Marketing Strategy in the Global Information Age

In turbulent markets that are affected by increasedpolitical and economic unrest in the global
marketplace, continuing to follow the same paths for marketing andbusiness strategy is
extremely risky, warnsYoram (Jerry) Wind of the Wharton School.Both the pace of change and
the level ofcomplexity call for a new marketingparadigm, one that may well requirecompanies to
scrap their current models andmethods and build a new approach to marketing.

Increasingly the unique product or service acompany develops and puts into themarketplace is
competitive for a shorter andshorter time period. The challenge thatfirms face is how to
differentiate productsin the marketplace when virtually everymanufactured good quickly
becomes acommodity.

Most companies tend to underestimate themarket strength of their competitors andespecially of

new competitors from outsidethe traditional boundaries of the industry.In addition, many
companies do a poor jobdeveloping a strong understanding of theunique cultures that exist
within eachcountry within which they do business.Many companies tend to stampede into
newcultures without taking the time to learnabout those cultures, the differences andsimilarities
between the new markets andcountries and the company's home country,and other countries in
which it operates.The more a company truly understands theunique needs and desires of the
newmarket, the more responsive it will be ableto be to that market.

Far too many companies develop productsor services for a general -- average -- globalmarket;
few develop products for specific,unique domestic market segments as partof an "umbrella"
global concept. Asurprisingly small number of companieshave top marketing teams that
includeexecutives from various countries. And, onlya handful of companies have
effectiveprocesses for knowledge transfer acrosscountries. According to Wind, a companyshould
be a microcosm of the globalmarketplace. The diversity of its ownorganization will help the
companyunderstand better the diverse needs, tastesand wants of the global economy.

The new paradigm that Wind describesfocuses on marketing as a businessphilosophy rather than
just as one businessfunction. Marketing should become the eyesand ears of the firms and to
provide it withthe needed early warning signals andinsights as to how to address thesechanges.
This requires that the marketingconcepts and methods themselves have tobe adjusted constantly
to reflect thesechanges.

Wind points out that among the mostimportant shifts suggested by the newmarketing paradigm is
that which takesorganizations from a mass market mentalityto "segments of one". This shift is
madepossible by the enormous advances indatabase marketing and masscustomization, which
allow companies toreach individual consumers economicallywith customized messages, media
and evenproducts and services. In the era of masscustomization and global markets, the focusis
on breakthrough products and servicesdesigned for the target portfolio of localregional and
global segments and whenappropriate customized to particularcustomers' needs.
The new business model will no longer bebased on transactions; it will be based onrelationships.
Customer and supplier willwork cooperatively together. A company willnot sell products or
services; rather, it willprovide solutions to customers' needs.Competitive advantage will not lie
in just acompany's marketing power as much as itwill in the quality, finesse, and timing of
itsmarketing efforts.

The new paradigm will lead to anorganizational culture that reflects theorganizational values and
ideally thecharacteristics of successful 21st centuryenterprises. In designing the
organizationalarchitecture for firms operating in the globalinformation age, technological
competenceis a must, as well as geographical scopeand expertise. This requires the
selection,hiring, development, motivation andretention of diverse workforce andstakeholders
who are representative ofdifferent parts of the world, sensitive todifferent cultures, and capable
of operatingeffectively and comfortably anywhere in theworld, utilizing available
informationtechnology tools.

The case for change-truly radicalchange-is powerful if companies are toavoid the threats and
capitalize on theopportunities of the changing globalinformation age. In a time of
dynamicmovements in all aspects of the globalmarketplace, not being market driven andnot
acting boldly and rapidly, along thelines suggested by the new marketingstrategy paradigm, is
the riskiest decisionof all. Rethinking, reorganizing, andreinventing the future and global
marketingstrategies are crucial.

All materials copyright © 1999 of the Wharton School of the University of Pennsylvania.
 Marketing Strategy in the Global Information Age

In turbulent markets that are affected by increased political and economic unrest in the global
marketplace, continuing to follow the same paths for marketing and business strategy is
extremely risky, warns Yoram (Jerry) Wind of the Wharton School. Both the pace of change and
the level of complexity call for a new marketing paradigm, one that may well require companies
to scrap their current models and methods and build a new approach to marketing.

Increasingly the unique product or service a company develops and puts into the marketplace is
competitive for a shorter and shorter time period. The challenge that firms face is how to
differentiate products in the marketplace when virtually every manufactured good quickly
becomes a commodity.

