Sustainable Consumption - Essay Example

Sustainable Consumption 1. Introduction The project provides a deep insight into the topic of global marketing in the context of international marketing. Global marketing can be described as the process where an organisation adjusts the marketing strategies to familiarize with the conditions prevailing in several other countries. Global marketing can support a company to attain international status and get worldwide recognition. The concept of global marketing is described in details through the proper explanation of various topics such as globalisation, role of World Trade Organisation (WTO) in international trade, effect of culture on consumer behaviour and difference in the way multinationals in the developed and emerging economies operate. 2. Globalization Globalization is a process of integration among people, governments and companies through the mode of international trade, which is aided by the information technology. The procedure has an impact on culture, environment, economic development, political systems and the society. Globalization has helped to form an interdependent and interconnected world, where free transfer of capital as well as goods and services take place across national boundaries (Blowfield and Dolan, 2014). During the middle-ages, individuals, followed by corporations, bought and sold goods through the eminent Silk Road across Central Asia (Hill, Cronk and Wickramasekera, 2013). Likewise, globalization has substantially supported corporations to invest in other countries. Constant technological and policy developments over past few decades can be attributed to globalization. It has spurred a rise in the cross-border migration, investment and trade massively (Young, et al.,2014). The rapid globalization has enabled the world to enter into a new stage of economic development. Since 1950, the volume of trade globally has increased by almost 20 times (Gwynne and Cristobal, 2014). From 1997 to 1999, the inflow of foreign investment has nearly doubled from $468 to $4827 billion (Gwynne and Cristobal, 2014). The entire process of globalization has become cheaper, faster and deeper in the recent past (Daly, 2013). The fresh wave of globalization is driven by policies that have opened the economies internationally and domestically. Since the Second World War, the governments of various countries have adapted to the system of free market economy, which has facilitated improvement in their productivity, thereby creating innumerable new prospects for investment and international trade (Hall and Vredenburg, 2012). Globalization has allowed the governments to drastically reduce the barriers to commerce and establishment of international agreements, which can further promote the trade related to investments, goods and services. Due to the open market economy, corporations are rapidly increasing their investments in the foreign countries through development of new factories and incorporation of marketing and production arrangements (Jean Louis and Simons, 2014). Hence, a crucial feature of globalization is the progress of international, industrial and financial business structure (Sharma, 2014). Another principal driver of globalization is technology. Advances made in the field of information technology (IT) have successfully transformed the economic conditions. Office automation and introduction of the ERP system have increased the pace of advancement and information sharing among organizations located in different parts of the world (Earnhart, Khanna and Lyon, 2014). Information technology has provided the business with valuable new tools for identifying and pursuing the economic opportunities available (Sun, et al., 2014). The information technology has enhanced the process of economic trend analysis, enabled swift transfer of assets and facilitated collaboration with international business partners. Globalization has a number of benefits as well as drawbacks. It helps in the development of an economy and the living standards of individuals. On the contrary, there are a number of effects created by globalization on the local enterprises, culture and the common people (Limão and Saggi, 2013). With development of the multinational corporations, local organizations might suffer losses in terms of cash inflow, labour, ideas and goods. It is, therefore, necessary for the governments to analyze advantages and disadvantages associated with globalization before incorporating any changes within a country (Dholakia, 2014). Multinational corporations such as, General Motors, McDonald’s, Samsung and British Petroleum, operate in multiple markets worldwide (J. Wild, K. L. Wild and Han, 2014). These companies have benefitted from the free trade and lax trade regulations (Dunning, 2014). 