Global Marketing and Communications - Essay Example

Global Marketing and Communications Table of Contents Introduction 3 Company Overview 4 Globalisation, Localisation and Glocalisation 5 Different Approaches 7 Macro Environmental Issues 8 Conclusion 10 References 11 Bibliography 13 Introduction “Going global – acting local. Communicating global brands to global markets” the aphorism was first used by Coca Cola Chairman Roberto Goizueta. In this modern era of globalisation many of the local brands are looking to venture outside of their own environment. Coca Cola is an established soft drinks brand started in United States. Soon the brand Coca Cola ventured beyond the shores of America and started thinking globally. Globalisation is a modern phenomenon through which companies that have established their product in their home country (local), try to use their established and successful business models ‘globally’ to achieve growth and profit (Friedman, 1992). In this context, companies face a difficulty in choosing the exact business model that can work globally as the taste and preference of two countries might not be the same. Well established local brands with their prudent research and development teams like Coca Cola has been able to successfully move to foreign lands (Ghemawat, 2003). Companies looking for globalisation generally look for a market with a culture to that of their own. Globalisation deals with seeing the full potential of an outside market and being able to successfully tap that market. A company which is able to do that becomes a successful global brand. Company Overview Coca Cola as a product came into existence in 1886. An Atlanta Pharmacist named John Pemberton brought it into existence. His bookkeeper Frank Robinson named it Coca Cola. Since then the brand Coca Cola has gone through a sea of change and has become one of the global leader in soft drinks industry (Coca Cola, n.d.). Coca Cola follows a style of growth and leadership along with constant up gradation in their activities thus making it possible for them to be sustainable. Coca Cola is enjoyed by more than 200 countries worldwide thus becoming a global brand after it had started as local brand. It is presently one of the largest companies in the world with the employee strength of around 93000 people and has completed 124 years in serving people worldwide with their global brand. It has achieved 48 straight years with an increase in dividends. At present, the company has 3300 beverages being sold worldwide. The present Coca Cola Chairman and CEO is Mr. Muhtar Kent and the company headquarters are located at Atlanta, Georgia (Coca Cola, n.d.). Globalisation, Localisation and Glocalisation Globalisation is the modern phenomenon that is conquering the attention of the world over in recent times. The term has basically gained popularity in the last two decades. Globalisation, from the point of view of international marketer, refers to the situation where geographical boundaries are neglected. It has made geographical boundaries seem immaterial. The international marketers generally “thinks globally, but act locally’, i.e. they firstly try to be established in their own land and then they move towards capturing the world market. Globalisation has made it possible for companies to earn economies of scale which have benefited them in making profit and becoming successful. It has also made the world a free market. It has helped the companies to implement their own successful business models worldwide. This has compelled the research and development teams of the companies to be more active and successful as they are constantly looking for developing ideas. Globalisation has introduced the term ‘Global Integration’ in which business organizations from world over are looking forward to learn and share thoughts in an act of making the world look like a global village. Globalisation has also facilitated trade liberalization (Stanford Encyclopedia of Philosophy, 2002). Localisation in terms of international marketing strategy is a concept opposite in meaning to that of Globalisation. Localisation affects the product quality. Localisation is generally considered to be a function of a single department of an organization and also it is considered as an afterthought to globalisation. Localisation in terms of marketing leads to single department in an organization. Localisation enables a country’s domestic and local requirements to be fulfilled by national sources (Peris, 2009). Under localization, the company loses the opportunity the gain economies of scale from their production. They also are deprived of the fact that they cannot interact with the global community thus loses the opportunity to expand their variation of products as well as their learning from the other industries. Localisation narrows down the scope for an organisation to be successful in the long run. As in the present context, where the world has turned into a global village, an organization always looks forward to expanding globally and thus follows the maxim ‘think globally, act locally’. The term ‘glocalisation’ is used as a combination of globalisation and localisation. It is used as a concept in which it is thought that one organization is able to bridge the global as well as local gap. To be able to succeed as a global player, an organization has to be successful locally too. Coca Cola, the referred global brand started as a local brand in the US. After becoming a success story for around a century it started to venture outside by becoming a global brand in mid 1990’s. Thus, it was a very thoughtafter strategy by Coca Cola. They have truly become an example of a ‘glocal’ brand. For developing an international marketing strategy, an organization firstly has to be successful in their home country. After that, they should look to venture outside their own land. And when one company is able to combine the local success to their global venture, they truly become a glocalised brand (Hines, 2000). Different Approaches Coca Cola is a global brand. It has established itself as a global brand by constantly upgrading itself according to the global situation. It has firstly tried to become a local market success by implementing some standard marketing approach. Communicating a brand in its local market deals strategies like advertisement, word-of-mouth publicities, using prominent personalities from various fields like sports, movies as brand ambassadors and endorsers for their products. Coca cola has used the above mentioned