Global Marketing vs Domestic Marketing

Marketing is far and wide. Informally or formally, organizations and people engage in various actions that could be called marketing. Marketing deeply influences our everyday lives. Good marketing is the result of careful designing and implementation. Marketing practices are continually being refined and reformed in virtually all industries the chances of success. But marketing excellence is rare and difficult to achieve. Marketing is both a “science” and an “art” – there is stable tension between the creative side and the formulated side of marketing.

Domestic marketing takes place within the boundaries of the nation. In a global industry the strategic ranking of competitors in the leading national or geographic markets are basically influenced by their global status. A global organisation is an organisation that functions in more than one country and captures production, R&D, marketing, logistical and financial advantages in its reputation and costs that are not obtainable to other purely domestic competitors. Research Background In recent times most of the reputed companies are doing the international marketing and entering to the global market.

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And also would like to know the effects of global marketing versus domestic marketing. And how they are effective in the current recession and how it helps to recover the recession. In this global village era it is not possible to concentrate only in the domestic market, and to find out what are the strategies they taken for global marketing. And to find out what are the challenges that domestic retailers face in the global market. Wal-Mart Stores, Inc. one of the leading retailers in the world also ranks as the biggest corporation in the world.

Domestically, Wal-Mart owns more than 1. 2 million employees, making it the country’s largest nongovernmental company. With unique marketing strategies and good management techniques, Wal-Mart was able to function effectively not only in US but also in the international market . Wal-Mart Stores, Inc. was initially founded and established by Sam Walton at Rogers, Arkansas in 1962. The business development of the retail store was significant that within a period of seventeen years, Wal-Mart had topped yearly sales at one billion US dollars.

They have a range of retail formats everywhere as Wal-Mart discount stores (placed in all 50 countries); Wal-Mart Supercenters, which are combined grocery stores and discount outlets (and which make them the country’s leading food retailer); Wal-Mart Neighbourhood Markets, smaller drug and food outlets offering a variety of general merchandise; and Sam’s Clubs, the number two U. S. warehouse membership club chain. The promotion strategies of Wal-Mart include a successful slogan “Low price always”. This is attained through bulk buying and large scale of operation.

Although they have a small profit margin, they are able to retain their cost leadership in the market. International business, which started in 1991, comprise Wal-Mart discount stores in Puerto Rico and Canada; Wal-Mart Supercenters in Brazil, China, Argentina, Germany, , Puerto Rico, Mexico , United Kingdom ,and the South Korea; and Sam’s Clubs in China, Mexico, Brazil, and Puerto Rico. Altogether, over one-quarters of Wal-Mart’s stores are situated outside the United States, and the international operations make more than 18. 5 percent of total revenues. Research Objectives

The prime objective of the research is to critically assess the effectiveness of global markets, and to analyze and understand the difference between global markets and domestic markets. For the evaluation, this research has tried to find out various stages for changing a domestic company into a global company. Literature Review According to S. Carter marketing is defined as the method of constructing lasting relationships through designing, executing and controlling the idea, promotion, pricing, services, distribution of goods, and ideas to produce shared exchange that satisfy organisational and individual requirements and objective.

Strategic marketing is negotiating, initiating, and managing suitable exchange relationships with crucial interest constituencies or groups, in search of sustainable competitive advantage within particular markets, on the strength of long run channel, consumer and other stakeholder franchise . The long held inhabitants of marketing are “focus”,”competitive advantage” and “customer value”. Which means that the organisation have to study the market first then evelop services or products that satisfy customer requirements and wants, build up the “correct” marketing mix and fulfil the objectives as well as providing customer satisfaction on a long-lasting basis. Preoccupation with the planned workings of the marketing mix direct to the neglect of lasting product development, so “Strategic Marketing” was developed. The focus was shifted from understanding the whole thing about the customer, to understanding the customer in a framework which includes the government regulations and policy, competition, and the broader social, political macro, and economic forces that outline the evolution of markets.

