Chasing logics, tend to affect the marketing variables such as product design, branding,

and communications. Such globalization patterns frequently take place “in public”
because globalization of products, communications, and brands is visible to all concerned.
Industry-based global logics, such as competitive, industry, and size (critical mass) logics,
mostly affect the intergration aspects of global operations, ranking from manufacturing to
research and development, logistics, and distribution. Because this type of globalization
path takes place within the oganization, these aspects are often hidden from view.

The two forces-customer-based logics and industry–based logics combine into various
paths of globalization, which explains the differences in global marketing practices among
international firms. When the global logic is low for both customers-and industry-based
factors, companies tend to opt for multidomestic marketing strategies. Faced with strong
customer-based global logic but weak industry-based global logic as a result of
differences in the competitive and industry structures across many markets, companies
can pursue global marketing mix strategies. Confronted with different customer pressures
across the world but high industry-based global logic, industry-based and customer-based,
are strong, a firm may find an integrated global business strategy most appropriate. Figure
8.7 depicts the different globalization patterns.

MULTIDOMESTIC MARKETING STRATEGIES

Although we explore organization issues in more detail in Chapter 16, some general
principles for the organization of multidomestic firms should be introduced at this point.
To a large extent, international firms operating as multidomestic firms have organized
their businesses around countries or geographic regions. Some key strategic decisions
with respect to products and technology are made at the central or head office, but the
implementation of marketing strategies is the left largely to local-country subsidiaries.As
a result, profit and and loss responsibility tends to reside in each individual country. At
the extreme, this leads to an organization that runs many different business in several
countries-hence the term multidomestic. Each subsidiary represents a separate business
that must be run profitably.

As we discussed in Chapter 1, multinational corporations tend to be represented in a

large number of countries and the world’s principal trading regions. May of today’s
large, internationally active firms may be classified as pursuing multidomestic strategies.
Many of today’s global firms have traditionally operated multidomestic marketing
 strategies, including well-known firms such as General Motors, Ford, IBM, Gillette,
General Electric, and Kodak, as well as major service business, including Citigroup and
Morgan Chase, two of the largest U.S-based financial services organizations. Overseas
firms with long international experience, such as Unilever, Royal Dutch-Shell, and
Nestle, who have established subsidary networks in many countries, have also tended to
operate under the multidomestic marketing mode. Unilever’s chairman explained his
company’s marketing strategy as “multi-local multinational” based on his observation
that “there is no such thing as a global consumer, I have never met one. Every consumer
is local.

Nestle, the world’s largest food company, is represented in most markets of the world
and is a typical practitioner of the multidomestic strategy. Including its operating
companies, such as Carnation, Rowntree, and Buitoni, among others, it has traditionally
practiced a decentralized approach to management. Local operating managers, thought
to be much more in tune with local markets, are given the freedom to develop marketing
strategies tailored to local needs. In the foods business, where considerable differences
exist among countries cultures and consumer habits, competitive environments, markets
structures, and practices, decentralization was judged by management to be imperative.
Many companies pursuing a multidomestic strategy have begun a move toward a more
centralized management structure, which has resulted in a reorganization around major
business lines. To reap the benefits of global leverage, companies realize that the
multidomestic business model leaves too many initiatives to local levels, thus resulting
in missed opportunities.

REGIONAL AND MULTIREGIONAL STRATEGIES

Regional marketing strategies focusing on Europe, Asia, or Latin American represent a

halfway point between multidomestic and truly global strategy types. Conceptually, they
are not global because the coordination takes place across a single region only. Pan-
European strategies stand out as the first real regional marketing strategies, created
because of the opportunities presented by the European Union and its increasing
integration.

