Global marketing and advertising development based on cultural specificities in the world

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Global marketing and advertising development based on cultural specificities in the world

Lisitsa E.S., Pavlovskaya S.V.



The object of the research: the connection of global marketing and advertising with cultural differences in the world economy.

The main aim of the research: on the ground of revealing the global marketing approaches of TNC's in the world to define main its elements based on cultural differences and to find driving and restraining forces, that affect global integration and global marketing.

The methods: general scientific methods of analysis and synthesis, methods of grouping, detailing, generalization and systematization of data, as well as economic and mathematical models.

The results: The article contains analysis of main approaches to the development of global marketing and advertising of TNC's, taking into account the cultural differences in the world economy, EPRG orientations (Ethnocentric, Regiocentric, Polycentric and Geocentric), and comparative analysis of internationalization and localization marketing strategies. Based on SWOT-analysis of main TNC's global marketing in the world, the main existing combinations of strategic elements and main directions for national companies are identified.

The results can be used to increase the quality of marketing strategies in national companies and could help in the process of internalization, to promote the international trade, competitiveness and national companies' marketing strategies due to cultural differences.

Conclusion: Globalization has led to the strengthening of foreign economic relations between states and the formation of a new global infrastructure. This predetermined the relevance of the creation of national companies ' marketing strategies, based on the global marketing strategies of TNCs with cultural differences of host countries.

To take into account the cultural differences of countries' domestic markets allows to avoid significant losses building an appropriate marketing strategy (for example, an EPRG system), to build an appropriate symbiosis of all the company's resources (including financial, labor, innovation, etc.), which allows to gain new niches in the market or keep competitive advantages. The regional trade agreements, the removal of tariff and non-tariff restrictions in world trade also influence. It allows to identify the driving and restraining key factors affecting global integration and global marketing strategies in modern conditions.

Key words: global marketing and advertising, global strategy, EPRG system, multinational corporations, China, advantages, advertising, internalization, localization.



Розвиток глобального маркетингу та реклами з урахуванням культурних особливостей в світі

Лисиця К.С., Павловська С.В.

Предмет дослідження: взаємозв'язок глобального маркетингу і реклами з культурними особливостями країн у світовій економіці.

Мета дослідження: на основі аналізу підходів транснаціональних корпорацій до формування глобальних маркетингових стратегій визначити основні елементи з урахуванням культурних відмінностей приймають ринків і виділити рушійні і стримуючі фактори, що впливають на глобальну інтеграцію і маркетинг.

Методи: загальнонаукові методи аналізу і синтезу, методи угруповань, узагальнення та систематизації даних, а також економіко-математичні моделі.

Результати роботи: В статті міститься аналіз основних механізмів побудови глобальної маркетингової стратегії і реклами ТНК, сформованих з урахуванням культурних відмінностей країн в світовій економіці, досліджено основні види маркетингових стратегій на основі EPRG-схеми, представлений компаративний аналіз маркетингових стратегій інтерналізації та локалізації, використовуваних різними ТНК (включаючи ТНК Китаю). На основі SWOT-аналізу основних елементів глобальних маркетингових стратегій ТНК виділені основні сполучення стратегічних елементів і напрямків розвитку національних компаній.

Галузь застосування результатів: Результати дослідження можуть бути використані при формуванні маркетингових стратегій національних компаній при виході на міжнародний ринок, допомогти в процесі інтернаціоналізації компанії, посилити положення компаній в міжнародній торгівлі за допомогою побудови враховує культурні відмінності маркетингової стратегії і реклами.

Висновки: Процеси глобалізації призвели до посилення зовнішньоекономічних взаємозв'язків держав і формування нової світової інфраструктури. Це зумовило актуальність формування маркетингових стратегій національних компаній з урахуванням світового досвіду маркетингових стратегій ТНК і з урахуванням культурних відмінностей приймаючих країн.

Облік культурних відмінностей внутрішніх ринків країн дозволяє уникнути істотних втрат при побудові відповідної маркетингової стратегії (наприклад, EPRG-схема), побудувати адекватну симбіоз всіх ресурсів компанії (включаючи фінансові, трудові, інноваційні та ін.), Що дозволяє завоювати нові ніші на ринку або утримати конкурентні позиції. Цьому також сприяє наявність регіональних торгових угод, зняття тарифних і нетарифних обмежень у світовій торгівлі. Все це дозволяє виділити рушійні і стримуючі ключові фактори, що впливають на глобальну інтеграцію і глобальні маркетингові стратегії в сучасних умовах.

