5. Discussion
There are a number of paradoxes in global marketing and advertising. For example, Paradoxical values are found within cultures and between cultures. Every culture has its opposing values. Markets are people, not products. There may be global products, but there are not global people. There may be global brands but there are no global motivations for buying those brands.(mooij, 1998)
A multinational company can gain benefits through increased standardization of its marketing mix but also circumstances that would hurt the company. But how can a company in country A sell its product in Country B without changing the product, promotion, price, or place and still earn a good return. (Kotler, 1986)
In order to achieve homogeneity, the most important issue in marketing standardization is to address the question that to what extent the product and services to be standardised. There are many barriers to make the operations standardised, like the regulations of the host country, cultural and language difference etc. The cultural difference is very important issue and its impact of adaptation should be central to the study of operational areas and it varies countries to countries (Jan-Benedict et al, 2002).
The globalization of marketing activities emphasizes consumer similarities across geographical borders and strives for standardized marketing strategies, while minimizing local differences; furthermore, it argues that the companies that do not embrace the globalization of marketing activities will be placed at a competitive disadvantage. Their usage of the globalization of marketing activities implies that firms strive to identify global segments that share the same psychographic characteristics. At the same time there are differences between markets (Domzal and Unger, 1987).
Let’s a look at the e.g. of Daimler Chrysler, U.S.A, which came up with a new customized product ‘Smart Car’ in 2007. The distinguishing trait of that car is that it is a hybrid vehicle which integrates traditional electronic batter with traditional petrol engine. The battery can be easily recharged in some hours which can run for adequate time. ‘Smart Car’ was launched after careful analysis of the buying trend and the growing needs of U.S. citizens. Since the citizens of U.S are very socializing and they make long distance to meet their friends, families, loved ones.
Parking was another issue in the U.S. and heavy traffic makes it difficult for drivers to get parking. Also, many people who were also concerned about environmental issues, and about the fuel prices which were increasing day by day. So this e.g. of market segmentation allowed the company to come up with a car which brought solution to all those problems that the U.S citizens were facing, since it consumes less petrol, which allows money saving and results in less pollution; and because of it’s small body size it can prove very handy in terms of parking (Daimler Chrysler).
But on the other hand, if the same car was launched in Saudi Arabia or any oil producing country, then it would have been a potential flop. Since Saudi preference of cars or vehicle is subjugated by huge cars with high oil consumption. Another feature of using big vehicle is the less concern for environment that usually dominates countries around Europe (Khaleej Times, 2008).
Though, it is an important aspect which represents homogeneity of demand of huge vehicles that compliments Levitt’s (1983) claim of consumer homogeneity is the fact that consumer preferences are similar in Middle-Eastern to those in Europe and America for vehicles like Merceedez, Jaguar, etc. But this demand also wraps the concept of consumer heterogeneity by focusing on a niche market segment that is the elite class of the society.
Likewise, if we take a closer look at the automobile industry, we can witness the phenomenon “think global, act local” that seems to fit in both the processes (heterogeneity and homogeneity) with a slightly tailored version. Selling completely different models in different countries of the world can be seen in companies like Ford, Toyota, Honda and other car manufacturers (Hollesnsen, 2007).
So the globalization of marketing activities must fit the products and the services to the practices and languages of different markets. (Koepfler,1989). But as per the levitt’s definition of globalization, it says that the whole world is been driven toward a converging a commonality which is technology. People from all over the world want the same technology to be in their hands almost at the same time. He further stressed that as markets become increasingly similar and more and more global, the key to victory lie in the ability to globalize (Levitt, 1983).
It is acceptable to have complete standardization in marketing, distribution, products/services etc. in the case of technology but not with products/services which has to do with cultural norms, behaviors, attitudes, motives etc. Take an example of Microsoft, which is the worlds’ leading software developing company. Their products are standardized throughout the world and their marketing is even standardized, just because people from all over the world want the same technology to be in their hands at the same time. Increased marketing, media, easy access to communication has brought awareness to the consumers and now they keep in touch with the latest news about products/services. If Microsoft let’s say comes with a new Intel processor, then they would sell in almost every part of the world instantly (Microsoft, 2008).
Globalisation of markets needs total dedication toward international marketing; it symbolizes the view that world is a single entity. For e.g. Levi’s jeans, Nike trainers and Coca-Cola have all crossed global borders; however there is some visibility of the tailoring of the message (Vignali, 2001). McDonalds is the right e.g. to be discussed this time. It has about 30,000 restaurants in almost 100 countries and considered to be a ‘global brand’. McDonalds also follows the strategy of tailoring its’ food as per the needs of the customers and their preferences. They have several restaurants in India and they are dealing in a market with 40% vegetarians of the total population, with an antipathy to fish and frozen meat; with a dislike to beef or pork amongst meat eaters; and with a likeness of spice. So, they come up with a new Maharaja Mac which was made from muttons, which replaced Big Mac, which is like all over the world. Vegetarian rice-patties with flavored spices and vegetable were also offered, which suggests that McDonalds changes its strategy as per the needs and wants of the customer, which is what marketing is all about (Hollensen, 2007).
