Free Marketing Essays - According to Kapferer (1992), “Defined in an absolute sense, there is no such thing as a ‘Global Marketing Mix’
According to Kapferer (1992), “Defined in an absolute sense, there is no such thing as a ‘Global Marketing Mix.’ A ‘Global Marketing Mix’ can only be realistic if there is room for adaptability. 100% Globalisation is a myth. ‘Glocal’ is as far as a business can go. Fortunately, few people worry about the purity of their global marketing; about the desirability, there is strong agreement.” This quote provides an excellent point of reference for discussing global marketing.
It is important, to begin with, not to confuse globalisation with standardisation (Mazur 2004). In standardisation, the company refines its products, services, and processes so that it can be replicated. This replication does then often happen in the international arena. However, standardisation reduces each component of the marketing mix to a constant, worldwide. It presents a stable global marketing mix and results in being as close as can be achieved in the real world to 100% globalisation (Mazur 2004). Unfortunately, businesses have found such standardisation to often result in lost market share when applied across international market segments (Mazur 2004). Globalisation requires the marketing mix to experience minor (or major) adaptations so as to most effectively reach whatever target customer group is being pursued.
The marketing mix is generally held to consist of seven components: people, product, place, price, positioning, process, and promotion. If a pure global marketing mix were possible, the same configuration of these seven components would be applicable internationally, regardless of cultural and conditional variances from country to country and region to region. Obviously, this is not the case. While for a period of time some businesses focused on global convergence, current data suggests the need for local adaptation of marketing strategy. This is usually achieved by careful analysis of regional market segmentation, which may or may not fall along national borders (Semenik and Bamossy 1995). Adaptability of each component of the marketing mix along international market segmentation is necessary for effective globalisation.
Global market segmentation provides companies with “opportunities to transfer products, brands, and ideas across subsidiaries in different countries (Kumar and Nagpal 2001, 8). These segments group regional areas into a customer range, allowing for appropriate price and product, targeted promotion, and appropriate positioning within the businesses’ sector. Importantly, these segments do not always coincide with political or geographical boundaries (Semenik and Bamossy 1995). For example, the market segmentation of two countries in South America may be the same, while the northern border area of Mexico may share a market segment with the southern border area of the United States.
Market segmentation is founded on good cultural data (Anon 1993). The more completely a company can consider the culture and value systems of a particular community, the more likely they are to correctly adapt their marketing components to positively present the company to the new area (Czinkota, Ronkainen and Tarrant 1994). This data is used to create broad schemes, and can be the result of any number of information gathering tools. One use is to create market segments, where a significant number of potential customers with similar demographics are concentrated (Semenik and Bamossy 1995). Each market area will differ from the others. However, equipped with such information and the realisation of the need for adaptation to remain competitive, a firm can make wise and culturally honourable decisions for the company’s expansion location(s).
Although these segment differences sometimes lead to minor alterations or additions to product, the current maxim is to brand globally and act locally (Vignali 2001). Major product composition is fixed on an international scale, although slight allowances are usually available for each regional market segment. These accommodations are slight, however, as local product adaptation can be costly and unprofitable. Likewise, local branding rarely contributes to economies of scale and is therefore pursued less often (Semenik and Bamossy 1995). However, globalisation requires the company to consider all aspects of the product, both domestically and internationally, at the creation stage. Doing so prevents expensive faux pas, such as the case of the Chevy Nova. Its name in Spanish can be said as “No va,” which means, “It doesn’t go,” not a particularly reassuring or marketable name for a car (Semenik and Bamossy 1995). The brand, its name, its feature emphasis, and the like must be developed with consideration for all its major markets worldwide. In areas where conflict is apparent, it is vital the company adapt to the local market.
A good example of effective global product and marketing is McDonalds. McDonalds has grown internationally primarily through franchising, which combines the global brand of its restaurant with local businesspeople who can adapt the restaurant to local tastes and needs (Vignali 2001). In examining McDonalds global marketing mix, some products are fixed throughout the organisation. French fries, for example, are available at any McDonalds outlet and are subjected to high levels of quality control (Vignali 2001). Additional products are sometimes added, based on local expectation. While one can get wine at McDonalds in France, in the restaurant’s home country of the United States there are no beverages available stronger than a chocolate milk. Other products are adapted to conform to the local cultural values of various international markets. In Israel, for example, sandwiches are offered without cheese as is required of kosher establishments (Vignali 2001). However, the primary product mix of hamburger, fries, and a coke remains constant throughout the global organisation.
Some companies will decide that the amount of product share sacrificed by not altering product outweighs the costs of product adaptation (Czinkota, Ronkainen and Tarrant 1994). In this sense, there is no room for adaptability of product in this organisation’s global marketing mix. The company is willing to sacrifice sales and product rather than conform their product to local consumers. This has been the marketing strategy of many firms, offering “here is our product, take it or leave it” approaches regardless of market (Semenik and Bamossy 1995). Unfortunately for them, few firms operate successfully in the global arena without being willing to at least offer minor adaptations throughout all components of their global marketing mix.
Place, price, and positioning are heavily dependent upon appropriate market segmentation and require adaptability from market area to market area. For example, McDonalds’ strategy of place is relatively fixed, with the organisation seeking easily-accessible, high traffic locations regardless of where they are establishing globally. Restaurant facilities have similarities, although with regional variations. Price is determined locally based on McDonald’s local positioning and the prices of competitors (Vignali 2001).
