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The influence of Globalization on The Marketing Industry
APA Formatting; (764) Words
The Influence of Globalization on The Marketing Industry
The advent of modern technology in the contemporary society has been one of the primary contributors of globalization. A look into the modern world reveals that many industries and economic systems around the world have been disrupted by the unique blend of technology and globalization. According to Reich (1998), globalization comprises of multiple linkages and connections in an economy or system that traverse individual countries to make up the modern world. It is prudent to posit that globalization has brought significant improvements in certain industries.
Impact of globalization on the marketing industry
It is expected that globalization would bring rapid changes to the marketing industry such as the intensification of competition and the subsequent changes in all spheres of marketing, product placement and advertising (Naghi & Para, 2013). Since the companies in the industry would be facing fierce competition, most areas of operation in the company would be changed to accommodate the current trends. One of the major elements of globalization is that any advancement in technology that is experienced in one country will always often be replicated in others (Paasi, 2005). This further intensifies competition even among the leading firms in an industry.
Globalisation in the marketing industry will bring rapid changes with most of these providing new opportunities for the firms in the industry. One of the major benefits of globalization will be the possibility of adopting economies of scale due to the wider scope of operation that globalisation presents (Levitt, 1993). For example, most marketing organizations will experience economies of scale in packaging and communication should they seek to explore new frontiers on the global scale. Besides offering companies with economies of scale, globalisation can quickly help in the launching and marketing of products worldwide.
Marketing firms also find it easy to create unique brand names and an identity to a particular brand courtesy of globalization. According to Hsieh (2005), this is achieved through significant communication cost savings since they can use same concepts in regions where there is a similar market structures. Other opportunities that globalization may bring to the industry also include the ability to expand target markets which increases sales. Firms in the industry may also be able to access cheap resources and sources of financing. Exploring new markets overseas gives companies an opportunity to sample some of the benefits that firms in that country accrue.
In as much as globalisation will often present numerous opportunities to the industry, it will also contribute to some challenges that firms in the industry will experience. One of these is that large firms in the industry will often centralize their operations from one region. This would eventually slow the decision-making process since major decisions are centralized. Furthermore, the issue of globalization may offer substantial advantages to local company and prompt bias for large international firms. The successful marketing of products will always require a firm to understand the target market before any marketing strategies are made (Naghi & Para, 2013). Local enterprises are thus more likely to attract the local market than international firms.
The risk of developing standardized products and services for the global market is one of the major perils of globalization in the marketing industry. Firms will often seek to adopt particular strategies that defines them and their brand. However, while this may establish the uniqueness of the brand, it will not augur well with some target markets in the world.
Globalization in the marketing industry will also favor large companies as opposed to the smaller firms. Large enterprises in the industry have access to vast resources which they may use to explore frontier markets in many parts of the world. Furthermore, these companies are likely to invest in developed countries where there are better technology and citizens have higher disposable incomes than other places.
Globalization affects businesses in numerous ways such as intensifying competition, expanding knowledge and technology. In the marketing industry, globalization presents many opportunities that firms in the industry can use to build their businesses. The ability to attain economies of scale is one of the fundamental opportunities that will arise in the industry. Speedy marketing of products and the creation of unique brand identities on an international scale will also be beneficial to marketing firms. An expanded market, access to resources and finances are also other opportunities offered by an open world. Despite the numerous benefits other challenges may arise for companies in the industry such as insensitivity to local markets, developing standardized goods and too much risk in the management of different global brands.
Hsieh, M. H. (2002). Identifying brand image dimensionality and measuring the degree of brand globalization: A cross-national study. Journal of International Marketing, 10(2), 46-67.
Levitt, T. (1993). The globalization of markets. Readings in international business: a decision approach, 249.
Naghi, R. I., & Para, I. (2013). The Effects of Globalization on Marketing. GSTF Business Review (GBR), 2(3), 168.
Paasi, A. (2005). Globalisation, academic capitalism, and the uneven geographies of international journal publishing spaces. Environment and Planning A, 37(5), 769-789.
Reich, S. (1998). What is globalization. Four Possible Answers, Kellog.