The ever-evolving digital landscape means competition is fiercer than ever.
Nowadays, even small businesses have an all-encompassing presence thanks to the internet.
Sure, you could dominate your domestic market.
But is it enough in an increasingly globalized world?
Keeping your business confined to the local market limits your lifelines for long-term sustainability and puts a hard ceiling on any potential growth.
With a global marketing strategy, you can implement steady global expansion for long-term success and profitability.
It’s about more than simply selling your products or services to a wider market, though.
Read on to find out what a global marketing strategy actually is and all the relevant nuances that could make or break your business expansion efforts.
It All Starts With Strategy
Global marketing comprises the entire process of planning and executing the development, positioning, pricing, promotion, and distribution of your offerings in an international market.
A global marketing strategy coordinates these marketing aspects and efforts across various nations around the world. It aims to create transactions that meet individual (customer) and organizational (brand) objectives.
While it doesn’t necessarily encompass all countries, your multinational marketing plan should include several regions, typically broken down as follows:
- Latin America and North America
- Europe and the Middle East
- Asia, Africa, and the Pacific
The components of such a plan generally include:
- Standardized products
- Uniform packaging
- Coordinated sales campaigns
- Synchronized pricing
- Unified advertisements
- Coordinated product intros
A global marketing strategy naturally leads to a degree of uniformity, reinforcing company values and brand recognition.
The caveat? Your products aren’t going to be as closely adapted to the local market.
Still, this potential disadvantage is offset by the driving factors behind global marketing—the scale and scope of cost benefits like quantity discounts, same-size packaging, and unified promotional material.
The Global Marketing Mix
The global marketing mix comprises the Four P’s of Marketing:
An effective global marketing strategy meets the demands of the global marketplace while maintaining competitiveness in domestic markets.
You need a customized global marketing mix to address the preferences, values, wants, and needs of different local markets. Social, cultural, legal, political, economic, competitive, and technological factors also play a role.
Ultimately, your worldwide marketing plan must maintain your company’s unified message while being flexible enough to adapt to changing local market trends.
Soothsaying? No, Just Segmentation
A global market segment is one where customer preferences, needs, and wants are similar regardless of location.
International companies typically target such markets with standardized products, often from categories like luxury brand items, electronics and technology, apparel, and personal care.
Conversely, product standardization is less common among more culturally-determined sectors, like food and beverages.
A global marketing strategy can take a two-pronged approach to market segmentation:
First, grouping countries into similar regions to increase the likelihood of homogeneous subgroups within a specific region. (Think trading blocs like the European Union).
Second, changing local preferences by introducing a product or service with new features, prices, or promotions.
Swedish furniture retailer IKEA is an excellent example.
It successfully changed the furniture industry in various countries with its standardized approach focussing on simple and functional furniture.
Environmental changes also affect domestic market segments, allowing for product standardization. (Think the surging popularity of “green” products, bottled water, and light beers).
Before implementing a global marketing strategy, your company must:
- Identify its target markets
- Determine which products resonate in such markets
- Define price points and distribution channels that best serve the target market
- Decide how to introduce its products
Product: To Standardize or Adapt?
Standardization (uniformity of product, styling, and design) is a major feature of international marketing.
It comes with cost-side and quality advantages like:
- Scale economies from the production of more identical units.
- Flexibility to invest in specialized components, technology, and machine tools—resulting in higher, more consistent quality.
- Potential positive demand effect on customer preferences.
Product standardization has its disadvantages, too.
Besides possible pent-up demand in an emerging economy, standardized products seldom manage to strike gold with a specific segment in a new domestic market.
It’s an expected but not necessarily severe obstacle.
You can overcome mispositioning with robust brand recognition, while scale advantages allow an entering product to be sold at a lower price.
Preferences also change, and a standardized product can offer new, never-before-seen features in a specific segment.
Still, adaptation is an equally important aspect of a global marketing strategy.
To gain traction and compete with local options, a product must be tailored to a domestic market’s unique cultural preferences.
For example, McDonald’s menu is vastly different in India compared to Japan or the United States. Meanwhile, Coca Cola has two formulas (one sweeter than the other) to satisfy domestic preferences.
Your company can still implement a global marketing strategy and benefit from the scale of economies even without an entirely standardized product.
But it’s just about impossible to develop a global strategy without a global brand.
A Brilliant Brand is a Balancing Act
Global brands are easily recognizable in any country, region, or market. Coca Cola, McDonald’s, Microsoft, and Apple are some examples.
Unsurprisingly, the top brands with the most brand equity (as a financial asset) are international. A product needn’t be available everywhere to form part of a global brand, either.
But an international brand doesn’t only need to reach across borders—it also needs loyalty from local customers.
As multinational companies expand to build their brand equity, local brands defend their market share by staying close to their clientele and building affinity (“soft equity”).
With this in mind, some global entities push their brand in a domestic market and acquire a successful local brand, retaining its name, customers, and market share.
The most prominent benefits of having a global brand include:
- Scale and scope economies
- Consistent quality
- High esteem status
- Demand spillover
- A global customer base
Striking the right balance between a unified international voice and local customer allegiance is key to a successful global marketing strategy.
