Standard Article

You have free access to this content

Global Marketing Strategy

Part 1. Marketing Strategy

  1. Johny K. Johansson

Published Online: 15 DEC 2010

DOI: 10.1002/9781444316568.wiem01024

Wiley International Encyclopedia of Marketing

Wiley International Encyclopedia of Marketing

How to Cite

Johansson, J. K. 2010. Global Marketing Strategy. Wiley International Encyclopedia of Marketing. 1.

Author Information

  1. Georgetown University, Washington, DC, USA

Publication History

  1. Published Online: 15 DEC 2010

1 Introduction

  1. Top of page
  2. Introduction
  3. The Organizational Context
  4. Global Segmentation and Positioning
  5. The Global Marketing Mix
  6. Conclusion
  7. Bibliography

A global marketing strategy (GMS) is a strategy that encompasses countries from several different regions in the world and aims at coordinating a company's marketing efforts in markets in these countries.

A GMS does not necessarily cover all countries but it should apply across several regions. A typical regional breakdown is as follows: Africa, Asia, and the Pacific (including Australia) Europe and the Middle East, Latin America, and North America. A “regional” marketing strategy is one that coordinates the marketing effort in one region.

A GMS should not be confused with a global production strategy. Outsourcing and foreign manufacturing subsidiaries, common features of a global production strategy, can be used with or without a GMS for the finished products.

As listed in Table 1, GMSs can involve one or more of several activities.

Table 1. Components of a Global Marketing Strategy
Items Listed in Order of Descending Occurrence
  • Identical brand names

  • Uniform packaging

  • Standardized products

  • Similar advertising messages

  • Coordinated pricing

  • Synchronized product introductions

  • Coordinated sales campaigns

The coordination involved in implementing a GMS unavoidably leads to a certain level of uniformity of branding, of packaging, of promotional appeal, and so on (Zou and Cavusgil, 2002). This also means that a GMS, in some ways, goes counter to a true customer orientation (see Marketing Planning). The product and marketing mix are not adapted to local preferences, as a customer orientation suggests. This is a potential weakness of GMSs, and leaves opportunities open for local products and brands.

As the notion of integrated marketing communications (see Integrated Marketing Communication Strategy) suggests, the ensuing consistency can have positive revenue benefits because of reinforcement of a unique message, spillovers between countries, and so on. But the main driving force behind the adoption of a GMS is the scale and scope of cost advantages from such uniform marketing strategies. These cost advantages include elimination of unnecessary duplication of effort, savings on multilingual and same-size packaging, use of the same promotional material, quantity discounts when buying media, and so on. The pros and cons of a GMS are given in Table 2.

Table 2. General Pros and Cons of Global Marketing Strategies
 ProsCons
• Revenue sideReinforced message, unique ideaCulturally insensitive
 Spillover of brand awarenessAntiglobal target
 Enhanced liking (mere exposure)Vulnerable to gray trade
• Cost sideReduces duplication, wasteRequires managerial time
 Uniform product design, packaging,Lowers morale in subsidiaries, agencies
 advertising 
 Quantity discounts in media buy 

2 The Organizational Context

  1. Top of page
  2. Introduction
  3. The Organizational Context
  4. Global Segmentation and Positioning
  5. The Global Marketing Mix
  6. Conclusion
  7. Bibliography

Firms typically contemplate adopting a more coordinated GMS, once they have significant presence in several countries and regions. Since local markets will never be exactly the same, a proposed global strategy will generally not be welcomed by the country managers. The existing local operations will have to be convinced to adopt the new global strategy. Thus, a GMS is always top-down, not bottom-up, and it is easy for antiglobalization sentiments to stir even within a multinational company.

The typical solution to this problem is to allow country managers to be involved in the formulation of the GMS, and to form cross-national teams to participate in the implementation. It is also common to designate one country the “lead” market for the strategy, and use its current strategy as a starting point for the global strategy. This lead country is typically one of the larger markets and one where the firm has a strong market share. In multibrand firms, it is also common to limit a global strategy to one or two brands, allowing the local subsidiaries to keep control of some of their own brands.

