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Globalisation and Standardization Essay Sample

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Globalisation and Standardization Essay Sample

Introduction

Due to modernization and advancement in technology, most businesses are beginning to explore international markets for better profits and opportunities. In the recent past, trading has become increasingly global in some way because of the need to gather and increase the company’s financial bases. Advancement in technology including communication efficiency and better international relations has contributed to the promotion of the international trade. Competition has however become a great challenge to the success of international trade but most companies are rising to the challenge. To achieve greater investments and better market opportunities in the international market, it is necessary that primary and secondary market research is done to ensure that information regarding the country is achieved.  (Zou, 1997)

For the past 40years, scholars, academicians and practitioners have had various views on Globalisation of markets and standardisation of international marketing. Levitt has written various articles concerning globalisation and his views have been embraced by very many business managers. Various debates have been carried out concerning the adaptation of international marketing strategy. Analysis of Levitt work on globalisation of markets and Zou’s standardisation of international marketing reveals various similarities and also differences.

A look at the two papers shows that both Levitt and Zou acknowledge that there is the emergence of global markets. This is especially for consumer products that are standardized. They concur that this new reality actually benefits from the existing economies of scale in management, marketing, distribution and management. All these ventures translate into reduced prices all over the world.

Both of them concur that technological advancement has played a big role in globalisation move. This has made all things to be like all the rest. This technological advancement trend has made markets to move towards commonality. That gone is the days when companies would sell products that are of lesser versions of the existing advanced products. This is especially in countries that are less developed. In fact they agree that the days are no more when profits abroad, margins and prices of products were higher than that exist locally. Both of them realize that the needs and the desires in the world have been really homogenized. This venture has resulted in global corporation and also Multinational Corporation. (Armstrong, 1977)

These two scholars agree that globalisation has influenced the standardisation of products all over the world. These products include cement, petroleum, chemicals, steel, autos, computers, electronic equipment, transport etc. They agree that globalisation is not just confined to raw materials only or just products that are high tech. Analysis reveals that the two scholars agree that customer’s universal language plays a big role in standardization. This is confirmed by various examples in the real world. They include Pepsi Cola Company that is found in Moscow and Coca Cola in Bahrain. Technology has made communication across the world to be very fast and very cheap.  This has affected the overall preference structure in the world as everything becomes just like the other things. This means that there is great homogenization that is present in the world’s preference structure. (Boote, 1982)

There are however some contrasts between Levitt’s and Zou’s assertions on standardisation of products. For instance Levitt argues that since there is the converging of the international environment, then marketing that is standardized can be used in different places where there are people of different cultures. He argues that due to globalization, everything is getting more like everything else all over the world. He backs up his argument by giving the example of Coca Cola and Pepsi Cola because they are products that are sold everywhere in the world. He argues that these products are embraced by everyone. They are successful products that are sold across the multitudes of ethnic, regional and national communities.

He also gives the example of cigarettes that are American made. He asserts that these cigarettes make global in roads yearly on the territories and markets that were previously occupied of monopolized by the local blends of this product. However he acknowledges that trade barriers exits for these products because then their global reach would even be greater. This gives a good example of homogenization of the world. He asserts that nothing is actually exempt. He argues that the methods that are incorporated min the industrialized world are still applicable in the rest of the world. His argument is that when this happens then the difference in modes of doing business, national tastes and preferences just disappear. (Levitt, 1983)

He says that this commonality of preference leads to the standardisation of commerce, trade, manufacturing and products. This result in the small markets that are nation based to expand and transmogrify. The world competition results in efficiency in distribution, marketing, management and production. Levitt says that powerful world competitors usually incorporate reliability and superior quality in their structures. These competitors just sell to international markets the same kind of products that they sell at the home market. These products just compete on the basis of appropriate value. This also explains why Japanese Companies that deal in various types of products like textiles, carbon fibres, microprocessors, robots motorcycles, cars, farm machinery etc are enjoying enviable success. (Levitt, 1983)

Zou on the other hand argues that standardisation of marketing actually depends on various variables. These variables he says are related to the cultural, social, legal and technological environment. Standardisation of marketing is only commendable where the environment is homogenous in nature. In case all the mentioned variables are heterogeneous in nature, then customized marketing is preferred. Zou asserts that standardized marketing can be hindered if the implementation elements in the environment are restricted. He gives an example of a country like Malaysia that obstructs any use of foreign models in advertisements.

This is a true picture according to Zou that standardisation of marketing is made difficult in an economic environment that is heterogeneous in nature. He says that marketing ventures must take into account the disparities in literacy, education and income levels of the targeted group of customers.  For instance he says that the marketing strategies in Canada are carried out to remind the customers of the available products while that which is carried out in Sweden and it major aim is to inform the audience of the available products in the market. On the other hand the marketing strategy like advertisement in Turkey is carried to persuade the target group of customers to purchase the products. (Zou, 1997)

He says that various factors like the stage of life cycle of a product and the competitive environment have to be considered. One of the highest barriers to standardisation of marketing according to Zou is the cultural environment existing in a place. This is because of the differences in traditions, needs, religion and consumption habits. All these when put into consideration make it very difficult to use a marketing approach that is uniform. He concludes adaptation is preferred than standardized marketing in the case where there are great cultural differences.