Regional strategies are essentially marketing strategies across several countries, although
most are in close proximity. For Europe, the overall marketing might include about fifteen
different main markets. The fact that several countries are involves with a close
coordinated strategy means that companies go through to determine their appropriate
regional stratery across, say, ten Asia markets is identical to the analysis a company
would apply to determine the best global marketing strategy across its top twenty global
markets. The global mindset is thus closely related to a pan-Europe mindset, at least on a
conceptual level. The major difference stems from the type of markets included in the
analysis, but not from the type of conceptual approach. The many different regional
marketing strategies typically center on any one of the three large trading blocs of North
American(United States, Canada, Mexico), Europe, and the Asia Pacific area(Japan and
the Pacific Rim countries). A global strategies may be structured around penetrating just
one regional market or several markets.

We speak of a North American strategy if a company has integrated its marketing

strategy for the United States, Canada, and Mexico. The creation of NAFTA caused
many firms to adopt an integrated North American strategy by merging operations of the
three signature countries. A pan-European strategy occurs when a firm integrates its
strategy across Europe. And finally, a firm adopting a pan-Asian strategy integrates its
marketing strategy across the Asian Pacific region. Companies may also integrates two
region into a trans-pacific strategy or a trans-Atlantic strategy.

GLOBAL MARKETING STRATEGIES

In the early phases of the development, global marketing strategies were assumed to be
of one type only. Typically, these first types of global strategies were associated with
offering the same marketing strategy across the globe. The debate centered on whether
a company could gain anything from this strategy and what its preconditions would be.
As marketers gained more experience, many other types of global marketing strategies
became apparent. Some strategies were much less complicated and exposed a smaller
aspect of a marketing strategy to globalization. In this section, we explore the various
generic types of global marketing strategies and indicate the conditions under which
they may best succeed.

INTEGRATED GLOBAL MARKETING STRATEGY. When a company pursues

an integrated global marketing strategy, most elements of the marketing strategy have
been globalized. Globalization includes not only the product but also the
communications strategy, pricing, and distribution, as well as strategic elements such
as segmentation and positioning. Such a strategy may be advisable for companies that
face largely globalized customers along the lines defined earlier. It also assumes that
the way a given industry works is highly similar everywhere, thus allowing a company
to unfold its strategy along similar paths country by country.

One company that the fits the description of an integrated global marketing strategy to
a large degree is Coca-Cola. Coca-Cola has achieved a coherent, consistent, and
integrated global marketing strategy that covers almost all elements of its marketing
program, from segmentation to positioning, branding, distribution, bottling, and more.
This globally integrated global marketing strategy is also aided by a constant and
intensive global logic faced by Coca-Cola from both its customers and the industry, as
evidenced by the relentless competitive struggle with its archrival PepsiCo. We cover
this classic global battle in more detail later in this chapter.

Reality tells us that completely integrated global marketing strategies will continue to
be the exception. However, there are many other types of partially globalized
marketing strategies. Each may be tailored to specific industry and competitive
circumstances.

GLOBAL PRODUCT CATEGORY STRATEGY. Possibly the least integrated type

of global marketing strategy is the global product category strategy. Leverage is gained
the from competing in the same category country after country and may come in the
form of product technology or development costs. Selecting the form of global product
category implies that the company, while staying within that that category, will
consider targeting different segments in each category, or varying the product,
advertising, and branding according to local market requirements. Companies
competing in the multidomestic mode are frequently applying the global category
strategy and leveraging knowledge across markets without pursuing standardization.
That strategy works best when there are significant differences across market and when
few segments are present in market after market.several traditional multinational
palyers who had for decades pursued a multidomestic marketing approach-tailoring
marketing strategies to local market condition and assigning management to local
management teams-have been moving toward the global category strategy. Among
them are Nestle, Unilever, anf Procter & Gamble, three large international consumer
good s companies doing business in food and household goods.
For decades, Nestle relied on regional executives who supervised many local
companies. Now it has adopted a series of strategic business units (SBUs) along
product categories, such as beverage, confectionery, or milk product. Senior executives
at the head office took on responsibility for those categories. The confectionary
business unit, centered around the Nestle Crunch and Kitkat brands, has focused on
key markets (Russia, India, China) for growth. The water business, with a global
market share of 16 percent, is devoted to making Nestle the leadig bottled water brand
around the world. Other product groups have similar goals and strategies. Asimilar
move has been made by Procter & Gamble, the U.S based producer of consumer
goods. For several of its categories, such as disposable baby diapers, senior head-
office executives now carry out the function of coordinating and sharing information
across one category on a global basis. Most recently, Procter & Gamble decided to
structure its entire organization around seven product categories with global
responsibility.

