1. Based on the above article(s) and guiding questions below, you are required to write an essay of at last 250 words (about 1 page double spaced with 12 font) and spell-checked with minimal grammatical errors.
2. The grading of this assignment is based on the attached rubric.

Essay:

Compare and contrast different global marketing strategies. How does global marketing relate to your current or future career?

global marketing strategy: perspectives and
approaches

Susan P. Douglas and C. Samuel Craig

INTRODUCTION

Markets worldwide are becoming increasingly
integrated across national borders at a macroe-
conomic, competitive, and product market level.
Firms of all sizes, and in almost all industries,
are increasingly conceptualizing their strategy
on a global basis. As a result, increasing interest
in studying this trend and in understanding its
key characteristics has developed. As noted by
Zou and Cavusgil (2002) a number of different
approaches have been adopted, which vary
in terms of their theoretical or conceptual
underpinnings, and focus on different facets of
marketing strategy as well as their definition of
terms such as global and marketing strategy (see
GLOBAL MARKETING STRATEGY). This has
resulted in the absence of a generally accepted
conceptualization of global marketing strategy,
and hence, an ability to generalize findings from
different research studies and more broadly
improve understanding with regard to the
impact of globalization on the firm’s competitive
position.

In this article, a framework is presented that
aims to provide a clear understanding of global
marketing strategy and at the same time allows
incorporation of other perspectives. First, the
different terms that are used in the present article
are explained. Next, the dominant approaches
to studying international/global marketing and
the theoretical perspectives that underlie these
approaches are briefly reviewed and the key
topics covered. The various issues confronting
the firm as it develops a global marketing strategy
are then discussed, starting with the initial devel-
opment of the strategy, followed by the ongoing
process of refining and developing that strategy
and consolidating the strategy to improve effi-
ciency and competitiveness in global markets.

Key concepts.
Global. The term global is used to define
the geographic scope of the firm’s operations
and strategy development. A firm is consid-
ered to have a global marketing strategy if it is

involved in marketing its products and services
in most geographic regions and areas in the
world, has established a clear strategy as to how
these operations are managed in each of these
areas, and retains control over how these oper-
ations are managed and evaluated (see GLOBAL
MARKETING STRATEGY: PERSPECTIVES AND
APPROACHES). This does not necessarily imply
that these operations are globally integrated or
standardized on a worldwide basis. The term
global will be used broadly to refer to any involve-
ment outside the firm’s home market, as global
strategy must start somewhere.

Marketing strategy. A marketing strategy is
defined as a strategy that is based not only on
identifying target customer needs and interests
in a clearly defined product market in order
to develop customer value creation but also
in clearly identifying the firm’s distinctive
skills and capabilities relative to those of
other competitors in the marketplace (see
COMPETITIVE ADVANTAGE: ITS SOURCES
AND THE SEARCH FOR VALUE). This results
in the development of a marketing strategy
based on the firm’s competitive advantage and
skills in relation not only to marketing activities
such as new product development, pricing,
advertising, and distribution, but also to other
elements of the value chain, both upstream
and downstream such as design, production,
sourcing, and logistics.

ALTERNATIVE APPROACHES AND
PERSPECTIVES TO GLOBAL MARKETING
STRATEGY

In studying global marketing strategy, a number
of different approaches have been adopted
ranging from the transaction cost perspective
to the evolutionary and global integration
perspective. Typically, each focuses on different
decisions or aspects of global marketing strategy
and corresponds in many respects to differences
in the experience of the firm in international
markets.

The transaction cost approach. One of the
earliest approaches adopted in studying the
development of global marketing strategy
was transaction cost analysis (Anderson
and Gatignon, 1986). This focused on the

Wiley International Encyclopedia of Marketing, edited by Jagdish N. Sheth and Naresh K. Malhotra.
Copyright © 2010 John Wiley & Sons Ltd

2 global marketing strategy: perspectives and approaches

appropriate choice of mode of entry into
international markets and viewed such decisions
as a trade-off between control and the cost of
resource commitments, and was grounded in
Williamson’s (1981) transaction cost economics.
While control enables the firm to coordinate
actions, execute and revise strategies, and
thus obtain a higher return, it also entails
commitment of resources and hence exposure
to risk in an uncertain environment. This
perspective has subsequently been widely used
in assessing mode of entry decisions (Erramilli
and Rao, 1983), notably for exporters and
service firms.

