Main argument developed by Ted Levitt

The concept of global marketing has drawn attention from various scholars such as Ted Levitt who postulated about the idea of globalizing markets where companies were to customize their products to suit the local tastes and preferences. Others such as Hofstede indicated the impact of national culture on work performance where different countries had different cultures and thus different modes of doing business. Such theories and concepts are essential in the concept of marketing. 

The main argument by an article developed by Ted Levitt on the globalization of markets revealed that companies that are well managed had made progress by localizing products through offering products that conform to the international standards that are advanced, reliable and charged reasonable prices (Ober & Hagos, 2016). Levitt went further to elaborate that globalization is the driving motive behind conducting business across the globe, improving company’s profitability, exports and alliances that are strategic such as joint venture. Global business can be defined as the buying and selling of products and services by individuals from various nations. Levitt predicted that the demands and the desires would irrevocably get homogenized.

Ted’s view was that enterprises would learn to operate from the point of view where the world would be one big market. Based on Ted Levitt’s assertions it is true regarding the internationalization of markets as written in 1983. The new technology has revolutionized communication and transport aspects. There is also a new reality in commercial operations, for instance, the emergence of international markets for standardized products consumed by consumers. The main argument developed by Levitt was that of international firms vs multinational corporation and also the hedgehog vs the fox. (Ober & Hagos, 2016) The fox was deemed to know many things, and this was compared to multinational corporations that knew many things about many nations and thus adapted their products to match customers’ needs in such countries. On the other hand, the hedgehog knows everything about just one great component, and this was synonymous to the global corporation that knew everything about one great deal that made it to be competitive on a global basis as well as regionally. This is evident in global companies such as McDonald’s where though its products are standardized, their products and menu are customized to match the local needs. Coca-Cola and Pepsi are global brand names though the beverages are different when it comes to the sweet content. Also, Apple products have global acceptance.

Hofstede’s Cultural Dimensions

The national culture had been seen to affect primary business activities spanning form capital structure to team performance. Cultural awareness leads to the huge success of global business ventures, and its lack can lead to failure (Hofstede, 1997). The model developed by Geert Hofstede was embedded in the study of IBM staff that were spread in over fifty nations. Hofstede identified five dimensions that display the huge disparities between the different national cultures. They entailed power distance, masculinity and uncertainty avoidance among other things.

Power distance according to Hofstede defined how social disparity was perceived and accepted among various cultures. According to Hofstede’s explanations, children from high power distance cultures are raised with much focus put on how they should respect their elders, and this is passed on to adulthood. Thus, in companies that are more centralized, employees prefer an autocratic style of leadership where junior employees are anticipated to follow whatever they are told to do.

Individualism vs. collectivism here refers to the preference that people have of belonging to a loosely knit social fabric where the value is placed on self and autonomy (Ghemawat & Reiche , 2011). On the contrary, collectivist structures value social units that are interdependent for instance the family as opposed to the self. In societies that follow individualistic patterns, employees command freedom to work independently and are passionate about challenging work.

Based on Hofstede’s definition, masculinity portrays cultures that have varied female roles where men concentrate on progress and competition aspects whereas the women concentrate on tender virtues such as the quality of life and moderation. For masculine norms, managers are assertive and decisive while in feminine cultures managers are intuitive where they negotiate and solve disputes and encourage participation when it comes to decision making.

Uncertainty avoidance can be defined as the extent to which members of a particular norm feel threatened in situations that they are unfamiliar with. Therefore, in high uncertainty avoidance norms, individuals prefer a structured environment that has rules and policies at work. Hard work in this context is embraced, and there is greater motivation for the workforce.

One component of globalization is the convergence of income, technology, and forms of media. Most authors thought that convergence would lead to tastes, preferences, and lifestyles by consumers being homogenized (De Mooij, 2003). For instance, cross-border music programs such as MTV, more travel behaviors and international communications have all lead to the perception of a global teenager where teenagers across the world are deemed to have identical values irrespective of their country of origin. According to Levitt in one of the articles titled, “globalization of markets, “he postulated that new technology had the chances of leading to homogenization of consumer wants and tastes since consumers anticipated to have standardized products that were of high quality and reasonable prices.

Main argument by De Mooji

The primary assumption that the economic systems are homogenous and that they lead to consumer behavior getting homogenized is backed by anecdotal evidence. The only evidence that exists is based on data that is macro-developmental for instance the number of telephones or cars per 1000 population. It is surprising that even with such data, only a few scenarios of convergence can be archived across European nations. However, in many other cases, huge consumption differences among nations that are stable over time are evident which means that countries are diverging. With people becoming affluent, it is evident that their tastes will automatically diverge. For instance, nations have converged for the gross number of passenger cars per a thousand population through the distribution across populations with regards to the numbers owned per household diverge (De Mooij, 2003). Durable products such as associated with wealth for instance passenger cars and computers, with regards to increased wealth initially lead to converging of countries. However, in the developed economies, at a particular level of wealth, convergence reaches a ceiling that cannot be surpassed and variations remain fairly stable or increase. Such ceilings have different levels based on the different product categories.