Unilever, the Dutch-British company in similar businesses as Nestle and Procter &
Gamble, is focus its business on about fourteen main categories.

GLOBAL SEGMENT STRATEGY. A company that decides to target the same

segment. The company may develop an understanding of its customer base and
leverage that experience around the world. In both consumer and industrial industries,
significant knowledge is accumulated when a company gains in depth understanding of
a niche or segment. Pure global segment strategy will even allow for different
products, brands, or advertising, although some standardization is expected. The
choices may consist of always competing for a particular technical application in an
industrial segment.

Segment strategies are relatively new to global marketing. Industrial firms in

particular have begun to adopt them. The former ici nobel explosives for use in various
types of mining, adopted a global segmentation strategy according to key mining
segments, such as deep mining, surface mining, and so on. Since the mining
companies are increasingly pursuing global strategies themselves, it has begun to
make sense for ICI Nobel to coordinate its strategies by segments and to leverage
products, experience, and sales activities around the world. Serono, a swiss-based
biotech company, has structured its global marketing operation around several key
segments. Serono markets around its reproductive health segment, where the company
has built the lead in Europe and is also expanding in the United States. Among
financial services firms, several companies have adopted global segment strategies.
Citibank, a unit of recently formed CitiGroup, runs several segment strategies for
different categories of private banking clients. Deloitte Touche Tohmatsu, a leading
professional services firm, has adopted global strategies for several key client
segments, such as for the financial services industry and telecommunications.

GLOBAL MARKETING MIX ELEMENT STRATEGIES. These strategies

incorporate globalization along individual marketing mix elements, such as pricing.
Distribution, communications, or product. They are partially globalized strategies that
allow a companyto customize other aspects of its marketing strategy. Although
various types of strategies may apply, the most important are global product strategies,
global advertising strategies, and global branding strategies. Typically, companies
globalize those marketing mix elements that are subjects to particularly strong global
logic forces. A company facing strong global purchasing logic may globalize its
account management practices or its pricing strategy. Another firm facing strong
global logic information logic will find it important to globalize its communications
strategy. DMS, a global Dutch chemical company, faced strong purchasing logic in its
engineering plastics sectors. The requirements of more and more customers who
expected a coordinated global approach led to the formation of a new global account
management structure, with responsibilities that cut across geographic lines.

GLOBAL PRODUCT STRATEGY. Pursuing a global product strategy implies that

a company has largely globalized its product offering. Although the product may not
be completely standardized worldwide, key aspects or modules are in fact globalized.

The company may elect to add a global product strategy if the product or service
offered fit the description of global products discussed earlier. Global product
strategies require that product use conditions, expected features, and required product
functions be largely identical so that few variations or changes are needed. Companies
pursuing a global product and developing a product have already been made. Global
strategies will yield more volume, which will make the original investment easier to
justify.

Volkswagen(VW) of Germany has adopted a global product strategy using a

limited number of car platforms as the basis for many of its models. The platform is
the basic chassis, or powertrain, of a car, with different models built onto it. Although
VW markets different brands, such as the Volkswagen brand, Audi, Seat, and Skoda,
the underlying powertrain is often the same for efficiency reasons. Similar platform
concepts are used by Whirlpool Corporation, the U.S major appliances firm, for its
product lines in different parts of the world. Although global product strategies might
lead to standardized products, many firms use the platform concept to pursue a partial
global product strategy, allowing for differentiation at the local level but preserving
key components globally for cost reasons. Other companies with relatively
homogeneous products have already achieved global product status. For exemple, in
the mobile phone handset industry, the products are largely standardized phones, with
the exception that they be refitted to different local telecommunications standards.
Although features may differ from country to country, substantial modules, or
elements, of the products are identical.

