Global Marketing Strategies: Globalization, Localization, and Glocalization

MKTM030 AS1
Assessment
Global Marketing Issues Assignment
Module Leader: Dr Martin Smith
Name – Abdul Basit
Student ID - 23853924

Contents
Introduction................................................................................................................ 1
Globalisation:.............................................................................................................. 1
Localisation:............................................................................................................... 3
Glocalisation:.............................................................................................................. 3
Conclusion: -............................................................................................................... 5
References:................................................................................................................. 6

Introduction
In this report, we will critically analyse the three common marketing strategies: Globalisation,
localisation, and globalisation. These three strategies have existed for a very long time, and
companies across the globe have used one of the strategies at any time of their existence. All
three strategies are distinct in their ways, and these are a real saver to countries and companies
when it comes to complex international markets. We will start off with globalisation, which
represents standardisation. The reason why we refer to this strategy as standardisation is because
the brands keep their practices consistent and common among different markets. The major
reason for this is that the brands tend to achieve economies of scale, which will be discussed later
on in the report (Levitt, 1983). Moving over to our second strategy and that is localisation. This
strategy focuses on customised products and services for every region. The marketing strategy
and the products and services are developed in a way that meets the demands and needs of local
customers (Johansson, 2000). Thirdly, we have a strategy that’s called glocalisation. Now this
strategy consists of the elements of both the other strategies, which are globalisation and
localisation. This strategy encourages the companies to have a global perspective while keeping
the local practices in consideration, too. As the brief says, "think globally but act locally"
(Robertson, 1995). In the report, we will be deeply analysing these three strategies through the
lens of a global marketing perspective, highlighting the advantages and disadvantages faced by
businesses who opt for any of the following strategies and critically analysing the difference
between all three strategies using real-life examples. In the end, we will discuss the conclusion as
to which strategy is best suited for the business in these recent times.
Globalisation:
I would like to explain the strategy further by quoting a few examples. The world today is all
about trade and connecting from different parts of the world. We watch TV shows from America
(Netflix), the clothes we wear are from Asian markets, and the food we consume is grown in
Africa. This example glorifies the importance of globalisation and how everything is globalised
and connected. If we dig deep into this approach, we get to realise that its all about
standardisation. Which seems complex in the start to understand; however, it's really not.
Standardisation (add a reference here), in simpler terms, means the business develops and offers
standard products, services, and marketing campaigns for every country or region it wants to sell.
(Vignali, 2001) explains that global companies have standardised products, promotional
campaigns, prices and distribution channels for all the markets in which they operate. They keep
their method the same by following standard procedures without any drastic customisation for
the local customers and things they prefer as per their liking and taste. (Ohmae 1989) expresses
his views that when large companies aim to compete, they become even more global. But as
Czinkota and Ronnenken (1995) say, multinational companies must know how to adapt
themselves to new markets by adjusting their marketing strategy, including how they sell and
distribute, and this is the only way to fit into the demands of the new markets they enter.
(Keynes, 2017) has made this strategy so easy to understand, he explains through an example
that any individual living in any part of the world, while he is enjoying a meal in one part of the
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world, can order anything from the other part of the world and the best part is that he can expect
that product to be on his doorstep without him doing anything, so it has become as easy as this.
One advantage of the strategy is that it helps businesses achieve economies of scale. Now, this
economy of scale is a vast thing, and it has several types through which businesses have
advantages. Another advantage of the approach is that for every business, having a strong brand
image is the most vital part, so through this approach, the business keeps its brand image and
communication towards its customers consistent throughout every market (Douglas & Wind,
1987). This gives businesses the advantage of being at the customer’s top minds and, through
consistent messaging across all regions, helps increase its sales and hence enjoy more profits.
Another advantage is the streamlined production process throughout all countries, as the same
standard processes have been followed. Also, this strategy keeps their production costs lower as
they follow the same procedures regardless of the country and market in which they operate.
