International Marketing

EVOLUTION TO GLOBAL AND INTERNATIONAL MARKETING

Done by: Ie.Ignatius Eric Cahya Saputra (3979155)

Introduction International marketing has become more important nowadays due to the faster acceleration of globalization which actually becomes the main reason of the growth in terms of numbers of companies who actually embark on foreign operations (Keegan, 2002). However in order to be globalized, it is not easy for those companies. Especially because of some reasons such as high level of complexity in terms of the targeted market, high-level of uncertainty in terms of perhaps the preference of consumer in the targeted market, and the possibilities of highvolume of heterogeneity, it means that the diversification in terms of culture in the targeted market is high, therefore it is difficult for companies to understand the customer preference and it is also difficult for them to customize their product to satisfied customers in the targeted market (Terpstra, 1985).In this paper, there are several steps that a company is suggested to go through it before they become globalized. However, there is a question whether the company who want to be globalized can actually skip one of the steps or maybe more steps to become globalized without the need to go through each step. Evolution to Global and International Marketing As mentioned above, a company who wants to be globalized has to go to several steps, those steps are: 1. Domestic Marketing Domestic marketing is the first stage of the evolution of a company to become global. In this stage the marketing scope of the company is only within the country boundaries. In this stage, the company only focuses on how to fulfill the local customers. It also means that they only attract and influence the local market. Companies who still in this stage are usually ethnocentric ad seldom pay attention in how the world has changed. It means, they seldom pay attention in the changing of customer preferences globally, never pay attention on emerging competition, and those better products that will arrived soon in the domestic market that may also become the competitors of their own product. 2. Export marketing The second stage is export marketing. Export marketing is an approach in which sell directly to overseas customers. It means, the manufacturing processes are done locally but the company sells it both domestically and to selected target market in other countries. This is the

early stage of a company to become more internationalized. There are actually 2 types of export marketing. Those are indirect and direct exporting. Indirect marketing is where the company is relying on those 3rd party companies to handle and distribute the products from the company. In other hand, direct exporting is a method where the involvement level of a company is higher. It means, the company sells directly to the customers overseas. 3. International marketing

The third stage of the evolution is international marketing. The difference on this stage is the company is getting more polycentric orientation. Not like the export marketing where the focus is still on local market, in this international marketing stage, the basic factor that been used to customized the product is those customers from other countries. A proper example of international marketing is when a company manufactures products in one certain country but they considered their neighborhood country as their market too. For instance, when F&N a beverages manufacturer from Singapore, their manufacturing plant is only in Singapore but their market is not only Singapore, but also Indonesia, Malaysia, Thailand, etc. 4. Multinational marketing In this stage the focus of the company is more on the regional basis. It means, they will customize the products base on the region-wide customers preferences. In this stage the company starts to realize economies of scale by standardizing the operations on a regional basis. In multinational marketing level companies have their manufacturing plant all over the region and they consider the whole world as their market. 5. Global marketing This is the last stage of the evolution. There are only few company that can actually achieve and evolutes until this stage. It is a marketing approach in which companies are actually standardizing all their marketing mix across the national, regional, and global markets. There are 3 main activities in this stages which are standardization efforts, coordination across markets, and global integration. In global marketing the manufacturing plants that the companies have are spread all over the world and their targeted markets are every place in the world or so called global market. In my opinion based on the steps definition, it is necessary yet easier for companies to actually go through every steps before they actually become a global company. However,

there are several companies that actually can simply become a global company without the need to go through each steps and mainly it is because the improvement and development in technologies such as internet. Company like Google, Facebook, Twitter, and Yahoo, they can actually skip some steps in the evolution to global marketing. However, it is difficult for the rest of the business to do so. Like for example The Coca Cola Company which is considered their business as one of the leading in the F&B industry. The Coca Cola Company Background The recipe of coca cola was actually developed in the 1886 by Atlanta Pharmacist named John Pemberton. In 1919 the Coca Cola Company was being bought by a group of investors headed by Ernest Woodruff and W.C Bradley for $25 million. The good thing for the company upon this action was these 2 so called new owners of The Coca Cola Company brought over the new, fresh and good concept about the vision of the company. According to the official coca cola website, they put some new uncommon emphasis on the product. They try to establish a quality drink campaign using a highly trained and experienced staffs. These actions have been done in order to encourage the sales volume of Coca Cola itself. However, the greatest contribution in my opinion from Mr. Woodruff was when he finally succeeds to bring coca cola to go beyond the national boundaries of the USA. He established a global momentum that makes coca cola exist in every corner of this world. it was all started on the year of 1900 when Charles Howard Candler took a jug of coca cola syrup with him when he went to England. Fortunately without any expectations, he got an order of 5 gallons of coca cola syrup, and Puerto Rico. Finally in the 1900s, bottling operations of the Coca Cola Company are established in Cuba, Panama, Canada Puerto Rico, The Philippines, and Guam. Moreover in the 1920 the Coca Cola Company opened their first bottling operations plant in France which is become the first Coca cola network in Europe. This vision has been always brought together with the existence of every Coca Cola Company and it is still being implemented in every Coca Cola Company to build Coca Cola business to become unparalleled global system. The Coca Cola Company in domestic marketing The first step that the coca Cola company went through is that they were successfully dominating their domestic market. In order for Coca Cola Company to dominate the market, they need to understand and fulfill their targeted customers needs. To be able to dominate the domestic or so called the local market is very important before a company actually