GLOBAL BRANDING STRATEGIES. Global branding strategies consist of using

the same brand name or logo worldwide. Companies want to leverage the creation of
such brand names across many markets because the launching of new brands requires a
considerable marketing investments. Global branding strategies are advisable if the
target customers travel across country borders and are exposed to products elsewhere.

U.S.-based athletic shoe manufacturer Reebok spent about $140 million on its
brand name and embarked on a global branding strategy, consolidating all of its
advertising under the Leo Burnett advertising agency. The company wants to come a
leading sports and fitness brand in the athletic shoe market, estimated at $12 billion,
and in the process achieve a 30 percent world market share.

Global branding strategies also become important if target customers are

exposed to advertising worldwide. This situation is often the case for industrial
marketing customers, who may read industry and trade journals from other countries.
Increasingly, global branding has become important also for consumer product, where
cross-border advertising through international television channels has become
common. Even in some markets such as eastern Europe, many consumers had
become aware of brands offered in western Europe before the liberalization of the
economies in the early 1990s. Global branding allows a company to take advantage of
already existting goodwill. Companies pursing global branding strategies may include
luxury product marketers, who typically face a large fixed investment for the
worldwide promotion of a product. In Chapter 12, we look at the various choices of
global branding in more detail.

GLOBAL ADVERTISING STRATEGY. Globalized advertising is generally

associated with the use of the same brand name around the world. A company may
want to use different brand names, however, partly for historic purposes. Many global
firms have made acquisitions in the other countries, resulting in several local brands.
These local brands have their own distinctive market, and a company may find its
counterproductive to change those brand names. Instead, the company may want to
leverage a certain theme or advertising approach that may have been developed as a
result of global customer research. Global advertising themes are most advantageous
when a firm wants to market to customers around the world who are seeking similar
benefits. Once the purchasing reason has been determined as similar, a common theme
may be created to address it. The difficulties encountered with selecting common
themes are discussed at length in chapter 12. Protect & Gamble’s advertising for its
Pantene hair care line offers an example of how a global advertising strategy works.
Originally started in 1999 in latin America, the company began to feature
endorsements by actresses and soap opera stars speaking in a woman-to-woman
conversational tone. This approach represented a departure from traditional Pantene
advertising elsewhere, in which advertisements emphasized specific product claims.
The new approach more than doubled Pantene sales in Latin America. P&G decided to
use the same approach elsewhere, but replaced the actresses and soap opera stars with
locally know personalities.

HYBRID GLOBAL MARKETING STRATEGY. The above descriptions of the

various global marketing models can give the impression that companies might be
using one or the other generic strategy exclusively. Reality shows, however that few
companies consistently adhere to only one strategy. More often, companies adopt
several generic global strategies simultaneously. A company might follow a global
brand strategy for one part of its business while at the same time using local brands on
other part of its business. The earlier descriptions were deliberately offered in pure
form to give you a clearer understanding. This simplification was not intended to
disguise the fact that many firms are a mixture of different approaches, thus the term
composite. When companies use composite global marketing strategies, one generic
strategy usually dominates, and other generic strategies tend to be a lower priority.
INTERGRATED GLOBAL BUSINESS STRATEGIES

A company that face a high degree of both customer-based and industry-based global
logics is in a position to consider an integrated global business strategy. In this case,
not only the marketing strategy, as discussed in the previous section, is globalized but
so are other aspects of the business strategy. Typically, globalization also involves
research and development (R&D), production, logistics, information technology,
finance, accounting, and many other key functions relevant to the business.

