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Global Marketing: Glocalisation and its Relation to the Standardisation – Adaptation Debate
The essay discusses the essence of a relatively new phenomenon of todays global business environment such as glocalisation. Companies conduct the market segmentation based not on differences, but the similarity of national segments by applying the standardisation strategy when using the concept of global marketing. However, standardised solutions do not always work effectively, and even global companies are forced to use the adaptation strategy, which is the basis of the principles of localisation. In modern conditions, it is necessary to take advantage of both strategies that will enable international companies to provide competitive advantages at the global level.
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Thus, the aim of the essay is to critically discuss the concept glocalisation and its relation to the standardisation – adaptation debate. The paper will study the term glocalisation, its relation to globalisation, as well as help in uncovering to which extent this concept relates to global and local business and marketing strategies. At the same time, the purpose of the essay is to reflect how these concepts relate to the standardization – adaptation debate that prevails in the marketing literature, as well as outline the advantages and drawbacks of these different strategic approaches in global marketing. A practical part of the paper will analyse two global companies that have applied a glocal strategy to their marketing programme and illustrate the analysis by using the dot plot table. The provided analysis will help to compare the ways, in which the companies global marketing programmes are different or similar, as well as summarise the findings in the conclusion part.
A modern process of globalisation of the world economy is accompanied by the formation of a number of contradictions that cause it to change the direction of the establishment of a new entity. Deresky and Christopher (2012, p. 250) argue about the two opposing trends that exist on a global level today. On the one hand, nations are combined by global communications systems, commerce and other spheres. On the other hand, they are split on ethnic and regional components. All this leads to a blurring of traditional nation-state boundaries from both sides. However, these two processes, namely globalisation and localisation, are intrinsically linked. It has led to the emergence of a new trend called glocalisation, which means the compound of the global with the local. Although global marketing strategies are being implemented at the international level, an attempt to effectively maintain the global and centralised marketing management fails in modern conditions (Gillespie & Hennessey 2015). A new concept of a large business, named glocalisation, has replaced the global marketing and brand management in the present days (Svensson 2001).
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The global financial and economic crisis of 2008 did not jeopardise the globalisation process itself, but only questioned its pace and bonuses. It has led to the appearance of a path of entry into the global peace. It became obvious that most countries would be integrated into the global space in more or less monolithic regions. In this context, the problem of demarcation of regionalism and civilised approach would be undoubtedly irrelevant in regard to the social and humanitarian studies (Holton 2011).
On the edge of the 20th 21st centuries, the civilisation approach had its undeniable advantages. According to Kjaer (2014), a considerable attention was paid to non-economic factors, socio-cultural integration, issues of culture and spirituality in general. The implication antagonism inherent in the Marxist model of class was being removed. At the same time, the civilisation approach made the cultural relativism absolute and questioned the possibility of the social and cultural progress.
The alternatives of the civilizational approach began to be formed within the framework of the globalisation of research in the late 20th century. The theory of glocalisation proposed by Robertson in 1995 became one of them. According to Robertson (1995), if the globalisation is the culmination of the modern project and represents its transition to a new quality, it must be acknowledged that modernity operates differently in various localities. Robertson (1995) claimed that the local was often not backward or regressive, but derived from the transitional essence.
Globalisation cannot remove the contradiction between the homogeneous heterogeneous and universal particular in favour of homogeneous and universal (Robertson 1992, p. 100). On the contrary, it could only succeed by adapting to local forms of the cultural life, traditions and even at the expense of their export to other countries and regions. Therefore, glocalisation was the inevitable downside of globalisation. Robertson (1995) noted that glocalisation was the challenge of modern unifying cultural globalisation when comparing it with the philosophical tradition of the German culture of the 19th the first half of the 20th centuries that was in contrast with the culture and civilisation.
The term glocalisation may not be quite appropriate, but it captures the essence of the manifesting worldwide phenomenon best, in which globalisation and localisation transform the development pattern. The meaning of this term has its origins in the Japanese word dochakuka that first appeared in the 1980s in articles of the Harvard Business Review. The definition used to adapt agricultural manufacture technologies to local conditions in the first place (Khondker 2004, p. 4). According to the dictionary meaning, the terms global and globalisation resulted in the merge of concepts of global and local ones. According to Khondker (2004, p. 4), it is the process that combines the processes of macro-localisation and micro-globalisation. However, Giddens (2000, p. 31) considers the relationship between the global and local from another standpoint. He argues that globalisation leads to a revival of local cultural identities. Thus, a local one is a response to global forces. In its turn, Ritzer (2004, p. 13) points that globalisation is glocalisation plus globalisation. Globalisation means the imperatives of growth that forces organisations and nations to expand globally and prevail over the local ones.
