Module: International Marketing (MSc in Strategic Marketing) International Marketing Literature Research Assignment Introduction The aim of this

assignment is to review a comprehensive sample of the most recent literature on strategic marketing in global markets in order to recognise trends and new models as well as present projections on future opportunities, risks and tendencies within the global marketplace. This analysis will serve as a foundation for both implications for the future working practices of marketing managers as well as a wider view of future directions in global marketing strategy

Literature Review The literature under review covers the period 1993 to 2007 with the majority of the cited works covering the period 2000 2007. It was thought that a review of earlier opinion and analysis in the field would serve as a reasonable point of comparison with more recent theories. An initial review produced eight areas of common themes which will be dealt with in turn in the form of a comparative study of each theme. The themes under review are (1) the debate around standardisation against localisation of product and service marketing; (2) the specific nature of the product lifecycle in an international marketplace; (3) developments in global marketing research; (4) the factors at work in the decision to enter a global market; (5) a review of global marketing concepts; (6) socio-cultural and demographic considerations; (7) specific risk factors in international markets; and (8) market entry models Standardisation vs. localisation of product and service marketing Interestingly, the literature posits the question of how far it is possible to standardise for the global market in terms of either standardisation of the marketing mix or the product but rarely both. Majaro, S (1993) suggests that a standardised marketing mix is a desirable goal based purely on the common argument of economies of scale and increased efficiency.1 Similarly, Baker, M (1993) argues for the preferred model of non-differentiation stating; If an opportunity to standardise exists, do not differentiate (pp. 433) Boyd, Walker, Mullins, Larreche (2001) present a more complex scenario but nevertheless continue

the tenet of think globally, act locally2 which would tend to suggest an relatively undifferentiated marketing mix with some differentiation of product and/or services in geographic areas. More recent literature presents a more sophisticated view informed more by consumer behaviour. De Mooij, M (2007) argues here that; local markets are people, global markets are products suggesting that consumers will make a purchasing decision informed by culture and values3 and that only in very rare cases, e.g. Coca Cola, can a product transcend local markets. This, however is more due to the success of the brand. The product lifecycle in an international marketplace Throughout the literature there is a great deal of consensus on the fact that the total lifespan of a product in the international marketplace has become shorter. Earlier analyses such as Baker, M (1993) view this as a reason to recover the total product investment as quickly as possible and argue that this can be achieved most readily through increased marketing standardisation.4 A more sophisticated view is presented in Hollensen, S (2007) where there is a distinction made between a macroeconomic and a microeconomic approach5. The macroeconomic approach sees production and initial demand established in the innovating country. Later, as the product matures, excess demand is exported to other developed countries followed by a later phase of maturity where demand is created in developing countries where production is established. Finally, the developing countries export the same product to their former suppliers. Crucially, the microeconomic approach shows that various products in the firm's marketing mix can be simultaneously at different points in the life cycle. Developments in global marketing research The earlier and later literature differs little on those variables which can skew research results when research is done on a global scale. Language interference, cultural values, consumption patterns, socioeconomic variables within market segments all receive significant analysis6. What tends to be more pronounced in the later literature is the increasing role of marketing research output in facilitating decision-making as well as the recognition that global marketing research is more complex and requires both primary and secondary research. Hollense, S, in particular, recognises the cost and time benefits of accessing secondary data7, and here, the Internet must serve as a major source of secondary marketing data that did not exist in 1993. The factors at work in the decision to enter a global market Following on from marketing research the political and economic environment are given significant emphasis in the majority of marketing literature. Hollense, S (2007) discusses also the layers of culture8 from the national culture influencing down to the individual's preferences. This is not

explored in terms of it's amplification across multiple national markets but Hollense does stress the importance of recognising high-context and low-context cultures9. In the former, a great deal of relationship building is required to win the trust of the partner in advocating a firm's products. De Mooij (2007) expands this concept to include marketing communications in general, pointing out that: In order to communicate effectively across cultures, the correct level of contexting must be found (pp157) Global marketing concepts An analysis of theory developed specifically out of changes to global markets shows little development of the standard theories of market segmentation, differentiated pricing and appropriate distribution channels which underpinned local and domestic marketing theory. However, the literature over the past five years has shown a particular set of theoretical models specific to global marketing. Hollensen, S (2007) discusses the Upsalla International Model10 whish suggests a sequential pattern of entry into international markets with an increasing commitment to overseas markets as the international experience of the firm grows. He contrasts this with a traditional approach of what is termed as the Penrosian tradition which returns us to the economy of scale and a cost-led approach working from the firms core competencies.11 Dunning (1998) suggests a similar OwnershipLocation-internalisation (OLI) framework12 identifying an ownership advantage of establishing overseas production facilities, a locational advantage which builds a logistics network around the overseas production and, finally, an internalisation advantage where it must be economical for a firm to utilise the previous two advantages rather than sell them to a foreign firm.13 Socio-cultural and demographic considerations The question of cultural factors in international marketing is that which has undergone the furthest development in recent literature. As early as 1993, Majaro, S (1993) identifies the importance of grouping markets according to cultural differentiation as opposed to political or geographical boundaries.14 Kotler, P (1999) takes this model a step further, adding benefit segmentation, demographic segmentation, occasion segmentation, i.e. according to when the product is used, usage level segmentation and lifestyle segmentation.15 The high-context and low-context cultural considerations mentioned previously, are given further credence in Boyd, Walker, Mullins, Larreche (2002) with each context lent a cross-section of reference groups16. These are peer groups such as friends and co-workers who provide normative pressure to purchase (peer-pressure), value-expressive reference where the consumer seeks to gain status and informal influence from friends and family, better known as word-of-mouth. All of those elements provide a further level of complexity to the now standard concepts of high and low context cultures