The standardization/adaptation perspective.
The standardization/adaptation issue (see
STANDARDIZATION/ADAPTATION OF INT-

ERNATIONAL MARKETING STRATEGY) was
initially raised by Buzzell (1968), examining
the potential benefits of standardizing different
elements of the marketing mix as opposed to
adopting localized strategies. This became a
central debate characterizing the marketing
literature following Levitt’s controversial article
‘‘The Globalization of Markets’’ Levitt (1983),
which argued that multinational firms would
only be successful if they marketed standardized
products worldwide, taking advantage of
potential economies of scale in production,
distribution, marketing, and management.
This debate has been widely pursued not only
in relation to marketing strategy in general
(Douglas and Wind, 1987) but also in relation
to the benefits and feasibility of standardization
relative to different elements of the marketing
mix, products, and target segments (Jain, 1989).

The global configuration/coordination pers-
pective. This perspective emphasizes the
importance of configuring and coordinating the
firm’s activities at different stages in the value
chain across different countries so as to improve
efficiency and gain the maximum competitive
advantage (Craig and Douglas, 2000; Takeuchi
and Porter, 1986; Roth, 1992). Activities at
the upper end of the value chain such as
sourcing, design, and engineering should, for
example, be concentrated in countries where
they can be performed most effectively and
cost efficiently. At the same time, activities

should be both vertically and horizontally
coordinated at different stages in the value chain
and across countries to optimize cost efficiency
and maximize speed of response to changes in
demand or competitor moves.

The global integration perspective. Another
perspective is the global integration approach
(Yip, 1995; Zou and Cavusgil, 2002). World
markets are viewed as an integrated whole,
and emphasis is placed on the importance of
conducting operations in all major markets
worldwide, and integrating strategy devel-
opment and execution across these markets
(see FORCES AFFECTING GLOBAL INTEGRA-
TION AND GLOBAL MARKETING). Similarly,
resources may be shifted from one market to
another in order to compete more effectively.
For example, competitive attacks in one market
may be met by counterattacks in a competitor’s
home market or other key markets. In addition,
emphasis is placed on developing a strategy for
the standardization of product, promotion, and
distribution activities across world markets.

The evolutionary perspective. The most
comprehensive perspective is to view the firm’s
operations as evolving over time as the firm
gains experience and expands in international
markets. The ‘‘stages’’ theory of internation-
alization developed by Johansson and Vahlne
(1977), based on a study of the pattern of inter-
nationalization of Swedish firms, argues that
the perceived risk associated with international
expansion leads firms to enter proximate, more
familiar markets first, gradually expanding into
more distant market as experience is gained in
operating in international markets. Similarly,
Douglas and Craig (1989, 1995) suggest that
international market expansion can be viewed
as a sequential decision-making process starting
with decisions relating to entry into international
markets, standardization versus adaptation of
international marketing mix decisions to
different environmental conditions, and subse-
quently focusing on coordination and integration
of these decisions across national markets.

More recently, it has been pointed out that
some firms are ‘‘born global’’ (Knight and
Cavusgil, 1996, see BORN GLOBAL). In essence,

global marketing strategy: perspectives and approaches 3

such firms immediately adopt a global perspec-
tive in initial market entry, and target customers
worldwide. Typically, these firms target ‘‘niche’’
markets where customers in different countries
have similar needs and interests, for example,
medical equipment and computer software. The
growth of the international communications
infrastructure, particularly, the Internet, often
facilitates identification of these opportunities
and establishment of relations with customers,
ensuring that customer needs are met and
satisfied on an ongoing basis.

Since the evolutionary framework also
provides the broadest perspective and can also
incorporate the other perspectives, this article
also focuses on the specific decisions that a
firm needs to make as it develops experience in
international markets.