And there’s more than one way to go about it.
Placement: Product Positioning in a Not-So-Perfect World
Placement and positioning determine how a product is presented and distributed in a given market.
Economic development and cultural nuances are two overarching aspects that largely affect the positioning of a product in a foreign market.
- Vending machines are commonplace in some countries and scarce in others.
- An apple is a popular healthy snack in the West. But in Japan, it’s a favorite during gift-giving occasions—placing importance on packaging, color, and price.
- You won’t see an international luxury brand distributed in a “Dollar Store.”
- A Ford vehicle may be positioned as functional and utilitarian in Europe and a status symbol in a poorer region.
First-time buyers in emerging markets seldomly view products the same way consumers with established preferences in more mature markets do.
For example, the conveyed benefits of a Buick in America differ from the benefits conveyed in the Japanese market, even though the product is pretty much the same.
The strength of local competition also varies across regions and affects how you position your product.
Where domestic competitors are formidable, a foreign brand (although a mainstream brand at home) usually attempts to target a niche in the global space.
European brands like Volvo and Heineken are perfect examples.
Conversely, a company occupying a niche position at home might target a more mainstream position in a foreign market. The Japanese brand Honda in the U.S. market is one such instance.
Extensive market research is crucial to understand and accurately define a local segment and the attributes dictating a product’s placement.
After that, you can execute impactful positioning as part of your global marketing strategy.
Price: Don’t Dice With Pricing and Distribution
Pricing in a global marketing strategy typically has three primary objectives:
#1: Generating profits to achieve company financial goals.
#2: Matching the expectations of a given market and consumer trends.
#3: Supporting a product’s positioning for consistency in promotion and placement.
Cost factors affecting pricing include:
- Custom duties
- Market place
- Market condition
- Product quality
- Promotion and advertising
Due to additional costs, pricing and distribution are more correlated in a global market strategy than a local one.
The ease of transportation, local prices, and currency fluctuations can allow customers to buy and ship branded products cheaper from abroad.
Consequently, multinationals must develop pricing and distribution strategies together to align prices that avoid the “gray trade.”
There’s no such thing as a one-size-fits-all global price for a product.
Besides cultural expectations, international companies must also consider pricing variables like political and economic fluctuations, trade tariffs, and jurisdictional legal requirements.
Other contributing factors include variances in production, raw material, and natural resources costs.
Promotion: Aces and Adversities of Global Advertising
International advertising has only been gaining momentum due in large part to the internet and its diverse range of platforms. Even local ads have a potentially global reach.
Not all marketing communications are globally coordinated, though. Media advertising is just one promotional tool of many, and media regulations vary widely across borders.
Each country also has varying availability, traction, and costs of different media types.
For example, print media isn’t typically as effective in poorer countries than in first-world countries. Despite its global reach, the internet hasn’t penetrated all four corners of the world, either.
Multinational corporations tend to favor a more localized approach, with only a small portion of their advertising budget dedicated to global campaigns.
Why? The linguistic, cultural, and religious differences between markets typically prevent standardized advertising messages.
Promotion as part of a global marketing strategy generally includes the following balanced objectives:
- Building a brand while maintaining the brand’s unified voice
- Optimizing the effectiveness of local advertisements
- Increasing the speed of implementation
- Developing economies of scale during the creative process
Global promotional campaigns must factor in how internal aspects (knowledge, beliefs, attitudes, and demographics) and external influences (lifestyle, culture, family, and ethnicity) shape consumer behavior.
Factors affecting an international marketing plan include:
- Values: Individual values arise from learned experiences and moral or religious beliefs. For example, material well-being is important to the American demographic, so status symbol products are more popular than in countries like India.
- Language: With over 3,000 languages worldwide, mistranslations can derail your global marketing efforts. You must be hyper-aware of linguistic nuances in the local and international promotional landscapes.
- Colors: Similarly, colors have varying connotations in different local markets. Purple is associated with death in Hispanic markets, while black and white signify mourning in Japan.
- Business norms: Business norms and etiquette also vary across countries. For instance, the public has access to some American wholesalers, whereas French wholesalers don’t typically market their products to the public.
- Religious beliefs: Like values, religious beliefs influence the purchase of products and shopping patterns. The Christmas season is a massive shopping period in Christian nations, but that isn’t always true for other religions and holy days.
Companies must adapt their global marketing strategies and respond rapidly to the factors influencing a domestic market.
Make an International Impact With Innovation Park
Now you know what a global marketing strategy is, its various components, and the aspects affecting key marketing decisions.
If you want to take your company beyond the confines of your local market, you need to adopt a pragmatic approach.
Your global marketing strategy should comprise and consider the elements of product, price, promotion, and placement.
Developing an optimized, impactful, and cost-effective marketing plan requires in-depth research and expert knowledge.
With Innovation Park, you’ll get all of that and more thanks to our global network of professionals, 15+ years of marketing expertise, and comprehensive end-to-end solutions. Your global expansion strategy is awaiting.
Book a paid consultation today, and let us take your company to new heights.
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