What is global marketing?

Global marketing is expansive, extensive, and complex. It can be seen as both a business strategy and an operation, as a force for good and/or as the ‘new imperialism’. It can be embodied in companies or perceived as a phenomenon (e.g. business globalization, the internet, etc.). One view of global marketing is as a giant supply chain management system or an added value system. Global giants such as Toyota (www.toyota.com), VW (www.vw.com) and DaimlerChrysler (www.daimlerchrysler.com) source their raw materials, semi-processed and processed materials, finance and human inputs from all over the world and deliver the results of the combination of these, i.e. vehicles, to numerous market segments, adding value as they do so.

Defining terms in the global marketing arena is a complex issue. Marketing across political and cultural boundaries raises many questions, problems, and juxtapositions, rendering precise definitions difficult. Typical issues centre on the standardization–adaptation argument; locus of control—central or devolved; and when exactly a multinational corporation focus becomes a global one. How does global marketing differ from domestic and international marketing? While there are no universal definitions, the following are those that we suggest for use throughout this text.

Domestic marketing

The focus of domestic marketing is primarily marketing carried out within a defined national or geographic boundary where the marketer is relatively free to plan, implement, and control marketing plans, including decisions on the marketing mix (i.e. the ‘controllables’), within a relatively known and easily researchable marketing environment (i.e. the ‘uncontrollables’). Over time, the marketer learns to anticipate the needs and wants of his/her market. There is little need to attend to the demands of the across-boundary markets, other than to monitor and meet the threat of imports. Focus and control are firmly on the domestic market.

International marketing

International marketing takes place when the marketer explores markets outside the national boundaries of the domestic market. This often begins with direct or indirect exporting to a neighbouring country. The focus is to find markets which have needs similar to those in the domestic market and can be satisfied with similar products and services. Typical of these are standard product parts and computers. While the marketing environment may be different and some adjustment may have to be made to the marketing mix elements, exporting in economic terms is basically the movement of surplus production overseas. Once again, planning, implementation, and control of the marketing mix are based in the exporting organization. When organizations begin operating across a number of national/political boundaries, they need a more cohesive and constructive approach to their engagement with their international markets. As they progress in their internationalization, organizations would increasingly recognize the importance of accounting for country-to-country differences in their international marketing planning decisions. Because they value these differences, there is the recognition that there are many distinct marketing systems, leading to the notion that international marketing can be viewed as ‘a collection of more or less coordinated domestic marketings’ (Perry, 1999: 45). In this sense, the characteristics of international operations are the differing effects of, and the emphases on, the uncontrollable marketing elements and hence the need for differing marketing mixes to address those differences.

However, international operators may wish to minimize the effect of these differences by operating a standardized marketing mix policy by appealing to global market segments. The emphasis may still be on central production, planning, implementation, and control, with deference paid to different market conditions. When organizations begin to produce in different countries and market according to the demands of local or regional markets, with the resultant devolution of production, planning, implementation, and control (‘think global, act local’), then they are evolving into a ‘multinational’. Despite this devolution, most multinationals have a corporate base from which to operate through a network of subsidiaries. The media company BSkyB (www.sky.com) is a typical example.

Global marketing

The concept of global marketing begins with the notion that the world has no centre. The ‘borderless’ global marketplace encompasses the participation of all countries—not only the industrialized and the newly industrialized nations, but also the emergent economies such as China and India—in international competition. This new ‘market internationalism’ is coupled with more integrative global structures, including free trade areas, common markets, and multilateral agreements (e.g. World Trade Organization) which link international markets more closely, even though protectionism and conflicts coexists with it. It rests upon ‘the dynamic premise that consumer preferences can be, and are, constantly being reshaped by common exogenous (rather than endogenous) forces, resulting in the convergence of many consumers’ wants and desires’ (Perry, 1999: 48). The growing availability and spread of communication and transportation technologies are making consumers more homogeneous and foreign markets more accessible. National borders are no longer effective barriers against external influences. For instance, the internet has made it possible for foreign companies to get around local advertising restrictions. Global marketing organizations would strive exclusively to ‘maximize standardization, homogenization, similarity, concentration, dependence, synchronization, and integration of marketing activities across markets’ (Svenssen, 2002: 581).

On the other hand, the truly global marketing organizations would also have an enlightened recognition that global consumers differ in their consumption behaviour from culture to culture. Markets are about people, not products. There may be global products, but there are not global people. There may be global brands but they are no global motivations for buying those brands (De Mooij, 1998). Global organization seeks to lever its resources across political and cultural boundaries to maximize opportunities and exploit market similarities and differences in search of competitive advantage. There is a proactive willingness to adopt a global perspective instead of a country-to country or region-by-region perspective in the development of a marketing strategy. It will move its resources from country to country to achieve its goals and maximize stakeholders’ value by globalizing marketing activities in the organization of worldwide efforts, the research of domestic and foreign markets, the pursuit of international partnerships, the sourcing of raw materials and support services, and the managing of international transactions. Organizations would operate as if the world were one large market, ignoring superficial regional and national differences while making sure that marketing activities fit the products and services to the practices and cultural characteristics of different markets.