Convergence/Divergence of the Global Market - Article Example

?Convergence/Divergence of the global market – What do we see when we look through the same marketing lens? Table of Contents Role of globalisation in the emergence of the convergence/divergence debate 3 Complexities associated with the management of marketing 4 Complexities associated with the international management of the 7Ps of marketing 6 Role has technology 8 Difference of International Marketing Manager’s skills requirements 9 Use of the convergence/divergence debate for internal decision making 9 Work Cited 11 Name of the Student: Name of the Professor: Course Number: Convergence/Divergence of the global market – What do we see when we look through the same marketing lens? Role of globalisation in the emergence of the convergence/divergence debate Globalisation involves development of strategic business model which assist in the creation and maintenance of competitive advantage to the international level. The strategic business model helps in developing a vision from the current situation to a desired future, along with the actual blueprint. This amalgamates and transforms domain selection, capabilities and resources into an innovative profit model. The consequence of globalisation can be both homogenising (converging) as well as promoting (diverging) on the strategic business models (Dolvik “The Globalisation Challenge: Convergence or Divergence of National Labour Market Institutions”). According to the scholars who believe in convergence, the countries relaxing their markets, adopting the cutting edge technology, developing institutions and moving towards industrialisation should be expecting similar strategic business behaviour because the people would be accepting same values with respect to behaviour related to work and economic activity. On the other hand, the scholars believing in divergence asserted that the national culture assist in shaping the beliefs, values and attitudes of the management in a country and not the technological growth or any sort of economic ideologies. Many scholars also believe that globalisation is not related to convergence to paramount practice; rather it is regarding leveraging the difference in an augmenting borderless world in order to achieve advantages and positions (Gupta and Wang 69-71). In order to bridge this disparity between two schools of thoughts, a middle path has been proposed which was also known as crossvergence. This defined the set of values which supported the values of east and west and it suggested that the Asian organisations should be developing a hybrid model that would include a blend of the best elements from both the perspectives. The scholars strongly believe that globalisation have made the managerial decisions regarding the strategic business models have become challenging due to volatility, competition and augmenting uncertainty. However, different countries have different viewpoint to dead with the rising challenges. From the above discussion one point is evident that globalisation has a significant role in the emergence of the divergence or convergence debate among the international marketers because with the occurrence of globalisation, scholars have been able to identify the elements that shaped the values and attitudes of the managers in organisation (Gupta and Wang 69-71) Complexities associated with the management of marketing The marketing managers function in a conditioning environment. Of all the conditioning forces nothing affects the manager more than certain characteristics related to the modern society. One of the most important characteristics is the profit system. The organisational competencies such as flexibility, innovation and responsiveness generally result from sense-making and cognition. Management in marketing signifies the role of the firm in case of its sense-making efforts which is done by dissimilating, gathering, interpreting and storing activities that assist in understanding and acting accordingly (Botcheva and Martin 1-4). The complexity lies in understanding and explaining the behaviour of the organisation in case of deploying marketing assets for competitive advantage. In order to understand this complexity or challenge, the management examine the strategic complexity or the ability of the organisation to integrate numerous environmental domains. In such case the organisations can either take in variety of interpretations based on environment. Sense-making however, requires percolating through various domains and synthesizing through them. The above facts reveal a resemblance of the marketing management complexities with the convergence school rather than divergence because convergence school associate strategic business model backed by state of the art technology, industrialisation and development of institution (Neill and Rose “The Effect of Strategic Complexity on Marketing Strategy and Organizational Performance”). In case of marketing strategy strategic complexities such as focus of the management on multiple dimensions of the environment, studying and extracting diverse information and taking marketing decisions is related to convergence school. However, divergence school gives importance to national culture, which also holds an integral position in the marketing environment. From the divergence perspective cultural diversity often result in clashes in internal as well as external business environment, which give rise to conflict. This is one of the major complexities associated with the divergence school in the international market. Complexities arise when products or services are not designed keeping in mind the culture of the place where the product or service is going to be offered. Conflict due to cultural diversity occurs when unbiased organisational culture does not exist. These complexities were negligible before the globalisation, but globalisation has brought these complexities in the marketing management arena along with association (Neill and Rose “The Effect of Strategic Complexity on Marketing Strategy and Organizational Performance”). Complexities associated with the international management of the 7Ps of marketing The concept of marketing mix is one of the core concepts of the marketing theory. However, in the recent past, the 4P’s of marketing mix (product, price, place and promotion) has been attacked by critics, which resulted in inclusion of new marketing mixes. With various modifications, the 4 P’s of marketing also included physical evidence, people and process as the other three P’s in marketing mix. However, these three P’s are specifically significant in case of service industry. In this case, the discussion would focus on the complexities that arise in the international management of all these 7P with respect to convergence or divergence perspective. Each of the 7 P has been discussed below to identify the complexities with respect to convergence or divergence perspective (McGuire 1-15). Product: Product in international market faces complexities in both the perspective because according to the convergence school of thought technology, industrialisation and strategic marketing decisions lead to sustainability. However, the current economic scenario of the market has created instability in the market. On the other hand, products designed keeping in mind the culture of one country might not be accepted in another country. Price: Price gets affected by the elements that are defined in the convergence perspective and not in the divergence perspective. The quality of raw materials and technology, level of strategic decisions affect the price of the product or service offerings. The turmoil in the stock market and the different industries has affected the price of raw material. This is a common phenomenon which leads to an increase in the price of the product or service and decreases it demand (McGuire 1-15). Place: The location has a major role to play in international