Globalisation and its Impact on Marketing Strategies

PROJ PROJECT ECT REPORT REP ORT ON GLOBALIZATION AND ITS IMPACT ON MARKETING STRATEGIES

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE DEGREE OF MASTERS IN INTERNATIONAL BUSINESS

HNB GARHWAL UNIVERSITY, SRINAGAR, UTTARAKHAND

SUBMITTED TO:

SUBMITTED BY:

Prof. Ashulekha Gupta

Abhinav Agarwal

HOD-MIB

MIB0901

INSTITUTE OF MANAGEMENT STUDIES, DEHRADUN

2009-2011

ACKNOWLEDGEMENT

I extend my sincere thanks to all those who helped me in the completion of this report. Without their undying help and guidance, this project would not be what it is. I speciall specially y extend extend my heartfel heartfeltt thanks thanks to my Faculty Faculty Guide Guide Prof. Prof. Ashulek Ashulekha ha Gupt Gupta a for helping me at every step, and guiding me in every way possible. This project would not have been successful without his help and continuous guidance throughout. A special note of thanks also goes out to the people from various fields for giving me their precious time and helping me with this project. I also extend my appreciation towards my family who encouraged me and were by my side whenever I needed them.

Abhinav Agrawal MIB 0901

CERTIFICATE

I have the pleasure in certifying that Mr. Abhinav Agrawal is a bonafide student of  o f  2nd year of the Master’s Degree in International Business (Batch 2009-2011), of  Institute of Management Studies, Dehradun under H.N.B. Garhwal University Roll No. ………..……. .

He has completed his report work entitled “Globalization and its impact on Marketing Strategies” under my guidance.

I certify that this is his original effort & has not been copied from any other source. This report has also not been submitted in any other Institute / University for the purpose of award of any Degree.

This project fulfils the requirement of the curriculum prescribed by this Institute for the said course. I recommend this project work for evaluation & consideration for the award of Degree to the student.

Signature

: ……………………………………

 Name of the Guide

: Prof. Ashulekha Gupta

Designation

: HOD - MIB

Date

: ……………………………………

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

Building on international business, strategic management and marketing literature, this  project advances prior knowledge on globalization and business by analyzing different effects of  globalization on firms. Globalization—the process of increasing social, cultural, political, and economic interdependence—has resulted in several changes in business environment. Global market opportunities and threats are major effects of globalization. While While the former former refers refers to the increa increases ses in market market potent potential ial,, trade trade and invest investmen mentt   potential, and resource accessibility, the latter refers to the increases in number and level of  competition, and the level of uncertainty. Two empirical studies included in this project explore how these effects influence firms’ international marketing activities and performance. Thus, central contributions of this project include: first, it classifies the effects of globalization on firms into global market opportunities and global competitive threats; second, it integrates literature on international business, strategic management, and marketing to address the effects of globalization on firms’ marketing conduct and outcomes; third, it demonstrates the generalizing of the transaction cost economics, the market power perspectives, and the literature on environment-organization interfaces in the domain of globalization; fourth, it confirms that global globaliza izatio tion n acts acts as a two-ed two-edged ged sword sword and that that allianc alliancee coopera cooperatio tion n presen presents ts a viable viable alternative for firms to navigate successfully in this new competitive landscape.

LIST OF CONTENT

TITLE PAGE………………………………………………………………..I ACKNOWLEDGMENT……………………………………………………II INTERNAL GUIDE CERTIFICATE………………………………………III EXECUTIVE SUMMARY…………………………………………………01 OBJECTIVE OF THE STUDY……………………………………………..03 INTRODUCTION………………………………………………………….. RESEARCH & METHODOLOGY………………………………………. FINDINGS & ANALYSIS…………………………………………… LIMITATION………………………………………………………………… CONCLUSION………………………………………………………………. BIBLIOGRAPHY…………………………………………………………….

OBJECTIVES

OBJECTIVE OF STUDY

The primary primary object objective ive of this this resear research ch is to gain gain a better better understan understandin ding g of the effects effects of  globalization on firms’ international marketing cooperation and performance of firms, both in developed and emerging economies (i.e., the India, and the other countries). The first two questions of this project are: 1) Does globalization affect firm performance? 2) Is the relationship between global market opportunities and its performance stronger than the relationship between global market threats and its performance?

