marketing literature research

7/31/2019 Marketing Literature Research

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Module: International Marketing (MSc in Strategic Marketing)

International Marketing Literature Research Assignment

Introduction

The aim of this assignment is to review a comprehensive sample of the most recent literature on

strategic marketing in global markets in order to recognise trends and new models as well as present

projections on future opportunities, risks and tendencies within the global marketplace. This analysis

will serve as a foundation for both implications for the future working practices of marketing

managers as well as a wider view of future directions in global marketing strategy

Literature Review

The literature under review covers the period 1993 to 2007 with the majority of the cited works

covering the period 2000 2007. It was thought that a review of earlier opinion and analysis in the

field would serve as a reasonable point of comparison with more recent theories.

An initial review produced eight areas of common themes which will be dealt with in turn in the form

of a comparative study of each theme. The themes under review are (1) the debate around

standardisation against localisation of product and service marketing; (2) the specific nature of the

product lifecycle in an international marketplace; (3) developments in global marketing research; (4)

the factors at work in the decision to enter a global market; (5) a review of global marketing concepts;

(6) socio-cultural and demographic considerations; (7) specific risk factors in international markets;

and (8) market entry models

Standardisation vs. localisation of product and service marketing

Interestingly, the literature posits the question of how far it is possible to standardise for the global

market in terms of either standardisation of the marketing mix or the product but rarely both. Majaro,

S (1993) suggests that a standardised marketing mix is a desirable goal based purely on the common

argument of economies of scale and increased efficiency.1 Similarly, Baker, M (1993) argues for the

preferred model of non-differentiation stating;

If an opportunity to standardise exists, do not differentiate (pp. 433)

Boyd, Walker, Mullins, Larreche (2001) present a more complex scenario but nevertheless continue


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the tenet of think globally, act locally2 which would tend to suggest an relatively undifferentiated

marketing mix with some differentiation of product and/or services in geographic areas. More recent

literature presents a more sophisticated view informed more by consumer behaviour. De Mooij, M

(2007) argues here that; local markets are people, global markets are products suggesting that

consumers will make a purchasing decision informed by culture and values3

and that only in very rare

cases, e.g. Coca Cola, can a product transcend local markets. This, however is more due to the success

of the brand.

The product lifecycle in an international marketplace

Throughout the literature there is a great deal of consensus on the fact that the total lifespan of a

product in the international marketplace has become shorter. Earlier analyses such as Baker, M (1993)

view this as a reason to recover the total product investment as quickly as possible and argue that thiscan be achieved most readily through increased marketing standardisation.4A more sophisticated view

is presented in Hollensen, S (2007) where there is a distinction made between a macroeconomic and a

microeconomic approach5. The macroeconomic approach sees production and initial demand

established in the innovating country. Later, as the product matures, excess demand is exported to

other developed countries followed by a later phase of maturity where demand is created in

developing countries where production is established. Finally, the developing countries export the

same product to their former suppliers. Crucially, the microeconomic approach shows that various

products in the firm's marketing mix can be simultaneously at different points in the life cycle.

Developments in global marketing research

The earlier and later literature differs little on those variables which can skew research results when

research is done on a global scale. Language interference, cultural values, consumption patterns,

socioeconomic variables within market segments all receive significant analysis6. What tends to be

more pronounced in the later literature is the increasing role of marketing research output in

facilitating decision-making as well as the recognition that global marketing research is more complex

and requires both primary and secondary research. Hollense, S, in particular, recognises the cost and

time benefits of accessing secondary data7, and here, the Internet must serve as a major source of

secondary marketing data that did not exist in 1993.

The factors at work in the decision to enter a global market

Following on from marketing research the political and economic environment are given significant

emphasis in the majority of marketing literature. Hollense, S (2007) discusses also the layers of

culture8 from the national culture influencing down to the individual's preferences This is not


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explored in terms of it's amplification across multiple national markets but Hollense does stress the

importance of recognising high-context and low-context cultures9. In the former, a great deal of

relationship building is required to win the trust of the partner in advocating a firm's products. De

Mooij (2007) expands this concept to include marketing communications in general, pointing out that:

In order to communicate effectively across cultures, the correct level of contexting must be found

(pp157)

Global marketing concepts

An analysis of theory developed specifically out of changes to global markets shows little

development of the standard theories of market segmentation, differentiated pricing and appropriate

distribution channels which underpinned local and domestic marketing theory. However, the literature

over the past five years has shown a particular set of theoretical models specific to global marketing.Hollensen, S (2007) discusses the Upsalla International Model10 whish suggests a sequential pattern of

entry into international markets with an increasing commitment to overseas markets as the

international experience of the firm grows. He contrasts this with a traditional approach of what is

termed as the Penrosian tradition which returns us to the economy of scale and a cost-led approach

working from the firms core competencies.11 Dunning (1998) suggests a similar Ownership-

