Analyse the effects of globalisation on the marketing function of a multinational enterprise.
With regard to the marketing function of multinational enterprises, or corporations, the nature of the mission today is fairly consistent with what existed prior to the age of globalization. Globalization is, in fact, a mere extension of international economic developments underway since the end of the Second World War. The entire basis of the European Coal and Steel Community, which was followed by the establishment of the European Economic Community, also known as the Common Market, and its successor organization, the European Union, has been to integrate economically, politically and socially the nations of Western Europe and, with the end of the Cold War, all of Europe. Breaking down obstacles to the movement of goods, services and people has been a European mantra intended to prevent another world war on the continent. The current era of globalization is an extension of the European, and Asian and Latin American movements toward greater economic integration. Most of the world’s countries recognize the need to interact and trade with other countries, lest they become isolated and increasingly insular, with the final phase embodied in the Democratic People’s Republic of Korea, or North Korea. While the North Korean model is an extreme case, the prevention of conflict and the facilitation of economic growth are widely acknowledged as being best assured through the closest possible relationships among nations.
What does this mean for marketing by multinational enterprises today? The point of the above background information is to emphasize that multinational enterprises have been around for many decades, and the fundamental tenets of operating abroad are well-known. Failure to understand and demonstrate sensitivity to the unique culture of each country – or region within countries – will result in lost business opportunities and markets. American multinational corporations learned the hard way in the decades immediately following the end of World War II the ramifications of such failures. The unique cultural and, depending upon the region, geographic features of specific foreign markets have to be addressed both in marketing and in manufacturing. Specific to marketing, efforts need to appeal to the individual market through use of the local language, through catering to the unique tastes of the local populace, and through avoidance of demonstrations of cultural insensitivity. In other words, marketing alcoholic beverages in a majority-Muslim country would obviously be seen as ill-considered and could even result in major international incidents. Similarly, marketing in Muslim countries that includes images of human beings on the packaging would result in mass protests against the corporation in question as well as against the home nation of that corporation. Cultural sensitivity is essential in all foreign markets. Absent that awareness, the multinational corporation’s ability to do business in the countries in question would be seriously limited.
Globalization, as noted, is a logical extension of the kinds of regional integration common around the world. Because it is viewed by many as exploitive of less-developed nations, especially in Africa, Latin America and Southeast Asia (which actually has enjoyed impressive levels of economic growth for many years and which is bound together through the Association of Southeast Asian Nations, or ASEAN), globalization has become synonymous with large country domination over small countries. Consequently, marketing on behalf of multinational enterprises has to take into account negative perceptions of foreign company involvement in those smaller, less-developed countries. Putting forth the most positive image in those markets – and in countries that are not so much markets as they are sources of raw materials or the location of manufacturing facilities – is essential to ensure the kind of social stability corporations require to function profitability.
Marketing exists to convey a positive image of one’s product or company and to instill in the subconscious of potential consumers the brand name so that they reflexively reach for that product when shopping. That was true before the advent of globalization, and remains true today. The key difference is the extent to which marketing as had to be extended to broader audiences rather than focusing on the more affluent markets of Europe and northern Asia.
Finally, in addition to the issue of cultural sensitivity, marketing campaigns by multinational enterprises have to always adapt to technological innovations, for example, the explosion in the use of social networking. Where once marketing could focus on the printed page, it had to adapt to the introduction of radio as a form of entertainment and information, and then to television. Today, marketers have to also take into account the massive use of social networking sites and the daily role of the Internet in many people's lives.