For global marketing this means falsifying alliances (relationships) or expanding networks, working intimately with industry competitors and home country government officials and to achieve entry to a target market. Organisations start to expand and run functions in the targeted country or outside countries. The following are the stages to describe the characteristics of companies in the method of developing from domestic to global ventures. There are mainly four stages; Stage one; domestic in focus: – In this stage all activities are focused in the home market.

In fact, many firms can survive like this, for instance raw milk marketing, domestically oriented firms are possibly fated to a long-term failure. Stage two; Home focus, but with exports (ethnocentric): – In this stage the organisations believes only in their home values, but they starts an export division. Stage three: – The stage two companies which recognize that they have to amend their marketing mixes to global operations. The focus changes to multinational (polycentric) and the adaption becomes fundamental.

Stage four: – The global firms which make value by extending programmes and products and concentrate on helping emerging global markets (geocentric). This includes identifying that markets all over the world consist of resemblance and differences and that it is feasible to expand a global strategy on the basis of this resemblance to achieve scale economies, but also responds and recognises to cost effective dissimilarities. The strategies are a mixture of adaptation, extension and creation. Global marketing Global marketing means widening business horizons to encompass the world when canning for opportunity and threat.

The concept of global marketing is gaining significance in last few decades. Changes in various environmental factors especially technology and economy has been responsible for company’s global marketing. Legal and economic factors influencing Global marketing environment Economic environment: – Economic factors like resources size of the economy, policies, economic conditions, per capita income, and demand conditions are all relevant to business. The economic environment has a tremendous impact on global marketing as the most crucial factor determining markets, potential is income.

The competitive front has taken a new shape, with companies facing global competition in the place of local competition. The major factors, which influence the economic environment, are the GNP and GDP, inflation rate, the disposable income, infrastructure capabilities and the cost of energy and its availability etc. Legal environment: – Prevailing legal and a regulatory environment in a market has to be thoroughly analysed by a company before ventures into it. The various factors governing the legal and regulatory environment are the sovereignty of the nation, contractual agreements, dispute settlement procedures, arbitration policies.

Rules regarding patents and trademarks, tax structure, licensing, exit routes and other related issues have a significant impact on the global marketing environment and therefore a company has to deal with these issues carefully. With an increasing number of countries opening up their economy and a large number of firms operating internationally, legal and regulatory issues have become complex. While planning to enter global marketing, following factors are to be considered;

• Capacity: every company which wants to enter into a global market should consider whether it has the market potentiality. They must recheck, whether they are established enough to enter global marketing.
• Marketing mix: A detailed examination of the components of the marketing mix and selecting target markets is essential. It also means adjusting to cultural constraints imposed by uncontrollable elements of the environment.
• Developing specific programme: An analysis has to be made with regard to company’s strengths and weakness and other constraints and specific action programme has to be developed which includes expected profit, sales target and budget.
• Competition: competitive moves are particularly important as a variable in the international market planning because many companies are moving from strong competitive position in the domestic market to foreign market in which they have minor position.
• Control: All marketing plans require coordination and control.

Continuous monitoring and control can increase the success of company’s performance in the global market. Global segmentation It is the method of segmenting the world market into different subsets of consumers who behave in the similar way or have similar requirements. The various forms of the global market segmentation are:

• Geographic segmentation: it is dividing the world into geographic subset. The advantage of geography is proximity.
• Demographic Segmentation: characteristics of the population such as age, gender income, education and occupation are all demographic variables. Many global companies also realise that for products with low price, population is a more important variable than income. The global telecommunication is a critical driving force behind the emergence of this segment.
• Psychographic Segmentation: it involves categorising people in terms of their life styles, attitudes and values. Data can be obtained through questionnaires. . Behaviour Segmentation: it focuses on whether people purchase and use a product. Consumer can be classified whether they are heavy, medium, light or nonusers. They can also be segmented according to user status.
• Benefit segmentation: it is type of segmentation in which customers are grouped according to certain benefits. Global benefit segmentation focus on understanding the problem a product can solve or the benefit it offers regardless of geography.

