International and Global Marketing

Question:

Give a brief discussion on international and global marketing?

Answer:

Globalization is a word that has been mistily described as a process, a state, a phenomenon or a concept. Globalization has been partially increasing trade across the nations and continents through the business activities in various countries (Kotler and Armstrong, 2012). It is the process that describes the growth opportunities for the organizations operating in the global markets. Globalization is a never ending process which has being going since 5000 years, but the significance of Globalization accelerated in 1991 (Asmussen 2011). The integration of markets, technologies and national states enabling the individuals, social groups, corporate and national states to reach out the world in deeper, farther, cheaper and faster that it was in the free markets. Globalization in the 20^th century has reached its apex, according to Potter and Biukovic (2011) with increasing integration of corporate, production, operation, communication of various resources, ideas, goods and services, cultures and environment.

The first and foremost stage in the international and global marketing stated is the improvisation of the automation and transportation that enabled the reliable far and distant trade activities. The telegraphs, communication channel of telephone in late 1800s had easily facilitated the transfer of information which was useful for the firms for their supply chain (Bird 2012). The second phase in the global market was when the territories were under the control of colonial powers and the multinational subsidiaries transfer was on hike. This has had ended with the economic crash due to global depression and the inward looking of the various government policies (Hao 2013). The third phase was the lowering of the tariffs and barriers that boosted the international trade. After the Second World War, the richer economies became wealthier and the war years faded and massively increased the demand of the consumer goods (Ramnath 2013). The fourth and the final phase of the process relates to the change in the technology which embedded the growth of the personal computers, innovation in technology of production, the internet and the world wide web, mobile phone and internet communication gave it an ease of development of the products and services for the target customers even beyond the boundaries (Martin and Schouten 2012). Distance was no more any issue for the organizations to operate their businesses.

The technological advancement in the global markets made it easy for tracking the resources or components, automation of the production and the finished goods distribution. The political attitude also was influenced due to the economic factors and policies of the governments that had allowed the consumers and companies to get technological advancement (Sherman 2011). This has lead to convergence of the global economic thinking with many nations accepting a free and liberal market idea. According to Kotler and Armstrong (2012), social trend were also influenced by globalization as the consumers were not that concerned by the product’s nationality rather were more reluctant to the individual needs and satisfaction. Thus, globalization is being into existence since historic times but the technological advancement is one the most driving forces for enhancing the globalized and international marketing.

The globalization and the international markets have given rise to the different dimensions that affects the daily operations of the organization. The dimensions include the economic dimension which includes globalization in money, trade, corporation, capital and banking; the political dimension consisting of the governance, peace, science, IGOS, regimes and NGOS; psychology factors includes individuals as the object and subject for global actions; the sociology dimension includes classes, communities, nations, conflicts or agreements; communication dimension involving information as knowledge and technology inclusion in internet as a tool; and anthropology where cultures overlap, clash, adapt and merge. The suggested elements for the increase of the globalization phase included the transportation, travel, communication, processes and products. Like for example, the forces that drive the globalization for McDonald’s, for instance, is the global brand that is present in various nations and regions which cater to the needs of the customer keeping in mind their social, cultural and country’s economic environment, while the image and branding remains the same for the company and constant (Mcdonalds.com 2016). The global forces influence the company’s market for identifying the efficient market conditions for carrying out their businesses. The major drivers of the market are the similar needs and taste of the customers, the global customers existence and different countries transferable marketing (Potter and Biukovic 2011). While the issues of the international and global marketing for the organization consists of the global competitors, county specific differences in cultures, interdependence of various nations, and different scale of economies, trade policies, barriers of tariffs, restrictions on ownership, local company subsidies, host government and local government tie ups and conflicts, the technological standards of various nations, capital and currency flows, and other marketing regulations for international organizations.

The external forces influence the international and global marketing of an organization that guides its success in international market. All the external factors include social life, customers, shareholders, culture, government, weather and other stakeholders. In the global business there are issues associated that influence the operations on regular basis due to change in the external factors. These factors are broadly known as PESTEL (political, economic, socio cultural, technological, environment and legal analyzes) which is required to be analyzed by the organization for moving its operations in the nation that will suit the aims and objectives of the organization. These factors identify the opportunities and threat for the organization.