3 Global Segmentation and Positioning

  1. Top of page
  2. Introduction
  3. The Organizational Context
  4. Global Segmentation and Positioning
  5. The Global Marketing Mix
  6. Conclusion
  7. Bibliography

The firms most likely to engage in GMSs are those present in global markets. Global markets are those where customer needs, wants, and preferences are quite similar across the globe (see Market Definition). Typical product categories are technology products, including consumer electronics, cameras and computers, branded luxury products, and also apparel, personal care, and entertainment categories where, for certain segments, globally standardized products are desired by all. By contrast, in multidomestic markets such as food and drink, where preferences are more culturally determined, global coordination is less common (see Customer Analysis). For example, ACNielsen's cross-national data suggest there are only 43 global brands in the consumer packaged goods categories found in the typical supermarket (ACNielsen, 2001).

3.1 Global Segmentation

The need to target similar segments in different countries is an attempt to minimize the drawbacks of a coordinated global strategy (see Market Segmentation and Targeting). A typical cross-national segment targeted with a standardized product is the teenage and young adult segments, where preferences are allegedly very similar even for food and drink categories. Coca Cola uses the same one-word slogan “Always” around the world. Nike is positioned with a rebellious image in many countries, even though the particular sports associated with Nike differ by country. Technology brands such as the iPod have usually even more coordinated global strategies, with synchronized rollouts of new models across countries.

Global marketers might use a two-stage approach to market segmentation (see Market Segmentation and Targeting), first grouping countries into similar regions to increase the chances of finding homogeneous subgroups within each region. Often the first step amounts to selecting a trade bloc, such as the European Union. As research has documented, many global strategies are, in fact, more regional than global (Rugman, 2005).

A GMS can also be successful if the firm has managed to change local preferences. A new product entering a local market will usually change preferences to some degree, whether by new features, promotion, or price. This is the basis for the extreme standardization proposed by Levitt in his seminal 1983 HBR (Harvard Business Review) article, where he suggests that “everybody” likes the same products. Examples of this abound. IKEA, the Swedish furniture retailer, has changed the market for furniture in many countries – it uses a very standardized and coordinated marketing strategy, focusing around its simple and functional furniture, annual catalog, and warehouse stores. Starbucks, the American coffee chain, also has re-created and enlarged a mature market in several countries with its new coffee choices, novel store layouts, and wider menu. In other cases, changes in the environment have affected preferences so as to make standardization possible. “Green” products are naturally targeting global segments, as are the lighter beers, the bottled waters, and the shift to wines. Such global segments naturally induce companies to adopt GMSs.

3.2 Global Positioning

The main issue in global positioning (see Positioning Analysis and Strategies) is whether the product offering should be positioned the same way everywhere or not. Complicating the issue is the fact that even with complete uniformity of the marketing mix, the arrived-at position may still differ between countries. A classic example are Levi's jeans, whose rugged outdoors image places it in a mainstream American lifestyle segment, but becomes a stylish icon in other countries. Also, as this example illustrates, even if a brand wants to be seen as “global,” its position is typically affected positively or negatively by its country of origin.

A fundamental factor affecting transferability of a position is the actual use of the product. A food product such as apples might be consumed as a healthy snack in the West (“An apple a day keeps the doctor away” as the saying goes). But in Japan, apples are a favorite item in the gift-giving season, placing a premium on color, packaging, and price – hardly the same positioning.

Even without such dramatic usage differences, differences in economic development and cultural distance, in general, are main factors influencing the potential for an identical position. A Ford car may be positioned as a functional value product in Europe, but might be a status symbol in a poor country. First-time buyers in emerging markets rarely view products the same way as buyers in the more mature markets, where preferences are well established. For example, the successful Buicks offered to new customers in China offer quite different benefits from those offered Buick customers in the United States, even though the product is largely the same.

