Globalization Essay

1719 words - 7 pages

Theodore Levitt, had created a strong influence on globalisation, and since then this term has been on every individual's lips. When his article, "The Globalisation of Markets" was published in 1983, many companies such as Coca-Cola, McDonald's and Walt Disney had followed his view of having a standardised consumer product. Supposedly, a standardised approach would foster mass production hence achieving economies of scale. With a standardised marketing plan, sales would escalate as a product image is created across the globe.However, Levitt's assumptions are invalid because not everyone shares the same taste, culture, customs and traditions. Furthermore, he assumes that customer needs and interests have become homogeneous worldwide, but he had failed to recognise that adaptation of the marketing mix is vital so as to satisfy the needs of the consumers in each region. People around the world still want to preserve their own heritage and culture by purchasing local products. Thus, the companies that have gone global have changed their strategy. Levitt mentions that Coca-Cola is a global company; however its failure has forced the company to "go global but act local". No doubt the core product is the same but the company adapts its pricing, distribution and advertising to suit each market segment and it has 200 other brands that are popular in different countries. For instance, its coffee drink, Georgia Coffee is successful in Japan only and the soy drink is only successful in Hong Kong but not in its home country.Even McDonalds have to adapt its menus to suit the local taste. It definitely wouldn't be able to sell the same menu in its home country to India as the culture there is different and majority of them are vegetarians. In Japan, the "teriyaki sauce" is added to the burgers. The company even changes its advertising message for different regions. Its commercial had failed in Spain when the US commercial was dubbed.Philip Kotler had mentioned that consumers would continue purchasing a product regardless of price due to brand loyalty, thus Levitt's assumption can be easily challenged when he says that people around the world are willing to sacrifice preference in product features, functions and design for lower prices.Also, Levitt had mentioned that "autos, steel, chemicals, petroleum ....." are standardised but he had failed to differentiate that this products are industrial products. For instance, Proton cars have a heating system for the UK region, but for the Asian region it comes with only air conditioning, however, the petroleum, which is an industrial good is standardised and it can be used for the cars in both UK and Asia. Furthermore, Levitt had made a contradicting point when he mentions that Japan modifies the left hand drive of cars for the US region.Basic human values may be the same but our attitudes, beliefs and behaviours vary and this affects our reactions towards messages and products. Culture has a strong impact on product...

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