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International marketing and business-introduction Core debate: adaptation versus homogenization Elena Horská Global marketing opportunities and threats: Opportunities: – Increase in market potential – Trade and investment potential – Resources accessibility Threats: – Increasing number of competitors – Increase in intensity of competition coupled with higher market uncertainty ... Considerations on globalization from business sphere „...Strategies and sources are solved at global level in our company, .... We produce regionally and sell locally. ... We support our brand and take care of local customer preferencies...“ (Herbert Baum, exprezident Campbell´s soup) „ ... Consideration on globalization and regionalization point at fact that company Nestle looks for balance between the global strategy and local conditions...“ (Peter Brabech – Lemathe, Nestle) Think global, act local... • In the 1970s the argument was framed as „standardization vs. adaptation.“ • In the 1980s it was „globalization vs. localization.“ • In the 1990s it was „global integration versus local responsibilities.“ • In the twenty-first century, standardization versus adaptation is simply not the right question to ask. Rather, the crucial question facing international marketers is what are the most efficient ways to segment markets. Adaptation • Adapting the marketing features to the local requirements and consumer needs: – Product – Price – Place – Promotion Modification of package and brand Changes in qualitative aspects and regional product Standardization • Standardizated products for global markets and global customers which are the same in all the world (a world is one global village): – Product – Price – Place – Promotion Global products Global products are related to: • Health, fitness, wellness • Convinience products • Enjoyment marketing, experiences, having fun in consumption • Country-of-origin/regional specialities • Higher levels of Maslow hierarchy of needs On the middle of the road: from adaptation towards standardization ???? • Mc´Donalisation • Coca-Colonization • Americanization: U.S. cultural imperialism On the middle of the road: from adaptation towards standardization • International marketing: looks for differences and uses the principle of adaptation to meet requirements of local customers • Integrated global marketing: looks for similarities and tries to find the effective model satisfying the majority of customers G-localization • Combination of standardization and localization in terms: – to behave as the home firm – to accept the local patriotism – to change the local consumer behaviour continuously, no rapidly – consumers to perceive the market changes as the natural development, no aggressive marketing. G-localization ... because of respecting ... • Focus on market responsibilities: – Cultural differences – Regionalism: is the grouping of countries into regional clusters based on geographical location – Deglobalization: moving away from the globalization trends and regarding each market as special, with its own economy, culture and region According to research associated with VanderMerwe and L´Huillier (1989), companies in Europe can compete effectively in Europe by accurately targeting customers close to one another, but not necessary living in the same country. The six clusters identified by VanderMerwe and L´Huillier (1989) are: • the UK and Ireland, • Central and Northern France, Southern Belgium, Central Germany and Luxembourg, • Spain and Portugal, • Southern Germany, Northern Italy, Southeastern France and Austria, • South Italy and Greece, • Northern Germany, the Netherlands, Northern Belgium, Iceland, Norway, Finland and Denmark. These studies did not consider countries of the Central and Eastern Europe. In present time they play an important role in processes of the European economic integration and present challenges for Western companies entering their markets. Based on the common features of historic background, geographical location, culture and consumer habits we can distinguish between Central European cluster, South – East European cluster and Baltic States. Of course, there are still certain internal differences within such roughly defined clusters. European Marketing and Consumer Approach Global approach Who is a target customer? Local approach Regional approach What is a plan for territorial expansion?