BEGINNING GLOBAL MARKET OPERATIONS

While not all firms expand operations to the point
where they can be considered global, all begin
by entering a country or countries outside their
home market. In initially entering into global
markets, a firm needs to make three key decisions:

• which countries to enter;
• what modes of operation to adopt; and
• the timing and sequencing of entry.

These decisions need to be considered in
the light of the firm’s objectives with regard
to global markets, particularly with regard to
the desired degree of involvement, and amount
of resources (human and financial) a firm is
willing to devote to developing operations in
international markets, as well as the level of risk
– macroeconomic, competitive, and policy – that
it is willing to consider in going international.

Selecting countries to enter. In deciding which
countries to enter (see MARKET ENTRY AND
EXPANSION), the firm needs to first evaluate
opportunities on a worldwide basis, assessing in
each country the macroeconomic environmental
factors, such as population size and growth, the
level of GNI (Gross National Income) and rate
of economic growth, the degree of urbanization,
the rate of inflation, the level of corruption,
political risk, financial risk, trade barriers, and

market regulation. In addition, opportunities
and risk at the product market level need to be
assessed. Here, the firm needs to consider the
absolute size of the product market and its rate
of growth, as well as per capita consumption and
growth. If a product is not currently marketed in
a country, surrogate indicators of demand need
to be used. The level of competition also needs to
be considered as also the presence and strength
of other global, regional, and local competitors.
Markets that are large may appear attractive,
but if the rate of growth is low this may signal
that the market is saturated. Similarly, the
market may have a high rate of growth, but
if there is a substantial degree of competition,
the firm may prefer to focus on developing
operations and stimulating primary demand in
a less competitive market. In conducting this
analysis, a hierarchical screening process based
on secondary data can be used to assess opportu-
nities worldwide in order to reduce and expedite
the assessment of opportunities and risk.

Mode of operation. Once having assessed
opportunities and determined which countries
to enter or consider entering, the firm needs
to consider the mode of operation, that is,
whether to enter via exporting (see EXPORT
PERFORMANCE), a contractual agreement with
another firm such as licensing or franchising,
contract manufacturing, or joint venture, or
alternatively, to set up a wholly owned subsidiary
either on a greenfield basis or via acquisition.
Here, a key factor is the degree of control
a firm wishes to exercise over operations in
international markets as well as the importance
of local input and experience in managing
and developing operations, and the resources
a firm is willing to devote to international
expansion. Some firms, for example, wine or
agricultural producers, have no choice but
to export if they wish to enter international
markets. Similarly, service operations, for
example, fast food, hotel chains, and car hire
typically expand via franchising to avoid the cost
of acquiring local facilities and to ensure input
of local management capabilities and experience
(see INTERNATIONAL FRANCHISING). This,
however, typically requires extensive systems of
control and training on a global or regional basis
to ensure that franchisees in all markets provide

4 global marketing strategy: perspectives and approaches

a consistent service experience and reinforce the
firm’s brand image internationally.

Timing and sequencing of global market
entry. The firm also needs to decide the timing
of its entry into different international markets,
that is, whether to be a first mover and enter a
country ahead of competition, or alternatively be
a fast follower (see INTERNATIONAL PRODUCT
DIFFUSION). Being a first mover enables the
firm to establish its brands and develop customer
and distributor loyalty ahead of competition
as well as to monopolize key resources such as
strategic locations, key distribution channels,
thus erecting entry barriers for competition.
On the other hand, being a first mover also
entails substantial risks as the firm needs
to expend resources to stimulate primary
demand and in some cases, develop the market
infrastructure besides convincing distributors to
stock the product. Similarly, there is substantial
uncertainty as to whether potential demand will
develop or whether environmental conditions
will change, for example, the imposition of
product regulations. Similarly, competitors can
learn from the firm’s mistakes and ‘‘leapfrog’’
the learning curve, entering later with a
more desirable product or effective marketing
strategy.

