Module 1 - Introduction to Globalisation

Globalization is actually the idea that there will be no national boundary in the world of business

and commerce and all the trade will operate on an international scale. Recognizing the cultural

diversity of the world to build a harmonious world is another agenda of Globalization.

Simple Definition

Globalization means the speedup of movements and exchanges (of human beings, goods, and

services, capital, technologies or cultural practices) all over the planet. One of the effects of

globalization is that it promotes and increases interactions between different regions and

populations around the globe.

According to WHO, globalization can be defined as ” the increased interconnectedness and

interdependence of peoples and countries. It is generally understood to include two inter-related

elements: the opening of international borders to increasingly fast flows of goods, services,

finance, people and ideas; and the changes in institutions and policies at national and

international levels that facilitate or promote such flows.”

Concept of globalization

People have derived benefits from the geographical locations of one another since ages. This has

been done by way of migration, trade and business relations. Likewise, even today the same

phenomenon continues on a large scale by the introduction of free trade agreements and novel

developments in international relations which enable the states to benefit from each other’s

interests. This process of inter-state integration and interaction is called globalization.

Definition
Globalization, the word means to make “global”, meaning making global ties or making

something or usage of something accessible and not restricted to a single territory. The process is

leaving a significant impact on the international community and on its environment, politics,

society and economic development. Besides, globalization has made gradual changes in the

health sector and individual well-being of societies.

The need for globalization

Not all things are in abundance everywhere, but they can be in abundance at a particular place.

For example if somebody is growing vegetables in their lawn and they have more than their

consumption requirement then they would want to sell them to make the most of the yield and

others will buy from them to escape the costly market rates. This is exactly how globalization

works. Countries even go a step ahead by availing themselves of the cheap labor opportunities

abroad. For example, a Japanese automobile company manufactures its automobile parts in say

Pakistan, assembles them in Bangladesh and sells the finished cars in the other countries. Japan

would only see which States can offer the most economic friendly results without compromising

the quality.

Historical background
Globalization is not a new concept. Traders traveled vast distances in ancient times to buy

commodities that were rare and expensive for sale in their homelands. The Industrial Revolution

brought advances in transportation and communication in the 19th century that eased trade

across borders.

The think tank, Peterson Institute for International Economics (PIIE), states globalization stalled

after World War I, and nations' moved toward protectionism as they launched import taxes to

more closely guard their industries in the aftermath of the conflict. This trend continued through

the Great Depression and World War II until the U.S. took on an instrumental role in reviving

international trade.1
 Globalization has sped up to an unprecedented pace, with public policy changes and

communications technology innovations cited as the two main driving factors.

After WWII, there has been a significant rise in world trade. There has been a 20% increase in

the volume of free trade particularly since the 1950s, whereas the foreign investments have

doubled.

Thomas Friedman, an American journalist and author, precisely opines on globalization that it is

getting “farther, faster, cheaper and deeper”.

Advantages of globalization

Globalization by removing the barriers also frees the States from their technological deficits.

This improves not only the industrial sector but greatly impacts the healthcare segment as well

when the States have begun to import advanced machinery and other assets that couldn’t be

manufactured within their territories. This also boosts the development in the developing and

underdeveloped countries by the flow of information and technology across borders.

Impact of globalization on law

Globalization has evidently impacted the legislation of the States. The laws of developed States

have been incorporated by other states by way of Ordinances. Mostly the laws adopted relate to

the areas which haven’t been touched by the domestic legislators. Intellectual property laws can

be an instance where TRIPS Agreement of WTO has been made the basis for the Copyright,

Trademark and Patent laws in various developing countries protecting the individuals and

businesses.

The progress of China

China has reached the zenith of world prosperity by globalizing only. It has impacted foreign

markets to the extent that there’s not a single State where Chinese goods and services are not

found. Yes, globalization extends to services as well. Developed countries invite foreigners by
offering them unbeatable working opportunities. That’s the reason most Asians are seen working

in the USA as doctors, engineers, lawyers etc. As a result, there has been an exchange of ideas,

languages and overall culture. Intercultural marriages are also an outcome of globalization.

Drawbacks

Nevertheless, excessive interdependence between the States at times gets problematic. For

example in 2010 when Greece met debt crisis the impact was seen on the entire Europe. Plus due

to increased demand for goods and amplified industrialization driven by globalization, the world

is facing global warming, which is currently the biggest disaster for the world to face.

Facts about Globalization:

● As a result of globalization, world per capita GDP rose from $680 to $6,500 in between
1900 and 2000 where the rise was so inconsequential before that.
● The dramatic rise of the GDP didn’t help the countries with low assets that much but
surveys and statistics show that the quality of life and growth have become better with
globalization.

● The most striking facilitator of globalization is the Internet.

● Japan, Korea, China, and Taiwan are the countries that have used the positive factors of
globalization the most to develop their economy and the quality of life.
● The WTO, the World Bank, and the IMF (International Monetary Fund) are the explicit
result of globalization.

https://youmatter.world/en/definition/definitions-globalization-definition-benefits-effects-exampl
es/
https://www.investopedia.com/terms/g/globalization.asp
Advantages of Globalization

1. Alteration of Technology: The global alteration of technology is a good sign.

Countries can borrow the technology via agreements and implementation for
overall development. Communication will be more accessible from any part of the
globe by utilizing advanced technology at minimal cost, time, and effort.
2. Better Services and GDP Growth Rate: Globalization always provides better
services to people. Through technological progress, services such as water supply,
networking, electricity supply, internet, and other services have become easier to
deal with. Easy access to the internet is also the advantage of globalization.
Globalization also ensures the participation of every country to uplift the world
GDP growth.
3. Improvement of Infrastructure: Governments can deliver their services to the
people more efficiently owing to the advancement of infrastructure. It is worth
mentioning that economic growth and the evolution of infrastructure are
harmonious with each other in the development of a country.
 4. Affordable Commodities: With access to the latest technology, the countries can
provide products to their citizens at affordable prices. Globalization encourages
competition in domestic sectors. Companies reduce product prices or follow a
discernment pricing strategy.
5. Extensions of Market: Globalization favors the extension of markets. It provides an
opening for domestic companies to go global.

Companies can observe saturation in demand for their commodities or services, but through
globalization, these companies can satisfy the growing needs of foreign clients.

Disadvantages of Globalization

1. Rising Inequality: Globalization can raise the problem of inequality everywhere in

the world by increasing specialization and trade. By trade boost of the per-capita
income, it causes relative poverty, worldwide.
2. Growing Unemployment rate: Globalization can increase the unemployment rate
since it demands higher-skilled work at a lower price. In countries where
Companies are relatively incapable of producing highly skilled workers, the
unemployment rate can increase in those countries.
3. Imbalanced Trades: The balance of trade refers to the ratio between export and
import of commodities and services. Any country can trade with any other country,
and globalization causes an imbalance in this ratio. It is also termed ‘trade deficits.’
Over the years, trade imbalance has increased in developed countries by
competition in the market.
4. Environmental Harm: The speed of industrialization is rising as an outcome of
globalization. Industrialization advances economic growth, but it also harms the
environment. Various chemical industries use harmful fertilizers and solutions or
release industrial wastes into nature that causes harm to human life and the
environment.
5. Exploits poorer labor markets: Globalization enables businesses to develop jobs
and economic possibilities in developing countries by often offering cheaper labor
costs. Yet, overall economic growth in such developing countries may be slowed
due to globalization or, worse, become stagnant

Difference and Comparison

 GLOBAL INTERNATIONAL
BASIS
MARKETING MARKETING

Meaning Global marketing is International marketing refers

the application of a to the company's penetration

single marketing into the prospective markets of

strategy in the different countries by directly

worldwide market, for engaging in the local marketing

a product or service. environment.

Product or Standard product or Customized product or service

Service service

Offerings

Marketing Cross-cultural Native marketing employees

People marketing personnel placed in the target foreign

employed at the markets

company’s head office

Marketing It requires intense It comparatively needs less

Research and market research due research and development

Development to the company's since the company has a

physical absence in physical existence in the

the prospective global international market and can

market. analyze the market.

Customer Less customer Customer engagement is quite

Engagement engagement due to high due to the local presence

the distant presence and multiple communication

and low customer channels.

interactions.

Marketing All the budgeting The international subsidiaries

Budget activities for global perform budgeting activities at

marketing are the local level.

performed at the

company's

headquarters.
Social Media Company has a Here, there are multiple social

Marketing unanimous social media pages of the company,

media page for its on Twitter, Instagram or

global operations. Facebook segregated

according to the country.

Advertising Here, a single Advertisements in the

commercial runs international market are

throughout the world tailored exclusively for the local

in various regional market and vary drastically

languages of different from country to country.

countries.

Promotion Promotion tactics are The promotional strategies are

Strategy adopted keeping in designed individually for every

mind the global local market.

audience perspective.
 Marketing Limited to the Spread across the subsidiaries

Autonomy company's located in different countries.

headquarters.

Advantages of Global Marketing

Global marketing is a beneficial strategy when it comes to the internationalization of business

operations if the product or service offered has a universal demand.

Let us now understand the following other merits of global marketing:

● The company can expand its customer base by selling the product or service
overseas.
● With the globalization of business operations, the company can go for mass
production, ultimately reducing the cost and ensuring economies of scale.
● Due to the reduced cost of production, the company can make a higher profit on
sales.
● The company gains recognition worldwide as a brand.
● Going global helps the organization to win over its competitors (domestic and
international) by ensuring quality product or service.
● The company adopts a consistent marketing practice while selling products or
services in the markets of different countries.

Advantages of International Marketing

International marketing has provided an opportunity for domestic companies to meet the
requirements of customers existing in vast and varied geographical market segments.

Following are the multiple benefits of international marketing:

● International marketing provides for expansion of the business units or establishing

subsidiaries in various countries.
 ● The sales of the organization can be increased as the company penetrates other
global markets, instead of operating only in the domestic market.
● All the marketing strategies are framed and customized according to the customer’s
needs in the target market.
● The business risks like fluctuation in market demand, economic conditions,
government policies, etc. can be diversified when the business operates in multiple
countries.
● International marketing promotes two-way communication with consumers due to
the company’s physical existence in the marketplace. Thus, keeping customers
engaged and enhancing the product or service provided.
● The company develops a robust economy by meeting the needs of consumers in the
local markets.
● The company can easily blend with the local markets and can very well understand
the marketing strategies or practices of the domestic players.

Disadvantages of Global Marketing

Global marketing is a narrow concept since it is not suitable for every business organization. Let
us now have a look at its various demerits:

● Sometimes, the organization fails to analyze the global target market and try to
enter it through the same sales and marketing channel, which it adopted in the
domestic market.
● The biggest challenge in global marketing is to fulfill the global consumer needs
with a universal product or service when the demands and requirements of the
consumers vary from country to country.
● While reaching out to the worldwide customers, the company needs to understand
the local language of the consumers belonging to different regions and countries,
which is a difficult task.
● The organization entirely relies on its research and information gathered through
external sources about the global target markets.
● The government’s restrictions and change in policies of selling products or services
overseas can harm sales and profitability.
● When the same product or service is introduced in different global markets, there
are more chances of rejection. This is because the product may or may not live up
to the expectations of all the target markets.
● The organization sometimes does not have complete knowledge or fails to specify
the global target market, which can be a reason for business failure.
● The company may end up with a weak global logistic if it plans its marketing
strategies according to the major countries only.
Disadvantages of International Marketing

International marketing provides an edge over the other internationalization strategies when it
comes to creating footprints worldwide.

However, it has certain demerits, which are discussed below:

● The cost of operating multiple subsidiaries in different countries is quite high.

● The foreign government’s policies and regulations impose restrictions on overseas
business operations.
● Competition with Local Companies: The local business organizations which have
been existing in the global target market, emerge as significant competitors for the
company.

Summary

The following point to point explanation will further brief you over the above comparison chart:

1. Global marketing refers to the adoption of the same marketing strategy for
worldwide selling of products or services, i.e., considering the whole global market
as one. Whereas, international marketing can be seen as customizing the marketing
strategies to suit the prospective international market.
2. The former provides a universal or standard product for all the foreign markets.
Whereas, the latter emphasizes on customizing the product or service as per the
overseas target market.
3. The companies adopting a global marketing process employs personnel persisting
with a distinct nature, skill set, gender, ethnicity and age; and working together in
the company’s head office. However, the organizations with international
marketing strategy have marketing people with cultural similarities since they
belong to the country where the company originated, but are placed in the target
market countries.
4. The former requires more market research and investigation as compared to the
latter due to lack of frequent market interactions.
5. The consumer interaction and brand engagement in global marketing strategy are
quite low as compared with that of international marketing because of distant
existence.
6. In the case of the former, the marketing budget is prepared at the company’s
headquarters. Whereas, the latter provides for the preparation of individual
marketing budgets by the subsidiaries for their respective local markets.
 7. In global marketing, the company has a single social media page which covers all
the target country markets. But, a company with international marketing has a
separate social media page for every country in which it carries out business.
8. In the former strategy, the company aired the same advertisement in different
countries in their regional languages. However, the organizations with the latter
approach frame many ads to suit different target country markets.
9. All the promotional activities are carried out with a comprehensive view on global
marketing concepts. Whereas, in international marketing, different promotional
tactics are used for every local market targeted.
10. The former restricts the decision making power to the company’s headquarter,
while the latter leaves marketing decision making on subsidiaries for their
respective local markets.

Hybrid Structure

The hybrid structure is a blend of international as well as global marketing, adopted by the
companies to ensure success and growth during international business expansion. Initially, this
strategy was adopted by Coca-Cola to win a competitive edge in the global market.

But now, it is being applied by many large scale companies as a proven strategy for
internationalization.

GLOBAL MARKETING EXAMPLES

If you are searching for inspiration on how to market your company successfully in the
international arena, check out these examples from well known companies.

Airbnb
Airbnb is for people who book and list accommodations all over the world. Generally, it is a
community marketplace that has more than a million listings in more than 34,000 cities in the
world. Airbnb became very successful globally because of social media. In 2015, Airbnb began a
social media campaign using the #OneLessStranger hashtag.

This social experiment had Airbnb asking its community to do random acts of hospitality for
people they did not know and take a photograph or video with them and share by making use of
the hashtag. In only 3 weeks after the campaign was launched, more than 3 million people
created content, engaged, or talked about the campaign.
Coca-Cola
Even though Coca-Cola is a big corporation, it also concentrates on programs in small
communities and infuses a lot of funds and time in small charities.

Case in point, Coca-Cola built 650 clean water installations in Beni, Suef in Egypt and sponsored
meals (Ramadan) for children in the Middle East. Moreover, the brand goes with an emotion that
everyone knows — happiness.

Domino’s
Domino’s positioned menu innovation in the forefront to increase its international awareness and
interest. They have consistent items for the pizza in all markets like their sauce, bread, and
cheese, where it works anywhere.

They just update the toppings for every market. If it is Asia, they have fish and seafood, for
example.

Dunkin’ Donuts
Did you know that Dunkin’ Donuts China has seaweed and dry pork donuts? With thousands of
stores in over 30 countries worldwide, Dunkin’ Donuts updated its menus to satisfy its
international consumers.

In Lebanon, they have the Mango Chocolate Donut; in South Korea, they have the Grapefruit
Coolatta; and in Russia, they have Dunclairs!

H&M
H&M almost always increases its store openings by 10 to 15 percent each year. One of the
secrets of their global expansion is maximizing their online experience.

Innocent Drinks
A leading smoothie company in the United Kingdom, Innocent Drinks can be found in 13
countries all over Europe. Even with its wide reach, they still maintain consistent branding.

Kentucky Fried Chicken

Kentucky Fried Chicken was able to do something quite interesting. In Japan, they were able to
connect their products with Christmas. So every Christmas, Japanese line up at their nearest KFC
for some chicken!

