Companies cannot just concentrate on domestic markets if they are to remain competitive. Global marketing allows marketing managers to look for growing target markets and product opportunities overseas.
For many years, marketing managers just had to be concerned with learning the intricacies of marketing in a domestic environment. They had to determine if a customer in Texas bought and consumed products differently than a consumer in Maine. Today, the marketplace has expanded in a global nature. For companies to continue to grow successfully, marketing teams must eventually learn to tackle the global marketplace.
Global marketing occurs when marketing managers use a global plan to effectively market their goods and services on an international basis.
There are many reasons why global marketing is very important to U.S. companies. Most companies realize that their target market is limited if they just concentrate on a U.S. market. When a company thinks globally, it looks for overseas opportunities to increase its market share and customer base. Lots of companies have caught on to this; in the past 20 years, global trade has gone from a few hundred billion dollars a year to 18 trillion dollars.
But, the global marketplace is very competitive, and the shrinking of the world through technology has made it easier for companies to reach global markets. U.S. companies now have to deal with not just domestic, but also international, firms for control of a global market share. In this lesson, we will examine how a diaper company called Diaper Sponge Pants has learned how to identify international opportunity via the global marketing world.
Importance of Global Marketing: Opportunity
Did you know that only 10% of all manufacturing companies in the United States take part in actually exporting their products? There is a huge opportunity for any U.S. company looking to participate in global marketing. Diaper Sponge Pants has realized that the U.S. market has a shrinking need for diapers as U.S. couples are having kids in smaller numbers or delaying having kids altogether.
Through extensive marketing research, the diaper company has realized that there is a growing middle class in China and India. This market has the money for disposable diapers, and they are also still having children at a growing rate. This opportunity will create a huge profit for the company.
Benefits of Global Marketing
Traditional economists support the idea of global business and marketing. The theory is that globalization creates even more competition, which in turn will produce higher quality products at an affordable price for consumers. Global marketing of products also improves the living standards of international countries. For example, Diaper Sponge Pants now provides disposable, high-quality diapers to countries like India and China, which before did not have such a product even available to them.
Global competition also provides quick technology growth and ends domestic monopolies that might provide inferior products. An example of this benefit would be Japan’s production of high-quality televisions and automobiles for domestic consumption. In the end, global marketing will cause products to be made in a very competitive manner, which will produce more affordable products, better environmental standards and higher labor quality.
Fears of Global Marketing
Although there is enormous opportunity for American companies overseas, there are also some cons to producing international growth. Many Americans have lost their jobs to shifts in production or job outsourcing. Many employees face constant worry that their job will be replaced with foreign workers overseas, and employers will also use this as a threat for cutting wages and benefits. Companies will continue to outsource if the end result is financial savings and continued target market growth.
Marketing managers must also provide a global marketing strategy in order to ensure profit and product growth. Examination of domestic trends and international growth opportunities will allow companies to predict how and where they should market their products. With so many products reaching saturation domestically, more and more companies are finding success overseas.
You will be able to explain the importance of, advantages and disadvantages of global marketing strategies after watching this video.