Another aspect is the sequencing of market
entry. A firm may decide to enter international
markets sequentially, adopting, for example,
a ‘‘rehearsal’’ strategy, entering one country
in a region first to gain experience in that
market, then rolling out into other countries.
For example, a US firm entering the Euro-
pean market might decide to enter the Nether-
lands first, and use that experience to develop
strategies for entering other large markets in
Europe, for example, France, Germany, and the
United Kingdom. A variant of this strategy is
to enter a single country in each region first
and use this as a base for developing opera-
tions and strategy in other markets in the region.
For example, McDonalds first entered into the
United Kingdom, and then expanded into the
rest of Europe, and used Australia as a basis for
developing operations in Southeast Asia.

A key factor driving strategy in initial
entry is the desire to achieve economies of
scale. Typically, a firm will use the same

marketing strategy, particularly in terms of
products, product positioning, and branding in
international markets as in domestic markets so
as to achieve tangible and intangible economies
of scale. Tangible economies typically arise from
production economies of scale or spreading
R&D and other investment costs, for example,
in developing advertising themes and copy, over
a larger volume of sales. Intangible economies
may be less apparent, arising from use of the
brand or corporate image on an international
basis, thus enhancing its visibility and value
to customers. Other intangible economies may
include specialized management skills and
know-how, for example, in the management
of franchise operations or the development
of creative product and marketing ideas as in
Apple’s product design capabilities, or Bic’s
skill in developing disposable products.

While many firms, both large and small, have
already entered international markets, typical
firms that are still in the early stages of entering
international markets are

• entrepreneurial firms (see INTERNATIONAL
ENTREPRENEURSHIP), often targeting
niche markets worldwide, for example,
firms selling specialized medical equipment,
export services, or new product variants
such as soft serve ice cream;

• large emerging market multinationals that
often enter markets in developed countries
with a low cost positioning based on resource
cost in their home market, for example,
Haier, a Chinese consumer electronics
firm; or Embraer, a Brazilian manufacturer
of small jet aircraft; or Mahindra and
Mahindra, an Indian manufacturer of
agricultural equipment.

REFINING AND DEVELOPING GLOBAL
MARKETING STRATEGY

Typically, once firms have entered a number
of countries, they begin to expand within these
markets. This is stimulated in part by concern
with meeting local competition and meeting
specific local needs and interests. This is further
reinforced by local management attitudes and
initiatives that typically reflect a belief that

global marketing strategy: perspectives and approaches 5

local market characteristics and demand condi-
tions are different and require adaptation of
products and marketing strategy. An important
concern is also more effective utilization of local
knowledge and assets resulting in product line
extension or development of new products that
can make use of existing channels of distribu-
tion. Constraints imposed by national market
barriers, for example, tariff barriers, quotas,
import duties, and local product regulation, may
also encourage local production.

In entering and expanding within countries
that the firm has decided to enter, the following
three decisions are of paramount importance:

• how far to market standardized products
worldwide or adapt to differing conditions
in different countries (see STANDARDIZA-
TION/ADAPTATION OF INTERNATIONAL
MARKETING STRATEGY), and similarly,
whether to adopt the same marketing
strategy, that is, pricing, promotion, and
distribution strategy or to adapt locally;

• whether to extend the product line to include
local variants adapted to local customer
demand and market conditions;

• whether to develop new products to meet
specific local needs, for example, in
emerging markets or markets with different
climatic conditions (see INTERNATIONAL
PRICING OBJECTIVES AND STRATEGIES;
DESIGNING A GLOBAL SUPPLY CHAIN:
OPPORTUNITIES AND CHALLENGES).

In considering whether or not to standardize
or adapt different elements of the marketing
mix, the firm needs to consider a number of
different factors. While there are a number of
benefits from standardization, there are also
barriers to standardization and advantages to
adapting, and these need to be weighed relative
to each element of the marketing mix. Some
mix elements such as product and how it is
positioned may be more readily standardized
than other elements such as pricing (see
INTERNATIONAL PRICING OBJECTIVES AND
STRATEGIES) or distribution (see DESIGNING
A GLOBAL SUPPLY CHAIN: OPPORTUNITIES
AND CHALLENGES). Similarly, the degree of
modification may vary ranging from minor
modifications such as adjusting to voltage, size

or color preferences, to major differences such
as taste and technological complexity.