McDonald’s
Even though McDonald’s keeps its branding consistent, McDonald’s tries to bring in some local
flavor to particular menu items. McDonald’s has McArabia in the Middle East—this is a
flatbread sandwich. It also introduced France to its macaroons and included the McSpaghetti in
the Philippines. In Mexico, they have a green chili cheeseburger and in South Korea, they have
bulgogi burgers.

Nike
Nike has evolved his international presence by carefully selecting international sponsorships.

Even though spending for sponsorships is quite unpredictable, demand costs usually rise sharply
because of triggers such as tournaments and championships. This has captured the attention of
the international arena.

Red Bull
One of Red Bull’s successful techniques is hosting extreme sports around the world. They have
the Red Bull Air Race in the U.K., the Red Bull Soapbox Race in Jordan, and the Red Bull
Indianapolis Grand Prix.

Starbucks
Starbucks adjusts its menu for local tastes. For Hong Kong, they have Dragon Dumplings, for
example. The company has had a wide reputation for the engagement of local cultures.

Unger and Kowitt

Unger and Kowitt is a law firm that focuses on traffic tickets in Fort Lauderdale, Florida.
Although its focus is in Florida, the business knows that the U.S. has many languages and
cultures. So its website is translated to English, Portuguese, Spanish, and Creole.

World Wildlife Foundation

The World Wildlife Foundation or the WWF is known for its Earth Hour initiative and moved it
to the mobile audience of Norway. Earth Hour is an international voluntary event wherein
participants turn their lights off for 1 hour to show the ease of fighting climate change. Since
Norway experiences long daylight hours, it is a great candidate for WWF’s initiative.

By using Mobiento, a digital agency, the WWF positioned their Blackout Banner on the top
media sites of Norway. When someone would finger swipe on the black screen, it would
gradually show the countdown for Earth Hour. This banner got around a million impressions.
The campaign also received marketing awards for its ingenuity.

https://www.cleverism.com/global-marketing-strategies/

https://sumo.com/stories/global-marketing-strategy

https://courses.lumenlearning.com/wm-principlesofmanagement/chapter/dimensions-of-cultural-
difference-and-their-effect/

Globalization of Media

The media industry is, in many ways, perfect for globalization, or the spread of global trade
without regard for traditional political borders. As discussed above, the low marginal costs of
media mean that reaching a wider market creates much larger profit margins for media
companies. Because information is not a physical good, shipping costs are generally
inconsequential. Finally, the global reach of media allows it to be relevant in many different
countries.However, some have argued that media is actually a partial cause of globalization,
rather than just another globalized industry. Media is largely a cultural product, and the transfer
of such a product is likely to have an influence on the recipient’s culture. Increasingly,
technology has also been propelling globalization. Technology allows for quick communication,
fast and coordinated transport, and efficient mass marketing, all of which have allowed
globalization—especially globalized media—to take hold.

Globalized Culture, Globalized Markets

Much globalized media content comes from the West, particularly from the United States. Driven
by advertising, U.S. culture and media have a strong consumerist bent (meaning that the
ever-increasing consumption of goods is encouraged as an economic virtue), thereby possibly
causing foreign cultures to increasingly develop consumerist ideals. Therefore, the globalization
of media could not only provide content to a foreign country, but may also create demand for
U.S. products. Some believe that this will “contribute to a one-way transmission of ideas and
values that result in the displacement of indigenous cultures (Santos, 2001).”

Globalization as a world economic trend generally refers to the lowering of economic trade
borders, but it has much to do with culture as well. Just as transfer of industry and technology
often encourages outside influence through the influx of foreign money into the economy, the
transfer of culture opens up these same markets. As globalization takes hold and a particular
community becomes more like the United States economically, this community may also come
to adopt and personalize U.S. cultural values. The outcome of this spread can be
homogenization (the local culture becomes more like the culture of the United States) or
heterogenization (aspects of U.S. culture come to exist alongside local culture, causing the
culture to become more diverse), or even both, depending on the specific situation (Rantanen,
2005).

Making sense of this range of possibilities can be difficult, but it helps to realize that a mix of
many different factors is involved. Because of cultural differences, globalization of media
follows a model unlike that of the globalization of other products. On the most basic level, much
of the media is language and culture based and, as such, does not necessarily translate well to
foreign countries. Thus, media globalization often occurs on a more structural level, following
broader “ways of organizing and creating media (Mirza, 2009).” In this sense, a media company
can have many different culturally specific brands and still maintain an economically globalized
corporate structure.

Vertical Integration and Globalization

Because globalization has as much to do with the corporate structure of a media company as with
the products that a media company produces, vertical integration in multinational media
companies has become a necessary aspect of studying globalized media. Many large media
companies practice vertical integration: Newspaper chains take care of their own reporting,
printing, and distribution; television companies control their own production and broadcasting;
and even small film studios often have parent companies that handle international distribution.

A media company often benefits greatly from vertical integration and globalization. Because of
the proliferation of U.S. culture abroad, media outlets are able to use many of the same
distribution structures with few changes. Because media rely on the speedy ability to react to
current events and trends, a vertically integrated company can do all of this in a globalized rather
than a localized marketplace; different branches of the company are readily able to handle
different markets. Further, production values for single-country distribution are basically the
same as those for multiple countries, so vertical integration allows, for example, a single film
studio to make higher-budget movies than it may otherwise be able to produce without a
distribution company that has a global reach.

Foreign Markets and Titanic

 The movie Titanic, which became the highest-grossing movie of all time, made twice as much
internationally as it did domestically.

Scott Smith – Best In Film: American Film Institute Showcase – CC BY-NC-ND 2.0.

Worth considering is the reciprocal influence of foreign culture on American culture. Certainly,
American culture is increasingly exported around the world thanks to globalization, and many
U.S. media outlets count strongly on their ability to sell their product in foreign markets. But
what Americans consider their own culture has in fact been tailored to the tastes not only of U.S.
citizens but also to those of worldwide audiences. The profit potential of foreign markets is
enormous: If a movie does well abroad, for example, it might make up for a weak stateside
showing, and may even drive interest in the movie in the United States.

One prime example of this phenomenon of global culture and marketing is James Cameron’s
1997 film Titanic. One of the most expensive movies ever produced up to that point, with an
official budget of around $200 million, Titanic was not anticipated to perform particularly well at
the U.S. box office. Rather, predictions of foreign box-office receipts allowed the movie to be
made. Of the total box-office receipts of Titanic, only about one-third came from the domestic
market. Although Titanic became the highest-grossing film up to that point, it grossed just $140
million more domestically than Star Wars did 20 years earlier (Box Office Mojo). The difference
was in the foreign market. While Star Wars made about the same amount—$300 million—in
both the domestic and foreign markets, Titanic grossed $1.2 billion in foreign box-office receipts.
In all, the movie came close to hitting the $2 billion mark, and now sits in the No. 2 position
behind Cameron’s 2009 blockbuster, Avatar.

One reason that U.S. studios can make these kinds of arrangements is their well-developed ties
with the worldwide movie industry. Hollywood studios have agreements with theaters all over
the world to show their films. By contrast, the foreign market for French films is not nearly as
established, as the industry tends to be partially subsidized by the French government. Theaters
showing Hollywood studio films in France funnel portions of their box-office receipts to fund
French films. However, Hollywood has lobbied the World Trade Organization—a largely
pro-globalization group that pushes for fewer market restrictions—to rule that this French
subsidy is an unfair restriction on trade (Terrill, 1999).

In many ways, globalization presents legitimate concerns about the endangerment of indigenous
culture. Yet simple concerns over the transfer of culture are not the only or even the biggest
worries caused by the spread of American culture and values.

Key Takeaways

● Technology allows for quick communication, transport, and mass marketing, greatly
contributing to a globalized marketplace.
● Media economies of scale achieve much larger profit margins by using digital
technology to sell information instantly over a global market.
● Foreign markets offer excellent profit potential as they contribute to media companies’
economies of scale. The addition of new audiences and consumer markets may help a
company build a global following in the long run.
 Exercises

Think of a U.S. product that is available throughout the world, such as an athletic brand like Nike
or a food product like Pepsi or Coca-Cola. Now go online to the different country-specific
branches of the company’s web site.

1. What differences are there?

2. How might the company be attempting to tailor its globalized product to a specific
culture?
3. What advances into the foreign market does this use of the Internet allow the company
to make?
4. What advantages does this globalization of its products give the company?
5. In what other ways has technology helped speed this globalization?

https://web.uri.edu/iaics/files/17-Dawei-Wang.pdf

https://www.investopedia.com/terms/g/gatt.asp

https://www.investopedia.com/terms/w/wto.asp

https://www.investopedia.com/terms/f/free-trade.asp

https://pib.gov.in/PressReleasePage.aspx?PRID=1814151

https://corporatefinanceinstitute.com/resources/knowledge/economics/customs-union/
Trade Bloc
What It Means
A trade bloc is a group of nations that has reached a set of special agreements regarding their
economic relationships with each other. The agreements generally focus on the relaxation or
elimination of trade barriers, which are laws that limit the amount of business done across two
countries’ borders. The most common types of trade barriers are tariffs (taxes on imports) and
quotas (limits on the quantities of various imports).

Trade blocs can take different forms. The most enduring and successful trade bloc, as of the early
twenty-first century, was the one binding 27 European countries under the European Union (EU).
The EU, whose roots lay in attempts to reunify Europe after World War II, was more than just a
trade agreement. It brought about wide-ranging economic, political, and social organization
among its member countries, including the establishment of a common currency and many other
unifying features usually imposed only by national governments. The United States, Canada, and
Mexico established another of the world’s most significant trading blocs with the North
American Free Trade Agreement (NAFTA) in 1992. Though NAFTA, by reducing most trade
barriers between these three countries, had important and controversial economic consequences,
it was not intended to erase national economic boundaries to the degree that the EU did, nor did
it actively promote the elimination of social and political boundaries.

The creation of trade blocs generally results in benefits to consumers, as high-quality goods and
services can be produced at lower prices than they could with trade barriers in place. Effective
trade blocs also tend to create stable political relations between countries and to increase total
employment and income levels in all participating countries, at least over the long term.

These benefits come at a cost, however. Inevitably some industries and companies eliminate
large numbers of jobs in one member country in order to take advantage of cheaper labor in
another member country. This can cause great pain to workers and communities. Likewise, trade
blocs, by increasing the freedom of companies motivated only by profit, often threaten poorer
member countries’ traditional ways of life and the environment.
What is a Tariff?
A tariff is a tax imposed by a government on goods and services imported from other countries
that serves to increase the price and make imports less desirable, or at least less competitive,
versus domestic goods and services. Tariffs are generally introduced as a means of restricting
trade from particular countries or reducing the importation of specific types of goods and
services.

For example, to discourage the purchase of Italian leather handbags, the U.S. government could
introduce a tariff of 50% that drives the purchase price of those bags so high that domestic
alternatives are much more affordable. The government’s hope is that the added cost will make
imported goods much less desirable.

Let’s take a closer look at each of them.

1. Specific tariffs
A specific tariff is a fixed fee applied to each unit of imported goods or products.
For example, a country may impose $10 in fees on every pair of imported shoes and $100 on
every imported smartphone.

Specific tariffs can be levied on many different types of goods and products. However, they can’t
be imposed on goods that differ vastly in value, such as diamonds, art, or motor vehicles.

2. Ad Valorem tariffs
The term ‘Ad Valorem’ is Latin for ‘on the value.’ This type of tariff is levied as a percentage of
the value of goods or products.

Usually, ad valorem tariffs are reserved for products or goods with differences in value, such as
cars – you can buy a car for $10,000 or $1,000,000.

For example, say you import a diamond watch worth $5,000, and there’s an ad valorem tariff of
50%. You would need to pay $2,500 in fees. However, if you import a watch worth $100, your
tariff will be $50.

3. Compound tariffs
As the name implies, a compound tariff is about combination – the specific tariff and the ad
valorem tariff.

Here’s how it works: Say a country imposes a $4 specific tariff on every litre of imported oil,
plus a 25% ad valorem tariff on the value of the total amount of oil. And, let’s say you import
1,000 litres of oil, and each litre costs $10.

In this scenario, you’ll need to pay $10,000 for the oil, $4,000 in specific tariffs, and $2,500 in ad
valorem tariffs.

4. Quota-based tariffs
A quota-based tariff is sometimes referred to as a sliding scale tariff. This type of tariff is based
on the scale or quota of your imports.

For example, say you want to import 1,000 rubber ducks. The government will tax you $1 on
every rubber duck, up to 500 ducks – those first 500 ducks are your tariff-rate quota.

The government will then charge you $5 for each of the remaining 500 ducks because you have
exceeded your tariff-rate quota.
Tariff vs duty
The terms ‘tariff’ and ‘duty’ are often used interchangeably. However, there is a small difference
between them.

A tariff refers to the percentage of tax or the specific rate you’ll need to pay on an import or
export. For example, if you import guitars to the UK from China, your shipment will be subject
to a tariff of 3.2%.

A duty is the total sum of money that you need to pay on the imported products. This amount
depends on the tariff. To continue with our example, if you imported £10,000 worth of guitars,
you would need to pay import duties of £320.

Free trade vs tariffs

Most tariffs are a form of economic protectionism. These tariffs aim to protect and stimulate the
domestic economy.

Unsurprisingly, tariffs are generally unpopular amongst traders and merchants. This is because
tariffs restrict international trade opportunities.

Many economists also argue against protectionism and say that trade barriers eventually do more
harm than good.

In fact, in the U.S., more than 1,100 economists, including former presidential advisers and
Nobel laureates, signed a letter in 2018 warning President Trump about the government’s
proposed increase of tariffs.

The letter quoted many parts of another letter sent by economists to the U.S. government in
1930. This historical letter cautioned against the protectionist measures implemented just before
the Great Depression.

Most countries have decreased tariffs during the 20th century through treaties such as the
General Agreement on Tariffs and Trade (GATT).

These trade agreements remove or reduce tariffs, which allows businesses to trade internationally
more freely.

https://corporatefinanceinstitute.com/resources/knowledge/economics/non-tariff-barriers/
Impact of Globalisation on Indian Advertising

● Huge western influence on Ad profession

● Westernised elite audience
● Print was most common form of advertising
● Doordarshan was only network- national and regional
● Advertisers produced one version of TVC - later dubbed in regional language
● Women portrayed in Indian attire that catered to taste and sensibility of Indian society
● Advertisers Indianising ads

Brand : Ganga

Company: Godrej Consumer Products

Brand Count: 163

If the Western Media's projection or prejudice about the social and cultural makeup of India was correct,
then Ganga soap would have been the most sold soap brand in the world. Those who have been

watching India specific programs in BBC and National Geographic may wond er how can
such a brand fail in the land of elephants and Sadhus ?
Ganga soap was launched with much fanfare in 1993. The soap was positioned on the religious platform
and was claimed to be made of water from the river Ganges. The soap attained salvation in the early
2000. The brand comes from an accomplished marketer who markets such iconic brands like Cinthol. The
brand was promoted heavily and even had the film stars like Govinda endorsing it. Promoted using the
tagline " Now bath in Ganga" very directly puts the soap in a religious platform. Reports suggest that the
brand's initial sales were encouraging and also there are reports that blame on the P&G and Godrej break
up caused the brand to decline. Ganga had a revitalisation effort in 1997 when Godrej tried to relaunch
the brand under the name Doodh Ganga. But those efforts went in vain. The primary reason why the
brand failed was that the differentiation was not sustainable over time. Although Hindu's are very religious
in nature and reverse the tradition, the consumers are discerning when it comes to purchasing products.
There is a clear divide between religion and products. Consumers seldom like mixing the two. It is OK if
religion and politics are mixed, not soups and gods. That may be the reason why the toys of Hindu
mythological characters are not popular in India.The brand when launched was really praised for its
innovative thinking. One could see through the logic of the launch. Just looking at the crowd at Kumbh
Mela would encourage any marketer to think about launching a product for the devotees of Ganga. But a
closer look at the customers could have proved the marketer wrong. Why would a customer buy a
product? That is a question that could reveal that Love for Ganga would not rake in sales.

