The Principles Of Globalization And International Marketing Essay

Nowadays, the idea of globalization has become one of the most crucial concepts that impact the operations of several organizations and companies worldwide. The changes occurring in the population, including changes in conditions of communication and technology have resulted in the modification of business and marketing processes and strategies, with the purpose of dealing with the brought up changes. Due to the existing proven fact that along with the changes that happen in the population is the event of observing global marketplaces becoming more homogenous. With this, companies and business organizations, especially multinational companies, constantly develop and enhance their marketing programs and tasks to meet up with the expectations of consumers and provide them across nationwide limitations. The development and improvement of such marketing programs, strategies and projects lead many research workers and analysts to judge and assess the consequences or influences of globalization. With this thought, this paper looks for to discuss the perceived influences of globalization on the international marketing strategies of organizations, with regards to a major multinational company. Furthermore is the discourse of the major makes that have resulted in growing globalization of market segments.

Globalization and International Marketing

The principles of globalization and international marketing are two important ideas that must be addressed and reviewed in relation to business operations of large multinational companies. Globalization is defined as the integration of the overall economy at a global level and will involve two main features ("What's Globalization?. . . ", 2003). The first main feature says that in globalization, most trade takes place among multinational firms, while the second main feature emphasizes that the major activity in the global economy is the stream of profit the form of derivatives, international investments and many others ("What's Globalization?. . . ", 2003). In simple terms, the idea of globalization simply means the beginning and mix relating of different economies on the globe, in line with the desire to truly have a wider and diverse market. With this, because the aim of globalization is to grow and diversify its market, the concept of international market then becomes relevant. International marketing refers to marketing across national borders, in which, the environment from where products and services can be found differs from country to country, and services and facilities are listed differently, with some products or services not available whatsoever in a few countries (Benneth and Blythe, 2002). From this definition, it can be noticed that the concepts of globalization and international marketing are similar, with the aim of market extension and diversification. However, the difference lies on the fact that globalization may become the result of international marketing.

A great deal of business organizations and companies engage in and focus on international marketing, with the desire to have more revenue, sales and acceptance from consumers. International marketing also allows business organizations opportunities for further development and improvement, in conditions of the products, services, strategies, systems, and procedures. This is because international market segments offer vast business opportunities for organizations with a product or service in high demand, consistent with newness, cultural version, attractiveness, and appropriate marketing strategies that can assist them especially ("Global Marketing and offer Chain", 2007). Furthermore, when firms concentrate on international marketing, they receive the chance to gain more knowledge and information in their industry, thus, getting the opportunity to provide more innovative services and products to their consumers.

With this, the strategies found in international marketing can be discussed. The strategies or methods found in international marketing are being employed by multinational companies, with the aim of expanding and diversifying their market segments. Primarily, exporting is the original strategy of firms in getting into a overseas market. Exporting means processing a product in one country and selling it to another, and entails marketing products that have been made or constructed in a aim for country (Benneth and Blythe, 2002). This is the preliminary step of international businesses because exporting is a low risk strategy, wherein few opportunities are created (Perner, 2007). Second strategy is through an establishment of any enduring presence in the foreign country through agreement manufacturing, which involves having someone else manufacture products, while a specific firm undertake a few of the marketing work, thus, saving investment (Perner, 2007). Third strategy is through licensing and franchising the products of local businesses (Benneth and Blythe, 2002), which can be low exposure methods of entry, as they allow other individuals or sets of individuals to use the firm's trademarks and gathered expertise, thus, producing little control over the operation of the business enterprise (Perner, 2007). Furthermore, companies can also create their name and reputation in a overseas market through sourcing components from international claims (Benneth and Blythe, 2002), or importing raw materials and other machines. This might somehow assist the business in establishing its reputation and name in the foreign country, thus, supplying it enough chance to be known by its target market. Last strategy or method of market access is through direct entry strategies, where the firm either acquires a firm or builds operations that involve the best coverage (Perner, 2007). With immediate access strategies, the firm can gather more knowledge regarding the local market of its concentrate on country, and sustains increased control over its resources and information (Perner, 2007).