Ключові слова: глобальний маркетинг, глобальні стратегії, EPRG схема, багатонаціональні корпорації, Китай, переваги, реклама, інтернаціоналізація, локалізація.



Развитие глобального маркетинга и рекламы с учетом культурных особенностей в мире

Лисица Е.С., Павловская С.В.

Предмет исследования: взаимосвязь глобального маркетинга и рекламы с культурными особенностями стран в мировой экономике.

Цель исследования: на основе анализа подходов транснациональных корпораций к формированию глобальных маркетинговых стратегий определить основные элементы с учетом культурных различий принимающих рынков и выделить движущие и сдерживающие факторы, влияющие на глобальную интеграцию и маркетинг.

Методы: общенаучные методы анализа и синтеза, методы группировок, обобщения и систематизации данных, а также экономико-математические модели.

Результаты работы: В статье содержится анализ основных механизмов построения глобальной маркетинговой стратегии и рекламы ТНК, сформированных с учетом культурных различий стран в мировой экономике, исследованы основные виды маркетинговых стратегий на основе EPRG-схемы, представлен компаративный анализ маркетинговых стратегий интернационализации и локализации, используемых различными ТНК (включая ТНК Китая). На основе SWOT-анализа основных элементов глобальных маркетинговых стратегий ТНК выделены основные сочетания стратегических элементов и направлений развития национальных компаний.

Результаты исследования могут быть использованы при формировании маркетинговых стратегий национальных компаний при выходе на международный рынок, помочь в процессе интернализации компании, усилить положение компаний в международной торговле посредством построения учитывающей культурные различия маркетинговой стратегии и рекламы.

Выводы: Процессы глобализации привели к усилению внешнеэкономических взаимосвязей государств и формированию новой мировой инфраструктуры. Это предопределило актуальность формирования маркетинговых стратегий национальных компаний с учетом мирового опыта маркетинговых стратегий ТНК и с учетом культурных различий принимающих стран.

Учет культурных различий внутренних рынков стран позволяет избежать существенных потерь при построении соответствующей маркетинговой стратегии (например, EPRG-схема), построить адекватный симбиоз всех ресурсов компании (включая финансовые, трудовые, инновационные и др.), позволяющий завоевать новые ниши на рынке или удержать конкурентные позиции. Этому также способствует наличие региональных торговых соглашений, снятие тарифных и нетарифных ограничений в мировой торговле. Все это позволяет выделить движущие и сдерживающие ключевые факторы, влияющие на глобальную интеграцию и глобальные маркетинговые стратегии в современных условиях.

Ключевые слова: глобальный маркетинг и реклама, глобальные стратегии, EPRG схема, многонациональные корпорации, Китай, преимущества, реклама, интернационализация, локализация.



Relevance

In international marketing, culture is an important factor that cannot be ignored. Cultural differences will bring about differences in consumer attitudes and consumer behavior. In other words, effective marketing in a particular cultural environment may not be effective in another culture, and may even cause misunderstandings, frictions, and conflicts. Only by adapting to different cultural environments and integrating them can local people recognize it. In the process of marketing, which involves the transition from one cultural environment to another cultural environment between countries, scientific analysis and research of cultural differences will be the prerequisite and guarantee for the success of international marketing activities.

Many enterprises in China have gradually shifted from «inward-oriented» to «extroverted», actively exploring the international market, and participating in all-round international business activities. Chinese experience of adaptation to cultural differences in marketing strategies is useful for companies from countries with emerging markets. They must pay attention to the influence of various cultural and environmental factors and analyze and adapt to these different cultural environments..

Object of the research: global marketing and global marketing strategies in the world.



Reference review

There are a lot research papers on global marketing and advertising (Czinkota, Kotler, Omi, Mariere de Mooij, Craig, Bradley, Hofstede, Levitt, Payne, Ronkanien, Fletcher, Brown, Jain, Jeannet and Hennessey, Johansson, Keegan, Green, Terpstra, Sarathy and oths.). Among Chinese and Asian authors could be mentioned Appiah-Adu, Amoako, Ahmed, Ullah, Ghanei, Liu Xisong, Yu Dengke, Li Wenqing, Dong Weiwei, Gou Haisha, Xiao Kang, Kun Qi, Sabhash Jain and oths.

The aim of the work: on the ground of revealing the global marketing approaches in the world to define main Chinese companies' strategies and to find some possible elements for national companies' marketing strategies due to cultural differences through the comparative analysis of multinational corporations' marketing strategies in Chinese market.