Rather than using Ganga as a differentiator, Godrej could have positioned the product on the basis of
Purity and Gentleness like the Pears Soap. The can show the use of Water from Ganga to reinforce the
positioning. But the religious platform failed miserably. Moreover, this platform is too old and dated for our
new generation. Another funny element is that although Hindus revere the Ganges, people are aware that
the river is the most polluted one. Hence there was a consumer buzz that using a soap made from such
water may be dangerous. Sensing this consumer talk, Godrej had to say that the water was taken from
places near the origin of Ganges hence not polluted. Overall it was a messy affair. Ganga is a brand that
could have survived as a small niche. I am still not sure about the exact reasons that the brand has failed
in the Indian market.The failure of such a brand should inspire a marketer to delve deep into the psyche
of the Indian consumer before jumping into conclusions.

https://www.youtube.com/watch?v=4PIzW2viXKY
https://www.youtube.com/watch?v=xtjUzbPeOoA
https://www.youtube.com/watch?v=v3vHMf21INU

https://homegrown.co.in/article/803208/the-most-iconic-ads-of-alyque-padamsee-that-pushed-the-bounda
ries-of-indian-society
Globalization in Indian Advertising

https://www.exchange4media.com/advertising-news/hamara-bajaj-to-worlds-
favourite-indian-a-peek-into-bajaj-autos-advertising-journey-94282.html

https://www.youtube.com/watch?v=scltYH13uEY

https://www.youtube.com/watch?v=zCDsbD4EHr4

https://indianexpress.com/article/entertainment/opinion-entertainment/how-lalita-ji-got-surf-ridin
g-the-washing-powder-waves-6156421/

https://brilliantio.com/why-is-the-world-a-global-village/
Study of global communication
The study of global communication is an interdisciplinary field focusing on global
communication, or the ways that people connect, share, relate and mobilize across geographic,
political, economic, social and cultural divides. Global communication implies a transfer of
knowledge and ideas from centers of power to peripheries and the imposition of a new
intercultural hegemony by means of the "soft power" of global news and entertainment
"International" Or "Global"

With the end of the twentieth century and the turn of a new millennium, the global arena and the field
of international communication were undergoing significant changes. Some authors started to use
the term global communication because it goes beyond the bounds of individual states and
emphasizes communication between and among peoples across borders and, importantly, the rise
of transnational media corporations. International communication traditionally refers to
communication between and among nation-states and connotes issues of national sovereignty,
control of national information resources, and the supremacy of national governments.Nevertheless,
earlier International communication theories have failed to develop models or research agendas that
match the reality of the contemporary role of global communication.

The old theories only explain part of the global picture and the theories of modernization,
dependency, and cultural imperialism have failed to satisfactorily explain global communication.The
term "global", implies a declining role of the state and state sovereignty. As a term, "international"
has within it notions of bilateral or multilateral decisions. "Global" could be seen as an aspiration,
also as a fear, of the weakening of the state. In addition, global may imply something more
pervasive, more geographically inclusive than international.

The study of global communication increased dramatically after World War II due to military
considerations coupled with their economic and political implications. Earlier attempts at theorizing
have failed to develop models or research agendas that match the reality of the contemporary role of
global communication More global communication research was written in the decade from 1945 to
1955; most of the research of the 1950s dealt with propaganda and the cold war. By 1970, global
communication research had grown to include a great variety of subjects, especially comparative
mass communication systems, communication and national development and propaganda and
public opinion.
From the point of view of global communication scholars, previous theories of modernization,
dependency, and cultural imperialism have failed to satisfactorily explain global communication. The
old theories only explain part of the global picture.
Technological development
The emergence of global communication technologies may be considered the origin of the field of
global communication in the nineteenth century. Numerous technical advances such as the creation
of a new major global communication phenomenon, convergence, digital environments and the
internet are some of the major engines driving the change from international communication to
global communication.

Global power shifts

With the collapse of the Soviet Union, the shadow of the Cold War has lifted to reveal shifting
political, economic, and cultural alliances and conflicts. The increasing importance of these currents,
especially in the cultural sphere, demands a reconsideration of the nature of the international
communication field within the rubric of international relations.

News agencies and propaganda

Three key players are usually recognized as the founders of the international news agencies. In
1835, Charles-Louis Havas created the world's first news agency; In 1849, Bernhard Wolff started
publishing stock market news and daily reports from Paris, London, Amsterdam, and Frankfurt; In
1849, Paul Julius Freiherr von Reuter established his own commercial service, the Reuter agency,
and organized a worldwide exchange of news in 1870.
In 1859, Reuter, Havas and the German Wolff agency reached an agreement to exchange news
from all over the world, which was known as the League of Allied Agencies, or the " Ring
Combination". In 1848, American News Agency Associated Press was founded and was formally
admitted into the "Ring Combination" in 1887.There are some major factors that point to the growing
importance of global communication in the world of the twenty-first century:world population
explosion
1. from geopolitics to gaia philosophy
1. increased cross-cultural communication
2. changing concept of community
3. greater centralization of control
4. information explosion
5. changes in technologies
6. greater dependence on global communication
7. greater interdependence and democracy
8. impact of communication on peace and war

Theoretical approaches and perspectives

Transcultural political economy

Transcultural Political Economy is a concept that is presented in Global Communications by Paula
Chakravartty and Yeuzhi Zhao. This concept looks at global communications and media studies in
three major areas: global flows of information and culture, decentralizing the conceptual parameters
of global information and media studies, and the normative debates in global communications in the
context of neoliberalism. Transcultural Political Economy is a multidisciplinary study that focuses on
the tensions between political economy and cultural studies. It "integrate[s] institutional and cultural
analyzes and address urgent questions in global communications in the context of economic
integration, empire formation, and the tensions associated with adapting new privatized
technologies, neoliberalized and globalized institutional structures, and hybrid cultural forms and
practices". Transcultural Political Economy addresses the issues surrounding the practice of
neoliberalism and its creation of unequal power structures within the world system.

Globalization theory
Globalization theory was popularized in the 1990s as a model for understanding global
communication. The concept of globalization inspired a number of theories from various schools of
thought in communication studies that each emphasize different aspects of globalization. Many
globalization theories highlight actors in the business sector as leaders in the processes of global
integration. Transnationalizing business is often celebrated as progression toward a more
interconnected world. Globalization theories are often associated with theories of modernity. Some
scholars view globalization as the social, political, economic, and cultural integration of societies into
a capitalist system; Others see globalization as a successor to modernity, while some see it as an
iteration of imperialism. Some question the usefulness and legitimacy of globalization theory, arguing
that it does not adequately conceptualize current international relations or function as a lens through
which to examine everyday events. Many scholars criticize globalization theories as overzealous
toward and unrealistic about the extent of global integration. Some scholars criticize social theorists
for offering opinions and predictions based on theory with little practical evidence. In contrast, some
scholars work to dispute the pessimistic views of globalization theory.

World systems theory

World-system theory is a macro-sociological perspective that seeks to explain the dynamics of the
"capitalist world economy" as a "total social system". A world-system is what Wallerstein terms a
"world-economy", integrated through the market rather than a political center, in which two or more
regions are interdependent with respect to necessities like food, fuel, and two or more polities
compete for domination without the emergence of one single center forever. World-system theory
was first articulated by Immanuel Wallerstein. There are three major sources of the world-system
theory conceived by Wallerstein: the Annales school's general methodology, Marx's focus on
accumulation process and competitive class struggles and so on, and dependency theory's
neo-Marxist explanation of development processes. Referring to the transnational division of labor,
the world-system divides the world into core countries, peripheral countries, semi-peripheral
countries and external areas. The core countries usually developed strong central governments,
extensive bureaucracies and large mercenary armies, which permitted the local bourgeoisie to
obtain control over international commerce and extract capital surpluses from the trade for benefits.
The peripheral countries often lack strong central governments or are controlled by core countries,
they export raw materials and rely on coercive labor practices. Semi-peripheries which served as
buffers between the core and the peripherals. They retain limited but declining access to
international banking and the production of high-cost high-quality manufactured goods. External
areas such as Russia maintain their own economic systems, they want to remain outside the
modern world economy.

Modernisation theory
The theory of modernization was developed by Daniel Lerner (1958) in the "Passing of traditional
society." Lerner's description of "modernized" is an individual having the ability to be empathetic and
being able to see oneself in another person's situation. This concept has come from the transition of
traditional societies to modern societies, where modern societies are distinctively industrial, urban,
literate, and participant. This theory looks at development in a linear fashion, concluding that nations
need to develop into a modern society to make it a sustainable and flourishing nation. Developing
modernized societies include technological advancement, and developing media sectors to help
create a participatory culture.

Post-colonialism
Post-colonialism is a theoretical approach to looking at literature that examines the
colonizer-colonized experience. It deals with the adaptation of formerly colonized nations and their
development in cultural, political, economical aspects. Some Notable theoreticians include: Frantz
Fanon, Edward Said, Gayatri Spivak, R Siva Kumar, Dipesh Chakrabarty, Derek Gregory.

Cultural imperialism
Cultural imperialism is a mighty civilization that exerts one cultural influence over another. Less
economically prominent cultures often import culture from Western countries, which have the
economic means to produce a majority of the world's cultural media, mostly via the global
transmission of media. The weak civilization adopts the mighty civilization's customs, philosophies,
worldviews and general ways of life. The theoretical foundations of the academic study of cultural
imperialism mostly come from Michel Foucault's concept of biopower, governmentality and Edward
Saïd's concept of Post-colonialism, which theories see cultural imperialism as the cultural legacy of
colonialism or forms of Western hegemony. Media effect study which is integrated with
political-economy tradition is the core argument of cultural imperialism. There are two opposite
effects of media study. The negative one is that Western media imposes socio-political conflicts to
the developing country and the latter one's resistance to the media effects to preserve their
traditional cultural identities. The positive effects are the issues of the process of civilization such as
women's rights or racial equality with exposure to Western media. Now the term of cultural
imperialism usually refers to America's global culture expansion to the rest of the world, which
include brand name products, video media, fast food and so on.
Global media studies
Global media studies is a field of media study in a global scope. Media study deals with the content,
history and effects of media. Media study often draws on theories and methods from the disciplines
of cultural studies, rhetoric, philosophy, communication studies, feminist theory, political economy

and sociology. Among these study approaches, political economic analysis is non-ignorable in

understanding the current media and communication developments. But political economic research
has become more resilient because of stronger empirical studies, and the potential connections to
policy-making and alternative praxis.

Each country has its own distinct media ecosystem. The media of mainland China is state-run, so
the political subjects are under the strict regulations set by the government while other areas such as
sports, finance, and the increasingly lucrative entertainment industry face less regulation from the

government. Canada has a well-developed media sector, but the mass media is threatened by the

direct outcome of American economic and cultural imperialism which hinder the form of Canada's

media identity. Many of the media in America are controlled by large for-profit corporations who reap

revenues from advertisements, subscriptions and the sale of copyrighted materials. Currently, six
corporations (Comcast, The Walt Disney Company, News Corporation, Time Warner, Viacom and
CBS Corporation) have controlled roughly 90% of the American media. Such figures come from the
policies of the federal government or the tendency to natural monopolies in the industry.

Central debates

Global power shifts

Immanuel Wallerstein's world system theory develops a basic framework to understand global power
shifts in the rise of the modern world. Wallerstein proposes four different categories: core,
semi-periphery, periphery, and external, in terms of different region's relative position in the world
system. The core regions are the ones that benefited the most from the capitalist world economy,
such as England and France. The peripheral areas relied on and exported raw materials to the core,
such as Eastern Europe and Latin America. The semi-peripheries are either core regions in decline
or peripheries attempting to improve their relative position in the world system, such as Portugal and
Spain. The external areas managed to remain outside the modern world economy, such as Russia.
There are two basic types of global power shifts in the 21st century. One is the traditional power
transition amongst states, which follows Wallerstein's world system theory. For instance, the global
power shifts from the West to the East since the rise of Asia. The other is power diffusion, the way
that power moves from states to non-states actors. For instance, "climate change, drug trade,
financial flows, pandemics, all these things that cross borders outside the control of governments."

Cultural industries
The term "culture industry" appeared in the post-war period. At that time, culture and industry were

argued to be opposites. "Cultural industries" are also referred to as the "Creative industries".

Definitions and scope of cultural industries

In the present day, there remain different interpretations of culture as an industry. For some, cultural
industries are simply those industries that produce cultural goods and services.

In the United Nations Educational, Scientific and Cultural Organization (UNESCO), the cultural
industries are regarded as those industries that "combine the creation, production and
commercialization of contents which are intangible and cultural in nature. These contents are
typically protected by copyright and they can take the form of goods or services". According to
UNESCO, an essential part of cultural industries is that they are "central in promoting and
maintaining cultural diversity and in ensuring democratic access to culture". "Cultural industries"
combine the cultural and economic, which gives the cultural industries a distinctive profile. In France,
the "cultural industries" have recently been defined as a set of economic activities that combine the
functions of conception, creation and production of culture with more industrial functions in the
large-scale manufacture and commercialization of cultural products.
In Canada, economic activities involved in the preservation of heritage are also included in the
definition of culture.
Global cultural industries
Since the rise of the cultural industries has occurred simultaneously with economic globalization,
cultural industries have close connections with globalization and global communication.
Herbert Schiller argued that the 'entertainment, communications and information (ECI) complex was
having a direct impact on culture and human consciousness. As Schiller argued, the result of
transnational corporate expansion is the perpetuation of cultural imperialism, defined as "the sum of
the processes by which a society is brought into the modern world system and how its dominating
stratum is attracted, pressured, forced, and sometimes bribed into shaping social institutions to
correspond to, or even promote, the values and structures of the dominating center of the system".
The second wave of transnational corporate expansion, which began in the 1970s with the
emergence of Export Processing Zones in developing countries, is focused on the development of
global production networks. This process was described as a "new international division of labor"
(NIDL) by the German political economists Frӧbel et al. (1980).
Ernst and Kim have argued that GPNs are changing the nature of the multinational corporation itself,
from "stand alone overseas investment projects, to "global network flagships" that integrate their
dispersed supply, knowledge and customer bases into global and regional production networks",
entailing a shift from top-down hierarchical models of corporate control to increasingly networked
and collective forms of organization.

Global media empires

The largest firms in media and media-related industries have a very high international profile. Global

media empires such as Disney, News Corporation, Time-Warner and Viacom-CBS now derive 25-45

per cent of their revenues outside of the United States.

It is often argued that the global media are dominated by a small number of powerful media
conglomerates. Edward S. Herman and Robert W. McChesney (1997) argued that the global media
were "dominated by three or four dozen large transnational corporations (TNCs) with fewer than ten
mostly US-based media conglomerates towering over the global market." Similarly, Manfred Steger
has observed that " to a very large extent, the global cultural flows of our time are generated and
directed by global media empires that rely on powerful communication technologies to spread their
message." He also argued that during the last two decades, a few very large TNCs would come to
dominate the global market for entertainment, news, television, and film.

Diaspora
Diaspora is often confused with exodus. Diasporas are minority groups that have a sense of
connection with a larger community outside of the borders they currently inhabit, and through

diasporic media create a sense of a larger identity and community, whether imagined or real. In

scholarly work about diaspora in communication studies, the view of nation and culture as
interchangeable terms is no longer prevalent. Stuart Hall theorized hybridity, which he distinguished
from "old style pluralism", "nomadic voyaging of the postmodern", and "global homogenization".
Hybridity is the retention of an original identity and strong ties to an original country and tradition, but
with the understanding that there is no unchanged, ideal nation of the past that they can return to. To
be hybrid is to also adapt to a new culture and tradition without simply assimilating in it, but rather

negotiating a place between the "original" and "new" cultures. In Communication studies, diaspora is

discussed as the identity that unifies people across time and space, sometimes existing in physical
spaces and other times existing in imagined 'non-spaces'. However, it has been argued that the

concept of 'diaspora' implies ethnic homogeneity and essentializes identity to only ethnicity. One of
the most cited and well-known works in the field of diasporic media is Hamid Naficy's work on exiled
Iranian Americans' creation of cable television in the United States.

