Introduction
The tradition of global marketing comes off in an explosive, or many would say, unpredictable environment of the world. (Kaynak, pp. 189, n.d.) As the world seems to contract swiftly with the arrival of speedy communication, conveyance, and monetary flows; products manufactured in one country, appear to attain wholehearted recognition and acknowledgment in other countries. (Kotler & Armstrong, pp. 589, 2005)
Since 1969, the global corporations’ expansion has been flourishing considerably, from a number of 7000 to extraordinarily reaching more than 65000. Some of the global corporations are really considered to be giants. “Exxon Mobil, the world’s largest company, has annual revenues greater than the gross domestic product of all but the world’s 20 largest countries.” (Melloan, A19, 2004)
Global Firms – gaining success
A global firm is defined as a firm that functions in more than one country. In contrast to the attributes available to the local firms, a global corporation attains a number of higher-degree advantages related to marketing, production, research and development, finance, and promotion. For a global company, the whole world is a market. It curtails the significance of national borders and develops ‘transnational’ brands. (Kotler & Armstrong, pp. 590, 2005) Furthermore, it lifts up the capital, acquires materials, constituents, and producers, and advertises and sells its products anywhere it can perform best. “Borders are so 20th century,” a global marketing expert says, “Transnationals take ‘stateless’ to the next level.” (Hamm, pp. 68-73, 2003)
Global Marketing Strategies
The swift action toward globalization requires the companies, who intend to follow it, to formulate basic strategies and stick to them throughout their course. The major six strategies that help a company to market internationally are as under.
- Understanding the global marketing environment – Before opting for marketing globally, a firm needs to understand the international marketing atmosphere. It has to look through the new opportunities and threats time has brought with it. It must first comprehend the social, economic, legal, and political features of each foreign market.
- Deciding whether to go global – Operating locally is easier and safer. But when firms intend to move abroad, the overall global positions significantly affect their strategic positions. Thus, the firms should weigh the potential profit on investment against the degree of risk and then decide whether it wants to move global or not.
- Picking up markets to enter – Here, firms need to set forth their global marketing objectives and programs. They should first decide on the type(s) of country, and the potential global market(s) they want to market in, depending on the market size, growth, costs, competitive edge, and threats. It is then that the firm must conclude which are the markets that offer the maximum profits in the long run.
- Deciding how to enter – Firms now need to decide which means to adopt for making a global entry. It can go for direct or indirect exporting, carrying joint ventures, and direct investments. (Kotler & Armstrong, pp. 601, 2005)
- Making a global marketing program – For going global, firms need to decide, to what extent they should modify their marketing mixes to the prevailing domestic conditions, which costs a lot, but gives them the anticipation of higher return. They must decide how much their 4Ps be adjusted to each foreign market’s needs.
- Developing an organization for global marketing – Only a few firms, in the end, become able to successfully operate globally. Starting with an export sector and moving up to a global division, these firms are run by the top experts, who have worldwide marketing scheduled and organized.
Problems in Planning
Two important components of global management which play a vital role in this process are planning and control, the most important of which is planning, which provides the root for consequent scrutinizing and controlling. An effective planning and control system is highly necessary for firms that deal globally, and which have subsidiaries scattered around the whole world. (Rusth, n.p., 1994)
The core phase in planning at both corporate and subsidiary levels, for every other global firm, is to make financial arrangements i.e. a sales budget or its distribution administered to country or subsidiary managers. The subsidiaries during this period, formulate temporary targets, aims, and objectives, workout applicable operating strategies, and put a budget record in order, for scrutinizing control, and assessment of the whole process. This forms the foundation stone of short-term planning by global companies. Thus it is critical for both, the main company itself and its global subsidiaries, to carefully gauge forthcoming possibilities, opportunities, threats, and recompenses. (Rusth, n.p., 1994)
The whole planning process is a very intricate one, due to the diversity of distinct variables that exist across countries. Every functioning atmosphere has different opportunities, threats, and recompenses. Each contrasts considerably under societal, economical, ethical, and legal issues. The subsidiary managers residing in other countries would most probably be having wavering national and social characteristics besides divergent scholastic and professional environments. Accordingly, at the subsidiary level, the intensity and type of knowledge, preference, and the ways for implementing strategies and techniques contrast, as one moves across the countries. These factors henceforth are a great challenge for the companies who do marketing or business at the global level.
References
Hamm, Steve, pp. 68-73 (2003), ‘Borders Are So 20th Century’, Business Week.
Kaynak, Erdener, pp. 189, (n.d.), The Global Business: Four key Marketing Strategies, Section IV: Third World Marketing, Web.
Kotler, Phillip & Armstrong, Gary pp. 589, 590, 601 (2005), Principles of Marketing, Chapter 19, The Global Marketplace.
Melloan, George, pp. A19, (2004), ‘Feeling the Muscles of the Multinationals’, Wall Street Journal.
Rusth, Douglas B. (1994), The Budgeting Process in a Multinational Firm, Multinational Business Review. Web.