Strategies for Target marketing:

• Undifferentiated Marketing: when Marketers determine that there is little diversify among market segments they may engage in mass marketing. This absence of segmentation is called undifferentiated marketing. It is a marketing effort targeted to a wide range of customers. The approach in appropriate is a market that lacks diversity of interest.
• Concentrated Marketing: it involves expansion of the marketing mix and resources and direction of marketing efforts to attract a single market segment. A firm might concentrate on a single market niche because management believes that the company has a competitive advantage in dealing with selected segment.
• Differentiated Marketing: it is a marketing effort in which marketer select more than one target market and then develops separate marketing mix for each. It is also called as multiple market segmentation. Differentiated marketing strategy exploits the differences between market segments by tailoring a specific marketing mix to each segment.
• Custom Marketing: The global environment must be analysed before a company pursues expansion into new geographic markets. Through global segmentation, the differences and similarities of potential purchasing consumers can be identified and grouped.

The groups are evaluated on the basis of several factors segmentation size and growth potential, competition and compatibility and feasibility. Analysis and findings Wal-Mart and International Expansion The global function of Wal-Mart was started by the launching of its first international store in 1991 at Mexico City . Wal-Mart had started operating their international markets by a belief that they could attain competitive advantage abroad by using their combination of technology, human resources and logistics with their incredible selling power with international consumer goods providers.

Wal-Mart’s strategy is designed to obtain companies and change them into Wal-Mart way stores. Wal-Mart’s global segment is made into various formats, which comprise restaurants, Supercenters, discount stores, retail stores, and Sam’s Club. Multinational retailer’s entrance is commonly by acquisitions & mergers, this is what Wal-Mart did while its preliminary entry into Mexico, with a joint enterprise with CIFRA,( the strongest retailer in Mexico).

CIFRA facilitates Wal-Mart’s entry with powerful networks in the business particularly with vendors and knowing the local culture and requirements while Wal-Mart brings in its skill like service and logistics. Wal-Mart’s workforce; specially the management are a significant resource and facilitate its contribution to its achievement. Wal-Mart; Domestic strategies Stability strategy Wal-Mart used to follow stability strategy in US market. They are retaining the cost leadership in the market by saving an average of 2350 dollars for every American family yearly .

With their motto “always low prices” they are capable to transfer the benefit for the customer. They are capable to steady the cost leadership with the help of well-organized distribution network. It provides them a competitive advantage over providers which minimize the bargaining right of the suppliers. When the US market is almost saturated they followed a “pause strategy” in which they took an opportunity and time to rest, they sustained with their supermarket stores. It helped the firm to firm up its resources after a long-lasting period of rapid development in the industry.

Actually it was a temporary strategy which was subsequently followed by “no change strategy”. However due to the tough competition in US market between Sears, K-Club, Kmart etc. they cannot follow this strategy for long. Growth Strategy Wal-Mart’s growth strategy is remarkably diverse from the other retailers. The majority companies start stores near main urban areas with a possibility of large clientele base. Wal-Mart spread out their stores from its Arkansas base by building new stores located near smaller towns and distribution hubs, rather than staring across the country like the other retailers.

Unlike other competitors, Wal-Mart has not bought up subsisting retail chains to conserve control over its corporate culture, which helped them to stay ahead of its rivals. Differentiation strategy The differentiation strategy is one which differentiates the service or product presenting by the firm, creating something that is unique comparing the others.

It can be technology, features, design or brand image, customer service, dealer network or other dimensions . High level of customer service and ‘no questions asked’ strategies makes Wal-Mart’s differentiation from the other competitors. Every Day Low Price’ strategy help to highlight Wal-Mart was the lowest value. Wal-Mart has the best internal communications comparing the other retailing stores. Without having to spend and rely on advertising, they also had the best communications with the customers, since their message has been so simple and so consistent over a long period of time: “We have got the products and we have got it at a lower rate” is their promotional message to convince consumers.

