This Blog discusses the importance of global marketing and explains the key
elements of the planning process: analyzing international market opportunities;
deciding whether or not to go abroad; establishing market entry mode; allocating
resources; developing the marketing plan; organizing for international marketing;
implementing the marketing strategy; and evaluation and control.
Companies pay little attention to international trade when the home market
is big and teeming with opportunities. The home market is also much safer.
Managers do not need to learn other languages, deal with strange and changing
currencies, face political and legal uncertainties or adapt their products to
different customer needs and expectations. This has been the attitude of many
western companies, which saw little need to sell in overseas markets because
their domestic market alone seemed to offer attractive opportunities for growth.
Today, however, die business environment is changing and firms cannot afford to
ignore international markets. The increasing dependency of nations around die
world on each other's goods and services has raised awareness among companies of
die need for a more international outlook in their approach to business. International
markets are important because most firms are geared towards growth and so must
seek new opportunities in foreign countries as their domestic markets mature. As
international trade becomes more liberalized, firms are facing tougher foreign
competition in the domestic market. They must develop the ability to fight off
competitors on tlieir own home ground, or to exploit business opportunities in
foreign markets.
Furthermore, time and distance are shrinking rapidly with the advent of
faster communication, transportation and financial flows. Products developed in
one country are finding enthusiastic acceptance in other countries. Across
western Europe and North America, names such as Toyota, Sony and Toshiba
have become household words in the same way McDonald's, Toys 'fl' Us, Philips
and IKEA are familiar names to most young consumers in Asian countries like
Japan, Singapore find Hong Kong.
Thus, as global competition intensifies, local companies that never thought
about foreign competitors suddenly find these competitors in their own back-
yards. The firm that stays at home to play it safe not only misses the opportunity
to enter other markets, but also risks losing its home market.
Consider, for example, Japanese victories over western producers in ninny
sectors - motorcycles, cars, cameras, consumer electronics, machine tools,photocopiers. These markets used to be the stronghold of US, German and British
companies in the 1970s, but are now dominated by .lapanese manufacturers. The
latter are not insulated from foreign competitors either. Increasing competition
from lower-cost newly industrializing countries (NIGs) in the Far East, notably
South Korea and Taiwan, are posing a big threat to established Japanese firms in
traditional industries like steel, chemicals and heavy machinery.
In the United States, American firms are fighting off aggressive assaults by
international European companies: Die's successful attacks on Gillette and
Nestle's gains in the coffee and confectionery markets are a reflection of the
growing level of international competition in 'safe' home markets. In the
European Union(Ell), foreign firms'direct investment is on the increase and
ititra-Union flows of investment in all kinds of business sectors - cars, clothing,
retailing, financial services - are particularly active. Many sophisticated and
aggressive foreign companies also see the emerging eastern European economies
as longer-term opportunities. So, more than ever, firms must learn how to enter
foreign markets and increase their global competitiveness.
Although some companies would like to stem the tide of foreign imports
through protectionism, this response would be only a temporary solution.
Suppressing a free flow of foreign imports would lead to fewer choices for the
consumer and higher prices for indigenously produced goods. In the long run, it
would raise the cost of living and protect inefficient domestic firms. It also means
that consumers' needs and wants would not be met effectively and efficiently. A
better solution is to encourage more firms to learn to make the world their
market.
The importance of internationalization is also reflected by the fact that most
governments run an export promotion programme, which tries to persuade local
companies to export. Denmark pays more than half the salary of marketing
consultants who help small and medium-size Danish companies get into exports.
Many countries go even further and subsidize their companies by granting prefer-
ential land and energy costs - they even supply cash outright so that their com-
panies can charge lower prices than do their foreign competitors.
Today the pressure on firms operating in global industries is not just to export
to other countries, but to strive to be a global firm. A global industry is one in
which the strategic positions of competitors in given geographic or national
markets are affected by their overall global positions, A global firm, therefore, is
one that, by operating in more than one country, gains research and develop-
ment, production, marketing and financial advantages in its costs and reputation
that are not available to purely domestic competitors,2 The global company sees
the world as one market. It minimizes the importance of national boundaries, and
raises capital, sources materials and components, and manufactures and markets
its goods wherever it can do the best job. For example, Ford's 'world truck' sports
a cab made in Europe and a chassis built in North America. It is assembled in
Brax.il and imported to the United States for sale. Thus global firms gain advan-
tages by planning, operating and co-ordinating their activities on a worldwide
basis. These gains are a key reason behind recent global restructuring
programmes undertaken by leading German car producers, BMW and Mercedes-
Benz. Global marketing is concerned with integrating or standardizing marketing
actions across a number of geographic markets. This does not rule out forceful
adaptation of the marketing mix to individual countries, but suggests that firms,
where possible, ignore traditional market boundaries and capitalize on similari-
ties between markets to build competitive advantage.
Because firms around the world are globalizing at a rapid rate, domestic firms
in global industries must act quickly before the window closes on them. This does
not mean that small and medium-size firms must operate in a dozen countries to succeed. These firms can practise global nichernanship. The world, however, is
becoming smaller and every company operating in a global industry - whether
large or small - must assess and establish its place in world markets.
Firms that confront international competitors in their existing markets must
ask some basic questions; What market position should we try to establish in our
country, in the geographic region (e.g. Europe. North America, Asia, Australasia)
and globally? Who will our global competitors he and what are their strategies and
resources? Where should we produce or source our products? What strategic
alliances should we form with other firms around the world V.
elements of the planning process: analyzing international market opportunities;
deciding whether or not to go abroad; establishing market entry mode; allocating
resources; developing the marketing plan; organizing for international marketing;
implementing the marketing strategy; and evaluation and control.
