Strategic Management of Marketing Operations in China and Mexico - Case Study Example

How a Global Corporation Strategically Manages its Marketing Operations across Global Markets and Cultures Table of Contents Table of Contents Introduction 3 Management within the Marketing Realms 3 Strategic Management of Marketing Operations in China 4 Strategic Management of Marketing Operations in Mexico 5 Marketing Plan for the Launch of the New Product 6 Cultural Ramifications 6 Cultural Implications within China 7 Cultural Implications within Mexico 8 The Role of a Truly Global Corporation 9 Conclusion 10 Bibliography 11 Introduction Multinational companies all over the world are enacting new mechanisms to make sure that the global patronage is exponentially increased whilst moving out to newer territories in search of unique markets, novel customers and to touch base with channel members, marketing gizmos and a number of other management related undertakings. Same is the case with Wal-Mart which expanded immensely well with a proper strategic tilt under its aegis. It went from an all-American retail chain to one that looked after the entire world. It can be safely stated that Wal-Mart has made a giant leap towards achieving success as it caters to the ‘need’ premise of the consumers throughout the world. It is indeed one of the biggest, if not yet the biggest retail chain in the world. The strategic management operations within China and Mexico need to be understood as far as Wal-Mart is related as well as the respective cultures of the two nations because these shall give a good enough idea of how adequate the policies of Chinese and Mexican governments, the private sector and other stakeholders were, when Wal-Mart entered within the two countries (Myers, Rhodes & Alexander, 2007). Similarly, how Wal-Mart has attained the role of a truly global enterprise has also been highlighted so that a proper understanding of Wal-Mart and its operations is deciphered. Management within the Marketing Realms The marketing angle is such that it needs to be managed, and in the case of Wal-Mart the requirement is all the more significant because it has opened up new retail outlets in different regions of the world. There are more than 8,500 stores within 15 countries globally, and has 55 distinctive names. Within United States, Wal-Mart operates with its own parent name, while in Mexico, it is known as Walmex, Asda in the United Kingdom, Seiyu in Japan, Best Price in India and other nomenclatures as it expands far and wide throughout the world. In the following, the strategic management of marketing realms within China and Mexico are discussed to gain a solid understanding of the subject at hand. Strategic Management of Marketing Operations in China China is a booming economy and this is the reason why Wal-Mart can thrive on the success that it has achieved elsewhere. The marketing operations within China can be localized to suit the needs of the Chinese citizens. From a strategic perspective, the marketing realms would be well covered if Wal-Mart knows that its procedures within China have to be in a step by step process. If these procedures are duly dealt with, there would be a sense of calmness attached with conducting Wal-Mart’s business operations in the country. The requirement therefore is to comprehend where Wal-Mart must manifest its total basis and how well it can maneuver the Chinese population into purchasing goods and commodities from Wal-Mart rather than other retail chains, which could comprise of the global ones as well as the local players. With positive customer service coming to the assistance of Wal-Mart through the ‘sundown rule’ and the ‘ten foot rule’, one can estimate the level of clarity within the marketing operations in Chinese Wal-Mart domains (Usunier, 2009). The strategic management of the marketing operations within China cannot be achieved if Wal-Mart does not understand the cultural implications of the land and the ways and means through which Chinese people involve within the purchase cycle. Since China is a booming market, it would only be natural on the part of the Wal-Mart officials to think of this region as a thriving one and apply the expansion plans to the lengths and breadths of the country, without envisaging the risks that can come about. Since 1996, when the first Wal-Mart opened in Shenzhen, the ‘go native’ strategy within China has worked wonders and produced results. Strategic Management of Marketing Operations in Mexico Since 1991, when Wal-Mart made its way within Mexico, good customer service and availability of high quality products have been the buzzwords to achieve success. This has meant that Mexican market has understood the Wal-Mart philosophy of business and how it caters to the diverse needs of the people in an out and out fashion. The products sold at the Mexican Wal-Mart stores always aimed at selling to the upper class and middle class consumers, which spoke volumes about the kind of thriving market Mexico is. The purchasing power is concentrated within the Mexican upper class and the middle tier, and it would only be natural to give them high quality products