In the context of global marketing, as we perceive it here, the issues of globalizing non
marketing functions are beyond the scope and purpose of this text. However, global
marketers need to understand the challenge of fitting into a global business strategy.
This challenge stems from relating marketing to other core functions, particularly
product development, research and development, and manufacturing. Integration
means that those functions, like the marketing functions, do not exist on a single-
country basis only, but that several or all regions share in common manufacturing,
research, or development.

In the early phases of a firm’s international development, the marketing

responsibility is frequently the first to globalize. Manufacturing, research, and other
core functions tend to remain attached to the domestic, or original, home market. In a
true international business strategy, this umbilical cord would be cut and the functions
would serve all all markets on am equal basis, without bias to ward home markets.
Such resource sharing, or integration, makes sense if the firm faces a strong industry,
competitive, or size logic, as described in the previous chapter.

When it comes to global business strategies, companies have several choices to

make. We explain two main forms in the next section: the global focus strategy and the
global business unit.

FORMULATING GLOBAL FOCUS STRATEGIES. As outlined earlier in this

chapter, geographic extension is one of two key dimensions in the strategy of an
international company. The second dimension is concerned with the range of a firm’s
product and service offerings. To what extent should a company become a supplier of a
wide range of products aimed at several or many market segments? Should a company
become the global specialist in a certain area by satisfying one a mall number of target
segments, and doing so in most major markets around the world?
 Even some of the largest companies cannot pursue all available initiatives.
Resources for most companies are limited, often requiring a tradeoff between product
expansion and geographic expansion strategies. Resolving this tradeoff is necessary to
achieve a concentration of resources and effort in areas where they will bring the most
return. We can distinguish between two models: on the one hand, we have the broad-
based firm marketing a wide range of products to many different customer groups,
both domestic and over seas, on the other hands, we have the narrowly based firm
marketing a limited range of products to a homogeneous customer group around the
world. Both types of companies can be successful in their respective markets.

Companies such as Protect&Gamble, Unilever, and Nestle are all examples of

consumer goods firms practicing a broad-based product strategy. In most markets,
these firms offer many brands and product lines. Among industrial marketers, general
Electric follows a similar strategy. Some of these firms, however, are broken down into
a large number of strategic business units, or divisions with a limited product range
aimed at a limited market segment. Within each business units. The chosen strategy
may be much more focused.

Firms with a narrow product range include Hertz and Avis, the U.S. car rental
companies, and Rolex, the Swiss watch manufacturer. These firms have a common
strategy of a narrow and clearly focused product line, with the intent of dominating the
chosen market segment across many countries. Many specialty equipment
manufacturers in the fields of machine tools, electronic testing equipment, and other
production process equipment end to fit this pattern o niche, or focus, marketing.

The trend today is for companies to expect their businesses to develop a worldwide
position and for some (such as GE) to become number 1 or 2 worldwide in any
category where they compete. This expectation requires a business to develop its
competitive position across all key markets, in particular across the major regions of
north America, Asia Pacific, and Europe. The preference is for business (or strategic
business units in large corporations) to focus on a particular line or segment by
extending that offering around the globe. This has also led companies to pursue global
marketing strategies for each business line rather than for the corporation as a whole.
Rather than having a single global strategy for one corporation, companies will let each
operating division set the appropriate type of global strategy best suited to the
division’s markets and industry environment.
 A company such as GE may pursue many different global marketing strategies,
not just one. Each business develops its own, and there may well be different generic
global marketing strategies for different businesses. In this sense, each business on a
worldwide basis. As a result, each operating division, such as GE appliances, GE
capital, GE Plastics, and GE Medical systems, develops and implements its own form
of global strategy. GE capital, which concentrates on financial services, is one of the
largest units of its kind and consists of twenty-eight operating units specializing in
different segments of the financial services market. GE Capital has invested heavily in
Europe, where it became involved with GPA, the large Irish aircraft leasing firm, and
the card finance companies of several European retailers. The company also invested
financing companies in Asia and in Japan specifically, where it acquired loan from
several banks, including Japan’s Long term Credit Bank. Needless to say, the global
marketing strategy of GE capital will have to be quite different from the global
marketing strategy of other GE units, such as GE Plastics.

