More communication and technological advances have made it possible than ever for companies to offer their services and products internationally. Today, to achieve success, even the smallest businesses ought to plan on their global marketing strategies in order to attract consumer interests outside of their local markets.
Before a new market entry, a company must conduct a thorough cross-cultural analysis to compare the differences and similarities between different country markets. In as much as there are several risks involved in expanding the market worldwide, the benefits are also insurmountable and if you fail to provide a product to the world market, your competitor will.
It’s important to note that some products are more appropriate for global market expansion than others. However, any business type can benefit if it requires fewer changes in its global marketing strategies to reach consumer markets anywhere in the world. To take a business worldwide means that you will be able to find new markets for your products or services, go into markets with less competition and reach new consumers overseas. The cross-cultural is quite essential since it provides some insight on the appropriate international strategy whether it is multi-domestic or global.
Global marketing strategy
This strategy makes an assumption that all consumers in all geographical regions or countries are the same. This strategy is best suited for standardized products such as Coca-cola and copy machine, where little or no product differentiation is required. For instance, Coca-cola can be found just anywhere in the world and can easily be identified as such. It is imperative to note that in as much as countries have narrowed down their differences thanks to globalization, some small differences still which have a huge influence on how exactly companies will look at and put plans in effect for global marketing behavior still occur.
Standardization Vs Localization
Since companies have begun to market their products globally, they are faced with the dilemma of whether to standardize (the same marketing concept in each and country) or localization (adjusting the marketing strategy to match the specific dimensions of the local market). For most companies, they decide on standardization of marketing mix for global markets for cost or efficiency scores and also because of lack of consistent global marketing strategy.
Standardization is a more cost-driven concept for marketers since it leads to supplying the same product/service/template configuration to create economies of scale as well as cost savings. When you create a single strategy for the international market and standardization of marketing mix elements, then you can gain consistency with customers and also lower costs. It’s believed that companies can easily achieve long-lasting success by solely concentrating on producing a standardized product that is functional, reliable, low-priced and advanced rather than focusing on the specifics of what anybody else thinks they might prefer. This easily leads to a much better resources allocation, higher profits, higher efficiency and consistent marketing.
During the implementation of a standardized strategy, companies make an assumption of homogenized consumer requirements. Thus, minimally invest in international marketing research in relation to changing the marketing mix. The marketing mix is made up of the company’s efforts in relation to the 4 marketing P’s: Place (distribution), Product, Promotion, and Price.
- Expected quality level of a specific product to be the same around the world
- Supporting positive consumer perception of a specific product
- Positive word-of-mouth can easily result in an increase in the sales across the globe.
- Cost reduction since selling in large quantities of a similar, standardized product and buying content in bulk reduces the cost per unit.
- Results in improved R& D, lowers cost of investment and marketing operational costs.
- Helps companies focus the same marketing mix especially on a single product, thus aids for quality improvement.
- Different markets would mean different preferences and fail to recognize that might make the local market not to react, allowing for the competitors to gain the market share if their products are tailored to match domestic market needs, for instance, Walmart’s failure to get into the global market by imposing its values all over the world.
- Largely depends on economic scales (international markets and products) with several countries implementing trade barriers, localization id predestined.
This global marketing plan takes into consideration the intrinsic diversity existing in global markets and treats people as ‘cultural beings’ whose behaviors and values are defined by the specific culture they live in. The adaptation strategy focuses on understanding the local consumer needs and other location-specific requirements then localizes the marketing mix as well as other business concepts to satisfy consumer wants and needs. Some brands have failed to localize their products with their communication offending some individuals in global markets for instance Pepsi, Colgate and Chevrolet had non-localized messages which were misinterpreted in several countries. China’s automobile industry also faced global barriers related to the perceptions that Chinese cars are of poor quality despite the industry growing too fast and being ready for the global expansion.
If localization is done properly, it can really save you some bucks because the cost of repositioning after offending a number of consumers can be very high and sometimes the damage is permanent. To localize the product names into local languages without necessarily compromising brand identity can be quite a challenge. Also, the issues of packaging are also differently perceived in a different culture, for instance, a golf ball company lost potential markets in China and Japan for packaging the balls in fours and in the two countries number four sounds like death hence considered bad luck.
Even with the challenges, many companies have found a way to perfectly target the international markets by proactively localizing their marketing mix and product, for instance, McDonald’s and KFC. In China, the two companies have always had success stories and recorded profits in China even with the financial crisis. They have achieved this by localizing their food retailing strategies and menus. Another example would be Unilever which saw an opportunity with low-income Indians who wished to buy the high-end personal care products and detergents but could never afford them. The company would then develop low-end packaging to ensure that they could be able to access them.
- Customers keep their landmark and feel noticed
- Respect local specifications and expectations
- Excellent local image.
- Higher cost, it’s quite expensive when trying to localize a product.
- Time-consuming and poor speed of execution
- Difficulty to know what consumers really want.
Ultimately, it’s all about striking the balance since both global business concepts have logical, coherent and rational advantages as well as valid inefficiencies. To this effect, it’s safe to say that marketing for multinationals doesn’t lie on either of the two but when they coexist especially in the same country. For success, incorporate the two approaches elements and to gain the perks of both approaches will require the companies to follow localization where necessary so as to satisfy the respective market needs and also standardize marketing strategies and several marketing mix elements. McDonald’s scores big as one of the companies that are benefiting from both standardization and localization and remains an untouchable brand after so many years.
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