“International Marketing”EVOLUTION TO GLOBAL AND INTERNATIONAL MARKETING

Done by:

Ie.Ignatius Eric Cahya Saputra (3979155)

Introduction

International marketing has become more important nowadays due to the faster acceleration

of globalization which actually becomes the main reason of the growth in terms of numbers

of companies who actually embark on foreign operations (Keegan, 2002). However in order

to be globalized, it is not easy for those companies. Especially because of some reasons such

as high level of complexity in terms of the targeted market, high-level of uncertainty in terms

of perhaps the preference of consumer in the targeted market, and the possibilities of high-

volume of heterogeneity, it means that the diversification in terms of culture in the targeted

market is high, therefore it is difficult for companies to understand the customer preference

and it is also difficult for them to customize their product to satisfied customers in the

targeted market (Terpstra, 1985).In this paper, there are several steps that a company is

suggested to go through it before they become globalized. However, there is a question

whether the company who want to be globalized can actually skip one of the steps or maybe

more steps to become globalized without the need to go through each step.

Evolution to Global and International Marketing

As mentioned above, a company who wants to be globalized has to go to several steps, those

steps are:

1. Domestic Marketing

Domestic marketing is the first stage of the evolution of a company to become global. In this

stage the marketing scope of the company is only within the country boundaries. In this stage,

the company only focuses on how to fulfill the local customers. It also means that they only

attract and influence the local market. Companies who still in this stage are usually

ethnocentric ad seldom pay attention in how the world has changed. It means, they seldom

pay attention in the changing of customer preferences globally, never pay attention on

emerging competition, and those better products that will arrived soon in the domestic market

that may also become the competitors of their own product.

2. Export marketing

The second stage is export marketing. Export marketing is an approach in which sell directly

to overseas customers. It means, the manufacturing processes are done locally but the

company sells it both domestically and to selected target market in other countries. This is the

early stage of a company to become more internationalized. There are actually 2 types of

export marketing. Those are indirect and direct exporting. Indirect marketing is where the

company is relying on those 3rd party companies to handle and distribute the products from

the company. In other hand, direct exporting is a method where the involvement level of a

company is higher. It means, the company sells directly to the customers overseas.

3. International marketing

The third stage of the evolution is international marketing. The difference on this stage is the

company is getting more polycentric orientation. Not like the export marketing where the

focus is still on local market, in this international marketing stage, the basic factor that been

used to customized the product is those customers from other countries. A proper example of

international marketing is when a company manufactures products in one certain country but

they considered their neighborhood country as their market too. For instance, when F&N a

beverages manufacturer from Singapore, their manufacturing plant is only in Singapore but

their market is not only Singapore, but also Indonesia, Malaysia, Thailand, etc.

4. Multinational marketing

In this stage the focus of the company is more on the regional basis. It means, they will

customize the products base on the region-wide customers’ preferences. In this stage the

company starts to realize economies of scale by standardizing the operations on a regional

basis. In multinational marketing level companies have their manufacturing plant all over the

region and they consider the whole world as their market.

5. Global marketing

This is the last stage of the evolution. There are only few company that can actually achieve

and evolutes until this stage. It is a marketing approach in which companies are actually

standardizing all their marketing mix across the national, regional, and global markets. There

are 3 main activities in this stages which are standardization efforts, coordination across

markets, and global integration. In global marketing the manufacturing plants that the

companies have are spread all over the world and their targeted markets are every place in the

world or so called global market.

In my opinion based on the steps ‘definition, it is necessary yet easier for companies to

actually go through every steps before they actually become a global company. However,

there are several companies that actually can simply become a global company without the

need to go through each steps and mainly it is because the improvement and development in

technologies such as internet. Company like Google, Facebook, Twitter, and Yahoo, they can

actually skip some steps in the evolution to global marketing. However, it is difficult for the

rest of the business to do so. Like for example The Coca Cola Company which is considered

their business as one of the leading in the F&B industry.

The Coca Cola Company Background

The recipe of coca cola was actually developed in the 1886 by Atlanta Pharmacist named

John Pemberton. In 1919 the Coca Cola Company was being bought by a group of investors

headed by Ernest Woodruff and W.C Bradley for $25 million. The good thing for the

company upon this action was these 2 so called new owners of The Coca Cola Company

brought over the new, fresh and good concept about the vision of the company. According to

the official coca cola website, they put some new uncommon emphasis on the product. They

try to establish a “quality drink” campaign using a highly trained and experienced staffs.

These actions have been done in order to encourage the sales volume of Coca Cola itself.

However, the greatest contribution in my opinion from Mr. Woodruff was when he finally

succeeds to bring coca cola to go beyond the national boundaries of the USA. He established

a global momentum that makes coca cola exist in every corner of this world. it was all started

on the year of 1900 when Charles Howard Candler took a jug of coca cola syrup with him

when he went to England. Fortunately without any expectations, he got an order of 5 gallons

of coca cola syrup, and Puerto Rico. Finally in the 1900s, bottling operations of the Coca

Cola Company are established in Cuba, Panama, Canada Puerto Rico, The Philippines, and

Guam. Moreover in the 1920 the Coca Cola Company opened their first bottling operations

plant in France which is become the first Coca cola network in Europe. This vision has been

always brought together with the existence of every Coca Cola Company and it is still being

implemented in every Coca Cola Company to build Coca Cola business to become

unparalleled global system.

