Major Theoretical Logic in Global Marketing - Essay Example

Major Theoretical Logic in Global Marketing Introduction Global marketing is one of the areas that have attracted the most research attention in the international marketing literature. A major theoretical logic in global marketing has been that a firm’s strategy must fit its external environment (the industrial organization view) and its internal environment (the resource-based view). Thus, when industry conditions demand a firm to achieve economies of scale and cross-market integration, the firm needs to pursue a global marketing strategy (Jain 1989; Samiee and Roth 1992). While it has been shown that a global marketing strategy should be viewed broadly and that a global marketing strategy does have significant impact on firms’ performance in global industries (Adler, 1998), the organizational processes, structures, and cultures that are necessary for successful implementation of a global marketing strategy have not been adequately researched in the literature (Jain, 1989). More broadly, there is a major gap in our understanding of the types of internal organizational resources that are conducive to implementing a global marketing strategy and that can lead to sustainable competitive advantages in the global market. A major issue that needs to be investigated is what organizational processes that successful global competitors adopt to influence its foreign subsidiaries so that they can achieve global marketing standardization, coordination, and integration (Samiee and Kendall, 1992). Potential organizational processes may range from suggestion, inducement, request, to direction (Bartlett and Ghoshal 1992). It should be interesting to know which process is more effective and, perhaps more importantly, under what conditions a particular process may be effective for implementing a global marketing strategy. Researchers need to properly conceptualize various organization processes, define their relationships to global marketing strategy implementation, and design empirical studies to test such relationships. Another major issue involves the organization structures that are conducive to global marketing strategy implementation (Appelbaum et al, 1998). While centralization vs. decentralization and product division vs. geographical division have received some discussion in the literature, other dimensions of organizational structure have not been investigated adequately. For example, how a firm’s decision to enter into international joint ventures (or any other modes of foreign market entry) affects its ability to implement a global marketing strategy, and how various knowledge management systems relate to a firm’s ability to implement a global marketing strategy are among important issues to be researched (Bellamy and Graham, 1987). Still another major issue in global marketing is the type of organization cultures that facilitates global marketing strategy implementation (Beyers and Lindahl, 1999). Perhaps the strength of the organization culture is an important variable, or the content of the organization culture is more relevant. Researchers need to develop sound classification schemes for organization cultures, and link them to a firm’s ability to implement a global marketing strategy. Empirical research in this area is particularly scarce. In addition to the aforementioned issues that relate to a firm’s internal organizational resources, research is also needed to identify various industry globalization drivers and the specific mechanisms through which a global marketing strategy can lead to competitive advantages for a firm. With quality research in these areas, a more complete theory of global marketing strategy can be expected in the future. International Marketing Culture is an important factor in understanding organisation, because for any organisation to operate effectively it must for some extent have a general set of beliefs and assumptions. Because understanding the term of the culture metaphor helps organisations to be aware of how employees are thinking about the organisation phenomena, and to recognize how different attitudes, value and beliefs affect the workplace. Understanding and assessing the national culture and organization's culture can mean the difference between success and failure in today's fast changing organisational environment. Cultural assessment can provide measurable data about the real organizational values and norms that can be used to get management's attention. Though, it can be said that the basic assumption, values and norms drive practices and behaviours. Hence when a culture is created it becomes a driving force for the shape and scope of the organisation. The framework for national culture has been developed by researcher Hofstede (1980). While the respective merits and drawback of different framework are widely discussed, the Hofstede basic module of culture can be seen as a helpful framework to illustrate the major issues that need to be considered in change process. Culture environment is one of the important principles that influence the organisation. Hostfede (1991) identifies that there are four dimensions that differentiate cultures at a national level (power distance, individualism-collectivism, masculinity-femininity, uncertainty avoidance), which help to understand that people arrive to organizations with their own national culture. Researchers have considered many factors in their efforts to explain economic growth. These include education, population, nutrition, technological progress, capital formation, international trade, and culture (Associated Press, 2003). Culture is an important factor in the art of management for it can mean the difference between success and failure in today's fast changing business environment. The framework for national culture has been developed by Geert Hofstede (1980), in which culture has been seen as a helpful framework to illustrate the major issues that need to be considered in cross-cultural management. Hostfede’s four dimensions of culture have been the subject of many researchers and business practitioners. Cultural assessment can provide measurable data about organizational values and norms that can be used to get management's attention and achieve economic growth. Adidas Strategies: Product Segmentation, Positioning and Distribution As mentioned earlier, Adidas brand segment has 3 divisions: Sport Performance, aimed at athletes at all performance levels; Sport Heritage, which targets trend-setters seeking sport-inspired streetware with an authentic origin; and Sport Style, which focuses on young cosmopolitan consumers looking for exclusive, fashion-oriented sportswear products (Boulette, 2004). Adidas said this three-divisional approach helps us to best develop and market innovative products, meeting the needs of today's diverse consumers. (adidas-Salomon, 2004) In the Sport Performance, the top five priorities are running, football, basketball, tennis and training (Chase, 1978). Accordingly, in the year 2004, Adidas’ major initiatives include: the Group's first ever global advertising campaign, entitled "Impossible is Nothing"; further commercialization of Adidas’ key technologies, special attention to the running and basketball categories; and, strong participation in the UEFA EURO 2004 European Football Championships and the Olympic Games in Athens. (adidas-Salomon, 