What is the concept of global marketing?

Global marketing is a marketing strategy that considers the whole world as a global market. It is best applied to products with a universal demand. For example, smartphone (Apple), vacation homes (Airbnb).

What are the elements of global marketing?

Elements of global marketing are: Products have universal demand Uniform marketing practices Standardised products or services Marketing activities are concentrated in the headquarter Promotion adopts a global customer perspective.

What is a global marketing strategy?

A global marketing strategy adopts the same product and marketing approach in all markets. The goal is to achieve economies of scale and maximise profits on a high-demand products.

What is the difference between global and international marketing?

The main difference between global and international marketing is while global marketing offers different markets the same products and services, international marketing adapts the products and services to the local environment. Global marketing is best applied to standardised products whereas international marketing products are more customised and adaptive.

_____________ means adopting the same product and marketing practices to all markets.

Global marketing standardisation

Global Marketing: Definition & Strategies

Q: Why is global marketing important?

Global marketing is important as it allows the company to: Increase profit margin Achieve economies of scale Gain global recognition Standardise the marketing practice

Global Marketing Definition

Global marketing means marketing the company’s products and services, considering the global market as one. It is different from international marketing, which tailors marketing activities to each region and country.

Global marketing means adapting the company's marketing strategy to an international market.

Global marketing adopts a uniform marketing approach to all locations. The product design and variety are kept the same. Marketing activities are also concentrated in the headquarters instead of spreading out as in international marketing.

A classic example of global marketing is Apple. The company targets an international audience but maintains uniformity in its product designs and features. On the other hand, Starbucks is an international company that allows its franchisees and partners to adapt the menus and store designs to local environments.

Why is Global Marketing Important?

Global marketing is best applied when the company’s product has a universal demand. Here are the key benefits of global marketing:

Global Marketing: Higher profit margin

The obvious advantage is that the company can expand its customer base. It is more profitable to sell to an international market than a local one. In the past, only large corporations could afford to operate abroad. Nowadays, the Internet allows even small businesses to reach customers in any part of the world. Companies that don't take part in global marketing are missing out on major opportunities to increase their income and profits.

Global Marketing: Uniform marketing strategy

The company can maintain consistency in how it promotes its products and services. This comes with two advantages. First, there are fewer marketing costs as the company can use unanimous commercials for customers worldwide. Second, standardized marketing practices can save time and effort, and allow the company to focus on core activities such as product development.

Global Marketing: Global brand recognition

Customers think more highly of a company that has a global presence. Think of Starbucks and Dunkin' Donuts, aren’t these businesses enjoying higher status than the coffee shop in your neighborhood? The truth is a global reputation can cascade to local markets, making people more aware of your brand and start buying from it.

Global Marketing: Economies of scale

Global marketing also helps you achieve economies of scale. By growing bigger, your company grows in power, network, and technical skills. All of this can contribute to a faster, cheaper, and more efficient production process. In other words, your company can produce more with fewer costs.

Economies of scale are the reduction of unit cost as a firm becomes bigger.

Global Marketing Strategies

Going global can help a company increase its customer base and sales revenue. Yet, entering a new market is not easy. Many companies that succeed in a local market have failed when moving abroad. To reduce the risk of failure, companies must ensure their global marketing strategies are effective.

Here are the main benefits of an effective marketing strategy:

Increase brand awareness
Improve profit margin
Discover new opportunities
Build strong relationships

To develop an effective global marketing strategy, the business must follow several principles:

Choose the right audience - A product may be popular in one area but is rarely used in another. Knowing your audience and their needs can prevent you from selling to the wrong market and wasting valuable resources.
Know the competitors - Identifying companies with similar products and services will help assess your ability to compete. You can also discover gaps that have not been filled, and develop better strategies to conquer the market.
Understand the market - Understanding local culture, social norms, and legal practices is crucial to successful global marketing. By knowing the market inside out, you can adapt the product to suit customer tastes better. Local experience can be developed through extensive market research or partnerships with local companies.

Types of Global Marketing Strategy

There are three types of global marketing strategy: standardization, international, and multinational.^¹

Global Marketing: Standardization

Global marketing standardization means adopting the same product and marketing practices for all markets. In other words, to sell the same things everywhere.

The benefit of standardization is that it is pretty simple to carry out. The company only needs to design the marketing campaign once and apply it to all markets. Global marketing standardization also gives the company more control over the market and reduces its reliance on local partners.

Standardization also quickens the production process as there's no need to develop new features. Companies also have an easy time when training their staff.

An example of standardization in global marketing is Red Bull. Red Bull uses the same packaging everywhere, 12-ounce cans with a global appeal. It also adopts a sponsorship marketing tactic in all markets it operates in. The consistency in packaging and marketing message has gained Red Bull tremendous success. Almost everyone can recognize the brand as an energy drink provider and a reputable sports events sponsor.

Standardisation vs Localisation

When entering an international market, companies choose to market their products in a standardized or localized way.

When the company opts for standardization, this is known as global marketing. The other case is referred to as international marketing.

A standardization strategy ensures consistency in all aspects of the brand. For example, the company will use the same packaging, design, and staff uniform in every location.

This kind of marketing approach:

Requires fewer marketing campaigns - as people can recognize the brand everywhere.
Is cheaper - there are fewer changes to be made, and the company can focus on perfecting the core product.
Makes the brand more memorable - when people see the same thing everywhere, it becomes embedded in their subconscious minds.

Standardization should be used when a brand wants to capitalize on its established reputation and when the product has a universal demand.