3. Role of the World Trade Organization (WTO) in international trade International trade relates to the exchange of goods, services and capital across the global territories and borders. World Trade Organization intends to liberalize and supervise the international trade. The organization was incorporated after the Marrakech agreement and replacement of the General Agreement on Tariffs and Trade in 1995 (Dutt, Mihov and Van Zandt, 2011). The organization regulates the trade between countries by effectively providing a thorough framework for negotiation and formalization of agreements. Besides that, a dispute resolution process is also provided to ensure participating countries adherence to agreements laid down by the organization. The agreements were needed to be signed by members of the concerned governments and ratified by their parliaments. Hence, a number of countries faced trade barriers and wanted to minimize the same. The agreements laid down by World Trade Organization helped in the process of liberalization of the international trade. The documents presented by WTO present legal ground rules for the international trade. These substantially assist the World Trade Organization to bind the government to the policies laid down in the agreement. The governments of different countries who sign the documents are forced to frame their policies within the agreed limits set (Dutt, Mihov and Van Zandt, 2011). Although the agreements are signed only by the governments, they prove helpful for the producers, exporters and importers of the respective country so as to conduct business smoothly. The system is framed by the WTO to promote the free flow of trade, which results in economic development and greater welfare of a country. The contract constitutes of policies that can easily remove obstacles faced in respect of international trade. Thus, the primary motives of the World Trade Organization in framing rules for international trade are to maintain stability and remove complexities in business (Oxaal, Barnett and Booth, 2013). This measure can ensure that companies, individuals and the governments are aware of the basic trade rules, which would not be modified abruptly. WTO by all means wanted to ensure that the rules framed are predictable and transparent (Maddison, 2013). The underlying principles of non-discrimination in the global trade as laid down by WTO are mentioned below: Most Favoured nation- In the agreement prepared by the WTO, it is stated that countries cannot discriminate between their trade partners. If any agreements are developed to lower the rates of tariff, then the same should be applicable to all WTO countries. Then again, certain exceptions are allowed for the bilateral free trade agreements. A number of special rules are also developed for the developing nations (Chaisse and Matsushita, 2013). Free trade- WTO promotes minimization of the trade barriers such as, custom duty. The organization also aims to facilitate gradual trade liberalization so as to instil more flexibility in the international business (Chaisse and Matsushita, 2013). National treatment- Another vital principle stated in the agreement is that both local and imported goods should be equally treated, especially after entry of any foreign product (McGovern, 2014). Binding Agreements- Binding the government to policies stated in the agreement provides the required predictability and stability in the international trade (Chaisse and Matsushita, 2013). Economic reform- The developed countries can improve their economic conditions through trade. As a result, WTO has recognized various challenges in the liberalization of trade that developing countries encounter and has developed special provisions accordingly (Narlikar, Daunton and Stern, 2012). Therefore, WTO has played a huge role in development of the international trade. 4. Effect of culture on consumer buying behaviour Culture can be described as the summation of shared purpose among the members of a society, along with their norms, customs and traditions. Cultural factors exert the deepest and broadest influence on buying behaviour of the consumers (Hughner, et al., 2007). It rightfully influences the customers through values and norms prevalent in the society wherein they live. Culture not only influences the consumers’ buying behaviour, but also reflects the same. It is the basic reason behind a person’s determination and desire to purchase a product (Chau, et al., 2002). Culture can be defined as an aggregate of the learned beliefs, customs and values that directly influence the customers’ buying behaviour. These are mental images that affect the way in which an individual evaluates alternative brands in a category of products. Culture regulates the preference for a brand over another (Young, et al., 2014). An individual’s specific beliefs and general values have a huge role to play while purchasing a product. For instance, most products in Japan are sold in groups of five, instead