Market mix in the global market

Standardization of the manufacturing, advertising or any other process that business planning to go global is possible, however, very rare (Chand, 2015).

Because markets vary in requirements and characteristics, we can, therefore, say that some element in a market mix may be changed by marketers to better adapt to the markets. Suitability research done on the marketers will guide the decision maker to determine which elements will be changed and which ones will be standardized.

Some may argue that with the internet, the world has become a small place and many customers are seeking the same products, however, global markets also have similarities and differences. Decision makers need to find out these similarities and differences in order to put together an effective marketing mix suitable for a region regardless of the cost incurred. For example, cultural differences may mean the advertising to change but the product remains or vice versa to suit local conditions.

Product

  1. In pharmaceuticals, the product is unlikely to change in any market, as the purpose of the offering is the same.
  2. Products attached to some heritage as Tusker has its roots in Kenya and change the product will mean losing authenticity.
  3. Luxury brand such as Armani, Gucci and Rolex have a global appeal to a segment of buyers who have similar mindset and lifestyle. The product is unlikely to change from country to country.

In other situations, products have to be changed to cater for local cultures and taste so that it can be acceptable. In most cases, products change at the entry point but with time, the market grows a desire for the standard offering.

Businesses will have to consider legal requirements, compatibility of the product, labeling and instructions requirement, and cost considerations in the manufacturing process in the host country.

Promotion

Promotional standardization can be affordable for any business thinking of globalizing but however, dangerous. Promotion of an offering is meant to motivate potential buyers to buy an offering therefore, the campaign should be sensitive to the needs of the market they are operating in. For example, the use of local celebrate may mean the success or failure of a marketing campaign.

In markets with high competition, businesses need to adopt even very small cultural element, customs, and motivations in their advertisement campaigns in order to get buyers attention.

Price

Additional cost caused by globalization needs to be considered in determining the price. This cost may include distribution channel margins demanded, insurance cost, packaging, tariffs, taxes exchange rate, and even transportation cost.

To the customer, the cost added to the price is not understood and therefore, companies should understand the price-value equation of customers especially in developing countries before pricing the offering. The customer will demand more value if the prices are high.

The supplier is also faced with gray markets, this is a situation where some else sell the same product you are selling without authorization from the manufacturer. Such a situation will immensely affect operations as the other distributor is benefiting from the product awareness you created and they have the ability to lower the price lower than what you are offering. Grey markets cut down profit margins for the authorized distributor and damages image of the brand.

Dumping is a situation where the distributor sells at a price lower than the stated price and may even fall below the cost of production and shipping cost. When it occurs, the prospects of the host country are affected killing the normal growth of mainland business with it. Anti-dumping laws prevent predatory pricing policies of foreign businesses.

Businesses that process products to a certain level then another department of the same business in a different country pick it up to make final products be sold such as in the case of outsourcing, should review its transfer pricing policies. Effective transfer pricing ensures that all the departments in the production process are profitable. Divisions in different countries should be treated as separate entities, however, should not appear to be evading taxes.

Place

Businesses planning to go global should find out the location of potential buyers, price sensitivity, preferences, information and value they require when making a purchase. Aside from the customer, the business will have to determine whether to use local importers and distributors or use own personnel.

In the beginning, the business may rely on the local distributors as they understand the region well but with time, they will set up their own distribution after reaching a certain level of penetration. However, some of the distributors may not hold the same interest as the manufacturer and may not improve the markets for the offering.

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