Localization means tailoring the product and marketing campaigns to match the expectations of local people. For example, the company can add or remove several menu items, adjust its logo and redesign the store to match the local culture.

This marketing approach requires more marketing campaigns to promote new products or features. The company also needs to adjust the advertising content for different regions.

A localized strategy is most rewarding when the company wants to get closer to the audience. It relies heavily on personal experience, national pride, or a sense of familiarity to attract new customers.

This is an effective approach for new businesses and products.

Global Marketing: International strategy

International strategy in global marketing involves importing and exporting goods. This is a low-risk strategy with the least level of engagement in the target market. The company does not have to set up an office abroad and can keep all operations within the home market. While international strategy is less risky, it is not the most rewarding.

Global Marketing: Multinational strategy

Multinational strategy in global marketing is a bit like international marketing. The products are tailored to each market, but the same procedure applies. The customization is based on the market demand and conditions. For example, more staff can be sent to populous and high-demand regions.

Global Marketing vs International Marketing

We have briefly mentioned the difference between global marketing and international marketing. But how exactly do they differ? Table 1 below may help you distinguish these two marketing approaches.

	Global Marketing	International marketing
Definition	Global marketing means offering different markets the same products and services.	International marketing adapts the products and services to the local environment.
Products	Standardized	Adaptive
Marketing staff	Cross-cultural personnel	Local people or employees placed in the target market
Market research	Intensive market research makes up for the lack of presence in the local market.	Less research as the company’s partners or local employees can provide much-needed details.
Customer engagement	Lower due to far distance	Higher due to strong local presence
Digital marketing	The company has the same social media pages for all operations	There are multiple social media pages for each region.
Advertising campaigns	Only one commercial is run across regions.	The advertisement can vary vastly from region to region.
Promotion	Promotion adopts a global perspective.	The promotion is customized.
Examples	Apple has uniform product offerings in all countries. It is a perfect example of global marketing.	Dunkin’ Donuts has an international marketing strategy that is adaptive to each region and country.

Table 1. Global marketing vs International Marketing, StudySmarter

Global Marketing Strategy Examples

Global marketing is an integrated part of modern businesses. Most companies adopt global marketing in one way or another. Here are a couple of examples of global marketing strategy in real life:

Global Marketing: Airbnb

Airbnb is a company that offers short-stay and cheap accommodation for budget holidaymakers. Founded in 2008, the company has now become one of the world’s biggest vacation home rental sites, with over 7 million listings in more than 220 countries.

One key to Airbnb's success is its marketing strategy that focuses on building a strong global community.

Airbnb adopts a comprehensive digital marketing strategy with email marketing, SEO, and social media to market its service to a global audience.

Through email marketing, Airbnb showcases itself as a memory-maker and shares experiences with users worldwide.
The company's Instagram page is filled with highly visual images of properties worldwide. Guests can share experiences with hashtags (#airbnb) and even book accommodation directly from their feed.
Twitter is another channel on that Airbnb establishes its presence. The company mainly uses short videos to promote listings and attract new users.
Facebook ads also generate Airbnb a lot of leads each month.
Airbnb's blog is a place for Airbnb to tell its stories. There’s a section for people for hosts and guests to share their unique stories.

Besides digital marketing, Airbnb partners with brands worldwide to broaden its network while offering its users memorable experiences.

Some Airbnb partners over the years include:

New York Red Cross
American Express
KLM Airlines
Fabrica
Virgin America
Sydney Opera House

Another successful global marketing strategy Airbnb employs is referral marketing, where the company rewards its referrers with vacation credit when the new members complete their trip.

International Marketing Strategy: Dunkin Donuts

Dunkin Donuts is a brand that successfully combines global and international marketing strategies.

The first franchise was opened in 1955. Nowadays, the company serves doughnuts and coffee in over 67 countries.^³

As a global company, Dunkin Donuts focuses on innovating the variety and quality of its products. The company has a whole innovation team to design new menu items to refresh consumers' tastes. It also experiments with many innovations such as digital technology and fast-to-market product concepts. For example, to target digital-savvy and busy customers, Dunkin Donuts uses mobile marketing to reward customers and offer on-the-go services.

Being locally relevant is another key to Dunkin' Donuts' success. Dunkin Donuts is a 100% franchise. This means all Dunkin operations are locally operated, giving the store a competitive advantage over foreign brands. Since the local owners are more aware of the regional culture, they can adapt the recipe to match local tastes.

In Korea, there are rice and charcoal doughnuts, as people in these regions enjoy savory food. In China, you can find fish flake doughnuts, and if you travel to Thailand, you can try the tropical taste of mango doughnuts.

The blend of standardization and localization in global marketing is key to Dunkin' Donuts' success.

Global Marketing - Key takeaways

Global marketing is a marketing strategy that considers the global market as a whole.
Global marketing adopts a uniform approach to developing and selling products and services.
Implementing a global marketing strategy can lead to higher profit margins, economies of scale, global brand recognition, and uniform marketing practice.
It is different from international marketing, which tailors the products to local environments.
There are three types of global marketing: standardization, international, and multinational.

References

Indeed, What Are Global Marketing Strategies? (Types and Examples), https://ca.indeed.com/career-advice/career-development/global-marketing-strategies, 2021.
Guesty, A Look Into The History of Airbnb Partnerships, https://www.guesty.com/blog/history-airbnb-partnerships-timeline/, 2015.
Day Translation Blog, How Dunkin’ Donuts Adapts to Different Markets, https://www.daytranslations.com/blog/dunkin-donuts-global-marketing/, 2019.

Global Marketing

StudySmarter Editorial Team

Global Marketing Definition