Marketing strategies under globalization

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Marketing strategies and global logistics under globalisation

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Dr Khalil Alkanaani discusses global logistics and marketing strategies under globalisation; and the necessary strategies to overcome the risks of foreign markets, restrictions and political policies that hinder foreign commodities, services and ideas exported to these markets.

world or a major region of the world were a single unity.1 Such companies sell the same product(s) in the same way everywhere.Thus, the term multinational has come to be associated with adjusting products and practices in each country with the attendant relatively high costs, while the term global implies standard products and practices with relatively lower costs – that is, a fully integrated worldwide strategy based on consistent brand selling.

When the opportunities for growth become limited in domestic markets, for whatever reason, there is no place to turn but to new countries. Companies do this by responding to what customers require through marketing research and/or establishing a decision support system so that the firm can direct its marketing activities more effectively by fulfilling the requirements of the 21st Century. A combination approach of ‘think globally, act locally’ seems to be most effective for most companies.

A global strategy is based on location-specific competitive advantage2, operating without regard for national boundaries. However, adjustments are made as required to meet local requirements.

Trend towards globalisation

World trade continued to surpass GNP in most countries throughout the closing years of the 20th century and looks set to continue for the foreseeable future.This trend is partially driven by expanding demand in new markets and the liberalisation of international trade through GATT/WTO accords, which have increased global competition and the free movement of goods and services across the political boundaries of many countries, both developed and developing.

A number of key, but interdependent, factors have been responsible for reshaping the activities of major companies, including3:

Globalisation of markets

Cheaper communication

Removal of barriers to trade and foreign investment

Achieving economies of scale in business

Innovation in logistics

Newly emerging economies are building their own industries with global capabilities assisted by the development of a global transportation infrastructure. Some of these industries are producing large quantities to meet global and local demand, benefiting from the principle of economies of scale, which enables them to produce larger quantities at lower cost.Thus, competitive pressure is greater than ever before.The terms international, multinational and global are sometimes used interchangeably when referring to international operations in general or international marketing specifically, yet they imply differences in approaches to marketing. In addition, there are great links between international marketing and global logistics management. Therefore, there is no marketing without logistics and no logistics without marketing.

International marketing refers to any marketing activity carried out across national boundaries. It is the marketing of goods, services and information across political boundaries. Multinational marketing describes the approach used by companies with a strong commitment to international marketing, treating each foreign market as separate and distinct, developing differentiated products and marketing strategies specifically for each market.

Global marketing, however, refers to the move towards global corporations that operate as if the entire

Some brands are recognisable throughout the world. One recent project had medicines delivered to hard to reach areas using Coke’s excellent global supply chain.

In this new environment, in order to remain competitive companies must seek ways to lower their costs. In this environment, global business materials and components are sourced worldwide, manufactured offshore and sold in different countries. Hence, a challenge for logistics management emerges as another strategic issue for global marketing industries to survive the globalisation era. Most markets will be dominated by well-prepared global competitors who identify their world markets for their products and develop a manufacturing and logistics strategy to support their marketing strategy. These firms will standardise parts, components and modules and then, through flexible manufacturing and logistics, provide the specific products demanded by each market’s consumers.4 The globalisation of markets, together with intensifying competition, new methods of manufacturing and changing relationships with both suppliers and customers, represents a considerable challenge to logistics managers with global responsibilitiesAnother ver y impor tant challenge forconsidering marketing goods and services abroad is to have a global intellectual property (IP) strategy or they risk being prevented from entering certain overseasmarkets. Strategies for protecting and maximising the value of IP are essential to achieving and sustaining competitive edge. Managing IP in a rapidly changing environment calls for a dynamic game plan.

In the past, patents offered stable, enforceable protection. Today, procurement and enforceability are dynamic.Technology may be obsolete before issuance, and enforceability is limited by court decisions. As a result, companies must develop a proactive patent strategy designed to prevent competition in the same invention and use of the same invention by competitors.

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