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Marketing in a Global environment

globalization, system dynamics


What are the major implications of globalization for business today, and how should companies respond innovatively to the challenges in the emerging world market.

Over the past few years Globalization has been by far the most discussed topic In India for a number of reasons. Eventhough , from a historical perspective globalization is definitely not a new phenomenon, considering the trade relationships civilizations established over centuries. Except for brief periods during the dark ages ,medieval ages and cold war days, It has been a fairly flat world for most part of its history.

Whatever may be the fact one has to concede that from Indian industry perspective the process of globalization started only in the late seventies, when the economy started opening up slowly. Multinationals with focus on technology started entering the country. Since ,independence in 1947,Indian establishment has laid more emphasis on civil services and defence , which meant Indian enterprise was mostly commodity and cosmetics. it was not before 1991 ,when the process was accelerated through a series of reforms and deregulation and in late 90’s when it was given a boosting by increasing FDI limits in many sectors that the pressure of competetion started having its Impact on Indian industry. In order to succeed in such an amazingly competitive environment, entrepreneurs, especially on the marketing side are required not only to foster creativity but also develop innovative techniques and processes to advance their interests. Plagiarism is least likely to succeed, because the hierarchy of commercial and cultural offerings available today is evolving rapidly and adoption of a proven process,strategies and promotional techniques may even woo the customer away from the company.

Still , the biggest problem faced is tackling the four P’s of marketing, namely Product,Price, Promotion and Place, as a marketer is challenged to put in place a strategy to address successfully each of the above parameter in the global bazaar, where customer is the king. The first parameter is definitely industry centric as to whether it is a product or a service industry and this defines the customer dynamics.The remaining three parameters are entirely customer centric and hence is to be addressed by the marketer.Comparing Indian companies viz a viz multinationals though the former has the advantage in terms of price,the superior advertising and launching strategy of the latter may gloze over their short comings in terms of price.For example ,take the market for IT professionals.IT industry particularly at the lower level is very competitive with major players recruiting in large numbers every week. Here ,in order to make sure that you have the best of talent for the period the information on requirement should be easily available . IBM came up with an interesting technique to counter this problem. Advertisement for recruitment and contact details are displayed on boards across all major cities in such a way that it is noticeable even with the short attention span of a commuting aspirant. In this way they could ensure that they get maximum number of applications for the job. Such aggressive marketing techniques can put your firm way ahead of competitors. If multinational companies operating in India especially the ones in FMCG sectors need to address the problem of acculturisation and customization of product without risking its identity, their Indian competitors need to address the problem of product quality and creation of new markets for their products.Another interesting technique for extending the reach was developed by Aventis pharma during early days of internet.If some body typed the word “heart burn” in any of the then available search engines the listings would lead to aventis pharma and all its products.

Indian ventures abroad , heirs to tradition begun more than a century ago by an unknown hotelier from central India who started a fast food chain in london during those early days of the raj,have been focussing on services. Thereby success in foreign market for these firms depends on how well they position their offering be it Idlis dosas ,naans or software services viz a viz products of the competetor. For firms dealing with raw materials,FMCG etc success depends on how well they manage their supply chain.

The rising tide of information as a result of globalization continues to confuse the customer , companies must play an editorial role in determining what is relevant for the him. Globalization is about enmeshing of cultures. The success of a company depends upon its awareness of the culture of the region it is operating on. Companies that understand their potential and capability for innovation will thrive. Capability to come up with new business models is an added advantage.


I have already stated that positioning of a product or service plays an important role in its success in the chosen market. Many companies instead of attempting to understand customer behavior and then evolve a suitable positioning strategy,attempt to brainwash the customers of their product by adopting techniques that stir emotions. such tactics can never succeed and are by large unethical business practices. Zig Ziglar ,in his much acclaimed secrets of closing a sale argues that lying about a product does not change its perception. Adoption of technology in marketing practices could improve the Capability of a company to extend its reach as well as increase its customer base. Many companies use GPS(global positioning systems) to track and monitor the flow of their products across different regions.

Professor Jay Forrester is 87 years old. A stalwart from MIT, he is known as father of a research and analysis called system dynamics — a methodology that uses computer-based models to simulate and study the interplay of growth and equilibrium over time. Way back in the 1950’s he envisioned that the techniques developed by him could be useful in a variety of disciplines including economics (say, for predicting cash flows). Absorbing the implications of these models in ways that Professor Forrester prescribes can allow mere mortals to comprehend the obscure nature of (and counterintuitive solutions to) such knotty problems as environmental damage, the boom-and-bust pattern of economic cycles, supply chain malfunctions etc. These problems, says Professor Forrester, are all manifestations of the underlying nature of complex systems, from living cells to organisms to organizations and corporations to nations to the world at large. In his pioneering computer simulations, Professor Forrester modeled the slow-to-emerge “tipping points” (as writer Malcolm Gladwell would later call them) that make systems difficult to manage, yet can also provide hidden leverage points for effective intervention. Modeling this kind of growth and resistance requires nonlinear calculus — a form of math so intricate that even the most gifted and highly trained mathematicians are incapable of solving nonlinear equations in their heads. Professor Forrester’s influence, particularly in business circles, is broader than his modest name recognition might suggest. The principles of system dynamics have been incorporated into scenario planning, war gaming, “lean production,” and supply chain management. More than a dozen universities, most prominently MIT, have business school departments devoted to the field. One of professor Forrester’s simulation prompted MasterCard’s decision to introduce the first third-party affinity cards. The model accurately predicted the amount of market share MasterCard would gain as well as the fact that Visa would match the offering within a year, and that American Express and Discover would not or could not follow in the co-branding.
Master card example shows how a company could exploit technology skillfully to multiply its market share and track the competitors. In a global environment the use of technology for marketing and positioning yields satisfactory results.

Any firm seeking entry into a foreign market should plan the venture in very meticulously. Data on customers should be collected and collated assiduously and periodically reviewed by employing statistical procedures and techniques. This helps in deriving various market measurements and providing more accurate projections .Data on customers should be both qualitative as well as quantitative.

Marketing in an era of globalization provides many challenges. In any region customer segment is heterogenous. Marketers should be creative as well as innovative. Strategies employed must confirm to ethical business practices. skilfull usage of technology in marketing initiatives could provide great results. Meticulous collection of customer data increases marketing efficiency.
The author works as a IT business analyst forSiemens a leading software house, in In India.He holds an MBA in telecom management ,and has Five years of experience in the field of IT systems and applications management.

1.Strategy+Business,(magazine by Booz Allen and Hamilton).
2.Advertising&marketing by ogilvy&mather.
3.All leading newspapers and magazines.
Published: 2007-08-21

About the author or the publisher
A management professional with eight years experience in telecommunications industry, I have written a lot of articles in subjects related to management and strategic information analysis.

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