Chapter Four

Globalization and Global

marketing
 What Is Globalization?

• In the mid-1990s, the IMF’s World Economic

Outlook defined globalization as ‘the growing
interdependence of countries world-wide
through the increasing volume and variety of
cross-border transactions in goods and
services and of international capital flows,
and also through the more rapid and
widespread diffusion of technology’.

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 Globalization Contd.
• Economists define it as international
integration of capital, labor market and
commodity.
• It is the interconnectedness of social life in
all spheres of life.
• Globalization has had great influences on
international business.
 Globalization
Globalization is the strategy, process,
procedure or technique of optimizing the
resources available in various countries and
catering to customers throughout the world
with internationally standardized products, at
competitive prices.
 Globalization Drivers

Globalization driver one: the changing

economic paradigm – from demand
management to neo-liberalism
The growing interdependence of economies
referred to in the above definition of
globalization has only taken place because of
the increasing acceptance of economic
liberalism as the preferred method of
‘managing economies’.

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 Globalization Drivers Contd.

Globalization driver two: the spread of

international governance and regulation
As economic liberal ideas were more widely
adopted and barriers to cross-border business
were eroded, questions came to be asked about
the most appropriate location of policies to
regulate the business environment.

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 Globalization Drivers Contd.
Globalization driver three: finance and capital
spread.
Deregulation, liberalization and technological change
have indeed combined in recent decades to
transform the finance sector to support the growing
number of transnational transactions.
Individuals and institutions, for example, are able to
transfer vast amounts rapidly around the globe to
arbitrage between exchange and interest rates.

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 Globalization Drivers Contd.
Globalization driver four: the diffusion of
information and communication technology
Technological innovation and its diffusion have
clearly played a significant role in the
redefinition and reorganization of commercial
and economic space known as ‘globalization’.

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 Globalization Drivers Contd.
Globalization driver five: social and cultural
convergence
A consequence of greater liberalization and the spread of
global communications technology is a degree of social and
cultural convergence, in itself a precondition for
globalization. This does not imply that a global culture has
replaced or is replacing the diversity of local and national
cultures in the world.
Social and cultural convergence across boundaries is only
possible when there is no clash with more profoundly held
cultural beliefs specific to a particular place or grouping,
such as religion.
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 Globalization and its challenges

Globalization – the removal of barriers to free trade and the

closer integration of national economies – can be a force for
good that has the potential to enrich everyone in the world,
particularly the poor, but the way it has been managed
(especially the international trade agreements) needs to be
rethought. Joseph Stiglitz

Globalization has been “misgoverned”. John K. Galbraith

 Challenges
• Distance
– Physical distance
– Psychic distance
• Context
– Political system
– Tax system
– Judicial system
– Labour system
• Resources
 Speed of Global Expansion
• Slow globalization
• Rapid globalization
– Competitor’s can easily replicate company’s idea
of success
– Scale of economies
– Highly capable management
 What is Global marketing?

-It is a type of marketing in which a company

adopts the same or similar marketing
strategies all over the world

What to be mostly similar?

 Promotion;
 Goods and services;
 Packaging and;
 Branding
Worldwide Marketing may includes:
Global marketing
International marketing

-How can you differentiate between

them?
 Global marketing
-The business thinks of the whole world as its operating space and does not
adapt its products or services, communication and distribution channels
to domestic requirements.
-It uses the same or similar marketing strategies all over the world
-A company implement the same promotional and advertisement tactics,
offers the same products, packaging, branding, labeling and services
across the world. moreover, commercials are run all over the world

 International marketing
-opens a subsidiary in a country and lets the subsidiary serve the local
market, paying attention to local customs in terms of customer
difference, styles and eating habits
-commercials and other promotion tactics are tailored for the local market.
-A company adopt different marketing strategies to different countries
specification. Various tactics all over the world
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