Global Marketing and Communication - Report Example

xxxxxx No. 12345 (Business) Global Marketing and Communication ABC xxxxx xxxx College Department of xxxxx xxxxxx 30 April, 2013 (Total words: 2189) Table of Contents Contents Page No 1. Executive Summary 03 2. Marketing Strategies 04 2.1 Localized Marketing Strategy 04 2.2 Global Marketing Strategy 05 2.3 Glocalized Marketing Strategy 06 3. Macro Analysis of Global Brand Apple Inc. 07 4. Strategy against the Contemporary and Future Threats 08 4.1 Product Differentiation 09 4.2 Low Price and Cost Leadership 09 4.3 Hybrid Strategy 10 4.4 Mergers and Acquisitions 10 References 11 1. Executive Summary Over the past thirty years or so, a universal shift has been occurring in the world economy. Today, the world has been observing a totally different scenario because geographical distances are reducing due to tremendous development in telecommunications and transportation technologies. While the global environment and culture have turned into almost same fashion, national economies are merging into an integrated global economic system. All these changes and developments have decreased the barriers to global trade and investments (Panic, 2003). In modern era, there is no such field of life which has not been affected by influence of international trade. In the cultural context, international trade has impacts on thoughts, theories, idealism, consumer behavior, and practices of human race (Grossman & Krueger, 1995) while in the perspective of international business environment, its impacts range from manufacturing, production, promotion, consumption, commercial exchange, and distribution. This seminar ‘Going global, acting local - communicating global brands to global markets’ is primarily conducted to encourage the local traders to take their brands to the international markets. In order to motivate the local traders and businessmen, they will be briefed about global marketing strategies along with examples of well-recognized global brands that how they made themselves a global brand with respect to their products. The seminar will also take a close look at the competitive analysis of Apple Inc. and will recommend some strategies to the company to encounter the challenges at competitive level. 2. Marketing Strategies Globalization has changed the business world in many aspects. Human history has never observed such a great progress and changing environment in the past. Numbers of local companies are venturing into global markets, and their entrance is fostering an unparalleled competition in terms of global brands, global products, and global advertising. The contemporary challenge of highest gravity is how to accelerate their operations to exploit maximum opportunities in the global markets. The situation has forced the companies to change their marketing strategies; therefore, most of marketers are applying different strategies. Both local and global marketing activities can be optimized by the application of glocal marketing strategies, and up to certain extent multinational companies have to customize their products (Kotler, 2009). Global companies undertook numbers of glocal tactics associated with glocal strategies not only to make their brand global but also to adapt localization for the development of four variables of the marketing mix (product, price, promotion, and distribution) in different parts of the world. This seminar will just focus on the product segment of the marketing mix. 2.1 Global Marketing Strategy A global marketing strategy promotes a single strategy for a product or service in an entire global marketplace. The strategy is best in case of high pressure in terms of cost reduction and low pressure from local responsiveness (Andersson & Svensson, 2009). The strategy is applied for various countries simultaneously and by successful application, companies can gain and increase a good market share. In the competition of products, companies based on differentiation marketing strategy such as Apple take substantial advantages because customers generally remember the quality of products. Cost-differentiated strategy makes the customers buy their products. 2.2 Localized Marketing Strategy Localized marketing strategy basically deals with customized products which are associated with specific market segments. This strategy seeks the opportunities to adapt the products which possess particular characteristics with respect to individual markets (Kotler, 1985). It is always a point of concerns and priority for multinational companies that how to generate a localized marketing strategy in the host country. Primarily, the concept of a localized marketing strategy is embedded in local manufacturing and local sales. At the start of 21st century, Toyota gained a great success by adopting a localized strategy in China. In 2003, its market share was 2.4% that was increased by almost 3 times in 2004 as 7.3%. Key to success for Toyota was its localization strategy i.e. offering the local proposals to the local customers with respect to their taste and needs. Localized strategy entertains the companies to generate their market share efficiently by keeping the cultural context of its target markets into considerations. Like Facebook, Mixi is a social networking website in Japan but dissimilar to Facebook. Mixi neither shows the number of friends someone has, nor does it have any ‘like’ icon or button. Mixi got popularity because of cultural acceptance. In