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Faculty Member JIM, Noida
What Globalisation is
Globalisation refers to the intensification of “connectedness” and “interdependence” among people, institutions & nations across the world.
-It is essentially a transitional process, one that is likely to continue & accelerate over the next 3-4 decades. -The size of the global market during this period could increase from around $ 10 trillion to possibly $90 to $130 trillion . An emerging “global” mindset implies no standard
organisational structure or management approach
-Firms will need to globalise their operations through a multilevel coordination of functions & capabilities, integrated across geography & cultures.
Globalisation has created global market segments that can allow for some degree of standardisation in marketing strategy. (e.g. youth market and high-end luxury goods)
International Marketing is complicated- an example
Consider any website featuring silk scarves in bright colours
- You click on it, enlarge the images, choose a particular item, pay for it on-line along with shipping costs - The electronic order is transmitted to Rovieng, a small rural village in Cambodia without electricity or telephone service. - Once order is received, women in the village hand-produce the scarves - Rovieng has Internet access and a village website through an American aid organisation - With solar panels powering desktop computers and a satellite dish linking them to the Internet, Rovieng has joined the global economy.
The complicacy of international marketing task
Foreign Environment Political / legal forces Domestic Environment Economic forces Environmental Country Market - A
Environmental Country Market - B
Political / legal forces
Firm characteristics Price Product
Promotion Channels Research
Environmental Country Market C
Economic climate Geography & infrastructure
Level of technology
Structure of distribution
Controllable Uncontrollable ( Need to realise the impact and how to adapt)
The illusion of homogeneous markets- examples
(New York Times, December 6, 2004)
- Expanded to Indonesia, but failed initially. Why? - Because stores were well lit, well organised and allowed no bargaining over price - Germans dislike store greeters because they are considered personally invasive - Brazilians & Argentines were put-off by Wal-Mart’s lack of familiarity with their preferences for particular cuts of beef
(Wall Street Journal, June 16, 2004)
- Acquired J-phone, 3rd ranked operator in Japan. Was losing subscribers & market share drastically within 2 years. Why? - Emphasised global service & shifting to handsets to a standard design it sold in other markets- designed for voice with few bells & whistles. - Japs used wireless phones more for e-mail, text messages & playing games rather than for voice traffic. - Japanese customers did not travel much & hence least interested in Vodaphone’s global capability
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