of four, as the latter is considered unlucky therein (Chau, et al., 2002). In Nigeria, there exist almost 250 ethnic groups (Blythe, 2013). Each group of individuals has a cultural difference in respect of other groups. Also, buying behaviour of the people in Nigeria differs from one market to another. In the same manner, there are several other countries that have a number of ethnic groups, where each group exhibits a different buying behaviour (Durmaz, 2014). It is important for the producers to thoroughly understand the effects of culture on the consumers’ buying behaviour. Producers cannot manufacture a new product without taking into consideration the culture of the concerned society. In foreign trades, the marketers take into account cultures of the trading partners (Griskevicius and Kenrick, 2013). Before exporting products to different countries, foreign traders study the culture of the respective country without failure (Sakkthivel, 2013). This assessment helps to judge value of the product for individuals residing in a particular country. In India, some individuals dislike edible cattle, while these are considered as suitable food items in Britain (Kacen and Lee, 2002). This example can explain cultural differences affecting the consumers’ buying behaviour in respective countries (Blythe, 2013). A brilliant adaptation to the specifications of each market and culture can be derived from the example of McDonalds. The fast food giant is well-aware of tastes and needs of the people related to different cultures. It sells special food items as per the needs of a particular country. All ingredients used by the food giant in the Muslim nations are certified halal. Besides that, McDonalds does not offer any products with pork or bacon therein (De Mooij, 2013). 5. Differences in the operation of multinationals in emerging and developed economies The rise of the multinational corporations (MNCs) in the emerging economies is a relatively fresh phenomenon. In the past decade, there were only a meagre amount of 20 organisations in the list of Fortune Global 500 companies (Cummings and Worley, 2014). Over last few years, the number has increased to 70. The emerging economies are presently home to almost 21500 multinational corporations (Cummings and Worley, 2014). The multinationals in emerging markets are heterogeneous in terms of maturity, origin, place in the value chain and strategy. The MNCs belonging to the emerging economies do not possess outstanding technologies and strong global brand. They often acquire recognized brands for gaining popularity. For instance, Tata Group based in India had tied-up with the automobile manufacturers, Land Rover and Jaguar (Escobar, 2011). Both the companies have a developed proprietary technology. So, this example highlights on the fact that MNCs in the developing nations more often than not acquire the established brands. The MNCs in the emerging economies are generally found to expand to several other nations for obtaining better advantages, which can further act as a springboard for internationalisation. The EM-MNCs (Emerging Multinational Corporations) has the adversity advantage. These companies can survive in corrupt bureaucracies, poor infrastructure and regulatory uncertainties efficiently (Young, et al., 2010). Also, multinational corporations in the emerging economies have the required capability to adapt the goods developed elsewhere in the domestic markets. They have easy access to the production and input markets. The EM-MNCs can equally take the advantage of low cost labour in other countries (Escobar, 2011). The MNCs in the emerging economies also support enhancement of employment opportunities and increased prosperity. The foreign investments also contribute towards improving the infrastructure such as, development of energy networks, transportation, health care and sanitation facilities (Taylor and Thrift, 2012). In the branch plants, the MNCs operate with less polluting technologies and better working conditions. On the other hand, multinational corporations in the developed countries experience greater conflict in the production and input markets. The MNCs in the developed economies have the extended opportunity to earn profit earned in all the branches (Beamish, 2012). They broaden the opportunities for people to earn higher incomes and provide goods and services of improved quality for consumption in the country where they operate. Most multinational corporations in a developed economy have greater amount of control over their branches. Globalisation has helped the MNCs to outsource cheap labour from the developing nations. The parent company located in the developed country also has the choice of centralised decision making (Cincera and Ravet, 2014). The branches of multinational corporations operating in the emerging countries are prone to greater risk of exploitation due to dire need for economic development. Thus, MNCs utilise the advantages derived by means of globalisation in business. The parent company can easily earn huge profit by way of outsourcing cheap labour and technology from the emerging countries (Narula and Dunning, 2010). Consequently, the above explanations rightfully differentiate operations of the multinational corporations in the developed and developing nations (Escobar, 2011). 