response to Mixi, Facebook changed its marketing strategy in Japan. It brought cultural context into consideration. Facebook established a local team in Japan to observe the social and cultural trends of consumers and then responded them effectively. McDonalds is the world’s leading fast-food brand. Despite the fact it operates in more than 119 countries with approximately 34,000 outlets across the globe, the company has adopted localized marketing strategy in many parts of the world (McDonald’s, n.d.). For example it offers wine in the fast-food chain of France, beer in Germany, and shrimp burger Teriyaki in Japan and Malaysia. McDonalds doesn’t overlook the strict Islamic compliances in Saudi Arabia. Each branch is closed five times a day for Muslim prayers. Similarly no pork is offered in these branches while 50% of products are either manufactured locally or they are procured from Gulf countries. Zara, a leading fashion retailer, is operating more than 1750 stores around 90 countries. Zara gained this growth through localized strategy by making joint ventures with host country companies. Since general environmental conditions are dusty in most of the third world countries especially in India, therefore, it introduced anti-dust keypads in its mobile sets. Market entry of Procter & Gamble into Nigerian market offered unique products because of their distinctive sizes. Global brand Aerial was welcomed in sachet packing by local population because it was easily affordable. 2.3 Glocalized Marketing Strategy This strategy involves not only a perspective of global strategy, but at the same time it also confirms the need of local adaptation (Foglio & Stanevicius, 2007). Global marketing strategy necessitates homogenous strategy for homogenous products, and the localization strategy demands customization of the products with respect to local requirements. Contrary to these two, glocalization concentrates on the fact that neither globalization nor localization would be effective alone; rather, it is vital to make a marketing strategy by keeping both of these two perspectives in mind. The biggest challenge for companies following the glocalized strategy is that they find it difficult to maintain a balance between adaptation and standardization. Coca-Cola, a globalization stereotype, is applying glocalized marketing strategy quite successfully. Its most famous and most popular global brand “Coke” is a good example of a standardized product. As far as localization is concerned, it claims one of the richest portfolios of beverages in Japan. It includes sparkly drinks as well as still beverages like tea, juices, canned coffee “Georgia”, fresh water, and sports drinks “Aquarius” (Quelch, 2003). In different countries, PepsiCo has also introduced its standardized product while in adapting localization, the company has offered a lot of global brands like Lemon Lays in Thailand, cheese-onion in the UK, paprika lays in Germany, and sea-food in China. 3. Macro Analysis of Global Brand Apple The issues, problems, or items which are not directly controlled by the company are known as macro issues. Such issues include government regulations, political situations of the particular country, availability of raw materials, environmental and climatological concerns, social and cultural norms, and competition between already existing major forces (Boulton, 2001). The competitive analysis basically explores that how a business strategy can be correlated to the existing competition. This type of analysis highlights the strengths and weaknesses of the market rivalries and the foremost step of the analysis is to figure out the existing and potential competition. Marketing theories provide two basic ways to identify the competitors. The first way is to group the rivals with respect to their competitive strategies and the second method is to evaluate the market according to the consumer behaviour and response to their products (Peter & Olson, 2008). Companies with global brand recognition frequently use these factors to cope up their potential issues. The competitive environment offers opportunities for new products, services, and marketing campaigns. Apple Inc. belongs to computer and technological industry which is experiencing a tremendous competition in all segments of its business which include the design philosophy, manufacturing, and sale of PCs, cell phones, music players, and other hardware and software products. The major factors of this intense competition include excessive investment by the companies in research and development, manufacturing and advertising of their products, frequent entry of new products with new features, continuous promotion in the performance and design of existing or new versions of products, and changing consumer behaviour as they have numbers of options available in the markets. The strong competition has resulted more sophisticated products having more capabilities and a broader applications. The continuous technological developments also increased the price and performance competition. The top competitors of Apple include Microsoft Corporation, Sony, Dell Inc, Samsung; Nokia, Google Inc. Research In Motion Inc. and Hewlett-Packard. All of these competitors are operating with multiple global brands. Apple has gained a competitive advantage over its rivalries by introducing blockbuster innovative products of iPod and iPhone. Although Samsung, LG, Nokia etc. have also produced high quality