By answering these questions, the study indicates the extent to which firms in two different economic contexts are affected by globalization. It also shows which dimension of globalization effects tends to have stronger impact on the performance of firms that are located in very different market environments. Some Questions arises while studying this topic:•

Up to what extent Globalization is affecting different aspects of our life including culture, environment and business or marketing.

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To study the different strategies used by the companies in this environment.

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To study the change in consumer behavior 

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To study the threats and opportunities globalization is creating.

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What steps companies may take to go for globalization?

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To study “Is globalization useful for business.”

SCOPE OF THE STUDY

The emphasis of this project is on how the degree of cooperation in co marketing alliances enables firms to manage globalization effects and stay competitive in international markets. As suggested in past literature, globalization makes alliances an essential part of a firm’s strategy in order order to stay stay compet competiti itive ve and to achiev achievee superi superior or perfor performan mance. ce. To better better capture capture global global opportunities, firms tend to cooperate with other firms to capitalize on and leverage their limited resources since it is impossible for one firm to “do it all and go it alone. Similarly, in order to cope with increasing global competitive threats, firms are likely to form alliances .Based on the classical industrial organization perspective—the market power, firms form alliances to reduce competition and uncertainty. Through such cooperation, companies gain market power that helps alleviate competition and improve its competitive position. Therefore, the next two research questions of o f this project are: 1) Does globalization affect the degree of cooperation in co-marketing alliances? 2) Do co-marketing alliances influence firms’ international performance? Guided by these two broad research questions, a more specific emphasis of this paper is on the degree of cooperation in international marketing activities of the co-marketing alliances among firms. Past literature also suggests that firms from emerging economies usually possess characteristics which distinguish them from those of developed economies. Therefore, empirical investigations on the relati relations onship hipss among among global globaliza izatio tion n effect effects, s, degree degree of co-mar co-market keting ing allian alliances, ces, and  performanc  performancee of firms firms from India and other countries, countries, which possess possess different different backgrounds backgrounds and characteristics, are undertaken by secondary data approach .

INTRODUCTION

An Overview

Globalizati Globalization on has caused dramatic dramatic changes to business business practices around the world. Companies Companies such as IBM, Intel, Microsoft, and Philips have started to outsource specialists from various parts of the world, causing job shifts and changes ch anges in companies’ structures. Alliances among automa automaker kerss (e.g., (e.g., GM-For GM-Fordd- Daimle DaimlerCh rChrys rysler ler,, Ford-M Ford-Mazd azda, a, and GM-Hond GM-Honda), a), petrol petroleum eum manufactur manufacturers ers (e.g., BP-Mobil, BP-Mobil, NUPI-Chevron NUPI-Chevron Texaco), and airlines( airlines(e.g., e.g., star alliances) alliances) are other examples of changes driven by this phenomenon. Therefore, this dissertation investigates the effects of globalization on business firms with a particular interest on how it affects firms from both emerging economies (i.e., China, Thailand), and developed economies, (i.e..India and the U.S). In this this study, study, “global “globaliza izatio tion” n” refers refers to the proces processs of increa increasin sing g social social and cultur cultural al interinterconnectedness connectedness,, political political interdependen interdependence, ce, and economic, economic, financial financial and market market integratio integrations ns that are are driv driven en by advan advance cess in comm communi unica cati tion on and and tran transp spor orta tati tion on tech techno nolo logi gies es,, and and trad tradee liberalization. .

GLOBALIZATION

Globalization (or  globalization ) describes an ongoing process by which regional economies,

soci societ etie ies, s, and cult cultur ures es have have beco become me inte integr grat ated ed thro through ugh a glob globee-sp spann annin ing g netw networ ork k of  communication and trade. The term is sometimes used to refer specifically to the integration of 

national economies into the international economy through trade, foreign direct investment, capita capitall flows, flows, migrat migration ion,, and the spread spread of technol technology ogy.. However However,, global globaliza izatio tion n is usuall usually y recogni recognized zed as being being driven driven by a combin combinati ation on of econom economic, ic, technol technologi ogical cal,, sociosocio-cul cultur tural, al,  political, and biological factors. The term can also refer to the transnational circulation of ideas, languages, or popular culture through acculturation.