Most consumers find it needless to think while they are in Wal-Mart. They use to purchase whatever they want n the amount they need as they know whatever they purchase will be a good purchase. Wal-Mart Globally Wal-Mart’s achievement is principally based on its focus of a single-business strategy. This strategy has attained desirable achievement devoid of relying upon diversification to maintain its development and competitive advantages. In fact, Wal-Mart’s service, low prices, and smile are their principle marketing strategies. Wal-Mart is the state’s most advanced retailer which uses information systems. Their transportation services and cross-docking inventory make them able to have the products required by the customer at all times .

For Wal-Mart to become a key global retailer, they have carefully utilized and examined strategies to profit from their various stores. One great strategy is beginning free-trade-zone distribution centres. Another strategy involves their service from when you go to their store to when you leave. Competitive Advantage It is an integral part of strategic planning. Strategically, competitive advantage is a method of either providing similar buyer value mere efficiently than the competitors or performing actions at similar but in a unique method that generate more buyer value than the competitors, hence command a premium price differentiation.

Competitive advantage is the perfect, match or fit between an organization and the strategy a company decides to employ . The rise of new technologies like Internet and Information technology has a great impact on the future of global marketing Domestically, Wal-Mart is expanding through their Superstores. With Wal-Mart’s competitive advantages in leverage and distribution over suppliers they are making it a big success. International expansion is vigorous and remains a significant factor for Wal-Mart’s future development opportunities.

The bargaining power of buyers and suppliers is least with Wal-Mart. As they have established a monopoly in their home market and rising their market-share in their overseas operations. Wal-Mart is Mexico’s and Canada’s top retail chain and in UK they are in the second position. Threat of entry continues low globally and in the home market. The new entries are limited as the charge of setup is large. Threat of alternate products is low to medium with customers having a choice from variety stores to purchase the similar product at high competitive prices.

The strength of competition can be categorized low to medium . The domination attained by the low bargaining power of buyers and suppliers is counterbalanced by the threat of entry and threat of substitute. In general a considerable quantity of power still lies with Wal-Mart considering maturity and the scale of operations in their industry. The key success factors of Wal-Mart are;

• Good financial position.
• Niche market: good worth for dollar.
• Flexible experienced purchasers.
• Distribution channel cross docking.
• Franchisee relationship. Main street locations. Wal-Mart’s attains competencies from:
• Supply chain management
• Cross docking
• Communication strategy with associates and suppliers
• People strategy
• Inspiration and ability from Sam Walton
• Relationship strategy with associates and suppliers
• Market and location strategy
• Customer service strategy
• Cost strategy
• Knowledge management

Innovation in I. T. and inventory management and warehousing Methodology For this research, I have used qualitative methodology techniques (secondary data) to gather the information required.

Secondary data provide the clear knowledge about the purpose of this research. The most significant feature of secondary data is that it can be gathered inexpensively and quickly. As the research proceeds further, it attempts to assess the comparative study between domestic and global marketing. In this research my findings on this particular topic was mainly obtained from research journals of various authors, books, Internet, and research papers. The research has also used the company’s online website to gather information’s like new products information’s, customer review and published journals.

Analysis and interpretations have done based on the collected data. As a researcher, I prefer to use more than one method to analyze the comparative study between domestic and global marketing. The first one is the qualitative method that would evaluate the effectiveness of the global marketing as well as domestic marketing. Another method I used is the analytical research method, which use facts and analyse these to make a critical evaluation of the information already available. This will help Wal-Mart to identify which marketing has more competitive advantage than the other.

Analysing more than one method will reduce the errors in the research outcome. Conclusion From my research I found that domestic and global marketing have its own advantages. After establishing domestically, Wal-Mart had expanded their business globally. Due to the technology development and threat competition is high in the global markets. After the analysis I found that Wal-Mart is maintaining excellent quality in their products. Three main classifications of changes are most significant: in technology software and hardware changes in market circumstances, and in the organization of manufacturing.

These technological changes and markets are likely to have substantial inference for the change in the direction of knowledge-intensive production and for the types of resources that must be expanded to manage with the varying situation. To market effectively in the international market one of the marketing campaigns should be expanded for each country. But initially business owners and marketers should study about the people in the aimed nation.

References 

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