The strength of local competition (see Competitive Analysis) is also likely to vary across countries, affecting the positioning. Where domestic competitors are strong, a foreign brand that is a mainstream brand at home will typically attempt to target a niche abroad. This applies to many European brands including Heineken, Illycaffe, and Volvo. In other cases, a company with a niche position at home may target a more mainstream position in another market – an example is Japanese Honda in the US auto market. In global markets, where often the same global players compete in the major foreign markets, positioning is more likely to remain constant across the mature markets. Examples include automobiles, with the global players occupying very similar positions in most markets. This is less true for new product categories that are still in the growth stage in many countries and the brands are not equally well known everywhere. Cell phone makers Nokia, Samsung, and Sony-Ericsson occupy quite different positions in each market.

The stage of the life cycle (see Stages of the Product Life Cycle) is also likely to vary across countries, affecting how well a particular position can be transferred. In the early stages, with preferences still in flux, a strategy based on the positioning in a lead country may not be very effective in a new country. Thus, the first automatic single-lens reflex camera was introduced by Canon as a mainstream product in Japan, but a specialty product for more professional photography overseas. In emerging countries with their pent-up demand, however, even new consumers aspire for the best products in the leading markets. This is why some Western companies (such as Electrolux, the home appliance manufacturer) will position themselves at the top of the market even in a country like Russia.

The typical strategic assumption is that a globally uniform positioning requires similarity of culture, of competition, and of life cycle stage. However, even in countries where one or more of these requirements are not met, a standardized global positioning may still work. For example, when global communications have made the brand name already well known, a global strategy may work even in a multidomestic market. McDonald's successful entry into many emerging markets is a case in point. And even where domestic competition is strong and would suggest a niche positioning, external events may shift the market in favor of a newcomer. This happened, for example, when the Japanese autos entered the American market and gained strength during the 1970s oil crisis. But these are exceptions and are certainly not automatic, as Coca Cola learned in India when local ThumsUp rebounded (see the section Global Brands).

4 The Global Marketing Mix

  1. Top of page
  2. Introduction
  3. The Organizational Context
  4. Global Segmentation and Positioning
  5. The Global Marketing Mix
  6. Conclusion
  7. Bibliography

4.1 Global Products and Services

Standardization of the product or service is usually a major feature of a global Marketing Mix. “Product Standardization” means uniformity of product or service features, design, and styling. There are several advantages to such standardization, including those listed in Table 3.

Table 3. Advantages of Product Standardization
  • Cost reduction

  • Improved quality

  • Enhanced customer preference

The advantages are mainly on the cost side – scale economies from the larger number of identical units produced. But there are also quality advantages involved. With longer series, there is more reason to invest in specialized technology, machine tools, components, and parts, yielding higher and more consistent quality. Finally, there is a possible positive demand effect on customers. Because of the prevalence of the products and designs, the “mere exposure” of individuals to the products engenders a positive impact on preferences. This is an effect which partly depends on competitive imitation – when most cell phones feature a built-in camera, consumers “want” a camera with their cell phone (see Competitive Analysis).

The disadvantages of product standardization are mainly on the demand side (see Table 4).

Table 4. Disadvantages of Product Standardization
  • Off-target

  • Lack of uniqueness

Apart from the case of pent-up demand in an emerging country, standardized products rarely manage to target precisely a specific segment in a new country market. They are at least slightly off target. This is not always such an obstacle to success. First, preferences may change – the standardized product may offer features not offered before in that market. Honda's 1970s entry into the US car market exemplifies this case, with the car offering both fuel efficiency and sportiness. Second, a mispositioning may be overcome by a strong brand name. The McDonald's entries in emerging markets fall in this category. Third, the entering product may well be sold at a low price – its scale advantages can allow such a strategy. This was the strategy followed by Samsung before its later drive toward a strong global brand (Quelch and Harrington, 2004).