Targets of the research are the following:

- analysis of the main approaches to global marketing and global strategies;

- revealing the main components of marketing strategies with the basis of cultural differences;

- comparing marketing strategies of MNCs (globalization strategy) and Chinese companies' (localization strategy);

- indicate main elements for companies' strategies from countries with emerging markets.

The methods: general scientific methods of analysis and synthesis, methods of grouping, detailing, generalization and systematization of data, as well as economic and mathematical models.

The content of the article

In global marketing organizations begin to develop and run operations in the targeted country or countries outside of the domestic one. The table 1 outlines a typology of terms which describes the characteristics of companies at different stages in the process of evolving from domestic to global enterprises.

Table 1. Stages of domestic to global evolution

Management emphasis	Stage one Domestic	Stage two International	Stage three Multinational	Stage four Global
Focus	Domestic	Ethnocentric	Polycentric	Geocentric
Marketing strategy	Domestic	Extension	Adaption	Extension
Structure	Domestic	International	Worldwide area	Adaption creation matrix/mixed
Management style	Domestic	Centralised top down	Decentralised bottom up	Integrated
Manufacturing stance	Mainly domestic	Mainly domestic	Host country	Lowest cost worldwide
Investment policy	Domestic	Domestic used worldwide	Mainly in each host country	Cross subsidization
Performance evaluation	Domestic market share	Against home country market share	Each host country market share	Worldwide

Source: Adapted from [8].

Global marketing refers to the global layout and coordination of companies to integrate their marketing activities around the world in order to gain a global competitive advantage. Global marketing has three important characteristics: global operations, global coordination, and global competition. Therefore, companies that conduct global marketing must not be limited to national boundaries when assessing market opportunities and formulating marketing strategies, but should look globally. It adopts a unified and standardized marketing strategy in the world.

More recently the focus of marketing is shifting to embrace both customer acquisition and customer retention, ensuring that appropriate amounts of time, money and managerial resources are directed at both of these key tasks. Marketing involves competing through competencies and capabilities, and building value to customers through managing relationships that deliver value [4].

Terpstra and Sarathy [11] defined international marketing as «finding and satisfying global customer needs better than the competition, both domestic and international, and of coordinating marketing activities within the constraints of the global environment». This definition is still considered in the traditional context and reflects on how international marketing concepts are falling behind the developments in the mother discipline of marketing.

Most scholars on international marketing have agreed that the basic nature of marketing does not change from domestic to international marketing, but marketing outside national boundaries does pose special problems as it operates simultaneously in more than one kind of environment.

With the advancement of science and technology and the development of transport and communication, the exchanges between countries have become more frequent, and the trend of world economic and social integration has been further strengthened. The world has more and more commonality in many aspects, and the demand between countries' markets is also increasing.

Global marketing is largely a business philosophy. Based on EPRG-approach there are different marketing approaches: E (Ethnocentrism) - home centeredism; P (Polycentricism) - polycentricism, R (Regiocentrism) - regional centeredism, G (Geocentrism).

Figure 1. EPRG framework

Source: The author's research



Ethnocentric orientation leads to a standardized or extension approach. Foreign operations are typically viewed as being secondary or subordinate to the country in which the company is headquartered. Sometimes valuable managerial knowledge and experience in local markets may go unnoticed. Manufacturing firms may view foreign markets as dumping grounds with little or no marketing research conducted, manufacturing modifications made or attention paid to customer needs and wants.

Figure 2. EPRG orientations

Source: The author's research

For example, in Nissan's early days of exporting to the United States, the company shipped cars for the mild Japanese winters. Executives assumed that when the weather turned cold, Americans would put a blanket over their cars just like Japanese would. Nissan's spokesperson said, «We tried for a long time to design cars in Japan and shove them down the American consumer's throat. That didn't work very well.»

«Citicorp» used polycentric approach until the mid-1990s. Marketing directors try to instill a higher degree of integration among operating units.

Using regiocentrism marketing strategy, «GM», executives were given considerable autonomy in designing autos for their regions. One result was the use of 270 different radios being installed around the world.

Globally centralism and companies adopt different marketing strategies. Their business philosophy is also different.

As a result, in the above-mentioned EPRG system, the national center is adopting the strategy of market expansion; polycentricism adopts the multinational strategy; the regional centerism adopts the regional marketing strategy; and the global centerism adopts the global marketing strategy. And, global centralism treats the world market as a whole, not a combination of a series of country markets.

Cultural differences are widely used to refer to the cultural differences in different regions of the world. Regional differences refer to differences in geographical areas caused by geographical differences. Figure 3 shows an illustration from Usunier (2000) contextual scale of differing cultures.

