Essay on the Effect of Globalisation on an Organisation’s Marketing Strategy
Number of words: 3856
Globalisation and an Organisation’s Marketing Strategy
Globalisation refers to the general process of social change, and it incorporates the aspects of history, culture including the caproate world. Globalisation has revolutionised the realm of business whereby organisations have adopted a different structure through outsourcing their members to different parts of the globe resulting in structural business changes. Furthermore, corporate communication, transport and financial markets have changed to adapt to the new era. An example of the effects of globalisation can be seen through the structures of different organisations such as airline and oil companies. This paper is aimed at examining the effects of globalisation in organisations marketing strategies.
Globalisation is a fascinating phenomenon since it is obvious that the world is becoming increasingly connected in terms of economic, financial, social, cultural, political, commercial, and environmental issues. As a result of these advances, globalisation has resulted in a world without boundaries. People’s lifestyles are changing, as are their business practices, and national legislation. Events in different regions of the world are now having far-reaching consequences in other parts of the world at a rate that no one could have imagined. According to (Peeri, 2020), the Asian financial crisis of 1997, for example, had a significant impact on businesses all over the world, and the SARS occurrence in 2003 proved how globalisation allows for rapid disease spread, affecting many airline companies, the hospitality industry, and other businesses globally.
On the other side, globalisation allows companies, as seen in the automotive and electronics sectors, to outsource and find consumers throughout the world. Companies benefit from a global production and operations globalisation because they enable them to achieve size and scope economy. Despite the world-wide phenomena of globalisation, the degrees of globalisation in each nation vary. A recently established globalisation index was a cooperation between the foreign policy magazine, AT Kearney and E.D.S (Olivié and Gracia, 2020). In each country, the firm determines the degree of globalisation. Many small developing nations from 2001-2004 were among the 20 countries in most globalised economies, including Singapore and Malaysia, with Singapore at top of the list in 2001.
Today, globalisation has become a massive phenomenon that cannot be ignored, as every country, regardless of size or degree of development, is globalised and influenced by it. It is inescapable that businesses would suffer as a result of this worldwide issue. Organisations have had to adapt their organisational structures and methods as a consequence of the opportunities and dangers offered by globalisation. Topaloglu, McDonald, and Hunt (2018) observe that despite the fact that many academics have frequently emphasised these two impacts of globalisation, a survey of relevant literature shows that empirical work on such effects and commercial organisations surpasses their competitors.
Against this backdrop, the goal of this paper is to look into how marketing produces value for customers, as well as the role of stakeholders in a global market and their influence on marketing activities within a company. It is proposed that global market opportunities allow firms to gain access to global resources and expand into a diverse new international market, thereby improving commercial performance. International market perils, on the other hand, may be detrimental to a company’s output and performance due to an increase in the number of competitors and the force of competition, as well as high levels of competitiveness.
Role of Marketing in Creating Value for Customers
Entrepreneurs are usually excited while describing their product or service concept, but less so when questioned about their marketing strategy. Marketing can refer to advertising, selling, or techniques used to persuade people to buy items they do not need at a price they cannot afford. Marketing includes promoting and selling, but it does not entail influencing customers. The Chartered Institute of Marketing defines marketing as “the management process responsible for discovering, predicting, and successfully satisfying consumer requirements” (McKay, 2016). It is both a style of thinking and a business function; it is the portion of an organisation that considers the customer first since having a customer-centric approach better understands requirements and desires. It may then actively use the resources at its disposal to deliver the highest value goods and services while also developing long-term relationships with existing and future consumers (McKay, 2016). Marketing may appear to be a costly luxury for many small firms, but every new business may profit from marketing concepts and marketing actions.
Profit is not the primary purpose of all businesses; others have other objectives. Charities want to raise awareness, recruit volunteers, and collect money for their cause, whereas the health care system wants to treat sickness and modify behaviour to promote health. Even conventional for-profit businesses may have other goals that necessitate marketing considerations, such as attracting the best workers or boosting awareness of their corporate social responsibility activities. According to McKay (2016), multiple aims and stakeholders need a more comprehensive and up-to-date definition. The marketing idea prioritizes the consumer: every for-profit organisation has to have an essential aim of delighting the customer which must be evey corporations aim. However, this does not mean that organisations should disregard the bottom line; for a business to grow and survive in the competitive realm, profits have to be earned. The main rationale is achieving the right balance between client happiness and company sustainability (Gitman et al., 2018). Marketing offers a significant return on investment, satisfies shareholders and stakeholders in companies and the community, and contributes from a customer-centred viewpoint to beneficial behavioural changes and a sustainable business future. Marketing has been unfairly criticised for being transactional, with an emphasis on making the first sale (Trivedi, Trivedi and Goswami, 2018). Good marketing aims to build long-term relationships in which value is constantly given for mutual benefit.