stepping out from the national boundaries because in the domestic market a company get a good learning way and experiences for them and it can be their cornerstone for them to actually step out and sell their product overseas. Therefore in my opinion any Companies need to be very customer-centric in order to be able to fully understand the local customers need. Customer centric is a view in which the company is very focusing on increasing the customers equity and keep up an innovative product adaptation in order to always be able to keep up with the customers needs (Sheth et al, 2000). The Coca Cola Company in export marketing Based on my understanding in terms of the definition of export marketing which is a marketing effort to sell the product directly or indirectly as the whole product without any adaptation based on the targeted customers preferences on the targeted market. I would like to say that Coca Cola has actually gone through this step. As we can see on the background on the Coca Cola Company, at the early of 1900s someone from Coca Cola Company brought over coca cola syrup on his journey to England, and unexpectedly someone in England placed an order of 5 gallons of Coca Cola syrup. It was a good export marketing effort done by The Coca Cola Company in my opinion. The Coca Cola Company in International marketing International marketing is where the adaptation of the product based on the foreign market preferences is a must. It is a marketing effort which is considered as a sales expansion from a local company in which the company start to sell their products to some other countries (Kotabe et al, 2008). In terms of international marketing stages, the Coca Cola Company has actually done a very good job in terms of modifying their product based on the foreign customers preferences. Based on the official website of the Coca cola Company, I can see that there are so many varieties in terms of flavor of Coca Cola itself. There are Coca Cola with lemon which is available in Australia, American Samoa, Brazil, France, Malaysia and etc. there are also Coca Cola Vanilla which is available in Hong-Kong, Austria, Australia, United Kingdom, and etc, and the Coca Cola raspberry which is available only in New Zealand. All we can see from this is that The Coca Cola Company is trying to keep up and match their product with the customers demand coming from the variety of countries. This is the main point and the point-of-differences that makes me sure that The Coca Cola Company has actually gone through this steps. However, in my opinion there is no need for a company to actually modify the whole product like for example what Coca Cola did with creating one

new fully modified product. In my opinion it is better for a company to actually not focusing on 4Ps but what they should do is promote the product more frequently so that the customers inside the targeted market will get use to the product that the company actually created from the beginning. The advantages of doing this is that when the targeted market get expanded all over the time, the company will be able to save huge percentages of costs, because if the company do this kind of strategy it is the same with doing standardizations for the whole world. My opinion is actually supported with a quotation that says that culture has no main effect on product, price, place and process; the main effect is on promotional efforts (Chung, 2007). It means that the one that should be modified is actually the promotional effort and not the 4Ps. The promotional efforts have to be adapted based on the Customers preferences in those targeted markets. Coca Cola Company in the multinational marketing and global marketing In my perception multinational and global marketing is almost the same. The efforts that the companies do when they reach these 2 stages are actually almost the same. The main thing about these two concepts is that standardization. According to Backhaus and Van Doorn (2007) standardization is a tradeoff between the possibilities in terms of amount of economical beneficial that a company may get and the perceived performance of the company in the eye of customers in terms of fulfilling the customers local needs. Actually the difference between multinational marketing and global marketing is that the basic factor which can be the main reason of modifying products. The basic factor in multinational marketing is only regional basis customers. Whereas the global marketing, the basis is global customers it could be country basis, regional basis, and world basis. Conclusion The Coca Cola Company is a leading company in terms of food and beverages industry. In my opinion The Coca Cola Company is a truly global company because their main product is the red canned Coke in which I found it the same in every place in the world. They do produce other varieties product in terms of flavor, but the main product they sell is the Coke that we can find everywhere in this world. the reason I write this statement is that based on the definition of the global marketing which is when a company producing standardized marketing mix all over the world (Kotabe et al, 2008). Based on my findings, I would say that The Coca Cola Company is match with the criteria given, so The Coca Cola Company is a global company.

Referencing Backhaus, K. and van Doorn, J. (2002), consumer perceptions of advertising standardization: a cross-country study of different advertising categories, International Management Review, Vol. 3 No. 4, p.37. Chung, H.F.L. (2007), International marketing standardization strategies analysis a crossnational investigation, Asia Pacific Journal of Marketing, Vol. 19 No. 2, pp.145-67 Ewing, M.T., Salzberger, T. and Sinkovics, R,R. (2005), An alternate approach to assessing cross-cultural measurement equivalence in advertising research, Journal of Advertising, Vol 34 No. 1, pp.17-36 Hassan, S.S, Craft, S. and Kortam, W. (2003), understanding the new bases for global market segmentation,Journal of Consumer Marketing, Vol. 20 No, pp. 446-62 History of Bottling, accessed 1-march-2012,
http://www.thecoca-

colacompany.com/ourcompany/historybottling.html

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