Global Marketing Advantages and Disadvantages

1154 words (5 pages) Essay in Marketing

03/07/17 Marketing Reference this

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As an increasing trend of globalization, which describes a movement of people, goods, capital and ideas because of increasing economic integration while increasing the trade and investment at the same time (Global Education, 2009), every field is trying their best to take advantage of the rich resources and benefits from this entire market. Countries are putting their best efforts to develop their economy, such as using global marketing. There are varies definitions of global marketing. From the point of Kreuter (2007), it can be defined as based on a specific marketing philosophy that seeks to overcome the individual approaches of the single country points of view. In recent years, a food industry has developed rapidly and gotten a great achievement from global marketing, such as the famous food brands McDonald’s and KFC. In this essay, I will discuss the advantages and disadvantages of food global marketing, as well as some suggestions to the overcome the disadvantages.

Besides, standardizing items of products, which is required by globalization of food marketing, can probably save cost. From the viewpoint of Vignali (2001), the marketers will provide the same products with the same selling methods, thus reduction of the production, distribution, marketing and management costs will be

made. Similarly, Kreutzer (2007) points out that a standardization of global marketing mix will achieve cost reduction while increasing efficiency in the sphere of marketing. Global marketing can be defined as that it is the combination of elements that you will use to market your product. There are seven elements: Product, Place, Price, Promotion, people, process, physical (McCarthy,1975, qtd. Vignali 2001). Consquetly , the companies can provide customers with the higher quality products and the lower price. Vignali (2001) also states that “there are substantial cost savings through standardization” which is one of the aims of McDonald’s to have a standardized set of food product tasted the same in every country (p.97). Companies pursue the biggest profit with the lowest cost, consequently this might be another reason why so many companies want to get into the global market.

Another benefit of food global marketing is that various services markets distributed all of the world may bring additional financial benefits. In other words, currency exchange rates and tax rates fluctuates all the time, so it is possible for global companies to get financial benefits by exchanging the different currency income in some ways. Based on the information from Cateora and Graham (2005), some companies suffered less during the period of the Asian market downturn in the late 1990s than the other firms specializing in the one place, because those companies adopted global marketing operations. Therefore, many global companies would like to take advantage of this operation.

Various advantages can be brought by the global marketing strategies for food companies, and more companies tend to occupy one part of the global market in the food industry. However, there are some disadvantages of food global marketing at the same time.

Firstly, different diversity requires the companies to modify their products to meet the different demand from the various customers in the world. When a company explores their target markets in one specific area, they need to take into consideration the local customs, policy and culture differences. As Kentent claims in 2008, a polycentric marketer knows well that needs in each country is different and they have to treat the customers more differently than they would in their own country. For example, McDonald’s can not provide burgers with beef in Hindus because they do not eat it, and Jains do not eat meat of any type, and also, Muslims do not have pork, as a result the restaurants in those areas provide suitable meals to

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adapt the local customs. This work must be complicated because every place has different customs. It requires the marketing departments of companies to create the acceptable items in each restaurant of one specific country (Vignali, 2001). Consquetly, it is not so easy as standardizing all the items of food in all the markets.

Secondly, standardization of global marketing may lead to homogeneity of goods. Trail (1997) states that the more alike markets are, the more homogeneous products would be. Because a company has to keep its brand and image the same globally, it has to sell the same products and advertisements in the whole markets, though it remains the global influence, customers will lose a lot of choice in this restaurant. For instance, when customers enter into a KFC or a McDonald’s restaurant, the main dish they can choose is limited to hamburgers and fried chips. People’s taste may change all the time. So that customers will not be fixed on one specific restaurant. This is a potential risk the global marketing may take.

Lastly, in the food industry, the raw material of one specific item of food may not be possible to get in local markets, thus delivering the material across countries is required, which means some harmness to a environment will be caused by the transports of deliver them. A case in this point is the famous ice cream called “Haagen Dazs”, the raw material is so unique, based on the information of Haagen Dazs office web site, it states that the raw material of dark chocolate is from Belgium and hand picked vanilla beans from Madagascar. So in every shop, raw material needs to be imported from several different original places, this action will cause emission of Carbon dioxide which leads to air pollution. Therefore, the environmental factors are another disadvantage of global marketing.

In conclusion, global marketing in the food industry is developing fast and a lot of food companies enjoy the benefits brought by global marketing, also the trend that more companies will take part in the global marketing group. Because so many advantages of global marketing they can take, such as the cost-saving and bigger market share, all those result in more profit and further development of company. However, the disadvantages of food global marketing can not be ignored. A point in this is the huge and complicated work for the market department to create suitable items of food taste to meet the different customs in different countries, also the potential risk of missing fixed customers and harm to the environmental. In order to stable the global markets and develop a company steadily, marketers should make

full use of global marketing-mix strategies but also international marketing strategies need to be used. Taylor (1991) suggests that both internationalization and globalization elements should be used by companies to achieve a competitive benefit (qtd. Vignali, 2001). What’s more, companies need to take measures to reduce the delivering of material such as making the material from local sources. If a good marketer takes full advantage of global marketing and avoids the drawbacks as well, the company will achieve a considerable profit and development.

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