenue forceSales promotionProductImageObjective strategy StandardisationIn one of the important studies on this topic, Cavusgil et al. (1993) concluded that it is difficult to make curtain statements about suitable standardization/adaptation strategy without an examination of (these factors). The favored option for firms is to take such a strategy which is a diverseness of standardisation as well as adaptation of the different elements of marketing management programmes. Most companies around the world globalise some elements of the marketing mix while localising others and they use a combination of multi-domestic, global or regio nal, and transitional strategies.Many international firms find it difficult to optimally relaxation standardizing and adapting their marketing, specifically the marketing strategies, across national borders, in order to be successful. Also, in the process of internationalisation, firms need to find the correct approach towards globalisation, regionalisation and mending of business activities, in general, along with finding a way to transfer the approach to their marketing strategies level (Stefan Schmid and Thomas Kotulla, 2011).CONCLUSIONThis study has launch more positive effects of globalization than negative ones. Globalisation has lead to the change of marketing strategies of companies to some extent, but its ultimate objective has been profit maximization rather than anything else. Several effects of the current globalization trends imply formation of co-marketing alliances as well as the standardization or adaptation of marketing mix. Therefore, as per the evidences prov ided above, I would like to request my Manager to both start co-marketing alliance with a company or to bring about changes in the marketing mix with respect to standardisation or adaptation in order to go beyond boundaries and maximise our profit.