A company that takes on a wider scope in their business coverage conquers the global market especially if it has established a competitive advantage in the industry. However, not everything works the same way as how business successfully operates in the domestic field.
Some companies fail in going global because of the false assumption that the approaches that work in their country goes true in the international aspect. So, these businesses embark on the same product, same marketing campaigns and even the brand names and packaging. Failure to consider the diversities and differences in culture and other factors may cause the breakdown of the business.
Having a standardized or uniform marketing strategy for both local or domestic and international market will only be effective if adequate market research is conducted. An international business must find out whether certain strategies for global marketing are also effective to the larger market.
Global marketing is not a breakthrough or something that is revolutionary; it is an evolutionary process. Not all companies can afford to become global but definitely all global or international companies started out as domestic-only businesses.
Evolution of Global Marketing
Global companies progress in their marketing plans in various phases. It starts out with domestic marketing. A business that promotes and advertises its products within national boundaries only competes with companies of similar marketing scope. The creation of products and services are intended for the home market and does not consider the possibility of making it available and beneficial to larger markets. Domestic marketers do not put emphasis on the market changes in the global setting. Instead, they are more focused on how they can create a competitive advantage against other companies in the home market.
From the domestic marketing approach, a company starts exporting to the foreign market. This phase is called export marketing. Once exporting process is becoming a success, certain factors would push the company to expand and put up offices outside the country in order to facilitate a more convenient business setting. However, marketing mix decisions are made according to the various target markets of each country.
Companies go up the ladder at a multi-national setting and would want to take advantage of the economies of scale. Marketing research, development, production, and marketing strategies are conducted on regional levels but not across regions.
A company that is considered a global marketer sees the world as a one large market. Marketing decisions are made to be uniform across foreign branches or offices.
Global Marketing Mix
As an organization advances from each level of marketing to become global in scope, there are four important marketing mixes that should be considered: product, price, placement, and promotion.
A global business is able to manufacture a single product or offer the same service to the global market with minimal adjustments of certain elements. Coca-Cola, for example, has uniform packaging in various countries. But a country can opt to use its native language on the bottle.
In the different markets, price is not constant and uniform. But the price changes are brought about by many factors such as cost of product development, cost of materials and delivery, and other factors that affect pricing.
Placement is the distribution of the product which greatly depends on the competition and the product’s position in the global market.
The aspect of marketing that entails adequate budget is promotion or product and service advertising. Companies take on integrated marketing to make cost-effective but effective advertising campaigns.
Advantages and Disadvantages of Global Marketing
Global marketing can be both beneficial and disadvantageous to the global companies. Beneficially, the expansion of the market worldwide is a huge plus. Because it is global, a business maintains consistency in brand image and name for global brand recognition. Moreover, marketing practices are uniform which contribute to a lower cost and expenses in marketing and advertising. Business relationships are also established in a more global aspect. Lastly, a company is able to benefit from the economies of scale in both production and distribution.
On the other hand, there are disadvantages with global marketing, too. But these are more of the differences of various aspects considering that the business is now global. Differences in the administrative procedures and product placement can occur. Customers have different and changeable preferences that lead to diversity in customer responses. However, these differences may be addressed by the many ways and techniques a company can integrate.