Although the term glocalisation is devoid of any conceptual framework or theoretical construct, it confirms the fact that globalisation and localisation have become the most crucial trends of the new century. According to the US Agency for International Development (1990, p. 1), these trends comprise in the establishment of open markets and movement towards more accountable and democratic governance. However, according to the World Bank report (1999), the term has emerged due to the detriment of the nation-state. Thus, economic and political factors that increase both the global and local impacts due to the traditional nation-states have been developed in the global economy. Kahler and Lake (2003), along with Hiscox (2003), argue that globalisation, which is narrowly understood as the economic integration into the international system, has created issues related with the need to transfer decision-making in the non-state sector. A control is being relocating these days. In this regard, states either delegate more responsibility for taking up solutions to supranational institutions or make decisions in regard to sub-national political entities. This type of analysis indicates that the national economic sovereignty has weakened as a result of globalisation, while the local economies, called the city-states, have become key actors in the global economy (Ohmae 1995). This fact significantly affects business in terms of modern conditions.
Thus, the strategy suggested by Robertson regarding the existence and understanding of the local in the global world became the basis for a three-year research project, the results of which were introduced by Berger and Huntington in 2002. Although the researchers showed a variety of models of adaptation and integration into the global space regions, the study was not in contradiction with the Robertsons approach (Berger & Huntington 2002). In his statements and conclusions, Robertson (1995) was fundamental at variance with Fukuyama (2006) who considered nationalism and fundamentalism as alternatives to the homogenising globalisation. As Robertson (1995) noted, liberal democracy, nationalism and religious fundamentalism were manifested only in certain local forms all over the globe, but not as something unchanging that was given once and for all. To support this point of view, Naisbitt (1994) and Friedman (2007) outlined the variety of local forms of globalisation, even relatively the USA, where glocalisation resulted in a depressive local color in some states by giving rise to xenophobia against migrants and more successful minorities, but not the expected enthusiasm for the American success in a liberal and democratic global world.
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The analysis of literature review has shown that glocalisation creates trends in both directions the decentralisation and centralisation in order to ensure the efficient management, as well as a stable, reliable and fair government. Svensson (2001) notes that glocalisation encourages subnational governments to play a more active role in attracting foreign investments, trade development, providing the infrastructure and increase the human capital. However, it promotes various forms of centralisation by increasing the value of the levers of macroeconomic policies, especially monetary policy and central banks.
The international integration of markets facilitates the decentralisation by reducing the opportunity costs in small businesses. The technological progress and global integration of the factoring market have changed the size of the economic systems of governments. It has resulted from the fact that an increasing number of public services is provided by decentralisation and private enterprises these days. Furthermore, a fair trade, international treaties and lending conditions have forced the central government to abandon its traditional role and convey significant management functions to non-central government agencies.
For instance, Synder (1999) showed the way, in which the government of Mexico accepted administrative functions, when the central government refused to adjust the volume of coffee production in the country. On the other hand, the international integration of markets has also increased the requirements for the stabilisation of the financial system that has covered the entire country. Additionally, it relates to the guarantees for the regions, which adversely affect asymmetric economic shocks. In order to stabilise the financial system and risk-sharing between regions, it is required to integrate economic resources in the centre. It means that glocalisation results in a supranational management and centralisation, on the one hand, as well as localisation and decentralisation, on the other hand. The problem is to develop an optimal decentralisation. The desired degree of decentralisation depends on what is intended to be decentralised, as well as the specific economic, historical, political and other circumstances that are planned to be decentralised.
Analysis of the Marketing Mix of 2 Global Companies Based on the Literature Review
The global marketing strategy focuses on the maximum standardisation, concentration, marketing management, synchronisation and integration of all marketing activities. In this regard, the global marketing strategy focuses on the versatility of marketing techniques in different countries. According to Keegan and Green (2015), the aim of the global marketing concepts is to implement multinational strategies, while the incarnation of a truly global strategy is almost impossible in practice. It has resulted in accepting global marketing as a managerial utopia.
A glocal marketing strategy uses universal tactical and strategic methods in many countries, but makes it possible to adapt to the unique markets. Menon (2014) noted that glocal strategies realise the need for adaptation, an individual approach, differences, diffusion, interdependence and flexibility in terms of the marketing activity. Thus, a glocal marketing concept introduces a new standard in the accuracy of the incarnation of global marketing strategies.
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The formation of a global culture, often considered as the spread of the Western cultural model, is paradoxically accompanied by the increased number of local cultural differences. For example, the purely economic aspect of globalisation, which is the activities of TNCs, has an essential cultural dimension these days. TNCs often face the problem associated with local cultural features when they enter new markets (He 2013).
Glocalisation at McDonalds
A global corporation McDonalds has recently surprised by the change of its course. In particular, it has decided to replace the main symbol of the corporation Ronald McDonald, which is the plastic industry giant emblem, with its Gallic equivalent Asterix in France (Buffery 2010). Given the lack of the French peoples love to the American mass culture, one of which has long been the McDonalds synonym, the organisers of a new campaign have decided to refuse from the services of the fluorescent-striped clown. The company has also decided to adopt the local values in the companys restaurants in different countries. For example, McDonalds executives have begun to use a patriotic advertising in France (Adams 2010).