Political and legal factor that influence the development of the business or organization and helps it to shape the operational cost (consumer law and minimum wage requirements for safety), rule for competition and presence of groups. The global legal entities based in The Hague, International Court of Justice look into the global crimes and on the other hand there are political formations of legal institutions such as World Trade Organization, UN, IMF, World Bank and OECD, who guides the national trade of goods, money and other transactions (Bird 2012). There are increased number of standards globally that includes the electrical standards and patent protection that breaks down the barriers to global trade. The vital political factor is the locally followed rules and legislations is regarding the law for foreign ownership, concentration and the cross ownership. Taking the example of McDonald’s, the Board of Directors of McDonald’s had adopted the policy for Political Contribution which ha formalized for the long standing practices regarding the political parties contribution, political organizations and public office contributions (Mcdonalds.com 2016). This was to recognize the company’s best of interest so as to make the political contributions. Hence, the policy is intended to make sure that the contributions are made in consistent manner with the company’s core values and the national laws. In UK, the recent government has initiated the change in the immigration policy (Hao 2013). The changes made by the new coalition government are making up to the Europeans organizations that migrate or operate to UK for its work operations. The policy reiterates the Standards of Business Conduct provision that requires the political contribution approvals and also for reviewing the requests the policy makers establishes the guidelines and regulations (Melewar and Gupta 2012).

The economic factor is one of the crucial elements of the external factor influencing the global and international organizations which includes- global trade, increasing incomes, market forces in world financial markets, global competition and the most important deindustrialization in North America and West Europe. The macroeconomic environment influences the organization’s strategies and decision making and its performance activities. A rise in living standard, the per capita growth inflation, and GDP and growth rate of the nation helps the organization to understand the economic conditions and the employment and population distribution in the country which help it in making right decision. The UK economy facing at present high unemployment and the stagnant growth due to domestic factors including- low investments, low spending and negative output gaps (Tradingeconomics.com 2016). All these have lead to the low productivity in the country (Hao 2013). The economic conditions of the nation and the world keep on changing with the related factors that includes the social forces, cultural factors, environment and technological changes in the world. International economic integration through factor movement, trade, communication of the economically useful technology and knowledge in the 21^st century and the coming years are at a rising trend (Dess 2012). Past half of the decade, the world has noticed a gradual rising pace for the economic globalization which is now at a rapid growth. The economy witnesses change in its economic structure and activities. So is the business strategy of the international organization which are developed keeping in mind the economic needs of the nation like changes in the wage rate, interest rate, inflation rate and the increase in demand and lower interest rate would boost the organization to take up risk and expand its operation (Potter and Biukovic 2011).

The cultural factors and social forces affect the customer behavior, needs, wants, spending and choice of consumption. According to Murphy, Laczniak and Prothero (2012), the reference groups, target families, role of individuals, the social status, all comes within the social factors of the nation. The cultural factors have an important and vital effect on the people choices and on the strategies, products offering and marketing of the international and global organizations. Cultures refer to mainly the ethics, ideas, customs and behavior of the people living in a place (Poon 2012). The community is not a country but is within a country that follows different religion, ethics, believes, rituals, customs, values and norms, even in profession and corporate. Cultural factors are inevitable for the organizations as they are not just in a particular country or vary from different nation to nation but the increase in globalization the cultural differences are notices within one nation also.

Culture is borderless, as it is invariably exclusive and is sometimes contradictory in few circumstances and situations affecting the choices of the organizations. The multifaceted feature of culture includes the difference in ideas, customs or the religions that is shared within a group. The culture tends to be evolving slowly, like with the Eastern Europe which takes place rapidly (Hao 2013). The corporate culture is also influenced by the cultural factors of the nation and the origin of the organization. It comprises of the values in the organization, ethics in the organization, the beliefs and practices of the organization (Grewal and Levy 2012). The corporate culture of the organization is influenced by the employees, owners, place of working and the integral values. Similar is the case with the people that have various class, culture, attitude and requirements, all these are to be taken care of before serving the customers. Like for example, McDonald’s being a global brand and company cannot offer the same products of US what it offers in India or China. Since the taste, preference, necessities and likes for the product is different in different nation (Doole and Lowe 2012). The cultural fit and the cross cultural strategies must be adopted by the organizations so that they do not get affected by global culture of the nations in this competitive environment and fulfill the requirements of the customers.

Hence it is an accepted fact that the global and international marketing needs to be revised from time to time and must be strategized in a way that it meets the requirements of the nation, its customers, political conditions and competitive advantage. All the international businesses if desire to compete and get success then they must effectively analyze the global environment and obey the ethical and legal rules and regulations. This analysis must be carried out by the PESTEL analysis which highlights the political factors, economical factors, socio-cultural factors, and technological factors, environmental and legal factors influencing the operations, marketing and activities of the international organization. Thus the changing conditions and rapidly growing competition due to improvised technology, cross culture and political regulations have defined the forces that will keep influencing and growing the global economy and organizations in the coming years.

References

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