In recent years, the speed of globalization has increased rapidly with the merging of economies, the popularization of Internet technologies, and the spread of a more unified global culture. Globalization has made a crucial impact on multinational enterprises (MNEs) by increasing the level of mobility of businesses and enlarging the amount of information spread around the world (Rugman 2005). Globalization has also made it possible for MNEs to employ people all over the world, offering them almost equal opportunities and preserving the stability of human capital on the same level (Dabic, Gonza´lez-Loureiro & Harvey 2013).
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However, it is necessary to understand that MNEs themselves have also served as a catalyst for globalization by implementing international production and distribution (Viswanathan & Dickson 1992). Therefore, MNEs could not ignore the opportunity to turn the process of globalization into a marketing tool (Grewal et al., 2013). Corporations were able to place their enterprises in those countries that they found most suitable and still sell their goods all over the world. Multiple representatives of the same MNE can now be located in different parts of the world, giving each one the chance to analyze the local market and adjust products and services accordingly (Rugman & Collinson 2009).
MNEs have to deal with multiple issues to achieve success in the global market. First of all, the economic part of the business must be an issue of analysis. It is crucial for the MNE to determine the correct market need and the potential for success in a specific country or region. In other words, it is important to find a real answer to the question: who will buy this product in this country? (Rugman, Oh & Lim 2011) Apart from economic rates, political and legislative issues must also be considered because they will affect the MNE’s capability of entering the market. Political crises or fraud can become real obstacles for MNEs (Rugman & Collinson 2009).
The socio-cultural background of the country cannot be neglected, either. Though for many products no major modification is required in regards to culture, in reality, the MNE’s approach to customers must be created with an emphasis on culture (Rugman & Collinson 2009)
In order to develop an effective marketing strategy all over the world, it is important for the MNE to learn about the peculiarities of the market from locals. This information must be gained through the local language, and it should include cultural traditions as well as subtle trends and preferences, which are often difficult to capture. Such an approach would allow any company to adapt to any market by modifying their goods in order to raise demand.
Despite the fact that not all goods and services have to be modified to enter a foreign market, it is still important to know the economic, political, legislative, and sociocultural issues of the country from within, as this knowledge will create a clearer picture of the market. For example, Volkswagen managed to successfully reenter the American market in the 2000s by offering a car with a more European design after the marketing department of the company realized that American youth would prefer such a European style and view it as chic and desirable (Rugman 2005).
Moreover, advertising is one of the most important elements of marketing strategies for MNEs because most people tend to trust their local and traditional brands. Therefore, when an MNE is entering the market, it is important for it to be able to “speak the same language” as its customer in a direct and literal sense. The MNE must use appropriate visual imagery and apply familiar archetypes to produce successful advertisements.
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Grewal, R, Kumar, A, Mallarragada, R & Saini, A 2013, “Marketing Channels in Foreign Markets: Control Mechanisms and the Moderating Role of Multinational Corporation Headquarters–Subsidiary Relationship”, American Marketing Association, vol. L, pp. 378-398.
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Rugman, A & Collinson, S 2009, International Business, Pearson, New York.
Rugman, A, Oh, C & Lim, D 2011, “The Regional and Global Competitiveness of Multinational Firms,” Journal of the Academy of Marketing Science, vol. 67, pp.67-89.
Viswanathan, N & Dickson, P 1992 “The Fundamentals of Standardizing Global Marketing Strategy”, International Marketing Review, vol. 24, no. 1, pp. 46–63.