The concepts of globalization and international marketing are two important concepts that must be addressed and discussed in relation to business operations of large multinational companies. Globalization is defined as the integration of the economy at a global level and involves two main features. The first main feature states that in globalization, most trade takes place among multinational corporations, while the second main feature emphasizes that the major activity in the global economy is the flow of money in the form of derivatives, foreign investments and many others. In simple terms, the concept of globalization simply means the opening and cross relating of different economies in the world, in line with the desire to have a wider and diverse market. With this, since the aim of globalization is to expand and diversify its market, the concept of international market then becomes relevant. International marketing refers to marketing across national borders, in which, the environment from where products and services are offered differs from country to country, and services and facilities are priced differently, with some products or services not available at all in some countries. From this definition, it can be observed that the concepts of globalization and international marketing are similar, with the aim of market expansion and diversification. However, the difference lies on the fact that globalization may become the effect of international marketing.
A lot of business organizations and companies engage in and focus on international marketing, with the desire for more profits, sales and recognition from consumers. International marketing also allows business organizations opportunities for further development and improvement, in terms of their products, services, strategies, systems, and operations. This is because international markets offer vast business opportunities for firms with a product or service in high demand, in line with newness, cultural adaptation, attractiveness, and appropriate marketing strategies that can assist them particularly. In addition, when firms focus on international marketing, they are given the chance to gain more knowledge and information in their industry, thus, having the opportunity to provide more innovative services and products to their consumers.
With this, the strategies used in international marketing can be discussed. The strategies or methods used in international marketing are being used by multinational companies, with their aim of expanding and diversifying their markets. Primarily, exporting is the initial strategy of firms in entering a foreign market. Exporting means manufacturing a product in one country and selling it to another, and involves marketing products that have been made or assembled in a target country. This is the initial step of international businesses because exporting is a low risk strategy, wherein few investments are made. Second strategy is through an establishment of an enduring presence in the foreign country through contract manufacturing, which involves having someone else manufacture products, while a specific firm take on some of the marketing efforts, thus, saving investment. Third strategy is through licensing and franchising the products of local businesses, which are low exposure methods of entry, as they allow other individuals or groups of individuals to use the firm’s trademarks and accumulated expertise, thus, generating little control over the operation of the business. In addition, firms can also establish their name and reputation in a foreign market through sourcing components from foreign states, or importing raw materials and other equipment’s. This would somehow assist the company in establishing its reputation and name in the foreign country, thus, giving it enough opportunity to be known by its target market. Last strategy or method of market entry is through direct entry strategies, where the firm either acquires a firm or builds operations that involve the highest exposure. With direct entry strategies, the firm can gather more knowledge regarding the local market of its target country, and sustains greater control over its resources and information.
These strategies are used by business organizations and firms to ensure their establishment in the market of their target country. With the use of such methods of strategies, business organizations and firms are able to focus on their aims and goals, thus, making them more focused in taking advantage of open opportunities that they can consider as their edge over other companies from the same industry. In addition, with these strategies and methods, multinational companies or firms would be able to obtain adequate and relevant information and knowledge regarding their target market and country, thus, would be useful in line with their product or service development and improvement. The use of such strategies, thus, enabling them to participate in the process of and in enhancing globalization.
In relation to the strategies and methods used by firms to engage in international marketing are the global strategies that also aim for the same goals that international marketing have. Most companies perceive globalization as a matter of taking a superior business model and extending it geographically, with necessary modifications, to maximize the company’s economies of sale. From this perspective, the key strategic challenge is to simply determine how much to adapt the business model – how much to standardize from country to country versus how much to localize to respond to local differences. However, the balance of localization and standardization does not disregard the fact that not all companies are similar from one another, including their differences in potential for development. Differences from country to country, in contrast, are viewed as obstacles that need to be overcome.
The presence of differences is being recognized by companies as not only as a disadvantage, but also as an opportunity for business and sales. This is exhibited by the large multinational company Coca Cola. The Coca Cola Company is the world’s leading manufacturer, distributor and marketer of non-alcoholic beverages, concentrates, and syrups, and is present in almost all parts of the world. It is considered a global company, one that largely participates in the process of globalization, for it is able to recognize and respect the cultural differences among countries and continents. Coca Cola was able to learn and educate itself to be able to continue serving, satisfying, and meeting the demand of its customers, through product innovation and development. With this, the company was able to participate immensely in the process of globalization, for the establishment of their name and reputation in the global market does not only mean the increase in the sales and profit of the company, but also the promotion and encouragement of education and learning, through the Coca Cola Foundation. The Coca Cola Foundation was formed and now operates in nearly 200 countries, with the primary goal of helping those in need, especially those who lack education and knowledge from academic institutions. From this, it can be seen and proved that the Coca Cola Company has been able to become successful with its endeavors, and thus, contributory to the process of globalization.
Moreover, in contrary to the global strategy of Coca Cola is the perception that going global does not mean that the company must necessarily have a presence around the world, like Coca Cola. This simply means that the company must perceive global competition and global markets and has determined the best strategy to prosper in that environment. The word “global” means the entire world, but is made up of smaller, more individual geographic entities, beginning with the market in a particular state or province and extending beyond, thus, does not limit only to the participation of large manufacturers. There are several furniture manufacturers who have carved a niche in the European market. Again, it is important to understand that a global strategy does not have to encompass every continent but can be regional, and giving large importance to plan, above all else.
To conclude, it can be perceived that the concepts of globalization and international marketing affect one another, in terms of the operations of global business firms. Coming up with international marketing strategies enables a global firm to participate in the process of globalization, which enhances its abilities in addressing all the problems and challenges that come its way. In addition, the development of international marketing strategies enables a global firm gather relevant and additional knowledge regarding its target market. The use of such knowledge would come in handy in the actual process of developing a product or service and in its operations.