Positioning also varies widely depending on the market segmentation McDonalds is targeting within that geographical market segment. For example, McDonald is positioned as inexpensive fast food in the United States. As such, its pricing is relatively low and the quality expectations of consumers equally restricted. In the US a typical McDonalds value meal costs less than one-half hour of work (Vignali 2001). Prices are significantly higher in the United Kingdom, where consumers are willing to spend more for restaurant food in general. Here the average McDonalds customer will work just over thirty minutes for the same meal (Vignali 2001). In Nigeria, however, eating out in any form is seen as a great luxury. There the average worker will work over eleven hours to pay for the same McDonalds value meal. Given the high comparative cost, it is not surprising that Nigerians have the highest quality expectations of McDonalds service and food for any of the three countries compared (Vignali 2001).
Process, like product, is one area where significant economies of scale can be realised through globalisation. IKEA has found a way to produce easily-shipped, largely to-be-assembled furniture for the residential markets. The customer either orders the furniture and then picks it up from an IKEA warehouse location, selects it from the warehouse directly, or in some cases has it delivered to his or her door. All three delivery options as well as the company supply operations have been fined tuned, allowing IKEA to operate over 130 stores internationally with highly competitive positioning (Semenik and Bamossy 1995). As far as process, McDonalds is world renown amongst major corporations for its efficiency in meal service and supply issues. This allows it to expand into new markets easily, enjoying the accompanying economies of scale of a large international organisation (Vignali 2001).
Promotion is the most localised component of the marketing mix. “The consumer, not the company, must decide what can be the same across borders,” and usually promotion is the most variable (Mazur 2004, 18). For example, McDonalds used sports figures in its promotional materials, ads, and television commercials several years ago. Rather than choose one known international sports figure, such as a Tiger Woods, the company picked figures recognised in each respective market, with a basketball star used in the United States, a footballer in the UK, and so on (Vignali 2001). This allowed McDonalds to project a locally appropriate image, one that identified the restaurant with local concerns and presented it as native to the region, rather than the United States.
One important aspect of adapting the global marketing mix is providing culturally sensitive primary and secondary marketing communications. For example, some firms will translate their promotional literature into the native language of their target area, but neglect the importance of providing website and supporting promotions in the same native languages (Dunham 2005). When a potential customer searches the Internet to locate a needed company, as is the case more and more often worldwide, they search using their native language. Only the firms who have translated all or part of their websites into the native language of the region or area are presented to the searching consumer (Dunham 2005).
To achieve this, regional control, or at least valued input, into promotional decisions is required (Anon 1993). What makes perfect sense in the London home office may be an impending disaster in the actual area of application. What sounds like a catchy slogan here may be a vulgar term in the intended market segmentation, such as happened with the Ford Pinto. The Pinto was named after a horse, but the word unfortunately is a quite vulgar slang term for undersized male anatomy in Portuguese (Semenik and Bamossy 1995). This regional input is one of the things that makes local ownership of McDonalds franchises so desirable. The local business owner can provide valuable insight into local market conditions and tendencies.
Finally, while businesses are invested in the benefits of globalisation, more need to examine the purity of their global marketing. Rather than simply taking the national marketing plan and tweaking it to hopefully fit an international market, businesses should begin a global marketing plan from scratch, making it truly in tune with each different market segment. Beginning from a global perspective will allow an international business to decide which products to offer where and to better position and promote its products worldwide. Returning to McDonalds as an example, the restaurant carefully evaluates each new market opportunity and the best marketing practices in each, and then develops a marketing mix for that new market segment. This sometimes results in marketing strategy and components particular to the specific region, mixed with typical McDonalds marketing mix components (Vignali 2001). The end result, however, is usually a quite effective marketing mix.
In conclusion, while a 100% global marketing mix is not attainable, many companies can move successfully onto a global scale by branding globally but acting locally. Creating an adaptable marketing strategy and component mix will allow the business to successfully negotiate the regional and cultural differences it will face, and increase both markets and profitability on the global market.
REFERENCES
Anon 1993. PR as part of the global marketing mix. Marketing, 1 July 1993, p. 22 [online]. Available at www.infotrac.galegroup.com, accessed on 12 April 2005.
Czinkota, M., Ronkainen, L., and Tarrant, J. 1994. The Global Marketing Imperative. NTC Business, Lincolnwood, IL, USA.
Dunham, W. 2005. Parlez-Vous Global Marketing? Legal Times, 28 March 2005 [online]. Available at www.infotrac.galegroup.com, accessed on 12 April 2005.
Kumar, V. and Nagpal, A. Segmenting Global Markets: Look Before You Leap. Marketing Research, vol. 13, no. 1, Spring 2001, p. 8–13.
Mazur, L. 2004. Globalisation is still tethered to local variations. Marketing, London, 22 January 2004, p. 18.
Semenik, R., and Bamossy, G. 1995. Principles of Marketing, a Global Perspective. South Western, Cincinnati, USA.
Vignali, C. 2001. McDonald’s: “think global, act local” – the marketing mix. British Food Journal, Bradford, vol. 103, issue 2, p. 97.