People around the globe are more connected to each other than ever before. Information and money flow more quickly than ever. Goods and services produced in one part of the world are increasingly available in all parts of the world. International travel is more frequent. International communication is commonplace. This phenomenon has been titled "globalization "globalization." ." "The Era of Globalization" is fast becoming the preferred term for describing the current times. Just as the Depression, the Cold War Era, Era, the Space Age, and the Roaring 20's are used to descri describe be partic particula ularr period periodss of histor history; y; global globalizat ization ion descri describes bes the politi political cal,, econom economic, ic, and cultural atmosphere of today. While some people think of globalization as primarily a synonym for global business and trade, trade, it is much more than that. The same forces that allow businesses to operate as if national borders did not exist also allow social activists, labor organizers, journalists, academics, and many others to work on a global stage. In terms of economics, businesses participate in globalization to increase the international flow on capital, including foreign investments. This would lead to the economic stability of the nation and means providing more development such as infrastructures and establishments. Furthermore, it could create international agreements among different nations, and may lead to more job opport opp ortuni unitie tiess in the nation nation.. This This also also affect affectss the politica politicall aspect aspect,, as more more projec projects ts will will be  produced, nationally and locally, and will practically help the nation or country in their stability and leadership. More opportunities may also mean the boosting of confidence of each individual to become more productive and effective. Culturally, there will be an increase in the exchange of  information, and multiculturalism will be achieved; having no inferior or superior races. This will lead to a boom in travel and tourism, which would totally help locals to promote their   products and profit from their small businesses.

 No one doubts that the world’s economy is truly global. Whether it’s a Fortune 100 company that sells on six continents or a local concern whose bottom line is affected by the cost of raw materials that originate across the ocean, every business is tied to the global economy. And ambitious companies look to become more global by the day.  Nestlé has reported massive double-digit growth in its China business. Procter & Gamble has acknowledged that emerging markets will account for 25 percent more business in a few short years. India will be a top-five consumer-packaged-goods market by 2010. The average salary in that country is growing by more than 10 percent a year. Global means growth potential. And the  potential is staggering. By 2030, the world population will have gained nearly 50 percent over  2002, and developing nations will represent 90 percent of the world’s population, up five  percentage points.

EFFECT OF GLOBALIZATION ON DIFFERENT ASPECTS

Globalization is an interesting phenomenon since it is obvious that the world has been going through this process of change towards increasing economic, financial, social, cultural, political, market, and environmental interdependence among nations. Virtually, everyone is affected by this process. Given these changes, globalization brings about a borderless world. Globalization drives people to change their ways of living, prompts firms to change their ways of conducting  business, and, spurs nations to establish new national policies. Events transpiring in different  parts of the world now have dramatic consequences to other parts of the world at a faster pace than anyone could imagine in the past. For example, the Asian financial crisis in 1997 has severe severely ly affect affected ed busine businesse ssess around around the world world and the outbre outbreak ak of SARS SARS (Sever (Severee Acute Acute Respiratory Syndrome) in 2003 has shown how globalization permits the rapid spread of the disease, which affects many airlines, the hospitality industry, and other businesses around the globe.

On the positive side, globalization enables firms to outsource and find customers around the world, e.g., the auto and electronics industries. The globalization of production and operations  benefits firms through the realization of economies of scales and scope. Hence, no one can deny that globalization has changed the way we conduct business. Althou Although gh global globaliza izatio tion n is a worldw worldwide ide phenom phenomenon enon,, the extent extent to which which each country country is globalized is not identical. To measure the degree of globalization of each nation, a globalization index was recently developed by cooperation between Foreign Policy Magazine, AT Kearney and EDS Company. The index indicates that some small developing countries in emerging economies such as Singapore and Malaysia were among the top twenty most globalized nations from 2001 to 2004 with Singapore being ranked as the most globalized nation. Thus, it is clear  that globalization is an important phenomenon, one that cannot be simply ignored, because every nation—regardless of size or level of development—is globalized and affected by globalization. With the prevalence of this worldwide phenomenon, it is not surprising that businesses are inevitably affected. Throughout this dissertation, the effects of globalization are classified into two broad categories: 1) Global Global market market opportu opportunit nities ies 2)

Global market threats.

