Management Myopia And organization Al Culture
Management Myopia And organization Al Culture In many cases, management simply ignores opportunities to pursue global marketing. a company that is “nearsighted” and ethno- centric will not expand geographically. anheuser-Busch, the brewer of Budweiser beer, lost its independence after years of focusing primarily on the domestic U.S. market. Myopia is also a recipe for market disaster if headquarters attempts to dictate when it should listen. Global marketing does not work without a strong local team that can provide information about local market conditions.
In companies where subsidiary management “knows it all,” there is no room for vision from the top. In companies where headquarters management is all-knowing, there is no room for local initiative or an in-depth knowledge of local needs and conditions. executives and managers at
58John tagliabue, “renault Pins Its Survival on a Global Gamble,” The New York Times (July 2, 2000), Section 3, pp. 1, 6; Don Kirk and Peter S. Green, “renault rolls the Dice on two auto Projects abroad,” The New York Times (august 29, 2002), pp. W1, W7. 59Joel Millman, “the Fallen: Lorenzo Zambrano; Hard times for Cement Man,” The Wall Street Journal (December 11, 2008), p. a1.
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50 Part 1 • IntroductIon
successful global companies have learned how to integrate global vision and perspective with local market initiative and input. a striking theme emerged during interviews conducted by one of the authors with executives of successful global companies. that theme was respect for local initiative and input by headquarters executives, and the corresponding respect for headquarters’ vision by local executives.
nATIonAL ConTRoLS every country protects the commercial interests of local enterprises by maintaining control over market access and entry into both low- and high-tech industries. Such control ranges from a monopoly controlling access to tobacco markets to national government control of broadcast, equipment, and data transmission markets. today, tariff barriers have been largely removed in high-income countries, thanks to the Wto, Gatt, naFta, and other eco- nomic agreements. However, nontariff barriers (NTBs) are still very much in evidence. ntBs are nonmonetary restrictions on cross-border trade, such as the proposed “Buy american” pro- vision in Washington’s economic stimulus package, food safety rules, and other bureaucratic obstacles. ntBs have the potential to make it difficult for companies to gain access to some individual country and regional markets.
oPPoSITIon To GLoBALIzATIon to many people around the world, globalization and global marketing represent a threat. the term globaphobia is sometimes used to describe an attitude of hostility toward trade agreements, global brands, or company policies that appear to result in hardship for some individuals or countries while benefiting others. Globaphobia manifests itself in various ways, including protests or violence directed at policymakers or well-known global companies (see exhibit 1-10). opponents of globalization include labor unions, college and uni- versity students, national and international nongovernmental organizations (nGos), and others. Shock Doctrine author naomi Klein has been an especially outspoken critic of globalization.
In the United States, some people believe that globalization has depressed the wages of american workers and resulted in the loss of both blue- and white-collar jobs. Protectionist sentiment has increased in the wake of the recent economic crisis. In many developing coun- tries, there is a growing suspicion that the world’s advanced countries—starting with the United States—are reaping most of the rewards of free trade. as an unemployed miner in Bolivia put it, “Globalization is just another name for submission and domination. We’ve had to live with that here for 500 years and now we want to be our own masters.”60
60Larry rohter, “Bolivia’s Poor Proclaim abiding Distrust of Globalization,” The New York Times (october 17, 2003), p. a3.
Exhibit 1-10 American fashion icon Ralph Lauren created the official uniforms that Team USA wore at the opening and closing ceremonies of the 2012 Olympics in China. Controversy erupted after it was revealed that the uniforms—navy blazers, white trousers and skirts, and berets—were “Made in China” rather than in the United States. Critics linked the outsourcing story to the broader issue of the loss of manufacturing jobs in America.
In response, a Ralph Lauren spokes- person released a statement pledging that the 2014 Olympics uniforms will be “Made in the USA.” Still, some observers believe that America’s com- petitive advantage lies in innovation, design, and marketing rather than low-wage manufacturing. According to this view, America’s economy actu- ally benefits from outsourcing. What do you think? Source: ASSOCIATED PRESS.
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chaPter 1 • IntroductIon to Global MarketInG 51
outline of this Book this book has been written for students and businesspeople interested in global marketing. throughout the book, we present and discuss important concepts and tools specifically appli- cable to global marketing.
the book is divided into five parts. Part 1 consists of Chapter 1, an overview of global marketing and the basic theory of global marketing. Chapters 2 through 5 comprise Part 2, in which we cover the environments of global marketing. Chapters 2 and 3 examine eco- nomic and regional market characteristics, including the locations of income and population, patterns of trade and investment, and stages of market development. In Chapter 4, we examine social and cultural elements, and in Chapter 5 we present the legal, political, and regulatory dimensions. We devote Part 3 to topics that must be considered when approaching global mar- kets. We cover marketing information systems and research in Chapter 6. Chapter 7 discusses market segmentation, targeting, and positioning. Chapter 8 surveys the basics of importing, exporting, and sourcing. We devote Chapter 9 to various aspects of global strategy, including strategy alternatives for market entry and expansion. We devote Part 4 to the global context of marketing mix decisions. Guidelines for making product, price, channel, and marketing com- munications decisions in response to global market opportunities and threats are presented in detail in Chapters 10 through 14. Chapter 15 explores the ways that the Internet, e-commerce, and other aspects of the digital revolution are creating new opportunities and challenges for global marketers. the two chapters in Part 5 address issues of corporate strategy and leader- ship, in the twenty-first century. Chapter 16 includes an overview of strategy and competitive advantage. Chapter 17 addresses some of the leadership challenges facing the chief executives of global companies. In addition, the chapter examines the organization and control of global marketing programs as well as the issue of corporate social responsibility.
Summary Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. a company that engages in global marketing focuses its resources on global market opportunities and threats. Successful global marketers such as nestlé, Coca-Cola, and Honda use familiar marketing mix elements—the four Ps—to create global marketing programs. Marketing, r&D, manufacturing, and other activities comprise a firm’s value chain; firms configure these activities to create superior customer value on a global basis. the value equation (V = B/P) expresses the relationship between value and the marketing mix.
Global companies also maintain strategic focus while relentlessly pursuing competitive advantage. the marketing mix, value chain, competitive advantage, and focus are univer- sal in their applicability, irrespective of whether a company does business only in the home country or has a presence in many markets around the world. However, in a global industry, companies that fail to pursue global opportunities risk being pushed aside by stronger global competitors.
a firm’s global marketing strategy (GMS) can enhance its worldwide performance. the GMS addresses several issues. First is the nature of the marketing program in terms of the balance between a standardized (extension) approach to the marketing mix elements and a localized (adaptation) approach that is responsive to country or regional differences. Second is the concentration of marketing activities in a few countries or the dispersal of such activities across many countries. Companies that engage in global marketing can also engage in coor- dination of marketing activities. Finally, a firm’s GMS addresses the issue of global market participation.
the importance of global marketing today can be seen in the company rankings compiled by The Wall Street Journal, Fortune, the Financial Times, and other publications. Whether ranked by revenues or some other measure, most of the world’s major corporations are active regionally or globally. the size of global markets for individual industries or prod- uct categories helps explain why companies “go global.” Global markets for some product
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