Marketing in a global market

Marketing in a Global Market

Type in 'global marketing' on Google's search engine, and you will gain access to more than 48,000,000 Web sites. There is no doubt that marketing in the global market is big business.

During the past decade, the world markets have changed enormously, as new markets opened up with the end of the Cold War forming new economic blocks and trading alliances, leading to new approaches to doing business for survival in the ever changing economy (Changing pp).

As the world population grows at a rate of 1.7% annually, more products and services are needed, and businesses are competing aggressively to fill the needs (Changing pp). The past twenty-five years has seen world trade grow in volume at an average of 5% annually, with more and more resources gearing towards exporting, especially since the end of the Cold War (Changing pp). Thus, the export business has become more competitive and challenging as population growth and new exporters enter the marketplace playing an increasingly crucial role in international trade (Changing pp). Prior to the 1970's, there were far fewer exporters, and many manufacturers did not know how to export and relied on export-traders for exporting, known as indirect exporting (Changing pp). Moreover, foreign buyers did not have many export sources to choose from, however, as competition increased, better quality products and lower prices made the traditional practice of single source of supply difficult for export-traders to maintain, thus changing the source of supply of similar products from one manufacturer to the other became inevitable, therefore, to survive, many manufacturers began exporting directly in the mid-1970's (Changing pp). However, by the early 1980's, the trend of ordering more items but less quantity of each item made direct exporting unprofitable for many manufacturers (Changing pp). The more-item-and-less volume trend in best handled by the export trader (Changing pp).

It is not a prerequisite for a business to sell to its domestic market before selling abroad, in fact, there are many successful export-traders and export-manufacturers, especially in Asia, that sell their products entirely to foreign markets (Changing pp). It is not just large companies that export, more and more small and medium sized companies are engaging in exporting, and are the leading source of job creation in many countries (Changing pp). Furthermore, expertise is not an absolute necessity, because the export procedure and routine is easy to learn and there are numerous forms of export assistance or advice available from the government and private sectors, however, prior exposure to international trade is a definite advantage (Changing pp).

Global Reach is an Internet company that specializes in building traffic to Web sites on a country-specific basis using targeted sales strategies designed for marketing overseas (International pp). The primary task of the company is to build market awareness, develop brands and generate business to targeted audiences based on national characteristics (International pp). According to IDC's eWorld 2001 Survey, most non-English Internet users prefer Web sites in their own language (International pp). Approximately 34% of French respondents prefer Web sites in English, while 62% prefer sties in French, while only 18% of Germans prefer English language sites, compared to 79% who prefer German language sites (International pp). Almost 85% of Chinese prefer sites in their native language, with 15% in English, and only 8% of Japanese prefer English, compared to an 84% preference for their native language (International pp).

The Internet is a powerful tool that expands international marketing into another dimension by making overseas markets easily accessible (International pp).

Global Reach uses techniques such as index registrations, search engine optimization of home pages for foreign keywords, online promotion, strategic linking, and paid search engine advertising to build traffic to a multilingual Web site, with each technique performed in the language of the target markets (International pp).

The tobacco market in the Middle East and North Africa region, MENA, is very diverse and stretches from the edge of the Black Sea to the Atlantic, and contains some of the most ancient and varied sets of cultures on the planet, with many countries enjoying a period of prosperity and technological advances (MENA pp). It is estimated that 590 billion cigarettes are smoke per year in the MENA region and growing by 2% annually, thus making this area one of the few growing markets for tobacco in the world (MENA pp).

Turkey is the largest exporter of oriental and semi-oriental leaf in the world, and although there was a rise in production in 2004 that stabilized the country's tobacco economy, the European Union plans for reforming tobacco subsidies for 2006 and the potential sale of Tekel, the tobacco monopoly, may have a destabilizing effect and lead to a rise in pricing (MENA pp).

Although Dubek has dominated the cigarette market in Israel and has a distribution network of 12,000 retailers nationwide, its share of cigarette sales has been affected by a rise in popularity of foreign brands (MENA pp). In 2003, Philip Morris became the leading player in sales of tobacco with its volume share rising to 45%, compared to Dubek's 39% (MENA pp). In fact Marlboro has overtaken Dubek's Time brand to become the leading brand, accounting for more than 11% of cigarette volume sales in 2003 (MENA pp). There are other multinational players that are steadily penetrating the market, as well as new players such as Armenian Grand Tobacco and Jerusalem Cigarette Company (MENA pp). Moreover, in 2004, BAT stopped using the services of TLS Tobacco Import Marketing and Distribution, and is now conducting distribution of its products without using intermediaries (MENA pp).

Saudi Arabia has no domestic manufacturers, thus the Saudi market is dominated by foreign imports (MENA pp). Philip Morris and BAT are particularly powerful, while MTM of Yemen and the Philippino company, Fortune Tobacco, also have a strong presence (MENA pp). Unlike other countries in the region, low tar brands (10 mg is the legal limit set by GCC regulations) and the ultra low tar are very popular (MENA pp). Philip Morris, with 20.6% of the market share, has the top two leading brands in the country, Marlboro and L&M, although BAT, with 9.9% of market share, has three of the top five sellers (MENA pp). Direct advertising of tobacco products is prohibited in Saudi Arabia, however, foreign publications continue to carry cigarette advertising, and cigarettes remain widely available in supermarkets and shops where they are typically prominently displayed (MENA pp).