Page 252 - Foundations of Marketing

Reaching Global Markets | Chapter 8 219

Frito-Lay’s Globalization
Strategy
Lay’s customizes its products
in many countries throughout
the world.

AP Images/Mary Altaffer

electronic communications equipment, Western-style clothing, movies, soft drinks, rock and
alternative music, cosmetics, and toothpaste. Sony televisions, Starbucks coffee, and many
products sold at Walmart all post year-to-year gains in the world market.
For many years, organizations have attempted to globalize their marketing mixes as
much as possible by employing standardized products, promotion campaigns, prices, and
distribution channels for all markets. The economic and competitive payoffs for globalized
marketing strategies are certainly great. Brand name, product characteristics, packaging,
and labeling are among the easiest marketing mix variables to standardize; media allocation,
retail outlets, and price may be more difficult. In the end, the degree of similarity among the
various environmental and market conditions determines the feasibility and degree of glo-
balization. A successful globalization strategy often depends on the extent to which a firm is
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able to implement the idea of “think globally, act locally.” Even take-out food lends itself to
globalization: McDonald’s, KFC, and Taco Bell restaurants satisfy hungry customers in both
hemispheres, although menus may be altered slightly to satisfy local tastes. When Dunkin’
Donuts entered the Chinese market, it served coffee, tea, donuts, and bagels, just as it does
in the United States, but in China, the donut case also includes items like green tea and hon-
eydew melon donuts and mochi rings, which are similar to donuts but are made with rice
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flour. The company has experienced success in China and plans to expand into Vietnam.
International marketing demands some strategic planning if a firm is to incorporate for-
eign sales into its overall marketing strategy. International marketing activities often require
customized marketing mixes to achieve the firm’s goals. Globalization requires a total com-
mitment to the world, regions, or multinational areas as an integral part of the firm’s markets;
world or regional markets become as important as domestic ones. Regardless of the extent to
which a firm chooses to globalize its marketing strategy, extensive environmental analysis and
marketing research are necessary to understand the needs and desires of the target market(s)
and successfully implement the chosen marketing strategy.
A global presence does not automatically result in a global competitive advantage.
However, a global presence generates five opportunities for creating value: (1) to adapt to
local market differences, (2) to exploit economies of global scale, (3) to exploit economies of
global scope, (4) to mine optimal locations for activities and resources, and (5) to maximize
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the transfer of knowledge across locations. To exploit these opportunities, marketers need to
conduct marketing research and work within the constraints of the international environment
and regional trade alliances, markets, and agreements.

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