Professional Documents
Culture Documents
Introduction
As domestic markets mature, it is becoming more and more fashionable for organizations to seek
growth through opportunities in foreign countries. Faster communication, new technologies and
improved transport links are making international markets more accessible and businesses pursuing a
global position can experience an upsurge in brand awareness and cost effectiveness. Global marketing
is a relatively new concept linked to these developments.
In the main, it is concerned with decisions for integrating or standardizing marketing actions across a
number of geographic markets. This does not rule out any customization of the marketing mix to
individual countries but suggests that organizations should capitalize on similarities between markets to
build competitive advantage.
Compelling cases can be put forward for both a standardization or adaptation approach to international
marketing practice. These arguments are keenly explored, drawing from examples of Coca-Cola's
international marketing programmed to elucidate key points.
Background of Coca-Cola
As the world's largest manufacturer and distributor of non-alcoholic beverages, Coca-Cola is certainly no
stranger to global marketing. Established in the US, Coca-Cola initiated its global expansion in 1919 and
now markets to more than 200 countries worldwide. It is one of the most recognizable brands on the
planet and also owns a large portfolio of other soft drink brands including Schweppes, Oasis, 5 alive, Kea
Oar, Fanta, Lilt, Dr Pepper, Sprite and PowerAde. Despite this, Coca-Cola often struggles to maintain its
market share over its main rival PepsiCo in some overseas markets, particularly Asian countries.
Assignment Sample
Economies of scale/experience
In many industries, companies can reap cost advantages by operating on a global scale and ultimately
improve their all-round competitiveness. Using a centralized structure, a firm can draw economies from
bulk purchase discounts or by sharing functions such as product development, marketing, production
and managerial resources among different markets.
In Coca-Cola's example, economies are gained through the competent running of a large-scale
franchising system for its bottling operations.
Technological viability
In sectors where technological and production processes are homogeneous, extra weight is placed on
standardization of products as a prerequisite for success. As part of its vision that Coke should taste the
same around the world, Coca-Cola has chosen to standardize its product and manufacturing process.
The knock on effects of this are more streamlined procedures and greater cost efficiencies. It is worth
noting Levitt's argument that companies' which opt to produce an assortment of products serving
different customer segments would be unable to survive globalization due to inefficiencies in their
operation.
Assignment Sample
Although the branding and position of Coca-Cola remains consistent worldwide, its execution is based
on what is judged to be best for each local market. This is evident in its 'Live on the Coke Side of Life'
advertisement campaign launched in 2006 where elements of local culture are included. On the product
side, Coke bottles and cans include the target countries native language and are sized to match up to
other beverage bottles or cans in that country. The company also offers a varied product line-up to
capture different consumer tastes, for example, soy drinks for its Asian markets.
Conclusion
In essence, the arguments above reveal that global marketing is not necessarily an all or nothing
proposition. Companies have the freedom to choose from many possibilities on the spectrum from total
standardization through to complete customization. Clearly there are circumstances where
multinationals can gain through increased standardization of products and marketing, especially with
respect to keeping costs down and building brand power.
On the other hand, in conditions where national market differences are more marked, this strategy
would harm the company and its reputation. By making standardization decisions using target market
conditions as its starting point, an organization can ensure that, in the long-term, customers are being
offered what they want.
Although Coca-Cola can seemingly gain a great deal from a standardized agenda, its decision to combine
global and local resources is ultimately more long-standing in a market where national customer
differences are influential.