elements of global marketing strategy

However, in Japan, karaoke bars are much different the majority of them feature private rooms (karaoke bars) for groups of people to rent for a specific amount of time. The local manager who has clear autonomy and profit-and-loss responsibility cannot hide behind such excuses. Defining where youll be advertising and marketing your product or service is one thing. But what if they created an entirely new, separate brand to sell in a different country? So, when youre expanding to a new country, a good question to ask yourself is, do you have a plan in place for bettering the community? Now lets look at the issues that arise when executives consider the four dimensions shown in Exhibit 1 in light of the degree of standardization or adaptation that is appropriate.

Not only do you have to make sure local teams are incorporated into your global marketing strategy, but you should also use them as a helpful resource. The success of the Sista launch made Henkels field managers much more receptive to global marketing programs for subsequent new products. To compensate local management for having to accept a standard product and to fit the core product to each local market, some companies allow local managers to adapt those marketing mix elements that arent subject to significant scale economies. Creating a sense of community is a surefire way to help establish a strong global presence. We help businesses across many different industries with their digital asset management, including food and beverage, consumer packaged goods, retail and apparel, media & entertainment, public sector, pharmaceuticals, and financial services. Were looking at long-term solutions, not just band-aids, Sullivan says. When poorly implemented, global marketing can make the local country managers job less strategic. This is especially important when R&D efforts are centrally directed. In the 1990s, Procter & Gamble introduced Joy, the more affordable option, to the Japanese market and found success quickly becoming one of the market leaders. Even neighborhoods can vary wildly in terms of their customs and cultures. The billboard features a picture of a bowl of noodles. Readers can evaluate their own current and desired levels of program adaptation or standardization on these four dimensions. A successful launch in the prime-mover market will, in turn, persuade other country managers to introduce the product. The product, brand name, positioning, and package design were standardized globally. They are by far your most credible advisors, Kelly finishes. Nowhere is the need for headquarters guidance on innovative organizational approaches more evident than in the area of product policy. Are the colors used on labels and packages offensive or attractive to the foreign buyer? Does each item have to be labeled individually? What are they missing in their lives? It seemed, and almost definitely was, an honest mistake. But despite the obvious economies and efficiencies they could gain with a standard product and program, many managers fear that global marketing, as popularly defined, is too extreme to be practical. The key is to articulate that the economic option is for those who want the look, but dont want to pay the price. Two-thirds of Millennials and nearly 60% of Gen Xers say they want to work for businesses that make an effort to give back to society. Seagram motivates its country managers to stay interested in the global brands by allocating development funds to support local marketing efforts on these brands and by circulating monthly reports that summarize market performance data by brand and country. Even though the product directors are staff executives with no line authority, because they have all been successful line managers in the field, they have great credibility and influence. They rightly view their subsidiaries and the managers who run them as important competitive strengths. Nestl views its brand names as a major corporate asset. Persuasion, however, has its limitations. But on the other, it comes off as overwhelmingly smug. As global competition grows, so does the need for rapid worldwide rollouts of new products. Its not easy, thats for sure. Even then, not the best tagline. As you can see, doing research on the psychological effects of color within each culture youre operating in is extremely important for choosing the right packaging colors for your product. Unilevers South African subsidiary developed Impulse body spray, now a global brand. By incorporating a digital asset management system into your organization, you can have a secure means of facilitating the creation, organization, production, and distribution of all your digital assets. To secure their acceptance, headquarters should make standard marketing programs reflect the needs of large rather than small markets. A companys approach to global marketing depends, first, on its overall business strategy. Country managers who cooperate with a product director can quickly become heroes if they successfully implement a new idea. Even a decentralized multinational may decide, however, that to protect or exploit some corporate asset, the center of gravity for certain elements of the marketing program should be at headquarters. However, you will find that the process for establishing a global brand strategy is often very similar to what you may already be doing domestically. Most of the opposition to the beverages tidal sweep, however, was centered in Europe, being provoked by the beer and wine interests, or by anti-American political interests, or by a powerful blend of oenology and ideology. One of the most disappointing mistakes that Ive seen companies make is that they hire highly competent, intelligent local people to serve their overseas markets, but then fail to consider their input when making strategic decisions, says Kelly in the article.

Once managers have decided how global they want their marketing program to be, they must make the transition. For most products, the appropriate degree of standardization varies from one element of the marketing mix to another. Procter & Gamble has established so-called Euro Brand teams that analyze opportunities for greater product and marketing program standardization. The problem is that Bi Bim Bap is actually a rice dish. 5. For example, Procter & Gamble has many, many brands. However, were leading off with the people because if you dont first and foremost understand who you are marketing to, you may end up trying to sell them a product they dont want and probably will never buy. Debates over the size of the gap between present and desired positions and the speed with which it must be closed will often pit the field against headquarters. Exhibit 1 lists four combinations of the scale economy and cultural grounding variables in order of their susceptibility to global marketing. But performance aside, small markets depend more on headquarters assistance than large markets. First, subsidiary managers who joined the company because of its apparent commitment to local autonomy and to adapting its products to the local environment may become disenchanted. Meanwhile, hosts can make extra money by renting out the spaces they arent using. Depending on the country, the reason varies. It wouldnt be so different than Birkenstock, which offers their premium sandals in addition to their economic option, which is made from EVA foam. A billboard in a subway station in Toronto promoting the new Yellow Pages app implores readers to, Find out if Bi Bim Bap tastes as fun as it sounds.. The trend seems to be toward tighter marketing coordination. Overall, this decision is an excellent one to learn from for those looking to branch out to foreign markets. If you have a more affordable, economically-friendly product, itll be the same in your new market. Large markets with strong local managements are less willing to accept global programs. Coca-Cola faced a very similar problem attempting to translate their own name into Mandarin.