Most companies tend to underestimate the market strength of their competitors and especially of
new competitors from outside the traditional boundaries of the industry. In addition, many
companies do a poor job developing a strong understanding of the unique cultures that exist
within each country within which they do business. Many companies tend to stampede into new
cultures without taking the time to learn about those cultures, the differences and similarities
between the new markets and countries and the company's home country, and other countries in
which it operates. The more a company truly understands the unique needs and desires of the
new market, the more responsive it will be able to be to that market.

Far too many companies develop products or services for a general - average - global market;
few develop products for specific, unique domestic market segments as part of an "umbrella"
global concept. A surprisingly small number of companies have top marketing teams that include
executives from various countries. And, only a handful of companies have effective processes
for knowledge transfer across countries. According to Wind, a company should be a microcosm
of the global marketplace. The diversity of its own organization will help the company
understand better the diverse needs, tastes and wants of the global economy.

The new paradigm that Wind describes focuses on marketing as a business philosophy rather
than just as one business function. Marketing should become the eyes and ears of the firms and
to provide it with the needed early warning signals and insights as to how to address these
changes. This requires that the marketing concepts and methods themselves have to be adjusted
constantly to reflect these changes.

Read More About...

motivation, competitive advantage, global economy, information technology, database marketing

Articles
 Complexity in Products and Services: Good or Bad, Depending on How You Manage It
Knowledge@Wharton
Career Advice from ADP's Arthur Weinbach
Knowledge@Wharton
Degussa's China Strategy: "The Issue of Risk Is Enormously Overestimated"
Knowledge@Wharton
[More results for: motivation]
Articles
'Rewarding Failure': Will the Crisis Leave a Residue of Moral Hazard?
Knowledge@Wharton
Rising Giants: Industrial Clusters Are Changing the Face of Chinese Manufacturing
Knowledge@Wharton
Legal Strategy 101: It's Time for Law Firms to Re-think Their Business Model
Knowledge@Wharton
[More results for: competitive advantage ]
Articles
BP's Fiona MacLeod: A Change Agent Sees Change 'Addiction'
Knowledge@Wharton
China's Growing Talent for Innovation
Knowledge@Wharton
Reforming the Ratings Agencies: Will the U.S. Follow Europe's Tougher Rules?
Knowledge@Wharton
[More results for: global economy]
Articles
Information Technology: Not a Cure for the High Cost of Health Care
Knowledge@Wharton
As Smartphones Proliferate, Will One Company Emerge as the Clear Market Winner?
Knowledge@Wharton
Muhammad Yunus: Lifting People Worldwide out of Poverty
Knowledge@Wharton
[More results for: information technology]
Articles
Attention Shoppers: Great Deals in Retail Mergers
Knowledge@Wharton
Technology is Changing the Advertising Business
Knowledge@Wharton
Is Online Consumer Spending Slowing Down?
Knowledge@Wharton
[More results for: database marketing]

Wind points out that among the most important shifts suggested by the new marketing paradigm
is that which takes organizations from a mass market mentality to "segments of one". This shift
is made possible by the enormous advances in database marketing and mass customization,
which allow companies to reach individual consumers economically with customized messages,
media and even products and services. In the era of mass customization and global markets, the
focus is on breakthrough products and services designed for the target portfolio of local regional
and global segments and when appropriate customized to particular customers' needs.

The new business model will no longer be based on transactions; it will be based on
relationships. Customer and supplier will work cooperatively together. A company will not sell
products or services; rather, it will provide solutions to customers' needs. Competitive advantage
will not lie in just a company's marketing power as much as it will in the quality, finesse, and
timing of its marketing efforts.

The new paradigm will lead to an organizational culture that reflects the organizational values
and ideally the characteristics of successful 21st century enterprises. In designing the
organizational architecture for firms operating in the global information age, technological
competence is a must, as well as geographical scope and expertise. This requires the selection,
hiring, development, motivation and retention of diverse workforce and stakeholders who are
representative of different parts of the world, sensitive to different cultures, and capable of
operating effectively and comfortably anywhere in the world, utilizing available information
technology tools.

The case for change—truly radical change—is powerful if companies are to avoid the threats and
capitalize on the opportunities of the changing global information age. In a time of dynamic
movements in all aspect of the global marketplace, not being market driven and not acting boldly
and rapidly, along the lines suggested by the new marketing strategy paradigm, is the riskiest
decision of all. Rethinking, reorganizing, and reinventing the future and global marketing
strategies are crucial.