These strategies are used by business organizations and companies to ensure their establishment in the market of their focus on country. By using such ways of strategies, business organizations and businesses are able to concentrate on their aims and goals, thus, making them more focused in taking advantage of open opportunities that they can consider as their edge over others from the same industry. In addition, with these strategies and methods, multinational companies or companies would be able to obtain adequate and relevant information and knowledge regarding their marketplace and country, thus, would be useful in line with their product or service development and improvement. The usage of such strategies, thus, permitting them to take part in the procedure of and in boosting globalization.

In regards to the strategies and methods employed by firms to engage in international marketing are the global strategies that also shoot for the same goals that international marketing have. Most companies perceive globalization as a subject of taking a superior business model and extending it geographically, with necessary improvements, to maximize the business's economies of sale. From this perspective, the key tactical problem is to simply regulate how much to modify the business enterprise model - how much to standardize from country to country versus how much to localize to react to local variations. However, the total amount of localization and standardization will not disregard the undeniable fact that not all companies are similar in one another, including their distinctions in prospect of development. Distinctions from country to country, in contrast, are viewed as obstacles that require to be defeat (Ghemawat, 2003).

The presence of differences has been identified by companies as not only as a drawback, but also as a chance for business and sales. This is exhibited by the large multinational company Coca Cola. The Coca Cola Company is the world's leading maker, distributor and marketing consultancy of non-alcoholic beverages, concentrates, and syrups, and is present in virtually all parts of the planet ("Global Affect of Coca Cola", 2005). It is considered a worldwide company, one which largely participates along the way of globalization, for it can recognize and value the cultural distinctions among countries and continents. Coca Cola was able to learn and inform itself to have the ability to continue serving, gratifying, and reaching the demand of its customers, through product advancement and development ("Global Affect of Coca Cola", 2005). With this, the company was able to participate immensely along the way of globalization, for the establishment with their name and reputation in the global market will not only suggest the upsurge in the sales and earnings of the company, but also the promotion and encouragement of knowledge, through the Coca Cola Base. The Coca Cola Basis was formed and today operates in practically 200 countries, with the principal goal of assisting those in need, especially those who lack education and knowledge from educational institutions ("Global Impact of Coca Cola", 2005). From this, it could be seen and proved that the Coca Cola Company has been able to become successful using its endeavors, and thus, contributory to the process of globalization.

Moreover, in contrary to the global strategy of Coca Cola is the conception that heading global does not mean that the company must automatically have a existence across the world, like Coca Cola. This simply means that the business must perceive global competition and global marketplaces and has identified the best strategy to prosper for the reason that environment. The term "global" means the entire world, but comprises of smaller, more specific geographic entities, you start with the market in a particular status or province and extending beyond, thus, will not limit and then the contribution of large manufacturers (Dossenbach, 2002). There are many furniture manufacturers who've carved a niche in the European market. One Northeastern company with 70 employees exports to England and currently dedicates about 20% of its development to its market. Again, it's important to understand a global strategy does not have to encompass every continent but can be local, and supplying large importance to plan, above all else (Dossenbach, 2002).

