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Opinions of Monday, 28 June 2010

Columnist: Acheampong, Stephen

Global Marketing

The level of societal development determines the market system that operates. Society has been developing from simpler to complex and marketing has also developed from barter to global. Before the introduction of money, people were exchanging goods for goods. Barter system of marketing was associated with numerous problems including valuation and double coincidence of wants. The introduction of money as a medium of exchange and a measure of value resolved the problems of barter and paved way for specialization and international trade. Provision of services including transportation, communications, insurance, agency, retailing, wholesaling, advertising, warehousing, and financing emerged to facilitate marketing. During the industrial revolution, domestic and international (import and export) trade became very popular but were associated with problems including trade restrictions, import and export licensing, pricing, producer and product information, price discrimination and so on. While domestic trade concerns exchange of goods and services within the confines of a country, international trade is about exchange of goods and services between countries. For instance, a trade between Kumasi and Accra is a domestic one while a trade between Ghana and USA is regarded as an international.

Global marketing is “marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives.” (The Oxford University Press) The emergence of computers and internet has reduced the world to a global village where producers and customers can just log onto the internet to interact and exchange goods and services.

Factors that have Promoted Global Marketing

These include;

• Information, communications Technology (ICT); the introduction of TV, radio, television, computers and internet has enabled producers launch their products and services worldwide. The introduction of computers and the internet has reduced the world to a global village where individuals, companies and countries can exchange goods and services. Business organizations engage in core business functions in product design, manufacturing, finance, and customer support to locations in other countries which have cost advantage. Therefore, the success of information age companies depends on their ability to operate globally. ICT provides the necessary information and communication tools for managing global businesses. Thus, coordinating, controlling, distributing, marketing, supplying and communicating as well as conducting 24-hour business operations. Customers now have access to 24-hour information worldwide in terms of price, quality, design and product use.

• Standardization; producers of goods and services have standardized their products to be used worldwide. For instance, North American countries use to produce electronic products with 110 voltages which could only be use those countries. Right now most producers are producing goods with 110-240 automatic switches to be sold on the global market. Again right hand side steering driving by most countries has enabled automobile producing countries market their vehicles in the global market. • The Emergence of world and international organizations – The creation of organizations such as World Trade Organization (WTO), European Union (EU) and Economic Community of West African States (ECOWAS) has broken a lot of socio-economic-politico barriers that inhibit free movement of goods and services. These include; trade restrictions, import and export licensing, exchange rate, immigration restrictions and language barriers. Most of these organizations promote free trade and freedom of movement. ECOWAS treaties and protocols for instance aim at removing all trade barriers to foster movement of goods, services and people.

• The transformation of industrial economies; knowledge and information revolution that began at the end of the 20th century has transformed the industrial economies from manufacturing to knowledge and information based-service economies. In most of the advanced nations like USA, Japan and Germany, most people no more work in factories and farms but have shifted to provide business services like banking, insurance, education, finance, delivery, copying and computing. Production of such products like computer games and financial services require a great deal of knowledge and they are of a great economic value. In USA for instance, knowledge and information based service constitutes about 60% of the GDP and employs 55% of the work force. Most of the factories have been moved to developing countries like China and India which now have comparative cost advantage in industrialization. The good news is that both the developing and advanced nations can take advantage of information and communication technologies to develop. In Ghana and in most developing nations, knowledge and information-based service businesses are growing faster. Internet, communications, computing, finance, insurance, and banking businesses now contribute to GDP and employment.

• Transformation of the business enterprise; Information and communication technologies have affected business organizations in the way they conduct business. Industrial age business systems were characterized by bureaucratic procedures, hierarchical and centralized organizational structures that caused delays and inefficiencies. E-business age companies have flattened organizational structures, with flexible and decentralized arrangements. They also rely on instant information and deliver customized products. The information age management systems depend on knowledge and creative abilities that can position the company in a competitive advantage rather than relying on old fashioned procedures that caused delays and inefficiencies. ICT-age companies regard the customer as the king and therefore respond to demands at the right time, with the right product, price and quality.

• Global culture; the introduction of Television, computers and internet has exposed the world to different cultures. Dressing, production systems, entertainment, language, and education have been influenced by the emerging technology to the extent that the world is becoming more or less a homogeneous society rather than being heterogeneous as it used to be.

• The emerging digital firm – A digital firm refers to the “one where nearly all the organization’s significance business relationship with customers, suppliers, and employees are digitally enabled and mediated core business process are accomplished through digital networks spanning the entire organization or linking multiple organizations” (Kenneth & Jane Laudon, 2004) A digital firm always has all the business information available and responds to customers very quickly. The digital firm has the potential to be more profitable and highly competitive than the rival traditional firm. Its operation eliminates middlemen, inventory and processing costs. A digital firm is defined by four major systems namely; supply chain management, customer relationship management systems, enterprise systems and knowledge management systems.

? Supply chain management uses network and software to integrate the relationships between suppliers in order to economize production, delivery, sourcing, planning and inventory cost.

? Customer relationship management systems seek to develop and maintain close and integrated relationship with customers. The firm tries to maintain customers profile on database and manages them. The system helps to identify profitable and loyal customers.

? Enterprise system uses the network to integrate information and internal business processes from all departments including production, finance, accounting, human resource, and marketing. Knowledge management system has the potential to create, innovate, research, store and share information. These are the four main areas where digital firms are investing to integrate their business systems.

• Collapse of communism; The collapse of communism removed the socio-economic-politico barriers and paved way for exchange of goods and services worldwide.

• United States factor; Global marketing developed mostly in USA. Inventions and entrepreneurship spirit brought about the need for distribution to the rest of the world. America opened up for marketing and a lot of professionals in the industry emerged while Europeans paid little attention to marketing. In view of this, Americans were able to establish a number of multi-national corporations including Coca Cola.

• Stephen Acheampong (Author of Achie Series including ICT for SHS). MBA, ICT, Certified Teacher (USA), CIM (AP) UK, PG (Dip. Ed), BA. (Hons.) Ghana.