3rd-year student, sp. “Customs Affairs”, d/d,
Scientific Advisor – Stupak M.H.,
Chernivtsi Trade and Economics Institute of KNTEU,
BUSINESS OPPORTUNITIES UNDER THE
CONDITIONS OF GLOBALIZATION
For businesses, the world is becom¬ing a smaller place. Travel and transportation are becoming quicker and easier, com¬munications can be instantaneous to any part of the world and trade barriers are breaking down. Consequently, there are
tremendous opportunities for businesses to broaden their markets into foreign countries. The challenge facing those promoting products globally is to determine whether marketing methods should be the same across the world or if they should be adapt¬ed to different markets based on specific cultural factors.
Many theorists argue that, with the ‘shrinking’ of the world, global standardization is inevitable. Over time, and as economies develop, it has been suggested that consumer buying patterns will blend into one another and national differences may disappear [1, p.48].
Kellogg, the American breakfast cereal producer, has been very influential in challenging consumption patterns in countries outside the United States. In France, for example, breakfast cereals were almost unheard of, and market research suggested that the market was closed to companies like Kellogg.
However, today, there is growing demand for break¬fast cereals across France. Nevertheless, the standardization of products for worldwide consumption in this way is rarely the most effective strategy as is evident from an analysis of the following key aspects of glob¬al marketing.
First of all, it is considered better business practice by many large, established companies to change their products from one country to the next. Take the example of Coca Cola. The recipe for this drink is changed to suit local tastes – the brand in the US is much sweeter than in the UK, whilst in India the product’s herbs and flavourings are given more emphasis.
In terms of the car industry, it would be too expensive for manufacturers to develop and build completely different vehicles for dif¬ferent markets, yet a single, global model is likely to appeal to no one. The best policy, as far as most multinational companies are concerned, is to adapt their product to a particular market.
Secondly, it is also important to con¬sider whether a product should be launched simultaneously in all countries (known as a ‘sprinkler launch’) or sequentially in one market after another (a ‘waterfall launch’) . In practice, most companies producing con¬sumer goods tend to launch a new product in one or two markets at a time rather than attempt to launch a product across a range of countries at a single time.
The advantage for firms is that it is easier to launch in one market, at a time. Effort, and concentration can be focused to ensure the best possible entry into the mar¬ket. Moreover, for technical products espe¬cially, any initial problems become apparent in a single market and can be corrected prior to launch elsewhere. Even though this method can be time-consuming, it is usual¬ly a safer approach than a simultaneous launch. Despite this, in certain highly com¬petitive markets such as computer chips, companies tend to launch their new products internationally at the same time to keep the product ahead of its com¬petitors.
The final consideration when planning to enter a global market, rather than assum¬ing the product will suit all markets, is to take cultural differences into account. Prices have to be converted to a different currency and any literature has to be translated into a different language. There are also less tangible differences. It is quite pos¬sible that common practices in one country can cause offence and have grave consequences for business success in another. That is why knowledge about cultural differences is absolute¬ly vital.
Therefore, if a company is attempting to broaden its operations globally, it must take the time to find out about local cus¬toms and methods of business operation. Equally important is to ensure that such information is available to all necessary workers in the organization. For example, in order to attempt to avoid causing offence to passengers from abroad, British Airways aims to raise awareness of cultural differ¬ences amongst all its cabin crew.
It can be concluded that global standardization of products to ‘fit’ all markets is unlikely to be the most viable option. Marketing methods employed will depend on many factors, such as the type of prod¬uct, the degree of competition, the reputa¬tion of the firm and/or the brand, the state of the economy into which the product is to be launched and how and when to launch. In short, the key to marketing success on a global level is to have sufficient information on how cultural differences are likely to affect the marketing of a product and then allow the appropriate decisions to be made.
1. S. Conversi, Daniele. The Limits of Globalization: Journal of Critical Globalisation Studies. – №3. – P. 36 – 59. – 2010.
2. Schoel W.F., Guiltiann J.P. Marketing. Allyn and Bacon, 2009.
3. http: //www.tyco-fire.com/quell.ua