Understanding Communication and the Communication Process
Lisa works as a Brand Executive with a reputed multinational firm. She was asked to deliver a presentation on her assignments and achievements. Her appraisal was due that month, and she did not get her promotion. No points for guessing, her presentation played the culprit. Her thoughts were not at all clear and she could […]
Public-Private Partnership in Stadium Financing
In the previous articles, we have already seen that funding a stadium can be very difficult from a financial point of view. The financial aspects of stadium financing can be challenging regardless of whether the financing will be provided by the government or by private parties. It is important to note that stadium financing can […]
Valuation of a Sports Franchise: Market Approach
In the previous articles, we have already come across a couple of methods used for the valuation of a sports franchise. However, we know that both of those methods have certain shortcomings which make them unsuitable for the valuation of a sports franchise. In this article, we will discuss a third approach called the market […]
Disadvantages of Securitization in Sports
In the previous articles, we have already seen how the use of securitization has grown in sports. We also know that the increasing use of securitization is because of certain benefits that are provided by this method of raising capital. However, it is important to note that securitization is a part of structured finance. Structured […]
Strategic Finance and Capital Structure
The capital structure decision has been considered to be a purely financial decision for a very long time. However, in reality, this decision has long-term strategic implications. The failure to understand these implications has encouraged firms to continue studying the fields of finance and strategy in isolation. The end result is that the firm often […]
In current times every company is wanting to be a global player, some companies this out of compulsion, for some its natural extension, whatever the case companies need to have marketing programs, which can create and sustain brand equity across geographical boundaries and market segments. However, before studying the global view for marketing strategies, it is important to understand regional market segments, profile, etc.
An interesting phenomenon has raised its head in recent time where companies are focusing on regional markets in an effort to counter globalization. In this regionalization, companies focus on geographic locations treating them as market segments.
For example, Pepsi has created four regions within USA to focus on individual market segment and designing a marketing program. The reason why companies are employing a regional approach is that mass markets have to cease to exist, as diversity in form of culture; demographics, etc. are in the forefront.
A typical large US city has Asian, Hispanic and African American population, there are by creating a need for marketing programs, which can make products and services reachable to this audience.
The world is becoming flat just not in terms of communication power but also in terms of migration and movement of labor across the globe. Globalization is here to stay and every company is in the fray to take advantage of this phenomenon. There could many reasons for which companies may decide to be a global player.
Bigger markets like China and India provide unending opportunities not only as a market but also as production hubs there by reducing overall cost for to be global players. Furthermore, by catering to different markets, companies can reduce the risk as a result of diversification.
It is clear there are many reasons for becoming global player, but there are outright advantages also for global marketing programs. Looking at the production side, as production increases per unit cost of the product will decrease, thereby reducing cost of the marketing program. As standardization increases in packaging, distribution and other marketing activities cost associated with them would decrease.
For example, Sony’s marketing campaign has universal appeal thereby assigning equal cost to products and geographies.
Another advantage is that with global presence and acceptance confidence with consumer reaches altogether a different level. It creates a sense of pride and ownership looking at the universal demand for the product.
With the uniform marketing program across geographical boundaries, companies can have consistent brand knowledge, this is especially important for mobile consumers. Furthermore, another advantage for companies is the ability to sell a good product universally at one go, thereby gaining a complete first mover advantage.
But with advantages in operating on a global there are also challenges and disadvantages. With standardization companies are unable to satisfy needs of consumer, which comes with different culture, demographics, etc.
For example, consumption of carbonated drinks and beer is much more in USA, Australia in comparison to that of India and China.
As perception and needs vary from culture to culture, consumer response to a standard marketing program may not equally have felt as per company acceptation.
Every product undergoes a life cycle which begins from the day it is launch in the market, so every geographical location may be having different product life cycle stage, so marketing programs also accordingly have to vary. Other challenge companies face is that of environmental like social, political and regulatory.
Therefore, a brand to succeed across geographical boundaries companies need to device marketing programs, which can create global consumer based brand equity. And for that marketing programs have to highlight point of differences and point of similarities across boundaries.
Furthermore, companies should understand brand building is tedious and time consuming. Brand name, logos, symbol has to be designed in a way that it properly communicates brand knowledge and not creates confusion in consumer’s mind. And at the same time construct and execute a global brand equity measurement system so that focus always remains of develop a strong consumer based brand equity.
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