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1 1- Globalization in Multinational Marketing Concept Levitt (1983) proposed that firm must adopt a homogenized approach for marketing in order to succeed in the international markets. His article included subject matters of differentiating the effectiveness and efficiency of global and multinational corporations by emphasizing a fundamental factor like technology which determine dynamic trends within the lives of people. Levitt (1983) mentions that the essentiality of the emergence of global markets being beneficial for multinational corporations and consumers. The idea pursued to express the standardization of products in global markets. The standardization of products assure that consumer received an appropriate value such as low price, high quality and reliability, and sufficient suitability. In this view, technology is such a tool to offer this opportunity to consumers around world. Levitt (1983) argued converging consumption pattern means almost most consumers around world desire same products (global products) and wish for modernity (prefer low prices). However, multinational corporations deal with high costs for adjusting and adapting the preferences and practices of a certain markets segment. Therefore, it is considered that companies activities are affected in different areas such as marketing, promotions, and distributions and so on. In comparison, due to the global markets, opportunities may increase in the economic scale in terms of division of labor and specialization on production. In additional, global market give the opportunity to people and nations to optimize their conditions through trades. Beside, customers desire to have world-standardized products, companies also seek to standardize their products with lower costs for offering. Therefore, the customer’s tastes have become homogenized. Technology has significantly affected on the trend of business and push the global toward homogenizing as a result the world’s preference structure has become homogenized. Strategy of multinational corporations should be shifted to global corporation and force suitable standardised products globally instead of adapt to superficial differences. “Offering everyone simultaneously high-quality, more or less standardised products at optimally low prices” (Levitt 1983). Therefore, it is better to have a few standardized markets instead of many customized markets while the mission of global products is provided modernity at lower prices. Critics of Levitt’s perspective claim that global standardization does not work in the reality and a product should be customized for each culture. Kotler states that the average product requires to adapt at least four or five out of a set of eleven marketing elements (labeling, packaging, materials, colors, name, product features, advertising themes, media, execution, price, and sales promotion). Kotler also emphases that all eleven elements should be reviewed before standardization is considered. 2-Customizing Global Marketing (Quelch & Hoff (1986). Quelch & Hoff (1986), provide a framework to help managers think and structure the different areas of the marketing function as the business shifts to a global approach. Then they provide the information of the challenges of global marketing. According to Quelch & Hoff (1986) evolution and tradition are two key factors that determine companies position in global marketing. In this senses, they considered two examples; Coca-Cola & Nestle. Coca-Cola is a company that applies global marketing principals such as brand name, formula, advertising, and design standard and so on, but in the meantime local managers are in charged for distribution programs and sales locally. Or Nestle to prevent distribution disruptions gives significant self-rule to the local managers to respond to local consumer’s needs. They mentioned to the four dimensions of global marketing which each of them demonstrates the degree of standardization or adaptation. These dimensions are; business functions, products, efficiencies, and cultural grounding. Global Marketing Strategies Companies involved in international marketing for several reasons; market expansion and new profit opportunities. When a company decides to going to the international market, it has to determine its marketing strategy in international markets (maintain centralized control or adjusted its products and marketing programs). If the company wants to maintain strong centralized control and uniformity in products and marketing activities, indeed, the company chooses to have a standardization strategy. But if a company wants to adjust its products and marketing activities to the need and preferences of local markets around the world, it choose to have a localization strategy. Below are the primary benefits of a global standardization strategy: Lower operating costs and economies of scale in product development and marketing are two important benefits of a global standardization strategy for corporations. Because marketers can use the same approaches in marketing activates, promoting, and delivering products and services around the world. Therefore, in this way, the companies have a competitive advantage in developing a unified brand, brand awareness and brand equity in the worldwide. Localization may involve: 1) Altering existing products to fit the needs of the local target market 2) Creating completely new products to fit the needs of the local target market. Although localization does increase the cost and complexity associated with developing and marketing tailored products, its supporters argue that it results in products and marketing strategy that are a better fit for local market needs and ultimately a greater sales success. A localized approach can protect companies from high-profile, disastrous consequences when a standardized product fails. Standardization is often responsible for marketing misfires like offensive marketing images, catastrophic naming, and product-design glitches. Its critics argue that standardization strategy overestimates how well any single, uniform product and marketing approach will succeed in markets all over the world. The Middle Ground: Blending Standardization and Localization In reality, global marketing cannot be consider as either full standardization or localized control of marketing and products. In reality, global marketing is not an either/or proposition requiring either full standardization or localized control of product and marketing. In fact, a successful global approach can fall anywhere on a spectrum–from tight worldwide coordination on programing details to loose agreements on product ideas. Most organizations find that flexibility is essential in order to allow organizations to capitalize global opportunities available to them. The right answer for each business depends on organizational structure, leadership and operations; the product category; the markets in question; and other factors. Both strategies offer attractive benefits as well as costs and risks. Most organizations find ways to balance the options available to them with a focus on how to maximize success in their target markets. 