Global is at Ion and Its Impact on Marketing Strategies

8/6/2019 Global is at Ion and Its Impact on Marketing Strategies

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GLOBALIZATION

AND ITS IMPACT ON

MARKETING

STRATEGIES


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LIST OF CONTENT

TITLE PAGE..I

ACKNOWLEDGMENTII

INTERNAL GUIDE CERTIFICATEIII

EXECUTIVE SUMMARY01

OBJECTIVE OF THE STUDY..03

INTRODUCTION..

RESEARCH & METHODOLOGY.

FINDINGS & ANALYSIS

LIMITATION

CONCLUSION.

BIBLIOGRAPHY.


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OBJECTIVES

OBJECTIVE OF STUDY


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The primary objective of this research is to gain a better understanding of the effects of

globalization on firms international marketing cooperation and performance of firms, both in

developed and emerging economies (i.e., the India, and the other countries).

The first two questions of this project are:

1) Does globalization affect firm performance?

2) Is the relationship between global market opportunities and its performance stronger

than the relationship between global market threats and its performance?

By answering these questions, the study indicates the extent to which firms in two different

economic contexts are affected by globalization. It also shows which dimension of globalization

effects tends to have stronger impact on the performance of firms that are located in very

different market environments.

Some Questions arises while studying this topic:-

Up to what extent Globalization is affecting different aspects of our life including culture,

environment and business or marketing.

To study the different strategies used by the companies in this environment.

To study the change in consumer behavior

To study the threats and opportunities globalization is creating.

What steps companies may take to go for globalization?

To study Is globalization useful for business.

SCOPE OF THE STUDY


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The emphasis of this project is on how the degree of cooperation in co marketing alliances

enables firms to manage globalization effects and stay competitive in international markets. As

suggested in past literature, globalization makes alliances an essential part of a firms strategy in

order to stay competitive and to achieve superior performance. To better capture global

opportunities, firms tend to cooperate with other firms to capitalize on and leverage their limited

resources since it is impossible for one firm to do it all and go it alone. Similarly, in order to

cope with increasing global competitive threats, firms are likely to form alliances .Based on the

classical industrial organization perspectivethe market power, firms form alliances to reduce

competition and uncertainty. Through such cooperation, companies gain market power that helps

alleviate competition and improve its competitive position.

Therefore, the next two research questions of this project are:

1) Does globalization affect the degree of cooperation in co-marketing alliances?

2) Do co-marketing alliances influence firms international performance?

Guided by these two broad research questions, a more specific emphasis of this paper is on the

degree of cooperation in international marketing activities of the co-marketing alliances among

firms.

Past literature also suggests that firms from emerging economies usually possess characteristics

which distinguish them from those of developed economies. Therefore, empirical investigations

on the relationships among globalization effects, degree of co-marketing alliances, and

performance of firms from India and other countries, which possess different backgrounds and

characteristics, are undertaken by secondary data approach.


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INTRODUCTION

An Overview


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Globalization has caused dramatic changes to business practices around the world. Companies

such as IBM, Intel, Microsoft, and Philips have started to outsource specialists from various parts

of the world, causing job shifts and changes in companies structures. Alliances among

automakers (e.g., GM-Ford- DaimlerChrysler, Ford-Mazda, and GM-Honda), petroleum

manufacturers (e.g., BP-Mobil, NUPI-Chevron Texaco), and airlines(e.g., star alliances) are

other examples of changes driven by this phenomenon. Therefore, this dissertation investigates

the effects of globalization on business firms with a particular interest on how it affects firms

from both emerging economies (i.e., China, Thailand), and developed economies, (i.e..India and

the U.S).

In this study, globalization refers to the process of increasing social and cultural inter-

connectedness, political interdependence, and economic, financial and market integrations that

are driven by advances in communication and transportation technologies, and trade

liberalization.

.

GLOBALIZATION


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Globalization (or globalization) describes an ongoing process by which regional economies,

societies, and cultures have become integrated through a globe-spanning network of


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communication and trade. The term is sometimes used to refer specifically to the integration of

national economies into the international economy through trade, foreign direct investment,

capital flows, migration, and the spread of technology. However, globalization is usually

recognized as being driven by a combination of economic, technological, socio-cultural,

political, and biological factors. The term can also refer to the transnational circulation of ideas,

languages, or popular culture through acculturation.

People around the globe are more connected to each other than ever before. Information and

money flow more quickly than ever. Goods and services produced in one part of the world are

increasingly available in all parts of the world. International travel is more frequent. International

communication is commonplace. This phenomenon has been titled "globalization."

"The Era of Globalization" is fast becoming the preferred term for describing the current times.

Just as the Depression, the Cold War Era, the Space Age, and the Roaring 20's are used to

describe particular periods of history; globalization describes the political, economic, and

cultural atmosphere of today.

While some people think of globalization as primarily a synonym for global business and trade,

it is much more than that. The same forces that allow businesses to operate as if national borders

did not exist also allow social activists, labor organizers, journalists, academics, and many others

to work on a global stage.

In terms of economics, businesses participate in globalization to increase the international flow

on capital, including foreign investments. This would lead to the economic stability of the nation

and means providing more development such as infrastructures and establishments. Furthermore,

it could create international agreements among different nations, and may lead to more jobopportunities in the nation. This also affects the political aspect, as more projects will be

produced, nationally and locally, and will practically help the nation or country in their stability

and leadership. More opportunities may also mean the boosting of confidence of each individual

to become more productive and effective. Culturally, there will be an increase in the exchange of

information, and multiculturalism will be achieved; having no inferior or superior races. This
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will lead to a boom in travel and tourism, which would totally help locals to promote their

products and profit from their small businesses.

No one doubts that the worlds economy is truly global. Whether its a Fortune 100 company

that sells on six continents or a local concern whose bottom line is affected by the cost of raw

materials that originate across the ocean, every business is tied to the global economy. And

ambitious companies look to become more global by the day.

Nestl has reported massive double-digit growth in its China business. Procter & Gamble has

acknowledged that emerging markets will account for 25 percent more business in a few short

years. India will be a top-five consumer-packaged-goods market by 2010. The average salary in

that country is growing by more than 10 percent a year. Global means growth potential. And the

potential is staggering. By 2030, the world population will have gained nearly 50 percent over

2002, and developing nations will represent 90 percent of the worlds population, up five

percentage points.

EFFECT OF GLOBALIZATION ON DIFFERENT ASPECTS

Globalization is an interesting phenomenon since it is obvious that the world has been going

through this process of change towards increasing economic, financial, social, cultural, political,

market, and environmental interdependence among nations. Virtually, everyone is affected by

this process. Given these changes, globalization brings about a borderless world. Globalizationdrives people to change their ways of living, prompts firms to change their ways of conducting

business, and, spurs nations to establish new national policies. Events transpiring in different

parts of the world now have dramatic consequences to other parts of the world at a faster pace

than anyone could imagine in the past. For example, the Asian financial crisis in 1997 has

severely affected businesses around the world and the outbreak of SARS (Severe Acute


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Respiratory Syndrome) in 2003 has shown how globalization permits the rapid spread of the

disease, which affects many airlines, the hospitality industry, and other businesses around the

globe.

On the positive side, globalization enables firms to outsource and find customers around the

world, e.g., the auto and electronics industries. The globalization of production and operations

benefits firms through the realization of economies of scales and scope. Hence, no one can deny

that globalization has changed the way we conduct business.