These two major effects are chosen to be investigated here because they are frequently cited in the past literature as the most apparent and immediate effects of globalization. Global market opport opp ortuni unitie tiess refer refer to the increa increases ses in market market potent potential ial,, trade trade and invest investmen mentt potent potential ial and resource accessibility. Global market threats refer to the increases in the number and level of  competition and the level of uncertainty.

EFFECT OF GLOBALIZATION ON CONSUMER BEHAVIOR 

Consumer Consumer researcher researcherss are increasingl increasingly y exploring exploring and comparing comparing behavior behavior and cognitions cognitions in diverse national environments. New samples of the consumer behavior are formed by the fact that it drastic changes within the political borders and in the spatial configuration of the sales markets markets for consumer goods, which are connected connected with strong strong sociologica sociological-cul l-cultural tural forces. Barriers Barriers between markets markets moved away through through regional regional integratio integration, n, and created created larger larger unified unified

market entities. Consumers are increasingly exposed to a myriad of diverse influences from  beyond their national borders, because the advances in communications technology are shrinking distances and forgetting links between markets worldwide. Traditional definitions of the unit of  analysis used in cross cultural research need to be critically re-examined in view of the changing consumer landscape. There are different changing dynamics of consumer behavior in the world. In the following a few are introduced. The first changing dynamic are the massive waves of migration which are taking  place, as consumers from emerging market economies are moving to industrialized economies. The second one is that consumers are becoming more mobile and travelling more both for   pleasure and business. One of the results of this changing dynamic is that the consumers are   becom becoming ing expose exposed d to the product products, s, lifes lifestyl tyles es and behavi behavior or patter patterns ns of consum consumers ers in other  other  countries. There are some reasons, for example that barriers come down (European Union) and consumers and goods move freely across national boundaries. Firms gradually alter traditional  patterns of behavior, by introducing new products, services and ideas into the global market  place.  place. As a result countries countries or cultures cultures can no longer be viewed in isolation isolation as a set of separate separate entities, characterized by their own distinctive value-systems, traits and customs. In the 60s and 70s the first studies (cross-cultural consumer research) emerged, which examine the consumer behavior in the different countries. Studies were primarily descriptive and lacked any strong conceptual framework to interpret findings and make inferences about observed similarities' or differences' in behavior in different countries. One wanted to examine whether  similar similar consumptio consumption n samples samples and behavior behavior in similar similar demographic demographic and sociologic sociological-cul al-cultural tural groups in the different national cultures exist. A number of studies have focused on examining the universality of consumer models in different countries and cultural contexts. This is one of  the key themes in cross-cultural psychology. Another stream of research focuses on comparing similarit similarities ies and difference differencess in various various aspects aspects of consumer consumer attitudes attitudes and behaviors behaviors such as values, cognitions and decision making etc., in different cultural contexts or countries. The key theme of this is the study of cultural values or rather to compare values va lues cross culturally. Differences in time orientation and use of time across countries or cultures have been another  favorite favorite topic of investigati investigation. on. A number of studies have focused focused on identifyi identifying ng global market segments based on demographic characteristics, such as, global teenagers, women worldwide,