Country of Origin Effect is the practice by marketers and consumers that links brands with countries and making purchasing decisions based on the country of origin of the commodity (Juneja, 2013). For instance, the quality associated with the Japanese and precision for the Swiss. This translates to having products and brands from such countries being purchased and discarded based on the notions of the value tied to such countries. In a nutshell, the country of origin effect evaluates the effect of the nation in which the commodity is manufactured.

 In the past few years, a lot of research and studies have been conducted on how the COO effect impacts consumers and this has facilitated to a renewed endeavor to either associate or dissociate with the commodities from the nations they are manufactured (Juneja, 2013). Though such association is thought to contribute to gains, it is imperative to note that there are negative impacts associated with the country of Origin effects. It is important to state that Country of Origin effect should be handled scientifically through conducting market research in target nations with regards to how consumers perceive the nation in which the brand is made.

It has been revealed that the Country of Origin has a substantial effect on the behavior of consumers as evidenced in Rolex watches from Switzerland and the swatch watches where the COO has a substantial effect on the purchasing decisions. Also, COO is linked with creating a lasting image of the brand as evidenced in what McDonald’s mean to the Americans and as such brand is associated with the country. Similarly, Coca-Cola and Pepsi are associated with the United States while on the other hand Louis Vuitton and other brands are associated with the French (Juneja, 2013). The point has been driven home is that COO has the effect of making the brand the country is linked to either get positive reviews or negative reviews such as banning of French fries in the US that was led by France being on the opposition. Thus, the marketer has to be cautious about the kind of COO based branding that they engage in as diverging from the traditional niches can devastate their prospects.

Country of origin effects

The paradox of culture lies in the subjective life that people feel in its constant flow which propels its volitions towards its inner perfection that cannot be seen from the notion of culture, attain that perfection on its own but through crystalized structures that are self-sufficient which have become alien to the form of culture (Jones, 2013). With most work delved into the intercultural communication studies in the past few years particularly in the field of linguistics has been dedicated to disinvesting the perception of culture. The problem with the term culture is that it has been employed and utilized in fields such as anthropology in history, sociology, and daily life. The idea that culture is a component of the wider dominance in social sciences as discussed by David Block in his discourse about the postculturalist view on identity that perceives culture as a social process rather than a determined and a fixed commodity. Others such as Qu, criticize the static and historical dimensions to cultural identity as they are blind to the changes associated with the norms or behaviors of particular groups which change. Such changes are due to responses to social and material situations as per our culture there are limitations of models with regards to our culture and fail to give an account of the creative modes individuals negotiate their social values and identities in particular contexts (Jones, 2013). Thus, such a processural perception of culture is not substantial to explain the methods individuals experience culture in their day to day lives and to handle matters about inequality and social injustices that are associated to such experiences (Jones, 2013). Purporting that culture is socially constructed fails to make it real for people who find themselves in the confines of cultural material manifestation with regards to the laws, passport, classrooms among other items.

Globalization has been perceived as having the power to transcend national boundaries with the objective of satisfying consumer needs and preferences. It can also be defined as the expansion of economic and political operations from a centralized national dimension to a global perspective. Thinking globally can be defined as applying international standards to a company. Globalization can only be achieved through liberation that is either political or economic. Thus, managers of global companies are advised to shift their mindset from a domestic mindset that curbs expansion and growth of firms to that of a global mindset. For instance, Coca-Cola being one of the biggest global companies embraces global standards as it operates on a global mindset which has seen its products get distributed across the globe.

It is true that some commodities from a certain multinational company may fail to do well in a particular country. Thus, global companies are tasked with the responsibility of ensuring they act locally by adapting their operations and products to such cultures in various nations. As such, localization is closely associated with the culture of communities. Acting locally from the perspective of globalization has the impact of putting, more emphasis on the local activities in the host nation while applying international strategies at the same time. This true as global organizations acting locally give the impression that firms should match their activities to suit the needs and demands of particular regions that the firm operates in. For instance, MacDonald’s easily achieves acting locally by having its products match the particular needs of a particular market where it has an outlet.

Conclusion

As postulated by the above theories, it is evident that companies desiring to compete on global scales have to customize and localize their products to match the tastes and preferences of the local consumers in the countries they have a presence.  

References

De Mooij, M., 2003. Convergence and divergence in consumer behaviour: implications for global advertising. International Journal of Advertising, 22(2), pp. 183-202.

Ghemawat, P. & Reiche , S., 2011. National Cultural Differences and Multinational. [Online]
Available at: https://kgk.uni-obuda.hu/sites/default/files/Milica-National-Culture-and-Its-Dimensions.pdf
[Accessed 10 October 2018].

Hofstede, G., 1997. Cultures and Organizations: Software of the Mind. London: McGraw-Hill.

Jones, R. H., 2013. The paradox of culture in a globalized world. Language and Intercultural Communication, 13(2), pp. 37-41.

Juneja, P., 2013. Country of Origin Effects on Marketing: How Brands from Certain Countries Score Over the Others. [Online]
Available at: https://www.managementstudyguide.com/country-of-origin-effects-on-marketing.htm
[Accessed 10 October 2018].

Ober, C. & Hagos, M., 2016. The Globalization of Markets. [Online]
Available at: https://prezi.com/w2rnlabb3usa/the-globalization-of-markets/
[Accessed 10 October 2018].