Diasporic media refer to media that address the needs of particular ethnic, religious, and/or linguistic
groups that live in multicultural settings Diasporic media can be in the diaspora's traditional
language or in another language, and they can include news or media from the "origin" country or
they can contain the diaspora's local news or media. Diasporic media can be created in radio,
television, film, music, in newspapers, magazines, and other publishing, as well as online. It can be
argued that the development and spread of satellite television is an instrumental element of the
growth of diasporic media today. Satellite television allowed migrants to access the news and
popular culture from their homeland, as well as allowing people who speak the same language to
access the same channels that might be produced outside of the "homeland"
Contemporary studies of diaspora show that diasporic media are part of the change in the tendency
Immanuel Wallerstein described in his world systems theory. The world systems theory postulates
that much of the flow of people in the world has been from the 'periphery', or
economically-developing states, towards the centre; which are often metropolitan,
economically-wealthy states that grew their wealth in colonialist entrepreneurship. However, contrary
to the movement of people, the flow of information (including media products), has tended to be from
the centre to the periphery.

Technology and media

The advancement of media and technology have played a pivotal role in the process of globalization

and global communication. Cable television, ISDN, digitalization, direct broadcast satellites as well

as the Internet have created a situation where vast amounts of information can be transferred

around the globe in a matter of seconds. During the early 20th century, telegraph, telephony, and

radio started the process of global communication. As media technologies developed intensely, they

were thought to create, in Marshall McLuhan’ s famous words, a ‘‘global village.’’ The launch of

Sputnik, the world’ s first artificial satellite, on October 4, 1957, marked the beginning of technologies
that would further interconnect the world. The first live global television broadcast occurred when
Neil Armstrong stepped onto the moon in July 1969. In November 1972, pay TV caused expansion
of cable when Service Electric offered Home Box Office over its cable system. By 2000, over direct
broadcast satellite, a household could receive channels from all over the world. Now with the World
Wide Web, smart phones, tablet devices, smart televisions and other digital media devices, billions
of people are now able to access media content that was once tied to particular communications
media (print, broadcast) or platforms (newspapers, magazines, radio, television, cinema).
Western and Non western media

http://mediacultureandglobalization.yolasite.com/menu.php

Popularity of Global Brands due to Content

3 Major Differences Between Netflix & Amazon Prime’s Approach

To Tap On-Demand Entertainment Sector In India

Right now, Indian entertainment sector is witnessing an all-time high of growth and demand.
As per our analysis, the sector will churn out revenues worth Rs 1.3 lakh crore by the end of
2022, thereby maintaining an impressive growth rate of 10-12% year on year.

However, within the vast entertainment sector, there is a subset of on-demand

entertainment accessed via the internet on mobile and desktop. And this is the sector to
look out for. We had earlier reported that this sector is growing at a breakneck speed right
now, and between 2015 and 2016, digital content increased by a whopping 500% in India,
which speaks volume about the demand and the supply.

On-demand videos on digital media is a competitive sector, and some of the heavyweights
of this industry are right now battling it out to prove their dominance. Among them, Netflix
and Amazon Studios are the two players to watch out for, because their whole business
model is based on generating subscription revenue from on-demand entertainment, mainly
videos, and the fight is intense.

Here are three different paths chosen by these two biggies of digital entertainment to tap
the booming Indian market:

Global Vs Local Approach

On one hand, Netflix is relying on their global experience of delivering on-demand content to
more than 80 million subscribers all over the world; Amazon is relying on local sentiments,
and aiming to tap their vast user base of 60 million Amazon Prime subscribers all over the
world via localized content.

For example, Amazon Studios has inked deals with Graphic India in Hindi and English, and
regional languages Tamil and Telugu for producing a new animated series called
‘’Baahubali: The Lost Legends”, which is based on the blockbuster
Besides, they have also collaborated with Farhan Akhtar to produce a forthcoming drama
called ‘Power Play’, a story about a cricket team owner. This clearly reflects the fact that
Amazon is aiming to target local sentiments of the Indian audience, and their deep focus on
going hyperlocal with content.

On the other hand, Netflix had purchased rights for “Brahman Naman,” at Sundance Film
Festival. This was a series on a road trip undertaken by teenagers to lose their virginity. A
concept derived straight from Hollywood’s cliche`coming of age stories.

Data Centric Vs Traditional Approach

Netflix is relying on their massive database of viewers watching habits, accumulated by
studying their millions of users from all over the world. When Phantom Films finalized their
deal to produce ‘Sacred Games’, an adaptation of a popular novel based on Mumbai crime,
the deal was inked at Los Angeles, not Mumbai.

Netflix Chief Executive Reed Hastings said, “There’s no point in us trying to out-Bollywood
Bollywood at this point,”

On the other hand, Amazon Studios chief Roy Price in a recent visit to Mumbai had
personally visited Amitabh Bachchan’s home, Shahrukh Khan’s home and even attended a
shooting session of a Bollywood movie.

Price Points
Finally, the price. If Netflix is targeting the niche, urbane customers, then Amazon Prime is
looking for a mass-market approach.

Netflix is charging Rs 500 per month (starting plan), which is way more than Amazon
Prime’s Rs 80 per month plan, which also includes free shipping of ecommerce orders and
more features.

Comparably, a typical cable connection in India costs Rs 200-250.

As per Netflix’s CEO, they are looking for ‘iPhone owners’ and ‘Western-oriented elites’, who
can afford Rs 500+ rental for on-demand entertainment.

It would be really interesting to observe, how these two major players respond to market
sentiments, and the onslaught of other players which include Hotstar, Balaji Telefilms’ Balaji
ALT, BSNL-Tata Sky partnership for on-demand videos, Zee’s OZEE, Hooq and more on the
way.

Between Amazon Prime and Netflix, which one will be your choice?

https://globalnetwork.io/perspectives/2017/05/future-globalization-cultural-heterogeneity

Cultural barriers and how to overcome them in your global company

as a global leader

Did you know that culturally diverse teams produce more creative and
innovative results than culturally homogenous groups?

This is a result of the fact that people from different cultural groups
approach challenges and problems in different ways. Different cultures
think and react differently to the same situations. They get the job
done in different ways.

By combining those different approaches and mindsets, a culturally

diverse team not only expands their skills and knowledge pool, but
has the power to think in more abstract terms and find solutions on
various levels.

Of course, this only works if the team works well together — and that
tends to be the tricky part. Cultural differences can lead to barriers
between team members, when their different styles of approach are
misunderstood, misinterpreted or not accepted.

Global leaders face not only the challenge of making a multi-cultural

team work well together despite their differences, but often also of
doing this while the team members are based in different international
locations.
In today’s globalized world, global leaders have to learn to understand
a wider, richer array of work styles. They must be able to determine
what aspects of an interaction are a result of personality and which
are a result of differences in cultural perspective.

Contents [hide]

● Five causes of cultural barriers

○ 1. Language
○ 2. Stereotypes and prejudices
○ 3. Signs and symbols
○ 4. Behaviors and belief
○ 5. “Us” versus “them” (ethnocentrism)
● How to overcome cross-cultural barriers
○ Embrace diversity and accommodate cultural differences
○ Promote open communication
○ Lead open discussions about team norms and shared
company culture
○ Rally the team around a shared vision or common cause
○ Leading cultural diversity as a global leader
○ Don’t miss our weekly emails

Five causes of cultural

barriers
Let’s get on the same page here first: what exactly is culture?

Culture is all socially transmitted and shared behaviors, manners,

customs, rituals, beliefs, ideas, arts, knowledge, values, morals and
ideals that are learned in a group of the same nationality, religion or
ethnicity. It is handed down from generation to generation, slowly
evolving, and creating many subcultures in the process.

Cultural diversity can make communication difficult, especially in the

workplace, where a misunderstanding can cause costly problems.
When people from different cultures work together, several factors can
become barriers. We’ll be taking a look at these factors first, and then
dive into how to overcome them in a global team.

1. Language
Not speaking the same language (well) can cause a myriad of
misunderstandings and is considered the most crucial barrier in
cross-cultural communication.

Verbal communication is important in every context, but the meaning

of words can literally get lost in translation. If one person isn’t aware of
the exact meaning of a word, it may be misunderstood or
misinterpreted by the other person and lead to a conflict of ideas.

2. Stereotypes and prejudices

Stereotypes are mostly negative images or preconceived notions
about a specific community, group or culture. The basis of
stereotyping can be many things, though the most common are
nationality, gender, race, religion or age.

Popular stereotypes, for example, are that all Germans are punctual
and very direct, or that all Asians are good at math.

This creates prejudice among people of different cultures and causes

judgmental attitudes towards one another. People look at other
cultures with certain stereotypes as “bad” or “difficult to work with”, or
“incomprehensible” and treat them with contempt and disrespect. If
things get this far on a team or in a company, working together
effectively can become extremely difficult between people who resent
and disrespect each other.

3. Signs and symbols

Non-verbal communication like signs and symbols differ from culture
to culture and can therefore not be relied upon in communication. For
example, the “thumbs up”, known in the Western world as a sign of
approval, is seen as an insult in Bangladesh.

While not quite as easily misconstrued in a team environment as the

other factors, it can still lead to cultural faux-pas that may take time to
smooth over and could be avoided in the first place.
4. Behaviors and belief
Cultural differences cause behavioral and personality differences like
body language, gestures, mindsets, communication, manners, and
norms, which may lead to miscommunication. Eye contact, for
example, is very important in some cultures, but rude and
disrespectful in others.

People’s varied religious or spiritual beliefs can also lead to conflict

and cross-cultural barriers.

Different cultures also have different understandings of time. Some

countries like Germany, Netherlands, Scandinavia, Switzerland or the
United States tend to view time as linear. Time is money, and
punctuality is a great value. Things tend to be done one at a time, to
be able to focus on it and finish the task within a fixed time frame.

Other countries, for example many Southern European countries like

Spain or Italy, see time as multi-active; this means that the more
things they do at the same time, the happier and more fulfilled they
feel. Present reality and especially personal relationships are more
important and valued than schedules or punctuality.

5. “Us” versus “them” (ethnocentrism)

From an evolutionary standpoint, belonging to a group made you
stronger and more likely to survive in a hostile world. Strangers or
other groups were “the enemy”, competing for food, safety and
territory.

This us- versus them-thinking is ingrained in our subconscious and

can lead to a sense of alienation if someone behaves in a way we
don’t understand or aren’t expecting — if they don’t fit in.

A person’s standard is his or her own culture; the more another

person’s culture, behavior, language, and beliefs deviate from it, the
more “other” they are labeled. This affects the understanding of
message and creates hostility.

How to overcome
cross-cultural barriers
Successful and effective cross-cultural management can be a
daunting task — and even more so for teams with members scattered
across the globe. People who are constantly interacting with each
other face-to-face for eight hours every day will bond and find
common ground faster than people who only interact with each other
online at certain

As a global leader you not only have to be aware of the cultural

barriers within your team, but actively strive to overcome them.

Embrace diversity and accommodate cultural

differences
As a global leader, you must make your team members and
employees understand that culturally diverse teams produce more
innovative and and creative results as opposed to homogenous
groups. Therefore, cultural differences should be appreciated, openly
discussed and utilized to support each other, rather than creating
barriers. You want a team to work well because of their differences,
not in spite of them.

Create opportunities for your employees to learn about their

colleagues’ perspectives and ways of life to build open-mindedness
and appreciation. Focus on the strengths that each culture brings to
the mix and discuss how these strengths can be integrated in the way
your team works together, handles challenges and tackles projects.

Promote open communication

Open communication is the only way that culturally diverse teams can
work through and overcome their differences to make them work well
together. As global leader, it’s up to you to promote that culture of
open communication within your company or team.
Don’t let resentment, problems, or misunderstandings between team
members fester; address them as soon as they arise and give all
parties the opportunity to present and discuss their grievances in a
safe and open environment.

If your team members’ or employees’ problems are with you, listen

closely to what they have to say. Thank them for their honesty, and try
to find a good solution or compromise that everyone agrees with.

A company culture of open communication is grown from the top

down. As global leader, you must lead by example and value
everyone’s opinion equally to ensure openness and honesty between
your team members.
Lead open discussions about team norms and
shared company culture
When your team members differ on a cultural level, you can unite
them by creating a new common culture: your company or team
culture.

Unlike leading by example to promote open communication, this won’t

happen in a top-down approach, though. A company or team culture
must be cultivated together and include all members. As the team
leader, it’s important to allot specific times for the team to discuss
differences and air grievances, find common ground and decide
together how to proceed.

This becomes more important, but also more challenging, with a team
that isn’t just culturally diverse, but situated in various locations.
Where people don’t interact personally, it becomes more difficult to
look beyond the cultural stereotypes and get to know the person
behind them. But this is crucial to foster understanding of each other
and building a company- or team culture together.

Rally the team around a shared vision or

common cause
Bringing people together around a shared vision or common cause
can be a powerful thing to unite the team and have all members
pulling together in the same direction.

Maybe the product or technology you’re developing and producing

together will save lives or help people in need? Or you might run
regular fundraisers to support local charities in your team members’
locations. Or maybe you’re all working together towards that 20%
more revenue to ensure a raise for all team members this year.

Leading cultural diversity as a global leader

As a global leader, it is your responsibility to ensure that your team
members or employees work together through their cultural
differences. Be aware of the stereotypes and prejudices you may
yourself have and try to consciously overwrite them. Understand the
differences your team members deal with among each other and
foster a company culture of open communication.

https://www.ramotion.com/blog/global-branding/

https://www.daytranslations.com/blog/20-traditions-around-the-world/

What Is Brand Awareness?

Brand awareness is the level of association and recognition your target
audience has towards your products, services and overall business.

Building brand awareness can help you:

● State your business values, mission, vision and purpose

● Bridge the gap between your company and the general public
● Make your business trending and popular both online and off-line
● Foster trust and build a strong bond between your customers and
your brand
● Put a brand face (and a voice) on to show the personality that is
easier to relate to
Brand awareness forms a connection between your business and your
audience's feelings about your business.

To form a meaningful connection that goes beyond just one single purchase,
try socializing, networking and, generally, behaving more like a person than
like a company.

Think of it this way:

● When you’re paying with a credit card, you’re not calling it a "credit
card" but simply – Visa
● During summer heatwaves, you’re enjoying your popsicle, not
freezer pops
● A Band-aid is what you use to stop the cut from bleeding, not a
plastic bandage
● Barely anyone ever says "lip balm" – it’s chapstick or nothing

All these products have one thing in common: their branded names have
replaced the generic terms used for them. They've got immense brand
recognition – the ultimate goal of every proprietor and enterprise owner.

Brand Awareness Strategies

1. Keep Consistency In Voice And Image

Consistency is a #1 strategy for leveling up your branding

awareness. People respond negatively to a change if it’s
frequent and seemingly aimless.A good example of a
consistent brand is Coca-Cola, whose logo and the image
hasn’t changed all that much ever since its establishment in
the late XIX century.

Did you know that 94% of the world’s population recognizes the
Coca-Cola logo?

Besides the logo, other aspects of consistency are a brand voice

and the image in media. Every channel your brand is
communicating on must have its own unique "zing", but must
also not deviate too much from the standards you set in your
branding process.

https://youtu.be/XhMVWzVXNNk

Use All Aspects Of Social Media

Having a page on relevant platforms is a must, but you should
get more serious than just having a Facebook/Instagram/Twitter
page created.