without thinking much on the price tangent. However, the age old ‘every day low pricing’ (EDLP) philosophy that has been coined by Wal-Mart merely, has been applied within the Wal-Mart stores at Mexico as well. It works to good measure for finding new and retaining old consumers towards Wal-Mart, because sales is important no matter how hard it is to deny on the part of the Wal-Mart management (Ghosh, 1998). To become more competitive in the market, the store managers and their subordinates have the final say in lowering down prices to suit the needs and wants of the consumers. This has been applicable within the Wal-Mart stores in Mexico for a long period of time now. It has been aided by national suppliers within Mexico who are doing their best to bring in channel management as smoothly as possible. Wal-Mart, in addition, also owns other branded retailers, which is a step in the right direction. Marketing Plan for the Launch of the New Product Whilst targeting the new market of South Asia, it is important to understand how Wal-Mart would be able to sell Hershey’s chocolates within it. The local level competition existent within countries like India, Sri Lanka, Bangladesh, Pakistan, Maldives, Bhutan, Nepal and others would mean that Hershey’s would have a tough time. It is only with the already established name of Hershey’s that its success will be ensured within the masses. The marketing plan for the launch of this brand would comprise of a solid marketing strategy that takes into consideration the South Asian region. It would also discuss the budget that would be dedicated to the entire South Asian region and hence the varied countries within this very region. A Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis would serve as a good omen to find out both internal and external workings that Hershey’s would have to go through to understand its entrance within the South Asian fraternity. The legal and economic repercussions for the product that is entering a new market is studied as well as the technological and supply chain matters, which essentially point out where Hershey’s might have to face difficulties in adoption and through building long-lasting relationships. Cultural Ramifications Since Wal-Mart is destined to touch base with the differing markets all over the world, one can recount how well it has been able to serve the Chinese and the Mexican markets (Schneider & Barsoux, 2002). The concentration within these two countries or regions has largely been different yet with the same desire – to serve the interests of the varied populations. The Chinese have more patterns in their lives while Mexicans are contemporary and like to be given high quality products when it comes to their shopping habits. Following is an understanding of the Chinese and Mexican cultures which will shape up the discussions in relevance with the question at hand. Cultural Implications within China Within China, the culture is such that it comes as a shock for many Western nations of the world. Similarly, Wal-Mart had to face cultural shocks when it first entered within China. The Chinese people are very different from the rest of the world. They have distinctive life styles of their own and due to their peculiar ways, their market dynamics are very varied. The Chinese are very techno-centric, which means that they like to engage their own selves within the technical angles, and thus the market for gadgets, technologically advanced products and the like is pertinent within the country. They believe that it is usual to have a gadget or electrical product which is up to date and contemporary as they reside in a world which is continuously on the move. Since China is a global manufacturer of such products, the Chinese like to have their hands full with such products as and when they can. Their understanding of the products is also much updated and they gain knowledge by reading different materials regularly (Donegan, 2011). Therefore the cultural perspectives within China are very encouraging to comprehend, and for Wal-Mart, it becomes even more significant because Wal-Mart devises tactics to make sure that the Chinese market remains involved with what is being sold at Wal-Mart and does not acquaint other retail stores more often. The people of China always welcome new chains and companies, and on the same token, they had a very positive response towards Wal-Mart when the latter decided to open its doors to the Chinese market. Hofstede’s cultural attributes seem to come about in full circle within China since this nation has a collectivist culture within its folds. Females comprise most of the Wal-Mart workers which is an indication of high femininity premise. Cultural Implications within Mexico Within Mexico, Wal-Mart had to make modern layout arrangements within their stores because the Mexican populace is highly different from the Chinese counterparts. They like products to be more advanced in terms of good customer quality and presented with finesse and elegance. This is an aspect that meant Wal-Mart to give up on its everyday low pricing strategy for once and focus more on delivery of products in an aesthetically