The two alternative approaches of Pan-Global Marketing Strategy and Global Localization Marketing Strategy mean that businesses have to make a major strategic decision when marketing internationally. The product will need to be either standardized or adapted.
Globalization and the aggressive growth of some large multinational companies have promoted the increased use of international marketing strategies.
However, due to the growing presence of foreign competitors, businesses are finding it increasingly important to win over competition. In fact, many of the issues that a business may face when entering new overseas markets can be overcome by detailed market research. But, this can be costly.
This is where strategies for international marketing come in handy. Strategies for international marketing are methods to overcome problems of entering into foreign markets.
Definition of Pan-Global Marketing Strategy
Pan-Global Marketing Strategy means that the Marketing Mix is standardized for all customers. The same product is sold across the world, as if the entire world was a single market. This includes selling the same consistent goods in the same way everywhere with the same promotional message around the globe ignoring local cultures.
Pan-Global Marketing Strategy is also called global marketing. It is employing a uniform approach to the marketing of goods in overseas markets rather than adapting marketing to the local conditions. Is the marketing of a product by using the same marketing strategy in numerous countries to gain from marketing economies of scale.
Global marketing is an extension of international marketing. It involves selling the same product using the same marketing approach throughout the world.
How does Pan-Global Marketing Strategy work?
Pan-Global Marketing Strategy: Single-product Marketing Mix → Global market
Pan-Global Marketing Strategy involves selling the same product by using the same marketing approach throughout the world. It adopts common products, brand messages and promotional campaigns for all countries across the whole world.
It is mainly used by global brand leaders.
Examples of Pan-Global Marketing Strategy
Mass producers: The Coca-Cola Company is the multinational company that designs, produces and sells its products to a world audience. The Coca-Cola brand is the most recognized in the world with brand recognition as high as 99% among consumers around the world. Thus, the company is able to exploit global marketing and production economies of scale by operating with considerable constancy at relatively low costs, as if the entire world or major parts of it were a single country.
High-end exclusive brands: The upmarket brands with international appeal for their exclusivity such as Rolex watches, Porsche cars and Dolce&Gabbana dresses use the opportunity to sell the same product as famous pop stars and film actors. Exclusivity is the key promise made by these brands, so consumers do not want them adapted to their local markets.
Mass-appeal brands: Mass-appeal brands such as Apple or Nike have substantial opportunities for global campaigns and selling standardized products benefiting from marketing economies of scale. However, these brands often find themselves in the cultural backlash being accused of cultural imperialism by an expanding anti-globalization movement.
Advantages of Pan-Global Marketing Strategy
Advantages of Pan-Global Marketing Strategy include:
- Higher brand recognition globally. Thanks for international promotion based on the widespread usage of the Internet and satellite TV, the business can establish a common brand identity for its products. This will cause higher recognition among customers who tend to travel internationally more and more often.
- Significant cost reductions. This strategy can help with cost reductions which can be substantial as the same Marketing Mix is used for selling the same product in all markets. Developing different products that may have only short Product Life Cycles for each country requires the firm to spend huge sums of money. Additionally, using the same advertising strategy for the whole world or region contributes to savings costs too.
- Fits the globalization trend. As the differences between consumers in different countries keep on reducing, people in different countries have more and more in common with each other than before. Hence, Pan-Global Marketing Strategy fits the underlying trend of globalization.
Disadvantages of Pan-Global Marketing Strategy
Disadvantages of Pan-Global Marketing Strategy include:
- Missed demand. Despite growing similarity between consumer tastes in different countries in recent years, it might still be necessary for the business to develop different products to suit cultural variations of local customers. Otherwise, they may simply not be willing to purchase the product that does not meet their expectations. Market opportunities will then be lost by trying to sell the same product everywhere. Additionally, setting the same price in all countries may fail to consider different average income levels of local consumers.
- Cultural issues. Using the same brand name across all markets may not be successful as some words can be culturally inappropriate. Also, some brands rand names do not always translate effectively into other languages. Some names may cause offense or unplanned crisis for the company, if the brand name to be used in all markets is not made with special consideration.
- Legal restrictions. As legal restrictions differ substantially between different countries, some products and their promotions may be illegal to sell and use. There will be restrictions what can be sold and shown in advertisements. For example, promotions involving harmful computer games, adult entertainment, gambling or alcohol tend to be restricted in many countries.
In summary, standardized product advantages include economies of scale in product development, economies of scale of production and economies of scale in marketing. The Pan-Global Marketing Strategy can be used to create a global brand identity and saves on the costs of offering different products to different markets.
