Global marketing strategy

Global marketing strategy is based on the assumption that on the international market there is so called global consumer with similar needs and preferences. Using this approach, on foreign markets companies apply identical marketing instruments and their combinations, there is no different instruments adapted for social and cultural environment in those countries, Global marketing strategy has several positive effects for managers:

• increase of efficiency by coordinating marketing efforts over several countries on the globe
• reducing role of national and cultural differences in product design and customer service
• utilisation of global logistics and value chains
• ability to reach for smart and creative employees overseas

Some examples of global companies using global marketing strategy are: Google, Uber, AirBnB, Microsoft, etc.

Global marketing

"Global marketing is defined as the firm's commitment to coordinate its marketing activities across national boundaries in order to find and satisfy global customer needs better than the competition". Therefore, the company can:

• based on similarities and differences between markets, develop a global marketing strategy,
• exploit the knowledge of the headquarters through worldwide diffusion
• transfer knowledge and practices from any of its markets and use them in other international markets.

Tips useful in marketing strategy:

• Coordinate its marketing activities: integrating and coordinating marketing strategies and implementing them across global markets. Involves also delegation, centralization, standardization and local responsiveness.
• Satisfy global customers: adapting elements of the marketing, services and products
• Get to know global customer needs: this involves analysing market segments, carrying out international marketing research, as well as seeking to understand similar
• Being better than the competition: monitoring, assessing and responding to global competition by offering low prices, better value.

Marketing strategy

A global marketing strategy is as selling identical products with the same promotional programs through similar channels at comparable prices in more than one country. Levitt's very popular statement of the strategy (1983) is "selling the same product the same way everywhere". Proponents of a global marketing strategy claim that, as the world evolves, people, nations, and markets become more similar. Arguments in favor of a global marketing strategy we can divide into a category:

• strategic
• economic
• competitive

The economic gains can get obtained through cither economies of scale or experience curve effects. Economies of scale appear when costs production, marketing, and administrative fall down as corporations become larger. Experience curve effects appear when a company entering its second foreign market should be more effective than when it entered its first market abroad. Whether a firm benefits through experience curve effects or economies of scale, standardizing products is can be lower operating costs. Standardized marketing tactics can result in sharing good ideas and economize on managerial overhead, across national markets. The marketing losses assumed from not adapting to differences in markets may compensate the reduced costs from standardization. " Lower prices, Increased reliability, and quality improvements made possible through a global strategy are argued to be sufficient to overcome difference: in national preferences, creating world preferences for a standardized product".

Examples

A lot of other companies have successfully pursued global marketing by creating strong global brands. For example, Philip Morris has made that Marlboro is the number one cigarette brand in the world. In automobiles, Daimler-Benz has gained global recognition thanks Mercedes nameplate. Global marketing strategies can also be based on system design, product positioning, distribution, customer service and packaging. For example, company McDonald's has designed a restaurant system that can be set up virtually anywhere in the world. Similar like Coca-Cola.

Advantages of Global marketing strategy

A global marketing strategy offers a number of advantages for companies looking to expand their reach to foreign markets. These advantages include:

• Increased brand recognition, as a consistent message is broadcasted to consumers from the same company in multiple countries, allowing customers to become familiar with the company and its products.
• Lower costs due to economies of scale, as the same materials and production process can be used across multiple countries.
• Ability to target a larger market, as the company can reach more potential customers and increase their sales.
• Easier to manage, as the same marketing plan can be used across different countries and the company can track their performance better.
• The ability to use global market research to better understand the needs of customers in different countries and tailor their marketing strategies accordingly.

Limitations of Global marketing strategy

Global marketing strategy has its limitations, which include:

• Failing to recognize cultural differences - Global marketing strategies often ignore local cultural differences, which can lead to poor engagement with the target market. For example, the same message or advertisement may not have the same meaning in different countries.
• Lack of local knowledge - Global marketing strategies can be difficult to implement without local knowledge, as companies may not be aware of the specific challenges and opportunities in the target market.
• Ignoring local competition - Global marketing strategies may fail to consider the impact of local competitors, who may be better positioned to provide adapted products and services to the local market.
• Cost of implementation - Implementing global marketing strategies across multiple countries can be expensive, as significant resources are needed to create and maintain the same message in different markets.
• Lack of flexibility - Global marketing strategies may be too rigid to adapt to changing markets and local trends. Companies must be able to adjust and update their strategies to remain competitive.

Other approaches related to Global marketing strategy

One of the approaches to global marketing strategy is to apply the same marketing instruments and their combinations on foreign markets. There are also other approaches related to global marketing strategy, such as:

• Standardization approach - this approach assumes that companies provide the same product or service worldwide, without any changes to its features, packaging, advertising, and other elements of the product or service.
• Adaptation approach - this approach implies that companies should adjust the product or service to the needs of the local customers. This approach implies that a product or service should be tailored to the local preferences in terms of its features, packaging, advertising, and other elements.
• Export/Import approach - this approach assumes that companies sell their products or services in foreign markets through exporting them from the home country or importing them from foreign countries.
• Licensing approach - this approach implies that companies grant special rights to foreign companies or individuals to produce or distribute their products or services in foreign markets in exchange for a fee or portion of the profits.
• Joint Ventures - this approach implies that two or more companies form a partnership to produce, market, and distribute products or services in foreign markets.

In summary, the global marketing strategy is based on the assumption that there is a global consumer with similar needs and preferences. However, other approaches related to global marketing strategy include the standardization, adaptation, export/import, licensing, and joint venture approaches. Each approach has its own advantages and drawbacks, and companies should choose the most appropriate one for their specific needs.

Global marketing strategy — recommended articles

International marketing mix strategy — Internationalization — Beachhead market — Marketing innovation — Imitator strategy — Competitive positioning — Focus strategy — Types of market segmentation — Strategic position

References

• Hollensen S. (2007). Global Marketing: A decision-oriented approach. Person Education Limited
• Keegan W.J., Schlegelmilch B.B. (2001). Global Marketing Management: A European Perspective. Person Education Limited
• Verhage B.J., Dahringer L.D., Cundiff E.W. (1989). Will a Global Marketing Strategy Work? An Energy Conservation Perspective. Journal of the Academy of Marketing Science, nr 1
• Zou S., Cavusgil S.T. (2002). The GMS: A broad conceptualization of global marketing strategy and its effect on firm performance. Journal of Marketing, nr 4, p. 40-56.

Footnotes

Author: Agnieszka Pytel