Although globalization is a worldwide phenomenon, the extent to which each country is

globalized is not identical. To measure the degree of globalization of each nation, a globalization

index was recently developed by cooperation between Foreign Policy Magazine, AT Kearney

and EDS Company. The index indicates that some small developing countries in emerging

economies such as Singapore and Malaysia were among the top twenty most globalized nations

from 2001 to 2004 with Singapore being ranked as the most globalized nation. Thus, it is clear

that globalization is an important phenomenon, one that cannot be simply ignored, because every

nationregardless of size or level of developmentis globalized and affected by globalization.

With the prevalence of this worldwide phenomenon, it is not surprising that businesses are

inevitably affected.

Throughout this dissertation, the effects of globalization are classified into two broad categories:

1) Global market opportunities

2) Global market threats.

These two major effects are chosen to be investigated here because they are frequently cited in

the past literature as the most apparent and immediate effects of globalization. Global market

opportunities refer to the increases in market potential, trade and investment potential and

resource accessibility. Global market threats refer to the increases in the number and level of

competition and the level of uncertainty.

EFFECT OF GLOBALIZATION ON CONSUMER BEHAVIOR


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Consumer researchers are increasingly exploring and comparing behavior and cognitions in

diverse national environments. New samples of the consumer behavior are formed by the fact

that it drastic changes within the political borders and in the spatial configuration of the sales

markets for consumer goods, which are connected with strong sociological-cultural forces.

Barriers between markets moved away through regional integration, and created larger unified

market entities. Consumers are increasingly exposed to a myriad of diverse influences from

beyond their national borders, because the advances in communications technology are shrinking

distances and forgetting links between markets worldwide. Traditional definitions of the unit of

analysis used in cross cultural research need to be critically re-examined in view of the changing

consumer landscape.

There are different changing dynamics of consumer behavior in the world. In the following a few

are introduced. The first changing dynamic are the massive waves of migration which are taking

place, as consumers from emerging market economies are moving to industrialized economies.

The second one is that consumers are becoming more mobile and travelling more both for

pleasure and business. One of the results of this changing dynamic is that the consumers are

becoming exposed to the products, lifestyles and behavior patterns of consumers in other

countries. There are some reasons, for example that barriers come down (European Union) and

consumers and goods move freely across national boundaries. Firms gradually alter traditional

patterns of behavior, by introducing new products, services and ideas into the global market

place. As a result countries or cultures can no longer be viewed in isolation as a set of separate

entities, characterized by their own distinctive value-systems, traits and customs.

In the 60s and 70s the first studies (cross-cultural consumer research) emerged, which examine

the consumer behavior in the different countries. Studies were primarily descriptive and lacked

any strong conceptual framework to interpret findings and make inferences about observed

similarities' or differences' in behavior in different countries. One wanted to examine whether

similar consumption samples and behavior in similar demographic and sociological-cultural

groups in the different national cultures exist. A number of studies have focused on examining

the universality of consumer models in different countries and cultural contexts. This is one of

the key themes in cross-cultural psychology. Another stream of research focuses on comparing


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similarities and differences in various aspects of consumer attitudes and behaviors such as

values, cognitions and decision making etc., in different cultural contexts or countries.

The key theme of this is the study of cultural values or rather to compare values cross culturally.

Differences in time orientation and use of time across countries or cultures have been another

favorite topic of investigation. A number of studies have focused on identifying global market

segments based on demographic characteristics, such as, global teenagers, women worldwide,

elite consumers, and have compared their attitudes and behavior patterns in different countries.

The changing dynamics of consumption behavior and the increasing complexity of cultural

influences on behavior, together with the limited ability of traditional research designs to capture

this complexity suggest the need to reexamine the design of cross cultural consumer research.

It is necessary to define the unit of analysis. There are different aspects to be attended here. The

first priority is to define the relevant unit of analysis, or cultural group to be studied. Important

point in this context is a high degree of homogeneity in attitudes and behavior among members

of the group. There are two different key criteria to define the unit. First there is the language,

which may be a dialect or main language, and secondly the degree of social interaction and

communication. Modern means of communication enable members located at geographically

dispersed sites to communicate, interact, and establish a strong closely knit community of shared

interest and identity. Besides this it structures the research design in cross-cultural studies. Once

the unit of analysis has been determined along with its cultural context, the next step is to

structure the research design and identity, the nature of the cultural phenomena or influences to

be studied.

The first and most common type of study involves a static comparison of cultic-units located at

different geographic sites and within different macro or micro-cultures. Another type of study

involves examination of the impact of exposure to direct and indirect influences from other

cultures on behavior patterns of a given group. A third type of study examines how attitudes,

interest and behavior patterns change with movement from one macro-culture to another. In such

studies, the local point is to examine the ethnic core of the culture, and in some instances, its

variation across sites. Different aspects of the ethnic core and its relation to behavior as

consumers can be examined, including, for example, its core values and beliefs, the artifacts and


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symbols of the culture, and their impact on consumption, and desired product benefits, or

ritualistic behavior.

While multi-site studies focus on the ethnic core of the cultic- unit, and its influence on attitudes,

preferences and consumption behavior, the second type of study focuses explicitly on examining

the impact of external cultural influences on the culti- unit or individual members. These are

influences which come from other macro-cultures or originate from a cultural context other than

the one in which their culti-unit is embedded. There are direct and indirect influences. Direct

influences will arise when an individual travels to or lives for a period of time in another cultural

context or macro-culture. Indirect influences, on the other hand, arise from passive exposure to

media, information, visual images, or other stimuli generated by organizations from other ma

cro-cultures. A third type of study deals with transition from one macro-culture to another. This

occurs when an individual moves from one macro-cultural context to another, as through

immigration to another country.


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Consumer Behavior in Global markets

The focus is to provide a comprehensive view of consumer behavior in global markets,

especially in relation to the countries of Eastern Europe and the third world.

Consumer behavior is likely to be somewhat different in developing countries since it is largely

influenced by social, political and economic conditions. It provides a framework that can be used

to study consumer behavior in global markets, this framework is applied to examine and

understand consumer behavior in countries of the third World and Eastern Europe. Besides this it

offers generalizations and recommendations to those wishing to market their products/services in

the Third World and Eastern Europe.

Theories/models have played an important role by detailing how various factors influence

consumer behavior. The four stages are termed access, buying behavior, consumption

characteristics, and disposal. A thorough understanding of each stage is essential for the global

marketer since the overall effectiveness of the marketing function is contingent on all four stages

being facilitated within any culture. First there are short definitions of each stage:

(1) Access

The first step in global marketing is to provide access to the product/service for consumers

within a culture. Access pertains both to physical access as well as to economic access.

(2) Buying Behavior

This stage encompasses all factors impacting on decision making and choice within a culture.

Examples of these factors include perceptions, attitudes, and consumer responses such as brand

loyalty.

(3) Consumption characteristics

The specific products/services that are purchased and consumed may be different in each culture.

The cultural orientation (traditional versus modern) and social class distribution, among other

factors, will determine consumption patterns within a culture.


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(4) Disposal

Most countries, including the developing countries, are becoming more environmentally

conscious and moving away from throw-away products. Hence marketers need to design systems

to facilitate the safe disposal, recycling, resale or manufacturing of products. They must also

meet their social responsibilities in other countries, especially in relation to public safety and

environmental pollution.

First, since the four stages are universally applicable, the paradigm offers a general framework to

understand consumer behaviour within any global market. Second, in order to understand the

broadest possible range of consumer behavior within any culture, the paradigm encompasses all

aspects of purchase and consumption within a simple framework. Third, the four stages of the

paradigm are arranged in a hierarchical fashion from the consumers' viewpoint. And fourth the

consistent with the concept of business process reengineering, which encourages business to

improve corporate performance by using a cross- functional perspective.

