With reference to an organisation of your choice, examine the impact

of globalisation and culture on marketing.

Example answer
Introduction
Globalisation refers to the merging of cultures and the trend towards a
global market for goods and services. Globalisation allows multinational
companies to save production costs by standardising their products and by
making use of huge economies of scale. It also is responsible for increased
competition, exchange of technology and know-how, more jobs available
to people, and lower prices for consumers.

Culture can be defined as shared beliefs and values which provide

guidance for members of society. When expanding to foreign countries,
multinational companies can follow a pan-global marketing strategy,
which involves using the same marketing mix for every country, or they
can use global localisation marketing strategies, where the marketing mix
is tailored to the needs of the consumers.

I will explore the impact of globalisation and culture on the marketing

strategies used by IKEA. The company was founded in a small village in
the south of Sweden in 1943. It has developed into the number one
furniture retailer with outlets in more than 30 countries around the world.
From the very beginning of its existence IKEA has aimed to sell home
furniture at affordable prices and reasonable quality. There have been
many challenges in establishing IKEA as a global furniture brand, which
in some cases were successfully handled, but in others led to IKEA’s
withdrawal from markets.
Overall look at the marketing strategy
The marketing strategy of IKEA is based on a few simple principles which
allow the company to provide low-price, decent quality furniture. IKEA
products are broadly the same all over the world, but differ in some details,
such as colour. The flat-pack of the products reduces waste and thus costs,
and also the packaging is made from environmentally friendly materials.
The do-it-yourself (DIY) products allow the customer to experience joy in
their purchase from day one, but IKEA also provides technical help when
needed, at a cost.

The price of the products appeals to middle-income families, and they can
purchase IKEA products during sales promotions when there are
significant discounts or through credit.

IKEA has established an efficient network of shops and logistics hubs in

the countries where it operates. Shops are usually located in the suburbs of
cities, but in recent years IKEA started establishing pick-up points and
small shops closer to the centre of cities to make it more convenient for
customers.

IKEA promotes its products mainly through advertising on TV,

newspapers and brochures, emphasising its attention to environmental and
ethical issues. The company cooperates with UNICEF and WWF in many
initiatives, which contributes to building a good corporate image.

Impact of globalisation and local culture – application and specific

example
IKEA has used the strategy of global standardisation of its marketing mix
in order to keep production costs low, combined with the local adaptation
of its marketing strategy in order to appeal to customers from different
cultures. While it maintains its Scandinavian origins at heart, displayed
through various features such as the blue and yellow shop buildings
and the traditional Scandinavian dishes on offer at the restaurant, it also
managed to add features that appeal to local customers.

An example of local adaptation of IKEA's marketing strategy is when the

company opened its first shop in Shanghai, China. The building was the
same, with the usual IKEA colours and interior; the customers were
provided with the opportunity to walk through the showrooms and try the
products before they decide to take some home; the warehouse was the
place where products could be found with the specification details. The
presentation of the rooms, though, included mosquito nets, chopsticks on
the tables, water fountains and other features of the Chinese home.

The range of products in the Shanghai shop shows consideration of the

Chinese style of cooking by providing several kinds of meat cleavers and
chopsticks alongside the knives and forks. For Chinese New Year, IKEA
shops in China feature the animal zodiac sign of the coming year on
several products, and also the colour red, which is considered to bring
good fortune. Every brochure for the Chinese market emphasises the
environmentally friendly packaging. Overall, IKEA’s product policy in
China follows the strategy of standardising its products as much as feasible
and customising them as much as needed.

In terms of pricing policy, IKEA in China has been reducing prices for the
Chinese market more than for any other market segment. Sourcing at least
70% of their products from Chinese manufacturers has made it possible to
save on production costs and offer discounts to Chinese customers. This
pricing policy is cost-oriented and is not necessarily dependent on culture.

Some of the IKEA shops in China are located in expensive downtown

districts, which is unusual for IKEA. This is because, at the time when
these stores were established, private cars were rare and the infrastructure
in Chinese cities was underdeveloped. Chinese IKEA stores are open long
hours, due to the Chinese customers’ expectations of opening hours.

Promotion is the element of the marketing mix which is most influenced

by the local culture. IKEA advertises upcoming events and activities in
local newspapers and on TV. The company offers sales promotions for
Chinese New Year, when Chinese customers are keen to buy new things
for their homes. They use local faces in commercials to underline that
what the company offers fits with the Chinese lifestyle.