strategies to succeed in their own localised market. Coca cola has followed a standardized slogan of ‘Open Happiness’ throughout the world. Communicating a product deals takes into consideration the following issues: Increasing the awareness of the product/brand among the consumers. Increasing the brand value of the product. Making the company earn profit in long run thus increasing its shareholders value. Also to increase the visibility of the product among the consumers. To change the positioning of the brand if it is not doing so well as an established brand. Adapted approach refers to an approach which an organization adopts when they venture into a foreign land. If the communication approaches for Coca cola in United Kingdom is taken into consideration, one can find that communication strategy revolves around following concepts like that of target audience. It refers to the age group that the company generally targets in their communication approach. Coca Cola in UK showed that during 1995- 2000 period, women became a heavier user than men. But during the study of recent trends it is seen that coca cola is losing the consumers in between the age group 15-24. They need initiate measures to rectify it. The company has increased their sale in the age group of above 25 -35 years along with increase in above 45 years age group. Targeting the youth is another important strategy used in UK by the company. To implement that Pull strategy has been used. Sponsoring concerts in which youth generally takes huge interest is also a part of this strategy. Other strategies includes targeting the male audience by sponsoring sports events, attracting them by distributing their products in pubs and night clubs in the UK which has increased the visibility of Coca Cola as a brand in UK. Advertising in television and through press in the newspaper is also a suitable strategy that is implemented in UK. Promoting the brand vigorously in time of summer is also a successfully used strategy of communication (Neuez, 2003). Macro Environmental Issues Macro environment refers to the uncontrollable and external factor that an organization has to keep in mind in terms of progression and becoming successful as a global brand. This factor includes the like of economic, demographic, social, technological changes, natural forces and resources. Factors also include economic factors like government regulations, interest rates, high inflation rates, taxes that are imposed in a foreign country for an imported product. Macro environmental factor that Coca cola might face may include social acceptance in some countries. In some countries like India, there are many local organisations which try to give bad name to Coca Cola by spreading rumours like usage of pesticides in Coca Cola. This has made their venture to the foreign land complicated (Business Dictionary, n.d.). Other than this, Coca Cola faces competition from existing local brands. In many countries now a days, to control foreign business growth local government impose taxes and strict regulations for foreign brands to prevent local brands from losing out. To prevent this situation, Coca Cola has to look into their foreign policies. They have to create cordial relationship by way of tie-ups, joint ventures etc. with the local brands. By this process, some unwanted problems like that of false allegations like pesticides etc can be prevented as it is expected that the local companies will stand in favour of Coca Cola itself (BlurtIt, n.d.). Coca Cola might try and use local brands for making the situation more helpful for them. Competition from equally powerful sources like Pepsi might be a macro environmental problem affecting Coca Cola. For tackling this situation, Coca Cola has to constantly try and upgrade the products and try to be one step ahead from competition. Conclusion It was in the mid of 1990’s, Coca Cola started to think beyond their own shores. During their venture of past few years, they have implemented their motto of “think globally, act locally”. Coca cola has first thought locally then tried their hand on a global scale. During this process they have been able to become a glocalised brand. It has adopted different marketing strategies like standardised and adopted for different marketing environment like standardised in US and adopted in UK. Coca Cola’s product communication strategy has varied from time to time according to market situation e.g. targeting youth through concerts and males through sponsoring of sports events. Coca Cola has also faced some macro environmental problems like that of social problems, competitions from local brands, etc. Thus, Coca Cola has truly become a ‘Global Brand’ and is still growing all the time in keeping their status as a market leader. References BlurtIt, No Date. What Are The Macro Environmental Threats For Coca Cola? Business. [Online] Available at: http://www.blurtit.com/q298522.html [Accessed May 08, 2010]. Business Dictionary, No Date. Macro Environment. Definitions. [Online] Available at: http://www.businessdictionary.com/definition/macro-environment.html [Accessed May 08, 2010]. Coca Cola, No Date. Our Company. Mission, Vision & Values. [Online] Available at: http://www.thecoca-colacompany.com/ourcompany/mission_vision_values.html [Accessed May 08, 2010]. Coca Cola, No Date. Atlanta Beginnings. Heritage Timeline. [Online] Available at: http://heritage.coca-cola.com/ [Accessed May 08, 2010]. Friedman, T., 1992. The World of The World of Coca-Cola. Cultural Studies of Critical Theory. [Online] Available at: http://theory.eserver.org/world-of-coca-cola.html [Accessed May 08, 2010]. Ghemawat, P., 2003. Globalization: The Strategy of Differences. Harvard Business School. [Online] Available at: http://hbswk.hbs.edu/item/3773.html [Accessed May 08, 2010]. Hines, C., 2000. Localization: A global Manifesto. Earthscan, 2000. Neuez, S., 2003. Communication Strategy. University of England. [Online] Available at: http://sophie.neuez.free.fr/Rapports/Rapport_comm.pdf [Accessed May 08, 2010]. Peris, N., 2009. Transcreation: Translation with Super-Powers! Archive for the ‘Globalization’ Category. [Online] Available at: http://localizationlocalisation.wordpress.com/category/globalization/ [Accessed May 08, 2010]. Stanford Encyclopedia of Philosophy, 2002. Globalisation. University of Stanford. [Online] Available at: http://plato.stanford.edu/entries/globalization/ [Accessed May 08, 2010]. Bibliography Hindle, Tim. Field Guide to Marketing. 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