A company that engages in global marketing focuses its resources on global marketing opportunities and threats. Successful global marketers such as Nestlé, Coca-Cola, and Honda use familiar marketing mix elements (the four P's) to create global marketing programs. Marketing, R&D, manufacturing, and other activities comprise a firm's value chain; firms can figure these activities to create superior customer value on a global basis. Global companies also maintain strategic focus while relentlessly pursuing competitive advantage. The marketing mix, value chain, competitive advantage, and focus are universal in their applicability, irrespective of whether a company does business only in the home country or has a presence in many markets around the world. However, in a global industry, companies that fail to pursue global opportunities risk being pushed aside by stronger global competitors.
A firm's global marketing strategy (GMS) can enhance its worldwide performance. The GMS addresses several issues. First is the nature of the marketing program in terms of the balance between a standardization (extension) approach to the marketing mix elements in the localization (adaptation) approach that is responsive to country or regional differences. Second is the concentration of marketing activities in a few countries or the dispersal of such activities across many countries. Third, the pursuit of global marketing opportunities requires cross-border coordination of marketing activities. Finally, a firm's GMS will address the issue of global market participation.
The importance of global marketing today can be seen in the company rankings compiled by the Wall Street Journal, Fortune, financial Times, and other publications. Whether ranked by revenues, market capitalization, or some other measure, most of the world's major corporations are active regionally or globally. The size of global markets for individual industries or product categories helps explain why companies "go global." Global markets for some product categories represent hundreds of billions of dollars in annual sales; other markets are much smaller. Whenever the size of the opportunity, successful industry competitors find that increasing revenues and profits means seeking markets outside the home country.
Company management to be classified in terms of its orientation toward the world: ethnocentric, polycentric, regiocentric, or geocentric. An ethnocentric orientation characterized as domestic and international companies;international companies pursue marketing opportunities outside the market by extending various elements of the marketing mix. A polycentric worldview predominates at a multinational company, where the marketing mix is adapted by country managers operating at autonomously. Managers at global and transnational companies are regio centric or geocentric in their orientation and pursue both extension and adaptation strategies in global markets.
Global marketings importance today is shaped by the dynamic interplay of several driving and restraining forces.
Driving forces include:
- needs and wants
- technology
- transportation and communication improvements
- product costs
- quality
- world economic trends
- opportunity recognition to develop leverage by operating globaly
- market differences
- management myopia
- organizational culture
- national controls such as non-tariff barriers