Example of failure and renewed effort

IKEA was not so successful in Japan when it launched a franchising deal
in 1974, and had to pull out of the market in 1986. It re-entered the
Japanese market in 2001 and opened stores in different parts of Japan. The
reason for the initial failure of IKEA was that local customers perceived
IKEA’s products as lacking durability. Living on an island with scarce
resources, the Japanese have developed a culture of purchasing high-
quality products which can be used for a long time. Prior to re-entering the
Japanese market in 2001 the company conducted extensive research into
the Japanese lifestyle. As a result IKEA selected those product lines that
were suitable for the crammed Japanese homes. Another element in the
success of IKEA in Japan has been the plan to make an entry into internet
sales by offering all store items through a dedicated website.
Conclusion
The way in which IKEA created the blend of its marketing mix shows that,
although globalisation allows for certain standardisation of the 4Ps of
marketing, there is also a need to adjust the marketing mix to the local
culture in order to be successful in a given market. Despite the merging of
cultures due to the process of globalisation, the entry barriers related to
culture still play a big role in determining consumer behaviour. Barriers to
trade and to international exchanges are constantly diminishing, but
cultural differences and perceptions remain an important feature to be
taken into account when localising marketing strategies.

Marks and comments

In the response above the following three concepts have been the focus:
globalisation, culture and strategy. The organisation addressed is IKEA, a
world-famous furniture retailer. The response considers the perspectives
of the company, of society and of consumers in different countries in the
world.

Paper 2, Section C is marked according to the assessment criteria

below:

Important
For a detailed description of each criterion, check the IB Subject Guide, p. 65.

Criterion A: Knowledge and conceptual understanding

 Marks Level descriptor

The work does not reach a standard described by the descriptors below.
0

1 Superficial knowledge of the given concepts is demonstrated. Business

management content is not selected or the content selected is irrelevant.

2 Satisfactory understanding of one or both of the given concepts is

demonstrated. Some business management content selected is relevant.
The relevant content is satisfactorily explained.

3 Good understanding of one or both of the given concepts is demonstrated.

The business management content selected is relevant, though it may not
be sufficient. The relevant content is generally well explained, though the
explanation may lack some depth or breadth.

4 Good understanding of both of the given concepts is demonstrated. The

business management content selected is relevant, sufficient and well
explained.

Marks

The answer will gain 4 marks as it demonstrates a good understanding of

the concepts of globalisation and culture.

Exam Tip
The answer meets the criteria because of:
 • Definitions of the two concepts in the introductory paragraph
• Relating the discussion of the marketing mix strategies to the concepts
throughout the response
• Considering the effects of globalisation on different stakeholders
• Considering the effects of culture on the marketing mix of IKEA

Criterion B: Application

Marks Level descriptor

The work does not reach a standard described by the descriptors below.
0

1 The given concepts and/or any relevant business management content are
connected to the real-world organisation(s), but this connection is
inappropriate or superficial.

2 The given concepts and/or relevant business management content are

connected appropriately to the real-world organisation(s), but this
connection is not developed.

3 The given concepts and relevant business management content are

generally well applied to explain the situation and issues of the real-world
organisation(s), though the explanation may lack some depth or breadth.
Examples are provided.

4 The given concepts and relevant business management content are well
applied to explain the situation and issues of the real-world organisation(s).
Examples are appropriate and illustrative.

Marks
The answer will score a 4 here, as the given concepts have been well
applied to the chosen organisation, and clear examples have been provided
of the features of the marketing mix which are used as global features and
those that are used to address the needs of local customers in China and
Japan.

Exam Tip

• The organisation is a real-world organisation, and some facts about the

company has been provided.
• The globalisation concept has been demonstrated and illustrated
through the discussion of the marketing mix of IKEA which is common
to its many locations.
• The culture concept has been illustrated through the examples of
localisation of the marketing mix for the Chinese and Japanese markets,
e.g. specific promotions and products for each country, and a specific
method of distribution in Japan.

Criterion C: Reasoned arguments

Marks Level descriptor

The work does not reach a standard described by the descriptors below.
0

1 Statements are made but these are superficial.

2 Relevant arguments are made but these are mostly unjustified.

 Marks Level descriptor

3 Relevant arguments are made and these are mostly justified.

4 Relevant, balanced arguments are made and these are well justified.

Marks

The marks will be 3 or 4: the arguments developed in each paragraph are

balanced and discuss both globalisation and culture, supported by specific
examples.