(Kobrin, 2020) explains the perception of globalisation over the years. It was known for being a
great strategy for about 200 years as it helped the countries connect well and be close, however,
in recent times, the perception has changed, and factors such as COVID-19, the Great Recession
of 2008, and migrations have worsened the strategy image due to it's leading towards low
employability, more inequality between rich and poor, too many immigrants, and spreading
diseases quickly.
This strategy has various disadvantages as well. Globalisation affects the environment in several
ways, such as contributing to climatic change and affecting the farmers and especially the
culture. It plays a major role in creating unequal trade models. It involves higher production,
transportation and more consumption of goods, so all of these lead towards increased pollution,
more cutting of trees, destruction, and depletion of natural resources. Farmers are affected as
large-scale agriculture is followed, resulting in their traditional practices being ignored. This
leads to the loss of land, livelihoods, and cultural heritage for indigenous communities. Local
traditions, languages, and practices are overshadowed by dominant global cultures. Lastly, the
increased movement of goods and people across the globe increases greenhouse gas emissions,
affecting the climate. This strategy is not really loved by everyone. It is known to be destroying
the environment (Retallack 2001), as it's very unfavourable for the farmers, especially in
developing countries, as expressed by (Shiva 1998, 2001).
If we talk about the process then McDonald's is a prime example of a company that adopts a
globalization strategy. There are 25,000 restaurants in over 100 countries approx. But the
procedure for everything is the same. Even the sizes are consistent. For example, the fries
measure 75mm, the meat for Big Mac weighs 45g and is 20 per cent fat, and the buns are 9.5-
9.8cm in diameter and 6cm high. All the suppliers around the world have to meet the same set of
requirements. Its menu and branding are also pretty much the same across the globe, with slight
differences as per the market in which it operates (but this will be discussed further in the
glocalisation part). For instance, the classic Big Mac is available in nearly every country where
McDonald's operates, maintaining a standardised taste and presentation. (Kincheloe & Steinberg,
2010).
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Localisation:
Next up, we have a localisation strategy, which acts as an alternative to the globalisation strategy.
Through this strategy, the companies customised their offerings as per every market it operates
in. All of its marketing communications, products, and services are developed in such a way that
it's adapted towards local markets, tastes and preferences. In order to understand this strategy, the
best, I would like to quote a little case study on the town of Totnes as to how that town prepared
itself and became resilient by using the strategy and performing intentional localisation (North
2010a). Norterg-Hodge (2003:24) helped explain this strategy in the best of ways; he says that
localisation is as simple as when economies try to fulfil their needs within or near their homes,
which clearly doesn’t mean that he was against trade, but he was more keen towards local
production. Mines (2000a) has quite a similar view, too; he explains that it puts emphasis on the
government to make such policies and frameworks that help the communities to diversify and be
self-sufficient. Majorly, all the writers talked about being self-reliant when it comes to strategy
localisation, as this term was used by Ekins, P. (1989), who said that this term leads towards
sustainability. He explains the concept in such a beautiful manner by saying that the countries
should consume what they are producing, encouraging them to produce what they consume.
There are several advantages to this strategy, such as through this approach, business connects
well with its customers. Majorly on a personal level by meeting their needs and wants. Through
this, the company satisfies its customers in a better way by delivering exceptional quality
services. By addressing local preferences and cultures, the business can increase its quality, too,
enhancing the customer's experience and its business model. Another advantage for this approach
is that the business understands every region and builds a deeper understanding of market
dynamics, having a meaningful and strong connection with the customers (Kotler et al., 2002).
There are haters for this strategy, too, as expressed by Beckerman, W. (1995) as completely
unnecessary or having the capability to completely ruin the developing economies. Monbiot, G.
(2005), as he argues and calls it unethical and destructive. Monbiot, G. (2003.) emphasises that
poor countries need the money, and if it cannot be traded, then they should find something else at
least. He emphasised the fact that the trade should take place, even if it is under fairer conditions.
(Monbiot 2003:12) expresses that the strategy can never be effective as the solutions that are
provided locally are never really appreciated and valued. Other disadvantages include when the
businesses customise their offerings for different markets, it increases not only their production
costs but also other costs as well such as marketing, selling, etc.
