Marketing in Global Diversity
Marketing in Global Diversity
Marketing in Global Diversity
H O W C O U N T R Y D I V E R S I T Y I N F L U E N C E S G L O B A L B U S I N E S S S T R A T EG I E S A N D P R O C E S S E S .
BY
A N T HO N Y O E S W A D I
FALL 2010
CONTENTS
Introduction
Approaches
Glocal approach
Disruptive innovations
Reverse innovations
Conclusion
References
INTRODUCTION
Looking at the current market and economic conditions, we can agree that most
companies need to expand beyond their current local boundaries. Competitions have become
much more intense because not only we have to consider local competitors but also foreign
competitors that could offer same services or products at a much lower price due to cheaper labor
or raw materials. Moreover, the expansion of information technology in the late 2000’s into 2010
has enabled many local small companies to market products around the world. Many companies
have virtual worldwide presents in multiple social networking such as Facebook, Tweeter,
Has the world become flat after all in 2010? An article in New York Times of April 3,
2005 by Thomas L. Friedman brought up the topic of the world is flattening. Nowadays, the
playing field is undergoing a leveling process. These entire phenomena occurred due to easier
access of information communication technology across the world. Do all these expansions in
information technology have anything to do with how countries diversity influences our global
marketing strategies and processes? The answer is a resounding yes. The above factors have
everything to do how we can understand changes in culture and maybe even norms and
regulations.
1
http://www.nytimes.com/2005/04/03/magazine/03DOMINANCE.html
Pre-existing companies’ strategies will be challenged and revamped to maintain competitive
advantages. More risks and threats will arise from both internal and local competitors as well as
foreign competitors. As an example, I will explore a small clothing company that one of my
Aside from Japan, Hong Kong is considered one of the major fashion hubs in Asia.
Additionally, Hong Kong has one of the most diverse cultures. After graduating with a fashion
degree from one of New York top design schools, Ms. Tam worked as one of New York fashion
designer companies. After familiarizing herself with the culture and current fashion market
trends, she recognized that Asia offers a lot more growth potentials in her career. She moved to
Hong Kong in 2008 and worked with another fashion company in Hong Kong to have in depth
Together with her fiancé, Ms. Tam founded a clothing store along with her own clothing
line “Aalis” in September 2009. In addition to the physical store, Aalis has presents in multiple
social networking media. Aalis’ Facebook profile, Twitter, and BlogSpot page were launch
almost at the same time as the grand opening celebration event. Ms. Tam utilizes all of these
social media as marketing channels and brand building strategy. She has been receiving order
requests mainly from friends and colleagues worldwide. As an aspiring Indie clothing designer,
Ms. Tam has been in multiple Hong Kong magazine publications since inceptions. Her store
What is the significant of the short case above and why did I bring it up? The world has
changed, and it will continue to change as information technology evolves. Although Hong Kong
is not one of the emerging markets in general, one of the key factors from the short case above is
to maintain success by understanding and acknowledging target market cultures and behavior
patterns. These actions are crucial to maintaining competitive advantages. Additionally,
marketing channels have been made easier and much more affordable.
Many small shops have taken advantages the channels that social networking media
offered. It is possible to advertise and gain a global present through friends and colleagues. This
is one of the reasons that Facebook has become one of the world most popular networking and
marketing media. We are going to focus on emerging markets and what type of marketing
strategy or approach can be beneficial to gain market presence globally especially in the bottom
What are emerging markets? Searching the phrase emerging market via Google yielded
and political growth such as China, India, and Russia. Additionally, they are also markets with
untapped or under utilized resources such as labors and natural raw materials. Moreover,
emerging markets are considered emerging competitors. On this note, China has been known as
2
http://www.uiowa.edu/ifdebook/faq/faq_docs/emerging_markets.shtml
3
http://en.wikipedia.org/wiki/Emerging_markets
the awakening “Sleeping Dragon”—an international powerhouse that recently open its house to
international market.
Emerging markets are viewed as places ridiculed with high corruptions, insecure
intellectual property rights, and infrastructure inadequacies. Many companies are simply
discounting emerging markets due to overwhelming risks outweigh the potential benefits.
markets. The lack of institutional infrastructures and inefficient logistics are not only among the
few shortcomings of emerging markets but also among their unique factors that shape business
opportunities. The growth in information technology, especially the Internet, has accelerated the
integration of emerging market into the global economic markets. Dealing with emerging
markets is not a race to the bottom. On the contrary, emerging markets are catching up to be the
tailor products and services suitable for specific target segments effectively. Market segments in
emerging markets are differentiated by income, needs, taste, and psychographic characteristics.