elite elite consumers, consumers, and have compared their attitudes attitudes and behavior behavior patterns patterns in different different countries. countries. The changi changing ng dyn dynami amics cs of consum consumpti ption on behavi behavior or and the increa increasin sing g comple complexit xity y of cultur cultural al influences on behavior, together with the limited ability of traditional research designs to capture this complexity suggest the need to reexamine the design of cross cultural consumer research. It is necessary to define the unit of analysis. There are different aspects to be attended here. The first priority is to define the relevant unit of analysis, or cultural group to be studied. Important  point in this context is a high degree of homogeneity in attitudes and behavior among members of the group. There are two different key criteria to define the unit. First there is the language, which may be a dialect or main language, and secondly the degree of social interaction and communication. Modern means of communication enable members located at geographically dispersed sites to communicate, interact, and establish a strong closely knit community of shared interest and identity. Besides this it structures the research design in cross-cultural studies. Once the unit of analysis has been determined along with its cultural context, the next step is to structure the research design and identity, the nature of the cultural phenomena or influences to  be studied. The first and most common type of study involves a static comparison of cultic-units located at different geographic sites and within different macro or micro-cultures. Another type of study involves examination of the impact of exposure to direct and indirect influences from other  cultures on behavior patterns of a given group. A third type of study examines how attitudes, interest and behavior patterns change with movement from one macro-culture to another. In such studies, the local point is to examine the ethnic core of the culture, and in some instances, its variat variation ion across across sites. sites. Differ Different ent aspect aspectss of the ethnic ethnic core core and its relation relation to behavio behaviorr as consumers can be examined, including, for example, its core values and beliefs, the artifacts and symbol symbolss of the cultur culture, e, and their their impact impact on consum consumpti ption, on, and desir desired ed produc productt benefit benefits, s, or  ritualistic behavior. While multi-site studies focus on the ethnic core of the cultic- unit, and its influence on attitudes,  preferences and consumption behavior, the second type of study focuses explicitly on examining the impact of external cultural influences on the culti- unit or individual members. These are influences which come from other macro-cultures or originate from a cultural context other than the one in which their culti-unit is embedded. There are direct and indirect influences. Direct influences will arise when an individual travels to or lives for a period of time in another cultural

context or macro-culture. Indirect influences, on the other hand, arise from passive exposure to media, information, visual images, or other stimuli generated by organizations from other ma cro-cultures. A third type of study deals with transition from one macro-culture to another. This occurs occurs when when an indivi individual dual moves moves from from one macromacro-cul cultur tural al context context to another another,, as through through immigration to another country.

Consumer Consu mer Behavior Behav ior in Global markets

The focus focus is to provid providee a compre comprehen hensiv sivee view view of consume consumerr behavi behavior or in global global market markets, s, especially in relation to the countries of Eastern Europe and the third world. Consumer behavior is likely to be somewhat different in developing countries since it is largely influenced by social, political and economic conditions. It provides a framework that can be used to study study consume consumerr behavi behavior or in global global market markets, s, this this framew framework ork is applied applied to examin examinee and

understand consumer behavior in countries of the third World and Eastern Europe. Besides this it offers generalizations and recommendations to those wishing to market their products/services in the Third World and Eastern Europe. Theori Theories/ es/mode models ls have have played played an import important ant role role by detail detailing ing how variou variouss factor factorss influe influence nce cons consum umer er behav behavio ior. r. Th Thee four four stag stages es are are term termed ed acce access ss,, buy buyin ing g beha behavi vior or,, consu consump mpti tion on characteristics, and disposal. A thorough understanding of each stage is essential for the global marketer since the overall effectiveness of the marketing function is contingent on all four stages  being facilitated within any culture. First there are short definitions of each stage: (1) Access The first step in global marketing is to provide access to the product/service for consumers within a culture. Access pertains both to physical p hysical access as well as to economic access. (2) Buying Behavior  This stage encompasses all factors impacting on decision making and choice within a culture. Examples of these factors include perceptions, attitudes, and consumer responses such as brand loyalty. (3) Consumption characteristics The specific products/services that are purchased and consumed may be different in each culture. The cultural orientation (traditional versus modern) and social class distribution, among other  factors, will determine consumption patterns within a culture. (4) Disposal Most Most countri countries, es, includ including ing the develo developin ping g countri countries, es, are becomin becoming g more more environ environmen mental tally ly conscious and moving away from throw-away products. Hence marketers need to design systems to facilitate the safe disposal, recycling, resale or manufacturing of products. They must also meet their social responsibilities in other countries, especially in relation to public safety and environmental pollution. First, since the four stages are universally applicable, the paradigm offers a general framework to understand consumer behaviour within any global market. Second, in order to understand the

 broadest possible range of consumer behavior within any culture, the paradigm encompasses all aspects of purchase and consumption within a simple framework. Third, the four stages of the  paradigm are arranged in a hierarchical fashion from the consumers' viewpoint. And fourth the consistent with the concept of business process reengineering, which encourages business to improve corporate performance by using a crossc ross- functional perspective. The practical application of consumer behavior findings in international markets has often posed a problem for marketers for two reasons. First, most consumer research in international markets has used a piecemeal approach. Second, there has been no comprehensive framework to integrate the findings in a meaningful manner.

