Global strategy and glocalisation

The central question in global marketing is standardise or adapt?

• Standardisation (one global mix) gives huge economies of scale in production, packaging and advertising, and builds a single, consistent global brand. But it may fit no market perfectly.
• Adaptation tailors the mix to each market, maximising local relevance — at the cost of scale economies and brand consistency.

Three approaches:

• Ethnocentric (domestic): the home market drives everything and the same product is sold everywhere with minimal change. Cheapest, but risks cultural blunders and poor fit.
• Polycentric (international): each country is treated as unique and gets its own tailored mix. Highly relevant, but expensive and it forfeits economies of scale.
• Geocentric (mixed): a global brand with local adaptation — the glocal approach that most large multinationals now adopt.

Which global marketing approach?

Tap a statement, then tap the approach it describes.

Choosing an approach

The 4Ps and Ansoff applied globally

• Product: adapt for tastes, climate, dietary and religious rules, safety and technical standards (voltage, language, regulation).
• Price: adapt to local disposable income, competition and price elasticity. Identical global pricing is usually impossible — the same price is a bargain in one market and unaffordable in another. Watch the exchange rate and the risk of grey imports if the price gap between countries is too wide.
• Promotion: adapt language, imagery, humour, colour symbolism and the media used — social platforms differ enormously by country.
• Place: distribution channels vary dramatically — from hypermarkets to street markets to mobile-first e-commerce. Infrastructure decides what is possible.

Ansoff applied globally: selling the existing product in a new country is market development — moderate risk, because the product is proven but the customers are not. Creating a new product for a new country is diversification — the highest risk of all, since the firm knows neither the product nor the market.

Your turn — is adaptation worth it?

Evaluating the adaptation

Global niche markets

Cultural diversity means that groups of people across the globe have different interests, values and needs. A niche that is far too small to be viable in one country can become a substantial market once it is aggregated globally — and the internet makes reaching those scattered customers affordable for the first time.

Features of global niche markets: a small share of the total market but a distinctive, clearly defined need; customers who are willing to pay a premium; low price elasticity of demand; specialist knowledge as a barrier to entry; and reach through e-commerce, social media and specialist distributors rather than mass retail.

Adapting the 4Ps for a global niche: a highly specialised product; a premium price the enthusiast will pay; targeted, community-based promotion (influencers, forums, specialist events); and direct or specialist distribution rather than mass channels.

Evaluation: global niches offer high margins and less direct competition, but volumes are limited, servicing customers across many countries is expensive, and a successful niche eventually attracts the attention of a mass-market giant.

Your turn — sizing a global niche

Why the internet created global niches

Getting culture wrong is expensive

Edexcel's considerations for businesses:

• Cultural differences — attitudes to family, religion, gender, authority, time and humour differ profoundly, and shape both the product and the way it is sold.
• Different tastes — flavour, sweetness, spice, portion size, colour and styling preferences vary widely.
• Language and inappropriate or inaccurate translations — a literal translation of a slogan can be meaningless, comic or offensive.
• Unintended meanings — a brand or product name that is harmless in English may be embarrassing or taboo elsewhere.
• Inappropriate branding and promotion — imagery, colour symbolism (white signifies mourning in parts of Asia) and advertising that violates religious or social norms.

How firms avoid this: local market research, employing local marketing staff, testing brand names and slogans with native speakers before launch, and giving local managers genuine authority to overrule head office.

Match the cultural pitfall to its fix

Tap a problem on the left, then the best response on the right.

Your turn — pricing for a new market

Interpreting the export margin

Standardise or adapt?

The big ideas to know

You have covered global marketing strategy, niches and cultural factors for Theme 4.3. Press Finish to see your score.