Since the typical multinational company does manufacturing in a large number of country subsidiaries, the need for scale has sometimes made it necessary to designate local production sites as suppliers for the whole world. Toyota's Kentucky plant produces the Camry for global distribution. The BMW Z4 sports car is only produced in South Carolina. Apple computers are all produced in Taiwan. In general, however, the risks of local strikes and political conflict make most companies assign production to more than one site.

From a marketing perspective, a uniform product or service is often less acceptable locally. Of course, some localization is always necessary in any case – electric appliances face different voltages and plugs, safety regulations differ between countries, and homologation requirements differ. But the more critical issues revolve around customer acceptance. What is seen as a good product or service in one market might not be acceptable elsewhere.

The fact is that there are relatively few products and services that are identical around the world. One would expect that products in global markets, such as technology products, would be identical. But generally speaking, PCs and cell phones are smaller in Asia, automobiles have a harder suspension in Europe than in the United States, and even stereo speakers vary slightly in bass level between North America (heavy on bass) and Asia (where smaller apartments places the listener closer). The classic failure by Euro Disney to transfer its American theme park unchanged to France is a good example of misguided standardization of a service product. Despite the success of the strategy in Tokyo, the Euro effort fell flat for many reasons, one of which was the no-alcohol rule inimical to Continental Europeans.

Luxury products are usually the same across the globe, and utilitarian items such as automobile tires, toothpaste, and kitchen utensils can be standardized. But products such as shampoos, soaps, and personal-care items need to take account of hair types, skin color, and water quality to perform satisfactorily. Coca Cola's level of sweetness differs across countries, McDonald's menu is adapted to country preferences (partly to reduce antiglobalization protests), and apparel manufacturers have to make adjustments for different body proportions between Western and Asian peoples.

To deal with these adaptations while trying to retain some scale economies, companies resort to two solutions. One solution is to use the same basic design or “platform” for the product, and then adapt by adding alternative features at the later stage of manufacturing. This is common in automobiles, where the platform involves the chassis on which the body is then fitted. But the concept is also used in the manufacturing of electronic products, computers, and home appliances. This is the solution adopted by Coca Cola and McDonald's as well.

A second related option is to break up the product into component modules that can be produced in large series to gain the scale advantages, and then produce different products by different combinations of modules. This has become a very prominent manufacturing strategy for large companies, since it allows the different modules to be outsourced and offshored. The manufacturing process then becomes a simple assembly process, which can then be done locally, if necessary, to gain lower tariff rates. This allows the company to “mix and match” features for different country markets, which helps adaptation to local preferences. It also helps to make the products in different markets somewhat different, helping to limit gray trade (more on gray trade below).

In the end, companies do not need to offer identical products everywhere in order to gain the scale economies of product standardization. Thus, a company can develop a coordinated global strategy even without a completely standardized product. But it is almost impossible to develop a GMS without a strong global brand.

4.2 Global Brands

Keeping the same brand name everywhere has become the signature feature of a global marketer, and “global branding” has become an obsession among many multinationals. For example, the Interbrew (now InBev) company's analysis of the Heineken advantage in profitability draws the conclusion that it is the lack of a global brand that depresses its own bottom-line performance. Hence, top management has decreed that Stella Artois be Interbrew's global “flagship” brand (Beamish and Goerzen, 2000).

Three definitions follow:

  • Global brands are brands that are well known and recognized in all major markets of the world. (e.g., Sony, Mercedes-Benz, Microsoft, Nokia).

  • Regional brands are brands that are the same across a region (e.g., P&G's Ariel in Europe is Tide elsewhere; Acura is Honda Legend in Asia).

  • Local brands are brands found in only one or two markets (e.g., Suntory whisky in Japan, A&W root beer in the United States, and the Trabant car in former East Germany).

Strictly speaking, the brand may be global although the product is not available everywhere – as happens to be the case for Rolls Royce as well as for Coca Cola. This usually means there may be a pent-up demand for some global brands, as was seen when McDonald's entered Russia in the 1990s.