Besides regularly posting content that is useful, helpful and

interesting to your audience, you should also:

● Engage with your followers through comments and

messages
 ● Engage or partner with other brands from your
community
● Use social media ads to expand your reach and grow
brand visibility
● Try various advertising and engagement techniques to
see what's working

Another social media-related thing to consider are contests,

quizzes and giveaways. Numerous businesses resort to this
method for raising brand exposure. One way to do this is to ask
your followers to share your post and tag their friends in the
comments.

A good idea for making the most of social media is partnering

with influencers in your industry. These social media celebrities
wield huge power in a massive fan base and are a good source of
new potential customers for you. Them endorsing your brand
could give you exposure to millions of people.

Plus, you should create your own custom, branded hashtags.

This tactic is especially effective on Instagram and Twitter.

Enhance Customer Satisfaction

always go above and beyond to provide your consumers with the
best customer experience. That should be engraved in your
business’ ethical code.

If you mess something up or provide sub-par service – make

amends by giving away something for free, or replacing the
product or giving a huge discount.

On the other hand, customers who are satisfied and better yet
– delighted by your products or services – will be happy to
leave positive reviews and recommend you to everyone. A
famous example that serves as words to do business by is
that of an eyeglasses company Warby Parker. As the story
goes, the owner sat on a train with a man who left his glasses
in a sitting compartment and he not only returned the glasses
to the man – he made a brand new pair for him.

That is building brand awareness in the most direct way possible

and it cannot fail to impress. That's what you should aim for.

Advertise On The Right Channels

77% of Twitter users appreciate a brand more when their tweet is
responded to. Acknowledge your customers!
However, this doesn't mean that you should invest only in Twitter
advertising.

Each advertising channel has a unique audience. And you should

choose the channels where your ideal customers spend most of
their time.

Partner With Other Brands

A brilliant way to stir more attention and increase brand
awareness is to conjure a partnership with other brands that
share your values, views or vision. Or, those can be local
companies from your community that you want to engage
with and support.

Some of the most memorable examples of this were:

● GoPro & Red Bull tying up for the Stratos project -

https://www.youtube.com/watch?v=dYw4meRWGd4
● BMW & Louis Vuitton creating The Art of Travel campaign
together - https://www.getpaired.co/blog/post-97/
● Starbucks & Spotify running the Music Ecosystem
co-branding campaign -
Co-branding can be a particularly effective strategy for
smaller businesses, especially to grow visibility and impact in
local communities. This can be done by holding joint events,
sponsoring events, supporting local sports teams or
festivities, donating to charities, etc.

Create Powerful Referral Programs

Referral (or loyalty) programs are systematic processes that can
automate rewards payout and can easily be tracked.

There are dozens of mind-boggling examples of awesome

referral programs throughout recent history.

Some of the examples are:

● PayPal’s money giveaways as referral awards

● Dropbox’s giveaway of extra storage space for anyone
who refers their friend to them
● Amazon Prime’s $5 discount on the next purchase for
every friend joined

Your business needs to be more than a job to you and your

employees – it has to be a calling.
Live Your Beliefs
A famous example of Airbnb’s co-founder and CEO, Brian
Chesky, illustrates this point the best. His world-renowned brand
got a huge backing from venture capitalist Peter Thiel who
granted Cheskey an important piece of advice: Keep the
company culture intact. As Thiel explained, once they get too big,
companies corrupt their culture and lose their way.

Airbnb’s core brand belief is contained in its slogan "Belong

Anywhere".
 Global brand positioning and perceptions

Global consumer culture is recognised as a collection of

common signs and symbols (e.g. brands) that are understood
by significant numbers of consumers in urban markets
around the world. International advertising is a powerful
driving force of this evolving phenomenon. However, scholars
have suggested that more comprehensive theoretical
frameworks are needed to better understand international
advertising in the global environment. Global consumer
culture positioning (GCCP) and perceived brand globalness
(PBG) represent two important constructs for studying
international advertising in the context of global consumer
culture. This review of GCCP and PBG highlights their past
application and future potential for advancing international
advertising theory, research and practice. It also sheds light
on the long-standing standardisation versus adaptation
debate.

As cultural meanings move about through interconnected

pathways, such as technology and media (see Appadurai
1990), new cultures are created that are found within (e.g.
local cultures) and span across (e.g. regional) the boundaries
of traditionally studied national cultures (Hofstede 1980). As
noted, global consumer culture (GCC) represents a collection
of common signs (e.g. products such as blue jeans and
brands such as iPod) that are understood by certain market
segments (e.g. youth) around the world (e.g. Alden etal. 1999;
Cleveland & Laroche 2007; Zhou etal. 2008).

Alden etal. (1999) recognise the emergence of GCC and argue

that brand positioning strategies across cultural borders
parallel the development of the global market. They call these
strategies global consumer culture positioning (GCCP),
foreign consumer culture positioning (FCCP) and local
consumer culture positioning (LCCP). GCCP is defined as a
strategy that 'identifies the brand as a symbol of a given
global culture' (Alden et al. 1999, p. 77). This strategy can be
seen in advertisements that suggest that consumers around
the wodd use a particular product or brand, as well as those
ads that reflect universal values (e.g. peace) or markets (e.g.
youth). GCCP is distinguished from FCCP, which positions the
brand as symbolic of a specific foreign consumer culture, and
LCCP, which associates the brand with local cultural
meanings (Alden etal. 1999).

The results of the original GCCP study (Alden etal. 1999)

suggest that a distinct global positioning strategy, which
differs from foreign and local positioning, is employed by
firms. For example, firms used a globally common language
(English), as well as global aesthetic styles (e.g. global
spokesperson - someone who is well recognised in multiple
countries) and story themes (e.g. membership in the global
culture - such as use of the latest worldwide technology) to
reach certain segments in multiple countries. In addition,
GCCP emphasised soft-selling techniques (indirect,
image-orientated content), rather than hard-selling techniques
(direct, strong message argument appeals). Certain product
types (durable high- . tech goods) were more likely to be
positioned globally

The results of this study (Steenkamp et al. 2003) reveal that

PBG is positively associated with perceptions of both brand
prestige and brand quality, but has a stronger relationship
with perceived brand quality. While the overall effect of PBG
on purchase likelihood was positive, when perceived brand
quality and prestige were controlled, the direct effect of PBG
on purchase likelihood was not significant. Alternatively, the
direct association between local icon value and purchase
likelihood was found to be significant. Moreover, the effect of
local icon value was positively related to perceived brand
prestige but not perceived brand quality. In addition, CET was
a significant moderator as PBG was positively associated
with purchase likelihood only for consumers with low
ethnocentrism. These findings were consistent across both
countries.

Although consumer perceptions of globalness were

considered important to the success of global brands prior to
the development of the PBG construct (e.g. Shocker et al.
1994), in this study Steenkamp et al. (2003) addressed the
questions 'Do perceptions of globalness influence purchase
decisions.^" and 'What makes global brands appealing.?'
They established a framework for empirically testing the
impact of consumers' perceptions towards global brands and
identified important pathways (perceived quality and prestige)
through which PBG influences purchase likelihood.

Global positioning and local relevance A major challenge with

understanding GCC is that while some signs (e.g. brands) may be
positioned consistently across cultures, their relevance and/ or
meaning across those cultures may vary (Tobin 1992). Kates and Goh
(2003) provide an example of Kraft's Philadelphia Cream Cheese,
which markets itself globally using a consistent brand position as an
'indulgent, heavenly experience'. They explain that, because heaven
is viewed differently in various cultures (e.g. Muslim vs Christian
cultures), angels were used to represent heaven in some cultures but
not in others. This is a clear example of how different cultures may
use culturally unique signifiers to represent various meanings (Tobin
1992), and how a globally positioned brand or commonly shared
symbol can be made locally relevant. The discussion of both GCCP
and PBG encourages consideration of the firm's global positioning as
well as changing consumer perceptions of what represents global
versus local. As discussed, taking into account both sets of
perspectives establishes a more comprehensive approach to
understanding GCC. This is important because in some cases what is
positioned as global by the firm is not considered global in the eyes of
consumers (Mazarella 2003). Furthermore, what is thought of as
global in a given culture today may not be considered as such
tomorrow (Tobin 1992). Additionally, although there is evidence to
suggest that PBG leads to more positive brand perceptions
(Steenkamp et al. 2003), negative perceptions have also been
associated with globalness and globalisation (e.g. Zhou & Belk 2004).
More recently, research has shown that individual differences
influence consumer preferences for not only local and global offerings,
but hybrid options as well (Alden et al. 2006).

About AAAI
Advertising Agencies Association of India (AAAI) is the official, national
organisation of advertising agencies, formed in 1945, to promote their interests. The
Association promotes professionalism, through its founding principles, which uphold
sound business practices between Advertisers and Advertising Agencies and the
various media. AAAI today is truly representative, with a very large number of small,
medium and large-sized agencies as its members, who together account for almost
80% of the advertising business placed in the country. It is thus recognised as the apex
body of and the spokesperson for the Advertising industry at all forums – Advertisers
and Media owners and their associations and Government.

Advertising standards council of India

The Advertising Standards Council of India (ASCI) was established in 1985. ASCI is a
voluntary self-regulatory organisation comprising members from marketing, creative,
media, and allied companies in India. Since its inception, ASCI has been committed to
protecting Indian consumers’ interests through self-regulation in advertising.
Creativity thrives in a world of free speech. However, with great freedom comes great
responsibility. ASCI ensures that advertising follows the four basic codes of ethical
advertising:

● Honesty: Is the advertising misleading for consumers? ASCI is always looking to

ensure that the claims being made in an ad are true.
● Decency: To ensure that advertising is not offensive to generally accepted norms
of public decency
● Non-Harmful: To safeguard against advertising situations or products regarded
as harmful or hazardous to society to an unacceptable degree.
● Fair in competition: To ensure that ads are not unfair or derogatory towards the
competition.

Consumers or organisations that find any advertisements violating these four codes can
reach out to ASCI to register their objections.

https://www.youtube.com/watch?v=bttaKS4sKR8&t=9s

https://www.youtube.com/watch?v=6rgLwYpFWm8

International Chamber of Commerce (ICC)

The ICC was founded in Paris, France in 1919. The organization’s
international secretariat was also established in Paris, and its International
Court of Arbitration was formed in 1923. The first chair of the chamber was
Étienne Clémentel, the early-20th-century French politician.

What Is the International Chamber of Commerce (ICC)?

The International Chamber of Commerce is the largest, most diverse business
organization in the world. The ICC represents 45 million companies in over
100 countries with broad business interests.

The ICC's networks of committees and experts represent the full range of
business sectors. They also maintain contact with the United Nations, the
World Trade Organization, and other intergovernmental agencies.
KEY TAKEAWAYS
● The International Chamber of Commerce (ICC) is the largest business
organization in the world, with 45 million member companies from more
than 100 countries.
● The International Chamber of Commerce (ICC) aims to foster
international trade and commerce to promote and protect open markets
for goods and services and the free flow of capital.
● The ICC performs a number of functions for businesses, including the
establishment of rules, dispute resolution, policy advocacy, and training.
● The ICC's vast networks of committees and experts belong to a full
range of business sectors and keep members informed of all issues that
affect their industries.
● The ICC maintains contact with the United Nations, the World Trade
Organization, and other intergovernmental agencies.

Understanding the International Chamber of Commerce (ICC)

The ICC aims to foster international trade and commerce to promote and
protect open markets for goods and services and the free flow of capital. The
ICC is responsible for a number of functions, including the establishment of
rules, dispute resolution, policy advocacy, and training. The ICC also wages
war on commercial crime and corruption to bolster economic growth, create
jobs and stabilize employment, and ensure overall economic prosperity.

Because members of the ICC and their associates engage in international

business, the ICC has unparalleled authority in setting rules that govern
cross-border business. While these rules are voluntary, thousands of daily
transactions abide by the ICC-established rules as part of regular international
trade.

What Is the Federal Trade Commission (FTC)?

The Federal Trade Commission (FTC) is an independent, bipartisan agency of
the U.S. government tasked with protecting consumers and ensuring a strong
competitive market. Lina Khan is the current Chair of the Federal Trade
Commission (FTC).

Its principal purpose is to enforce non-criminal antitrust laws in the United

States, preventing and eliminating anticompetitive business practices,
including coercive monopolies. The FTC also seeks to protect consumers
from predatory or misleading business practices.

KEY TAKEAWAYS
● The Federal Trade Commission (FTC) is a bipartisan federal agency
that enforces antitrust laws and protects consumers.
● It was signed into law by President Woodrow Wilson in 1914 as part of
the administration's trust-busting efforts.
● FTC activities include investigating fraud or false advertising,
congressional inquiries, and pre-merger notification.
● The FTC also handles scams and unfair or predatory business
practices.
● The FTC discourages anticompetitive behavior through the Bureau of
Competition, which reviews proposed mergers with the Department of
Justice.

Understanding the Federal Trade Commission (FTC)

The Federal Trade Commission (FTC) was established in 1914 by the Federal
Trade Commission Act, as part of the Wilson administration's trust-busting
efforts—trust-busting being a significant concern at the time. It was tasked
with enforcing the Clayton Act, which banned monopolistic practices.

Before the birth of the FTC, there was the Bureau of Corporations, created by
the Roosevelt administration in February 1903. Part of the Department of
Commerce and Labor, the Bureau of Corporations was tasked with making
sure businesses acted in the best interest of the public. The success of the
Bureau of Corporations led to the creation of the FTC.
The FTC continues to discourage anticompetitive behavior through the
Bureau of Competition, which reviews proposed mergers together with the
Department of Justice (DOJ). As the years have passed, the FTC has been
tasked with enforcing additional business regulations, as codified in Title 16 of
the Code of Federal Regulations.

Advertising Standards Authority

In 1961 the Advertising Association established the Committee of Advertising Practice (CAP) to draft
the British Code of Advertising Practice (the CAP Code). In 1962 the industry set up the Advertising
Standards Authority (so named even though it is not a public authority in the usual sense) to
adjudicate on complaints that advertisements had breached the new Code. The ASA operated under
an independent chairman who was to have no vested interest within the industry.
Not long after the inception of the ASA the Molony Committee considered but rejected proposals to
introduce a system to regulate the advertising industry by statute. The Committee reported that it
was satisfied that the industry could be regulated effectively from within by the ASA. A guarded
comment within the report, however, warned that the self-regulatory system depended upon the
satisfactory working of the ASA and the maintaining of acceptable standards.
The Advertising Standards Authority (ASA) is the self-regulatory organisation of the advertising
industry in the United Kingdom. The ASA is a non-statutory organisation and so cannot interpret or
enforce legislation. However, its code of advertising practice broadly reflects legislation in many
instances. The ASA is not funded by the British government, but by a levy on the advertising
industry.
Its role is to "regulate the content of advertisements, sales promotions and direct marketing in the
UK" by investigating "complaints made about ads, sales promotions or direct marketing", and
deciding whether such advertising complies with its advertising standards codes. These codes
stipulate that "before distributing or submitting a marketing communication for publication, marketers
must hold documentary evidence to prove all claims, whether direct or implied, that are capable of
objective substantiation" and that "no marketing communication should mislead, or be likely to
mislead, by inaccuracy, ambiguity, exaggeration, omission or otherwise". The agency has also
restricted ads featuring scantily clad women. Guy Parker has been chief executive of the ASA since
June 2009

https://softcube.com/the-entire-history-of-advertising/

International Advertising as a Social Force

 In the view of the advertiser the primary objective of advertising is to
sell products or services. In achieving this primary goal, there are often
profound secondary consequences. Advertising exerts a formative influence
whose character is both persuasive and pervasive. Through the selective
reinforcement of certain social roles, language and values, it acts as an
important force fashioning the cognitions and attitudes that underlie behavior
not only in the market place, but also in all aspects of life. In an international
setting, advertising has an important social influence in a number of ways.
First, much international advertising is designed to promote and introduce new
products from one society into another. Often this results in radical change in
life-styles, behavior patterns of a society, stimulating for example the adoption
of fast food, casual attire or hygiene and beauty products. International
advertising also encourages desire for products from other countries, it
creates expectations about " the good life", and establishes new models of
consumption. Advertising is thus a potent force for change, while selectively
reinforcing certain values, life-styles and role models.