The Coca Cola Company in domestic marketing

The first step that the coca Cola company went through is that they were successfully

dominating their domestic market. In order for Coca Cola Company to dominate the market,

they need to understand and fulfill their targeted customers’ needs. To be able to dominate

the domestic or so called the local market is very important before a company actually

stepping out from the national boundaries because in the domestic market a company get a

good learning way and experiences for them and it can be their cornerstone for them to

actually step out and sell their product overseas. Therefore in my opinion any Companies

need to be very customer-centric in order to be able to fully understand the local customers’

need. Customer centric is a view in which the company is very focusing on increasing the

customers’ equity and keep up an innovative product adaptation in order to always be able to

keep up with the customers’ needs (Sheth et al, 2000).

The Coca Cola Company in export marketing

Based on my understanding in terms of the definition of export marketing which is a

marketing effort to sell the product directly or indirectly as the whole product without any

adaptation based on the targeted customers’ preferences on the targeted market. I would like

to say that Coca Cola has actually gone through this step. As we can see on the background

on the Coca Cola Company, at the early of 1900s someone from Coca Cola Company

brought over coca cola syrup on his journey to England, and unexpectedly someone in

England placed an order of 5 gallons of Coca Cola syrup. It was a good export marketing

effort done by The Coca Cola Company in my opinion.

The Coca Cola Company in International marketing

International marketing is where the adaptation of the product based on the foreign market

preferences is a must. It is a marketing effort which is considered as a sales expansion from a

local company in which the company start to sell their products to some other countries

(Kotabe et al, 2008). In terms of international marketing stages, the Coca Cola Company has

actually done a very good job in terms of modifying their product based on the foreign

customers’ preferences. Based on the official website of the Coca cola Company, I can see

that there are so many varieties in terms of flavor of Coca Cola itself. There are Coca Cola

with lemon which is available in Australia, American Samoa, Brazil, France, Malaysia and

etc. there are also Coca Cola Vanilla which is available in Hong-Kong, Austria, Australia,

United Kingdom, and etc, and the Coca Cola raspberry which is available only in New

Zealand. All we can see from this is that The Coca Cola Company is trying to keep up and

match their product with the customers’ demand coming from the variety of countries. This is

the main point and the point-of-differences that makes me sure that The Coca Cola Company

has actually gone through this steps. However, in my opinion there is no need for a company

to actually modify the whole product like for example what Coca Cola did with creating one

new fully modified product. In my opinion it is better for a company to actually not focusing

on 4Ps but what they should do is promote the product more frequently so that the customers

inside the targeted market will get use to the product that the company actually created from

the beginning. The advantages of doing this is that when the targeted market get expanded all

over the time, the company will be able to save huge percentages of costs, because if the

company do this kind of strategy it is the same with doing standardizations for the whole

world. My opinion is actually supported with a quotation that says that “culture has no main

effect on product, price, place and process; the main effect is on promotional efforts” (Chung,

2007). It means that the one that should be modified is actually the promotional effort and not

the 4Ps. The promotional efforts have to be adapted based on the Customers preferences in

those targeted markets.

Coca Cola Company in the multinational marketing and global marketing

In my perception multinational and global marketing is almost the same. The efforts that the

companies do when they reach these 2 stages are actually almost the same. The main thing

about these two concepts is that standardization. According to Backhaus and Van Doorn

(2007) standardization is a tradeoff between the possibilities in terms of amount of

economical beneficial that a company may get and the perceived performance of the

company in the eye of customers in terms of fulfilling the customers’ local needs. Actually

the difference between multinational marketing and global marketing is that the basic factor

which can be the main reason of modifying products. The basic factor in multinational

marketing is only regional basis customers. Whereas the global marketing, the basis is global

customers it could be country basis, regional basis, and world basis.

Conclusion

The Coca Cola Company is a leading company in terms of food and beverages industry. In

my opinion The Coca Cola Company is a truly global company because their main product is

the red canned Coke in which I found it the same in every place in the world. They do

produce other varieties product in terms of flavor, but the main product they sell is the Coke

that we can find everywhere in this world. the reason I write this statement is that based on

the definition of the global marketing which is when a company producing standardized

marketing mix all over the world (Kotabe et al, 2008). Based on my findings, I would say that

The Coca Cola Company is match with the criteria given, so The Coca Cola Company is a

global company.

Referencing

Backhaus, K. and van Doorn, J. (2002), “consumer perceptions of advertising

standardization: a cross-country study of different advertising categories”, International

Management Review, Vol. 3 No. 4, p.37.

Chung, H.F.L. (2007), “International marketing standardization strategies analysis a cross-

national investigation”, Asia Pacific Journal of Marketing, Vol. 19 No. 2, pp.145-67

Ewing, M.T., Salzberger, T. and Sinkovics, R,R. (2005), “An alternate approach to assessing

cross-cultural measurement equivalence in advertising research”, Journal of Advertising, Vol

34 No. 1, pp.17-36

Hassan, S.S, Craft, S. and Kortam, W. (2003), “understanding the new bases for global

market segmentation”,Journal of Consumer Marketing, Vol. 20 No, pp. 446-62

History of Bottling, accessed 1-march-2012,

http://www.thecoca-colacompany.com/ourcompany/historybottling.html

Keegan, W.2002. Global marketing management. New Jersey: Pearson Education Inc .

Kotabe, M, Riege, A, Griffiths, K, Noble, G, Ang, SH, Pecotich, A & Helsen, K 2005,

International Marketing, 2nd edn, John Wiley & Sons, Milton.

Sheth, JN, Sisodia, RS and Sharma, A. (2000), “the antecedents and consequences of

customer-centric marketing”, Journal of the Academy of Marketing Science, Vol 28 No 1,

pp.55-66.

Terpstra, V.1985. The changing environment of international marketing. Advances in

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