1) a. Reflection on the importance and scope of the global marketing The primary objective of the project was to identify the importance and scope of global marketing in the context of international marketing. I am of the opinion that global marketing leads to greater commercial advantages. It is the best process of conceptualising and conveying an end product worldwide with hopes of capturing the international market (De Mooij and Hofstede, 2011). I perceive that proper global marketing can enable a company to become internationally acclaimed. I am of the outlook that globalisation has considerably developed the international marketing scenario. Global marketing has been an evolutionary process. From the exchange of goods in the Silk route, global marketing has come all the way to the investment of companies in foreign countries. The office automation and ERP systems in organisations can be cited as an example of development within the companies. Globalisation has opened the world economies for supporting the process of trade without any barriers (Kim, et al., 2002). Trade and commerce greatly evolved due to the ability of companies to exchange goods and to open up branches in other countries. The change in the form of worldwide development is a reflection of the process of globalisation. I feel that it is justified to credit the WTO for incorporating drastic change in the global marketing scenario. As the organisation loosened and liberalised the trade rules, it was able to help several countries to conduct trade more efficiently. The free trade and decline in the tariffs were added advantage for all countries. It supported the entire process of selling and marketing products globally. The global marketing scenario has changed under the impact of liberalisation in the trade rules. The principles stated in the agreement were made flexible and commonly applicable for all member countries with certain exceptions for the developing ones. I agree that the rules set by WTO have helped in the entire process of trading and marketing internationally. By studying the above topics, I am of the impression that culture has a huge role in influencing the consumers’ buying behaviour. Culture purely defines the persona and helps one to be distinguished within a group based on a set of beliefs and customs, which mostly differs from one person to another. Every country has a specific set of culture, where people come from separate cultural backgrounds. Each person’s upbringing in a different country defines their modes of expression as well as ways of thought (L. C. Leonidou, C. N. Leonidou and Kvasova, 2013). Hence, I reckon that the production team of any company must understand the culture of each country and prepare strategies of developing and marketing products accordingly. The right strategy can help a company to be more internationally accepted. For instance, the menu set by McDonalds varies extensively based on the region of its operation (Paulson and Stokes, 2013). The primary focus of the company as mentioned earlier is to market popular products within a country (Ali, Kapoor and Moorthy, 2010). I reckon that global marketing is necessary for companies whose goods have a demand universally such as, food and automobiles. Globalisation has resulted in an increase in the number of multinational corporations in developed nations with their branches mostly situated in emerging countries. The multinational corporations have supported the process of international marketing extensively. The EM-MNCs facilitate greater trade and more economic development as well (Booth, 2014). The multinational corporations in emerging countries have helped in the development of employment opportunities. The corporations extended the opportunities for people to earn higher incomes. Due to globalisation, the multinationals exceedingly received the advantages of availing cheap labourers and inputs of their branch companies (Booth, 2014). Outsourcing and technological transfer can be done more effectively by the multinational organisations (Aguzzoli and Geary, 2014). The multinationals can conduct global marketing more successfully because of the advantages obtained in business. Similarly, raw materials, machinery, components and finance can be obtained from the best sources (Buckley and Hashai 2014). The organisations supplied goods and services of better quality for consumption in a country where they operate (Badgaiyan and Verma, 2014). Furthermore, the multinational corporations also produced goods as per culture, taste and preferences of the people. MNCs operating in different countries frame the marketing strategies as per needs and investment capacities of the consumers therein (Escobar, 2011). Hence, I believe that global marketing in the context of international marketing leads to greater foreign investments, lower the rate of unemployment and enhances the process of optimum utilisation of resource in the emerging countries (Albu, Lupu and Sandu, 2014). 