Figure 3. Contextual scale of different cultures

Source: [11]

global marketing advertising cultural

The impact of cultural differences on international marketing include:

1. Cultural differences create more market opportunities for international marketing. Under different cultural backgrounds, different living customs and market conditions, technical conditions, and belief traditions can often create more market opportunities for enterprises.

2. Cultural differences are conducive to international marketers' market segmentation. Market segmentation is the basic method for companies to choose the target market. The target market is based on market segmentation and the premise, only according to a certain standard for market segmentation. In international marketing, culture is the most important influencing factor of corporate marketing activities, and market segmentation is based on cultural differences, which is beneficial for enterprises to identify cultures in different markets. Preferences to better meet consumer needs,

3. Cultural differences set barriers to the entry of international marketing. Cultural differences have increased the difficulty of the company's international marketing research.

From another side, culture affects people's behavior. The impact of these elements in international marketing is:

- language can be described as a reflection of culture;

- customs and habits should be strictly monitored because it is the difference between cultures (f.e. righthanded culture);

- technological progress has shifted towards cultural convergence;

- education includes the process of including skills, thoughts and attitudes, and training in a particular discipline;

- values and attitudes help determine who believes to be correct or appropriate, what is important, and what is desirable;

- religion can provide a basis for sharing similarities across shared beliefs, is very important in different countries. Consumption patterns may be demanded or banned by religions.

Based on cultural differences main characteristics of marketing advertising are:

(1) Advertising Powers Marketing Strategy. The role of advertising is to increase the brand's exposure and popularity, and to narrow the distance from consumers in order to provide conditions for further product promotion. The realization of marketing strategy or product promotion cannot be separated from advertising.

(2) The same place for marketing strategy and advertising is to create or maintain a brand. The formulation of the marketing strategy is to solve the problem and increase the sales of the product, and finally increase the brand awareness of the product. A product must establish a good image in the public, must rely on a certain brand, and then can be better accepted by the public, and companies invest in advertising to do marketing is also to win a good reputation in the public. As a result, this reputation is the brand. To maintain the brand and maintain the image of the brand in the public's mind, large-scale advertising is a good shortcut.

(3) Advertising helps to improve the effectiveness of marketing strategies.

Excellent example is «Procter & Gamble»'s advertising strategy, which include: localization of international brand advertising, P & G's media advertising strategy, the perfect combination of P&G advertising strategy and other promotional methods

Advertising as part of marketing mix 4P promotions, combined with other promotional tools will have a multiplier effect. P & G's advertising strategy is not used alone, but combined with other promotional measures to promote sales to each other.

Unfortunately, it could be the lack of advertising in the current marketing strategy. It will be:

1. Lack of innovation on its own. A good marketing strategy must be supported by good advertisements. A reasonable and effective marketing strategy must have a certain degree of innovation. With the rapid development of China's advertising, some problems have emerged (low level of advertising production, low professional quality).

2. There is no rational and correct use of media portfolio, resulting in low resource utilization (many enterprises in China didn't fully understand the advantages of various advertising media).

3. Lack of clear understanding of marketing strategies and advertising marketing.

At present, in China's large-scale enterprises and well-known domestic and foreign brands, the company has a high degree of internationalization due to its integration with the international market. Therefore, there are independent planning departments and professional marketing planners who are engaged in marketing planning and have high professionalism.

Global marketing has become a right hand tool of the global economy because it respects cultural differences, covers the barriers of cultural differences. For example, the distribution of goods (the 4th global marketing mix factor) is also dependent on the cultural differences. The transport systems, logistical systems, wholesale systems and retail systems differ across the European countries because of legal issues. The cultural differences in these systems across the world have a direct impact on the distribution of products. For example, in some countries a wide range of products can be sold in the retailing outlets, while in other countries the retailing outlets can sell only specialized products [7].

Due to this, global marketing and cultural differences cannot be separated, they have become inter-linked and inter-dependent. Many global opportunities have arisen because of the clustering of market opportunities worldwide. In short, Chinese enterprises must «go global» to enter the international market and actively participate in international competition in order to survive and develop.

Under the requirement of «go global», Chinese enterprises have the following advantages: policy support advantages (Chinese enterprises can effectively use various rules and policy support), location advantages (location of resources, location of industries), market location (Chinese market is the same with the world market, but also the unique, creating a diversity of needs), many advantages of overseas, China's international relations and reputation advantages.

