Global Marketing

Global Marketing
“A process (or set of processes) which embodies (represent) a transformation in the spatial (relating to,
occupying, or happening in space) organization of social relations and transaction … generating
transcontinental or interregional flows and networks of activity, interaction, and the exercise of power”.
Globalization may not be a particularly attractive or elegant word. But absolutely no one who wants to
understand their (and/or others’) prospects in future can ignore it. According to the ‘globalists’ school of
thought, globalization represents;
• A convergence of tastes and increasing homogeneity that allows for the use of standard products and
services worldwide.
• The process of integrating purchasing and manufacturing processes on a global scale to achieve cost
efficiencies
• Industries dominated by a few major players worldwide.
• Large organizations with global cultures and mindsets
A number of scholars see globalization as a process driven by a series of global industry drivers. These drivers
are market drivers, such as common customer needs and the existence of global channels; cost drivers, such
as global scale economies and global sourcing efficiencies; economic drivers, such as trade policy and
deregulation; and competitive drivers, such as the existence of global competitors.
Market Globalization Drivers - Market drivers depend on the nature of customer behavior and the
structure of channels of distribution. Some common market drivers are:
Common Customer Needs:
Factors that affect whether customer needs are similar in different countries include economic development,
climate, physical environment, and culture.
Global Customers and Channels:
Global customers buy on a centralized or coordinated basis for decentralized use. Their existence affects the
opportunity or need for global market participation, global products and services, global activity location, and
global marketing.
Transferable Marketing:
Certain elements of the marketing mix, e.g., brand name, pricing strategy, etc., may be transferable across
markets. The implications are that these elements can be effectively used both for increasing as well as
reducing barriers.
Lead Countries:
Lead countries represent countries where innovations in particular industries are prone to take place, e.g.,
Japan for consumer electronics, Germany for industrial control equipment, and the United States for
computer software.
Cost Globalization Drivers - Cost drivers depend on the economics of the business. These drivers
particularly affect production location decisions, as well as global market participation and global product
development decisions. The most commonly cited cost drivers are:
Global Economies of Scale and Scope:
Global economies of scale apply when single-country markets are not large enough to allow competitors to
achieve optimum scale. One of the most visible examples of this has been in the electronics industry. In many
cases, economies of scope may be available by using facilities and processes in a single operating unit to
produce a larger variety of goods or services with or without the presence of scale economies. Areas where
economies of scope may be visible include consumer research, product development, and the creation of
marketing programs.
Steep Experience Curve:
Besides economies of scope and scale, steep learning activity associated with concentration of activities can
result in significant cost advantages.