2) a. Reflection on the reasons for undertaking the resit The reason for undertaking the resit is not because of gaining greater understanding about global marketing, but because of the accidental plagiarism committed in the previous project. The similarity that was found in the previous project with certain other academic works was a mistake which was not committed intentionally. I tried to make sure that the ideas taken from other literary works does not match with my project but botched to paraphrase the lines and make the construction of the sentences different. The project was devoid of originality and clarity. Besides that, it displayed lack of understanding and acquaintance with the topic. I failed to prepare the project as per the specifications laid down for the same. I ensured that the mistakes are not repeated again in this project. I made sure that the present project is a work of originality and reflects complete knowledge and understanding of the topic. Hence, to serve this purpose I have conducted extensive research work and prepared the paper based on the knowledge gained. I made this project with lot of accuracy and paraphrased every sentences accumulated from several relevant sources. The present project is free from all sorts of plagiarism and is a self created work. Conclusion Through the proper analysis of the paper it can be concluded that global marketing leads to the increased trade and profitability of the business. The success of a company can augment with the attempt of internationalising the business. The goodwill and profitability are directly affected by the global marketing attempts of an organisation. Global marketing is a rising trend which every organisation needs to attempt for having a dynamic and globally acclaimed status. The number of companies expanding the business globally has increased drastically after the loosening of the trade rules by the WTO. Globalisation has resulted into smoothened trading activities between different countries. The concept of global marketing has been explained in details throughout the paper. Reference List Aguzzoli, R. and Geary, J., 2014. An ‘emerging challenge’: The employment practices of a Brazilian multinational company in Canada. Human Relations, 67(5), pp. 587-609. Albu, N., Lupu, I. and Sandu, R., 2014. Multinationals as Vectors of Corporate Governance Improvement in Emerging Economies in Eastern Europe: A Case Study. In Corporate Governance in Emerging Markets, pp. 331. Ali, J., Kapoor, S. and Moorthy, J., 2010. Buying behaviour of consumers for food products in an emerging economy. British Food Journal, 112(2), pp. 109-124. Badgaiyan, A. J. and Verma, A., 2014. Intrinsic factors affecting impulsive buying behaviour—Evidence from India. Journal of Retailing and Consumer Services, 21(4), pp. 537-549. Beamish, P., 2012. Multinational Joint Ventures in Developing Countries (RLE International Business, pp. 34. London: Routledge. Blowfield, M. and Dolan, C. S., 2014. Business as a development agent: evidence of possibility and improbability. Third World Quarterly, 35(1), pp. 22-42. Blythe, J., 2013. Consumer Behaviour. New York: Sage Publications. Booth, J., 2014. Globalisation and the Current Global Economy. Emerging Markets in an Upside Down World: Challenging Perceptions in Asset Allocation and Investment, pp. 9-24. Buckley, P. J. and Hashai, N., 2014. The role of technological catch up and domestic market growth in the genesis of emerging country based multinationals. Research Policy, 43(2), pp. 423-437. Chaisse, J. and Matsushita, M., 2013. Maintaining the WTO's Supremacy in the International Trade Order: A Proposal to Refine and Revise the Role of the Trade Policy Review Mechanism. Journal of International Economic Law, pp. 43. Chau, P. Y., Cole, M., Massey, A. P., Montoya-Weiss, M. and O'Keefe, R. M., 2002. Cultural differences in the online behavior of consumers. Communications of the ACM, 45(10), pp. 138-143. Cincera, M. and Ravet, J., 2014. Globalisation, industrial diversification and productivity growth in large European R&D companies. Journal of productivity analysis, 41(2), pp. 227-246. Cummings, T. and Worley, C., 2014. Organization development and change. Massachusetts: Cengage Learning. Daly, H., 2013. Globalisation versus internationalisation, and four reasons why internationalisation is