Global marketing is marketing on a worldwide scale. Global marketing involves taking advantage of global operations processes differences, similarities in business processes and business opportunities in order for an organization to meet global objectives. Marketing can also be defined as a marketing strategy used mainly by multinationals to sell goods or services globaly. Global marketing is best described as the process of global expansion efforts by corporations or organizations. This process of expansion is through efforts which include joint ventures, franchising and licensing.
Introduction
In modern business platforms, business intelligence is essential in shaping the strategy of corporation’s growth based on the company’s mainstream economic activity. Business intelligence entails gathering information from the business environment. Gathering information is a continuous process that keeps the company informed about competition, threats, impending business storms, and other core business processes that can help bring both insulation and growth.
Coordinated organization activity is required to survey and record the changes in the environment and the aspects of environment that the organization wishes to stay informed about. This is defined as organized intelligence. The need for intelligence is far much greater than the daily profit. It is essential in insulating the company against impeding business storms.
A company that begins as a domestic-only company can shift to become global; this shift is not a radical one but rather a progressive process. It can start out as an exporter and gradully become a global marketer. This means the corporation idenfies the world as a common market hence it creates products and services that have regional balance and an appeal in any marketplace. To succeed in such a process, corporations must take into consideration some core processes like the coodination of marketing policies for each country. Coporations should ensure that their marketing mix can be adapted to fit in the local market conditions.
The role of Marketing
Marketing is used to find, keep and satisfy customers with products and services using the four Ps: Product, price, position and promotion, and these are also the elements of global marketing. Relevant information helps an organization understand and shape its marketing strategy, penetrate markets and identify emerging markets for its products and services (Hassan Et Al, 14). Execution of marketing strategies depends entirely on the condition of the business environment and weather.
A global company can create a single product then redifine it to fit in different markets. The price of the product always varies with different markets because it is affected by many variables. One of these is the cost of product development – this depends on whether the product and the ingredients used to create it are locally available or imported. The cost of delivery which includes transportation and labour also influences the price. Two other factors that influence the ultimate profit margin of the product are; whether it is a high end or economical product and where it fits in relation to the competition. The distribution of the product is decided by each market region and is also affected by how the competion is offered to target market. Advertising takes the largest share of marketing budgets, this is followed by product development,and creation. The challenge is to send the same message worldwide and make it revelant to, engaging and cost effective (Masaaki et al, 67).
Techniques used by Global Marketers
Information is the basic ingredient for a successful marketing strategy. A global marketer looks for opportunity and threats and then makes this information available through a management information system (Keegan, 188-189). This information is for discovering what people want, need or aspire for; it also involves discovering how they act. All this information is gathered through documented sources or direct perception.
However, before a decision is made a formal research must be carried out which includes a plan, collection of data through primary and secondary sources, followed by data analysing (Herman et al, 6). The fiindings must be presented clearly for decision making on how to deal with the problems and opportunities. The challenges in global marketing research is that secondary data may be distorted and some of required markets are so small that only modest expenditures can be made (Keegan, 189).
A Review of Marketing Research Analytical Techniques
Consumer behavior is an important aspect of global marketing. Various contexts arise when consumer behavior comes into focus. It is the dynamics of consumer behavior that brings about the changing elements of marketing which include product pricing, positioning and advertising. To understand these dynamics of consumer behavior and their impact on marketing, analyzing consumer behavior and trends is important. An approach by global marketers to comprehensively understand consumers in dynamic business environment involves the use of various analysis techniques.
One of the commonplace analysis technique is the cluster analysis approach whereby, an analyst approaches consumer behavior through clustering market segments and evaluating consumer behavior within each market. The analyst then compares the patterns of consumer behavior in each market and clusters those whose patterns corellate. This approach helps marketers identify markets for various brands and also, manage consumers based on such observations.
For example, clustering techniques can be used to identify demographic characteristics of consumers with similar purchasing histories, or to isolate differences between groups of products. Market researchers can then study the individual clusters of consumers or products in detail and maximize results from future marketing strategies.
Another method of measuring markets and analyzing consumer behavior is conjoint analysis. To determine the relative importance a consumer places on product attributes can be difficult because they may all seem important or when viewed individually, they are perceived differently than in the combination found in a product.
Through correspondence analysis analyzing consumer behavior is realized. It begins with data arranged in tables, usually two-way cross-classifications and the goal is to explain the variance in the table. The variables are supposed to be secret. Secondly, they should be nominal or continous and in other cases, ordinal variables that are segmented into either market or price ranges. We can identify ‘female’ as a point for the variable gender, in real time.
Van Westendorp modelling is based on two approaches used to determining the right price to charge for a product or service. cost-driven pricing allows many businesses to calculate the cost of production then add a certain amount on this cost to make a profit.
However, this is not always a wise choice because a competitor with a lower cost structure will be able to undercut them on price. The other more suitable option is to establish the best price to charge the consumer which a business can determine using various pricing research methods.
Global Market Segmentation
Equally important is the need to understand the different subgroups into which a population is divided. This is referred to as market segmentation. Bennett defines market segmentation as the process of subdividing a market into distinct subsets of customers that behave the same way and have the same needs (Bennet). Each subset is a market target to be reached with unique marketing strategy. This process includes understanding the basis of segmentation, product specific factor reflecting customers needs and or response to marketing variables (purchase behavior and usage, benefits sought, preference or loyalty). Conversely, (Fatt) suggests that some themes are universal and could be used in advertising around the world – mother and child, desire for love, health or to be beautifu (Keegan 96).