Since the country managers in the prime-mover markets have to risk their resources to launch the new products, theyre likely to tailor the product and marketing programs to their own markets rather than to global markets. Second, powerful local managers are often unwilling to give up their best people to other country assignments. Nestl has transferred to its central marketing staff many former local managers who had succeeded in their Nestl businesses and who now influence country executives to accept standard new product and marketing ideas. To overcome the limits of persuasion, many multinationals are coordinating their marketing programs so that headquarters has a structured role in both decision making and performance evaluation that is far more influential than person-to-person persuasion. Spatial LayoutTo further illustrate the significance of the actual layout of the space where your service is offered, lets consider a karaoke bar. Even more important, effective coordination can exploit a companys best product and marketing ideas. The answer is to focus on means as much as ends, to examine the relationship between the home office and the field, and to ask what level of headquarters intervention for each business function, product, marketing mix element, and country is necessary to close the gap in each.

We will then show how companies we have studied are tackling the implementation challenges of global marketing. But for country managers who view control of marketing decision making as central to their operational success, the transition will often be harder. The decentralized multinational that permits country managers to proceed at their own pace on new product introductions may be at a competitive disadvantage in this new environment. Of course, global marketing has its pitfalls, but it can also yield impressive advantages. (Products like personal computers, for example, are often marketed on the basis of performance benefits that share a common technical language worldwide.) If a manufacturer develops a new version of a seemingly culture-bound product that is based on new capital-intensive technology and generates superior performance benefits, it may well be possible to introduce it on a standard basis worldwide. R. J. Reynolds revitalized Camel as a global brand after the German subsidiary came up with a successful and transferable positioning and copy strategy. Fourth, if transferees from the field have to take a demotion to work at headquarters, the costs in ill will often exceed any gains in cross-fertilization of ideas. The fruitful dialogue that characterizes a relationship between equal partners will no longer flourish. Often, when the headquarters of a decentralized multinational identifies or develops a new product, it has to persuade the country manager in a so-called prime-mover market to invest in the launch. They generally do not wish to transform these organizations into mere sales and distribution agencies. The least threatening, loosest, and therefore easiest approach to global marketing is for headquarters to encourage the transfer of information between it and its country managers. Procter & Gamble developed Pampers disposable diapers as a global brand in a product category that intuition would say was culture-bound. Their objectives are to make each products advertising more consistent around the world and to make it easier to transfer ideas and information among local agency offices, country organizations, and headquarters. Headquarters has to be careful, however, that the information its passing on is useful. Since the market potential in each country was small, they said, they did not have the time or resources to launch Sista. You may even risk bringing down your brand image as a result. Partly because product quality and accounting data are easier to measure than marketing effectiveness, standardization can be greater in production and finance. To avoid distribution disruptions caused by wars in Europe, to ease rapid worldwide expansion, and to respond to local consumer needs, Nestl granted its local managers considerable autonomy from the outset. Are certain markets susceptible to buy-one-get-one messages in retail stores? Overall, then, the driving factor in moving toward global marketing should be the efficient worldwide use of good marketing ideas rather than any scale economies from standardization. In the best of all possible worlds, marketers would only have to come up with a great product and a convincing marketing program and they would have a worldwide winner. Experience also suggests that products will be less culture-bound if they are used by young people whose cultural norms are not ingrained, people who travel in different countries, and ego-driven consumers who can be appealed to through myths and fantasies shared across cultures. In Exhibit 1, we assess program adaptation or standardization levels for each companys business functions, products, marketing mix elements, and countries. Local managers are responsible for sales and distribution programs, which they run in conjunction with local bottlers. Managers shouldnt be bound by any matrix, however; they should find creative ways to prepare a product for global marketing. If headquarters or regions assume much of the strategic burden, managers in overseas subsidiaries may think only about short-term sales. Yet management must recognize that even with a one- or two-year transition period, some turnover among field personnel is inevitable. First up, what your brand and marketing should revolve around the people! Products and marketing programs are also locally managed, but new ideas are aggressively transferred, with local managers encouragedor even proddedto adapt and use them in their own markets. If youre operating in multiple countries, then you have employees that are not just in different parts of the world, but also in different time zones. Encourage field managers to generate ideas. Theyll want headquarters to assume the financial risks for new product launches and welcome the prepackaged marketing programs. Cultural grounding. As you can see, your UVP will then influence your global marketing strategy. But finding the right place to actually sell your offering is another. The project team countered that capitalizing on potential scale economies, its pan-European marketing and manufacturing programs would be superior to any programs the subsidiaries could develop by themselves. Copyright 2022 MediaBeacon, Inc., AnEskoCompany. One reason for this is because different areas of the world associate specific meanings to certain colors. McDonalds put in the work to understand the people they were about to serve and altered their offering to fit their palate. Consider these two examples: To conclude that Coca-Cola is a global marketer and Nestl is not would be simplistic. One of the most disappointing mistakes that Ive seen companies make is that they hire highly competent, intelligent local people to serve their overseas markets, but then fail to consider their input when making strategic decisions.

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elements of global marketing strategy