better.Globalisation, Economic Transition and the Environment: Forging a Path to Sustainable Development, pp. 39. De Mooij, M. and Hofstede, G., 2011. Cross-cultural consumer behavior: A review of research findings. Journal of International Consumer Marketing, 23(3-4), pp. 181-192. De Mooij, M., 2013. Global marketing and advertising: Understanding cultural paradoxes. New York: Sage Publications. Dholakia, U. M., 2014. Three Senses of Desire in Consumer Research. Available at SSRN, pp. 42. Dunning, J. H., 2014. Economic analysis and multinational enterprise. London: Routledge. Durmaz, Y., 2014. The Influence of Cultural Factors on Consumer Buying Behaviour and an Application in Nigeria. Global Journal of Management and Business Research, pp. 14. Dutt, P., Mihov, I. and Van Zandt, T., 2011. WTO Matter for the Extensive and the Intensive Margins of Trade, pp. 23. Earnhart, D. H., Khanna, M. and Lyon, T. P., 2014. Corporate Environmental Strategies in Emerging Economies. Review of Environmental Economics and Policy, pp. 45. Escobar, A., 2011. Encountering development: The making and unmaking of the Third World. New Jersey: Princeton University Press. Griskevicius, V. and Kenrick, D. T., 2013. Fundamental motives for why we buy: How evolutionary needs influence consumer behavior. Journal of Consumer Psychology, 23(3), pp. 372-386. Gwynne, R. N. and Cristobal, K., 2014. Latin America transformed: globalization and modernity. London: Routledge. Hall, J. and Vredenburg, H., 2012. The challenges of innovating for sustainable development. MIT Sloan Management Review, pp. 45. Hill, C. W., Cronk, T. and Wickramasekera, R., 2013. Global business today. New York: Mcgraw Hill Book Company. Hughner, R. S., McDonagh, P., Prothero, A., Shultz, C. J. and Stanton, J., 2007. Who are organic food consumers? A compilation and review of why people purchase organic food. Journal of consumer behaviour, 6(2‐3), pp. 94-110. Jean Louis, R. and Simons, D., 2014. Business Cycles Synchronicity and Income Levels: Has Globalisation Brought us Closer Than Ever? The World Economy, 37(5), pp. 592-624. Kacen, J. J. and Lee, J. A., 2002. The influence of culture on consumer impulsive buying behavior. Journal of consumer psychology, 12(2), pp. 163-176. Kim, J. O., Forsythe, S., Gu, Q. and Moon, S. J., 2002. Cross-cultural consumer values, needs and purchase behavior. Journal of Consumer marketing, 19(6), pp. 481-502. Leonidou, L. C., Leonidou, C. N. and Kvasova, O., 2013. Cultural drivers and trust outcomes of consumer perceptions of organizational unethical marketing behavior. European Journal of Marketing, 47(3/4), pp. 525-556. Limão, N. and Saggi, K., 2013. Size inequality, coordination externalities and international trade agreements. European Economic Review, 63, pp. 10-27. Maddison, A., 2013. Economic progress and policy in developing countries. London: Routledge. McGovern, E., 2014. International trade regulation. Topsham: Globefield Press. Narlikar, A., Daunton, M. and Stern, R. M., 2012. The Oxford Handbook on the World Trade Organization. Oxford: Oxford University Press. Narula, R. and Dunning, J. H., 2010. Multinational enterprises, development and globalization: some clarifications and a research agenda. Oxford Development Studies, 38(3), pp. 263-287. Oxaal, I., Barnett, T. and Booth, D., 2013. Beyond the sociology of development: economy and society in Latin America and Africa. London: Routledge. Paulson, S. K. and Stokes, P., 2013. The globalisation of business activity: structures, processes and prospects for the demise of postmodernism. Global Business and Economics Review, 15(2), pp. 251-264. Sakkthivel, A. M., 2013. Examining the impact of socio–cultural and psychographic/demographic variables on women consumer behaviour: an exploratory study from Arab League countries. International Journal of Electronic Finance, 7(2), pp. 161-175. Sharma, M., 2014. Impact of globalisation on Indian organization. International Journal of Scientific Research and Education, pp. 205. Sun, G., D'Alessandro, S., Johnson, L. W. and Winzar, H., 2014. Do we measure what we expect to measure? Some issues in the measurement of culture in consumer research. International Marketing Review, 31(4), pp. 1-1. Taylor, M. and Thrift, N., 2012. The Geography of Multinationals (RLE International Business): Studies in the Spatial Development and Economic Consequences of Multinational Corporations, pp. 43. London: Routledge. Wild, J., Wild, K. L. and Han, J. C., 2014. International business. New Jersey: Pearson Education Limited. Young, M. N., Tsai, T., Wang, X., Liu, S. and Ahlstrom, D., 2014. Strategy in emerging economies and the theory of the firm.  Asia Pacific Journal of Management, 31(2), pp. 331-354. Young, W., Hwang, K., McDonald, S. and Oates, C. J., 2010. Sustainable consumption: green consumer behaviour when purchasing products. Sustainable Development, 18(1), pp. 20-31. Read More