Under such circumstances, the needs of Chinese enterprises to «go global» need to achieve the following strategic objectives and requirements:

1. The company should have a strategy of international development, which include company's competitiveness and internationalization strategy. The company's core competitiveness includes product brands, technology systems, information networks, organizational management systems, and corporate culture. The internationalization strategy is the long-term goal that enterprises determine in order to adapt to changes [5].

2. The company will develop to scale and strengthen the competitive strength in the international market. They can achieve economies of scale by expanding production scale, reducing the cost of export products, improving the economic efficiency of enterprises.

3. A company moves from a domestic operation to a transnational operation.

4. Use high technology/innovations to transform traditional Chinese products and optimize product structure.

5. Implement brand strategy to improve the international image and competitiveness of Chinese products.

6. Realize the modernization of enterprise management and optimize the structure.

7. The choice of investment location. Chinese enterprises should consider the target market and investment location strategy according to their business objectives, technical level and strength [1, 3].

In short, I believe that «going global» to open up the international market is an important strategic choice for Chinese companies under the background of global economic globalization. Countries in the world have actively participated in international competition and cooperation

Using target market analysis and SWOT analysis of political and legal environment, and technical environment helps the determine the main elements for future marketing strategy planning (table 2).

For transnational companies to occupy the global market and promote global marketing strategies, internationalization and localization are two aspects of a problem. Multinational corporations must adapt to the different needs of the target consumers in each country's markets, maximize the integration of internationalization and localization. To do this, they must establish a marketing concept that integrates internationalization and localization.

The company's localization strategy is mainly reflected in its development stage and consolidation stage. There are many companies that have succeeded because of their localization, and many companies have achieved benefits because of globalization.

Table 2. SWOT analysis of TNC's global marketing in the world (main approach elements)

	S Advantage Innovation, R & D capabilities Marketing capabilities Low prices, rapid response There are a number of loyal customers	W disadvantage The overall market share should be extended. The need to strengthen internal management. The lack of international management talent.
O opportunities Internet and global expansion, maintain rapid growth Globalization has led to lower production costs	SO strategy Adopt international strategy	WO strategy Strengthen the management and service outside To introduce international talent
T threat The changing needs of consumers increasingly Industry could be more competitive The price is getting cheaper	ST Strategy Improve existing product design	WT Strategy Changing the mode of development

Source: Adapted from [2, 6, 9].

The reasons for the globalization of TNC's mainly lie in: the promotion of free trade (f.e. declining tariffs, establishment of regional trading groups), financial integration and capital market opening, advances in communications and technology make simpler and cheaper), general customer needs.

In order to meet the market requirements of the host country, companies can adopt localization strategies. The difference between this strategy and the globalization strategy lies in providing products and services that can better meet the needs of the local market according to different markets in different countries [10].

In short, enterprises should pay attention to in the process of internationalization.

(1) The duality of competition and cooperation in the relationship between enterprises.

(2) Integrate local resources and culture to realize the company's localization strategy.

Key factors that affect global integration and global marketing are:

- quality: global and domestic companies may each spend 5% of sales on R&D but the global company has much more revenue from its markets;

- world economic trends: economic growth in key developing countries equals major market opportunities. Slowing growth in developed countries has compelled managers to look abroad. Rapid economic growth, in a country such as China, has caused policymakers to open markets to outsiders. Competition can strengthen domestic companies. All-round trends to free market, liberalization, and «light» regulation are another driving forces;

- leverage: experience transfers, economies of scale, global strategy, competitive advantage, to focus resources to create superior value. Experience transfers mean that a company can leverage its experience in any part of the world. It can use management practices, strategies, products, advertising appeals, or sales or promotional ideas. Economies of scale can be gained in manufacturing and by centralizing functional activities. A global strategy is built on an information system that scans the world business environment to identify opportunities, trends, threats, and resources.

Among restraining key factors, that affect global integration and global marketing, could be:

- management short sight: ethnocentric companies will not expand geographically. Successful global companies have learned to integrate global vision and perspective with local market initiative and input;

- organizational culture;

- national controls: each country tries to protect its home industry through tariff and non-tariff measures. Through GATT, WTO, NAFTA, EU, EEU and other agreements and organizations, tariffs have been largely removed in high-income countries. Non-tariff barriers to trade include «buy local», food safety rules, and others;

- opposition to globalization: this term means the hostility toward trade agreements, global brands, or company policies. There are a lot of opponents to globalization, which include NGOs, labor unions, students. In developing countries, many researchers believe that free trade agreements benefit the world's most advanced countries.



References

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