The practical application of consumer behavior findings in international markets has often posed

a problem for marketers for two reasons. First, most consumer research in international markets

has used a piecemeal approach. Second, there has been no comprehensive framework to integrate

the findings in a meaningful manner.


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GLOBALIZATION AND MARKETING CO-OPERATION

GENERAL BRAND STRATEGIES

Brand strategy is aimed at influencing people perception of a brand in such a way that they are

persuaded to act in a certain manner, e.g. buy and use the products and services offered by the

brand, purchase these at higher price points, donate to a cause.

A global brand needs to provide relevant meaning and experience to people across multiple

societies. To do so, the brand strategy needs to be devised that takes account of the brands own

capabilities and competencies, the strategies of competing brands, and the outlook of consumers

(including business decision makers) which has been largely formed by experiences in their

respective societies. There are four broad brand strategy areas that can be employed.

(1) Brand Domain- Brand domain specialists are experts in one or more of the brand domain

aspects (products/services, media, distribution, solutions). A brand domain specialist tries to pre-

empt or even dictate particular domain developments. This requires an intimate knowledge, not

only of the technologies shaping the brand domain, but also of pertinent consumer behavior andneeds. The lifeblood of a brand domain specialist is innovation and creative use of its resources.

A brand domain specialist is like a cheetah in the Serengeti preying on impala and gazelle.

The cheetah is a specialist hunter with superior speed to chase, and the claws and teeth to kill

these animals. The cheetah is also very familiar with the habits of its prey.

(2) Brand Reputation- Brand reputation specialists use or develop specific traits of their brands tosupport their authenticity, credibility or reliability over and above competitors. A brand

reputation specialist needs to have some kind of history, legacy or mythology. It also needs to be

able to narrate these in a convincing manner, and be able to live up to the resulting reputation. A

brand reputation specialist has to have a very good understanding of which stories will convince

consumers that the brand is in some way superior. A brand reputation specialist is like a horse.


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(3) Brand Affinity- Brand affinity specialists bond with consumers based on one or more of a

range of affinity aspects. A brand affinity specialist needs to outperform competition in terms of

building relationships with consumers. This means that a brand affinity specialist needs to have a

distinct appeal to consumers, be able to communicate with them affectively, and provide an

experience that reinforces the bonding process. A brand affinity specialist is like a pet dog.

(4) Brand Recognition- Brand recognition specialists distinguish themselves from competition by

raising their profiles among consumers. The brand recognition specialist either convinces

consumers that it is somehow different from competition, as is the case for niche brands, or rises

above the melee by becoming more well known among consumers than competition. The latter is

particularly important in categories where brands have few distinguishing features in the minds

of consumers.

IMPACT ON BRAND STRATEGIES

The factors discussed above each have their own specific impact on the four general brand

strategies and their strategy sub-types. Due to the limitations of its format, this paper focuses on

factors that influence the four general strategies only. We also limit the discussion to one global

branding issue that has attracted a lot of attention among practitioners in recent years, namely

brand harmonization or standardization. This is not say that the factors discussed above do not

also have a profound effect on other global branding issues such as global brand extensions,

rationalizing a global brand portfolio, global brand architecture and co-branding global brands.


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THE GLOBALIZATION OF MARKETING

Since at least 10 years you hear a lot about Globalization, about the shrinking physical and

mental distances between countries.

There are probably four different marketing constituents that need to be considered if one

analyzes the extent of the globalization of marketing: The Consumer, Brands, the community of

Marketers, and the academic field of marketing.

The Consumer There is no doubt that todays consumers are much more globally oriented

than ever before. The internet makes physical boundaries seem obsolete, the exchange of ideas

and communication appear more borderless. But, but most consumers, especially in the US, still

spend most of their discretionary income on US brands, on products and goods that are sold

(definitely not manufactured) in the United States. There is only a very limited global sourcing

and purchasing behavior of consumers. This is very different from businesses which are getting

used to buy goods and services from anywhere. Still, the US consumer is used to shop non US

brands, and thinks more and more beyond physical country boundaries but there are only a few

(very rich) truly global consumers.

Brands The number of truly global brands (e.g. Apple, Nokia, Hugo Boss) have increased over

the last decade. One just needs to look at Toyota and their increasing leadership in the

automotive industry on a global level. One can imagine that the world of brands morph into two

extremes, of very global and very local brands. Brands will have to decide if they want to focus

primarily on their local or their local identity.

Marketers Its still pretty rare to find really global marketers in the CMOs position of Fortune

2,000 Firms. Its much more common for CEOs to have the global work experience with stints

on multiple continents. CMOs still seem to follow the old rule of originating from a brands

motherland. While this is partly understandable (you first need to understand the consumers

mindset of the brands mother or fatherland), CMOs need to become much more global players.

Unfortunately there does not seem to be a growing community of global marketers, not even

within the big marketing services firms, that actively promote the global CMO.


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Academics The biggest lack of globalization resides within the academic community. Most US

marketing academics are too busy enough in reinforcing their own US superiority while non US

academics dont like to rely heavily on the US marketing leadership. Just recently I asked US

academics about their favorite non US marketing personality or stimulating book. I did the same

with some of their European counterparts and inquired about their favorite US marketing

academic or book. In both cases I only received blank stares and uncomfortable silence.

This brief assessment of the globalization degree along the key marketing constituents shows

that leading brands behave and think much more global than the practicing or the academic

oriented marketer. We Marketers have to be careful that we dont fall further back but instead

keep up with the speed of globalization. Currently its more driven by brands and opinion

leading consumers instead of a community of global marketers.


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FORCES OF GLOBALIZATION

Why Go Global?

The playing field is wide open for small business. Heres why both men and

women should consider going global:

Increase sales.

Generate economies of scale in production.

Raise profitability.

Insulate seasonal domestic sales by finding new foreign markets.

Create jobs, productivity growth and wealth.

Encourage the exchange of views, ideas and information.

Small business in particular can take a mentoring role in educating other men and women in

going global. They can establish educational programs, conferences and other activities to

advance their colleagues, and in doing so, promote professional growth and leadership among all

small business owners. The best is truly yet to come.

What Does It Take To Go Global?

Any small business owner must be adaptable, strategic and willing to take calculated risks. But

becoming a successful global small business requires the following commitments:

Be comfortable with change. Welcome new experiences; and learn as much as possible about the culture in which you

are interested in doing business.

Be willing to take risks, even though it may create short term challenges.

Push yourself to continuously innovate.


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DIFFERENT MARKET ENTRY STRATEGIES

1. Exporting

Exporting, the most traditional mode of entering the foreign market is quite a common one even

now. International trade has been growing much faster than the world output resulting in greater

world economic integration. Exporting is the appropriate strategy when one of more of the

following conditions prevails.

1. The volume of foreign business is not large enough to justify production in the foreign market.

2. Cost of production in the foreign market is high.

3. The foreign market is characterized by production bottlenecks like infrastructural problems,

problems with materials supplies etc.

4. There are political or other risks of investment in the foreign country.

Exporting is more attractive than other modes particularly when underutilized capacity exists.

