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With the rise of globalisation, what are the effects on Business 2 business organisations?

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Introduction

MGMT2101 MAJOR ESSAY STEPHEN FOSTER 40316686 With the rise of globalisation, what are the effects on Business 2 business organisations? Executive summary This essay will look at how B2B organizations are effected by globalisation and how these businesses need to adapt if they are to succeed in their new environments. More specifically, the essay will look at the effects of globalisation on B2B organizations in the Asian / pacific markets. Examining the threats, opportunities, difficulties, limitations and the importance of localization from a marketing perspective. Introduction Firstly, to analyse the effects of globalisation on B2B organisations, we have to understand what these terms actually mean. Globalisation can be defined as the growing integration of economies and societies around the world. This integration is a result of lower transport costs, reduced trade barriers, faster communication of ideas and rising capital flow. (Kotler & Armstrong, 2001). Business marketing can be any activity that Facilitates exchanges 'involving products and customers in business markets' (module 1, 2003) A strong marketing base is essential for any B2B organization venturing into a new country, but identifying that base can be complex due to different social and demographic structures, especially for western business entering the Asian markets or visa-versa. (Dixon & Karboulonis, 1999) Due to cultural, economic and demographic reasons, the target market segments will vary greatly from country. Because of this, it is strongly recommend for a business to invest in primary research and to examine secondary research before producing a business strategy for the new market. A business entering a new market place has to answer a number of questions. What are the present and potential market segments? Who are the key Potential customers and major competitors, and what are the main environmental factors? Due to the cultural background of a country The B2B interactions vary greatly. A study of 62 Australian operations multinational companies, 42 by the U.S or Europe and 20 by Japanese firms. ...read more.

Middle

As part of the deal, Everton FC received two Chinese international players, superstars in their own country but unknown everywhere else.(www.toffeeweb.com) The effect of this deal was to make Everton arguably the most popular club in the world, a bold statement perhaps, but the deal made Everton the most supported team in China, And with television rights to the Everton games purchased by China's state television channel, Everton's popularity rocketed. (www.Evertonfc.com) In the past season Everton have received staggering viewing figures. For example, Everton FC Vs Manhester City, not a particularly big game by any standards, but with the two Chinese players making their debut for the Everton first team, the game received viewing figures of around 600 million- yes, that was million. (www.toffeweb.com) Now, getting to the marketing aspect of this. There is a population of over a billion people, half of which have definite consumer buying power. This presents Everton with an incredible merchandising opportunity. Everton are aiming to sell Everton FC club-shirts to around one in every thousand potential customer through b2b relations with sporting retailers and locally based manufactures throughout China, and with Everton scheduled to make a summer tour of China, that target is by no means unattainable. Environment Demographic/economic China, as a market place, has a massive with 1 billion consumers. Despite being one of the largest countries in the world in terms of geographical size, its cities are among the most densely populated. Despite the recent recession in the Asian economy, China is still booming, with the purchasing power of the average consumer skyrocketing. Other demographic factors, such as changing family structures, in-forced by government regulations of one child per family, will also have an impact on Everton's marketing approach, as this would alter the spending habits of the average consumer household. (Kotler & Armstrong, 2001) Social/cultural The global rush of businesses to China will inevitably fail to produce good returns over the long-term if conducted without the appropriate respect for Chinese business and economic culture, if conducted in a manner that indicates short-term thinking and engagement, or that derides or ignores Chinese abilities, experience or values. ...read more.

Conclusion

So what action would need to be done? With regards to price, Everton has to consider, both Chinese and English governments, laws, markets and competitors. Being a county with such low costs, they will have to be careful not to sell the product to cheaply and effectively create 'Gray markets', but not to expensive for the average consumer. The 'six pocket syndrome' of many Chinese families will hopefully allow the mark up price to be reasonably high. Promotion, this will most likely have to be localized to China, and its different target segments. Taking into account differences in language in income levels of end consumers, values and trade practices. There will have to be a great deal of primary qualitative and quantitative research to specify these factors. Place, establishing a geographical base location will be important, and will have to consider proximity to manufactures, distributors and business markets. There should also be a website to provides B2B access to Everton, from anywhere in China. It is important to make sure the website is localized to China if they are to fully benefit from it. Positioning, due to Everton's reputation as a club, and their affiliation with Kiejan, the club has already established an appealing space in the minds of potential customers in relation to competitors. Also television broadcasts of games will increase Everton's exposure as a brand. My recommendation will not be able to address issues such as economic down turn, fluctuating exchange rates and high inflation. This is because these factors are out of the control of Everton. They can only hope to manage them. But, due to the size of the Chinese market the exchange rate is usually quite stable, and Asia appears to be moving out of the economic slowdown. On a final note, one of my favorite sayings is that 'fortune favors the brave', and this may ring true especially for Everton if they decide to take the plunge into Asia. The Benefits in 15 years time could be almost inconceivable. . ...read more.

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