Global Marketing Strategies
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Type of Academic Paper – Assignment
Academic Subject – Marketing
Word Count – 2700 words
Global Marketing
Global marketing is defined as a process through which a company influences its existing and potential customers to purchase the company’s goods and services. According to De Mooij (2013), global marketing, in simple words, is the selling of products and services internationally and includes the process of producing, planning, placing, and promoting of company’s products to the markets overseas. The products which have universal demands have more importance in the intensely competitive business environment. Global marketing’s ability is to catapult success for the company and take it to the next level. Global marketing strategies are designed to understand the market’s dimensions where the company is about to introduce its products and services.
Significance of Global Marketing
Global marketing is known as advertising products which in turn provides benefits to the business. The significance of global marketing for the company or business is defined below;
Market Expansion
In an organisational setting, global marketing enhances its ability to expand its operations across the globe while offering it an opportunity to sell more of the offered products and services most effectively and efficiently. The expansion of the market includes the advertisement of products and services to attain a larger customer base (De Mooij, 2010). This allows the company to have potential profit margins. In the contemporary business environment, global marketing has played an influential role in enhancing its marketing strategies.
Global Networking
Global marketing is essential for attaining a larger customer base and connecting with new markets and customers (Schmitt, 2010). Sometimes the cost of production in some countries becomes low because of a cheaper workforce, lower taxation, and cheaper modes of advertising. Global marketing concerning organisational setting helps establish new connections for the business and opens more doors of opportunities.
Global Marketing Strategies
According to Grant (2016), a global marketing strategy is defined as a strategy that encapsulates countries to coordinate at one platform by making marketing efforts. Coordination is the main element of global marketing strategy, and it leads to a level where uniformity in branding, promotional appeal and packaging is required.
Direct Imports
Direct import is defined as the imports of the products made directly in the country without the interference of the manufacturer (Fagiolo, 2010, p. 1). In this kind of import, the involvement of intermediaries is significantly lower than in another form. It is one of the global marketing strategies, legal, and companies have to follow global economic trends.
Indirect Exports
Indirect exports are selling the products through an intermediary (Ahn, Khandelwal, and Wei, 2011, p. 73). With this strategy, the company introduces its products to the foreign market. In this regard, it has been indicated that indirect import is a relatively cheaper strategy to expand operations in the global market. The agents and distributors are known to be intermediaries who target export markets and sell the products and services to the ultimate consumers.
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Global Positioning
Product positioning is an important marketing tool in a strategic marketing plan (Fuchs and Diamantopoulos, 2010; p. 1763). Product positioning can create a brand image and highlight the brand attributes that differentiate the product from other products in a market. Product positioning identifies points of differentiation and parity that enable the organisation to meet consumers’ needs while adding value to the key elements of the products, such as innovation, leadership, price, functionality, and quality.
Global positioning is defined as a marketing tool in which the company positions its products on a global or international level (Govindarajan and Ramamurti, 2011, p. 191). In other words, when companies start the expansion of their business, in the foreign markets, through the use of different attributes of their products is known as global positioning. For instance, Unilever entered foreign markets by using its global strategy of “act global and think global”. This strategy had made the company stand out in the global markets and gain a presence worldwide. Moreover, to gain a strong customer base in the global market, Unilever has also selected the world’s rival markets by using cross-market subsidisation. This has helped Unilever to position itself in the global market and attract buyers with its price strategy.
Global Positioning Strategies
Competition Strategy
The competitive strategy of product positioning requires unique attributes and features of the product, which gives it superiority over the other products existing in the market (Teece, 2010, p. 172). For instance, Avis Rental Cars used a different tagline of “we try harder”. The unique tagline ultimately helped the company to differentiate its offering resulted in the development of competitive advantage. There can be two ways of positioning the product in the market. For example, either the company uses the same strategy used by other competitors or uses a new marketing strategy. For instance, Colgate and Pepsodent are two products using the same strategy. Pepsodent brought 24 hours protection for kids, and Colgate shifted from family protection strategy to kid’s protection strategy.
Product Benefit Strategy
Product benefit strategy focuses on product attributes and their benefits (Aaker, 2012). According to this strategy, the attributes are being discussed on the part of producers and are added according to the customer’s demand. Sometimes the companies are associated with a variety of product features such as reliability, economy, and durability. All of the features are primarily for the attraction of consumers. For instance, Unilever has positioned itself by emphasising on reliability and economy of countries, where it has continually positioned its products.
Pricing Approach
The pricing approach is the most effective positioning strategy. There are categories that the company tries to offer in many products in terms of features, performance, and services. These features require the best pricing policy, which also gives competitive positioning to the product in the market (Peter and Donnelly, 2011). The effective pricing strategy leads towards a higher market reputation and prestige. Consumers are often attracted to the products which give them high quality at low prices. The premium pricing strategy is often justified by offering consumers and customers superior quality products or introducing a unique product. Here a balanced perspective is required, market reputation and price strategy go hand in hand, and the product attributes must be displayed to the customers effectively. Only then the customers will make purchases even if the price is high.
Importance of Global Positioning
Market Oriented Organisation
Product positioning strategy offers a great deal of market orientation on producers (Auger et al., 2010, p. 140). It is a dimension of broader market perspectives. It offers identifying the product attributes and aligns them with consumers’ demands to gain a more competitive advantage. This perspective gains market orientation for the entire organisation.
Alignment with Market Changes
Product positioning strategies help an organisation cope with market dynamics (Belleflamme and Peitz, 2015). The changes in the market occur on day to day basis, and the marketers are required to have a closer look at these changes. These developments lead to higher expectations from the customers, and product positioning is significant for fulfilling consumer demands.