Even when there is no excess capacity, expansion of the existing facility may sometimes be

easier and less costly than setting up production facilities abroad. Further, many governments, as

in India, provide incentives for establishing facilities for export production. The alternatives to

making in foreign countries by the international marketer for marketing the goods in the foreign

countries are licensing and contract manufacturing. Although these have certain advantages,

there are also certain risks. Hence, if a company does not want to go in for licensing or contract

manufacturing, the only avenue open is exporting.

2. Licensing and Franchising

Licensing and Franchising, which involve minimal commitment of resources and effort on the

part of the International marketer, are easy ways of entering the foreign markets. Under


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International licensing, a firm in one country (the licensor) permits a firm in another country (the

licensee) to use its intellectual property (such as patents, trademarks, copyrights, technology, and

technical know-how, marketing skill or some other specific skill). The monetary benefit to the

licensor is the royalty or fees which licensee pays. In many countries, such fees or royalties are

regulated by the government; it does not exceed five per cent of the sales in many developing

countries.

A licensing agreement may also be one of cross licensing, wherein there is a mutual exchange of

knowledge and/or patents. In cross licensing, a cash payment mayor may not be involved.

Franchising is a form of licensing in which a parent company (the franchiser) grants another

independent entity (the franchisee) the right to do business in a prescribed manner. This right can

take the form of selling the Franchisers products, using its name, production and marketing

techniques, or general business approach. One of the common forms of franchising involves the

franchisor supplying an important ingredient (part, material etc.,) for the finished product, like

the Coca-Cola supplying the syrup to the bottlers.

3. Contract Manufacturing

Under contract manufacturing, a company doing international marketing contracts with firms in

foreign countries to manufacture or assemble the products while retaining the responsibility of

marketing the product. This is a common practice in international, business.

Contract manufacturing has the following advantages.

1. The company does not have to commit resource for setting up production facilities.

2. It frees the company from the risks of investing in foreign countries.

3. If idle production capacity is readily available in the foreign country, it enables the marketer to

get started immediately.

4. In many cases, the cost of the product obtained by contract manufacturing is lower than if it

were manufactured by their international firm.


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4. Management Contracting

Under the management contract, the firm providing the management know-how may not have

any equity stake in the enterprise being managed. In short, in a management contract the supplier

brings together a package of skills that will provide an integrated service to the client without

incurring the risk and benefit of ownership Thus, as Sir Philip Kotler observes, management

contracting is a low-risk method of getting into a foreign market and it starts yielding income

right from the beginning.

The arrangement is especially attractive if the contracting firm is given an option to purchase,

some shares in the managed company within a stated period. Management contract could,

sometimes, bring in additional benefits for the managing company. It may obtain the business of

exporting or selling otherwise of the products of the managed company or supplying the inputs

required by the managed company.

Management contract enables a firm to commercialize existing know-how that has been built up

with significant investments and frequently the impact of fluctuations in business volumes can be

reduced by making use of experienced personnel who otherwise would have to be laid off.

5. Turnkey Contracts

Turnkey contracts are common in international business in the supply, erection and

commissioning of plants, as in the case of oil refineries, steel mills, cement and fertilizer plants

etc; construction projects and franchising agreements.

A turnkey operation is an agreement by the seller to supply a buyer with a facility fully

equipped and ready to be operated by the buyers personnel, who will be trained by the seller.

The term is sometimes used in fast - food franchising when a franchiser agrees to select a store

site, build the store, equip it, train the franchisee and- employees and sometimes arrange for the

financing.


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6. Wholly Owned Manufacturing Facilities

Companies with long term and substantial interest in the foreign market normally establish fully

owned manufacturing facilities there. As Drucker points out, it is simply not possible to

maintain substantial market standing in an important area unless one has a physical presence as a

producer. A number of factors like trade barriers, differences in the production and other costs,

government policies etc., encourage the establishment of production facilities in the foreign

markets Establishment of manufacturing facilities abroad has several advantages. It provides the

firm with complete control over production and quality. It does not have the risk of developing

potential competitors as in the case of licensing and contract manufacturing.

Wholly owned manufacturing facility has several disadvantages too. In some cases, the cost of

production is high in the foreign market. There may also be problems such as restrictions

regarding the types of technology, non-availability of skilled labor, production bottlenecks due to

infrastructural problems etc. If the market size is small, a separate production unit for the market

may be uneconomical. Foreign investment also entails political risks.

7. Assembly Operations

As Miracle and Albaum point out, a manufacturer who wants many of the advantages that are

associated with overseas manufacturing facilities and yet does not want to go that fat may find it

desirable to establish overseas assembly facilities in selected markets. In a sense the

establishment. of an assembly operation represents a cross between exporting and overseas

manufacturing.

Having assembly facilities in foreign markets is very ideal when there are economies of scale in

he manufacture of parts and components and when assembly operations are labour intensive, and

labour is cheap in the foreign country. It may be noted that a number of U.S. manufacturers ship

the parts and components to the developing countries, get the product assembled there and bring

it back home. The U.S. tariff law also encourages this. Thus, even products meant to be marketed

domestically are assembled abroad.


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8. Joint Ventures

Joint venture is a very common strategy of entering the foreign market. In the widest sense, any

form of association which implies collaboration for more than a transitory period is a joint

venture (pure trading operations are not included in this concept). Such a broad definition

encompasses many diverse types of joint overseas operations, viz,

1. Sharing of ownership and management in an enterprise.

2. Licensing/franchising agreements.

3. Contract manufacturing.

4. Management contracts.

Three of the above have already been discussed in the preceding sections. The following

paragraphs are confined to the first category referred to above, i.e. joint ownership ventures.

What is often meant by the term joint venture is joint ownership venture.

The essential feature of a joint ownership venture is that the ownership and management are

shared between a foreign firm and a local firm. In some cases there are more than two parties

involved.

A joint ownership venture may be brought about by a foreign investor buying an interest in a

local company, a local firm acquiring an interest in an existing foreign firm or by both the

foreign and local entrepreneurs jointly forming a new enterprise.

9. Third Country Location

Third country location is sometimes used as an entry strategy. When there are no commercial

transactions between two nations because of political reasons or when direct transactions

between two nations are difficult due to political reasons or the like, a firm in one of these

nations which wants to enter the other market will have to operate from a third country base. For

example, Taiwanese entrepreneurs found it easy to enter Peoples Republic of China through

bases in Hong Kong. Third country location may also be helpful to take advantage of toe friendly


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trade relations between the third country and the foreign market concerned. Thus, for example,

Rank Xerox found it convenient to enter the erstwhile USSR through its Indian joint venture

Modi Xerox. There are several cases of countries not having direct commercial transactions. For

example, it was true of Israel and Arab Countries. In the past, government of India did not permit

trade with South Africa and Mauritius.

10. Mergers and Acquisitions

Mergers and acquisitions (M & A) have been a very important market entry strategy as well as

expansion strategy. A number of Indian companies have also used this entry strategy. Mergers

and acquisitions have certain specific advantages: It provides instant access to markets and

distribution network. As one of the most difficult areas in international marketing is the

distribution, this is often a very important consideration for M & A. Another important objective

of M and A is to obtain access to new technology or a patent right. M and A also has the

advantage of reducing the competition. Mergers and acquisitions may also give rise to some

problems which arise mostly because of the deficiencies of the evaluation of the case for

acquisition. Sometimes the cost of acquisition may be unrealistically high. Further, when a

enterprise is taken over, air its problems are also acquired with it. The success of the enterprise

will naturally depend on the success in solving the problems.