Specific risk factors in international markets Similar to the development of the standardisation-localisation model emerging to deal with the specific choices related to international market entry the identification of risk mitigation factors salient to international marketing has developed rapidly. Baker, M (1993) recognises the risk mitigation inherent in internationalisation, protecting the firm from adverse fluctuations in the national economic cycle.17 Hollensen, S (2007) concurs, outlining the ownership, operating and transfer risk in being attached purely to domestic markets. All of the literature, in short, is strong on identifying the risks of domestic-based marketing, however there is scant coverage of the specific risks of internationalisation Market entry models Comprehensive models are easily identifiable in the literature and cover diverse entry modes,18 total product offer,19 and maturity models20 Hollensen, S (2007). Earlier literature is more product-based than market-led, as with Majaro, S (1993) who presents three approaches to entering a product onto the international market: the development of new products, the deletion of weak products and the modification of new products.21 Hollensen, S more or less deals with market maturity as a key consideration of entry. Two distinct models suggested here are the waterfall approach where the product is disseminated from advanced through developing to less developed countries and the shower approach where all three are simultaneously targeted where early market penetration is a goal.22 Overall, the literature is consensual on the fact that shorter product lifecycles are the salient feature of internationalised markets Future directions and managerial implications Clearly, future developments in global marketing are prevalent in the most recent literature. De Mooij, M (2007) is clear on the fact that culturally-sensitive advertising will continue to be a key consideration when marketing managers and account managers are planning advertising strategy.23 The growth of multiple media for advertising and marketing will mean that product marketing needs to be differentiated to the smallest sub-segments. In addition, it is clear that consumers will continue to be sceptical of advertising messages, with marketing based on cultural value considerations being the most appealing. This is why marketing through social networks with a high degree of informal and normative influence is likely to be the measure of successful future marketing strategies. One of the greatest consumer behavioural shifts which has perhaps not been fully considered is that of a certain fluidity between high and low-context cultures. There is little reason to suppose that low-

context cultures such as the USA and Germany are heading toward a more high-context future. Historically, it is difficult to think of a culture which has become more formalised and more stratified. It is the opposite shift that marketing researchers will need to keep monitoring. High-context cultures such as Japan and Saudi Arabia are increasingly adopting more informal attitudes to communication and consumption, moving from group conformity to individualisation, from hierarchical to more egalitarian beliefs. This process is being accelerated by the increased availability of low-context media through the internet. Concluding Note The literature has shown a reasonably consistent graduation from an undifferentiated to a highlydifferentiated marketing mix with an increased emphasis on managing markets rather than products per se. The cultural dimension has also gained prominence, partly as a result of both informal and legislated cultural diversity both globally and nationally. This recognition of diverse markets has been tackled through a focus on sub-segments in marketing research and localisation of global brands to highly-differentiated local markets

References

Majaro, 1993, p40 Boyd, Walker, Mullins, Larreche, 2001, p.2 3 Mooij, 2007, pp3-4 4 Majaro, 1993, p80 5 Hollensen, 2007, p.262 6 Majaro, 1993, pp70-71 7 Hollensen, 2007, p.157 8 Hollensen, 2007, pp. 219-220 9 Hollensen, 2007, pp. 220-221 10 Hollensen, 2007, pp.63-67 11 Hollensen, 2007, p.61 12 Dunning, 1998, pp.23-25 13 Hollensen, 2007, p.62 14 Majaro, 1993, p.45 15 Kotler, 1999, pp. 26-27 16 Boyd, Walker, Mullins, Larreche, 2001, p.131 17 Majaro, 1993, p.63 18 Hollensen, 2007, pp.295-309 19 Hollensen, 2007, p. 421 20 Hollensen, 2007, pp.427-431 21 Majaro, 1993, p.91 22 Hollensen, 2007, p. 261 23 Mooij, 2007, p.301
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