Global Marketing

The level of societal development determines the market system that operates. Society has been
developing from simpler to complex and marketing has also developed from barter to global. Before the
introduction of money, people were exchanging goods for goods. Barter system of marketing was
associated with numerous problems including valuation and double coincidence of wants. The
introduction of money as a medium of exchange and a measure of value resolved the problems of barter
and paved way for specialization and international trade. Provision of services including transportation,
communications, insurance, agency, retailing, wholesaling, advertising, warehousing, and financing
emerged to facilitate marketing. During the industrial revolution, domestic and international (import
and export) trade became very popular but were associated with problems including trade restrictions,
import and export licensing, pricing, producer and product information, price discrimination and so on.
While domestic trade concerns exchange of goods and services within the confines of a country,
international trade is about exchange of goods and services between countries. For instance, a trade
between Kumasi and Accra is a domestic one while a trade between Ghana and USA is regarded as an
international.

Global marketing is “marketing on a worldwide scale reconciling or taking commercial advantage of

global operational differences, similarities and opportunities in order to meet global objectives.” (The
Oxford University Press) The emergence of computers and internet has reduced the world to a global
village where producers and customers can just log onto the internet to interact and exchange goods
and services.

Factors that have Promoted Global Marketing

These include;

• Information, communications Technology (ICT); the introduction of TV, radio, television, computers
and internet has enabled producers launch their products and services worldwide. The introduction of
computers and the internet has reduced the world to a global village where individuals, companies and
countries can exchange goods and services. Business organizations engage in core business functions in
product design, manufacturing, finance, and customer support to locations in other countries which
have cost advantage. Therefore, the success of information age companies depends on their ability to
operate globally. ICT provides the necessary information and communication tools for managing global
businesses. Thus, coordinating, controlling, distributing, marketing, supplying and communicating as
well as conducting 24-hour business operations. Customers now have access to 24-hour information
worldwide in terms of price, quality, design and product use.

• Standardization; producers of goods and services have standardized their products to be used
worldwide. For instance, North American countries use to produce electronic products with 110
voltages which could only be use those countries. Right now most producers are producing goods with
110-240 automatic switches to be sold on the global market. Again right hand side steering driving by
most countries has enabled automobile producing countries market their vehicles in the global market.
• The Emergence of world and international organizations – The creation of organizations such as World
Trade Organization (WTO), European Union (EU) and Economic Community of West African States
(ECOWAS) has broken a lot of socio-economic-politico barriers that inhibit free movement of goods and
services. These include; trade restrictions, import and export licensing, exchange rate, immigration
restrictions and language barriers. Most of these organizations promote free trade and freedom of
movement. ECOWAS treaties and protocols for instance aim at removing all trade barriers to foster
movement of goods, services and people.

• The transformation of industrial economies; knowledge and information revolution that began at the
end of the 20th century has transformed the industrial economies from manufacturing to knowledge
and information based-service economies. In most of the advanced nations like USA, Japan and
Germany, most people no more work in factories and farms but have shifted to provide business
services like banking, insurance, education, finance, delivery, copying and computing. Production of such
products like computer games and financial services require a great deal of knowledge and they are of a
great economic value. In USA for instance, knowledge and information based service constitutes about
60% of the GDP and employs 55% of the work force. Most of the factories have been moved to
developing countries like China and India which now have comparative cost advantage in
industrialization. The good news is that both the developing and advanced nations can take advantage
of information and communication technologies to develop. In Ghana and in most developing nations,
knowledge and information-based service businesses are growing faster. Internet, communications,
computing, finance, insurance, and banking businesses now contribute to GDP and employment.

• Transformation of the business enterprise; Information and communication technologies have

affected business organizations in the way they conduct business. Industrial age business systems were
characterized by bureaucratic procedures, hierarchical and centralized organizational structures that
caused delays and inefficiencies. E-business age companies have flattened organizational structures,
with flexible and decentralized arrangements. They also rely on instant information and deliver
customized products. The information age management systems depend on knowledge and creative
abilities that can position the company in a competitive advantage rather than relying on old fashioned
procedures that caused delays and inefficiencies. ICT-age companies regard the customer as the king
and therefore respond to demands at the right time, with the right product, price and quality.

• Global culture; the introduction of Television, computers and internet has exposed the world to
different cultures. Dressing, production systems, entertainment, language, and education have been
influenced by the emerging technology to the extent that the world is becoming more or less a
homogeneous society rather than being heterogeneous as it used to be.