Exam Tip
How the balance has been achieved here:

• Marketing mix elements for IKEA have been discussed in terms of

globalisation and what allows IKEA to have low prices for decent quality
furniture
• Marketing mix elements for the company have been discussed in terms
of adaptation made for different cultures
• Specific examples are provided
• Conclusion underlines the conceptual framework of the answer

Criterion D: Structure
 Marks Level descriptor

The work does not reach a standard described by the descriptors below.
0

1 Two or fewer of the structural elements are present, and few ideas are
clearly organised.

2 Three of the structural elements are present, or most ideas are clearly
organised.

3 Three or four of the structural elements are present, and most ideas are
clearly organised.

4 All of the structural elements are present, and ideas are clearly organised.

Marks

The response will score a 4 as it has all the structural elements required.

Exam Tip

• Introduction: the brief explanations of the two concepts offered in the

initial paragraphs, followed by an introduction of the company
• The presentation of the marketing mix of IKEA in separate paragraphs.
Underlining the elements of the marketing mix (product, price,
promotion, distribution) and building a paragraph around each of them
will help structure your response
 • Discussion of the adaptation of the marketing strategy for specific
markets with examples
• Conclusion which sums up the arguments that despite globalisation and
the convergence of cultures, cultural perceptions are still important for
consumer behaviour.

Criterion E: Individuals and society

Marks Level descriptor

The work does not reach a standard described by the descriptors below.
0

1 One individual or group perspective is considered superficially or

inappropriately.

2 One relevant individual or group perspective is considered appropriately,

or two relevant individual or group perspectives are considered
superficially or inappropriately.

3 At least two relevant individual or group perspectives are considered

appropriately.

4 Balanced consideration is given to relevant individual and group

perspectives.

Marks
The answer will probably score a 3 here as it lacks individual perspective
but has considered two relevant group perspectives: that of the company
and that of the customers.

Exam Tip
• The perspectives of the different stakeholders should be considered in
the response: company, employees, customers, local community,
environment. In the IKEA answer the following stakeholders’
perspectives have been considered: customers, environment, company.
• It is important to determine who the major stakeholders are and to
discuss their perspectives. In the introduction the stakeholders that you
are planning to examine can be stated.

Answer advice
Read all the parts of the answer so that you do not repeat content in any
part

• You do not have to learn definitions to score full marks.

• A definition can be viewed as a really good, detailed explanation.

You need to convince the examiner that what you have written is good
enough to be worth the full marks for each criterion.

• Present one argument per paragraph if possible.

• Remember you will have to link the arguments to the question so do
not invent ideas you cannot back up.
• Use words like ‘Firstly,’ and ‘Secondly,’ to start paragraphs.
 • Leave a line between paragraphs so the arguments are visually
obvious.
• For each paragraph use the structure SEL (State the
argument, Explain it fully and Link to the question).
• If you can still ask ‘Why?’ at certain places in the paragraph, then
you have not fully explained your argument.
• The explanation needs to be detailed and show real understanding of
the concepts and the syllabus and of how those apply to the
organisation in question.
• Focus on the concepts in question and plan your answer in advance
by making notes or a quick mind map of the relationship between
the concepts and the organisation you have in mind.
• Quickly brainstorm and write down phrases/key words/examples to
remind you what you should include in your answer. Later on you
can arrange those in clear and balanced paragraphs.

How to tackle the question

1. Understanding the Q

• What are the key concepts of the question – there are always two
concepts in each question
• Think of the key features of each of the concepts identified
• Think how the concepts relate to a real-world organisation you have
investigated
• You cannot score full marks if you do not provide specific examples
for each of the arguments you are making.

2. Use of tools/techniques/theories
 • Just stating a theory or a business tool is not enough; it has to be
used appropriately. This means that an example (for a certain
company) you give should be analysed or evaluated, using business
theories, tools or techniques.
• You are expected to apply relevant syllabus content in your answer.

3. BM terminology: use appropriately throughout

4. Use of examples: use purposefully and clearly to strengthen the

response

5. Balanced response: use clear ‘for’ and ‘against’ arguments to support a

conclusion; weigh strengths and weaknesses of certain practices; compare
and contrast certain practices, consider the implications of certain practices
on the organisation and/or individuals and society.

6. Judgements: make these clear and well-supported

Advice on timing

• You have about 30-40 minutes to answer.

• On IB answer paper (a bit narrower than normal A4) the average
person with average-sized writing can write nearly 4-5 sides of
paper.
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