Concerning the issue of cultural differences and standardization, Levitt says that they are vestiges of the past. That national tastes and standards are actually inheritances that slowly and gradually die. He says that others just expand and prosper into the global preferences in the mainstream. He gives example of ethnic markets that have experienced this. For instance western and country music, Chinese food, jazz, pizza and pita bread are everywhere in the world.

These market segments just exist in large segments of the whole world. Levitt says that these market segments confirm the existence of homogenization.

Levitt does not agree with Zou’s views on tailoring marketing strategies to suit a specific environment. In fact he says that the issue of selling products that tailored to meet the needs of each nation is actually thoughtless. He argues that business managers that embraced this concept never put it into practice. (Zou, 1997)

Looking at the work of these two scholars shows some similarities. One of them is that both of them acknowledge that marketing standardisation is increasing with time. This is because of the globalisation move and trend in the world. The two writers agree that communication technologies are changing rapidly and these play a big role in influencing marketing standardization. These technologies include internet advertisements, and satellite TV. This is very evident in China. This is because there has been a dramatic change in the marketing strategies therein. Many media overlaps in the world today push organizations towards a more standardized approach in their marketing ventures. (Zou, 1997)

Levitt also does not agree with Zou (1997) standardisation of international marketing strategy by firms from developing countries. Levitt is widely known as the America’s marketing sage that is leading in this field. He concedes that Zou’s work failed to show the major distinction between brands and products. He argues that the very fact that same product is sold in various nations it does not mean that the product needs to be identical. However these two writers agree that there are two vectors that shape the world. That is globalisation and technology. Even if there is the evolvement and divergence of preferences there is normally the gradual convergence to the formation of markets where the existing economies of scale result in reduced prices and costs.

It is very obvious that these two writers, that is, Levitt (1983) the standardisation of markets and Zou et al (1997) Standardisation of international marketing by firms from developing country acknowledge standardisation of products. They also agree that globalisation has tremendous effects on standardisation of products. Globalisation continues to expand all over the world as communication technological advancement continues to improve day after day.  (Levitt, 1983)

Conclusion

Levitt’s work-(1983) The Globalisation of markets and Zou et al (1997) Standardisation of international marketing strategy by firms from developing countries has got various similarities and differences. The two writers greatly agree on the aspect of globalisation in the world today. They agree that globalisation actually affect market standardization. Technological advancement in the world is acknowledged by both of them and its effect on product standardization. The two writers however have differences in relation to standardization. Levitt argues that since there is the converging of the international environment, then marketing that is standardized can be used in different places where there are people of different cultures. Zou et al on the other hand argues that standardisation of marketing actually depends on various variables. These variables he says are related to the cultural, social, legal and technological environment. Standardisation of marketing is only commendable where the environment is homogenous in nature. Where the environment is heterogeneous, standardisation of marketing is hard to implement. Whatever the assertions, each writer’s views are worth respect.

Reference:

Akaah, I. (1991): Strategy standardisation in international marketing; – an empirical investigation of its degree of use and correlates; – Journal of Global Marketing; Vol. 4 No.2. pp 39-62

Armstrong, J. (1977): Estimating non response bias in mail Surveys; – Journal of Marketing Research, Vol. 14 No. August; pp396-402

Baalbaki, K. (1993): Marketing management bases for international market segmentation, an alternate look at the standardization; customization debate;- International Marketing Review;- Vol. 10 No.1, pp19-44

Boote, S. (1982): Psychographic segmentation in Europe; – Journal of Advertising Research, Vol: 22 pp 19-25

Buzzell, R. (1968): Can you standardize multinational marketing? Harvard Business Review- pp102-13

Cavusgil, S. (1994): Marketing strategy-performance relationship; an investigation of the empirical link in export market ventures; – Journal of Marketing; Vol. 58 ; pp1-21

Cavusgil, S. (1993): Product and promotion adaptation in export venture: an empirical investigation; – Journal of International Business Studies, Vol. 24 No.3; pp 479-505

Chen, I. (2003): Successful strategies of newly industrialized east Asian firms in Europe;- European Journal of Marketing;- Vol. 37 No.1/2; pp 275-97

Chung, H. (2003): International standardisation strategies; the experiences of Australian and New Zealand firms operating in the Greater China markets;- Journal of International Marketing; Vol. 11 No.3; pp 48-82

Levitt, T. (1983): The globalisation of markets; – Harvard Business Review; pp 92-102

Samiee, S. (1992): The influence of global marketing standardisation on performance; Journal of Marketing, Vol. 56 No: April; pp 1-17

Shaw, V. (2000): The successful marketing strategies of German companies in the UK; European Journal of Marketing; – Vol. 34 ; pp 91-106

Shoham, A. (1999): Bounded rationality, planning, standardisation of international strategy and export performance; a structural model examination;- Journal of International Marketing;- Vol. 7; No.2; pp 24-50

Sorenson, R. (1975): To what extent should a consumer goods multinational corporation vary its marketing from country to country?  Harvard Business Review; – pp 38-54

Zou, M. (1997): International Standardisation Strategies; – the Experience of Australian and New Zealand Firms; New York; Melbourne Press

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