3-Managing in a Borderless World Managers of MNEs are often nearsighted. They focus only on home country customers and organizational units that serve them. However, in order to be effective managers of global operation should maintain a genuine equidistance perspective or in the other words thinking globally. In terms of competitive perspective, the world is borderless because government has no longer control and monopoly the information flow, therefore, the information is flow freely now for everyone. Because of the information flows around the world, people everywhere can be aware of other people prefer in different countries through TV or social media. Therefore, geographical borders are becoming irrelevant, global consumers increase and as a result global taste and need lead to global products. Insiderization is the ability of a MNE to become a full-fledged insider in the local market. Global companies eg. Nestle, Unilever, Coke, etc have become global by insiderization. A headquarter mentality is the expression of managerial nearsightedness. To become truly global, companies must create a mini -UN (Raymond Vernon of HBS) model by replicating business systems in their subsidiaries. Managers need to identify the balance between adaptation vs standardization through insiderization (do it as locals do). Cultural Section: 4-Brand Concepts as Representations of Human Values: Do Cultural Congruity and Compatibility Between Values Matter? Torelli,.. 2012 Global brands are faced with the challenge of conveying concepts that not only are consistent across borders but also resonate with consumers of different cultures. Building on prior research indicating that abstract brand concepts induce more favorable consumer responses than functional attributes, the authors introduce a generalizable and robust structure of abstract brand concepts as representations of human values. Using three empirical studies conducted with respondents from eight countries, they demonstrate that this proposed structure is particularly useful for predicting (1) brand meanings that are compatible (vs. incompatible) with each other and, consequently, more (less) favorably accepted by consumers when added to an already established brand concept; (2) brand concepts that are more likely to resonate with consumers with differing cultural orientations; and (3) consumers’ responses to attempts to imbue an establish brand concept with new, (in)compatible abstract meaning as a function of their own cultural orientations. Brand concepts are defined as “unique”, abstract meaning associated with brands. These unique, abstract meaning arise from a particular combination of attributes, benefits, and the marketing efforts used to translate these benefits into higher-order concepts. Although brand concepts reflect both tangible and intangible aspects of the brand over the year, but it is realized that that establishing abstract brand concepts on the basis of motivational and emotional meaning induces more favorable consumer response than focusing on superior functional attributes. For multinational companies (MNEs), one of the greatest challenges lies in carefully managing these abstract brand concepts across different cultures (Hollis 2008). This implies that global brands need to convey abstract concepts that not only are consistent across borders but also resonate with consumers of different cultures. Consistency in brand concepts across borders allows MNCs to lower marketing costs and more easily manage advertising and promotions across countries. However, MNCs also need to localize advertising and promotion through the incorporation of concepts and ideas that align with local cultural value priorities (De Mooij 2010). The expectation is that a cultural matching between the abstract brand concepts and consumers’ value priorities will facilitate brand penetration in the local markets. Brand Concept as Human Value Accordingly, we propose that a new measure of brand concepts based on the structure of human values (Schwartz 1992) would be amenable to understanding brand perceptions across consumers with differing cultural values. Our reasoning is as follows: First, human values are universal constructs that represent the same meanings around the world yet have been documented to vary systematically in their self-relevance for people in different cultural contexts. Second, human value priorities have already been extensively used to document cross-cultural differences in both consumer behavior and psychological research. Finally, recent refinements in understanding the links between Schwartz’s value types and key cultural dimensions used by MNCs to successfully localize their advertising appeals facilitate our investigation of the compatibility between brand concepts, as well as the brand preferences of consumers with differing cultural orientations. Managerial Implications: Increased competition in world markets and the joint forces of globalization and localization are forcing MNC managers to creatively localize their promotional messages by adding new meanings to existing brand concepts. The expectation is that a cultural matching between the promoted brand concept and consumers’ value priorities will create brands that can resonate with local consumers. However, variations in value priorities across cultures make such localization decisions challenging, yet frequently encountered. We provide an actionable framework that MNC managers can use to localize their promotion strategies, particularly when