The market definition specifies who the consumers and rivals are. It entails identifying influential macroenvironmental variables and defining the parameters within which the firm works. Companies were myopic (short-sighted) in describing their business in terms of specific products. For instance, the railways in the United States failed to anticipate the influence that air travel or automobiles would have on their industry (McKay, 2016). If they had defined their business as transportation, they might have recognised the threat posed by replacements. Companies like Apple have a wide view and see their company as more than just computer design and manufacturing. Once an organisation has identified which markets it wants to service, it must consider how it might generate value for consumers. The four kinds of value are highlighted next.
Consumer value may take different dimensions, including performance value, which entails the functional advantages obtained such as what the product does, for example, a mobile phone with additional capabilities such as holographic projection. Competitors can replicate these physical qualities easily (McKay, 2016). Emotional value relates to the intangible advantages based on consumer perceptions and how the product makes them feel. This aspect is not readily imitated and may include luxury branded items. On the other hand, price value entails paying low prices and saving money. Aldi is a great example of a firm that benefits from everyday cheap prices (McKay, 2016). Relationship value is established between a firm and its clients, as shown in personal services like hairdressing. Many tangible items offer value by fostering client relationships.
It is evident that physical or intangible offers are valued in situations where the advantages are obvious. Value creation is a two-way street in which both the consumer and the business gain; to continue providing customer value, a business must meet its objectives. At its most basic, value is about trade— customers exchange money for goods or services, and the firm gains from this transaction. However, not all transactions are about money and profit. If every employee considers how they can offer value to the customer, the part-time marketer is born, and the marketing department becomes redundant (McKay, 2016). However, a professional marketer has a wide range of abilities, including research, management, and promotional programs, aiding sales force activities, pricing, and forecasting. As McKay (2016) contends, professional marketers serve as customer advocates, representing consumers in all decisions and reaffirming the commitment to customer value and as brand guardians who defend brand values on decisions touching on marketing mix.
Simply put, the marketing department mixes a variety of components to give value to customers. The quantity and titles of these elements have been disputed over time, but marketing functions or activities are often referred to as the marketing mix or the four Ps. The marketing mix comprises the product (what is supplied, and intends to satisfy consumer needs) price (the amount charged by the firm or the expense the client will incur to acquire the product), promotion (the exchange of information between a company and its customers), and place (acess to the product by the consumer) (The 4 Ps of Marketing: Understanding the Marketing Mix | Emarsys, 2017). In the services industry, three more Ps are added, including physical proof (location and appearance of the company), process (how the service is structured and provided), and people (the service employees who interact with customers) (Soroya, and Ameen 2021)
Before delving deeper into the marketing mix, it is worth noting that the consumer must be recognised. A parent (customer) may purchase products for the family (consumers), but all family members impact the choice. Influencers in a business-to-business (B2B) market might include engineers, users, finance, and specifiers. When products are sold through retailers or wholesalers, it is critical to guarantee that the product is available, and marketing efforts should be directed towards the merchant (McKay, 2016). Therefore, marketers must consider the demands of the whole decision-making unit when developing the best marketing mix.
It might be tough for an entrepreneur to comprehend that their product, brand, or service concept is not universally adored. Given that no two consumers are the same, segmentation is vital as it divides a bigger market into smaller homogeneous groups of people with comparable needs. People in each segment share traits, but segments should be as different as possible (Payne, Frow, and Eggert, 2017). Segmentation enables a company to get to know its consumers and focus on leveraging its resources to satisfy their needs.