2004) Other major strategy approaches include: “Impossible is Nothing campaign”, which is Adidas' attitude drives year-long brand campaign; further commercialisation of ClimaCool, Adidas’ 360° ventilated technology and a3, Adidas’ energy management footwear technology. (adidas-Salomon, 2004) Regarding Sport Heritage, strategies include: limited distribution to prevent dilution of the brand plays a major role in the success story of this division; future broadening its attack on the whole lifestyle market with fresh new products inspired by our brand's unique heritage in football, Olympic sports, tennis and basketball; future expansion of Adidas’ fashion distribution. Finally, with regard to Sport Style, Adidas disclosed: “After an overwhelming response from both retailers and consumers in 2003, the adidas Sport Style division is entering its second year with the fashion-to-wear collection in 2004. Our Y-3 collection, developed with designer Yohji Yamamoto, is helping us extend our product appeal to the cosmopolitan consumers who are looking for exclusive, style-leading active sportswear products. Yamamotos strong presence in this area allows us to expand the power of the adidas brand. The collection is limited to fashion-oriented accounts in Europe, North America and Asia. Influential design and new technology combined with the highest quality standards clearly distinguish Y-3 from any other product in the market. We believe this division has the potential to generate up to 5% of adidas sales in the long term”. (adidas-Salomon AG, 2004) Competition is an important factor to consider before entering a business. Companies should have successful competitive strategies to be able attract, retain and grow customers. However, before the company can plan and execute these strategies, it should be able to pinpoint its sources of competitive advantage which can be differentiated through products, services, channels, people and image (Kotler & Armstrong, 2001). Since the market is in the international orientation, the advertisers should keep in mind the differences that are distinct between and among the target market from different cultural backgrounds which may significantly affect the affectivity of the campaign. The fact is, there may be ideas that will not be applicable across the diverse target market population. Studies on the relationship of consumer behavior and their personal values and cultural orientation as well as their beliefs on certain principles, the dispositions they hold and side they take on political, gender and social problems and issues should be duly accorded. Moreover, other elements, such as understanding the right target audience for a product or service, an indeed, researching such an audience in considerable depth, are equally important. Similarly, even if the appropriate channels are known and understood, the content of the messaging and communications developed for those channels, and that audience, or naturally of critical importance. Such channels for example, will include TV advertising, or an outdoor campaign. Advocates of such channels will argue with justification, that media can now be bought to give a highly articulate degree of one to one targeting, but more importantly the inclusion within messaging across these channels of a telephone number, email address, or website, fulfill our requirement to develop one to one dialogue (Elgar, 2003). When considering channels for any campaign, including new product or service launches, integration across different channels can have a substantial impact upon response, compare to channels working in isolation. The typical example cited is often direct mail followed by telemarketing, where the mail pack serves to put the brand or product in the mind of the recipient, 'warming them up' to the telemarketing. There are also natural partners - as digital becomes a more accepted part of the marketing mix, it is unusual to find any communications strategy particularly product launches, which ignore the use of email and websites. As noted in the channel comparisons above, a combination of email and website work can give high impact, high relevance, and high reach, and in my opinion must form a key part of any communication strategy (Boylaud, 2000). The long history and practice of people across different countries and cultural identities could be very overwhelming in the challenge that it presents to business and advertising individuals who have ambitions to take the extra mile of gaining a share of consumers and clients from varying localities abroad. Today the array of possibilities in applying the marketing strategy of international advertising is unimaginable. Instead of taking the technological barriers as hindrance and drawbacks in the international business operations because of the technological divide that cuts across the people from different social status, looking for avenues of more strategic and effective campaigns and treating such drawbacks as opportunities nay result to favorable outcomes. E-commerce removes the geographical separation between regions, and made dealing with foreign trade a snap. E-commerce is just on its initial phase in China, but it is expected to grow as the Ministry of Information Industry starting to structure the basic framework for e-commerce development, rules and regulations. As such, the arrival of broadband internet means that more and more people will shop online - suggesting there is plenty of room in the market for the convenience store and its competitors. Service differences are likely to smooth out, making it more likely that people will choose on the basis of price and brand loyalty (Cohen and Moore, 2002). With this, the management will need to reassess its goals as well as opt to take on a differentiation strategy by promoting unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. Furthermore, even though the concept of the strategy is a standardized international level advertising campaign, the people who will be responsible in executing the said project should be sensitive enough to investigate on the local environment. The same advertising campaign does not necessarily mean that the strategy, plans and approached that will be utilized is similar. Too much generalization about a locality and the people who will be the target of the campaign may post danger on the success of the project. It is important to get close to the audience by knowing their culture. Thus, it is always important to know the characteristics and nature of the products and services offered by any advertising campaign because this will guarantee the success of the marketing strategy. But knowing the product alone can be detrimental any marketing plan if the advertisers and the manufacturers themselves have no idea of the new target market they are trying to penetrate (Del Vecchio, 2000). The fact that there are really products and services that cannot be applied or utilized in a particular country should be a constant thought and reminder to the advertisers and business organization with plans of gaining entrance and share of clients and consumers in other countries (Hardy and Clegg, 1996). The services and products should be correctly classified as to whether they will be sellable in the new market. References Adidas-Salomon AG. (2004). Adidas-Salomon History [online]. 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