Often the symbols, ideals and mores that international advertising

portrays and promotes are those of Western society and culture. Through the
reach of advertising, brands such as Levi's, Nike, Marlboro and McDonalds
are known by and have become objects of desire for teens and young adults
throughout the world. Similarly, images and scenes depicted in much
international advertising are either Western in origin or reflect Western
consumption behavior and values. Even where adapted to local scenarios and
role models, those shown often come from sectors of society, such as the
upwardly mobile urban middle class, which embrace or are receptive to
Western values and mores.

Consequently, a criticism frequently leveled at international

advertising is that it promulgates Western values and mores, notably from the
US, in other countries. This is viewed particularly negatively in societies with
strong religious or moral values, which run counter to those of the West as, for
example, Islamic societies in the Middle East. When Western advertising
depicts sexually explicit situations or shows women in situations considered
as inappropriate or immoral, it is likely to be considered a subversive force
undermining established cultural mores and values. Equally, in some countries
such as France, there is a strong negative reaction to the imposition of US
culture, values and use of English in advertising. Promotion of tobacco
products by US and UK companies in countries where there is no legislation
regulating or banning cigarette advertising has also been criticized.

At the same time, international advertising also acts as an

integrating force across national boundaries. It disseminates messages using
universal symbols and slogans, and establishes a common mode of
communication among target audiences in different parts of the world. At the
same time, multicultural values are reinforced by advertisers, who adopt
images incorporating peoples of different nations and diverse cultural
backgrounds, as, for example, the Colors of Benneton campaign or the British
Airways "Peoples of the World" campaign. The impact of such campaigns is
further reinforced by the growth of global media such as Star TV, CNN, MTV
or print media that target global audiences worldwide. Consequently, while, on
the one hand, international advertising can be viewed as a colonizing force
propagating Western values and mores throughout the world, it is also an
important force integrating societies and establishing common bonds,
universal symbols and models of communication among peoples in different
parts of the globe.

Definition of International Advertising

International advertising entails dissemination of a commercial

message to target audiences in more than one country. Target audiences
differ from country to country in terms of how they perceive or interpret
symbols or stimuli, respond to humor or emotional appeals, as well as in
levels of literacy and languages spoken. How the advertising function is
organized also varies. In some cases, multinational firms centralize
advertising decisions and budgets and use the same or a limited number of
agencies worldwide. In other cases, budgets are decentralized and placed in
the hands of local subsidiaries, resulting in greater use of local advertising
agencies.

International advertising can, therefore, be viewed as a

communication process that takes place in multiple cultures that differ in terms
of values, communication styles, and consumption patterns. International
advertising is also a business activity involving advertisers and the advertising
agencies that create ads and buy media in different countries. The sum total
of these activities constitutes a worldwide industry that is growing in
importance. International advertising is also a major force that both reflects
social values, and propagates certain values worldwide.

2. International Advertising as a Communication Process

In international markets the process of communicating to a target

audience is more complex because communication takes place across
multiple contexts, which differ in terms of language, literacy, and other cultural
factors. In addition, media differ in their effectiveness in carrying different
appeals. A message may, therefore, not get through to the audience because
of people's inability to understand it (due to literacy problems), because they
misinterpret the message by attaching different meanings to the words or
symbols used, or because they do not respond to the message due to a lack
of income to purchase the advertised product. Media limitations also play a
role in the failure of a communication to reach its intended audience.

The process of communication in international markets involves a

number of steps. First, the advertiser determines the appropriate message for
the target audience. Next, the message is encoded so that it will be clearly
understood in different cultural contexts. The message is then sent through
media channels to the audience who then decodes and reacts to the
message. At each stage in the process, cultural barriers may hamper effective
transmission of the message and result in miscommunication.

In encoding a verbal message, care needs to be taken in translation.

Numerous examples exist of translation problems with colloquial phrases. For
example, when the American Dairy Association entered Mexico with its "Got
Milk?" campaign, the Spanish translation read "Are You Lactating?" Low levels
of literacy may result in the need to use visual symbols. Here again, pitfalls
can arise due to differences in color association or perception. In many
tropical countries, green is associated with danger and has negative
connotations. Red, on the other hand, is associated with weddings and
happiness in China. Appeals to humor or sex also need to be treated with
considerable care as their expression and effectiveness varies from one
culture to another. The dry British sense of humor does not always translate
effectively even to other English-speaking countries.

In addition to encoding the message so that it attracts the attention of the

target audience and is interpreted correctly, advertisers need to select media
channels that reach the intended target audience. For example, use of TV
advertising may only reach a relatively select audience in certain countries.
Equally, print media will not be effective where there are low levels of literacy.
Certain media may also be more effective in certain cultures. For example,
radio advertising has substantial appeal in South America where popular
music is a key aspect of the local culture.

The cultural context also impacts the effectiveness of

communication. In "high context" cultures, such as the collectivist Asian
cultures of Japan and China, the context in which information is embedded is
as important as what is said (Hall 1976). In low context cultures, which include
most Western societies, the information is contained in the verbal messages.
In these cultures, it is important to provide adequate information relating to the
product or service in order to satisfy their need for content (De Mooij 1998).
Conversely, people in high context cultures are often more effectively reached
by image or mood appeals, and rely on personal networks for information and
content. Awareness of these differences in communication styles is essential
to ensure effective communication.

International Advertising as an Industry

The world advertising industry is characterized by a large number of

small and medium sized advertising agencies that operate primarily in one
country and by a small number of very large advertising agencies with
operations in many countries. These agencies have developed extensive
networks of offices throughout the world in order to coordinate the advertising
process in all the countries where their clients do business. These networks
often include both wholly-owned subsidiaries and formal relationships with
local advertising agencies to establish a presence in new markets, particularly
in emerging markets.
In an effort to establish greater control over their advertising, many major
advertisers are consolidating all their advertising with one agency. For some
major advertisers such as IBM and Citibank, this represents annual
advertising expenditures in excess of $500 million worldwide (Grein and
Ducoffe, 1998). As a consequence, advertising agencies that do not have a
global network are at a serious disadvantage when competing for new
advertising accounts or attempting to retain existing ones that are expanding
globally.

The majority of these large advertising agencies are headquartered in the US.
Of the ten largest advertising agency groups, seven are headquartered in the
US, and one each in the UK, France and Japan, although WPP, the British
agency holding company, is made up of two large US-based agencies. With
the exception of Dentsu, the Japanese agency, most other agency networks
generate the majority of their revenues outside their home country. The largest
agency group, Omnicom, places over $37 billion of advertising for its clients
around the world and derives half its revenue from outside the US. Omnicom
has 891 offices in over 85 countries and employs 35,600 persons worldwide
(57 percent work outside the US). US-based advertising agencies and their
subsidiaries are responsible for most of the advertising throughout the world.
For example, of the approximately $60 billion in advertising placed by the top
25 agency networks in Europe during 1955, 89 percent of the total was placed
by subsidiaries of US-based agencies. This general pattern holds in most
parts of the world that do not have restrictions on foreign ownership. The
major exception is Asia where the three major Japanese agencies account for
62 percent of the advertising placed by the top 25 agency networks. Current
and comprehensive information on advertising can be obtained from
Advertising Age's web site, www.adage.com.

Worldwide over $400 billion is spent on advertising. Approximately

half of that amount is spent in the US and the other half outside the US.
Information on advertising spending can be obtained from Advertising Age's
web site and from McCann-Erickson's web site (www.mccann.com). The bulk
of expenditure outside the US takes place in Europe and Japan, although
Brazil, Canada, Mexico, and Australia are also important advertising markets.
Outside of these markets, China is the next largest advertising market and is
also growing rapidly.
 The Table below shows advertising spending in the top ten global ad
markets. The US and Japan account for 65 percent of the total advertising
spending in these markets and the top four European markets an additional
25 percent. Apart from Brazil, no other market accounts for more than two
percent of the total spending. The concentration of spending in the US in part
explains the dominance of US-based advertising agencies. Not only do they
work for US-based clients that continue to expand outside the US, but also
they accumulate knowledge and experience in the practice of advertising that
can be applied elsewhere.

1997 Advertising

Expenditures
Country (millions) Percent

U.S.
Japan 117.0 50
U.K. 35.7 15
Germany
France 20.8 9
Brazil
Italy 20.3 9
Australia 9.7 4
Canada
S. Korea 8.8 4

7.2 3

5.5 2

5.4 2

5.3 2

Total: 235.7 100

Note: The expenditures in this Table reflect only the 13 measured media
tracked by Advertsing Age such as TV, magazines, radio, the Internet and
yellow pages. The $400 billion figure cited above includes unmeasured
spending such as direct mail, promotion, co-op advertising, and catalogues.

Once the advertising message has been created, a media plan must
be developed and specific media vehicles purchased to deliver the message
to the target audience. Media differ from country in their availability,
effectiveness and efficiency in delivering a message, and, with relatively few
exceptions, tend to be organized on a country-by-country basis. Notable
exceptions include StarTV, MTV, CNN in television, Business Week
International, the Asia Wall Street Journal, the International Herald Tribune in
print, and selected industry and medical publication that are read worldwide.
There is also a trend toward consolidation of media in order to achieve greater
economies of scale and leverage content developed in one market to others.
This consolidation facilitates purchase of media on a regional and global
basis. In addition, the Internet is emerging as a truly global medium that does
not conform to country boundaries.

https://successfulglobalmarketing.weebly.com/untitled/global-marketing-strate
gy-standardization-vs-adaptation

International Advertising and Global Consumer

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 THE INTERNATIONAL MARKETING ENVIRONMENT

The social/cultural environment

The cultural environment consists of the influence of religious, family, educational,

and social systems in the marketing system. Marketers who intend to market their
products overseas may be very sensitive to foreign cultures. While the differences
between our cultural background in the United States and those of foreign nations
may seem small, marketers who ignore these differences risk failure in implementing
marketing programs. Failure to consider cultural differences is one of the primary
reasons for marketing failures overseas. Table 6 provides some illustrations of cultural
difference around the world.

This task is not as easy as it sounds as various features of a culture can create an
illusion of similarity. Even a common language does not guarantee similarity of
interpretation. For example, in the US we purchase “cans” of various grocery
products, but the British purchase “tins”. A number of cultural differences can cause
marketers problems in attempting to market their products overseas. These include:
(a) language, (b) color, (c) customs and taboos, (d) values, (e) aesthetics, (f) time, (g)
business norms, (h) religion, and (i) social structures. Each is discussed in the
following sections.

Language

The importance of language differences cannot be overemphasized, as there are

almost 3,000 languages in the world. Language differences cause many problems for
marketers in designing advertising campaigns and product labels. Language problems
become even more serious once the people of a country speak several languages. For
example, in Canada, labels must be in both English and French. In India, there are
over 200 different dialects, and a similar situation exists in China.

Student Example

Chevrolet created a car called the Chevy Nova. This car was very popular in the
United States, but when they tried to sell them in Spanish speaking countries, they
seemed to have problems because NO VA means ‘no go’ so they thought the car
would not move. If companies are going to sell their products internationally, they
need to think about what their name means in the countries where they want to sell
them.

Lucy Fasano

Class of 2020

Colors

Colors also have different meanings in different cultures. For example, in Egypt, the
country’s national color of green is considered unacceptable for packaging, because
religious leaders once wore it. In Japan, black and white are colors of mourning and
should not be used on a product’s package. Similarly, purple is unacceptable in
Hispanic nations because it is associated with death.

Student Example
The U.S is the only currency that uses the same color green for all of its money. Other
countries use different colors for different values of currency but the U.S uses the
same color for all denominations.

Jason Shevenko

Class of 2020

Customs and taboos

All cultures have their own unique set of customs and taboos. It is important for
marketers to learn about these customs and taboos so that they will know what is
acceptable and what is not for their marketing programs.

Illustrations of potential areas of misunderstanding due to differences in

cultural norms

In Ireland, the evening meal is called tea, not dinner. In Asia, when a person bows to
you, bow your head forward equal or lower than theirs. A nod means “no” in Bulgaria
and shaking the head side-to-side means “yes”. The number 7 is considered bad luck
in Kenya, good luck in the Czech Republic, and has magical connotations in Benin.

Pepsodent toothpaste was unsuccessful in Southeast Asia because it promised white

teeth to a culture where black or yellow teeth are symbols of prestige. In Quebec, a
canned fish manufacturer tried to promote a product by showing a woman dressed in
shorts, golfing with her husband, and planning to serve canned fish for dinner. These
activities violated cultural norms. Maxwell House advertised itself as the “great
American coffee” in Germany. It found out that Germans have little respect for
American coffee.

General Motors’ “Body by Fisher” slogan became “Corpse by Fisher” when translated
into Japanese. In German, “Let Hertz Put You in the Driver’s Seat” means “Let Hertz
Make You a Chauffeur”. In Cantonese, the Philip Morris name sounded the same as a
phrase meaning no luck. In Hong Kong, Korea, and Taiwan, triangular shapes have a
negative connotation.

In Thailand, it is considered unacceptable to touch a person’s head, or pass something

over it. Red is a positive color in Denmark, but represents witchcraft and death in
many African countries. Americans usually smile as they shake hands. Some Germans
consider smiles overly familiar from new business acquaintances. Americans should
not say “Wie gehts?” (“How goes it?”) It is also too informal for first meetings.

If you offer a compliment to a Chinese-speaking person, he or she will decline it,

because disagreeing is the polite way to accept praise. Do not say “Merci” (“Thanks”)
to a French person’s compliment. You might be misinterpreted as making fun. Italians
wave goodbye as Americans beckon someone–with palm up and fingers moving back
and forth; but in Asia, waving with the palm down is not interpreted as goodbye, but
rather, “come here”.

Offering gifts when you visit a home is expected in Japan, but in the Soviet Union it
may be considered a bribe. In Brazil and Portugal, business people like to entertain
foreigners in their homes. When it is time to go, the host may feel constrained to insist
that the foreigner stay. Foreigners should politely take their leave.
Consider how the following examples could be used in development of international
marketing programs:

• In Russia, it is acceptable for men to greet each other with a kiss, but this custom is
not acceptable in the US.

• Germans prefer their salad dressing in a tube, while Americans prefer it in a bottle.

• In France, wine is served with most meals, but in America, milk, tea, water, and soft
drinks are popular.

McDonalds’s Corporation has opened 20 restaurants in India. Since 80 per cent of

Indians are Hindu, McDonald’s will use a nonbeef meat substitute for its traditional
hamburger. The likely beef substitute will be lamb, a very popular meat in India. In
anticipation of its restaurant openings, McDonald’s conducted extensive market
research, site selection studies, and developed a relationship with India’s largest
chicken supplier. McDonald’s has opted to market its product in India, largely because
India’s population of more than 900 million represents one sixth of the world’s
population.

Student Example

In certain countries, a vast majority of Muslims find drinking alcohol as sinful.

Therefore, marketing alcohol would not only result in lower sales but also may get the
company in trouble with the people in the country who may be severely offended that
alcohol is being marketed in a positive light. However, in America, beer commercials
seem to be the norm and can be seen whenever you turn on the television or on ads
online.
 Charles DeWilde

Class of 2020

Values

An individual’s values arise from his/her moral or religious beliefs and are learned
through experiences. For example, in America we place a very high value on material
well-being, and are much more likely to purchase status symbols than people in India.
Similarly, in India, the Hindu religion forbids the consumption of beef, and fast-food
restaurants such as McDonald’s and Burger King would encounter tremendous
difficulties without product modification. Americans spend large amounts of money
on soap, deodorant, and mouthwash because of the value placed on personal
cleanliness. In Italy, salespeople call on women only if their husbands are at home.