CREATING GLOBAL BUSINESS UNITS. Many firms have come to realize that a
strong global presence in one given product was becoming strategic requirement.
Since traditional multinational firms, often competing through a multidomestic
strategy, have realized the weakness of their unfocused patterns of global coverage,
they have begun to assemble business units that have a better global focus. Many
firms are striving to changed their business to reflect a more coherent market position,
whereby a business consists of strong units on major markets. To advoid globally
unfocused strategies, international firms have either retrenched to become regional
globalization, or complete globalization.

A strategy of complete globalization is selected by firms that essentially

globalize all of their business units. This pattern is typical of companies such as
General Electric of the United States ( as discussed earlier) and Siemens of Germany.
Such firms end up a dozen or more globally positioned business, each charting its own
global marketing strategy. Selective globalization is adopted by firms that globalize
several business but also exit from others because financial resources may be limited.
Examples of selective globalization include ICI of the United Kingdom, where some
units, such as manmade fibers, polyurethane, and acrylics, were sold off to strengthen
the market positions of other units. Globalization niche strategies are selected by firms
that focus on one or very few businesses worldwide and exit form others because of a
lack of resources. Nokia, the Finnish telecommunications company, employs such
niche strategies. The company exited from computers, paper, and other sectors to
concentrate on cellular phones and telecommunication infrastructure. Nokia eventually
became a global leader in both sectors, beating both Motorola and Ericsson, which had
traditionally been strong in those businesses. Although largely focused on mobile
handsets and mobile infrastructure, the handset business, Nokia Mobile Phones, has
been further subdivided into nine different business units, each with a global mandate
and a narrow segment focus.

In general, companies with a narrow product or business focus that are globally
marketed are considered to perform better than firms with a broad product line.
Because the establishment of strong global marketing positions requires substantial
resources, many firms have begun to adopt the narrow focus model by reorganizing
business no longer viewed as part of the company’s core operations or strategy. On the
other hand, we had also seen firms conjure up irrelevant number 1 marketing positions
by combining different business into newly created and at times artificial categories.
The combining of pharmaceutical and agrochemical companies into life sciences
business is a case in point. Pioneered by Monsanto, many other companies followed
suit and combined several businesses under one corporate umbrella to pursue the
leading position in life sciences. When these market positions failed to yield any
position results, a major trend toward focus emerged and may agrochemical business
were reorganized into separate firms. Syngenta, formed from Novartis and
AstraZeneca agrochemical businesses, is an example.

COMPETITIVE GLOBAL MARKETING STRATEGIES

As firms compete globally for markets, the competitive game changes and different
elements, rather than those characterizing traditional single-market competition,
become the focus. The purpose of this section is to give some background on the
shifting and varied competitive game by highlighting some well-know battles in the
global marketplace. Two types of games are of particular interest to us. First, there are
several heated global marketing duels in which two firms compete with each other
across the entire global chessboard. The second game pits a global company cussed in
depth here for illustrative purposes.

GLOBAL FIRM VERSUS GLOBAL FIRM

One of the longest-running battles in global competition is the flight for market
dominance between Coca-Cola and PepsiCo, the world ‘s largest soft-drink companies.
Traditionally, the two have been relatively close in the U.S market, but Coca-Cola has
long been the leader in international markets. With international markets growing
much more rapidly than the domestic market, the advantage continues to shift in favor
of Coca-Cola. Coca-Cola, with its Coke brand. Outsells Pepsi in most of the United
Kingdom.

