The Oxford University Press defines global marketing as “marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives.” Global marketing is one of the many challenges international companies face in the new world of economy. International economy gives us a much wider picture of how different countries are doing economically and how they design their marketing strategies and successfully sell most of their products and services with a huge profit. The rapid development in technology has reduced the distance factor and it is possible to know what is happening at a far-off country even while sitting at our home. The driving force behind this is the internet.
Marketers find it challenging to effectively reach potential customers around the globe and to position their products and services appropriately in the context of different cultures. Promoting a product is not that difficult these days because mediums such as the internet, television, radio etc. have made the larger world appear smaller. The notion of distance does not bother us much in the present day context. Advertisements of products meant for sale are put up at multiple places. These commercials are the convenient means to grab people’s attention. Creating product awareness has become extremely easy these days. Marketers need to make use of appropriate strategies for the large variety of cultures which inhabits the earth. Every field of human activity has a tough competition and in order to sustain that competitive spirit, very effective methods of approaching the potential customers have to be designed. Marketers need to hook their customers with effective strategies.
Identifying a true market need is crucial for all business men. A key to success in business is offering products and services which customers need very badly. A successful businessman identifies the customers’ problems and solves them by providing the customers with the best possible product or service. Consumers are generally influenced to purchase products by the marketing messages delivered through the media including the print media like magazines. Humor used in the marketing messages attracts customers’ attention. What motivates customers to buy products varies from country to country.
Globalization, liberalization and privatization have brought in revolutionary changes in human life recently. As an after-effect of globalization, all the local products and services have gone global. Trade is increasingly global in scope today. Because of the increased transportation and communication facilities, trade is more practical and more feasible these days. Difficulties of commuting to far-off places for trade have reduced. Today we can engage in business-related activities even while sitting at home. The advantages of technology are so pervasive that the larger world appears small to us at least in the virtual sense. Consumers and businessmen can access the best products and services from any country. Rapid technology lifecycles increase competition among countries as to who can produce the newest in technology.
For success in business any firm has to have an international involvement. A purely domestic firm focuses only on its home market and has no ambitions of expanding it overseas. It does not perceive any potential competitive threat from abroad. Such a firm may get some orders from abroad, but if it does not consider such orders it will eventually deteriorate the business itself. Only when a firm begins the export stage there will be efforts to make its presence known in the international arena. In the international stage, as country markets get more foreign orders, a firm will begin to be seen in the international business scene. In the multinational stage business deals are taken up in some regions at the outset. In the subsequent period, the tentacles are getting spread across countries in a wide range. In the global stage, the focus covers the entire world market and the scene is no longer centered round the home country.
International marketing, as we all know, occurs when a business directs its products and services towards consumers in more than one country. The concept of marketing is the same all over the world, but the environment in which the marketing plan is implemented can be very much different from one another. The marketing concerns like input costs, price, advertising, distribution are likely to differ from country to country. There are many factors in a business which are not in the control of managers. Those factors will have an impact on business decisions. An international marketing scene has to adopt, manage and co-ordinate marketing plan in unstable foreign environment in order to become successful in business enterprise. Businesses explore foreign markets in response to unsolicited orders from consumers and they do export in order to expand the business. Marketing abroad can pose some corporate risk. It can also save a business from some undesirable recessions in the home country.
Firms marketing internationally also face challenges just as firms marketing domestically do. International marketing environments pose more uncertainties since the international scene of business cannot always be predicted. It requires managers to take decisions which are in the firm’s control namely which product to market, what price it should demand, the promotion strategy and the distribution channels. It is a complex, composite whole which, when studied separately, educates us on what goes into running a business in the international stage. Firms marketing internationally also need to react to factors in the home country which might affect their ability to do business. Domestic politics, competition and economic conditions are some examples of such factors in the home country.