GLOBALIZATION AND MARKETING CO-OPERATION

GENERAL BRAND STRATEGIES Brand strategy strategy is aimed at influencing influencing people perception perception of a brand in such a way that they are  persuaded to act in a certain manner, e.g. buy and use the products and services offered by the  brand, purchase these at higher price points, donate to a cause.

A global brand needs to provide relevant meaning and experience to people across multiple societies. To do so, the brand strategy needs to be devised that takes account of the brand’s own capabilities and competencies, the strategies of competing brands, and the outlook of consumers (including business decision makers) which has been largely formed by experiences in their  respective societies. There are four broad brand strategy areas that can be employed.

(1) Brand Domain- Brand domain specialist specialistss are experts experts in one or more of the brand domain aspects (products/services, media, distribution, solutions). A brand domain specialist tries to preempt or even dictate particular domain developments. This requires an intimate knowledge, not only of the technologies shaping the brand domain, but also of pertinent consumer behavior and needs. The lifeblood of a brand domain specialist is innovation and creative use of its resources. A brand domain specialist is like a cheetah c heetah in the Serengeti preying on impala and gazelle. The cheetah is a specialist hunter with superior speed to chase, and the claws and teeth to kill these animals. The cheetah is also very v ery familiar with the habits of its prey.

(2) Brand Reputation Repu tation - Brand reputation reputa tion specialists specia lists use or develop specific sp ecific traits of their brands bran ds to suppor supportt their their authen authentic ticit ity, y, credib credibili ility ty or reliab reliabili ility ty over over and above above compet competito itors. rs. A brand brand reputation specialist needs to have some kind of history, legacy or mythology. It also needs to be able to narrate these in a convincing manner, and be able to live up to the resulting reputation. A  brand reputation specialist has to have a very good understanding of which stories will convince consumers that the brand is in some way superior. A brand reputation specialist is like a horse. (3) Brand Affinity - Brand affinity specialists bond with consumers based on one or more of a range of affinity aspects. A brand affinity specialist needs to outperform competition in terms of   building relationships with consumers. This means that a brand affinity specialist needs to have a distinct appeal to consumers, be able to communicate with them affectively, and provide an experience that reinforces the bonding process. A brand affinity specialist is like a pet dog. (4) Brand Recognition Recogniti on- Brand recognition specialists spec ialists distinguish distingu ish themselves from competition competi tion by raisin raising g their their profi profiles les among among consume consumers. rs. The brand brand recogn recogniti ition on specia speciali list st either either convin convinces ces consumers that it is somehow different from competition, as is the case for niche brands, or rises above the melee by becoming more well known among consumers than competition. The latter is  particularly important in categories where brands have few distinguishing features in the minds of consumers.

IMPACT ON BRAND STRATEGIES The factors discussed above each have their own specific impact on the four general brand strategies and their strategy sub-types. Due to the limitations of its format, this paper focuses on factors that influence the four general strategies only. We also limit the discussion to one global  branding issue that has attracted a lot of attention among practitioners in recent years, namely  brand harmonization harmonization or standardiza standardization. tion. This is not say that the factors factors discussed discussed above do not also have a profound effect on other global branding issues such as global brand extensions, rationalizing a global brand portfolio, global brand architecture and co-branding global brands. b rands.

THE GLOBALIZATIO GL OBALIZATION N OF MARKETING Since at least 10 years you hear a lot about Globalization, about the shrinking physical and mental distances between countries. There There are probabl probably y four four differ different ent market marketing ing constit constituent uentss that that need need to be consid considere ered d if one analyzes the extent of the globalization of marketing: The Consumer, Brands, the community of  Marketers, and the academic field of marketing.

