Which of the following are the two components of a global marketing strategy?

Global marketing is adjusting a company’s marketing strategy to the specific needs of international consumers. Global marketing aims to reach a wider audience in the worldwide market.

In the article, we explain why this process is important and highlight its advantages and disadvantages. We also provide 3 global marketing strategies and describe their usage with examples.

Why is global marketing important?

According to Business Wire, the global market should grow from $3.2 billion to $6.4 billion from 2021 to 2026. These amazing statistics illustrate the worldwide trend for companies to enter an international market.

Nowadays, the influence of globalization is obvious. More and more brands try to sell their product worldwide for several reasons. Firstly, reaching global markets gives companies access to a large customer base. Secondly, it allows business owners to reduce spending by achieving economies of scale. Thirdly, companies that sell goods worldwide diversify their risks and are less influenced by crises in certain countries.

Reaching global markets helps increase people’s awareness of the product significantly. You can build a strong reputation as a worldwide-known brand by selling in different countries, which gives you an amazing competitive advantage. Moreover, extending the company brings huge business opportunities and, as a result, new ways of getting income.

Understanding all these benefits makes many business owners start selling internationally. However, there are many cultural, legislative, demographic, and political differences that you should consider in your products’ promotion. It is not enough to develop one marketing strategy for all countries. Your company should be flexible to satisfy consumers worldwide, so global marketing is necessary.

You should understand all the pros and cons before starting to work with consumers worldwide. Continue reading to discover them in the next section.

Advantages and Disadvantages of Global Marketing

Working in the worldwide market is the chance to grow and develop for many companies. However, you should understand both the positive and negative peculiarities of international business processes to manage sales successfully. Firstly, take a look at the advantages of global marketing.

1. You can reach a wider audience. If your company grows constantly, you can find out that there are few consumers in the country to increase your revenue. This is the time to start product promotion abroad. Global marketing allows you to sell more products, attract more customers and enlarge your market share in different countries.
2. Your brand influence will increase. Building a well-known brand's reputation gives you a powerful competitive advantage in local markets of different countries. Moreover, by adopting your advertisements to the peculiarities of each culture, you can make the audience more loyal to your company. Brands with a strong reputation, like Coca-Cola or Nike, can influence not only consumers' purchases but their worldview and lifestyle.
3. You can reduce costs on product development. Working with the global market means attaining the economy of scale that helps you avoid overspending, particularly on shipping raw materials. Also, you can locate your plants or factories in the countries with loyal taxation policies to save company's money. Global marketing allows businesses to sell worldwide and reduce spending on raw materials by standardizing.
4. Your company can get much more feedback. This fact will influence the speed of your growth directly. Knowledge of your brand’s weaknesses and problems in markets of different countries means the possibility to improve them much faster. Global marketing can help you gain feedback worldwide in a few clicks, especially by using social media advertising and email marketing.
5. Local crises will not influence your company so much. If you are focused on the market of a certain country, its economic or legislative problems may mean the end for your business. However, diversifying risks will help you make this influence not so crucial. Sometimes, conflicts with political organizations or competitors do not let companies succeed in the local arena. Working with global markets allows businesses to avoid these problems or reduce their influence.

Now you understand the advantages of selling to international consumers. Let's take a look at the disadvantages of global marketing.

1. It can be difficult to overcome cultural barriers. Adopting your promotion strategy to the global market means satisfying audiences with different cultural backgrounds. For example, McDonald’s had to change their standard recipe and replace beef with vegetarian cutlets in all their burgers in India because of the national values. If you want to succeed in a foreign market, it is essential to deeply understand people's cultures and privileged consumer behavior types. Some companies may not be so flexible, and it will be a roadblock to their product's promotion in the global market.
2. Your company should adapt to the legislation of foreign countries. It can be costly and risky to start working without understanding the laws and taxations of the new markets. Sometimes businesses need lawyers’ help to make their start abroad smoother and avoid fines. This process may be time-consuming, but it is necessary before launching the promotional campaign.
3. It may be difficult to avoid overspending on buying raw materials. If you start working with foreign markets without proper research, the inventory costs can increase significantly. Firstly, it may be challenging to find the balance between supply and demand because the results of your promotional campaigns will not be the same as in your country. Secondly, if you start working with local suppliers, finding the cheapest resources in the area requires time to save your costs.

Now you understand all the benefits and roadblocks of global marketing. In the next section, we provide 3 strategies to promote your products worldwide successfully.

3 Global Marketing Strategies

While starting work with global markets, business owners face many difficulties with product development and promotion. In this section, we explain the difference between two approaches to global marketing and provide three widespread strategies to achieve success in the international market.

Firstly, let’s take a look at the approaches to doing business while working abroad. These two types depend on how centralized product development is.

• International approach involves product import and export. Usually, a company's offices and plants are located in a home country while its products are sold worldwide. It allows businesses to have centralized management and make changes in their products faster.
• Multinational approach means that the company's offices and plants are located in a few countries you work with. In such a way, businesses diversify risks and adapt their products to different markets. Marketing strategy, pricing policy, and product line may vary too.

Now take a look at three main strategies of global marketing. They are more focused on the product variety in different countries, not on the location of the company’s capacity.

1. Standardization. This strategy means that the product line, marketing, pricing, and other elements are standardized in different countries. Top managers make the most important decisions in the main office and there is little independence in local markets. This strategy allows companies to save costs on raw materials by standardizing the production process. Also, there are fewer investments needed to develop a product marketing strategy because it is the same in all markets. The most well-known examples of companies with this strategy are Coca-Cola, McDonald’s, and Apple.
2. Diversification. This strategy gives more freedom to the local offices and is often based on the multinational approach. It means that the company may have completely different products all over the world that can be united under the one brand’s name and logo. Such a strategy allows businesses to diversify risks and develop the business in completely new areas. Companies use it when there is a significant difference between the markets they work with. The most famous example is Nokia which produced household appliances, mobile phones, paper products, and many other things at certain times of its existence.
3. Segmentation. This strategy means that the company chooses a certain segment of the audience to work with and produces only products for this segment in all countries. Marketing, pricing policy, and product line can vary, but there is often a piece of standardization. It is the most flexible strategy that gives some independence to international offices but allows to incorporate the best company’s organizational decisions.

Congrats, now you know what global marketing is and why it is important, understand the advantages and disadvantages of global marketing, and are ready to use different strategies to promote your company worldwide.

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