Global brands have received increased attention from top management in many multinationals because of the importance of brand equity as a financial asset (see Perception of Brand Equity). Expanding into new markets is an obvious way of building further financial equity, which is usually calculated by simply aggregating projected revenues across country markets. Not surprisingly, most top brands in terms of financial equity are global. But a strong brand not only needs reach across countries, it also needs allegiance from local customers. As global brands have stretched further to build financial equity, local brands have been able to defend their turf by staying closer to their customer and building affinity, or what may be called soft equity (see Customer Equity).

Recognizing this, many global companies not only market their global brand in a country market but might also buy up a successful local brand and retain its brand name – and customers. One example is Coca Cola in India. After its reentry in 1993 (Coca Cola had exited India in 1977 instead of giving up its secret formula), Coca Cola acquired ThumsUp, a leading local producer, with the idea of replacing its brand with Coca Cola. But after several efforts at withdrawing ThumsUp and launching its own brand, Coca Cola finally gave up and shifted marketing resources to ThumsUp. The problem was that Coca Cola was positioning itself as the young teenage drink, just as it had done in many countries, while in India, where alcohol consumption is very limited for religious and cultural reasons, the main cola market was among young adults who in other parts of the world were drinking beer. ThumsUp in India is a rebel's drink, hardly the image of Coca Cola.

The most clear-cut advantages of global brands are the cost efficiencies from scale and scope. The typical benefits to global brands are several (see Table 5).

Table 5. Benefits to Global Brands
  • Scale and scope economies

  • Demand spillover

  • Global customers

  • High esteem, status

  • Consistent quality

The cost efficiencies tend to come from the ability to produce identical products and packaging in long series, and also because global brands can draw on uniform global promotions (more on this below). Demand spillover is a result of the increased exposure to the same brand in many places, especially useful when customers are global. The growth of international tourism has been a strong driver of global brands. The status and esteem advantages have been shown by researchers, especially prominent in less-developed countries. While some research has demonstrated a high quality perception for global brands, the more firmly established finding is that global brands tend to have a more consistent quality than local brands.

The disadvantages of global brands become advantages for local brands. Local brands can usually count on the advantages in Table 6.

Table 6. Advantages for Local Brands
  • Local brand affinity

  • Motivated local employees

  • Prodomestic (and Antiglobalization) sentiment

Of course, none of these advantages come without effort and disciplined application by the firms, whether global or local. The arrival of global brands into many markets has been a challenge for many local brands who think that local consumers will automatically stay loyal. Global brands, as Naomi Klein claims, have changed the playing field – but they have not, as she claims, simply dominated local brands (Klein, 2002).

4.3 Global Pricing and Distribution

In GMSs, pricing, and distribution are more closely connected than at home. The reason is not that the costs involved in distribution (transportation but also insurance and custom duties) necessarily raise the final price to the customer. Such straight “price escalation” does not usually occur except in one-time transactions. Many multinationals have strong home market “cash cows,” and when faced with more intense competition in foreign markets they reduce prices by lowering transfer prices to their subsidiaries. Some firms also use foreign markets as an easy way out of overcapacity, applying marginal cost pricing procedures (although these can run afoul of dumping laws). And the improved efficiency of global transportation, thanks to global express carriers and consolidated shipment procedures, means that geographic distance is no longer the trade barrier it once was. Transportation costs are typically a small proportion of the total price paid (see Marketing Channel Strategy).

The strong connection between pricing and distribution rests more directly on another phenomenon. The ease of transportation, coupled with differing local prices and currency fluctuations, are what provide the margin that allows for arbitrage opportunities for customers to buy branded products cheaper abroad. This is an instance of so-called “gray trade” – the importation of branded products through other than authorized channels (see Multichannel Marketing). It is the rise of gray trade that force multinationals to decide pricing and distribution strategies jointly – and even multinationals that would otherwise not contemplate a global strategy, have to find a way to align prices to avoid such trade.