One of the primary benefits of standardization
is that firms are able to achieve economies of
scale in R&D and production. Product stan-
dardization in international markets enables a
firm to reduce the number of models world-
wide and hence reduce development costs in
addition to enabling them to afford a higher
level of design expertise. Similarly, pharmaceu-
tical companies are able to spread the high cost
of developing new drugs, and consumer goods
companies the costs of advertising (see INTER-
NATIONAL ADVERTISING – IS THERE STILL A
STANDARDIZATION VERSUS LOCAL ADAPTA-
TION DEBATE?) development across a higher
sales volume. Standardization also enables firms
to transfer ideas, experience, and knowledge
developed in one market to other markets, for
example, the concept of disposable products,
or experience in developing environmentally
friendly products and packaging (see GLOBAL
CONSUMERISM AND CONSUMPTION). Stan-
dardized products also facilitate the development
of a uniform image of quality and service and
the ability to develop a strong corporate or brand
image worldwide. Standardization also facili-
tates coordination and control of operations in
different country markets as uniform perfor-
mance standards can be established and perfor-
mance more readily compared across countries.

On the other hand, there are a number
of barriers to standardization. Differences in
customer characteristics and response patterns
caused by different sociocultural values and
lifestyles, climatic or usage conditions, or percep-
tions and associations with different images,
may generate need for different products, or
promotional and distribution strategies. Simi-
larly, government regulations and restrictions
relating particularly to product and promo-
tional decisions, or campaigns to buy local prod-
ucts, may result in the need to adapt product
positioning and promotional strategy. Likewise,
differences in the marketing infrastructure, for
example, the availability, cost, and effectiveness
of different media such as TV, radio, and print as
well as nontraditional media, such as the Internet
or viral marketing have to be accounted for.
Similarly, the organization of the distribution
infrastructure and the importance of large-scale

6 global marketing strategy: perspectives and approaches

distribution organizations versus small Mom
and Pop stores may vary considerably from one
country to another, or the presence of interna-
tional or regional retailers may vary considerably,
facilitating or hindering local brands and prod-
ucts. Similarly, the extent of and strength of
local or regional competitors may vary. Typi-
cally, the presence of strong local competition
will create pressures to adapt either in terms
or product, promotion, or pricing strategy. In
addition, local managers are typically opposed
to standardized products as these reduce their
control over marketing strategy, as marketing
policy and guidelines are likely to be established
at regional or corporate headquarters.

Such differences in market and demand
conditions in different countries and regions,
typically lead the firm to extend the product line
adding new product variants that are adapted
to specific needs and tastes (see MANAGING
THE GLOBAL PRODUCT PORTFOLIO). This
may include adding product versions with
new flavors or scents, or different types of soft
drinks, or bottled waters. This typically helps
to generate additional sales, fills out the firm’s
product line, and enables the firm to tap a
broader range of customers as well as compete
more effectively in the local marketplace.

At the same time, the firm may also develop
new products tailored to specific local market
needs (see INTERNATIONAL PRODUCT INNO-
VATION AND DEVELOPMENT). For example,
in emerging markets the firm may develop
simple functional products, for example, mobile
phones targeted to low-income consumers who
are unable to afford more complex high-end
products marketed in developed countries.
Similarly, computers that uses icons may
be designed for illiterate consumers, and
solar-powered equipment created for consumers
with no or unreliable access to electricity. Again,
this will help the firm’s sales growth in a given
market and tap a broader base of customers.

In extending the product line and devel-
oping new products within a given country,
a key priority is to leverage economies of scope,
adding products and product variants that can be
distributed through existing channels of distri-
bution or produced at existing production facil-
ities. This enables the firm to spread overhead
costs over a higher volume of products. At the

same time, it utilizes experience and knowledge
of market conditions in a given country, and
investment in research to identify and under-
stand customer needs. Similarly, where the same
channels of distribution are used, relations devel-
oped with distributors or sources of supply may
be further reinforced. In essence therefore, a key
aim is building the firm’s operations in a given
market, and particularly in building the scale
and scope of operations so as to compete more
effectively in local markets.