• The emerging digital firm – A digital firm refers to the “one where nearly all the organization’s
significance business relationship with customers, suppliers, and employees are digitally enabled and
mediated core business process are accomplished through digital networks spanning the entire
organization or linking multiple organizations” (Kenneth & Jane Laudon, 2004) A digital firm always has
all the business information available and responds to customers very quickly. The digital firm has the
potential to be more profitable and highly competitive than the rival traditional firm. Its operation
eliminates middlemen, inventory and processing costs. A digital firm is defined by four major systems
namely; supply chain management, customer relationship management systems, enterprise systems
and knowledge management systems.

? Supply chain management uses network and software to integrate the relationships between suppliers
in order to economize production, delivery, sourcing, planning and inventory cost.

? Customer relationship management systems seek to develop and maintain close and integrated
relationship with customers. The firm tries to maintain customers profile on database and manages
them. The system helps to identify profitable and loyal customers.

? Enterprise system uses the network to integrate information and internal business processes from all
departments including production, finance, accounting, human resource, and marketing. Knowledge
management system has the potential to create, innovate, research, store and share information. These
are the four main areas where digital firms are investing to integrate their business systems.

• Collapse of communism; The collapse of communism removed the socio-economic-politico barriers

and paved way for exchange of goods and services worldwide.

• United States factor; Global marketing developed mostly in USA. Inventions and entrepreneurship
spirit brought about the need for distribution to the rest of the world. America opened up for marketing
and a lot of professionals in the industry emerged while Europeans paid little attention to marketing. In
view of this, Americans were able to establish a number of multi-national corporations including Coca
Cola.

• Stephen Acheampong (Author of Achie Series including ICT for SHS). MBA, ICT, Certified Teacher (USA),
CIM (AP) UK, PG (Dip. Ed), BA. (Hons.) Ghana.

Global Marketing 86

Every successful company has a marketing department that works diligently to make the company
known throughout their country and eventually the world. Global marketing is simply marketing to the
entire world and destroy the differences between barriers and meet the expectations of varieties of
consumers all over the world. Marketing consists of establishing relationships with others through
planning, execution and successful distribution of goods to satisfied consumers.

Some of the most successful companies to achieve global marketing include auto manufacturers such as
Toyota, Ford, Honda, General Motors, and Volkswagen. These companies all started as small entities in
their own countries and eventually achieved successful global implementation. New companies have
modern marketing tools to help them achieve successful global marketing. The internet and e-
commerce immediately makes a company a global business. Since the internet is a world-wide entity, a
small company based in South Dakota can easily reach customers in China with the click of a mouse.
Customers can literally come from anywhere.

Successful global marketing was not achieved overnight for companies. Global marketing is a process
just like other aspects of marketing. Usually a company starts out with a small export base. They work
hard to achieve domestic marketing first and then they begin tackling the rest of the world. Some
companies tackle the small export base and they don't get any further from there. Global marketing is
more than just exporting goods to another country; it is successful implementation of a product into a
foreign trade market. Marketing decisions are made at the home front and sent overseas and expected
to sink or swim. The foreign customer is very different from the domestic customer. Language barriers,
customs paperwork, and shipping costs deter many companies from becoming global entities.

Cultural ignorance could hinder acompany from global marketing. One of the best ways to target the
foreign market is to create products in the country that are based on the needs of the local customers.
The marketers that create local product development are called polycentric. A polycentric marketer
understands that each country has different needs and they must market to the country differently
than they would in their country.
The world is one big market for companies to take advantage of. There must be marketers in each
country that will help the company meet the needs and expectations of all the countries in which they
sell their products. A good example of a successful global marketing company is the Coca-Cola
Corporation. The soda beverage remains the same, but the can changes. The advertisements are
different in each country. Instead of being intolerant to the needs of each country, they have translated
their logo and brand name to suit the needs of each country in which they market. The goal of global
marketing is to become like the Coca-Cola Corporation and sell the same product to everyone in the
world, with perhaps just one or two small changes to the product that will suit the needs of everyone in
the world.

There are 4 simple steps a company must establish to start global marketing.

First, a company needs to achieve domestic dominance. If a company is trusted at home, it is easier to
integrate their focus into the global market. A company that only focuses on marketing to their own
country will eventually run out of people to market to and lose its place. Some companies can remain
successful domestic entities because the demand for the product on the home front is high. Dairy
farmers are a great example of domestically oriented organizations.