Some small percentage of customers in emerging market might prefer high-end products while
majority of people—bottom of the pyramid market segment can only afford the least-expensive
products. Understanding these segments will help global companies tailor their business models
globalization and emerging markets. Li & Fung faced with pressure of the fast growing Internet
business community. These new Internet startup companies were able to compete by buying
many offline companies or acquiring offline companies’ core management teams due to the
constant availability of capital injections from investors. Li & Fung was able to address the lack
of online division by performing semi bubble-in approach of acquiring Castling. Li & Fung
targeted SME (small and medium-sized enterprise) market for its Internet model. Li & Fung
essentially restructured supply chains and intermediation to minimize cost and maximize
As a global export trading company, Li & Fung’s daily operation was very successful due
to direct sales and client managements. However, the growing trend of dot-com companies posed
a serious potential threat to the continuous success of Li & Fung operation. With the availability
of investors to provide constant flow of capital resources, dot-com companies could easily
acquire core management teams from other top companies by offering higher benefits or simply
by buying offline companies. Lifung.com was Li & Fung’s answer to the growing online
business environment. To remain competitive in the online business, Li & Fung took a semi-
APPROACHES
move rapidly towards globalizations, new approaches are needed to comply with current
markets’ preferences. In the early stages of marketing strategy, product oriented approaches were
sufficient. Companies concentrated on producing products, quality of the products, and selling of
the products. However, in global economy, customer relation focus is as important as the product
quality. This approach is part of the contemporary marketing approach. This approach has been
one of the most popular approaches along with social marketing and brand marketing.
In emerging markets, customer focus marketing, social marketing, and brand marketing
play significant roles in the success of a company. As I mentioned earlier, emerging markets lack
many institutions. The existence of structural voids has created complications, and it requires
additional efforts for many companies to accomplish the same goal in emerging markets as
compared to developed markets. Any inadequacy can spread and cultivate mistrusts. Therefore,
customer marketing and brand marketing become extremely crucial to gain success in effective
Recently, glocalization—globalization with local focus approach has been the buzzword
is essentially providing the full-featured quality product tailored to the needs of emerging
markets’ demands. Some customers in emerging markets might look for products with global
quality but with local features and prices. Another group of customers might be happy with local
segment are usually done by disruptive innovations and reverse innovations. Disruptive
machine for doctors in rural India. An EKG machines such as the ones commonly found in most
U.S. hospitals are very expensive and impractical for rural emerging markets population. GE’s
portable EKG machine has the same accuracy, quality, and reliable technology found in its larger
cousins. The small and lightweight EKG machine is easily configurable to meet patients’
completely new product from the beginning in emerging markets and for emerging markets.
Therefore, these products are more in-tuned with their local consumers and more conformed to
the local surroundings. Additionally, marketing approaches for both disruptive and reverse
innovations focus primarily on specific societal benefits and added benefits offers to consumers.
In addition to employing product and brand innovations, companies need to act local and
create lasting brand values in terms of marketing practices to be successful in emerging markets.
Hence, increased stresses on the importance of companies engaging markets at the local level via
thorough understanding of local and regional culture, buying power, and needs. As a goal,
companies will be able to create strong product and brand positioning as clear and attractive as
possible. It is crucial to create a strong link between brand and product value. It is not surprising
that local companies can dominate local segment because of their superior local knowledge and
4
http://ekgmachinenews.com/the-new-mac400-portable-ecgekg-machine-from-general-electric/318/
The rise of mobile technology in emerging markets has become prevalent in the recent
years. Mobile technology has become one of the most successful and dominant value solutions
for reaching rural areas in India and China. The demand of global service level of quality has
reshaped how multinational companies operate to capture the vast consumer potentials especially
in countries with fast growing markets such as Russia, India, and China.
middle class, mobile communications is a substitute for Internet and even television. Many
articles have mentioned that rural farmers in China and India have made mobile phone as part of
their daily necessity for the main source of local news, weather, and other relevant information.
A set of mobile advertising and marketing is an essential element to the long-term growth
in emerging markets. Text-based mobile SMS marketing and community centric approaches
have proved extremely advantageous and successful for companies such as ITC e-Choupal in
India and Bharti Mobile. Moreover, mobile marketing can be considered as a form of reverse
innovations due to its high chance of success in the market of growing middle class customers.
mobile and the Internet will continue to fade away as customers continue to access media and
information through mobile devices. The implication of the disruptive growth of mobile
CONCLUSION
The search for new market is an enduring challenge. The dynamic of global environment
has forced multinational companies (MNC) to innovate both in product and in marketing
positioning. Some MNCs may have underestimated the power and the degree of customer loyalty
of the BOP market. Additionally, the current practices and principle of MNCs might not fit for
emerging markets with respect to advertising, pricing, and distribution strategies or approaches.
These companies will have to be adaptive and have glocalization mentalities—providing high
level of global values with local focus product marketing using all tools available such as reverse
However, there are cases where multinational companies from developed market
operating in emerging markets can also be judged as exploiting the growing bottom-of-the-
pyramid population. Essentially, operating in emerging markets has high risks and rewards. If
done well, the advantage of tapping into the $5 Trillion BOP market segment5 will bring
enormous revenues. Additionally, limited number of competitors and increasing trend of product
consumptions have provided many opportunities for both local and multinational companies.
Therefore, creating strong global brands and lasting product values are extremely essential to the
companies’ financial health. Without a thorough understanding of local people’s needs, desires,
cultures, any marketing approach will have very little chance of success in emerging markets.
5
BOP Market - $5 Trillion: Total by Income Segment. http://www.wri.org/chart/bop-market-5-trillion-
total-income-segment
6
Hollis, Nigel. The Global Brand. 2008
REFERENCES
http://blog.nielsen.com/nielsenwire/global/going-global-means-going-mobile-in-emerging-
markets/
https://www.mckinseyquarterly.com/A_grassroots_approach_to_emerging-
market_consumers_1866
5-trillion-total-income-segment
http://www.nytimes.com/2005/04/03/magazine/03DOMINANCE.html
5. Glocalization. http://en.wikipedia.org/wiki/Glocalisation