Download Transnational Marketing Strategy

Chapter
1
Transnational Marketing Strategy
Learning Objectives
After going through this chapter; the reader should be able to:
1.Explain the natural and goal of transnational marketing strategy
through business worldviews.
2.Understand the strategic orientation of companies in global market
environment.
3.Recognize the salient points for creating and expanding the business
transnational and ensuring modalities of channels of distribution.
4.Identify the trends of marketing applied to almost all the
organizations and managers to all the levels in the organizations;
wanting to go transnational or international.
5.Ascertain the paths and patterns of integrated marketing
communication leading to globalization; employing IT revolution in
the WTO regime.
6.Explain the fundamental ideas of ethnocentric, polycentric,
regiocentric and geocentric companies for approaching the
globalization, process moving towards global village.
‘The future is already here. It’s just unevenly distributed’.
— William Gibson
‘How did you go bankrupt? Gradually, then suddenly’.
— Earnest Hemingway
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7.Describe the vital aspects of marketing communication in creating
mass markets; along with the views of Alvin Toffler, John Naisbitt
and Theodore Levitt.
8.Describe the multifarious approaches of the driving forces and
retraining forces of the economy. Roles of technology, transportation,
driving market needs, cost, free markets & peace in driving, and
culture, casts, national controls, war, management myopia and
nationalism in refraining.
9.Display how the management operational process relates to the
theories of management, and it scientifically blends practice into
theory and vice-versa. It is emphatically depicted in relation to the
access of media communication in creating global melting pots and
global customers.
10.Realize that all orientations of management require a systems
approach, taking into account situations, incidences, contingencies
and complexities of the market places. Market is in a flux; and has to
unshackle from the conventional mode, and integrate into the desired
forces of markets, which can reinforce through trade agreements.
11.Define into the essence of globalization mode; passing through the
transnational check posts, for capitalizing on market share; expecting
ROI on R&D for innovation in products and services.
12.Interact on the aspects of leveraging on experience transfer, resources
become optimally utilized and scales of economies in the countries
integrate and symbiotically develop.
13.Insight in to case-lets on company types replete in the business world
and overcome obstacles in the path of progress.
14. Understand into the essence of the book that it intends to portray.
The mass market has splintered into the ‘demassified’ market. In The Third
Wave, Alvin Toffler has described how the mass market has split into evermultiplying, ever-changing sets of mini-markets that demand a continually
expanding range of options, models, types, sizes, colours and customizations’.
Further, as John Naisbitt concludes in Megatrends, ‘the multiple option society
is a new ball game and marketers know that they must win consumers market
by market’. Perhaps, the most dramatic example is General Motor’s announced
plan for its new Saturn automobile—the car will virtually be designed by
its today’s wisdom, contrary to the old, that the more products you can go
to market with, the more constituencies you will attract. However, it must
be reckoned that opportunities are problems in disguise. Is it possible, the
question arises, to sell all or most products to all constituencies and keep them
sold, with the same old shotgun approach of mass marketing that worked so
well in the past?
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With expenditures for advertising reaching $100 billion a year in the US
alone and sales promotion estimated as high as $60 billion US, transnational
businesses must re-examine the advertising, promotional and marketing
assumptions and test them against the new realities. The new approach, in
essence, needs to use new techniques and technologies including the media
to target the most likely marketing prospects, insist on accountability for each
advertising expenditure and link the advertising to a public and/or private
database used to convert prospects into ‘tiers’ and transform tiers into heavy
users, through multiple distribution channels.
The reasons for it are the following:
• Demassification of the market
• The changing transnational and US household
• The decline of brand loyalty
• Deregulation
• New ways to shop and pay
• The development of database marketing
• The rise of the service economy
• The flowering of the information society
• Proliferation of new products through innovations
• Multiplication of distribution channels
• The explosion of couponing ($20 billion annually)
• The slippage in network television advertising efficiency
• The new playing field—Customers, Marketers and Ground Rules
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To sum up, the transnational marketplace is changing dramatically, whether
one likes it or not. Demographic and lifestyle changes have delivered a heavy
blow to mass marketing and brand loyalty. Today’s is a multi-population
society, and the individual consumer is (more of a) king. De regulation has
splintered the financial, travel and communications sectors into a shopper’s
paradise of choices.