management. Those national or local location decisions are not affected by cultural take, but international location decisions are indeed affected. In case of convergence perspective, profitability and footfall affect the decision to choose the location. However, this might backfire because the target customer group for the company might not be visiting those places much because of religious issues or culture. So in this case both are interdependent. Promotion: Promotional events designed for one cultural background in a country might clash with another, so the strategic aspects in convergence perspective have little control in case of promotion. Promotion is done to grab the attention of people and people stay in a culturally knitted society (Hollensen 272-275). Process: Divergence is the most significant challenge in case of process in international marketing management due to diversity in the market. Convergence do has few challenges, but they are not significant enough to mention because business operations cannot function without minute complexities. Physical evidence: Shabby infrastructure in case of service marketing, poor and back dated technology is a challenge or draw back on convergence front. Not understanding the pulse of the target customers and their desires is a challenge on the divergence front. People: As mentioned earlier, the major challenge is to understand customer, which begins with understanding employees. If the conflicts are not managed, cultural differences are not blended, and then technology or industrialisation will not work (Hollensen 272-275). Role has technology The role of technology would be discussed in this segment of the study with reference to the emergence of convergence or divergence phenomenon and further strategies for better deployment of technology would be discussed in order to manage the present situation. According to the international trade theory, convergence of income between the different countries can occur if all the countries have access to similar production functions. Barriers in trade can be only eliminated if the obstruction is eliminated in terms of place, distance, communication, etc. This is possible if cutting edge technological infrastructure is available to the companies (James 312-320). Technological development is an integral element which is considered important in convergence school of thought. Technological selection through accumulation and adoption are the ways assumed in explaining convergence in the present business environment. Equal access to technical changes and technology differ between developed and developing countries. This might affect the time of their industrialisation, which is why countries are segregated into developed, developing and under developed countries. However, technological growth is considered important according to divergence school of though and so according to them it does not play important role (Koldewijn “The role of IT in HR policies convergence, divergence, crossvergence: a process model based on evidence from the Middle East”). Access to cutting edge technology at the same time is not so difficult nowadays because of the World Wide Web platform based on Web 2.0 platform, which is interactive and allows a two way communication process. Barriers can be reduced with the appropriate and extensive use of technology in eliminating barriers arising due to location, time or resources (James 312-320). Difference of International Marketing Manager’s skills requirements After a comprehensive analysis of the role of globalisation, technology and 7P’s of marketing in convergence and divergence perspective, the skills of the international marketing manager would be evaluated for assessing the diverse requirement for converging customers that diverging. The empirical evidences state that convergence is based on macro development information. It also includes the concept of technological homogeneity and based on which decisions are taken to estimate the needs and wants of the customers. It is based on the theories put forward by Levitt, which includes that customers would always want to have high quality products at low cost and they consider their decision to be rational, which is unrealistic generally (Doole and Lowe 8-12). The international marketing managers in this scenario need to consider the usage of equally advanced technology as the developing countries are using to identify the needs and wants of its customers. They must have the capability to forecast sales and demand in order to plan out the production and supply strategies. Cultural perspectives are significant but irrational or unrealistic assumptions of the customers must be replaced by rational and profit maximising strategies and demand, which the manager can do through strategic planning and usage of right resources backed by advanced technological infrastructure. Use of the convergence/divergence debate for internal decision making Global strategies have emerged with the intersection of international business and strategic management. Researchers and scholars have tried to identify similarities in cultural specific attitudes and beliefs and consumption patterns. The underlying issue that is behind this debate is whether national culture or ideologies oblige societal values or not. Marketing managers, who believe that the economical ideologies lead to value enhancement generally, support convergence perspective (Peng and Pleggenkuhle-Miles 1-15). On the other hand, who believe that national culture affect in augmentation of value are the once who believe in divergence. Convergence and divergence have equal importance in organisations, with discretion based on the type of industry. The international marketing strategies developed by marketing managers and the practices availed during business operations have perfect blend of technology, profit motive, economic standpoint and technology along with the choice of national culture. The debate between both these perspectives and school of thoughts would never end if the motto is to identify the most important perspective, but identifying the significance is definitely easily in internal decision making (Peng and Pleggenkuhle-Miles 1-15). Work Cited Botcheva, Liliana and Lisa L. Martin. “Institutional Effects on State Behaviour: Convergence and Divergence.” International Studies Quarterly. 45.1 (2001): 1-26. Print. Dolvik, Jon Erik. “The Globalisation Challenge: Convergence or Divergence of National Labour Market Institutions?” Fafo Institute for Applied Science. ARENA and Fafo Institute for Applied Science, 1999. Web. 23 December 2013. Doole, Isobel and Robin Lowe. International Marketing Strategy. 5th ed. Connecticut: Cengage Learning, 2008. Print. Gupta, Vipin and Jifu Wang. “Globalization and Convergence-Divergence Debate: Strategic Perspectives for Emerging Markets.” Journal of Business and Economics Research. 1.2 (no date): 69-76. Print. Hollensen, Svend. Global Marketing. 4th ed. New York: Prentice Hall, 2007. Print. James, Jeffrey. “Convergence and Divergence in the Global Economy from a Technological Perspective.” International Journal of Information Technology and Management. 2.4 (2003): 312-323. Print. Koldewijn, Rob. “The role of IT in HR policies convergence, divergence, crossvergence: a process model based on evidence from the Middle East.” Faculty of Management and Governance Business Administration. University of Twente, August 2009. Web. 23 December 2013. McGuire, Linda. “Marketing and Professional Public Service.” Working Paper Series: Faculty of Business and Science. 59.2 (2002): 1-19. Print. Neill, Stern and Gregory M. Rose. “The Effect of Strategic Complexity on Marketing Strategy and Organizational Performance.” Milgard School of Busines. University of Washington, n.d. Web. 23 December 2013. Peng, Mike. W. and Erin G. Pleggenkuhle-Miles. “Current Debates in Global Strategy.” International Journal of Management Reviews. (2008): 1-35. Print Read More