Student Example

● I visited Germany in High School for a German exchange program and not
only learned the language better but got first-hand insight into German
etiquette. One of the most important things I learned was how important
punctuality is, it means you are organized and good at time management which
is very important in their culture. The interesting thing is being too early is just
as detrimental as being late. Knowing little tips like this can help companies
from having business deals fall through.

Melissa Huston
 Class of 2020

Aesthetics

The term aesthetics is used to refer to the concepts of beauty and good taste. The
phrase, “Beauty is in the eye of the beholder” is a very appropriate description of the
differences in aesthetics that exist between cultures. For example, Americans believe
that suntans are attractive, youthful, and healthy. However, the Japanese do not.

Student Example

A few years ago, Cheez-it decided to edit the design on their boxes. The changes were
minimal, such as a change of font and subtle changes to the layout. This exemplifies
the idea of “aesthetics”, as Cheez-it did the minor changes to the design so they
looked better to the common consumer. Lisa Einet, the design director at Kellog,
stated that the change of design was to modernize the snack and more strongly appeal
to its current consumer. She believed the font simply looked more appealing to the
consumer they were aiming to attract.

Nicolai Wilson

Class of 2020

Time

Americans seem to be fanatical about time when compared to other cultures.

Punctuality and deadlines are routine business practices in the US. However,
salespeople who set definite appointments for sales calls in the Middle East and Latin
America will have a lot of time on their hands, as business people from both of these
cultures are far less bound by time constraints. To many of these cultures, setting a
deadline such as “I have to know next week” is considered pushy and rude.

Business norms

The norms of conducting business also vary from one country to the next. Here are
several examples of foreign business behavior that differ from US business behavior:

• In France, wholesalers do not like to promote products. They are mainly interested
in supplying retailers with the products they need.

• In Russia, plans of any kind must be approved by a seemingly endless string of

committees. As a result, business negotiations may take years.

• South Americans like to talk business “nose to nose”. This desire for close physical
proximity causes American businesspeople to back away from the constantly
forward-moving South Americans.

• In Japan, business people have mastered the tactic of silence in negotiations.

Americans are not prepared for this, and they panic because they think something has
gone wrong. The result is that Americans become impatient, push for closure, and
often make business concessions they later regret. These norms are reflected in the
difficulty of introducing the Web into Europe (see the next “Integrated marketing”).

Religious beliefs

A person’s religious beliefs can affect shopping patterns and products purchased in
addition to his/her values, as discussed earlier. In the United States and other Christian
nations, Christmas time is a major sales period. But for other religions, religious
holidays do not serve as popular times for purchasing products. Women do not
participate in household buying decisions in countries in which religion serves as
opposition to women’s rights movements.

Every culture has a social structure, but some seem less widely defined than others.
That is, it is more difficult to move upward in a social structure that is rigid. For
example, in the US, the two-wage earner family has led to the development of a more
affluent set of consumers. But in other cultures, it is considered unacceptable for
women to work outside the home.

Integrated Marketing

Hooking up in Europe

Everyone in Europe vacations in August, and business is booming at Internet Train,

the perhaps inappropriately named chain of Internet cafes in Florence, Italy. Just over
the Ponte Vechio, the old bridge joining the Uffizi art gallery with Pallazo Pitti, there
is a small storefront with 20 personal computers. Inside, people from around the world
peck away at their email, communicating with friends and acquaintances from more
than a hundred countries–for just ITL 6,000 (about USD 3) per half hour.

Thousands of kilometers away in London, near Victoria Station, the scene is much the
same. Stelio’s Haij-Joannu, a Greek shipping tycoon and Internet entrepreneur, has
created Easy Everything, which he claims are the world’s largest Internet cafes.
Haij-Joannu boasts nine Internet cafes with 3,900 PCs ready and available. “Easy
Everything (easyeverything.com) is wonderful,” reports Reade Fahs, CEO of London
based First Tuesday, a global Internet networking organization. “You call it an Internet
cafe, but it’s much more. Most Internet cafes are about the coffee with computers on
the side. This is about 400 thin-screen computers in this very cool environment with a
little coffee on the side.”

Of course, the story in Europe goes far beyond email and Internet cafes. They are just
the top of the innovation revolution sweeping Europe from the North to the South.
Consider easyGroup, which owns easyEverything: easyGroup includes easyJet.com
and easyRentacar.com (all properties controlled by Haij-Joannu). EasyJet.com bills
itself as the “Web’s favorite airline” and markets itself as it discount airline with steep
incentives for buyers to transact online. EasyRentacar.com is “the world’s first
Internet-only rent-a-car company,” he adds. He also plans to start easyMoney.com,
offering discount mortgages online. Still, the challenges of European Internet
marketing are legion. Putting a B2C (business-toconsumer) or a B2B
(business-to-business) site up in Europe is much more difficult than in the United
States. Among the many complexities facing pan-European websites are the
following:

(a) developing a site for multiple languages

(b) developing a site for multiple currencies

(c) providing multilingual customer service

(d) shipping across borders in Europe

(e) handling the value-added tax (VAT)

(f) coping with strict government regulatory issues

(g) recruiting and retaining people in markets that prohibit or curtail stock options and
other economic incentives (22)

The political/legal environment

The political/legal environment abroad is quite different from that of the US. Most
nations desire to become self-reliant and to raise their status in the eyes of the rest of
the world. This is the essence of nationalism. The nationalistic spirit that exists in
many nations has led them to engage in practices that have been very damaging to
other countries’ marketing organizations.

For example, foreign governments can intervene in marketing programs in the

following ways:

• contracts for the supply and delivery of goods and services

• the registration and enforcement of trademarks, brand names, and labeling

• patents

• marketing communications

• pricing

• product safety, acceptability, and environmental issues

Political stability

Business activity tends to grow and thrive when a nation is politically stable. When a
nation is politically unstable, multinational firms can still conduct business profitably.
Their strategies will be affected however. Most firms probably prefer to engage in the
export business rather than invest considerable sums of money in investments in
foreign subsidiaries. Inventories will be low and currency will be converted rapidly.
The result is that consumers in the foreign nation pay high prices, get less satisfactory
products, and have fewer jobs.

Monetary circumstances

The exchange rate of a particular nation’s currency represents the value of that
currency in relation to that of another country. Governments set some exchange rates
independently of the forces of supply and demand. The forces of supply and demand
set others. If a country’s exchange rate is low compared to other countries, that
country’s consumers must pay higher prices on imported goods. While the concept of
exchange rates appears relatively simple, these rates fluctuate widely and often, thus
creating high risks for exporters and importers.

Trading blocs and agreements

US companies make one-third of their revenues from products marketed abroad, in

places such as Asia and Latin America. The North American Free Trade Agreement
(NAFTA) further boosts export sales by enabling companies to sell goods at lower
prices because of reduced tariffs.

Regional trading blocs represent a group of nations that join together and formally
agree to reduce trade barriers among themselves. The Association of Southeast Asian
Nations (ASEAN) is an example of a regional trading block. The organization is
compromised of 10 independent member nations, including Indonesia, Malaysia,
Thailand, and the Philippines. A free trade agreement within ASEAN member nation
allows for the free exchange of trade, service, labor and capital. However, universal
implementation of these standards is scheduled for 2020. In addition, ASEAN
promotes regional integration of transportation and energy infrastructure.

One of the potentially interesting results of trade agreements like ASEAN or NAFTA
is that many products previously restricted by dumping laws, laws designed to keep
out foreign products, would be allowed to be marketed. The practice of dumping
involves a company selling products in overseas markets at very low prices, one
intention being to steal business from local competitors. These laws were designed to
prevent pricing practices that could seriously harm local competition. The laws were
designed to prevent large producers from flooding markets. In 2007, about 60 nations
had anti-dumping legislation. Those in favor of agreements argue that anti-dumping
laws penalize those companies who are capable of competing in favor of those
companies that are not competitive.

Almost all the countries in the Western hemisphere have entered into one or more
regional trade agreements. Such agreements are designed to facilitate trade through
the establishment of a free trade area, customs union or customs market. Free trade
areas and customs unions eliminate trade barriers between member countries while
maintaining trade barriers with nonmember countries. Customs unions maintain
common tariffs and rates for nonmember countries. A common market provides for
harmonious fiscal and monetary policies while free trade areas and customs unions do
not. Trade agreements are becoming a growing force for trade liberalization; the
development of such agreements provides for tremendous opportunities for companies
with global operations.

The creation of the single European market in 1992 was expected to change the way
marketing is done worldwide. It meant the birth of a market that was larger than the
United States, and the introduction of European Currency Units (Euros) in place of the
individual currencies of member nations. Experience in multilingual marketing would
help non-European companies succeed in this gigantic market. With new technologies
such as multilingual processing programs, it would be possible to target potential
customers anywhere in Europe, in any language, and in the same marketing campaign.

Progress toward European unification has been slow-many doubt that complete
unification will ever be achieved. However, on 1 January 1999, 11 of the 15 member
nations took a significant step toward unification by adopting the Euro as the common
currency. These 11 nations represent 290 million people and a USD 6.5 trillion
markets. Still, with 14 different languages and distinctive national customs, it is
unlikely that the European Union (EU) will ever become the “United States of
Europe”.

Tariffs

Most nations encourage free trade by inviting firms to invest and to conduct business
there while encouraging domestic firms to engage in overseas business. These nations
do not usually try to strictly regulate imports or discriminate against foreign-based
firms. There are, however, some governments that openly oppose free trade. For
example, many Communist nations desire self-sufficiency. Therefore, they restrict
trade with non-Communist nations. But these restrictions vary with East-West
relations.

The most common form of restriction of trade is the tariff, a tax placed on imported
goods. Protective tariffs are established in order to protect domestic manufacturers
against competitors by raising the prices of imported goods. Not surprisingly, US
companies with a strong business tradition in a foreign country may support tariffs to
discourage entry by other US competitors.

Student Example
While I was studying abroad in Switzerland, I experienced the effects of tariffs when
trying to purchase meats such as beef. Switzerland does not produce much of its own
meat, this is exacerbated by the fact that they also have very high standards for meat
as well. So, the only way for Swiss people to enjoy meat is to import it. The majority
of cattle in Switzerland is used for milk production and not meat production. There
was nearly a 20% decrease in price simply by crossing the border into Germany or
Austria, and sometimes the tariff applied in Switzerland was double the original price
according to a study by the World Trade Organization. Furthermore, according to a
study by Swiss Info, Switzerland’s meat prices are also 142% more expensive than the
global average, ouch!

Eric Simpson

Class of 2020

Expropriation

All multinational firms face the risk of expropriation. That is, the foreign government
takes ownership of plants, sometimes without compensating the owners. However, in
many expropriations there has been payment, and it is often equitable. Many of these
facilities end up as private rather than government organizations. Because of the risk
of expropriation, multinational firms are at the mercy of foreign governments, which
are sometimes unstable, and which can change the laws they enforce at any point in
time to meet their needs.

The technological environment

The level of technological development of a nation affects the attractiveness of doing
business there, as well as the type of operations that are possible. Marketers in
developed nations cannot take many technological advances for granted. They may
not be available in lesser developed nations. Consider some of the following
technologically related problems that firms may encounter in doing business overseas:

• Foreign workers must be trained to operate unfamiliar equipment.

• Poor transportation systems increase production and physical distribution costs.

• Maintenance standards vary from one nation to the next.

• Poor communication facilities hinder advertising through the mass media.

• Lack of data processing facilities makes the tasks of planning, implementing, and
controlling marketing strategy more difficult.

The economic environment

A nation’s economic situation represents its current and potential capacity to produce
goods and services. The key to understanding market opportunities lies in the
evaluation of the stage of a nation’s economic growth.

A way of classifying the economic growth of countries is to divide them into three
groups: (a) industrialized, (b) developing, and (c) less-developed nations. The
industrialized nations are generally considered to be the United States, Japan, Canada,
Russia, Australia and most of Western Europe The economies of these nations are
characterized by private enterprise and a consumer orientation. They have high
literacy, modem technology, and higher per capita incomes.
Developing nations are those that are making the transition from economies based on
agricultural and raw materials production to industrial economies. Many Latin
American nations fit into this category, and they exhibit rising levels of education,
technology, and per capita incomes,

Finally, there are many less developed nations in today’s world. These nations have
low standards of living, literacy rates are low, and technology is very limited.

Usually, the most significant marketing opportunities exist among the industrialized
nations, as they have high levels of income, one of the necessary ingredients for the
formation of markets. However, most industrialized nations also have stable
population bases, and market saturation for many products already exists. The
developing nations, on the other hand, have growing population bases, and although
they currently import limited goods and services, the long-run potential for growth in
these nations exists. Dependent societies seek products that satisfy basic needs–food,
clothing, housing, medical care, and education. Marketers in such nations must be
educators, emphasizing information in their market programs. As the degree of
economic development increases, so does the sophistication of the marketing effort
focused on the countries.

The competitive environment

Entering an international market is similar to doing so in a domestic market, in that a

firm seeks to gain a differential advantage by investing resources in that market. Often
local firms will adopt imitation strategies, sometimes successfully. When they are
successful, their own nation’s economy receives a good boost. When they are not
successful, the multinational firm often buys them out.
Japanese marketers have developed an approach to managing product costs that has
given them a competitive advantage over US competitors. A typical American
company will design a new product, then calculate the cost. If the estimated cost is too
high, the product will be taken back to the drawing board. In Japan, a company
typically starts with a target cost based on the price that it estimates the market is most
willing to accept. Product designers and engineers are then directed to meet the cost
target. This approach also encourages managers to worry less about product costs and
more about the role it should play in gaining market share. Briefly, at Japanese
companies like Nippon Electric Company (NEC), Nissan, Sharp, and Toyota, a team
charged with bringing a product idea to market estimates the price at which the
product is most likely to appeal to the market. From this first important judgement, all
else follows. After deducting the required profit margin from the selling price,
planners develop estimates of each element that make up the product’s cost:
engineering, manufacturing sales, and marketing. US firms tend to build products,
figure how much it costs to build the product, and then ask whether the product can be
sold at a profitable price. US companies tend not to assess what the market will be
willing to pay.

Marketing objectives

Having identified stakeholder expectations, carried out a detailed situation analysis,

and made an evaluation of the capabilities of the company, the overall marketing goals
can be set. It is important to stress that there is a need for realism in this, as only too
frequently corporate plans are determined more by the desire for short-term credibility
with shareholders than with the likelihood that they will be achieved.

The process adopted for determining long-term and short-term objectives is important
and varies significantly, depending on the size of the business, the nature of the
market and the abilities and motivation of managers in different markets. At an
operational level, the national managers need to have an achievable and detailed plan
for each country, which will take account of the local situation, explain what is
expected of them and how their performance will be measured. Examples of
objectives might be:

• financial performance, including return on investment and profitability;

• market penetration, including sales (by volume and value), market share by product
category;

• customer growth, by volume and profitability;

• distribution, including strength in supply chain, number of outlets;

• brand awareness and value;

• new product introductions and diffusion;

• company image, including quality and added value (or service).

The Wall Street Journal

wsj.com

In practice

International markets offer organizations market expansion and profit opportunities.

However, entering international markets poses risks and valid reasons to avoid
entering these markets. International marketing plans must identify the benefits and
risks involved with international expansion, and detail the options for entry into the
foreign market.

Deciding whether or not to adjust its domestic marketing program is a critical issue
for any organization planning to expand internationally. Organizations must
understand the various environmental factors affecting international marketing to
determine whether a standardized or customized marketing mix will be the best
strategy.