11. Strategic Alliance

Strategic alliance has been becoming more and more popular ininternational business. Also

known by such names as entente and coalition, this strategy seeks to enhance the long term

competitive advantage of the firm by forming alliance with its competitors, existing or potential

in critical areas, instead of competing with each other. The goals are to leverage critical

capabilities, increase the flow of innovation and increase flexibility in responding to market and

technological changes.

Strategic alliance is also sometimes used as a market entry strategy. For example, a firm may

enter a foreign market by forming an alliance with a firm in the foreign market for marketing or


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distributing the formers products. A U.S. pharmaceutical firm may use the sales promotion and

distribution infrastructure of a Japanese pharmaceutical firm to sell its products in Japan. In

return, the Japanese firm can use the same strategy for the sale of its products in the U.S. market.

Strategic alliance, more than an entry strategy, is a competitive strategy.

There are different types of alliances according to purpose or structure. Based on the description

of the generic forms of coalitions by Michael Porter and Mark Fuller, Magsaysay classifies

alliances according to purpose as follows.

1. Technology development alliances like research consortia, simultaneous engineering

agreements, licensing or joint development agreements.

2. Marketing, sales and service alliances in which a company makes use of the marketing

infrastructure etc., of another company, in the foreign market, for its products. This may help

easy penetration of the foreign market and preemption of potential competitors.

3. Multiple activity alliance which involves the combining of two or more types of alliances.

While marketing alliances are often single country alliances, as international firms take on

different allies in each country, technology development and operations alliances are usually

multi-country since these kinds of activities can be employed over several countries.

4. Multiple activity alliance involves the combining of two or more types of alliances. While

marketing alliances are often single country alliances, as international firms take on different

allies in each country, technology development and operations alliances are usually multi-

country since these kinds of activities can be employed over several countries.

12. Countertrade

Although the major reason for the substantial growth of counter trade is its use as a strategy to

increase exports, particularly by the developing countries, countertrade has been successfully

used by a number of companies as an entry strategy.

For example, Pepsi Co, gained entry to the USSR by employing this strategy. Countertrade is a

form of international trade in which certain export and import transactions are directly linked


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with each other and in which import of goods are paid for by export of goods, instead of money

payments. In the modern economies, most transactions involve monetary payments and receipts,

either immediate or deferred. As against this, countertrade refers to a variety of unconventional

international trade practices which link exchange of goods - directly or indirectly - in an attempt

to dispense with currency transactions.

10 STEPS FOR GOING GLOBAL

As with any sound business plan, the first step is doing your homework. Here are ten action steps

for taking on the world:

1. Conduct market research to identify your prime target markets.

2. Search out the data you need to predict how your product will sell in a specific

geographic location.

3. Update your database rigorously with a view to focusing more closely on those products

or services which are in demand and dropping those which are not.

4. Articulate your business plan for accessing global markets.

5. Get companywide commitment.

6. Build a web site and implement your international plan sensibly.

7. Factor in a two year lead time for world market penetration.

8. Make personal contact with your new targets armed with culture specific information and

courtesies, professionalism and consistency.

9. Value the relationship more than the deal; the individual is more important than closing

the deal under discussion.

10. Welcome the unknown.


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GLOBAL MARKET OPPORTUNITIES AND FIRM PERFORMANCE

Global market opportunities can be defined as increases in market potential, trade and investment

potential and resource accessibility resulting from globalization. Developments in information

technology, removal of trade and investment barriers, privatization, and deregulation of trade and

investment policies have provided firms seeking international markets with tremendous

opportunities. Such changes in the business environment enable firms to not only access new

markets but also lower costs by relocating their operations and exploiting cheap resources around

the world. Firms can outsource their production in various locations to lower their costs. Market

transactions have also become more efficient due to globalization of technology. These new

market opportunities have eventually fostered rapid growth in various economic sectors in many

regions around the world (Graham, 1996). A large volume of cross-border flows of trade,

investment, and technology during the 1990s and early 2000s is excellent evidence of increasing

opportunities driven by globalization.

As discussed earlier, globalization increases market potential, trade and investment potential and

resource accessibility of firms. It has become easier for firms to outsource their production to

different locations to gain benefits from location advantage since less trade and investment

barriers are present in todays global marketplace. Firms are able to reach out and serve many

new untapped markets around the globe. Liberal movements of financial and human capital also

facilitate their business transactions. Moreover, advances in communication technology and

information systems also lower search costs and improve efficiency.

Hence, it is clear that globalization makes resources necessary for a firms growth and success

more abundant. Given that these opportunities are likely to enhance the firm performance, the

first hypothesis of this study can be stated as:

Firm performance is positively influenced by global market opportunities.


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GLOBALMARKETTHREATSANDFIRMPERFORMANCE

Global market threats can be further categorized into 1) global competitive threats and 2) global

market uncertainty. Global competitive threats are defined as the intensified competition in

global markets resulting from larger numbers of competitors in the global marketplace. Along

with higher competition, another threat posed by globalization is global market uncertainty,

which refers to the increasing complexity and demand uncertainty in the market. These two types

of global market threats and their hypothesized relationships are discussed in detail in the

following sections.

GLOBALIZATION EFFECTS, CO-MARKETING ALLIANCE AND

PERFORMANCE

Due to the emergence of global market opportunities and global market threats, firms have been

forced to respond quickly to these effects. Unlike other environmental changes, the effects of

globalization are far more pervasiveaffecting every individual, business, industry, and country

The environment surrounding business today is characterized as a hypercompetitive

environmenta faster and more aggressive competitive environment. Major forms of business

restructuring in response to the dramatic changes brought by globalization include, for example,

investments in new technologies, downsizing and reengineering, the formation of strategic

alliances and networks, and a shift from international and multinational to global and

transnational strategies. Among these various forms of business restructuring designed to


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manage globalization effects, alliance formation is considered the most remarkable business

trend of the past decades. Therefore, it is of interest to both academics and practitioners to

explore how alliances help firms achieve superior international marketing performance in the

globalization era.

Since globalization makes alliances an integral part of a firms strategy to better satisfy

customers and to achieve sustainable competitive advantage, the proliferation of alliances in

recent years is not surprising. It has become difficult for firms to stay competitive in this era

without allying with other firms. Moreover, to achieve superior marketing performance in the

present business environment, firms need to manage relationships with partners, customers, and

different parties in the value chain. As a result, there has been an increasing trend towards more

cooperation among firms, both vertically and horizontally. Such inter-firm cooperation is

especially important for firms to compete in the global marketplace. In order for firms to succeed

in international markets, they need cooperate with other firms and or governmental agencie.

Thus, the purpose of this paper is to explore whether globalization affects the degree of

international marketing cooperation of firms participating in co-marketing alliances, a type of

strategic alliance in which partners cooperate in one or more marketing activities. Specifically,

we propose to investigate the influence of globalization effects on the degree of firms

cooperation in co-marketing alliances, and the relationship between such cooperation and the

firms international marketing performance.


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VIEWS OF DIFFERENT COMPANIES

Strategies adopted by Various Companies

How Johnson & Johnson is winning in this environment. Specifically, the shift in economic

activity to developing nations, along with the associated rise of the middle class, which is

projected to significantly increase levels of consumer spending. How Johnson & Johnson is

maintaining its competitive edge in a global environment, citing its recent acquisition of Pfizer

Consumer HealthCare and the geographic expansion of Splenda. The Pfizer acquisition

effectively doubled the size of Johnson & Johnson's OTC market, with 50% of this market

now located outside of the U.S. Furthermore, in only five years since its launch, Splenda is

now distributed in 33 countries worldwide. While the core brand footprint - the look and feel

of the product - is consistent from region to region, Johnson & Johnson tailors the approach

and positioning of Splenda to local markets. The company's global reach and focus on local

market dynamics has enabled it to successfully enter these new markets.

