Globalization of Marketing and Business Activities in World Markets

Introduction

Globalisation have been the catchphrase and goal for multinational companies to gear their standardised marketing and business activities across worldwide markets. However, in recent years, multinational brands have emphasised the importance of adapting their businesses and marketing strategies to regional circumstances, socio-cultural factors and consumer needs. This concept is widely known as glocalisation.

Within the first part of this essay, we will define the concept of glocalisation and contextualize the concept of globalisation. First, we will discuss how globalisation applies to global and local business and marketing strategies, and how it contributes to the standardisation-adaptation dispute that is prevalent in marketing literature.

Important discussions will be held on the advantages and disadvantages of various strategic approaches to global marketing.

Within the second part of this essay, we will pick and compare two multinational companies in the same sector. Evaluate the degree to which the two firms apply the glocalisation approach to their marketing plan and use the dot plot table to explain the analysis.

We will also compare and evaluate the discrepancies and similarities of the global marketing strategies of both companies. Finally, the global marketing strategies of both firms will be objectively examined by drawing on the first section of the literature review.

The final part of this essay will conclude our findings and analysis of glocalisation and the two multinational companies’ global marketing strategies.

 Literature Review

Robertson (1995) refers glocalisation as specific international advertising and marketing of products and services to suit rapidly diverse local markets and environments. In addition, Lee (2003), Maynard and Tian (2004) define glocalisation as the capability to absorb stimuli from other cultures to fit seamlessly and enrich established cultures, while at the same time leaving unfamiliarity aside as something distinctively unique.

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Kraidy (2001) claims that glocalisation distinguished itself by shifting the normalisation of international context and standards to better match local preferences by juggling between standardisation and adaptation, while globalisation focused solely on standardisation. Glocalisation allows the incorporation of a local perspective of products or services on a global platform. The concept of glocalisation can be seen as a strategic convergence of the international market and local characteristics and expectations that lead to different variations (Foglio and Stanevicius, 2007).

By contrast, globalisation and standardisation as described by De Nuve (2007) and Swyngedouw (1995) is the absorption of local cultural dynamics into universal global trends. Kraidy (2001) differentiate globalisation as being centred on the presence of multinational structures and international standardisation, while glocalisation focuses the specificities and nuances of a global concept. Levitt (1983) claimed in his research that international businesses have begun to concentrate on offering standardised and consistent products and services that customers recognise and accept. An easily identifiable product that is trustworthy would make it easier for the customer to have a positive view of the brand name. Positive word-of-mouth may mean a rise in sales globally.

Within the same article (Levitt, 1983), McDonald’s and Coca-Cola are mentioned as two examples of a globalised company with standardised products, design, packaging and marketing that deeply embed their brand identity into the customer head. Standardised branding enhances brand recognition and clarity, resulting in a favourable view from potential and existing consumers. Branding, thus, is the most important aspect of globalisation, leads international business to concentrate on establishing and showcasing brand identity than their products. According to Jain (1989) and Levitt (1983), standardisation is a merger of cultures with a similar market landscape and customer demand. They claim that international corporations with a global vision in their strategy should develop a standardised marketing strategy for the global market, offering greater business continuity, economies of scale and lower costs due to technological advances and lower trade barriers. Levitt (1983) also argues that successful companies forsake adaptation and concentrate on the aggregate demands of global consumers rather than the particular needs of individual locations. Focusing on standardisation also means having more capacity to enhance the quality of existing products.

As the standardisation of products and services continues to be an effective strategy, international business has been surprised by the segregated response from consumers worldwide. The reaction of consumers to standardised product marketing activities differs between various countries or regions due to a lack of understanding of the socio-economic, cultural and distinctive factors involved. A fast-moving and competitive market proves to be challenging for multinational companies to establish a successful marketing strategy for each specific market environment. Marketers are therefore changing their approach from globalisation to globalisation by identifying the needs and requirements of targeted local consumers and adapting their marketing strategies to local conditions and environments (Dumitrescu and Vinerean, 2010). Czinkota and Ronkaine (1998) describe adaptation as a consideration of all environmental factors of a particular country or region. Vrontis and Tharassou (2007) claim that adaptation enables multinational companies to tailor their marketing strategies and mixed to be in line with the intended consumer demands and distribution channels. Focusing solely on standardisation can expose the vulnerability of companies and lead competitors to gain market share if they glocalise their products or services to fulfill the requirements of a particular market segment.