Location-internalisation (OLI) framework12 identifying an ownership advantage of establishing

overseas production facilities, a locational advantage which builds a logistics network around the

overseas production and, finally, an internalisation advantage where it must be economical for a firm

to utilise the previous two advantages rather than sell them to a foreign firm.13

Socio-cultural and demographic considerations

The question of cultural factors in international marketing is that which has undergone the furthest

development in recent literature. As early as 1993, Majaro, S (1993) identifies the importance of

grouping markets according to cultural differentiation as opposed to political or geographical

boundaries.14 Kotler, P (1999) takes this model a step further, adding benefit segmentation,

demographic segmentation, occasion segmentation, i.e. according to when the product is used, usage

level segmentation and lifestyle segmentation.15The high-context and low-context cultural

considerations mentioned previously, are given further credence in Boyd, Walker, Mullins, Larreche

(2002) with each context lent a cross-section of reference groups16. These are peer groups such as

friends and co-workers who provide normative pressure to purchase (peer-pressure), value-expressive

reference where the consumer seeks to gain status and informal influence from friends and family,

better known as word-of-mouth. All of those elements provide a further level of complexity to the

now standard concepts of high and low context cultures


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Specific risk factors in international markets

Similar to the development of the standardisation-localisation model emerging to deal with the

specific choices related to international market entry the identification of risk mitigation factors

salient to international marketing has developed rapidly. Baker, M (1993) recognises the risk

mitigation inherent in internationalisation, protecting the firm from adverse fluctuations in the

national economic cycle.17 Hollensen, S (2007) concurs, outlining the ownership, operating and

transfer risk in being attached purely to domestic markets. All of the literature, in short, is strong on

identifying the risks of domestic-based marketing, however there is scant coverage of the specific

risks of internationalisation

Market entry models

Comprehensive models are easily identifiable in the literature and cover diverse entry modes, 18 total

product offer,19 and maturity models20 Hollensen, S (2007). Earlier literature is more product-based

than market-led, as with Majaro, S (1993) who presents three approaches to entering a product onto

the international market: the development of new products, the deletion of weak products and the

modification of new products.21Hollensen, S more or less deals with market maturity as a key

consideration of entry. Two distinct models suggested here are the waterfall approach where the

product is disseminated from advanced through developing to less developed countries and the

shower approach where all three are simultaneously targeted where early market penetration is a

goal.22 Overall, the literature is consensual on the fact that shorter product lifecycles are the salient

feature of internationalised markets

Future directions and managerial implications

Clearly, future developments in global marketing are prevalent in the most recent literature. De Mooij,

M (2007) is clear on the fact that culturally-sensitive advertising will continue to be a key

consideration when marketing managers and account managers are planning advertising strategy.23

The growth of multiple media for advertising and marketing will mean that product marketing needs

to be differentiated to the smallest sub-segments. In addition, it is clear that consumers will continue

to be sceptical of advertising messages, with marketing based on cultural value considerations being

the most appealing. This is why marketing through social networks with a high degree of informal

and normative influence is likely to be the measure of successful future marketing strategies.

One of the greatest consumer behavioural shifts which has perhaps not been fully considered is that of

a certain fluidity between high and low-context cultures There is little reason to suppose that low-


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context cultures such as the USA and Germany are heading toward a more high-context future.

Historically, it is difficult to think of a culture which has become more formalised and more stratified.

It is the opposite shift that marketing researchers will need to keep monitoring. High-context cultures

such as Japan and Saudi Arabia are increasingly adopting more informal attitudes to communication

and consumption, moving from group conformity to individualisation, from hierarchical to more

egalitarian beliefs. This process is being accelerated by the increased availability of low-context

media through the internet.

Concluding Note

The literature has shown a reasonably consistent graduation from an undifferentiated to a highly-

differentiated marketing mix with an increased emphasis on managing markets rather than products

per se. The cultural dimension has also gained prominence, partly as a result of both informal andlegislated cultural diversity both globally and nationally. This recognition of diverse markets has been

tackled through a focus on sub-segments in marketing research and localisation of global brands to

highly-differentiated local markets

References


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1 Majaro, 1993, p402 Boyd, Walker, Mullins, Larreche, 2001, p.23 Mooij, 2007, pp3-44 Majaro, 1993, p805 Hollensen, 2007, p.2626 Majaro, 1993, pp70-717

Hollensen, 2007, p.1578 Hollensen, 2007, pp. 219-2209 Hollensen, 2007, pp. 220-22110 Hollensen, 2007, pp.63-6711 Hollensen, 2007, p.6112 Dunning, 1998, pp.23-2513 Hollensen, 2007, p.6214 Majaro, 1993, p.4515 Kotler, 1999, pp. 26-2716 Boyd, Walker, Mullins, Larreche, 2001, p.13117 Majaro, 1993, p.6318 Hollensen, 2007, pp.295-30919 Hollensen, 2007, p. 42120 Hollensen, 2007, pp.427-43121 Majaro, 1993, p.9122 Hollensen, 2007, p. 26123 Mooij, 2007, p.301

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