Second, a company must have a home focus with exporting. The products and message from the
company should be based on home values, but it should be able to cross country lines and incorporate
the message to foreign markets.

Third, marketing to global markets must be mixed with overseas organizations. Changing the marketing
strategy to become a polycentric strategy is the best way to adapt to the needs of all the potential
customers throughout the world.

Fourth, the value of the product must be on demand in a global market. The company needs to focus on
serving the needs over customers throughout the world; this is achieved by targeted marketing to
individual countries and determining the customer needs in each country. Global strategies must be
developed to recognize the financial aspect of each consumer and respond to different marketing ploys.
Global marketing is unpredictable and marketers must be aware of different opportunities and be
willing to adapt and create new products for global demands.

A good marketer follows the "Four P's" of marketing. Product, price, placement, and promotion are the
"Four P's" of marketing and successful implementation of each "P" will transform even the smallest of
companies into a global entity. Going back to the Coca-Cola example, they have reached successful
global implementation by creating the same product for every country with minor changes to the
packaging. The design of the can or bottle is exactly the same, only the language on the can or bottle
changes. The bottle and can is a unique brand on its own.

To achieve global marketing, marketers must recognize the different price variables for each country.
While $2.99 may not be expensive in the United States, that can be quite expensive for Cambodia. The
price will always vary for each market because it is affected by several variables. Price is affected by the
cost of the product development, cost of manufacturing, delivery, and competition. The profit margin
for a product will change depending upon the goal of the company. If marketers simply want to be
known world-wide, they may not care how much money they make off a product in every country, as
long as the cash flow remains positive.
Products must be marketed differently to each country. A billboard with a Victoria's Secret model may
be okay in the United States, it would be quite offensive in India. The product must be distributed
differently in each country. Marketers must consult with local marketers and discuss the needs of the
target market. The placement of product promotion and distribution are important aspects of the
overall global marketing strategy. Advertising is the most expensive portion in successful global
marketing. A global corporation will seek to find ways to reduce costs and still reach their target market.
If a company decides they want to use the same marketing campaign to the entire world, they must
deliver the message in a relevant, engaging fashion.

Technology-driven corporations are one of the easiest companies to market on a global scale.
Technology usually is not culturally bound. Computers and software applications are developed with a
global scale in mind. Since technology companies spend millions and sometimes billions of dollars
researching and developing products, it forces the organizations to recoup the cost from a global
market. Marketers of technology firms have larger marketing budgets than other companies and they
are able to use international advertising.

Building relationships with foreign companies is one of the best ways to achieve global
marketing. Foreign companies understand the needs of the local market and are able to provide
advice on advertising ideas and market research. Using proven results and methods to reach a
foreign customer will save your company time and money. Market research of foreign markets
will discusses the needs of product and company branding, attention flow, and emotional need.
The international forms of communication are based on visual elements. For example,
McDonalds is a great example of a company that has achieved successful global marketing. The
yellow and red "M" can easily be identified in practically any country and verbal elements do not
exist.

Once a company establishes global marketing, the advertising costs will slowly start to be
reduced over time as people recognize the company and product. The scope of the company
will increase and the demand will also become larger. A company will gain international power
and can create uniformity amongst marketing practices and procedures. Global marketing can
also help to establish relationships. While some countries may have a particular impression of
the United States, they may accept the products we produce. The Apple iPod is a great example
of a product that has crossed into a world-wide product. Countries that may have problems with
the United States are sill willing to buy the iPod because it is a good product with successful
global marketing.

As with any consumer, global market demands are different. Companies will need to adapt their
product and services to meet the needs and wants of individual countries. It is always important
to do target research on countries before you begin global marketing. There are legal elements to
consider with global marketing that need to be taken into consideration before the marketing plan
even begins. Product placement and product development need to be considered heavily by the
marketing team before they jump into the goal market. The best way to start global marketing is
to establish a good web site where people can go and research the company before the ads begin
hitting the billboards in foreign markets.
Globalization

 Globalization and India

Globalization is the process of rapid integration of countries and happening through greater
foreign trade and foreign investment. It refers to increased possibilities for action between and
among...
 Comparison of Indian and American stock markets
Investing in Foreign stock exchanges or in American? Sensex reached 500 marks from its base
point 100 with in seven years where as Dow Jones took 46 long years to achieve it . Again
journey of Sensex from 500 to 1000 points took only four years but D