Developing Global Awareness

Global awareness is about working to understand a region’s geography,

resources, history, economy, religions, and languages in order to gain insight
into varying perspectives and ways of being and thinking around the world.
Global awareness also involves knowledge of world market potentials and
global economic, social, and political trends. Over the next few decades
enormous changes will take place in market potentials in almost every region
of the world, all of which a globally aware person must continuously monitor.
Finally, a globally aware person will keep abreast of the global economic,
social, and political trends because a country’s prospects can change as
these trends shift direction or accelerate.
A globally aware person is knowledge about culture and history. Knowledge
of cultures is important in understanding behavior in the marketplace or in
the boardroom. Knowledge of history is important because the way people
think and act is influenced by their history. Some Latin Americans’ reluctance
about foreign investment or Chinese reluctance to open completely to
outsiders can be understood better if you have a historical perspective.
Global awareness can and should be built in organizations using
approaches. The obvious strategy is to select individual managers
specifically for their demonstrated global awareness. Global awareness can
also be obtained through personal relationships in other countries. Indeed,
market entry is very often facilitated through previously established social
ties. Certainly, successful long term business relationships with foreign
customers often result in an organizational global awareness based on the
series of interactions required by commerce. Foreign agents and partners
can also help directly in this regard. But perhaps the most effective approach
is to have a culturally diverse senior executive staff or Board of Directors.
Unfortunately, American managers seem to see relatively less value in this
last approach than managers in most other countries.
Stages in International Marketing
Firms typically approach involvement in international marketing rather
cautiously, and there appears to exist an underlying lifecycle that has a
series of critical success factors that change as a firm moves through each
stage. For small and medium-sized firms, in particular, exporting remains the
most promising alternative to a full-blooded international marketing effort,
since it appears to offer a degree of control over risk, cost, and resource
commitment. Indeed, exporting, especially by the smaller firms, is often
initiated as a response to an unsolicited overseas order-these are often
perceived to be less risky. Therefore, the following possibilities exist:
Domestic marketing. This involves the company manipulating a series of
controllable variables, such as price, advertising, distribution, and the
product, in a largely uncontrollable external environment that is made up of
different economic structures, competitors, cultural values, and legal
infrastructure within specific political or geographic country boundaries
International marketing. This involves the company operating across
several markets in which not only do the uncontrollable variables differ
significantly between one market and another, but the controllable factor in
the form of cost and price structures, opportunities for advertising, and
distributive infrastructure are also likely to differ significantly.
Export marketing. In this case the firm markets its goods and/or services
across national/political boundaries. In general, exporting is a simple and low
risk-approach to entering foreign markets. Firms may choose to export
products for several reasons. First, products in the maturity stage of their
domestic life cycle may find new growth opportunities overseas, as Perrier
chose to do in the US. Second, some firms find it less risky and more
profitable to expand by exporting current products instead of developing new
products. Third, firms who face seasonal domestic demand may choose to
sell their products to foreign markets when those products are “in season”
there. Finally, some firms may elect to export products because there is less
competition overseas.
A firm can export its products in one of three ways: indirect exporting, semi-
direct exporting, and direct exporting. Indirect exporting is a common
practice among firms that are just beginning their exporting. Sales, whether
foreign or domestic, are treated as domestic sales. All sales are made
through the firm’s domestic sales department, as there is no export
department. Indirect exporting involves very little investment, as no overseas
sales force or other types of contacts need to be developed. Indirect
exporting also involves little risk, as international marketing intermediaries
have knowledge of markets and will make fewer mistakes than sellers.
Multinational marketing. Here the marketing activities of an organization
include activities, interests, or operations in more than one country, and
where there is some kind of influence or control of marketing activities from
outside the country in which the goods or services will actually be sold. Each
of these markets is typically perceived to be independent and a profit center
in its own right.
Global marketing. The entire organization focuses on the selection and
exploration of global marketing opportunities and marshals resources around
the globe with the objective of achieving a global competitive advantage. The
primary objective of the company is to achieve synergy in the overall
operation, so that by taking advantage of different exchange rates, tax rates,
labor rates, skill levels, and market opportunities, the organization as a whole
will be greater than the sum of its parts.
Thus Toyota Motors started out as a domestic marketer, eventually exported
its cars to a few regional markets, grew to become a multinational marketer,
and today is a true global marketer, building manufacturing plants in the
foreign country as well as hiring local labor, using local ad agencies, and
complying to that country’s cultural mores. As it moved from one level to the
next, it also revised attitudes toward marketing and the underlying
philosophy of business.
Ultimately, the successful marketer is the one who is best able to manipulate
the controllable tools of the marketing mix within the uncontrollable
environment. The principal reason for failure in international marketing
results from a company not conducting the necessary research, and as a
consequence, misunderstanding the differences and nuances of the
marketing environment within the country that has been targeted.