Landler and Barbaro (2006) presented an example of Walmart’s inability to penetrate and adapt global markets. Performance in the United States retail industry did not translate well into other countries, because the company discovered that individual countries had their own local retail outlets that local consumer favoured and consumer buying patterns. The standardised method used by the company proved to be ineffective in entering international markets. Standardisation also depends heavily on economies of scale, particularly global manufacturing companies, which are restricted by trade barriers in some countries.

Douglas and Wind (1987) explain that adopting standardisation is a common but not an absolute strategy to increase a company’s performance. Standardisation works particularly well for multinational companies for commonly distributed goods or services that, in these situations, will function homogeneously on all markets. However, non-durable products, such as food and cosmetics, are more likely to require adaptation to the consumer climate of each countries or regions. Despite offering goods or services at a certain price point in the country of origin, adapting and production of a lower cost packaging product for less developed countries or regions would open up a new market for the organisation.

Both globalisation and globalisation strategies are reasonable, practical and consistent by emphasising the advantages of a multinational company’s effective use of them. Nonetheless, concentrating entirely on any strategy would be uneconomical and inadequate. As Kitchen (2003) and Soufani et al. (2006) have clarified, success would be more likely if both strategies are used in the marketing strategy. Vrontis and Thrassou (2007) have also advocated for the importance and necessity of standardising some marketing mix components and adapting others to specific business environments. Diversity in some countries does not permit for complete standardisation, yet the higher cost of adaptation may restrict its use (Vrontis, 2005). It is therefore crucial for a multinational company to weigh up the pros and cons of using globalisation and globalisation strategies before implementation. The three aspects of succession in standardisation and adaptation that Nanda and Dickson (2007) emphasise on are the uniformity of the consumer response to the marketing mix, the transferability of competitive advantages and correlations in the level of economic liberty. The capability and flexibility to integrate all strategies and leveraging advantages and minimise uncertainty would be necessary for multinational corporations to succeed in glocalising their products and services to the target market and its consumers.

Analysis of the Marketing Mix of 2 Global Companies

McDonald’s is an American fast food company founded in 1940. The business started out as a hamburger stand, and later transformed the company into a global franchise with the largest restaurant chain by revenue (McDonald’s Is King Of Resaurants In 2017, 2017). The business serves more than 69 million customers every day in more than 100 countries (Chicago Tribune, 2017) through 37,855 outlets (Annual Report, 2018). While McDonald’s is renowned for its burgers, cheeseburgers and French fries, the company is now developing a range of menus to meet customer expectations and adverse reactions related to food health issues (Robbins, 2020). McDonald’s opened its first store in Singapore in 1979 and has been expanding since then.

Aside from offering the regular hamburgers, nuggets and fries that could be found internationally, McDonald’s Singapore also provides exclusive offerings. McDonald’s versatility and willingness to respond to local food influences and modify menus to suit the local taste was one of the company’s key tactics for glocalisation. The company has come up with successful time-limited offerings such as salted egg yolk burger, nasi lemak (a local rice dish) burger, banana soft serve ice cream, etc. (Goh, 2017). Prosperity burger is also reappearing every Chinese New Year along with twister fries in orange and red packaging to add to the festive mood.

Singapore, as an Asian country, is often more fond of cute things. Therefore, McDonald’s has released various limited edition collections over the years like Hello Kitty McSweet Millennium Love 2000 Collection, Hello Kitty Fairy Tales 2013, Minions Despicable Me 2 Happy Meal 2013, LINE Forever Love Special Edition Box 2015 and etc. (Mitsueki, 2015). Some of the launches have met with long queues of Singaporeans eager to get their hands on one.

With more than 120 restaurants in Singapore, McDonald’s has strategically set up its position in different areas to ensure consistent patronage. Almost all tertiary institutions have an outlet that students can visit at any time of the day and the menu prices are lower than outside of campus. Outlets are also frequently located in the heartland and have become popular destinations for local residents, providing easy access to McDonald’s at any location and creating a sense of familiarity (Locate Us – McDonald’s®, 2020). There are also drive-through outlets for customers on the go. Delivery is also a big part of McDonald’s plan to ensure that consumers can eat their food at the comfort of their home or workplace anytime of the day. Delivery may be made via McDonald’s application and 24 hour hotlines, as well as third party applications like Grab or FoodPanda (McDelivery® Singapore, 2020).