Firms focusing on refining and developing
their international marketing strategy, are
typically firms competing predominantly on a
regional basis, for example, companies such as
Henkel, the German-based manufacturer of
detergents and other household products, as well
as products targeted to handymen such as glue,
paint, and solvents. Similarly, Kao, the Japanese
detergent and personal products manufacturer,
is focusing on growth in Southeast Asian
markets. Other companies are transitioning
from developing their strategy to consolidating
their positioning and strategy across regional
and global markets. McDonald’s, for example,
has rolled out local variants such as shrimp
burgers and fried rice patties developed in Japan
to other countries in Asia and McArabia flat
bread in Europe. Similarly, in Europe many
facilities are being upgraded so that customers
come not only for fast service and inexpensive
food, but also to enjoy a comfortable and clean
environment. Other service ideas, such as home
delivery started in Cairo, Egypt, are being added
in other busy city centers.

CONSOLIDATING/INTEGRATING GLOBAL
STRATEGY

A number of factors act as triggers to consolidate
and rationalize operations across different
markets (see FORCES AFFECTING GLOBAL
INTEGRATION AND GLOBAL MARKETING).
These include, for example, cost inefficiencies
and duplication of effort across different country
markets, particularly those that are similar
in terms of demand characteristics or are
geographically proximate. Similarly, opportu-
nities may occur for the transfer of products
and brands developed in one country market to
other country markets, targeting similar market

global marketing strategy: perspectives and approaches 7

segments, for example, high-income consumers,
younger consumers, in business-to-business
markets, or global customers. Similarly, the
emergence of competition on a global scale
is facilitated by improved linkages between
national market infrastructures, for example,
retailing or advertising media.

Such factors lead firms to pay increased
attention to consolidating operations in global
markets, and improving the coordination and
integration of operations at different levels of the
value chain, such as promotional efforts through
greater use of regional or global media and posi-
tioning strategies or the establishment of global
and regional product development centers. Simi-
larly, sourcing or production strategies may be
coordinated or configured at a global level. Here,
however it is important to note that global config-
uration of sourcing and production strategies are
dependent on standardization at the product
design level.

A key element of the firm’s strategy at this
point is therefore to establish a global portfolio
of countries, products, and target segments in
order to establish direction for future efforts
(see MANAGING THE GLOBAL PRODUCT
PORTFOLIO). Then, it needs to establish global
strategy based on the market scope and target
market of its various product business, which
may be focused on a specific target segment
worldwide, or alternatively be broad based,
targeting the mass market in different countries,
or hybrid, that is, some combination of both.
Finally, the firm will need to consider improved
integration and coordination of operations both
upstream and downstream in the value-chain as
well as horizontally across geographic regions
and product businesses.

In establishing the geographic scope of the
global portfolio, the firm should maintain a
balance between mature markets, such as the
United States, Western Europe, and Japan,
while targeting emerging growth markets such
as China, India, Brazil, Thailand, or Colombia.
The mature markets provide low growth, but
also lower risk and require little additional
investment to develop and build demand. The
emerging markets, on the other hand, offer high
growth potential, but require greater investment
to understand customer demand, evaluate the
nature of local competition, and build the market

infrastructure, particularly in underdeveloped
regions. At the same time, the degree of inte-
gration across markets, for example, in Europe,
South America, or the Indian subcontinent needs
to be considered, in order to effectively allocate
investment efforts within a region, as well as
diversify across different regions of the world.

Once the firm has established the countries
and regions to target, the next step is to establish
the firm’s GLOBAL MARKETING STRATEGY.
Here, an important issue is how far this is inte-
grated across different countries and regions
of the world. This is likely to depend, to a
substantial degree, on the scope of the product
market. Where the firms adopt a focused strategy
targeting a specific market segment, such as
high-income consumers, or young adults, they
are likely to integrate strategy across markets,
adopting the same positioning, the same or
similar product line and pricing, promotional
copy and media, and distribution strategy. This
may result in the use of global or regional
media and, similarly, global or regional retailers
who are able to provide coverage matching the
geographic scope of the firm’s operations and
hence, improve marketing efficiencies. If, on the
other hand, the firm targets a broad-based mass
market, considerably greater difficulties may
be encountered in integrating strategy across
markets. While increasingly, many firms are
adopting global branding strategies, the extent
of the product line may vary from one region
to another or even by country. Similarly, while
advertising themes may be uniform across coun-
tries and regions, their execution may vary and
distribution strategies may similarly need to be
adapted to differences in the structure of the
distribution system and the availability and reach
of organized distribution, for example, super-
markets, mass-market retailers, and department
stores.