Companies pay little attention to international trade when the home market
is big and teeming with opportunities. The home market is also much safer.
Managers do not need to learn other languages, deal with strange and changing
currencies, face political and legal uncertainties or adapt their products to
different customer needs and expectations. This has been the attitude of many
western companies, which saw little need to sell in overseas markets because
their domestic market alone seemed to offer attractive opportunities for growth.
Today, however, die business environment is changing and firms cannot afford to
ignore international markets. The increasing dependency of nations around die
world on each other's goods and services has raised awareness among companies of
die need for a more international outlook in their approach to business. International
markets are important because most firms are geared towards growth and so must
seek new opportunities in foreign countries as their domestic markets mature. As
international trade becomes more liberalized, firms are facing tougher foreign
competition in the domestic market. They must develop the ability to fight off
competitors on tlieir own home ground, or to exploit business opportunities in
foreign markets.
Furthermore, time and distance are shrinking rapidly with the advent of
faster communication, transportation and financial flows. Products developed in
one country are finding enthusiastic acceptance in other countries. Across
western Europe and North America, names such as Toyota, Sony and Toshiba
have become household words in the same way McDonald's, Toys 'fl' Us, Philips
and IKEA are familiar names to most young consumers in Asian countries like
Japan, Singapore find Hong Kong.
Thus, as global competition intensifies, local companies that never thought
about foreign competitors suddenly find these competitors in their own back-
yards. The firm that stays at home to play it safe not only misses the opportunity
to enter other markets, but also risks losing its home market.
Consider, for example, Japanese victories over western producers in ninny
sectors - motorcycles, cars, cameras, consumer electronics, machine tools,photocopiers. These markets used to be the stronghold of US, German and British
companies in the 1970s, but are now dominated by .lapanese manufacturers. The
latter are not insulated from foreign competitors either. Increasing competition
from lower-cost newly industrializing countries (NIGs) in the Far East, notably
South Korea and Taiwan, are posing a big threat to established Japanese firms in
traditional industries like steel, chemicals and heavy machinery.
In the United States, American firms are fighting off aggressive assaults by
international European companies: Die's successful attacks on Gillette and
Nestle's gains in the coffee and confectionery markets are a reflection of the
growing level of international competition in 'safe' home markets. In the
European Union(Ell), foreign firms'direct investment is on the increase and
ititra-Union flows of investment in all kinds of business sectors - cars, clothing,
retailing, financial services - are particularly active. Many sophisticated and
aggressive foreign companies also see the emerging eastern European economies
as longer-term opportunities. So, more than ever, firms must learn how to enter
foreign markets and increase their global competitiveness.
Although some companies would like to stem the tide of foreign imports
through protectionism, this response would be only a temporary solution.
Suppressing a free flow of foreign imports would lead to fewer choices for the
consumer and higher prices for indigenously produced goods. In the long run, it
would raise the cost of living and protect inefficient domestic firms. It also means
that consumers' needs and wants would not be met effectively and efficiently. A
better solution is to encourage more firms to learn to make the world their
market.
The importance of internationalization is also reflected by the fact that most
governments run an export promotion programme, which tries to persuade local
companies to export. Denmark pays more than half the salary of marketing
consultants who help small and medium-size Danish companies get into exports.
Many countries go even further and subsidize their companies by granting prefer-
ential land and energy costs - they even supply cash outright so that their com-
panies can charge lower prices than do their foreign competitors.
Today the pressure on firms operating in global industries is not just to export
to other countries, but to strive to be a global firm. A global industry is one in
which the strategic positions of competitors in given geographic or national
markets are affected by their overall global positions, A global firm, therefore, is
one that, by operating in more than one country, gains research and develop-
ment, production, marketing and financial advantages in its costs and reputation
that are not available to purely domestic competitors,2 The global company sees
the world as one market. It minimizes the importance of national boundaries, and
raises capital, sources materials and components, and manufactures and markets
its goods wherever it can do the best job. For example, Ford's 'world truck' sports
a cab made in Europe and a chassis built in North America. It is assembled in
Brax.il and imported to the United States for sale. Thus global firms gain advan-
tages by planning, operating and co-ordinating their activities on a worldwide
basis. These gains are a key reason behind recent global restructuring
programmes undertaken by leading German car producers, BMW and Mercedes-
Benz. Global marketing is concerned with integrating or standardizing marketing
actions across a number of geographic markets. This does not rule out forceful
adaptation of the marketing mix to individual countries, but suggests that firms,
where possible, ignore traditional market boundaries and capitalize on similari-
ties between markets to build competitive advantage.
Because firms around the world are globalizing at a rapid rate, domestic firms
in global industries must act quickly before the window closes on them. This does
not mean that small and medium-size firms must operate in a dozen countries to succeed. These firms can practise global nichernanship. The world, however, is
becoming smaller and every company operating in a global industry - whether
large or small - must assess and establish its place in world markets.
Firms that confront international competitors in their existing markets must
ask some basic questions; What market position should we try to establish in our
country, in the geographic region (e.g. Europe. North America, Asia, Australasia)
and globally? Who will our global competitors he and what are their strategies and
resources? Where should we produce or source our products? What strategic
alliances should we form with other firms around the world V.
No comments:
Post a Comment