The following aspects can be used in market segmentation:
Demographic segmentation -Age, marital status, gender, ethnicity, income, occupation, and education are used to divide the market into groups. Marketers producing products for children, teenagers, universities recruiting students, and assisted-living institutions marketing services to the elderly, for example, will be interested in age (Gitman et al., 2018)
Geographic segmentation– It’s also common to divide a market depending on climate, geography, and population density (urban, suburban, small-town, or rural). Many products are impacted by the weather, such as snow shovels in Hawaii and above-ground pools in Alaska. Consumer preferences change depending on where they are (Gitman et al., 2018).
Behavioural segmentation is the classification of customers based on factors such as product attitude, user status, and frequency of use. Technology-based product providers may segment the market based on different levels of technological receptivity (Polovin, 2020)
Psychographic segmentation- Customers are classified according to their interests, activities, attitudes, and values, which are reflected in their interests, activities, attitudes, and values (Polovin, 2020). What if a marketer created a profile of you based on your lifestyle? Do you love being outside and live an active lifestyle? If you answered yes, you might be interested in buying athletic equipment and gear.
Stakeholders’ Role in an International Context
A stakeholder is someone interested in the firm, its I.T services, or its projects. They might be corporate workers, suppliers, vendors, or any other partner. They are all invested in the organisation. Stakeholders can also be investors in the firm, and their activities influence the company’s results. Such a stakeholder is crucial in shaping the company’s future as well as its day-to-day operations.
In the recent past, the concept of “stakeholder” has grown in popularity. Governments, NGOs and the business community adopted this word to define the collection of internal and external players influencing corporate activity. Despite being a well-known phrase, there is no clear and commonly recognised description of what it truly implies. The fundamental assumption of the stakeholder idea is that the requirements, interests and repercussions of people and groups that influence or are affected by policies and activities of a corporation must be taken into account (Guerrero-Villegas, 2019). In order to understand the notion of stakeholders, three main aspects should be examined: the organisation, the other players and the type of connections between businesses and other players.
The first important study on stakeholder model was done by Edward Freeman. This playwright is seen as a forerunner in the field of stakeholder analysis. As a result, the great majority of studies has accepted the criteria he provided. “Any group of individuals who may effect or is affected by the execution of the organisation’s goals,” according to Freeman (Guerrero-Villegas, 2019). Freemans’s work is noteworthy since he is the first person to develop a holistic management philosophy for stakeholders. The book was released in the early 1980s, in the midst of enormous financial transformation and expansion. In a chaotic environment characterised by stock market activism, outside competition, newly evolving cultural imperatives, a politicised international raw material supply, consumer activism, expanding public business and growing special interest groups, Freeman says that a new strategic business management approach is necessary.
According to Freeman, the “Stakeholder Paradigm” is a unique paradigm that may provide managers with critical competencies in this changing environment. Each of these stakeholders, according to Freeman, is critical to the firm’s success and, conversely, has a stake in the organisation. This representation of the stakeholder model is rather simple and unchanging (Valentinov, Roth, and Will, 2019). Since stakeholders are subject to shifting impacts and duties over time, the picture gets harder. It is possible for each stakeholder to be further classified by numerous players. Freeman was the first to provide a strategic framework for these relationships, enabling all persons to benefit from or impact the future of the organisation, which had previously been confined to its owners or shareholders (Guerrero-Villegas, 2019). In any case, this is a remarkable accomplishment that represents some of the paradigm shifts needed in the economic model by this theory. The focus on expectations and demands of the controlling groups, such the investors, shareholders or owners was not enough; it was also necessary to take account of the requirements, expectations and desires of other groups which were intricately connected and formerly solely viewed as peripheral.
In reality, both the theory and the model have faults. For starters, the static model fails to account for the dynamic component of the theory. That is, the model depicts the issue in a static manner, ignoring the fact that connections between an organisation and its stakeholders is dynamic. Second, the model does not take intra-stakeholder heterogeneity into account. Various stakeholders may have diverse interests and expectations as a result of this heterogeneity, even though they are members of the same stakeholder group (Guerrero-Villegas, 2019). Supervisors, as well as blue-collar and white-collar workers, are examples of employees. They may have competing interests and pursue counter-agendas and objectives. Finally, this theory provides a simplified picture of a rapidly evolving corporate environment.