In integrating and consolidating strategy
across countries and regions, a primary concern,
as in initially entering international markets,
is to achieve both tangible and intangible
scale efficiencies, particularly with regard to
the management of marketing and service
operations. At the same time, synergies may
arise from coordinating and integrating strategy
and operations, especially across proximate
markets, or in integrating communications

8 global marketing strategy: perspectives and approaches

efforts at a regional or global level. Similarly,
the transfer of best practices is critical, that is,
ideas for products, promotional or distribution
strategies across countries and regions, as well
as experience and know-how in effectively
managing marketing operations in different
environmental conditions.

Many large US and European multinationals
are in the process of consolidating operations
across world markets. Many consumer goods
firms, who previously had local or regional
brands are focusing on building a global branding
strategy, at the corporate, product business, and
product level. In some cases, this leads to the
development of tiered branding strategies where
the product level brand is endorsed by the corpo-
rate brand as well as a family or house brand.
Attention is also paid to building a global infor-
mation system, particularly at the firm level
so that production and distribution logistics
can be better coordinated and integrated across
countries and regions as well as across product
businesses. Increasing emphasis is also paid to
the transfer of management across geographic
regions in order to enable them to develop expe-
rience in working in different environmental
contexts, and hence develop and train a multi-
cultural global workforce of managers capable of
operating in a variety of different contexts. At
the same time, they are able to bring their expe-
rience working in other countries and regions to
deal with similar problems and situations in a
given country or context.

ISSUES IN THE CONTINUING EVOLUTION OF
GLOBAL MARKETING STRATEGY

The global marketing strategy of firms continues
to evolve in response to a changing environ-
ment and new challenges. Three of the most
pressing issues are (i) the increasing complexity of
managing operations on a global scale; (ii) coping
with the increasing intensity of competition not only
from established multinationals but also from
new competitors from emerging markets; and
(iii) exploiting opportunities in emerging markets.
The role of each of these in shaping the evolution
of global marketing strategy is further elaborated.

Complexity of managing international opera-
tions. As international operations grow in

importance and complexity, management has
to direct, coordinate, and control operations
on a much broader and more diverse scale
and scope (see MARKETING STRATEGY
IMPLEMENTATION). This may entail decisions
relating to the reconfiguration of the geographic
organization of operations at different stages
in the value chain, for example, developing
global production platforms, or centers of
product innovation, or improving vertical and
horizontal coordination at different stages of
the value chain as well as developing external
communication linkages with customers,
developing global account management systems,
improved supplier linkages, and organizational
restructuring to improve coordination and
communication links across countries and
regions. In addition, establishment of a global
information system, and of a global management
workforce, consisting of managers able to
operate in different countries and cultural
contexts are essential to operate effectively in
increasingly culturally diverse and far-flung
world markets.

Increasing intensity of competition. Firms have
also to cope with the increasing intensity of
competition as well as the emergence of new
sources of competition. As growth slows in
many markets in developed countries, such as
the United States, Western Europe, and Japan,
competition between established multinationals
in these markets has become increasingly severe.
This has been exacerbated by the entry of firms
from emerging markets such as China, India,
or Brazil. These firms are able not only to
leverage the advantages of a low-cost resource
base to build their position in global markets and
enter developed markets but are also learning to
adopt the technologies and management skills of
firms in developed countries and in some cases
surpass them in terms of innovative skills. Typi-
cally, these firms enter developed markets with
a low-price positioning. However, often, as they
establish a market position and effective distri-
bution channels, they begin to move upward,
adding higher-priced products and developing
their brand image. This poses an increasing chal-
lenge to established multinationals in developed
countries.

