WHAT IS GLOBALIZATION?
Advantages
Globalization is a process of interaction and integration among the people, businesses and governments of different nations, a process driven by international trade and aided by new technologies. This process has effects on the environment, on cultures, on political systems and on economic development and prosperity around the world. Policy and technological developments of the past few decades have spurred this progression, at the point that we believe the world has entered a new phase in its economic development.
Disadvantages
Globalization allows poor countries and their citizens to develop economically and raise standards of living: in the past decades this phenomenon has incredibly changed the main features of international trade. Thanks to this, trade has become more competitive leading to the production of high quality products. Competition is useful to improve a product, and globalization is helping to speed up this process by promoting international trade.
However, globalization has its drawbacks. The creation of an unfettered international free market has benefited multinationals corporations in the Western world at the expense of local enterprises, local cultures and common people. We believe that being a local company that decided to go global - supporting the models of globalization - can help us to understand how to protect the small local realities and common people. We are socially aware and we will take care of this downside of the globalization phenomenon.
INTERNATIONAL MARKETING
Going global implies some responsibilities: International marketing will be a new reality at Tantum, as well as all the ways in which it can be applied.
New technologies, communication systems, faster and safer transport links, free international trade: all these globalization features helped the raise of international marketing. We now live in a dynamic world where everything is faster and accessible.
International marketing occurs when there is the opportunity to expand sales in markets other than the original market.
For Tantum, expanding to the Asian - and global - market means expanding horizons to international marketing.
Methods of entry into international markets
Exporting
International Franchising
Exporting is simply when either the product is sold to a foreign custumer (pheraps the order has been placed via the business's website) or indirectly through an intermediary auch as a trading company based in the foreign country.
International franchising means that foreign businesses are used to operate a firm’s activities abroad. It involves a franchisor who grants to an individual or company (the franchisee) the right to run a business, selling a product or service under the franchisor’s business model and identified by the franchisor’s trademark or brand.
Joint ventures
An international joint enture occurs when two businesses based in two or more countries form a partnership. A company that wants to explore international trade without taking on the full responsabilities of cross-border business transactions has the option of forming a joint venture with a foreign partner.
Licensing
A licensing agreement refers to a contract between two companies where the owner of a property or activity gives permission to the other business to produce its branded goods or patended products under a licence, which will involve strictly controlled terms over quality.
Direct investments in subsidiaries
Setting up company-owned subsidiaries in foreign countries might be another methos to do international marketing. This could have higher success thantaking over or merging with locally based companies.
Entry into international markets
Opportunities
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Develop marketing operations in expanding markets when the domestic market is saturated
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Potential to increase profit through rapid sales growth and low costs in emerging markets
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Spreading risks between different markets at different stages of the economic cycle
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Poor trading consitions in the home market (like in our case) means that international marketing can allow sales to continue to grow.
Threats
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Differences in consumer needs and wants, increased costs of adapting products and their marketing strategies to meet these differences.
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Different legal environment in different countries. Tantum will have to meet all legal requirments in the new markets and we will need to obtain specialised knowledge of these legal constraints for each market traded in
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High level of competition from national producers
The role of cultural differences in international marketing
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Promotion
A global marketing strategy also has to study cultural differences before planning its advertising strategy. Advertising will be planned in such a manner that it appeals to the customers in the international market. Some cultures show an open attitude towards advertisments, others don't.
Tantum will respect the local cultures in its advertisments in the best way possible.
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Products
Setting up company-owned subsidiaries in foreign countries might be another methos to do international marketing. This could have higher success thantaking over or merging with locally based companies.
Cultural awareness among international traders is really important. Companies that are going global have to compete with local companies who are armed with vast knowledge on how the local people react to a certain cultural pulse. Thus the newcomers must make sure that their products and promotional techniques are sensitive to cultural values of the people to leave a good impression of their branding.
Cultural awareness should be applied in every aspect of marketing: selling, label-printing, prices, advertising and promotion of products. It covers language, the lifestyle and the behavioural patterns of the people in the country of interest.
Tantum will do its best to respect and to regard the local cultures and consider them during the decision-making process. We implemented an internal policy to hire local people to both benefit of their cultural knowledge and to integrate with the new work environment.
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Price
Average income levels vary greatly across the globe. It's obvious that people from deveoped countries can afford to pay higher price products that people from developing countries.
For this reason our company will adapt its prices to the local income level.
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Place
The distribution of goods is also dependent on cultural differences. The transport system, logistic systems, wholesale system and retail system differ across the world because of infrastructure and tradition. In some countries customers tsill support small local stores rather that big supermarkets. Also, in some countries, access to internet is still unreliable and limited so our e-commerce strategy is unlikely to be successful in those areas.
(Business Management textbook, pages 439-446, http://www.marketingteacher.com/what-is-international-marketing/ ; http://smallbusiness.chron.com/can-cultural-differences-affect-business-communication-5093.html)