What are the disadvantages of global marketing

Lower costs for communication and production are one of the key arguments for standardizing an international marketing strategy that can be used globally. Commercials for radio and television and text ads for print media can be created once and usually only have to be translated. Depending on how large these production costs are in relation to the total costs, the potential for savings can be enormous. Cost savings can also be achieved and duplicate work avoided if, for example, the same annual report is published worldwide and only translated. In general, it can be said that internationally standardized marketing has a low level of complexity with regard to the associated processes. If processes such as media planning, communication or budgeting are globally standardized, they work more smoothly and streamlined.

In this regard is the controversial article The Globalization of Markets by Ted Levitt (1983). Levitt's thesis of convergence is that international markets are either already homogeneous or in the process of becoming one. The needs and desires of people are becoming more and more similar around the world. It must therefore be a priority for companies to standardize their marketing strategies and their successful brands internationally. If a standardized product has a low price and is of high quality at the same time, it beats the local product and is accepted by the consumer (LEVITT 1983: 93ff). Thanks to the savings in production costs already mentioned, companies can operate in a lower price segment than the competition and still operate successfully. Proponents of internationally standardized marketing often refer to this thesis, but its unconditional maintenance can be questioned.

A standardized marketing strategy has the advantage that it can be implemented promptly and the product can be introduced quickly into the target market. Existing processes can be used; the parent company has an extremely dominant role as a decision-making body. A globally congruent image of company, brand and product can be realized more easily. In addition, time-consuming, comprehensive research into the (cultural) peculiarities of the different target markets is largely eliminated.

If there are target markets with the same consumer behavior, it may be possible to successfully address several target markets with a standardized concept. If the values, norms and lifestyle of consumers are similar, cross-border market segments can be advertised relatively uniformly. For example, teenagers in Germany and France have more in common than German teenagers and housewives (cf. SOARES 2004: 21ff). The extent to which such a congruence is actually sufficient to use globally conceived marketing effectively across national borders must be thoroughly analyzed in advance. One approach here would be the identification of transnational consumer clusters.

Cost reduction through standardization, however, also means that the company has to take into account the fact that it leaves out a potentially lucrative segment of the target market. This can be a risky decision, because the lost profit may be greater than the costs saved through standardization (cf. DMOCH 1996: 282f). With standardized marketing it is more difficult to concentrate on the different legal framework conditions of the respective target markets. This can have a negative impact on the “costs” factor insofar as the (possibly unconscious) disregard of particularities in legislation or state regulations can have expensive legal consequences.

A standardized campaign will only be partially successful if several target markets are in focus at the same time, but only certain communication channels are to be used. The question arises as to which media channels are used in which country and how widely. If a marketing concept primarily contains advertisements for print media, the concept may be successful in a country with high use of newspapers (e.g. Germany, Great Britain); In a country with a stronger focus on television (e.g. Italy, Turkey), advertising will reach significantly fewer potential consumers.

The large distance to the target groups can often lead to less acceptance among consumers. A standardized concept is problematic if the product has an emotional or symbolic value for consumers. When it comes to such a product, do consumers value the fact that it is closely linked to their home culture or that it is country of origin is their own country, standardization will not be very successful (cf. DENIS 1996: 7).

This post is part of the Intercultural Marketing article
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