Global Business Environment Multinationals Such Thesis

Excerpt from Thesis :

Some of the problems that this type of approach offered were:

Reliability issues -- many of these marketing directors had their own host perspective (local responsiveness) and the headquarter perspective (global integration), but none of the overarching overview that someone coordinating all the activities in other countries might have.

7. Research findings, Analysis and Evaluation

The results of the primary research are fully supported by the findings of the secondary research and backed by the general theory in the area of global marketing strategy. The marketing directors of both companies in all different regions (Asia, Latin America, Europe) have admitted to adapting their marketing strategies as much as possible to local specificities, but also recognized the important role that the headquarters and central marketing department played in the way they made their decisions, especially since the central departments were also coordinating the marketing budgets and were working towards creating economies of scale and a more profitable global company.

Some of the most interesting examples were related to the way that the marketing mix was subject to local responsiveness pressure and parts of it or the whole had to be tailored to fit the local conditions. Perhaps one of the most interesting examples in this sense was in Spain, where Coca Cola was sometimes presented as a soft drink that could be combined with wine, mainly because this was a custom among the young generation in Spain. This type of local responsiveness pressure affected the product and the promotion, two of the elements of the marketing mix.

In both Pepsi Cola and Coca Cola's case, the advertisements were very often the most subjected to local responsiveness pressure. Some of the Pepsi advertisements, for example, had been tailored in the United States to be based on football as the intermediary by which the drink could be brought to the consumers. This meant a significant campaign to have different important football players join in promoting the product.

This was obviously not possible in Brazil, where the marketing director informed that the football played in the U.S. was more or less unknown and that the entire theme needed to be changed so that it would focus on soccer and some of the Brazilian stars. Nevertheless, this was not a phenomenon singular in Brazil: the same commercial made plenty of sense both in Poland and in Japan, places where soccer has been or is becoming a cult sport. In all these countries, the commercial where different soccer player (Ronaldinho, Beckham, Henry etc.) meet and play together is a great success, as is the fact that many of these soccer players have been, at some time or other, the official figures for Pepsi (as was the case for Ronaldinho).

Most of the marketing directors who were interviewed reported a constant communication with the marketing department at headquarters, which comes to emphasize the idea that in both companies, there is a gradual flexibility between global integration and local responsiveness. Marketing decisions sometimes tend to be local, but, most often, decisions about marketing campaigns or the launch and promotion of a new product are taken with more factors of decision involved. As is the case, the local marketing director is always consulted, mainly because the input he is able to provide will bring additional touches to the campaign, as well as valuable knowledge of the local characteristics.

These findings were doubled by those of the secondary research, notably P. Kotler who actually discusses the exact case of Coca Cola in one of the chapters of his book "Marketing Management." The way that both companies tended to approach the problem of global integration and local responsiveness pressures was by a centered positioning, where the decision were made at a central, thus global level, but customization was allowed and encouraged based on the input from the different locations.

8. Conclusion

Global integration pressures, along with local responsiveness pressure, play a more and more important role in the way that global marketing strategies are created. The study evaluated that the impact of both types of pressures on the final marketing decision was significant. However, some of the primary research has also revealed that many of the global marketing strategy decisions were taking into consideration both the global constraints (necessity to remain competitive on the market through decreasing costs and economies of scales, the creation of a global brand and global characteristics etc.) and local responsiveness (the necessity to adapt parts of the marketing mix to local realities, so as to better appeal to the customers, creation of particular products for some markets etc.).

In both cases, the way that the company best managed to position itself between the two types of pressures impacted the market share and company profitability. The marketing director in Spain, for example, mentioned that Pepsi's capacity to adapt to the local custom of drinking wine with a soft drink increased the company's market share on the local market by 5%. Similar figures could most likely be reported in the case of Coca Cola on other foreign markets. The best conclusion from this is that local responsiveness does pay off, especially in the short and medium term, while global integration has a greater impact on profit and market share in the long run, especially considering that local responsiveness is more costly.


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