The usage of direct mail, the most popular type of direct marketing, varies around the world based on literacy rates, level of acceptance, infrastructure, and culture. In countries with low levels of literacy, a medium that requires reading is not effective. In other countries, the literacy rate may be high, but consumers are unfamiliar with direct mail and suspicious of products they cannot see.
3.3 Global advertisingThe most visible promotional activity is perhaps global advertising. Global advertising can be defined as advertising more or less uniform across many countries, often in media vehicles with global reach. In many cases complete uniformity is unobtainable because of linguistic and regulatory differences between nations or differences in media availability, but, as with products, localized advertising can still be basically global. In contrast, multidomestic advertising is international advertising deliberately adapted to particular markets and audience in message and/or creative execution (W.J. Keggan, 2002).There are several traditional problems facing the decision maker in global advertising. One is how to allocate a given advertising budget among several market countries. The other is the message to use in these various markets. A third is what media to select.But even before tackling these management decisions, the advertiser needs to define the objectives of the advertising in the different countries. And before doing that it is imperative that the decision maker identify what can conceivably be expected from the global advertising effort. Thus, the logical starting point in global advertising management is the assessment of the role of advertising in the country markets and the alternative advertising media (Johansson, J.K., 1997).Despite the drawbacks of standardized and translated messages, global advertising has become an important alternative to adapted multidomestic advertising. The technological advances in global communications, the growth of global media, and the strength of global advertising agencies have combined to make global advertising possible. And the possible spillovers from unified messages and the increasing homogeneity of many markets have made global advertising desirable. As the affluence of countries grows, new products and services appear, and customers need more information. Advertising becomes more important and advertising expenditures as a percentage of the GDP increase. For the global marketer, faced with increasing spending needs in all markets, a coordinated effort with synchronised campaigns, pattern standardization, and unified image across trade regions is usually more effective and cost efficient than multidomestic campaign (W.J. Keggan, 2002).3.4 Global e-marketingE-marketing is a term that can be used to label the potential of information technology and the Internet, and the impact on marketing. E-marketing is perhaps the single most important new development in technology in the entire history of marketing, particularly the ability to leap over distance. In global marketing, strategies and practices reflected the importance of distance. The most important variable impacting trade behaviour is distance. However, the Internet is totally independent of distance. For the first time in history, the world has become a level playing field. Anyone, anywhere in the world can communicate with anyone else in the world in real time with no premium charged for distance. E-mail is major new communication tool that supplements fax and telephone to eliminate the barrier distance. E-mail is a marketing communication tool that offers unprecedented power for one-to-one message for both B2B and B2C communication (Johansson, J.K., 1997).The aim of marketing segmentation has always been to create a unique value offer for as many customers as possible. Before the Internet, this meant, in practice, creating an offer for a segment of the market that was an aggregation of customers. Almost overnight, the World Wide Web has emerged as a powerful new tool for accomplishing what in the past was only theoretical possibility in marketing: creating marketing programs that target a segment as one. Another major thrust of marketing in recent years has been relationship marketing. The Internet has opened up immense new possibilities for creating a relationship with global customers, potential customers, suppliers, and channel members. The end of segmentation means that marketers can now focus on delivering value to the individual customer (W.J. Keggan, 2002).In addition to increasing volatility, the move from an industrial to a post-industrial e-economy also represent the global marketer with a new set of rules. Long established principles, such as the emphasis of retailers in “location, location, location”, are passй. People in such rigid time prefer to buy goods via the Web, instead of spending valuable time fighting traffic to buy these goods somewhere in a town. Looking at the changing business principles forced by the new e-economy, A. Rangaswamy summarized the situation in such way:Table 5. A. Rangaswamy, “Toward a Model of eBusiness Performance”, 1999.From To | ||
Market share | Strategic control | |
Technology as an enabler | Technology as driver | |
Seller-centric market | Buyer-centric markets | |
Physical assets | Knowledge assets | |
Vertical integration based on size | Vertical integration based on speed | |
Decreasing return to scale | Increasing return to scale | |
Firm-centric marketing strategies | Network-centric marketing strategies |
In a similar vein, Andersen Consulting stated that the new economy will force companies to adopt some new game plans. Among the most important follow:
1. Secure a dominant market position as quickly as possible.
2. Form alliances based on their potential for market access and synergies.
3. Anticipate very high start-up investments.
4. Defend positions through an ongoing process of innovations.
3.5 Global pricingPricing globally is much trickier that pricing in the home market. The level of price is often a minor headache compared with problems of currency fluctuations and devaluations, price escalation through tariffs, difficult-to-access credit risks, transfer prices, and price controls - all common issues in global pricing. Many of the problems in global pricing concern host country institutional limitations that constrain strategy. The problem is that of coordinating pricing across countries, to satisfy multinational customers, without imposing a straitjacket on local subsidiaries and illegally fixing prices for independent distributors.The competitive analysis might be as simple as finding out what global and domestic competitors in particular country maker charge for their products and services. These prices tend to set the “reservation” prices in the local market, that is, those limits beyond which firm's product will not be considered and people will avoid buying. The analysis can go further and attempt to isolate the differential advantages that the firm's product might have over these existing offerings, so-called “perceived value" pricing (Johansson, J.K., 1997).When a company operates in several nations, the same product might appear on the market in different countries at widely different prices. A global customer does not usually like to pay different prices for the same product in different parts of the world.3.6 Global ethicsThere is a question about the extent to which the whole of ethics of marketing thinking and practice is accepted. In many newly opened markets, customers are not used to the way of Western marketing, and many can be expected to voice opposition to the unabashed trumpeting of a firm's product. It is not just the hard-hitting advertisements that cause problems; people might find the “everything has a price" mentally abhorrent. Certain promotional activities are likely to become regulated as the free-to-all euphoria in the new countries recedes. It will be important for marketers to correctly read the mood of the populace and to not engage in practices that will stir up negative sentiments. Ethical marketing is likely to be enforces much in some of these countries than it is in the United States (W.J. Keggan, 2002).