McDonald’s has also come up with a range of promotional campaigns to encourage consumers to visit their outlets. In 2019, the company announced 40 days of 1-for-1 offers where consumers were able to download applications on their mobile phones to use the deal (Yeo, 2019). This campaign aims to create a feeling of loyalty to McDonald’s while enabling more download and access to the mobile application.

McDonald’s has also partnered with the Singapore National Olympic Council to organise the Olympic Day Run event in Marina Bay to spread and promote the Olympic values and inspire participants to become involved and also to display support for local Olympic athletes (Be Active – McDonald’s®, 2020). McDonald’s management has also introduced a number of operational and training enhancements through TAFEP to provide older employees with specific skills upgrades (Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP), n.d.). The company also supports older staff to stay involved in mentoring younger employees and to help create a warm and family atmosphere in restaurants. Flexible job opportunities are also offered to older employees and housewives who choose to work closer to home. These helps to establish McDonald’s Singapore as family friendly brand and form closer bonds with Singapore communities.

McDonald’s success among Singaporeans has stood the test of time given the country’s rapid growth and development over the decades, making a great effort to define the Singapore market and make it special to the region through it various marketing strategies. McDonald’s Managing Director Robert Hunghanfoo points out that some of the main market challenges facing McDonald’s are the need to respond to the changing consumer environment, customer demands and preferences which have seen similar trends internationally. He also states that by conducting market analysis and focus groups, the company has gained insight into Singapore’s expectations and can develop their strategies (How McDonald’s keeps winning over Singaporeans, 2016). This glocalisation approach by McDonald’s Singapore aligns with Kitchen (2003) and Soufani et al. (2006) statement that success would be more likely if both strategies are used in the marketing strategy.

Carl’s Jr is an American fast food restaurant chain founded in 1941, which started as a hot dog cart (Carpenter, 2011). The company has a total of 3,664 franchised or business-owned restaurants in 39 countries (Find a Carl’s Jr.® | Carl’s Jr.®, n.d.). Carl’s Jr opened in Singapore for the first time in 2007 with a very warm welcome from Singaporeans. However, shops have been opening up and shutting down over the years. There are actually only 7 stores in Singapore now (Locations | Carl’s Jr. Singapore, n.d.).

Carl’s Jr offers the same menu items as its regional counterpart without selling food exclusive to Singapore. In the absence of exclusive food items, customers may not be as enticed to visit them for their food. In the absence of time-limited food items, consumers are therefore more likely to identify the company’s brand name as generic and unsurprising. As explained in part 1, non-durable products, such as food and cosmetics, are more likely to require adaptation to the consumer climate of each countries or regions.

Many of Carl’s Jr stores are situated in central Singapore where it is filled with many food choices that are direct competitors to Carl’s Jr (Locations | Carl’s Jr. Singapore, n.d.). As a result, customers would have a tougher time and are less likely to visit them frequently as a choice of food. Without setting up outlets in the heartland, it is difficult to develop a sense of community with local residents. Meals are only available in stores with no delivery systems which reduces the number of potential customers.

For several instances, Carl’s Jr does not have promotional strategies to attract consumers and never has collaborated with other organisations for events or celebrations. Many of the company’s advertising materials are identical to their counterparts in the United States. This approach may cause the brand name to feel distant in the eyes and minds of consumers, resulting in less loyalty and dedication to patronising their outlet.

Carl’s Jr Singapore has adapted a more standardise approach in their marketing strategies without exclusive menu catered for Singaporeans and advertising using similar promotion materials globally. And Carl’s Jr is also criticised for its promotional campaigns, which involves skimpily dressed supermodels behaving suggestively with foods that does not resonate well with Singapore audiences. When comparing to McDonald’s Singapore marketing strategy, Carl’s Jr Singapore is definitely lacking the ability to localise to Singapore consumer’s preferences and behaviour.

Conclusion

As seen in Part 2, multinational companies need to adapt their products and services to the local climate of countries or regions instead of standardising their global marketing strategies. Consumer habits that vary on the basis of cultural, socio-economic and political influences are hard to predict. Multinational corporations need to consider these factors and adapt their marketing strategies accordingly, redirect them to a more glocalised approach and provide customers with differentiated products or services that resonate and match their preferences.