The Consumer – There is no doubt that today’s consumers are much more globally oriented

than ever before. The internet makes physical boundaries seem obsolete, the exchange of ideas and communication appear more borderless. But, but most consumers, especially in the US, still spend most of their discretionary income on US brands, on products and goods that are sold (definitely not manufactured) in the United States. There is only a very limited global sourcing

and purchasing behavior of consumers. This is very different from businesses which are getting used to buy goods and services from anywhere. Still, the US consumer is used to shop non US  brands, and thinks more and more beyond physical country boundaries but there are only a few (very rich) truly global consumers. Brands – The number of truly global brands (e.g. Apple, Nokia, Hugo Boss) have increased over 

the the last last decad decade. e. One just just need needss to look look at To Toyo yota ta and and thei theirr incr increa easi sing ng leade leaders rshi hip p in the the automotive industry on a global level. One can imagine that the world of brands morph into two extremes, of very global and very local brands. Brands will have to decide if they want to focus  primarily on their local or their local identity. Marketers – It’s still pretty rare to find really global marketers in the CMO’s position of Fortune

2,000 Firms. It’s much more common for CEO’s to have the global work experience with stints on multiple continents. CMOs still seem to follow the old rule of originating from a brand’s motherland. While this is partly understandable (you first need to understand the consumer’s mindset of the brand’s mother or fatherland), CMO’s need to become much more global players. Unfortunately there does not seem to be a growing community of global marketers, not even within the big marketing services firms, that actively promote the global CMO.

Academics – The biggest lack of globalization resides within the academic community. Most US

marketing academics are too busy enough in reinforcing their own US superiority while non US academics don’t like to rely heavily on the US marketing leadership. Just recently I asked US academics about their favorite non US marketing personality or stimulating book. I did the same with with some some of their their Europea European n counte counterpa rpart rtss and inquir inquired ed about about their their favori favorite te US market marketing ing academic or book. In both cases I only received blank stares and uncomfortable silence.

This brief assessment of the globalization degree along the key marketing constituents shows that leading brands behave and think much more global than the practicing or the academic oriented marketer. We Marketers have to be careful that we don’t fall further back but instead keep up with the speed of globalization. Currently it’s more driven by brands and opinion leading consumers instead of a community of global marketers.

FORCES ORCE S OF GLOBAL GL OBALIZAT IZATION ION Why Go Global?

The playing field is wide open for small business. Here’s why both men and women should consider going global: •

Increase sales.

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Generate economies of scale in production.

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Raise profitability.

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Insulate seasonal domestic sales by finding new foreign markets.

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Create jobs, productivity growth and wealth.

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Encourage the exchange of views, ideas and information.

Small business in particular can take a mentoring role in educating other men and women in going going global global.. They They can establ establish ish educat education ional al progra programs, ms, confer conference encess and other other activi activitie tiess to advance their colleagues, and in doing so, promote professional growth and leadership among all small business owners. The best is truly yet to come. What Does Do es It Take Tak e To Go Global? Glo bal?

Any small business owner must be adaptable, strategic and willing to take calculated risks. But  becoming a successful global small business requires the following commitments:

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Be comfortable with change.

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Welcome new experiences; and learn as much as possible about the culture in which you are interested in doing business.

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Be willing to take risks, even though it may create short term challenges.

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Push yourself to continuously innovate.

DIFFERENT MARKET ENTRY STRATEGIES 1. Exporting

Exporting, the most traditional mode of entering the foreign market is quite a common one even now. International trade has been growing much faster than the world output resulting in greater  g reater  world economic integration. Exporting is the appropriate strategy when one of more of the following conditions prevails. 1. The volume of foreign business b usiness is not large enough to justify production in the foreign market. 2. Cost of production in the foreign market is high. 3. The foreign market is characterized by production bottlenecks like infrastructural problems,  problems with materials supplies etc. 4. There are political or other risks of investment in the foreign country. Exporting is more attractive than other modes particularly when underutilized capacity exists. Even when there is no excess capacity, expansion of the existing facility may sometimes be easier and less costly than setting up production facilities abroad. Further, many governments, as in India, provide incentives for establishing facilities for export production. The alternatives to making in foreign countries by the international marketer for marketing the goods in the foreign countries are licensing and contract manufacturing. Although these have certain advantages,

there are also certain risks. Hence, if a company does not want to go in for licensing or contract manufacturing, the only avenue open is exporting.