Gray trade affects a number of multinationals. For example, there are numerous stories of Asian contract manufacturers who make branded products for Western multinationals on day shifts, and then produce an added batch of identical products on the night shift. These products are then shipped abroad at low costs, distributed via indirect channels perhaps from a third country, and finally appear on the various markets in the West. In other cases, gray trade involves Western distributors (large European retailers, for example) who acquire goods in a low-priced country and then sell it at higher prices at home. Britain's Tesco chain sent buyers to Wal-Mart stores in the United States to buy Levi's for resale at home, a practice that was stopped by a European court. Another popular form of gray trade, “shopping tourism,” is what happens when overseas trips are arranged for tourists to buy products cheaper in a foreign country.

The drivers of gray trade include the factors in Table 7.

Table 7. Selected Drivers of “Gray Trade”
  • Transportation is global and efficient

  • Trade barriers are low

  • Products and brands are standardized

  • Communication is global

Gray trade is not usually illegal. By contrast, trade in counterfeits (fake products) is illegal and vigorously opposed by multinationals that fear the loss of revenue and dilution of their brand name. But there are similar negative effects from gray trade as from counterfeits. Gray trade strains the relationship with authorized channel members since channel members face intrabrand competition. There may be legal liabilities, usually involving warranties that cannot be honored. There is also a risk of erosion of brand equity because of the lower price in the market. Seiko, the Japanese watch maker, has failed to establish itself as a strong premium brand partly for this reason. And gray trade complicates global coordination when one country realizes a sudden influx of gray goods. Even though companies cannot take legal action, when faced with gray trade, they have to engage in relationship building with distributors, screen orders carefully, and monitor shipments.

Because of pricing regulations, the multinational producer cannot usually dictate retail prices in local markets (see Pricing Strategy). Nevertheless, to achieve the desired brand position, they can use suggested retail prices. These are the prices that have to be coordinated across countries because customers can purchase the products anywhere in the world. But to coordinate prices is difficult, for several reasons as shown in Table 8.

Table 8. Why Global Coordination of Prices is Difficult
  • Currency exchange rates fluctuate

  • Local distributors are independent

  • Import prices to subsidiaries have to consider tariffs, taxes.

  • Local competition varies across countries

One single global price is unrealistic. Even though a business-to-business company such as Boeing, the aircraft builder, quotes all its prices in American dollars, exchange rate problems still arise for its customers. For many global companies, the solution is to devise “pricing corridors,” centered around a desired positioning price. The “corridors” are the limits of prices between which the local price may vary without interference from headquarters. The price corridors should reflect not only demand and competitive pressure in the local market but also the differences in exchange rates and likelihood of gray distribution – a very difficult balancing act. In addition to formal corridors with a centralized positioning price, the global pricing coordination typically involves informal coordination with the local subsidiary to allow flexibility (Assmus and Wiese, 1995).

4.4 Global Marketing Communications

Next to global brands, the most visible aspect of a GMS is perhaps global advertising. Global advertising can be defined as media advertising that is more or less uniform across many countries, often, but not necessarily, in media vehicles with global reach. Although global appeals had been used previously in promotions – IBM's global “Think” slogan appeared as early as the 1920s – global advertising arrived with the advertising agency Saatchi & Saatchi's television commercial “Manhattan Landing” for British Airways in the early 1980s. With increasing globalization and the stress on global brands, the momentum behind global advertising has been sustained despite antiglobalization and prolocalization sentiments around the globe. One contributing factor has been the rise of the Internet and the availability of many commercials on sites such as YouTube, where even local advertisement campaigns potentially have global reach.

There are several forces behind the need for integrated global communications (see Integrated Marketing Communication Strategy). One can distinguish between supply-side drivers and demand-side drivers, as shown in Table 9.