Major Factors that Affect Globalization

The major drive of companies and companies to globalize is their goal or need to expand and widen their target market segments. The expansion and widening of the mark markets of international organizations shows that the organization has enough resources to sustain and maintain its businesses and production. Growth of the business also suggests that the company has attained enough knowledge in keeping the operation of the company, thus, more discovered and experienced in its own industry. That is a significant factor to identify, for with the desire to develop, the company is designed for more profit and sales, which would allow to company to become more established in its industry. Second major factor to recognize and point out is the role of diversification, which relates to the presence of different civilizations and races in the company. Several positive effects are attributed to diversification, and includes effective source of information allocation through inner capital markets, the upsurge in the ability of firms to internalize market failures, and increase in productivity (as cited in Li and Jin, 2006). In addition, diversification can also boost the era of ideas, for more individuals get involved in the operations of the company. Employees are also exposed to more cultures, practices and knowledge, thus, growing its organizational culture. Third major influence is the wide open opportunities for firms to activate in home based business ventures, which would provide them with chances for much more profit and prestige. Home based business ventures involve the production of new products or the development of a specific service or product. Fourth major affect or drive is the fact that businesses may achieve fame or prestige if it globalize. The establishment of name, product/service, and reputation in specific countries and continents gives the business organization a chance to be thought to be one of the most successful business organizations in the whole world, thus, becoming competent in its own industry. Last major impact is the probability of appealing to new and more skills and skills in the business, which would give the organization the border of performing well over others.

Impacts of Globalization

One of the identified impacts or effects of globalization are the establishment of international alliances or coalitions, which link businesses of the same industry based mostly in various countries (Agnihotri and Santhanam, 2003). With international alliances, international insurance policies and agreements will be established and reinforced, thus, effecting an increase in the establishment of harmonious connections among companies. In addition, international alliances strengthens the industry where specific companies participate in, thus, reinforcing their relationship that would allow them to come up with approaches for further improvement and development. Second impact of globalization is the development and improvement of the complete organization in order to address issues or problems, for based on the participation in globalization is the increase in the amount of problems to be encountered. The need to configure and coordinate globally in sophisticated ways creates some obvious organizational issues, such as organizational composition, reporting hierarchies, communication linkages, and incentive mechanisms (Agnihotri and Santhanam, 2003). With this, it can be grasped that along globalization is the need to develop, improve, innovate, and choose new strategies and methods in relation to systems adjustment to enable modification to the changes and obstacles being experienced by the organization. Adjustment and restructuring in the business is necessary because along with the company's motive to develop and broaden its marketplace is the necessity for additional labor force and management functions and styles that could enable the business accommodate the increase in changes. Restructuring and redecorating of the company, thus, serves to be always a great way of modification.

Third impact of globalization is the establishment of federal relations. Inside the globalized era, the selection of overseas market to go into and the setting of accessibility will largely rely upon the negotiations with the foreign governments concerned (Agnihotri and Santhanam, 2003). It is because the international business must have the ability to make negotiations and agreements with the federal government concerned, in order to adhere to necessary requirements and encourage harmonious romantic relationships. Furthermore, the 'muscle electricity' of the global firm can be vital in deciding the shift of electricity equilibrium, so that it must maintain its relationship with the overseas federal government to its edge (Agnihotri and Santhanam, 2003). Creating a good and controllable relationship with the government worried ensures a sustained marriage with the firm, thus, extending its businesses in the international country. Last major impact of globalization is the upsurge in competition among other companies in the same industry. A worldwide firm may be in a better position to compete with its global competitor, as it can enhance its resources internationally (Agnihotri and Santhanam, 2003). Having the ability to take part in its foreign marketplace makes the global company more advanced and much more developed compared to its competitors in the same industry, for this is able to meet the criteria and needs of its international customers. From this conception, major suppliers and stakeholders would like the global organization to other organizations.


From this talk, it could be perceived that the ideas of globalization and international marketing have an effect on one another, in terms of the functions of global business firms. Discovering international marketing strategies allows a global firm to participate in the process of globalization, which increases its capabilities in dealing with all the problems and challenges that come its way. In addition, the introduction of international marketing strategies allows a global company gather relevant and additional knowledge regarding its target market. The use of such knowledge would come in useful in the genuine process of making a product or service and in its functions. Several factors determine the drive of organizations to participate in the procedure of globalization, and include enlargement, diversification, new open opportunities, fame or prestige, and attracting new talents and skills in the business. The connection of such factors enables a global organization to devise useful and impressive ways on stepping into a overseas market. These methods produce a quantity of influences, including international alliances, organizational troubles, government relationships, and competition. These effects enable global companies address issues in their company, which further develop and improve their management and system.

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