Global marketing has the potential to bring a company to its proverbial next level. In order to understand how to thrive in global marketing one must first understand the conditions leading to the development and sustainment of global market. The need and environment for a global market stemmed from a number of factors. One factor is the rapid technological advances in equipment, communications, and transportation, which are all major drivers of both the ability and the desire of companies to expand globally.
Advances in production equipment allows companies to create larger volumes of product which, when paired with the expanded customer base of a global market, can generate greater profits which can be reinvested into research and development efforts. These increases in product volume and profit are aided by faster communication and transportation, which serve to shrink the global marketplace and provide less costly methods for companies to distribute products, information, and financial flows.
Another factor is the international system, which includes the development of the International Monetary Framework, trading blocs, General Agreements on Tariffs and Trade (GATT), and other such formations of international agreements facilitated by the spread of global peace. One final factor is the spread of awareness in disparate markets of different products and processes. In the process of forming international infrastructures, global experiences have served to change attitudes and behaviors of entire segments of domestic markets.
Being exposed to ideas from around the world has affected these market segments’ tastes and professed needs, eventually leading to a convergence of world markets to global markets sharing common tastes and needs across geographical boundaries. From a more conceptual angle, global markets derived from the Bretton Woods system of global free trade and are able to thrive under the policies of a hegemon, or dominant world power.
The Bretton Woods Agreement established a method enabling currencies to be convertible for trade, by pegging currencies to gold, and formed the International Monetary Fund and the International Bank for Reconstruction and Development. The system established by the Bretton Woods Agreement was validated due to the United States’ economic dominance and manufacturing base. Through the uses of diplomacy, finance, and military force, the United States has ensured openness in the Bretton Woods system, a concept defined by the Greek word hegemony.
It has been theorized that international systems are best able to maintain stability when managed by a single dominant world power. According to the theory of hegemonic stability, the downfall of the reigning hegemon causes the global market to suffer instability until another rises into power. Furthermore, the tastes and needs of global markets will change to reflect that of the hegemon, which explains the current spread of western culture.
The convergence of world markets has created the need for companies to approach all country markets within their scope of operations as a single global market, identifying market segments with similar demands that can be satisfied with the same product, standardizing what components of the marketing mix that they can, and adapting the marketing mix to accommodate for significant cultural differences when necessary – an approach called global orientation.
Factors that must be considered for a company to achieve global awareness and succeed in global orientation include objectivity, tolerance toward cultural differences, and a solid knowledge base. The first factor, objectivity, involves being objective in the assessment and handling of opportunities, risks, and issues associated with prospective investments. The second, tolerance, requires an understanding of and willingness to work with different cultures that exhibit behaviors unlike one’s own.
The final factor to achieving global awareness is becoming knowledgeable about the changes occurring throughout the world, the global economy, social trends, world market potentials, world history, and individual cultures. A company’s success in the three aforementioned factors will determine the level of global awareness they will be able to achieve, their success in a transition to global orientation, and ultimately their success in the global marketing environment.
Once a company has achieved global marketing success, it must establish a competitive advantage in order to thrive. Competitive advantages can be typified by a company’s competitive strategy coupled with their emphasis on new product-market growth. Table 1 depicts Mullins and Walker’s (2013) typologies of business level competitive strategies. An example of how a company may fit into this typology is that of Samsung.
Samsung gauges whether they are on the right track in the global market through the use of data collection and studies including revenue measurements, profitability measurements, average price indices (API), brand attitude studies (BAS), and dealer attitude studies (DAS), which would place them in the position of analyzer using both competitive strategies of differentiation and cost leadership. Table 1: Combined Typology of Business-Level Competitive Strategies Emphasis on new product-market growth Heavy Emphasis No Emphasis prospectorAnalyzerDefenderReactor
Differetiation Units primarily concerned with attaining growth through aggressive pursuitof new product-market opportunitiesUnits with strong core business; actively seeking to expand into related product-markets with differentiated offeringsUnits primarily concerned with maintaining a differentiated position in mature marketsUnits with no clearly defined product-market development or competitive strategy Cost leadershipUnits with strong core business; actively seeking to expand into related product-markets with low-cost offeringsUnits primarily concerned with maintaining a low-cost position in mature markets
In conclusion, global markets have evolved from increased international cooperation and interaction. In order for companies to continue to grow and thrive, they must become globally oriented in their operations and implement a competitive strategy for the global environment. Globalization has opened up many opportunities for worldwide development and is strengthened by the participation of companies in the global market and by strong leadership by a world power.
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Global Marketing Orientation. (2016, Jul 27). Retrieved from https://studymoose.com/global-orientation-essay