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Division of Vintage Management BV Head Office Antonio Vivaldi Str. 52-G 1083 HP Amsterdam The Netherlands “Are Russia’s companies ready for implementation of Global Marketing ??” With an export quote of approximately 70% for commodities ( oil, gas, lumber & metals) Russia’s export package will need a strong growth in sectors with a higher added value component, to gain an improved share in the global economy as suitable for a larger economy ( 6th in volume) OECD reports for Russia 1) the priorities for 2013, as supported by indicators. Lower barriers to foreign investments. Reduce state control over economic activities and other barriers to competition. Raise the effectiveness of innovation policy. Complementary: Raise the quality of public administration. Reform the healthcare system. ( OECD 2013) A limited number of Russian companies (mainly LSE’s) are already active on global level but limited to the energy and other commodities sectors. As we will define “Global Marketing” as: Global marketing is defined as the organization’s commitment to coordinate its marketing activities across national boundaries in order to find and satisfy global customer needs better than the competition. This implies that the organization is able to: # develop a global marketing strategy, based on similarities and differences between markets. # Exploit the knowledge of the “Home Organization” through worldwide diffusion( learning) and adaptation. # Transfer knowledge and “best practices” from any of its markets and use them in other international markets. The government of the Russian federation is strongly involved in the globalization process but in Russian (business) society there are at least three different responses to globalization – full acceptance, selective acceptance and radical rejection (Tsyganov 2012) Entering WTO in 2012 and as a result of the globalization process, Russia will be influenced by economic problems in other WTO member states more easily. The influence of globalization of Russian economy will be huge and authorities should improve Russian legislation to create possibilities for national manufacturers and service suppliers, to enter the international market, to be able to compete with foreign products and to create innovations. But it is also necessary to create terms and requirements in banking and investment spheres to secure and protect bank depositors, reduce risks of negative impact of economic problems in other countries which, because of close economic connections, could affect Russian investors (Drozdova 2012) Industry globalism & Preparedness for internationalization. The companies are not able to influence the degree of industry globalism , as it is mainly determined by the international marketing environment. In the case of a high degree of industry globalism there are many interdependencies between markets, customers and suppliers, and the industry is dominated by a few, large powerful players (global) whereas the other of the spectrum (local) represents a multi domestic market environment, where markets exist independently from one another. The degree of preparedness is mainly determined by the company’s ability to carry out strategies in the international marketplace i.e. the actual skills in international business operations. These skills or organizational capabilities may consist out of personal skills ( e.g. language, cultural sensitivity etc.), the managers’ international experience or financial resources If the company has only limited international experience, no financial resources and a weak position in the home market, the company. at first, should try to improve its performance in the domestic market. Better “to stay at home” ( Solberg 1997) Development of the “Global Marketing” concept. The form of the company’s response to global market opportunities depends greatly on the management’s assumptions or beliefs; both conscious and unconscious,, about the nature of doing business around the world, to summarize in four orientations: ( Perlmutter 1969) Ethnocentric Polycentric Regiocentric Geocentric The region- and geocentric oriented companies ( in contrast to ethnocentric and polycentric) seeks to organize and integrate production and marketing on a regional or global scale. Each international unit is an essential part of the overall multinational network, and communications and controls between head office and affiliates are less top-down than in the case of the ethnocentric company. ( Hollensen2007) “Key Terms” in the “Global Marketing” oriented company: Coordination of marketing activities To find global customer needs Satisfy global customers Being better than the competition. The global marketing oriented company strives to achieve the slogan: - “ think globally but act locally” (the “Glocalization “ framework) Comparison of the global marketing and management style of SME’s and LSE’s. In daily practice of global marketing, there is an indication of a “convergence” in business policy , with SME’s and LSE’s. The reason underlying the “convergence” is that many large multinationals ( such as IBM, Philips, GM and ABB) have begun downsizing operations, so in reality, many LSE’s act as a confederation ( network) of small, autonomous, entrepreneurial and action oriented companies The main qualitative differences between marketing and marketing styles in SME’s and LSE’s: Resources ( financial) Formation of strategy/ decision-making processes. Organization Risk taking Flexibility Take advantages of “economies of scale” and “economies of scope” Use of information sources. Business education / specialist expertise. Forces for “global coordination / integration” In the shift towards integrated global marketing, greater importance will be attached to transnational similarities to target markets across national borders and less on cross-national differences. The major drivers are: (Sheth and Parvatyar 2001, Segal-Horn 2002) Removal of trade barriers (deregulation) Global accounts / customers. Relationship management /network organization. Standardized worldwide technology Worldwide markets “Global village” Worldwide communication Global cost drivers. Forces for “market responsiveness” Cultural differences Regionalism / protectionism. “De globalization” ( Hollensen 2007) Creating value by using information. Fundamentally, there are four ways of using information to create business value. ( Marchand, 1999) Managing risks Reducing costs Offering products and services Inventing new products. Summary / Recommendations Global marketing is defined as the company’s commitment to coordinate its marketing activities across national boundaries in order to find and satisfy global customer needs better than the competition does. The company should be able to: Develop a global marketing strategy, based on the similarities and differences between markets. Exploit the knowledge of the “home organization” through worldwide diffusion ( learning) and adaptations. Transfer knowledge and “best practices” from any of its markets and use them in other international markets. ( Hollensen 2007) CdT-12/03/2013 Amsterdam – Moscow – Warsaw – Kazan - Yerevan