Impact of globalisation on marketing strategies
Globalisation is the integration of the worlds economy through mass consumption of mainly Western culture, technology and trade due to advances in telecommunications and transport developments. The Impacts of globalisation Include: Low trade barriers Low transport costs Increasing role of TNCs Internet Increased telecommunications technology As a consequence of globalisation, the Ilberallsatlon of world trade has meant the economy operates on a global scale. This has resulted in increased international trade and communications to move products between countries.
The global economy s networked, for example, a consumer can purchase shorts in Italy and shirts from Hong Kong via the internet using electronic cards.
As a result, marketing strategies have been significantly influenced by globalisation. Marketing strategies include market segmentation, differentiation and position if product/service, products, price, promotion, place, people, processes and physical evidence, e-marketing and global marketing. Global marketing, e-marketing, place, price and promotion are discussed below. The global marketing strategy has been significantly impacted by globalisation.
The ntegration of the worlds economy and the breaking down of trade barriers has made it possible for businesses to market their products globally.
It opens up a broader market of people with the disposable income to purchase goods and services. When entering an overseas market, a business may need to modify their existing marketing strategy to satisfy the needs and wants of overseas consumers. For example, a business may adopt a customised approach which requires the marketing plan to be customised according to the economic, political and socic:–cultural characteristics of the target country.
Mcdonalds is an example of a business which has successfully achieved this. Despite its standardised name, logo and production methods, there are local variations.
For example, McDonalds sell beer In France and Germany, sake In Japan and noodles In the Philippines. As the scale of globalisation Increases, It Is becoming Increasingly obvious that marketing strategies need to be adapted to sult the global market. E-marketlng Is another strategy that has been slgnlflcantly Influenced by globalisation. E-marketing Is the practice of using the Internet to perform marketing activities.
As a result of globalisation, advances in the area of telecommunications, transport ana computers nave resulted In tne Olslntegratlon 0T Darrlers sucn as distance and cost, allowing unprecedented mobility, enabling the world to become a global village.
Globalisation has resulted in the creation of the ‘information superhighway allowing marketers to exploit all types of e-marketing. Businesses now have access to global markets through the creation of websites that can promote products and the distribute them to the other side of the world within 24 hours of purchase.
One type of e-marketing, social media advertising, has meant that usinesses can reach millions of consumers, for example, Facebook reaches over 500 million people. In 2010, Twitter become “advertisement friendly’.
Within the first day, Coca-Cola sent out a tweet promoting their product. The tweet was seen 86 million times. Due to the rapid advances in telecommunications technology, as a result of globalisation, businesses are able to expand and reach out to potential consumers via the internet. In accordance with increased telecommunications technology, businesses are increasingly moving away from the traditional channels of distribution.
Non-store etailing is becoming increasingly popular.
However, due to globalisation, businesses are beginning to exploit alternative methods of marketing such as: Telemarketing – the use of a telephone to make a sale. This leads to interactive technology, which will enable customers to purchase via the television or computer. Internet marketing – businesses are increasingly using the internet as a promotional tool. The increasing popularity of internet shopping will result in the need for traditional distribution methods to be modified. For example, Billabong has online stores available for its online teen customers.
Retailers and wholesalers may be sidestepped as customers deal directly with manufacturers. Electronic post and parcel delivery channels will be used intensively to meet the increasing demand. Globalisation has allowed businesses to market their products globally due to the breaking down of trade barriers. This has significantly influenced basic marketing strategies such as price. When marketing overseas, the business must consider external factors such as the amount of competition in the marketplace, government regulations, the product life cycle and the level of economic activity when etermining price.
As a result, McDonalds implements a local pricing strategy rather than a global one. This can be seen when comparing the Big Mac prices, for example, the cost in the I-JK is El . 18 compared to EO. 87 in Australia, illustrating how McDonalds has had to determine different pricing strategies for different global markets. In each country, McDonald’s assess the demand for their product as an indication for determining price.
For example in the US, a Big Mac with fries costs the same as a Chicago office workers earnings in 14 minutes. In Nigeria, an equivalent meal would onstitute 11 hours and 23 minutes of work for someone living in Lagos.
Thus depending on the market, then the price will be determined. Similarly, promotion has also been affected. McDonalds localises its promotional strategies as it needs to take into account the range of cultural differences within each country. As a result, McDonalds has a variety of marketing campaigns in various countrles.
For example, In tne u Engllsn Tootoaller Alan snearer Is usea to promote their product, compared to France where they use Fabien Barthez. Localisation is also evident in East Asia. McDonalds invests a lot in television advertising aimed pecifically at children, whereas in Beijing not a single ad has been placed on TV.
In China, ads have little chance of being seen. As a result, newspapers and magazines are a better way to advertise.
Globalisation has enabled businesses to operate globally, however this has meant that businesses need to adapt their marketing strategies to suit the global market. Globalisation has resulted in the integration of the worlds economy and has made it possible for businesses to operate in a global market. However this has impacted on various marketing strategies and has forced businesses to adapt to suit the local market.