Myths of Globalization review
In the article Myths of Globalization, Susan and Yoram analyze international marketing and globalization. In this article, every firm should be able to adopt an effective marketing strategy to get the global share. This article, the key to success in the global market, is the development of effective marketing strategy and standardized products — the article study why standardization of product is believed to be necessary for the global market. The paper is divided into four main parts: traditional international marketing, the effectiveness of standardization of products, barriers to standardization, and finally, the combination of standardization, and a general approach in the international market.
Traditional marketing strategy involves the adoption of uniform strategy or meeting specific market conditions. Uniform strategy is believed to give the firms a competitive advantage over other firms in the global space. However, meeting specific market conditions brings more success than a uniform strategy. Every market in international trade has its specific minimum requirement, which must be met by every firm. Issues to do with tariffs, quality, and value addition are necessary for the international market. Also, the uniform strategy is difficult to achieve due to the difference in government policies and the difference in organization control.
The article describes the reason for standardization in three assumptions: the customer preferences are becoming homogeneous, the customers are looking for high-quality goods with low prices, and the firms can achieve economies of scale only by operating global. MacDonald’s is one of the case examples of a company that has succeeded in offering homogenous products and services. The consumers are willing to trade off other preferences for low prices as long as the good can satisfy their utility.
The three assumptions, however, have some shortcomings. Homogeneity of preference is difficult to achieve in the day-to-day market since companies have a different process, and customers have a varied taste when it comes to specific products. The issue with low prices for a quality product is not practical in the real world. High-quality products are associated with relatively higher prices. Firms are coming up with discounts on a high-end quality product to sell more. The third assumption of economies of scale depends on the firm technological advancement and the cost of production to meet the global market requirements.
There are various barriers to standardization highlighted in the article. The main barrier is the difference in government policies across the globe. The tariff and quotas are different among the countries, thus affecting pricing policies by firms in different countries. The nature of marketing strategies is also affected by government regulations. Interdependence with the resource market affects the standardized process since different countries have their unique capital and human resource, thus affecting standardization.
In conclusion, the writers of this article suggested there need for a combination of standardized and another general approach of marketing strategies to enter the global space. The firms can adopt the standardized process, but adopt different marketing strategies depending on the market. The companies should, therefore, conduct market research in different countries for an effective marketing mix in international trade.
In my opinion, globalization is happening so fast. Hence, the companies should offer global advanced standardized goods that are reliable and of lower prices. The companies should concentrate on the demand of the market as opposed to individual demand. Globalization enhance economies of scale, thus the need for effective and efficient marketing technique.