The Interactive Journal provides extensive information about world business. On the
Front Section, select World-Wide from the main page. World-Wide focuses on
international news and events. You will find information about trade agreements,
international governing organizations, and regional conflicts in this section. Under the

Asia, Europe, and The Americas headings, you will find information specific to these
regions. General news stories, financial markets activity, and technology issues are all
discussed as they pertain to the specific region. For country specific information, page
down to Country News in any of the regional sections. Using the drop down menu,
you will find links to recent news and business articles.

In the Economy section, you will find an International Calendar of Economic Events.
On the Front Section, select Economy from the left menu. In this section you will also
find articles about noteworthy economic developments in various countries. Travel
news is found in the Business Fare section of Marketplace. Here you will find a

Currency Converter as well as travel related business articles.

Deliverable
Select one major headline in the Asia, Europe, and The Americas sections. Use the
Country News menu to select the specific countries discussed and to look for
additional information about the articles you have chosen. Review the articles and
write a one-paragraph synopsis of each.

Summary

Most American firms have discovered that many opportunities exist in international
marketing, as evidenced by the vast amount of goods exported by US-based firms.
There are many reasons why US firms choose to engage in international marketing.
Perhaps the most attractive reasons are the market expansion and profit opportunities
afforded by foreign markets.

Basic principles of domestic marketing apply to international marketing. However,

there are some differences, many of which are centered on environmental factors
which affect international marketing: (a) the economic environment, (b) the
competitive environment, (c) the cultural environment, (d) the political/legal
environment, and (e) technological environment and the ethical environment.

Once a firm has decided to enter a particular foreign market, it must decide upon the
best way to enter that market. A firm has five basic foreign market entry options, the
selection of which depends largely on the degree of control that the firms wishes to
maintain over its marketing program. When a firm chooses to market its products
internationally, it must decide whether to adjust its domestic marketing program.
Some firms choose to customize their market programs, adjusting their marketing mix
to meet the needs of each target market. Others use a standardized marketing mix. In
making the decision to customize or standardize, there is a wide range of possibilities
for adapting a firm’s product, price, promotion, and distribution strategies.
https://blog.hubspot.com/marketing/global-marketing-and-international-business

Case Study - Companies That Failed

Internationally From a Lack of Social
Understanding

For many companies, expanding internationally is a huge goal. To be able to grow a

brand outside of the initial country opens up the opportunity for increasing sales by
entering untapped markets who are looking for exactly what a company is selling.
For company’s who have successfully expanded internationally, the rewards are
plentiful. For example, Lego — which is a Danish company — came to the United States
in the 70s. Since their expansion, they have become one of the United States’s most
beloved toys, reaching nearly 10% of the toy market share in 2018 (good enough for
third overall, behind Hasbro and Mattel).

But, not all international expansions go smoothly.

If a business is not careful and doesn’t do their due diligence, their marketing messages
may be lost in translation. Or, if they don’t take the time to incorporate some in-depth
market research into their expansion strategies, they may end up losing money instead
of making money.

Here are some examples of companies that failed internationally due to a lack of social
understanding and an in-depth breakdown of what really went wrong.

Walmart in Japan and Their Failure to Differentiate

In 2018, Walmart brought in more than $500 billion in sales globally. Not surprisingly,
3/4 of those sales came from the U.S.

But, overseas — particularly in Japan — things are not going so well for the American
retail giant.

Recent reports have shown that Walmart may be looking to exit Japan nearly 17 years
after its initial expansion into the Japanese market. This expansion involved purchasing
a minority stake in Seiyu — a Japanese grocery store — in 2002, which then turned into a
fully-owned subsidiary in 2008. Like Walmart, Seiyu uses the “Everyday Low Prices”
mantra to market to their consumers.

In between then and now, not much has gone right for Walmart in Japan. Aeon, the top
supermarket in Japan, owns 45% of the market share. Meanwhile, Walmart’s Seiyu sits
at 12%.

That may not sound terrible, but to put it into perspective, let’s compare it to another
U.S. supermarket that has expanded into Japan with much more success — Costco.

Costco only has 26 stores in Japan, but in 2017 they brought in just over $3 billion in
revenue. Seiyu, on the other hand, has 331 locations and brought in $7.1 billion in
revenue.

So, what went wrong exactly?

Well, the low price strategy that both Walmart and Seiyu abide by is not nearly as
effective in Japan as it is in the United States.

While consumers in the U.S. appreciate the convenience of being able to find great
deals at one central location, Japan consumers are not as concerned with this
convenience, making it less of a differentiator in the Japanese market.

Michelle Grant, the Head of Retailing at Euromonitor International, outlines this issue in
a CNBC video, titled “Why Walmart is Failing in Japan.”

In the video, Grant describes how Japanese consumers “enjoy the treasure hunt of
pricing” and will go to multiple stores while shopping in search of the best deals. Also,
as this Bloomberg Businessweek article points out, Japanese consumers often
associate low prices with cheap quality.

In addition to all of that, Japan’s retail market was already so congested with everything
from your stereotypical supermarket to online retailers and mom-and-pop shops by the
time Walmart expanded into that region.

Now, this doesn’t mean that the barriers to entry were impenetrable. It just means that
to enter that market, you need to have a strong differentiator that was effective to the
market. This was something that Costco did well, while Seiyu failed.

Japanese consumers typically aren’t used to shopping in bulk, so going to Costco offers
them a totally new shopping experience. Meanwhile, Seiyu was no different than any
other supermarket that Japanese consumers were already familiar with.

Last, Walmart also failed to recognize that Japanese consumers enjoy fresh, locally
sourced food — which is something Seiyu does not offer a lot of.

It remains to be seen whether Walmart will be able to turn it around or if they’ll

ultimately end up selling Seiyu. But, one thing is certain, the U.S. supermarket’s lack of
understanding their consumers in Japan has set them pretty far back.

Home Depot in China and the DIY Attitude

Home Depot is known as the place to go for those who embody the DIY mindset when it
comes to home improvement.
In the late 20th century, China started to commercialize and privatize urban public
housing to encourage homeownership. For the first time since the 40s, Chinese citizens
could own homes.

Up until this point, Home Depot didn’t even think about expanding to China. But, as more
and more Chinese citizens started to own homes, the demand for home improvement
and construction materials boomed. As a result, Home Depot acquired Home Way in
2006.

Unfortunately, in 2012, Home Depot closed all its Home Way stores and left the market.

So, why the quick exit from the Chinese market for Home Depot?

The problems they encountered — as laid out in another CNBC video — can be boiled
down to two main issues.

First, the Home Way stores were predominantly located in Chinese suburbs. While being
located in the suburbs makes sense in the U.S. — as this is where people tend to move
when they gain wealth — this is not the case in China.

Chinese citizens who acquire wealth will typically stay in the cities and live in
apartments or condominiums, which typically don’t require the need for renovations.

Home Depot took their time when it came to deciding whether or not to enter the
Chinese market. However, it seems they still lacked the proper amount of preparation
and social understanding it takes to successfully navigate a new and foreign market.

Coors’ Messaging is Lost in Translation in Spain

Coors is a very successful American beer manufacturer. But, they made an
all-too-common mistake when it came to launching their “Turn it Loose” campaign in
Spain — not double-checking a slogan’s translation before going to market.

When translated into Spanish, their tagline was interpreted as a common expression
that means “suffer from diarrhea.” So, not great.

While this isn’t as big of a failure as the previous case studies, and Coors maintains a
strong presence in the Spanish market, it is a lesson in the importance of tailoring your
marketing message to fit new consumers, and their language and cultural terms, when
in an international market.

You can find plenty of examples of other companies who have made mistakes in
marketing to foreign markets, and there will certainly be more messaging mishaps in
the future.

Takeaways: How to Avoid These Mistakes For Your

International Expansions

To ensure that your company doesn’t fall victim to an international marketing blunder,
there are a few things you should do prior to setting up shop in a new country, region, or
even state.

First, do the research. ou most likely conducted market research in your current markets
and target audience, you will also need to go through the same process in new markets
before expanding. It’s important to first establish whether or not there is an opportunity
in that international market prior to entering.

In addition, you have to zero in on the consumer preferences of the new target audience.
What type of products they like, what their hobbies are, what flavors they prefer, and
simply whether or not your offering will be valuable to them.
When it comes to marketing, it is not effective to simply assume you can take current
campaigns and apply them without alteration in other areas of the world. People differ
from city to city, country to country, and continent to continent.

Brands that failed in India

Today, India is one of the biggest markets. Got a product? Chances are that
there’s enough potential in this one country alone to make your sales and
profits skyrocket. Businesses in the West realize this colossal reach that India
has, and are always aching to invest and expand operations around our thriving
economy. In fact, the West has always looked at India and seen only profits
waiting to be reaped. Doesn’t this remind you of the East India Company?

Just like them, many other foreign businesses have also fared terribly in the
country with some being forced to move out. This article attempts to take a look
at some of the biggest conglomerates who entered the Indian subcontinent but
their aspirations soon came crashing down.

GENERAL MOTORS

One of the world’s largest car makers, General Motors (GM), re-entreated India
in 1994 (after leaving in 1954) as well. After 21 long years in the country, the
company decided to stop selling vehicles in India in 2017. Reason? No profits, of
course. During all these years, General Motors’ market share never went up to
double digits in India
Why Did It Fail?

Primarily, bad networking and several structuring issues were the reason behind
its shutting shop in India. The company was known to be struggling with various
management issues, which contributed hugely towards this failure. In 21 years,
GM India had 9 different CEOs with an average tenure of only 2.5 years.
Meanwhile, Maruti, for example, is still on their 5th CEO in over 35 years of
operations in India. CEOs at GM could never really focus on building a strong
network, presence, or any strategy, as internal conflicts and problems
continuously surrounded the brand.

Further, launch and withdrawal of products were rather frequent with General
Motors, which also led to the lack of a long term reputation, which can arguably
be said to be a must for the automobile industry.

This inconsistency, outdated practices, lack of trustworthy reputation, and the

failure to sense the Indian market, led to the demise of operations for General
Motors in India.

NOKIA

The Finnish company Nokia reached its finishing point in 2014 when it was sold
to Microsoft. Although the use of its name in technologies and branding still
continues, the Nokia we knew is now no more. Having been the industry leader
for a long time almost all across the globe, Nokia’s sudden nose-dip into failure
was a mystery for many.

Nokia Corporation started with products like paper items, bicycle tires, rubber
boots and various other electronic items before getting into mobile phones. For
14 years straight Nokia was the largest global mobile phone maker.
Although the failure of Nokia was global, many argued that it started with losing
its grip in the Indian market. Rightly so, it seems, because Nokia was the
biggest name in India when it came to mobile technologies and also the reason
behind many firsts, in the country.

The first phone call through a cell phone in India was made on a Nokia mobile in
1995. The first camera phone, business phone and even a torch phone were all
launched by Nokia in India. The invention of the ever-so-popular Snake-game
and the Sare-jahan-se-acha ringtone are both accredited to them. So, basically,
Nokia was everywhere and was the definition of mobile phone in India.

Why Did It Fail?

The reason for their failure can accurately be summed in two A’s – Apple and
Android. Apple and Android crushed Nokia. Relying only on Symbian operating
systems, Nokia failed to adapt early to the software shift in the market and
concentrated only on producing better hardware. They also overestimated the
strength of their brand and assumed they will be able to catch up quickly even
if they started late. With Samsung expanding base in India and investing heavy
in Research & Development, and with the launch of the iPhones and iOS, along
with increasing purchasing power in the country, it didn’t take time for the
crowds to move on and forget about Nokia.

Again, for a company that at one point forced it competitors to be mere

spectators in the industry, lost the game because of lack of innovation,
over-estimations and the failure to adapt. Business strategies seem fairly simple
until you start practicing the business. The fundamentals of any business
require extensive knowledge and expansive research. This is a course that has
not only helped people take their already established businesses to
unimaginable heights, but has also given us many success stories amongst first
time starters. It is a must for any entrepreneur, I would say!
KELLOGG’S

Kellogg’s was and still is a mighty brand. Its cereals are known and consumed
worldwide more than any of its rivals. With various other popular sub-brands
under its belt, at one point Kellogg’s sat on a staggering 40% market share of
all ready-to-eat products due to their cereal products alone.

However, tough times began for Kellogg’s in the 1990s. Market share fell as
competition increased, and therefore, Kellogg’s attempted to look beyond the
traditional markets of the USA and UK, and entered India in 1994, three years
after the opening of international trade barriers in the country. Their top brand
Corn Flakes was launched after a heavy investment in the country and positivity
ensued due to the huge market potential.

Why Did It Fail?

Cereal-eating was a new concept for India. For light breakfast, the subcontinent
relied mostly on a bowl of hot vegetables, of which there were many brands in
the country. Moreover, Kellogg’s was expensive. Other, widely accepted
alternatives were available at almost one third the price of this foreign breakfast
habit.

Without bowing down on the prices and with little to no research on the market,
more products like Wheat Flakes, Honey Crunch, All Bran, etc. were introduced.
As a result, the sales continued to go from decent to poor and Kellogg’s became
a one-off novelty purchase for many, with limited returning customers.

Even the attempt to ‘Indianize’ the products with Masala variants didn’t work
out too well, and now Kellogg’s is trying to venture into the biscuits space. All in
all, in over 20 years, the ride is still going tough for this huge brand in India, no
where close to as good as they expected. Yet, optimism is high and Kellogg’s is
still willing to explore future prospects in the subcontinent.

KODAK

The American company Kodak was the pioneer in camera technology. Built on
the strong foundation of innovation and change, Kodak is rightly credited for
many inventions in the photography industry. It was always such a huge name
that it’s tagline ‘Kodak Moments’ was synonymous to having happy times in life,
and was used in events around the world.

Why Did It Fail?

The story of Kodak is as ironic as it gets. The first ever digital camera was
designed in 1975 by Steve Sasson. Where did Steve work? Yes, Kodak! When
Steve introduced his revolutionary technology to his bosses at the company,
their response was “that’s cute – but don’t tell anyone about it”, as reported in
The New York Times.

As Kodak was also one of the biggest producers in camera films, the
management saw this invention as a threat to that business. Result – no
marketing of this brand new invention. It wasn’t long before other competitors
like Sony, Fujifilm, Nikon got hold of the technology and capitalized heavily on
the opportunity. Kodak remained in denial and was adamant to not go ahead
with this filmless digital technology.

The world moved ahead, but Kodak failed due to its slowness in transition.
Regarding digital photography as the enemy, Kodak chose not to adapt to the
change that the market needed. It only got into digital photography when it was
too late. Failing to lead the way with the innovation, Kodak itself gave to the
world, the company announced bankruptcy in 2012 and exited the image
capturing business. Kodak Moment enough!?

WHAT ARE THE LESSONS WE CAN LEARN FROM

THEM?

1. Learn – Do your homework. Every business operates on some

rudimentary principles of operations; some general and some industry
specific. Failure to identify and abide by these can result in fatal
finishes. You can learn about everything that is required to know about
managing your business here.
2. Research and adapt – Market research and careful scrutiny of the same
is vital for any business and helps in assigning realistic goals and
making necessary changes. The importance of adapting in accordance
with the research cannot be emphasized enough.
3. Don’t underestimate (or overestimate) – Being truthful to your
company and its standing is the biggest gift you can give to it. From
the many examples above, you must realize that underestimating your
competition or overestimating your strengths are some of the first
anti-business practices. Kellogg’s underestimated its local competition,
Nokia overestimated its market stature. Results? Scroll up to read,
re-read, and re-re-read.
4. Consumer is boss – Changing regional dynamics and consumer
behavior in different cultures can make it really tough for even the
biggest businesses to understand and adapt to. Nevertheless, if one is
willing to treat customers as the boss of the company and keep their
wants and expectations at the top, the going can get a lot easier. This
is also a must for any brand who wants to succeed in India, or any
other culturally diverse market for that matter.
https://hbr.org/2004/09/how-global-brands-compete