Glocalisation:
Now coming towards the most interesting approach followed by the companies. The term
glocalisation has been driven from global + Local. When local and global aspects are combined
in different social, cultural, and economic contexts, it is referred to as "glocalization," a term that
was initially used in the 1980s (Miyoshi & Harootunian, 1989). According to Robertson (1995,
p. 28), glocalization is the process by which local and global forces interact to change our
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environment. In a range of social, cultural, and economic contexts, it is the blending of local and
global components as expressed by Mommaas, H. (2016). This strategy combines the benefits of
local and global strategy and has fundamentally altered how businesses and organisations operate
(Svensson, 2001). It has changed the perception and consumption of the people by mixing global
and local preferences as shared by (Steenkamp, 2019). To have a better understanding of the
strategy, have a look at the analysis of McDonald's' marketing mix. The company marketing mix
proves the fact that it follows and is known for being glocal (Ohmae, 1989). Figure below
extracted from Vignali, C. (2001) McDonald’s: “think global, act local” illustrates that the brand
is continuously expanding and is a star brand outside its own domestic market, which is the
USA.
This strategy involves businesses developing their products and services, planning their
marketing strategies in such a way that they are aiming for global markets and expanding its
operation in the global markets, however, keeping the local community into consideration too,
Creating a streamlined experience for the customers throughout the world while keeping the
local markets, its customers, their taste and preferences into consideration and adapting their
offerings that will suit those markets. By doing this, the business expands globally and increases
its revenues and hence, profits. Companies such as McDonald’s, KFC and Starbucks
continuously adapt their menu as per the market it operates in. They even introduce new products
keeping the local culture and festivals in mind. Examples include that McDonald's decided not to
sell its Big Mac in parts of India because Hindus do not eat beef since it's sacred to their religion.
KFC is introducing a special menu for Eid in Muslim countries, etc. Not only food companies do
this, but fashion companies follow the strategy too as Barbie was a well-known toy
manufactured by Mattel in the 1960s, known for her blonde hair and blue eyes. However, in
more recent times, Barbie has been customised to meet the needs of the local market and is now
available in a variety of ethnicities.
There are various advantages to this approach, the business gains a competitive edge in the
market as it possesses the strengths of both globalization and localization. Companies are more
flexible in adapting to local market conditions while having a global presence. The biggest
advantage of the approach is that a lot of customers will already be aware of the brand due to its
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global presence making the brand known and famous among customers, hence giving the brand
advantage. It helps build and strengthen loyalty among local customers, too. Other benefits
include that this approach helps businesses adapt to local conditions, making them more
dynamic, and once the business masters this, they can operate and expand to any market they
want.
The disadvantages include the struggling of the brand in its initial years, as the brand requires a
deep understanding of both global trends and local dynamics. To deliver customised offerings to
the local markets, the implementation may be time-consuming, difficult, and resource intensive.
The biggest drawback for the brand could be that there is always going to be a risk of spoiling
the brand image in case anything goes wrong or the brand cannot execute effectively or meet the
local demands, etc. So, the fear of ruining brand image is always going to haunt the companies.
Conclusion: -
After having a detailed analysis of all three strategies, I would like to showcase a few factors that
should be considered before reaching a conclusion. The characteristics of the market where the
business operates, the preferences of the customers in that particular market, and the most
important factor, company objectives. These three factors contain great importance, and they
should be considered before any business chooses a strategy. However, to conclude, I would like
to say that each global marketing strategy—globalization, localization, and glocalization is
important in its own way. While globalisation helps businesses control their costs and be efficient
in their services and offerings, the localisation strategy builds a deeper connection with their
customers and connects with them by adapting to their tastes and preferences. Lastly comes
glocalisation, which shows us the balance between the two approaches leveraging global scale
while adapting to their local market preferences. By critically evaluating these strategies through
a global marketing perspective and understanding their implications, I have reached the
conclusion that glocalisation is the most effective strategy as it’s the blend of both strategies,
making it more vital and valuable as it contains the pros of both strategies.
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