hardware products in the competition of Apple, however, they all depend on some other company for software support. Apple’s iPhone is far ahead of its competitors as its gadget is independent of any support. In the segment of operating system, Apple has been facing a long-lasting severe competition with Microsoft. In this segment Microsoft has proved its dominance as its operating system Windows has a market share of about 90% while Apple’s operating system Mac has a share of less than 07% (Net Applications, March 2013). Similarly numbers of other new products are being introduced in the market which is really a point of concern for Apple to maintain its market standing in future. ThinkPad of IBM has challenged the market iPod and iPhone as it has different series to entertain different consumer behaviour. The different series comprise of R Series (for routine use on daily basis), T series (for premium performance), and X series (for passengers). Dell’s products like solution for Homes and different business sectors are also making the competition to rise further. Nokia’s innovative global brands are also a great competition in cell phone industry. 4. Strategy against the Contemporary and Future Threats The rivalry among the existing competitors of computer industry is going stronger day by day and the current marketing environment is very much unpredictable. Any new successful release of Dell or Sony may collect record revenue for their companies and can cause a sharp fall in Apple’s market share. With the exception of Microsoft’s operating system Windows, most of the products have been found of very short life. For example, if Google launches an innovative brand ‘Google iPlayer’ which may have distinguished features and innovative design, then ultimately a huge population, that previously used Apple’s iPod, would turn toward the new gadget. Bowman Strategy Circle is generally used to make out the best possible strategies and evaluate the related information for the successful implementation of chosen strategy. Apple Inc. can use different strategies of Bowman Strategy Clock to compete its rivals. 4.1 Product Differentiation The leading factor of Apple’s success in this industry is its innovative products through cost differentiated strategy (Boddie, 2005 & Business Wire, 2011). Each year, Apple launches new brands with non-identical and unique features. In order to maintain its current position, Apple is required to spend excessively on research and development to figure out the market demands and changing consumer behaviour. Many experts believe that mobile internet will be the leading technology in future to download the music. Nokia has already introduced download applications on its mobile phones. Therefore, Apple must enhance the features of downloading directly from iTunes to iPod and iPhone. Through this approach, Apple will also maximize the loyalty of its customers. 4.2 Low Price and Cost Leadership Generally this strategy is applied to one specific product. The application of no frills strategy will enhance the consumer circle of Apple; however, the drawback of this strategy is that Apple will lose its gross profit. If Apple decides to go with low price strategy, it must integrate its low price strategy with cost-leadership strategy. The integration of these two strategies will support the company to maintain its market share. 4.3 Hybrid Strategy In current scenario, most of the companies are adopting hybrid strategy for their global marketing. Apple can also use this strategy by differentiating its services and products with respect to low investment (Allen and Helms, 2006). It will also facilitate it to charge different prices for different products depending upon their quality, manufacturing cost, and the cost of competitors. 4.4 Mergers and Acquisitions In order to compete in the price war, the establishing of a niche market will be beneficial to Apple as it will enable the company to fight and reduce the operational costs. Further, Apple can also make strategic alliances or mergers to establish higher standards of distribution channels, better quality products, and thus increase the market share in future. References Allen R.S, & Helms M. M. (2006). Linking strategic practices and organizational performance to Porter’s generic strategies. Business Process Management 12 (4): 433-454. Boulton, Dr. W.R. (2001). Understanding the strategic analysis model. Retrieved on April 17, 2013 from www.auburn.edu/~boultwr/index.html Boddie, J. (2005). Behind Apple’s Strategy: Be Second to Market, Strategy and Innovation, Vol.3, No.4, July/August 2005. Retrieved on 18 April, 2013 from Business Wire, (2011). Strategy Analytics: Apple becomes world’s number one smartphone vendor, Q2 2011, 29 July 2011. Andersson, S., & Svensson, G. (2009). Global Marketing: think globally and act locally. Lund: Studentlitteratur. Foglio, A., & Stanevicius, V. (2007). Scenario of glocal marketing as an answer to the market globalization and localization. Retrieved on April 17, 2013 from Vadyba/Management: http://www.leidykla.vu.lt/fileadmin/Vadyba/16-17/40-55.pdf Grossman, G. M., & Krueger, A. B. (1995). Economic growth and the environment. Quarterly Journal of Economics, 110, 353-378. McDonalds. (n.d.) Getting to Know Us. Retrieved on April 17, 2013 from: http://www.aboutmcdonalds.com/mcd/our_company.html Kotler, P., Keller, K.L, Brady, M., Goodman, M., & Hansen, T. 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