In addition to learning from keynote addresses, ranging from health and wellness to the evolution

of market research.

The "Branding Strategies: The Challenge of Going Global and Staying Local" panel explored

what marketers can do when expanding product lines globally to protect their brands and

improve the chances of successfully launching products.

Rob Warren, Senior Vice President of Global Tequila for Diageo, explains that in taking a brand

global, the core essence of the brand and what it stands for must remain consistent. However, the

way that Diageo brings a brand to life for consumers may be tailored to specific cultures.

Sylvia Lin, Associate Director of Global Oral Care Long Term Innovation for Colgate-

Palmolive, noted that companies should determine how to gain a competitive advantage in a new

market. For example, Colgate-Palmolive conducts extensive research to determine whether


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Colgate toothpaste should be marketed in English or in local languages. "In some instances it

makes sense to leverage the American brand; in others, it simply does not," explains Lin. The

"Health and Wellness: Trends in a Global Marketplace" panel discussed how marketers can react

to and capitalize on health and wellness trends when developing competitive marketing strategy.

Sharon Fox, Director of Marketing of Beverages at Kraft Foods, discussed a holistic health and

wellness trend, explaining that customers "desire balance in mind, body and soul; it is not just

about what they eat, but about overall healthiness." Kraft has developed a Sensible Solution Flag

for over 500 products that meet specific health related criteria, like 100-calorie-packs and Crystal

Light.

Brian Graybill, Director of Marketing of Tostitos, describes how Frito Lay responded to

changing consumer preferences by launching its Flat Earth products, snacks that include half a

serving of fruits or veggies per ounce. He also stressed the importance of engaging children in

healthier food options. However, Mr. Gray noted that lifestyle is more of a challenge than calorie

intake with kids. This led Frito Lay to launch "America on the Move," a program dedicated to

educating children about active, healthy lifestyles.

The Industry believes that while flavor preferences may vary regionally, philosophies and

general trends in health and wellness are global in nature. Companies worldwide are addressing

widespread health problems like heart disease, diabetes, and obesity. Some People dedicated to

the media industry, "Ready to Sweep out Traditional Media?" focused on the impact of new

media such as user-generated media and mobile marketing on consumers' purchasing behaviors.

The panelists also addressed whether they believe new media will soon supplant traditional off

-line media.

Elizabeth Poon, Regional Brand Development Manager for Unilever, believes in the

effectiveness of new media in developing consumer interaction with a brand. Unilever

established consumer interaction with its Dove brand through an online contest for women to

create a 30-second Dove advertisement. The winning video from this popular contest was aired

during the 2007 Oscar broadcast and generated serious industry buzz. According to Ms. Poon,


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"consumers always had power and intent to contribute; only now they have the tools."

Panelists agreed that while newer media has advantages in its accountability and in the

immediacy of results, traditional media still has its place. "It's not a matter of new versus old;

integration is the bottom line."

Some other Industry expert explored the changing landscape of market research. Panelists

discussed how technology, such as online and adaptive surveys, online focuses groups, consumer

auctions, and data mining have affected the field.

Dan Salzman, Global Vice President of Marketing Research in Consumer Healthcare for

Johnson & Johnson, believes that technology has made research faster, cheaper, and allows

companies to answer questions in non-intrusive ways. In addition, the targeted nature of new

technologies allows researchers to "no longer seek to get accurate averages, but tailored solutions

for customers."

Steve Nollau, Partner of Brado Cuneo Nollau, believes that a cost-saving advantage related to

technological advances in marketing research. New technology has enabled companies to test

product concepts at an early stage in the development process, "preventing lots of money from

being spent on bad ideas and promoting investment in viable ones."

Last, the effects of the Internet and globalization on consumers, as they are provided increasing

access to product information, purchase outlets, and overall purchase options. This evolving

landscape presents both challenges and opportunities in consumer loyalty and retention for the

retailer, manufacturer, and marketer.


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HOW GLOBAL BRANDS COMPETE

Consumers in most countries had trouble relating to generic products, so executives instead

strove for global scale on backstage activities such as production while customizing product

features and selling techniques to local tastes. Such "global" strategies now rule marketing.

Global branding has lost more luster recently because transnational companies have been under

siege, with brands like Coca-Cola and Nike becoming lightning rods for anti globalization

protests. The instinctive reaction of most transnational companies has been to try to fly below the

radar. But global brands can't escape notice. In a research project involving 3,300 consumers in

41 countries, the authors found that most people choose one global brand over another because

of differences in the brands' global qualities. Rather than ignore the global characteristics of their

brands, it's critical for firms to manage those characteristics, because future growth for most

companies will likely come from foreign markets. Consumers base preferences on three

dimensions of global brands--quality (signaled by a company's global stature); the cultural myths

that brands author; and firms' efforts to address social problems. The authors also found that it

didn't matter to consumers whether the brands they bought were American--a remarkable finding

considering that the study was conducted when anti-American sentiment in many nations was on

the rise.


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GLOBAL BRANDING V/S LOCAL MARKETING

Day by day, global branding is becoming a bigger challenge. Why? Because it's no longer

possible to isolate a brand and its reputation. Companies might think you've created an excellent

strategy for your brand in one local market, only to realize that the rest of the world has access to

that same local communication. This exposure destroys any possibility of separating your local

branding strategy from your global branding strategy. This unavoidable exposure of companys

local brand-building strategy in the international arena is part of the growing difficulties that

attend global brand building. Related to this complication are the internal issues that arise. For

example, how can corporations handle the local and global mix in their marketing departments?

Is every local marketing department now obsolete? Can local marketing be taken over by a

single department of centralized marketing functions?

Such issues are the result of the speed and spread of communications. The Internet has enabled

every consumer to access every piece of communication in the world. Good old concepts like

running test markets have been dramatically altered because of the increasing proximity among

markets. True separation among markets has disappeared.

When Coca-Cola selected Australia as the test market for the first non-Coca-Cola drink it had

launched in years, most of the world watched the experiment, and almost as many peopleparticipated in the experiment from outside the test market. This might very well have been the

strategy's intention. However, if the objective was to test a new product in a local market, the

strategy clearly failed.

Global communication is more or less forcing brand builders around the world to adjust their

approaches. They're having to forego the strategy that provides local marketing teams with full

autonomy. So, how should we handle the brand challenge?

First of all, the local brand is not dead. But some of the activities that are used to promote it are

now obsolete. I would separate local brand-building activities from global brand-building

activities on the promotional side, as McDonald's has done. Ronald McDonald is the key in-store

promotional figure. Very seldom do you see him on television commercials and, when you do,

you see him publicizing in-store promotions.
http://www.coca-cola.com/http://www.mcdonalds.com/http://www.coca-cola.com/http://www.mcdonalds.com/


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Ronald, very cleverly, has become McDonald's point of differentiation in each market. He

celebrates Christmas in Northern Europe and the Chinese New Year in Hong Kong. He promotes

McDonald's wine in France and McDonald's Filet-o-Fish in Australia. But he never appears in

globally accessible media. McDonald's' global messages come through television commercials.

The corporation produces local adaptations of these, too. But you can see McDonald's local

twists are substantially stronger in the in-store promotions than on television.

The purpose of global brand management is to conceive of and control a brand's global direction,

and this is done by defining and communicating the brand's core values. The execution of this

communication lies in devising and consistently applying a specific style, tone, and image.