Table 9. Major Drivers of Global Advertising
Supply Side
  • Global ad agencies

  • Global media

Demand Side
  • Global customers

  • Preference convergence

On the supply side, the emergence of consolidated global advertisement agencies has played a significant role in generating more global advertising. Although in many ways, the agency globalization has been a response to the globalization of the client firms – global managers find it useful to deal with the same agency in different parts of the world – once established, the global agency will naturally want to leverage its global capabilities (as in the Saatchi & Saatchi case). The global agency can also claim superior production values with a global campaign, since more resources can be used for one television commercial that is going to be shown around the world. The emergence of global media – the BBC, the Sky channel, the CNN, Financial Times, and so on – and their consolidation into global media companies such as Viacom, Bertelsmann, and Time Warner has also encouraged the development of global advertising and promotions that can be used effectively everywhere. There are cost savings in buying all media from one consolidated source.

On the demand side, customers are increasingly global. Consumers now travel much more than before as the lower cost of travel have made for many more tourists, and for business-to-business products, the customers are often multinational companies. In addition, with global communication producing spillovers between countries, local preferences change and allow the penetration of global brands in local markets using standardized appeals. Globally coordinated advertising thus becomes a natural complement to the global brand. It has given us the “Always” of Coca Cola, the “Our Passion” of Microsoft, the “Do you dream Sony?” and “The Ultimate Driving Machine” of BMW. Global Internet ads are now common, with companies such as IBM and Heineken producing commercials on their Web home pages and repeated on the YouTube.

In the general case, however, not all the marketing communications of a global company is globally coordinated. First of all, media advertising is only one of several promotional tools. Many retail promotions such as POP (point of purchase), coupons, and free samples, are necessarily more localized. Regulations vary across countries. Not all countries' retail regulations allow contests, for example, and in many cases, coupon redemptions are denied by stores. Even naturally global promotions such as sponsorships of the Olympics and the World Cup often require local input to leverage the promotion effectively. In one notorious instance, Budweiser's sponsorship of the World Cup in Germany in 2006 encountered opposition from German brewers and consumers. In an effort to appease German drinkers, Budweiser made a local deal to allow the German-made Bitburger beer to be sold in stadiums, albeit in unmarked cups.

But even media advertising is rarely fully globalized. The motivation for local subsidiaries and their agencies to do their best creative work is enhanced with more autonomy. Not all media are equally available in all countries, and the costs vary considerably. Effectiveness also varies. In poorer countries, print media are usually less effective. By contrast, Europe on the whole gives much greater weight to print than other countries. The Internet, a new and naturally global channel of communications, has still not penetrated all corners of the world.

In addition, the advertising message often has to be adapted. Linguistic, cultural, and religious differences can prevent standardization of advertising messages and render symbols inappropriate. IKEA's use of the Moose, successful in Europe and Canada, was too provincial in the United States, where a simpler blue-and-yellow logo is used. Product usage may not be the same, making a uniform appeal miss the target. Ice cream is bought for its nutritional value in poorer countries, not so in advanced markets. This means the local subsidiary and its advertising agency usually have to do more than merely translate a message. Not all local adaptations work of course. A Nike advertisement with LeBron James, the American athlete, slaying a dragon turned out to be a failed local adaptation in China, where dragons are a force for good.

Because of these issues, most companies dedicate only a portion of their total advertising budget to a global campaign. An example comes from Samsung, the Korean electronics maker who has moved ahead of Sony in global brand value in the last few years (see Brand Value). In 2003 about 40% of above-the-line budgeting was for global advertising. The remaining 60% of a $1 billion budget was allocated to local and regional subsidiaries for their nonglobal spending on specific products and markets. While the localized campaigns may employ local agencies, it is common for the global campaign to be handled by one large global agency, FCB (Foote, Cone, and Belding), in the Samsung case.

Most global companies place strict limits on how their name should be portrayed, including fonts and coloring. Sony requires all uses of their name and logo to be approved at headquarters in Tokyo before release. There are a few identical ads used, particularly in print advertising. The Marlboro cowboy can be seen around the world. The well known Absolut advertisements, with the shape of the bottle contoured in the advertisement, are used in many countries, sometimes localized. These are examples of the notion that a great idea can be used everywhere, a common assertion in advertising circles.