However, McDonalds does not offer both beef and pork to avoid issues related to Hindus or Muslims in India, but the vegetarian version of Big Mac called Maharaja-Mac is offered there nowadays (Kannan 2014). McDonalds products have created certain market problems in a country such as India. The idea of a piece of beef in a bun was unattractive for the majority of the Indian citizens who profess Hinduism, and even for the most westernised of them. The company has spent a lot of time and money to create a double cuisine in each restaurant in India in order to prevent mixing vegetarian and meat products. Such concepts as purity and defilement are highly significant for an Indian customer. Despite the best efforts of McDonalds, consumers have started to associate the company with the product depicted in its brand, in particular a bun stuffed with beef (Nelson 2012). There were cases in Delhi, when older members of families were surreptitiously sniffing plates in McDonalds trying to establish if the beef was served, while more aggressive clients also insisted on the inspection of both cuisines to make sure all utensils were stored separately. Meanwhile, others were questioning the companys employees for a long time about the precautions that had been taken to keep the meat products out of vegetarian dishes.
In addition, McDonalds tried to adapt to local conditions, which is to make the menu an Indian-adopted one. However, many customers were scared of the lack of species in the meat. It has not attracted the Indian consumers as far as it attracts many others in diverse countries all over the globe, along with the menu made up of a hamburger, French fries and a glass of Coke.
Glocalization at the Coca-Cola Company
From the very beginning of its output to international markets, since the Second World War, the Coca-Cola Company has insisted that its products should be the same in all countries of the world. By the end of the 20th century, the brand had become a fixture of the perception of the American way of life all over the world. However, after the failure of 1999, the chairman of the Board of Directors, Doug Daft, recognised the need to change the companys course. After that, Coca-Cola has begun to develop local products by acquiring local brands or creating new ones instead of following the path of globalisation of the main product.
Today, the Coca-Cola Company is one of the most ardent supporters of the new ideology (Sollmann 2014). The company that has tried to teach the world to live in harmony once gives its national departments as much marketing sovereignty as it can. Thus, the company has announced its glocal approach in Scotland, where it has traditionally been the second largest company that operates in the fizzy drinks market ,while the local brand Irn-Bru is a leader (Scottish fact of the day: Irn-Bru 2014). Ironically, McDonalds has contributed to Irn-Brus leadership in the market by offering its clients Irn-Brus beverages until the Coca-Cola Company has claimed against it.
Over the past few decades, the processes of globalisation have appeared in various sphere, including the economy, communications, international law, tourism and culture. At the same time, the opposite trend of the process is the movement to the accelerated development of local cultures, small ethnic groups, the exacerbation of their claims to sovereignty, and others. On the one hand, nations are combined by global communications systems, commerce and other spheres. On the other hand, they are split in terms of ethnic and regional components. All this leads to a blurring of the traditional nation-state boundaries from both sides. However, the processes of globalisation and localisation are intrinsically linked. It has led to the emergence of a new trend glocalisation, which involves the creation of the global combined with the local, namely global centres with the periphery.
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Glocalisation implies the possibility of culture to absorb the external impact on a nation that enriches it. At the same time, it rejects hostile in regard to the culture external influences. The aim is the assimilation of aspects of globalisation in the local culture helping the local growth and diversity, but not allowing for the total domination of globalisation on the national self-development.
A glocal marketing strategy uses universal tactical and strategic methods in many countries ,but makes it possible to adapt to unique markets. Glocal strategies are aware of the potential need for the respective adaptation, individual approach, differences, diffusion, independence and flexibility in terms of the marketing activity. Thus, the global marketing concept introduces a new standard in the accuracy of incarnation of global marketing strategies. A glocal marketing concept supports the need for a balance and harmony between standardisation and adaptation, homogenisation and individual approach, concentration and diffusion, timing and flexibility, as well as integration and separation of marketing actions. A glocal marketing approach means that global and local features are taken into account in equal measure and optimise a marketing strategy.
A practical part of the essay has reviewed the implementation of a glocal marketing strategy by McDonalds and the Coca-Cola Company. The results of the analysis have allowed concluding that both companies try to standardise and adapt their marketing mix in every market they operate. In order to do this, both companies study local traditions and customers expectations to be able to show the respect to the clients requirements. It is a highly significant aspect of the marketing mix as it helps companies to strengthen their positions on the newly entered markets. An unhappy experience of McDonalds in India has demonstrated the need to adapt to the local culture and customs. It is relevant to note that both companies global marketing programmes are similar, which makes it possible to state that a chosen glocal strategy is effective.
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