The role of local brand management is to refine the communication of the brand's core values by

adjusting their execution to communicate meaningfully with each local market. If a local event

like the Chinese New Year is taking place, it's the local brand-builder's task to ensure the brand

leveraging on it. Local brand building depends on an acute awareness of local trends; it's all

about leveraging knowledge that the international marketing department has no access to or

sympathy with.

The global marketing department is the strategic group. The local team is the tactical group. Both

need to work hand in hand.

Managing Brands in Global Markets: One Size Doesn't Fit All

Global companies need global brands to some extent. But global branding is not an all-or-

nothing proposition. There is a continuum along which firms can decide how global they wish

their brands to be -- with a single global brand at one extreme and an assortment of nothing but

local brands at the other. Global and local brands can be part of a successful marketing mix at

any spot along the continuum. Decisions to use a combination of local and global brands -- whatthe Wharton professors call the "hybrid" approach -- depend on many factors, including

products, industry, local cultures and the nature of the competition.


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There are "various levels of being truly global. It is not always achievable, nor desirable, to go

the full extent. Some form of local adaptation may be necessary, either in the product/service that

is offered or in the positioning relative to competition."

Big Brands, Big Money

Which global brands are most valuable? According to the 2004 Business Week/Interbrand

survey, Coca-Cola tops the list of the 10 most valuable global brands ($67.4 billion), followed by

Microsoft ($65 billion), IBM ($53.8 billion), General Electric ($44.1 billion), Intel ($33.5

billion), Disney ($27.1 billion), McDonald's ($25 billion), Nokia ($24 billion), Toyota ($22.7

billion) and Marlboro ($22.1 billion).

These brands and others share some common features: They have a consistent name that is easy

to pronounce; corporate sales are globally balanced with no dominant market; the essence and

positioning of the brand is the same the world over; they address the same customer needs, or the

same target segment, in every market; and there is great similarity in execution (pricing,

packaging, advertising) across cultures.

What kinds of products do not lend themselves to global brands? Food is one category where,

literally, differences in tastes from culture to culture compel global companies to adapt to local

conditions, according to Day. At the other end of the spectrum is a company like Intel, whose

products and markets make it easier for executives to establish a truly global brand with a

memorable catch-phrase: "Intel inside."

It's much easier for a company like Intel to establish a global brand, Intel has a smaller number

of buyers [than many other global companies] and all of those buyers are using computer chips

for the same purpose. And all of Intel's competitors are global. Intel is a global brand without

significant local adaptation. The same holds true for Disney, which stands for family

entertainment in all cultures.


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Forces against Globalization

One such force is the inherent market differences that can exist from country to country. For

example, KFC, formerly Kentucky Fried Chicken, has 5,000 restaurants in the U.S. and 6,000 in

other countries. It has learned that it cannot open restaurants globally based on its U.S. model. In

Japan, KFC sells tempura crispy strips. In Holland, it features potato-and-onion croquettes. In

China, KFC's chicken gets spicier the farther inland one travels.

Another countervailing force is entrenched local brands. Conditions favoring local over global

brands include unique market needs; low frequency of purchase, so that brand loyalty passes

from one generation to another through family traditions; and the relative unimportance of

advertising, which makes it harder for global companies to change loyalty patterns.

A third force mitigating against global brands is the growing concentration of retail buying

power -- labeled "growing channel power" by the authors -- which can lead to heightened price

sensitivity on the part of the buyer. Wal-Mart's goal to offer low prices every day can constrain

companies wishing to sell their products through Wal-Mart stores.

Finally, criticism of global brands by activists opposed to globalization can also limit global

branding. A 1999 book titled No Logo, by Naomi Klein, alleged that global brands and excessive

corporate power were chief contributors to poverty around the world. Well-known logos of firms

such as Nike, Disney, Shell and McDonald's became symbols of a host of complaints about

globalization. Targeted companies responded by establishing codes of conduct and improving

labor practices, but the anti-globalization movement served notice that high-profile brands

carried risks.

1600 Brands

In a chapter titled "Managing Brands in Global Markets," the authors trace the paths of two

global brands, Unilever and Music Television Networks (MTV). Both companies exhibit the

various challenges faced by global firms to sell their products and services worldwide. The


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experiences of these two firms also show that developing brands for global markets is more

complex and nuanced than Levitt's portrait of an inexorable march toward globalization would

suggest.

In the 1990s, Unilever was struggling under the weight of some 1,600 brands in more than 50

countries. Revenues were lopsided -- 3% of the brands provided 63% of revenues -- and the

company was not growing. In 2002, Unilever launched a program to reduce its number of brands

to 400 "core" brands so that it could concentrate its resources on fewer products. The company

combined branding strategies by placing the 400 in three categories: international brands (such

as Dove and Lipton), regional brands (such as a spread called Flora in the United Kingdom and

Becel in Germany), and local brands with strong positions in single countries (including

Wishbone salad dressing in the United States and Persil detergent in England).

MTV might appear to be the kind of company that could establish the type of uniform global

brand that Levitt envisioned. MTV entered Europe in 1987 with pan-regional programs in

English. Programming was provided to cable operators at no charge, and all revenue came from

advertising. Within a few years, however, things changed. Advertisers called on MTV to offer

local programs, either because they could not afford pan-European coverage, their products were

available only locally, or their products were not uniformly branded in all countries. At the same

time, strong local competitors emerged, such as VIVA in Germany and MCM in France. MTV

responded to the change in climate. Today, MTV Europe (MTVE) has a presence in 41 countries

with multiple languages and formats and nearly 50% local programming.

For one thing, MTV realized that the local advertising sales market was much bigger than the

pan-European market. Moreover, changes in technology allowed separate satellite feeds to each

country. Hence, MTV managed to address local content and advertising concerns, while

simultaneously leveraging its powerful global brand identity -- the anti-establishment voice of

young people.


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EFFECT OF GLOBALIZATION ON INDIAN INDUSTRY

Effects of Globalization on Indian Industry started when the government opened the country's

markets to foreign investments in the early 1990s. Globalization of the Indian Industry took

place in its various sectors such as steel, pharmaceutical, petroleum, chemical, textile, cement,

retail, and BPO.

Globalization means the dismantling of trade barriers between nations and the integration of the

nations economies through financial flow, trade in goods and services, and corporate investments

between nations. Globalization has increased across the world in recent years due to the fast

progress that has been made in the field of technology especially in communications and

transport. The government of India made changes in its economic policy in 1991 by which it

allowed direct foreign investments in the country. As a result of this, globalization of the Indian

Industry took place on a major scale.

The various beneficial effects of globalization in Indian Industry are that it brought in huge

amounts of foreign investments into the industry especially in the BPO, pharmaceutical,

petroleum, and manufacturing industries. As huge amounts of foreign direct investments were

coming to the Indian Industry, they boosted the Indian economy quite significantly. The benefits

of the effects of globalization in the Indian Industry are that many foreign companies set up

industries in India, especially in the pharmaceutical, BPO, petroleum, manufacturing, and

chemical sectors and this helped to provide employment to many people in the country. This

helped reduce the level of unemployment and poverty in the country. Also the benefit of the

Effects of Globalization on Indian Industry are that the foreign companies brought in highly

advanced technology with them and this helped to make the Indian Industry more

technologically advanced.