global marketing strategy: perspectives and approaches 9

Exploiting opportunities in emerging markets.
Slower growth in developed markets has
prompted firms to look to emerging markets
for growth opportunities. Although current
income levels in these countries are low relative
to developed countries, ranging from $4460 in
Russia to $730 in India, the growth rates and
economic fundamentals in these countries
suggest immense future market potential (see
EMERGING MARKETS). Both India and China
have sizable and relatively affluent middle
classes which constitute a large market for
goods and service as well as vast markets of
rural poor and an increasing number of highly
successful entrepreneurs. Here, an important
decision for developed market firms is whether
to focus on the affluent urban middle class in
these countries, leveraging existing products
and global brands, with limited adaptation of
the marketing mix, or alternatively, target lower
income consumers, typically in rural areas.
Targeting lower income consumers, however,
typically requires the development of radically
new marketing strategies, including the devel-
opment of new low-cost functional products
and improvement of distribution access and effi-
ciency in rural areas. In addition, creative ways
to enhance the ability of consumers to afford
products need to be developed. While requiring
substantial effort and ingenuity, the size and
potential of the emerging markets, not only in
India and China but also other continents such
as South America and Africa, offers tremendous
opportunities for future growth.

CONCLUSION

The crafting of global marketing strategy is a
dynamic ongoing process, continually evolving
as the firm expands into new countries and
markets, requiring adaptation to new market
conditions and demand factors, competitive
forces, as well as internal pressures within
the firm. Also, the fundamental nature of
global marketing strategy changes as the firm’s
involvement in global markets increases. To
succeed, the firm must become an organism that
continually evolves, adapts, and responds to
the changing realities of the global marketplace.
Firms that are able to do so will prosper; those
that do not will wither.

Bibliography

Anderson, E. and Gatignon, H. (1986) Modes of foreign
entry; a transaction cost analysis and propositions.
Journal of International Business Studies, 1, 1–26.

Buzzell, R. (1968) Can you standardize international
marketing?. Harvard Business Review, 69, 102–113.

Craig, C.S. and Douglas, S.P. (2000) Configural advan-
tage in global markets. Journal of International
Marketing, 8 (1), 6–25.

Douglas, S.P. and Craig, C.S. (1989) Evolution of
global marketing strategy: scale, scope and synergy.
Columbia Journal of World Business, 24 (3), 47–58.

Douglas, S.P. and Craig, C.S. (1995) Global Marketing
Strategy, McGraw Hill, New York.

Douglas, S.P. and Wind, Y. (1987) The myth of glob-
alization. Columbia Journal of World Business, 22 (4),
19–29.

Erramilli, M.K. and Rao, C.P. (1983) Service firm’s inter-
national entry-mode choice: a modified transaction
cost analysis approach. Journal of Global Marketing,
57, 19–38.

Jain, S. (1989) Standardization of international marketing
strategy: some hypotheses. Journal of Marketing, 53,
70–79.

Johansson, J. and Vahlne, J.-E. (1977) The internation-
alization process of the firm- a model of knowledge
development and increasing foreign market commit-
ments. Journal of International Business Studies, 8,
47–58.

Knight, G. and Cavusgil, S.T. (1996) The born global
firm: a challenge to the traditional theory of interna-
tionalization. Advances in International Marketing, 8,
11–26.

Levitt, T. (1983) The globalization of markets. Harvard
Business Review, 61, 92–102.

Roth, K. (1992) International configuration and coordi-
nation archetypes for medium-sized firms in global
industries. Journal of International Business Studies, 23
(3), 533–549.

Takeuchi, H. and Porter, M.E. (1986) The strategic role
of international marketing: managing the nature and
extent of worldwide coordination, in Competition in
Global Industries (ed. M.E. Porter), Harvard Graduate
School of Business Administration, Cambridge.

Williamson, O.E. (1981) The economics of organizations:
the transaction cost approach. American Journal of
Sociology, 87 (3), 548–577.

Yip, G.S. (1995) Total Global Strategy: Managing for
Worldwide Competitive Advantage, Prentice Hall,
Englewood Cliffs

Zou, S. and Cavusgil, S.T. (2002) The GMS: a broad
conceptualization of global marketing strategy and its
effect on firm performance. Journal of Marketing, 66,
40–56.