Global Marketing Management

In the 1970s the market segmentation argument was framed as standardization versus adaptation. In the 1980s it was globalization versus localization and in the 1990s it was global integration versus local responsiveness. The fundamental question was whether the global homogenization of consumer tastes allowed global standardization of the marketing mix. The Internet revolution of the 1990s with its unprecedented global reach added a new twist to the old debate.

Even today, some companies are answering global as the way to go. For example, executive at Twix Cookie bars recently tried out their global campaign with a new global advertising agency, Grey Worldwide. With analysis, perhaps a global campaign does make sense for Twix. But look at the companies that are going in the other direction. Levi’s jeans have faded globally in recent years. Ford has chosen to keep acquired nameplates such as Mazda, Jaguar, and Volvo. And perhaps the most global company of all, Coca-cola is peddling two brands in India – Coke and Thums Up. Coke’s CEO explained at the time, Coke has had to come to terms with a conflicting reality. In many parts of the world, consumers have become pickier more pennywise or a little more nationalistic and they are spending more of their money on local drinks whose flavors are not part of the Coca-Cola lineup.

Part of this trend back toward localization is caused by the new efficiencies of customization made possible by the Internet and increasingly flexible manufacturing processes. Indeed, a good example of the new mass customization is Dell Computer Corporation which maintains no inventory and builds each computer to order. Also crucial has been the apparent rejection of the logic of globalism by trade unionists, environmentalists, and consumers so well demonstrated in Seattle during the World Trade Organization meetings in 2000. While there is a growing body of empirical research illustrating the risks and difficulties of global standardization contrary results also appears in the literature. Finally, prominent among firms’ standardization strategies is Mattel’s recently unsuccessful globalization of blonde Barbie. We correctly predicted in the last edition of this book that a better approach was that of Disney with its more culturally diverse line of Disney Princesses including Mulan (Chinese) and Jasmine (Arabic). Even though Bratz and Disney Princesses won this battle of the new toy soldiers the question is still not completely settled.

Indeed, the debate itself is a wonderful example of the ethno centrism of American managers and academics alike. That is, from the European or even the Japanese perspective markets are by definition international and the special requirements of the huge American market must be considered from the beginning. Only in America can international market requirements be an after thought.

Moreover as the information explosion allows marketers to segment markets ever more finely, it is only the manufacturing or finance managers in companies who argue for standardization for the sake of economies of scale. From the marketing perspective customization is always best. The ideal market segment size, if customer satisfaction is the goal is one. According to one expert, Forward looking proactive firms have the ability and willingness…. To accomplish both tasks [standardization and localization] simultaneously.

We believe things are actually simpler than that. As global markets continue to homogenize and diversify simultaneously the best companies will avoid the trap of focusing on country as the primary segmentation variable. Other segmentation variables are often more important – for example climate, language group, media habits age, or income. The makers of Twix apparently think that media habits (that is, MTV viewer ship) supersede country according to their latest segmentation scheme. At least one industry CEO concurred regarding media based segmentation: With media splintering into smaller and smaller communities of interest, it will become more and more important to reach those audiences wherever [whichever country] they may be. Today, media companies are increasingly delivering their content over a variety of platforms; broadcast – both TV and radio and cable, online and print, big screen video and the newest portable digital media. And advertisers are using the same variety of platforms to reach their desired audience. Finally perhaps few famous Italian brands are the best examples: Bruno Magli shoes, Gucci leather goods and Ferrari cars sell to the highest income segments globally. Indeed, for all three companies their US sales re greater than their Italian sales.

In the 21st century standardization versus adaptation is simply not the right question to ask. Marketers will rightly always argue for the latter. Rather the crucial question facing international marketers is what are the most efficient ways to segment markets Country has been the most obvious segmentation variable particularly for Americans. But as better communication systems continue to dissolve national borders, other dimensions of global markets are growing in salience.