The various negative Effects of Globalization on Indian Industry are that it increased competition

in the Indian market between the foreign companies and domestic companies. With the foreign


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goods being better than the Indian goods, the consumer preferred to buy the foreign goods. This

reduced the amount of profit of the Indian Industry companies. This happened mainly in the

pharmaceutical, manufacturing, chemical, and steel industries. The negative Effects of

Globalization on Indian Industry are that with the coming of technology the number of labor

required decreased and this resulted in many people being removed from their jobs. This

happened mainly in the pharmaceutical, chemical, manufacturing, and cement industries.

The effects of globalization on Indian Industry have proved to be positive as well as negative.

The government of India must try to make such economic policies with regard to Indian

Industry's Globalization that are beneficial and not harmful

EFFECT OF GLOBALIZATION ON RURAL MARKETING

Rural Agricultural Marketing - Impact of Globalization: Contract Marketing

The macro level changes due to the New Economic Policy have had a direct impact in the field

of agricultural marketing. So the impact of globalization has been highlighted here.

As a result of globalization substantial investments in new ventures are being made by national

as well as international corporations. A number of foreign companies are slated to enter the

Indian market through collaborations with the well known Indian companies like Eagle Agro-

farms, Maxworth Orchards, etc. It is clear that the wholesaler in the fresh products market as

well as the processor will prefer contract marketing tie-ups with the farmers for sourcing his

supply requirements.

The concept of contract farming is not new to India. Several years back, contract marketing was

successfully tried in respect of "Hima peas". 'MARKFED' of Punjab also operated a scheme of

contract marketing for green peas, Agrecotec proposes to setup country-wide retail network of

shops for fresh fruit vegetable marketing. ,Direct marketing to consumer is already being done

by the Mother Dairy through its outlets in Delhi.


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The successful integration of production and marketing under Apni mandi' scheme in Punjab and

the marketing managements of 'FRESH' in Hyderabad are clear signs that contract marketing is

going to be increasingly resorted to in the years to come. Pepsi Foods" also an another example

of contract farming of potatoes and tomatoes. Under this farming farmers will be producing

specific varieties or qualities tailored to meet the requirements of the processor or the fresh

produce market.

The potential benefits of the contract farming are:- producers can reduce the market risk, post

harvest losses can be reduced, technology can be transferred to the producers, contract serve as a

security for increased access to credit by both producers and processors, contract may create a

greater sense of common interest among the producers and induce greater involvement in group

activities etc.

Common problems may be volatility in market price, there is risk that the processors may

manipulate the quality standards, coordination problems may be there regarding delivery of

inputs or produce, processors may lack the competence or capacity to deliver the require

technical assistance, producers may become tied to a contract relationship by virtue of debt,

specialization, or the disappearance of other markets and may be unable to adjust their

production activities to changing conditions etc.

Many of these problems of contract farming will not arise where goodwill and credibility exist

between the farmers and the concerned company.

Major Areas of Concern in the Rural Marketing Sector

1. Government should assume a more dynamic role in the field of agricultural marketing that of a

strong buffer between global forces and local needs.

2. Emphasize value addition by giving a thrust to agro-processing industries at farm level so thatthe benefit of value addition is transferred to the producer.

3. There is a need for professionalizing agricultural marketing as a subject of great practical

application.


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4. Creation of an effective market intelligence network, right from the importer in the global

market to the producer in the remote corner of the rural India.

5. Institutional linkages should be emphasized upon to integrate the markets, for easy movement

of goods and also to facilitate the inter-state trade.

6. Regular surveys and analytical studies on agricultural marketing should be conducted, so that

appropriate policy adjustments and refinements whenever necessary.

7. Decentralization in the marketing system.

8. To introduce social marketing for bringing about a change in the behaviour and attitude

through social advertising and social communication. Some fertilizer companies and commercial

banks are taking up Village Adoption Programme under the social marketing.

9. A design frame work for information technology based Agricultural Marketing Network is

essential. Computer installations at State as well as district marketing boards enhances the

availability of trade information.

10. Economic incentives should be offered to the farmers to encourage them during low

economic conditions.


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RESEARCH

&

METHODOLOGY


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RESEARCH WORK

Research in a common parlance refers to a search for knowledge. Research can also be

defined as scientific and systematic search for pertinent information on the specific topic. So

research means careful investigation on inquiry especially through search for new fact in branch

of knowledge. Research is an academic activity and as such as term should be used in a technical

sense. Research comprises defining and redefining problem, formulation hypothesis or

suggested solution, collection, organizing and evaluating data, make deduction and research

conclusion and careful testing the conclusion to determine whether they fit or not . Research

purpose is to discover answer to question through the procedure of scientific procedure.

Research Design

The study is descriptive and empirical in nature with applied bias.

Descriptive Study:

Descriptive studies are utilized when the researcher attempts to describe the state of affairs

without controlling the variables causing change. This study includes the survey and fact finding

inquires of different kind. The major purpose of descriptive research was description of the state

of affairs that exists in Globalization and its marketing strategies.


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Empirical Studies:

An empirical research relies on experience or observation alone often without due regard for

system and theory. It is the data research coming up with the conclusion which is capable being

verified by observation and experiment.

Analysis Pattern

The nature of the project is of the subjective nature so for the analysis of the available data, the

use various statistical and mathematical and graphical techniques was not required. There were

no additional statistical and technical tool were considered for suitability of the procedure &

problem in order to achieve the desire objective. The study was of the qualitative aspect not the

quantitative. All the data was collected through interviews a secondary data so not tool were used

It has been found that firms from emerging economies usually possess characteristics which

distinguish them from those of developed economies. Therefore, empirical investigations on the

relationships among globalization effects, degree of co-marketing alliances, and performance of

firms from India and other countries, which possess different backgrounds and characteristics,

are undertaken by secondary data approach.

In Secondary data, external research was done through Internet website & published books

were consulted.


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PERFORMANCE OF SOME GLOBALISED FIRMS:-

Local success on a global scale

MC CAINOF CANADA & MC DONALDOF US

Much of the debate about global branding has centered on the question of whether global brands

should attempt to speak with one voice around the world, or whether they should adapt to local

cultures. A popular strategy for many brands has been to globalize logos, brand names and

trademarks, while introducing product variations at the local level. But a few global brands have

gone the extra mile and achieved what must be the best of all possible worldsacceptance as

local brands nearly everywhere they do business. Most of the brands that have achieved

multilocal status have been around for awhile, although the tie-in is not completely obvious.

One modern American brand that has achieved widespread local acceptance overseas isMcDonald's. The American fast food chain has become such a routine part of the landscape in

parts of Asia, for example, that kids may not even be aware of the company's foreign origins. In

the book "Golden Arches East," Emiko Ohnuki-Tierney relates a story of Japanese Boy Scouts

who were surprised, when traveling abroad, to encounter a McDonald's in Chicago (edited by

James L. Watson, Stanford, 1997).

McDonald's began expanding internationally in 1967, twelve years after it began franchising in

the US. By 1996, the restaurant chain was operating restaurants in more than 25 foreign

countries. In contrast to Singer and Philips, however, McDonald's became multi-local in the

absence of trade barriers and at a time when global communications were not practically

instantaneous; nor have McDonald's overseas restaurants operated independently of the home

office.


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Although the restaurant chain has made numerous efforts to localize its menu (it offers, for

example, salads in the US, lamb burgers in India, vegetarian burgers in the Netherlands, teriyaki

burgers in Japan, salmon sandwiches in Norway, frankfurters in Germany, and poached egg

burgers in Uruguay), it did not gain local acceptance

Documents

Global is at Ion and Its Impact on Marketing Strategies