The battle for global market share is an ongoing one that erupts simultaneously
on several fronts. One of the most dramatic actions took place in Latin America.
Venezuela was the only market in Latin America where Pepsi led Coke by a
substantial margin(76 percent share versus 13 percent), thanks to its long-standing ties
with the local bottler. In a dramatic play for share, Coca-Cola negotiated with
PepsiCo’s Venezuelan bottler to acquire a controlling interest in that company. The
day after the deal was announced, on August 16, 1996 the Venezuela bottler was
switched to bottling Coke, and Pepsi lost its distribution literally overnight. It took
Pepsi thirty months and a combined investment of more than $500 million to
reestablish itself in the country. Pepsi Co’s other large Latin American bottler,
Argentina-based Baesa, with operations in several Latin American markets, also
suffered when it itself unable to dislodge Coke in Brazil, one of the world’s largest
markets, where Coke leads Pepsi with a five-to-one advantage.

Coca-Cola and PepsiCo are fighting it out in other competitive arenas as well.
In Europe, Coca-Cola consolidated its bottling with a few major bottlers with regional
and international reach. Coca-Cola was able to concentrate its own activitives on brand
building and franchise creation while its bottling partners were running distribution and
local operations. In eastern Europe, where Pepsi traditionally was ahead of Coke,
Coca-Cola was able to change its strategy following the extensive liberalization that
began around 1990.

A final major arena, and potentially the largest prize, is Asia. While its U.S.
market was growing slowly, Coca-Cola believed that the major markets of China,
India, and Indonesia, which together are home to almost half the world’s population,
Coca-Cola would be able to double its business every three years for indefinite future.
Although Coca-Cola and PepsiCo were relatively evenly matched at outset, Coca-Cola
was able to pull ahead PepsiCo in China bay a substantial margin in major cities.
Finally, Coca-cola had left India many years ago when it was forced to leave it control
of its business. On its return in 1993, Coca-cola found PepsiCo already established. In
the race for local dominance, Coca-cola acquired a leading local soft-drink firm, Parle,
fifty-four bottling plants. Coca-cola is rapidly building up its India operation and has
already overtaken PepsiCo in this large market. It is expected to invite another anchor
bottler into India from among its established Asia bottlers.

Many other well-known matchups mirror the soft-drink global marketing wars.
Unilever, a Europe-based firm, and Procter&Gamble of United States clash in many
market, particularly in laundry products. The two firms compete with each other in
most of world market, and action in one market easily spill over into other, causing
observers to describe the competitive action as “The Great Soap Wars”.75

A equally bruising battle is under way between Kodako the United States and Fuji of
Japan. Fuji has successfully entered th U.S market gained about 25% share, which
pressure on Kodak at home. The U.S firm has also had great difficulty expanding in
Japan. Despite efforts by the U.S government, the World Trade Organization has not
found any evidence of unfair practices in the Japannese market on the import of
foreign film.

LOCAL COMPANY VERSUS GLOBAL FIRM

As we have shown, global firms can leverage their experience and market position in
on market for the benefit of another. Consequently, the global firm is often a more
potent competitor for a local company. As many examples show, however, there are
smart local companies that can, sometimes with fewer resources, offer strong
resistance to the encroachment of international firms into their local markets. The beer
market in China, fast becoming the premier beer market by volume, knows many local
and the international competitors. Foreign brewers flock to China in search of the last
frontier and encouraged by the huge potential volumes. Tsingtao, China’s oldest
brewery and one of its strongest brand names, has acquired the interests of
international brewers piling up huge losses in the emerging Chinese market. Foreign
brewers, arriving in China with their own international brand names, often retire the
Chinese adherence to long-time local names and instead revives those local brands,
rather than replacing them with a national brand. Its strategy has allowed Tsingtao to
purchase the interests of foreign-owned brewers. It then works on improving the local
brand or the quality of the beer and does not change the name. the company aims at
reaching a 10 percent share of the China market, a volume large enough to join the
ranks of the top ten brewers worldwide.