Even if we look at the promotional strategy of McDonalds, it looks to localize its marketing communications strategy as it needs to consider the mammoth range of cultural and ethnic differences that it would be faced within each country. It would be immature to ignore the several local markets and the factors which can affect the performance of its product in them. It also needs to examine consumers’ attitudes towards its usage pattern; product and ethnic; moral and religious considerations in that environment. Though the idea is to promote McDonalds as a global image, McDonalds focuses on the needs of the communities they are penetrating. In communications framework, the slogan “brand globally, advertise locally” (Sandler and Shani, 1991) is the McDonalds promotional strategy.
McDonalds has a wide range of advertising campaigns in several countries. For e.g. in the U.K, they use the England footballer Alan Shearer as a figurehead to endorse their hamburgers, whereas in France they use Fabien Barthez which is a very famous French international goalkeeper (Vignali, 2001). The point is that the message that they are trying to deliver is the same, but they use different celebrities in different cultures to get their message across. The advertising of McDonalds is different in China, as, by autumn 1994, they still had not showed an advertisement on Beijing television. As articulated by the General manager that it was pointless to place and advertisement on television because Chinese commercials, unlike in the West, appear only during the interval in between the programmes. And after one programme, audiences normally switch to another channel, which means that advertisements have a very little chance of being seen. Therefore, newspapers and famous magazines were seen as a better mean of presenting McDonald’s public image. In the Beijing region, McDonalds relied on a transitional public relations company, to deal with the Chinese new media (Vignali, 2001).
Correspondingly, another “quintessential global cult brand” (IKEA) as named by Jobber (2007) portrays a standardization strategy which is tremendously culture sensitive that involves prompt responsiveness to shifting global consumer behavior. The target market signifies consumer between the age group of 25 to 40 (middle wage families in urban areas). The international marketing strategy incorporates a mix of both global and local standpoint. The basic product range is identical but the differences occur in the way catalogue is meant for consumer groups (Hollenson, 2007).
Wind (1986) stressed the ideology of “thinking globally act locally”, which explains that an organization should keep a worldwide viewpoint, but they should take into consideration the countries characteristics and cultural norms before making their marketing strategy. By following the approach “thinking globally act locally”, firm end up their focus only on the domestic market and can also avoid the pitfalls of globalization. The company should enthusiastically follow a market oriented approach and must tailor the marketing according to a particular country.
6. Conclusion
So after getting hold of market segmentation and international marketing standardisation, we can now assert that IMS contradicts the very principal of market that is market segmentation. Because it talks about consumer homogeneity all over the world and since market segmentation is done to classify the different customer’s behaviours, needs, attitude, motive and buying pattern of a particular product/service. These days we can find so many examples of firms and businesses which are moving away from international marketing and global marketing activities (Vignali, 2001).
Furthermore, some companies have reinforced the world “global” from their strategic method. As James (2001) discusses that Coca-Cola’s strategy has now become “think local, act local”, and this shift of the company can be better described as not a withdrawal, but a move toward globalization which is relatively directed at greater integration.
And organizations following such strategy incorporate their efforts; ensure local flexibility whilst exploiting the benefits of global integration and efficiencies, as well as ensuring the universal diffusion of innovation (Hollensen, 2007). McDonalds realized that despite the cost savings intrinsic in standardization, success is often accredited to bring able to adapt to a specific environment. Now, their overall pricing objective is to increase market share and in each country they look at the barometer for setting price. Below is the table given, which will help in justifying our argument:
(Table A)
In the U.S.A, for example, the cot of a Big Mac with fries is equivalent of a Chicago office worker’s earnings during 14 mintues. Whereas, a meal like this is seen as a luxury, as opposed to a normal product, and would cost a lot more relative to earnings.
It is important to recognize that a marketing strategy strives to attain success in the market. A market is almost similar but yet comprises vital differences. A company’s marketing strategy is more likely to fail if they instinctively think that that a strategy which works in one country might work in another country. The way to success can be achieved with a thorough understanding of why the consumers will be going to buy our products in each market, and which can vary across markets. Company will be victorious when a comprehensive understanding about the consumers’ need, motives, and attitudes toward a particular service/product is accomplished.
So, international marketing standardization in principal contradicts the very principal of marketing: marketing segmentation, but if companies can add the approach of localization to globalize marketing, then they will spread their same message of ‘being global’ and with that, they can also conform with the basics of marketing, which is all about identifying and anticipating customers needs and preferences (CIM, U.K).
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UB No. 07024044, International Marketing FT-MB