It has become affordable for any company to keep track of an individual’s
preference and purchases and respond to them. Thanks to the computer,
marketers can reach out to customers and competitor’s customers with special
products, services and offers tailored to the personal information accumulated
in Public and Private Customer databases. The toll-free telephone call, the 6 to
10 credit cards per household, the retail transaction computer terminals and
the targeting of direct mail to individual lifestyles and psychographics are all
reshaping consumer habits. These are the new considerations on every side—
no the service economy, the information society, the flood of ‘me too’ products.
However, in this highly competitive market the innovating companies can
still win.
Prelude
Transnational marketing is the business process of aptly focusing on
the resources and objectives of a company on a transnational marketing
opportunities and scope. Almost all the companies, nowadays, pursue global
marketing for a couple of reasons. The companies take up the advantage of the
available opportunities for growth and expansion and to survive. Those who
fail to follow transnational opportunities eventually lose their domestic markets
as against the expansion plan of multinationals. They are driven to a side by
the competitive competitors launching and operating from overseas. What is
important is to apply the ‘universal discipline of marketing’ to transnational
opportunities derived from the markets. Fundamental objective of marketing
is to create customer value, innovation integration and competitive advantage.
Further, it has to be reinforced with focus and to be maintained properly.
Management of companies is categorized in terms of its orientation toward
the global markets. International companies seek marketing opportunities
outside the home market by applying the various elements of marketing
mix. They are basically called ethnocentric, polycentric, region-centric and
geocentric. A polycentric business worldview dominates business as a
multinational company. Herein, marketing mix is adopted by the ‘country
executives’ operating autonomously. A polycentric orientation is said to be
having worldviews, which are unlike that of the ethnocentric companies (which
disallows the company to look abroad) Unlike ethnocentric fanatic – patriotic,
polycentric companies wish to expand their business to the other potential
foreign centuries. They are essentially the transnational companies already
operating in overseas market. But in the case of multinational companies, the
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companies have operating chief functionaries and executives from the same
country or other countries. All polycentric companies may not be multinational
companies. Executives at global and transnational companies are either regioncentric or geocentric in orientation. They follow both extension and adaptation
strategies in the global context of business. Transnational marketing is formed
by the dynamic interplay of N-number of driving and restraining forces.
They include needs and wants, technology, transportation, costs, quality,
economic growth and recognition of opportunities to leverage global business.
Similarly, the restraining pressures and forces include market differences,
management myopia, organizational culture and national controls. Economies
are bound to grow in the virgin markets. Product innovations are bound to
happen, and people will always adopt superior products with affordable
price tag.
Management Orientation and Beliefs
Management is about getting things done through others utilizing man, material
and money. Orientations are the factors contributing to the domain of makebelieve principles adopted in the environment,
across the countries. Make-believes create
viewpoints and orient the mind to understand
with a perspective, and the perspective is a belief
in a matrix.
All the companies around the globe respond
to the transnational market opportunities. It
is greatly dependent on the management’s
assumptions or beliefs. It could be conscious or/
and unconscious. It is about the nature of world
of business and its antecedents, interactions and
interceptions.
Mind’s eyes
Taking these perspectives into view, the worldview of a company’s
employee can be described. In fact, these worldviews are pertinently termed
as ethnocentric, polycentric, region-centric and geocentric.
As a matter of fact, the management of a company with its prevalent
ethnocentric orientation can consciously make a change by adopting a decision
to make it geocentric. These are based on the line and length of the companies’
ambit of work operations in the business environment. These orientations in
its acronym, collectively and continuously are known as EPRG framework.
They are:
E: Ethnocentric
P: Polycentric