Although global firms have superior resources, they often become inflexible after
several successful market entires and tend to stay with standard approaches when
flexibility would be a better approach. In general, the global firms’ strongest local
competitors are those that watch global firms carefully and learn from their moves in
other countries. Some global firms require several years before one of their products is
introduced in all markets. Local competitors in the some markets can take advantage of
the advance notice produced by such time lag to built defenses or launch a preemptive
attack on the same segment.

CONCLUSIONS

Any company engaging in global marketing operation is faced with several very
important strategic decisions. At the outset, a decision need to be make about
committing the company to some level of internationalization. Increasingly, firms find
that the presence of strong global logic demands that global marketing must be pursued
for competitive reasons and that it is often not an optional strategy. Once committed,
the company needs to decide where to go, both in terms of geographic regions and
specific countries.

During the 1990s, a changing competitive environment considerably affected these

choices. In the past, companies have moved from largely domestic or regional firms to
become global. As multidomestic companies, these firms competed in many local
markets and attempted to meet the local market requirements as best they could.
Although many firms still approach their international marketing effort this way, an
increasing number are taking a global view of their marketplace.

The global firm operates differently from the multidomestic or regional company.
Pursuing a global marketing strategy does not necessarily mean that the company is
attempting to standardize all of its marketing programs on a global scale. A global
marketing strategy also does not imply that the company is represented in all world
markets. Rather, a global marketing strategy requires a new way of thinking about
global marketing operations. Global companies are fully aware of their strengths across
as many markets as possible. Consequently, the global company builds its marketing
strategy on the basis of thorough understanding of global logic pressures and enters
any markets dictated by the overall global logic it faces in any given industry.

A global company is also keenly aware of the value of global size and market share. As
a result, several strategic decisions, such as a which markets to enter, becomes subject
to the overall global strategy. Rather than making each markets pay its way separately,
a global firm may aim to break even in some markets if this strategy helps its overall
position by holding back a key competitor. As strategy begins to resemble that of a
global chess game, companies have to develop new skills and learn about new
concepts to survive. Understanding and exploiting the lead market principle will
become more important.

Globalization of many industries to day is a fact. Some companies have no choice but
to be came globalized,one key competitors in their industries are globalized, other
firms must follow. This situation lead to a rethinking of the strategic choices and
inevitably leads to new priorities. Globalization is not simply a new term for something
that has existed all along, it is a new, competitive game requiring companies to adjust
to and learn new ways of doing business. For many companies, survival depends on
how well they learn this new game.

As we have seen in this chapter, globalization has become a multifaceted term

requiring companies to monitor their markets carefully. Globalization mat occur in
several parts of a firm’s business and may require different responses, where it occurs
at the customer, market, industry, or competitor level. As a result, there are many types
of generic global marketing strategies a firm may choose from, moving the
fundamental choice away from whether a global marketing strategy should be pursued
toward which global marketing strategy should be adopted.

In the future, we can expect to see global marketing strategies adopted by firms from
all parts of the world. As markets become increasingly accessible to all firms, the trend
toward globalization will continue. Firms in developing and emerging economies,
which are as affected by the global logic as those based in the developed world, will
begin to concentrate on their own strengths and develop global marketing strategies for
a particular sector. This trend is a key reason why managers in merging markets will
need a global mindset as much as their peers in developed countries.
Global marketing strategies are also becoming an issue for firms not typically
associated with globalization. Smaller firms, although focused, increasingly find
benefits from a global marketing strategy. To make the best of their limited resources,
these firms will likely select niche strategies but pursue global reach in many key
markets. Furthermore, many of the new venture start-ups will join the global game
from the outset as they compete for key markets globally. Such venture firms will
implement global marketing strategies early and by design, in contrast with earlier
international companies such as Nestle, Unilever, and others, which often became
global accidentally rather than as the result of an explicit and intentional strategy.