Consumer Goodwill and Loyalty
If the right product is positioned in the market with the right strategy, the consumers will be more loyal to the products (Auger et al., 2010, p. 140). A systematic approach to product positioning makes the company’s name and its products more prominent in the market, which ultimately leads to strong customer relations. Concerning Unilever, the company has continually offered its customers superior quality products and services, which has ultimately resulted in goodwill and loyalty.
Designing Promotional Strategy
An effective product positioning helps an organisation design effective promotional strategies (Belleflamme and Peitz, 2015). This can also be done by conducting extensive market research. When the advantages and benefits of the products are being communicated, the promotional strategy can be designed according to where the product is being positioned.
Attracting Consumers
Product positioning strategy differs the product from other products in the market, attracting customers to make more purchases (Auger et al., 2010, p. 140). Consumers have specific demands of product features, such as some want safety, some low price, and some want specific features. Positioning the product will attract different sorts of consumers.
Facing Competition
Product positioning helps an organisation to face extensive market competition, which ultimately leads to a high-profit margin. With the dynamism in the market and changing customer demands, product positioning can get a strong response from consumers and gain competitive strength on the part of producers and marketers.
Global Market Segmentation
Global market segmentation is defined as a process of choosing potential customers beyond the national borders of the country where the company exists and splitting them into groups or categories to gain sales (Wedel and Kamakura, 2012). Global market segmentation becomes important with the emerging markets in the last decade. The segmentation is usually done on the basis of the customer’s needs and demands. In simple words, it is the division of world markets into different groups targeting the people or group of people who want similar products.
Segmentation by Population and Income
The segmentation of the potential customers based on their income includes the people who can make high purchases (Cleveland, Papadopoulos and Laroche, 2011, p. 244). In this type of market segmentation, the company chooses the people who are earning monthly income and can spend on the sales of the products. For instance, Lamborghini has continually targeted individuals from elite social class, and with higher income. This has allowed the company to differentiate its vehicles from others available in the marketplace.
Age Segmentation
Some product attributes are connected to a certain age of people. For instance, Unilever introduces brands in the localities, where women of age 30 are more concerned with the skin issues. Offering products to certain people can gain sales and customer influence in the market.
Gender Segmentation
Global segmentation is also done by focusing on the particular gender (Cleveland, Papadopoulos and Laroche, 2011, p. 244). Some clothing companies have continually segmented their markets based on gender-based on their manufacturing capabilities. For instance, Garnier makes products specifically for women, and Ralph Lauren focuses on men clothing.
Psychographic Segmentation
Psychographic segmentation is defined as the market-based division on personality traits, attitudes, values, lifestyles and interests of the consumers. This is a more authentic and useful way of market segmentation because it includes engagement of product design according to consumer’s choices.
Role of Global Market Segments
Profit Potential
Global market segmentation plays an important role for the companies operating in developing and emerging markets (De Mooij, 2013). The right segmentation leads toward the higher sales of the products making the high-profit margin. For instance, in the last few years, Unilever has gained profit with its gender segmentation strategy.
Growth
The global market segmentation strategy also helps the business to grow in international markets. Targeting the right customers for the right product ultimately helps in business expansion, irrespective of the intensity of competition in the industry. For instance, Unilever’s product Dove has targeted women who are inclined towards skincare products especially in India so the actual brand has grown tremendously in the emerging market of India.
Retaining Customers
Effective global market segmentation strategy is beneficial for retaining customers (De Mooij, 2013). Customer retention is an important prospect because it does not only gain customer loyalty, but also customers’ association with the brand. Unilever has retained customers in global markets by focusing on people, who like spending on skincare products.
Market Share
Along with the growth opportunities, global market segmentation also pursues a higher market share. Segmentation proposes a competitive position in the market along with its relationship with customers, suppliers, and channel partners. For instance, Unilever’s global market share in personal care s €20,074bn due to its effective market segmentation strategy.
Recommendations
In order to have a sound global marketing strategy, companies like Unilever would have to follow global trends in the intensely competitive business environment. For that matter, the following recommendations have been given:
Direct Exports
According to Gao et al. (2010, p.377) direct exports are the trade transaction in which the company sells its goods and services directly to the ultimate consumers in another country. This type of transaction does not include a medium such as a retailer or any organization. Director export can have a huge impact on the market because there would not be many expenses related to the retailer or any other middle man in the business transactions.
Niche Marketing
Niche marketing is defined as a specific segment in which inhibits the preferences and habits of the particular segment (Wilson and Gilligan, 2012). The marketers define their product by using niche marketing strategies. This can be beneficial for setting global strategy and also would help the company to survive market competition. Further niche marketing would assess the company to have highly specialised products for the particular market niche.
Adaptation of Industry Trends
Industry trends have a tendency to change over time (Hirst, Thompson, and Bromley, 2015). Any company which would want to expand its market on a global level must have a sound understanding of the industry trends. Industry trends include products, prices, distribution mechanisms, and promotions. The company is required to adopt the industry trends in order to gain prominence in the global market.
Global Brand Consistency
Global brand consistency is defined as a notion in which the organization maintains its brand image and attributes consistently in the global market (Bengtsson, Bardhi, and Venkatraman, 2010, p. 519). For having an effective global marketing strategy the company must keep its brand image consistent. One more reason for having a global consistency is its effect on the company’s revenues and its direct impact on the company’s value as well.
References
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