In this respect, the delimitation of the environment of the model is flawed, with different levels not specified properly. Stakeholders both in the local business environment and in the wider globe of the company are disconcerted. The primary value of this book, however, is that there are significant constituencies other than shareholders and that managers are provided with tools for assessing and proactively addressing the needs of organisational stakeholders. The research by Freeman, Phillips, and Sisodia (2020) is the second major work on stakeholder theory. This study is significant because it identifies three features of stakeholder concept: descriptive, instrumental, and normative. These three elements together allow for a better knowledge and forecast of how organisations operate, taking into consideration all stakeholders and shareholders.
- The term “descriptive” denotes the model used to describe the firm’s features and operations. This method aims to assess the extent to which managers control the firm while taking into account the various stakeholders’ interests.
- Second, the “instrumental” component determines the connections (or lack thereof) between shareholder administration and traditional goals like profitability and growth. Stakeholder management, in this approach, produces a better result for the firm than other managerial strategies.
- “normative” feature comprehends the firm’s position in society, taking into account the moral and ethical norms that must be adhered to in order for organisations to function effectively.
The authors contend that the three features of stakeholder theory are critical because they describe its key characteristics and incorporate many theoretical methods to make it complete. The three components are “encased” inside one another (Freeman, Phillips, and Sisodia, 2020). At the next internal level, the “instrumental predictive value” supports the external shell of descriptive theory. “For the descriptive accuracy of the theory, the core normative concept must be true, since it implies that the executives and agents act as if the interests of all stakeholders were of an intrinsic worth.”
In terms of the last argument, globalisation has two major effects on businesses. On the one hand, globalisation provides more chances for international expansion because of the rising dynamics to different topographical markets. On the other hand, local markets are becoming more competitive as a result of the rising presence of international businesses. Due to possession of specific pros, foreign businesses have harmed the competitiveness of local enterprises. In a worldwide environment, company internationalisation entails several benefits as well as dangers and problems. In general, foreign firms must confront higher obstacles than domestic businesses (Guerrero-Villegas, 2019). Different factors, such as those that are legal, social, monetary, radical, cultural, and even moral, must be considered in the context of international commerce. Legal systems, for example, might differ between countries. This aspect requires businesses to conform to the legal framework of the jurisdiction in which they do dealings. It is also typical for the cultural settings of the nations involved to vary significantly.
Stakeholder Theory in Firms Operating at an International Level
As before stated, a “stakeholder” is a discrete individual or a group that may affect or be affected by a company’s activities in order to achieve its objectives. Firms and society are mutually beneficial and must collaborate. Decisions concerning the creation and execution of business policies and strategies should be the result of a continuing and active conversation between firms and other stakeholders in this respect. Companies should make it a priority to meet the needs and expectations of their stakeholders, since this will benefit them in the medium and long term (Guerrero-Villegas, 2019). Stakeholders must be taken into account if the firm is to stay competitive.
In the case of multinational enterprises who involve a large number of stakeholders as a result of their activities in many nations and areas, stakeholder theory is especially relevant. Each stakeholder has particular requirements and expectations that are, in some cases, more specific and, in some cases, broader. International companies have higher pressure than local firms because they interact in the local and global arena with highly relevant, diversified and strong stakeholders that may give legitimacy and action (Guerrero-Villegas, 2019). For instance, administrations in certain nations regard gender equivalence as a critical issue, while others do not. The same dichotomy emerges when it comes to environmental protection, particularly when comparing poor and wealthy countries.
To summarise, in order for a firm to benefit from its stakeholder relationships, it is imperative to differentiate them correctly and understand their needs. Firms can get an authorisation to operate in overseas markets by correctly responding to stakeholder expectations. Managers must be on the lookout for emerging stakeholders in the host country as well as variations in the needs and prospects of current stakeholders in the home-based state (Brazer, 2019). An organisation must have access to leading indicators of any potential change in the attitudes of various types of stakeholders toward the company in order to grasp the impact that various categories of stakeholders have on its business weather internationally or locally. This information must be provided as soon as possible, before any shift in attitude has an influence on sales, stock value, employee happiness, and other variables. Reports must be detailed, comprehensive, and cover all sorts of stockholders. This type of stakeholder analysis provides precise real-time information about each stakeholder’s level of influence, positive or negative power, legitimacy, and urgency with which the business must respond. In the new era of stakeholder capitalism, businesses must use these sophisticated technologies to assess the impact stakeholders have and will have on their performance.
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