Globalization created a new avenue of the market for businesses to expand worldwide and scale-up. We can name soft drink brands like Coca-Cola or Pepsi and supermarket chains like Walmart because they grew their businesses in Asia, Africa and Europe.
Similarly, we have several TV shows, movies, sporting events, etc., are finding the audience from across the world. Global marketing methods have contributed to this phenomenon.
How can a company strategize to reach the global market? By considering cultural, social and economic differences across the countries, an organization can reach out the global market. We need to strategize and need to learn so many different marketing strategies to implement best practices to make a local store into an international company.
Quick Takeaways from the Article:
- What are the ways for enter into Global markets
- How can companies can leverage International marketing with global strategies
- How a company can achieve competitive advantage over other companies in global market.
A market that has expanded its operations worldwide or operates in more than a country and offers products and services to the customers from more than one country can be called as a global company. For example, Apple Incorporation has a worldwide market. It serves its operations worldwide, and its manufacturing units are divided into different parts of the world like China, South Korea, etc. However, still, its products reach all over the world.
We might be seeing McDonald’s and Starbucks in different parts of the world. These companies are a perfect example of global marketing companies. The lightning speed of technology and communication are one of the reasons for the local companies to become global markets.
Global Marketing Strategies:
Starting small is a safe strategy. It gives a company enough time to understand the market and correctly target the audience. Colgate’s decision to enter the Chinese market is an example. There are several questions to address the cultural barriers to convince Chinese customers to use toothpaste daily. Tooth Brushing is not a part of their daily routine, especially in rural villages. After considering all the factors, Colgate entered into the Chinese market, and its market share expanded 7% in 1995, and now it is more than 40%.
Deciding on which business will sustain is the most significant decision of any business’s marketing strategy.
Without changing its product line and investment, a company can enter into new markets with exporting policy. It offers a chance to build consumers internationally organizations. Before entering, they need to set up a sales branch, customer service centre, and a marketing team or sales team of their own in the exporting country. Once the operations are set-up in the new territory, the company should be ready for the expansion based on the potential growth in demand.
Licensing is similar to contract manufacturing by one company to another company in different markets. For example, a company offers its proprietary assets to another foreign company with a royalty fee. In this way, a company can enter new markets by holding a royalty share through licensing.
More than 80% of McDonald’s business is franchise based. Franchising is the form of licensing that we have discussed above. In the franchising method, franchiser provides all the information relating to his business marketing plan, including revenue model, business model, brand, logo everything required to start a business. The franchisee needs to take care of the legal aspects of the company to set up his shop. In Franchising, the risk is less, and the business model is already a successful one.
Resources are available in other countries, and we can utilize those resources by entering into a joint-ventures with other companies. For example, Tesla cars run through battery power, but lithium mines are more in china, that is why Tesla started its manufacturing centres in China.
Companies enter into joint-ventures so that they can use the host country’s resources while expanding the business in partnership with the public of the host country.
Setting up manufacturing centres with massive investment in other countries with the foreign government’s permission to develop that country’s local areas by using their natural resources, hiring cheap labour, creating new jobs, etc. is another strategy to globalize a company.
Developing products that suit the local market by keeping full control of investments, direct investment comes with colossal risk; global marketers should consider the foreign government policies and changing market conditions.
When entering into the new markets, it is essential to differentiate products with the competitors. Competition is everywhere globally, but adapting to the latest trends and knowing the unique needs is very important in product differentiation strategy to survive and grow.
Understanding the global market perspective in terms of cost is a critical aspect to consider.
Pricing is the main factor that drives business into profits or drags it into losses. To make an excellent price; we need to make sure our costs do not go overboard. Socio-economic differences in the country will impact pricing and cost. Before entering into any new country, we need to have a clear understanding of the target market.
Why Do We Need Global Marketing?
The competition is everywhere, and if we do not change our marketing strategies, it is the most significant risk that a company will take. The foreign market is a boon to domestic companies for expanding their operations internationally. It is not actually an easy process to enter, but if we cope up to strategize then there are remarkable results in the global market, some of them as follows
- Expand their marketing activities into different countries
- Grabbing a vast customer base and satisfying their needs internationally
- Advantage of investing in foreign countries significantly when they are growing economically
- Overcoming home competition and exploring to the potential markets
- Discovering new ways to improve the product in different markets by customizing them according to their need.
Risk is the chance of loss or success, and the reasons are captivating in Global marketing strategy to expand internationally and provide services globally.
If any company decides to become global, they have to be committed to their goal. All strategies should focus on gaining profits in the hosting company by having a grip in their marketing activities.