sound way. The culture of Mexico is such that the people have contemporary lives within the cities while the rural dwellers are more focused towards the older way of life. The difference is because the urban and the rural quarters are following varied dictums as far as their life patterns are concerned. The folk art traditions of Wal-Mart meant that artistic ambiences would work well within Mexican Wal-Mart stores and thus an artistic ideology was seen as a successful touch point. Reports from 2006 suggested that Wal-Mart’s Mexican chains had started to grow at a lightning speed whereby it left its national counterparts behind by a good enough margin (Ghauri, 2006). It was for this reason that Wal-Mart came to be known as Walmex (short for Wal-Mart and Mexico), which employed more than the number of its three competitors combined. The Mexican people appreciated that Wal-Mart had become a part of them and it continues to increase even to this day. Many job opportunities came up with its opening within Mexico and this meant that more locals were appreciative of its coming within their land. Hence the Latin American culture played a huge role within the success of Wal-Mart and it easily gave a tough time to its parent location – the United States of America. The Role of a Truly Global Corporation It is a fact that Wal-Mart has a very huge responsibility on its shoulders. This is manifested by the kind of retail chain philosophy that Wal-Mart has been able to develop over a period of time. No matter the markets are located in China or Mexico, the bottom line remains the fact that Wal-Mart has become a household name in such nations. On the same token, it has become generic at times because Wal-Mart is synonymous with shopping, saving on money and having a good time with the entire family – all at the same time. A truly global corporation like Wal-Mart must understand where it has to expand vertically or how it must go about in a horizontal integration with channel members, local partners, competitors and other stakeholders. There has been enough talk about some of the biggest names in the world of business to come ahead and do their bit as far as expanding beyond a certain proportion is concerned. One can safely state that Wal-Mart has gone about expanding for all the right reasons, where it has touched many of the nations on the globe, and with due profits (Dahringer, Leihs & Muehlbacher, 2006). Wal-Mart owes this triumph to the global philosophy of serving the consumers with everyday low pricing and to look after their needs, wishes and desires with empathy. On this token, Wal-Mart is serving the masses and is seen as a better retail chain than many others present in the business world, and which have a direct or even an indirect competition with Wal-Mart. The manner in which Wal-Mart is able to garner trust, support and confidence of the consumers is something that needs to be cherished by its top management, and in the same vein, enough concentration should be paid towards the fact that Wal-Mart has to look after retaining its old consumers while reaching out to the newer markets to serve the people, who have still not heard of Wal-Mart as such. Conclusion For Wal-Mart, the journey to make it big has always been filled with risks yet the results have spoken for their own selves. For a company that was founded in the year 1962 and which concentrates solely on retailing, Wal-Mart has been able to make its name within this category with much success, and for all the right reasons (Sedita & Belussi, 2010). This goes to show how culturally acceptable it has become in the different regions of the world due to its tailored policies, approaches and undertakings. Without a doubt, the strategic management of marketing operations around the world is predominantly much vigorous which showcases what kind of dynamism exists within Wal-Mart’s entirety. Wal-Mart has a long way to go still, and it is only with the passage of time that it will take over the rest of the world that it has planned, and give a tough time to the competitors – of all sizes, shapes and demographics. Bibliography Dahringer, L., Leihs, H. & Muehlbacher, H., 2006. International Marketing: A Global Perspective. Thomson Learning, 3rd Ed. Donegan, J., 2011. Walmart and Carrefour experiences in China: resolving the structural paradox. Cross Cultural Management: An International Journal, 18(4) Ghauri, P., 2006. Managing International Market Entry Strategy: The Case of Retailing Firms. Advances in International Marketing, 17 Ghosh, A., 1998. Brand management in post-NAFTA Mexico. Journal of Product & Brand Management, 7(2) Myers, H., Rhodes, M. & Alexander, N., 2007. International market selection: measuring actions instead of intentions. Journal of Services Marketing, 21(6) Schneider, S. & Barsoux, J., 2002. Managing across cultures. Prentice Hall, 2nd Ed. Sedita, S. & Belussi, F., 2010. Managing the fragmented value chain of global business: exploitative and explorative off-shoring toward emerging market economies. Advances in International Management, 23 Usunier, J., 2009. Marketing Across Cultures - Prentice Hall, 5th ed., Ch 1 & 4 Read More