But even in a global campaign there is usually some variety. The typical form of global advertising in television follows what is known as pattern standardization. Here the advertisement visualization is adapted to local culture and language, with recognizable local spokespersons and actors, and a story that has local appeal. The brand name and logo are identical, and the final slogan is usually translated directly. Instead of actors speaking, voiceovers allow local language to be superimposed on a commercial. In this form, global advertising is becoming more common today, creating a unified image of corporations and brands as well as countries and places.

Summarizing, the advantages of global communications include those shown in Table 10. The potential disadvantages are also several, as shown in Table 11.

Table 10. Advantages of Integrated Global Communications
  • Consistency of brand communications

  • Media spillover

  • Cost savings

  • Improved production

  • Leveraging a great idea

Table 11. The Disadvantages of Integrated Global Communications
  • Images and symbols might not be locally acceptable

  • Appropriate media might not be available

  • Product usage is not the same

  • Local creativity can be stifled

In the end, most companies play it safe, with some global uniformity but allocating the majority of the funds for regional and local adaptation of communications.

5 Conclusion

  1. Top of page
  2. Introduction
  3. The Organizational Context
  4. Global Segmentation and Positioning
  5. The Global Marketing Mix
  6. Conclusion
  7. Bibliography

GMSs have become increasingly important with the internationalization of business and globalization of markets. Even though they are characterized by centralized coordination and streamlining to achieve scale and scope economies, localization, and adaptation are becoming increasingly important as emerging markets rapidly manifest culturally and ethnically differentiated consumer demand. Global success depends crucially on striking the right balance between uniformity and local adaptation. This balance, as we have seen, involves both top-down leadership and sensitivity to local markets – a true managerial challenge.

Bibliography

  1. Top of page
  2. Introduction
  3. The Organizational Context
  4. Global Segmentation and Positioning
  5. The Global Marketing Mix
  6. Conclusion
  7. Bibliography
  • ACNielsen (2001) Reaching the Billion-Dollar Mark: A Review of Today's Global Brands. ACNielsen Inc., Chicago.
  • Alden, D.L., Steenkamp, J.-B.E.M., and Batra, R. (1999) Brand positioning through advertising in Asia, North America and Europe: the role of global consumer culture. Journal of Marketing, 63 (1), 7587.
  • Assmus, G. and Wiese, C. (1995) How to address the gray market using price coordination. Sloan Management Review, 36 (3), 3142.
  • Beamish, P.W. and Goerzen, A. (2000) The Global Branding of Stella Artois, Case 900A19. University of Western Ontario, Ivey School of Business, p. 23.
  • Dawar, N. and Parker, P. (1994) Marketing universals: consumers' use of brand name, price, physical appearance, and retailer reputation as signals of product quality. Journal of Marketing, 58 (2), 8195.
  • Ghemawat, P. (2007) Why the World isn't flat. Foreign Policy, 159 (5), 60.
  • Holt, D.B., Quelch, J.A., and Taylor, E.L. (2004) How global brands compete. Harvard Business Review, 82 (9), 6881.
  • Klein, N. (2002) No Logo: No Space, No Choice, No Jobs, Picador, New York.
  • Quelch, J. and Harrington, A. (2004) Samsung Electronics Company: Global Marketing Operations. Case 9-504-051. Harvard Business School, Boston, MA, p. 32.
  • Roth, M.S. (1995) The effects of culture and socioeconomics on the performance of global brand image strategies. Journal of Marketing Research, 32 (2), 163175.
  • Rugman, A. (2005) The Regional Multinationals, Cambridge University Press, Cambridge.
  • Zou, S. and Cavusgil, T.S. (2002) The GMS: a broad conceptualization of global marketing strategy and its effect on firm performance. Journal of Marketing, 66 (4), 4056.