Domestic policies on foreign trade cannot be controlled by individual businesses. Firms marketing internationally must be aware of how domestic policies help or hinder foreign trade activities. There may be uncertainties in the business environment of the host country which need to be sustained by the internationally marketing firms. Laws, politics, economy and competition are the four important issues which may influence a business firm. The host country’s geography, infrastructure, currency, distribution channels, technological development and cultural differences can also influence the business activities. Companies operating internationally are bound by the laws of both the host and home countries. The legal systems of different countries are different. The differences between two legal systems can also affect the business in a foreign land. Politics also is a huge concern for international marketing. Unstable political situations can pose major risks for businesses in an international marketing scene.
Economic conditions like the Gross Domestic Product and economic
development widely vary from country to country. Gross Domestic Product
(GDP) denotes the economic health of a country. Before starting business
in an alien land, business owners should study the economic conditions
of the country where they want to do business. Economy has a huge impact
on the size and affluence of a particular target market. Any trade
agreements between the two concerned countries must also be studied
beforehand which helps to foresee the course of business deals there.
The profitability of potential markets need to be understood before
actually venturing into the business. The business strategies also have
to be restructured from time to time in order to suit the marketing
activities in the best possible way. A slight change in the economy of
one particular country will have its own repercussions on an
international business setting. Take for example, a drop in the currency
value of one particular country will cause corresponding changes in the
concerned business. The business will result in a loss in such cases.
Promotion in an international economy is particularly difficult because of the possible ups and downs in the economy of the various countries involved in the deal. The International Monetary Fund, popularly known as IMF, is an international cooperative institution which aims to promote and assist in international monetary stability. IMF came into being by the end of World War II. For many years after its inception its main goal was to oversee a system of stable, fixed exchange rates among the currencies of member nations. Since 1971, the currencies started to float with the demand and supply in the market determining their value. This organization works to build a stable world economy which provides loans to member nations during periods of economic crises and technical assistance through educational and promotional means. In addition to the IMF, the Bretton Woods agreement resulted in the formation of the World Bank. Formally known as the International Bank for Reconstruction and Development, the World Bank aims to promote economic growth among the world’s developing nations.
The IMF formally amended its constitution in 1978 to change its role in the world economy. It now plays a number of roles in addition to promoting international economic stability and growth. The goals of IMF can be put under the three areas namely surveillance, technical assistance and financial assistance. The IMF gained everyone’s appreciation and admiration mainly because of its financial assistance to countries which undergo financial crisis. Those financial assistance programs steadily increased over the years and also had severe criticism from some sources. Yet, the noble cause which the IMF stands for can never be demeaned. 185 member nations continue to support the IMF thinking that open communication and coordinated policies will ultimately lead to greater international economic stability. IMF also promotes a climate which will result in an increased growth in international trade and development.
The economic problems are a hangover of the financial crisis any nation underwent. People are of different opinions when it comes to dealing with economic crisis. Some opine that breaking up the big banks into separate subsidiaries which would wall off commercial bank operations from units that trade securities and derivatives will help. They can also sell insurances and maintain international operations. In essence, the world economy has changed in its structure and foundations and the change is irreversible. Capital movements are the driving force of the world economy. Taking the global picture, the prices of non-oil commodity began to fall in 1977, raw material prices were the lowest in early 1986 in recorded history. It is as low as the depths of the Great Depression. Agricultural output has risen globally though the biggest increase may still be ahead. Yet there is a discrepancy between the demand and supply of products.
Practically for all non-farm commodities, whether forest products,
minerals or metals, the world demand is shrinking. The amount of raw
material needed for a given unit of economic output has been dropping
throughout the century. The IMF calculates this decline as one and
one-quarter percent a year since 1900. The amount of industrial raw
materials needed for one unit of industrial production is now two-fifths
of what it was in 1900. The growing population all over the world poses
serious threats to the survival of mankind on this planet. There is no
harmony between the demand and supply of materials needed for human
beings. Natural resources are overused constantly and they get exhausted
very soon as they are not renewable sources of materials.
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