Therefore,marketing segmentation identifies and categories groups of customers and countries according to various characteristics while targeting can be seen as evaluating the segments and focusing marketing efforts to those (people, groups, region, and countries) that have significant potential to respond. This reflects what the company should identify as the consumers it can reach most effectively and efficiently (Hofstede, 34).
Relevant information helps an organization understand and shape its marketing strategy, penetrate markets and identify emerging markets for its products and services. Execution of marketing strategies depends entirely on the condition of the business environment and weather. Information should help identify demographics, market weather, consumer interests, potential long-term benefits, competition, weaknesses, and strengths of competitors and future economic climate of these markets.
Global marketing segmentation deals with dividing world markets whereby specific segements of individual consumer groups or country groups of potential customers are identified. (Hassan and Katsanis, 12-40) These segements or subgroups have similar motivations such as geography, personality, demographic, techno graphic, use of product, psychographic and gender differences (Keegan, 92).
Demographic segmentation draws its statistical sense by obtaining measurables from the population context. It draws its corporate sense from market characteristics based on gender, age, income, education and occupation. Some of the emerging global segments in demographic trend are aging population, fewer children, women working outside the home, higher incomes and living standards (Hofstede, 20-36).
Age is a useful demographic variable and one segment is based on global teenagers who are aged between 12 -19. This age group displays the same consumption behavour with regard to fashion, music or youthful lifestyle because they tend to rebel agains cultural norms. This group is attractive in both size and multi-billion purchasing power; therefore, a unified marketing strategy is able to reach them because simply because of their combined shared universal needs, desires, fantasies for brand names, novelty, entertainment and trendy and image oriented products. The other global segment is the older, more affluent consume or the elite who is well traveled and has money to spend on prestigious products with the image of exclusivity is another global segment. Their needs and wants range from luxury cars to expensive rare wines and gold cards.
Technography is an important new segmentation based on ownership, use patterns and attitudes towards information communication technologies and entertainment technologies (Keegan). Information communication technologies have emerged as a central focus and defining force in a wide range of occupations and lifestyles based on the role and scope that technolgy plays in consumers’ lives.
Geography is ranked lowest as a basis for market segmentation because although markets are in the same geographic area, they may not necessarily similar – one may be high income, while the other is low emerging, less developed society.
Why market size estimates may differ depending on the method being used
Market size may differ significantly depending on the method used to do the valuation. Valuation is a business process that involves following set of procedures d to estimate the value of a market toa corporation hoping to make inroads. The results of such a valuation may vary based on the condition, defined as the standard of the market and the value, which is the benefit of owning the business in a particular environment or investing in the particular market (BNET).
An organization and its customers, in actual business situations, would expect optimal results, that is, value for their investment. This outcome determines the market value to the organization. Assuming a company is selling low priced products, the population makes corporate sense. This means that population is a more significant segmentation variable than the income (Bennett, 7- 20).
Reconciling differences
The most important indicator of segmentation variable for potential market for consumer and industrial products is national income. The World Bank has segmented this into higher, upper middle, lower middle and low income because the annual per capita varies around the world (Keegan, 190).
However, national figures are averages. They are fast changing therefore identifying a segmentation decisions can be a challenge and requires additional information. It is important to note that the average income does not reflect the standard of living either; to understand the standard of living in a country, one needs to determine the purchasing power of the local currency. In low-income countries, the actual purchasing power of the local currency is much higher than the implied exchange rate (Keegan, 188).
The important lesson for global marketers is to be aware of the misleading effect of averages, which distort the true market conditions of emerging markets.
Reconciling the market is understood as the method to recoup profits. This can be done through several methods. Spying on existing business in the target market can provide relevant market intelligence. The statistics should provide information about how many consumers spend on a particular product. Here are some other methods of reconciling the market differences.
- Evaluate the actual size of the market. This involves evaluating the size of the market and potential for your individual product or product line.
- How much of the market does your competitor serve? Through business intelligence, you can establish how many consumers your competitors serve.
- Increasing your market share through establishing modalities of edging out your competitors is explained as a way of reconciling your profits. How much market share can you cut away from your competitors? How many consumers will you get from such a move?
- Generally, the size of the market varies from the number of people in it. It should be understood that consumers are dynamic and not all consumers buy the same type of products.
Conclusion
Many global business opportunities have arisen since there is a common market aspect worldwide. Organisations have established the existence of common and basic segments exist globaly. As such it possible for these organizations to meet the demands of these markets through orientation of products and services.
The more culturally unconventional the product is, the more a global clustering or grouping can take place. This gives license for a standardized approach in the design of a marketing plan. Furthermore this can be helped with technology which is one of the single most powerful driving forces of global markets – because it is not is limited by culture.
Works Cited
Peter. Bennett,. (Ed) Dictionary of Marketing Terms, 2nd Ed. Chicago: American Marketing Association, 1995. Print.
BNET. “Global Marketing: definition and additional resources from BNET”. Web.
Arthur, C.Fatt. ,“The Danger of ‘Local’ International Advertising” Journal of Marketing.1967.
Geert, Hofstede. Culture’s consequences: comparing values, behaviors, institutions, and organizations across nations. California: SAGE, 2001. Print.
Salah, Hassan. S and Katsanis, Lea Prevel, “Identification of Global Consumer Markets: A Behavioural Framework.” Journal ofInternational Consumer Marketing.: 3 No. 2 1992.
Simon, Herman. Hidden Champions: Lessons from 500 of the World’s Best Unknown Companies Boston. Harvard Business School Press, 1996. Web.
Kotabe, Masaaki and Helsen, Kristiaan. Global Marketing Management, 3rd Ed. John Wiley & Sons Publishers, 2004.
Warren, Keegan. The Global Marketing Management. California: Prentice Hall, 2002. Print.