2. Licensing and Franchising

Licensing and Franchising, which involve minimal commitment of resources and effort on the   part part of the Intern Internati ational onal market marketer, er, are easy easy ways ways of enteri entering ng the foreig foreign n market markets. s. Under  Under  International licensing, a firm in one country (the licensor) permits a firm in another country (the licensee) to use its intellectual property (such as patents, trademarks, copyrights, technology, and technical know-how, marketing skill or some other specific skill). The monetary benefit to the licensor is the royalty or fees which licensee pays. In many countries, such fees or royalties are regulated by the government; it does not exceed five per cent of the sales in many developing countries. A licensing agreement may also be one of cross licensing, wherein there is a mutual exchange of  knowledge and/or patents. In cross licensing, a cash payment mayor may not be involved. Franchising is “a form of licensing in which a parent company (the franchiser) grants another  independent entity (the franchisee) the right to do business in a prescribed manner. This right can take the form of selling the Franchiser’s products, ‘using its name, production and marketing techniques, or general business approach.” One of the common forms of franchising involves the franchisor franchisor supplying supplying an important important ingredient ingredient (part, (part, material material etc.,) for the finished finished product, like the Coca-Cola supplying the syrup to the bottlers. 3. Contract Manufacturing

Under contract manufacturing, a company doing international marketing contracts with firms in foreign foreign countries countries to manufacture manufacture or assemble assemble the products products while retaining retaining the responsibi responsibility lity of  marketing the product. This is a common co mmon practice in international, business. Contract manufacturing has the following advantages. 1. The company does not have to commit resource for setting up production facilities.

2. It frees the company from the risks of investing in foreign countries. 3. If idle production capacity is readily available in the foreign country, it enables the marketer to get started immediately. 4. In many cases, the cost of the product obtained by contract manufacturing is lower than if it were manufactured by their international firm.

4. Management Contracting

Under the management contract, the firm providing the management know-how may not have any equity stake in the enterprise being managed. In short, in a management contract the supplier   brings together a package of skills that will provide an integrated service to the client without incurring incurring the risk and benefit benefit of ownership Thus, as Sir Philip Kotler observes, management management contracting is a low-risk method of getting into a foreign market and it starts yielding income right from the beginning. The arrangement is especially attractive if the contracting firm is given an option to purchase, some shares in the managed company within a stated period. Management contract could, sometimes, bring in additional benefits for the managing company. It may obtain the business of  exporting or selling otherwise of the products of the managed company or supplying the inputs required by the managed company. Management contract enables a firm to commercialize existing know-how that has been built up with significant investments and frequently the impact of fluctuations in business volumes can be reduced by making use of experienced personnel who otherwise would have to be laid off.

5. Turnkey Contracts

Turn Tu rnke key y cont contra ract ctss are are comm common on in inte intern rnat atio iona nall busi busine ness ss in the the supp supply ly,, erec erecti tion on and and commissioning of plants, as in the case of oil refineries, steel mills, cement and fertilizer plants etc; construction projects and franchising agreements.

“A turnkey operation is an agreement by the seller to supply a buyer with a facility fully equipped and ready to be operated by the buyer’s personnel, who will be trained by the seller. The term is sometimes used in fast - food franchising when a franchiser agrees to select a store site, build the store, equip it, train the franchisee and- employees and sometimes arrange for the financing.”

6. Wholly Owned Manufacturing Facilities

Companies with long term and substantial interest in the foreign market normally establish fully owned owned manufa manufactu cturi ring ng facili facilitie tiess there. there. As Drucke Druckerr points points out, out, “it is simply simply not possib possible le to maintain substantial market standing in an important area unless one has a physical presence as a  producer.” A number of factors like trade barriers, differences in the production and other costs, government policies etc., encourage the establishment of production facilities in the foreign markets Establishment of manufacturing facilities abroad has several advantages. It provides the firm with complete control over production and quality. It does not have the risk of developing  potential competitors as in the case of licensing and contract manufacturing. Wholly Wholly owned manufacturing manufacturing facility facility has several several disadvantages disadvantages too. In some cases, the cost of    production is high in the foreign market. There may also be problems such as restrictions regarding the types of technology, non-availability of skilled labor, production bottlenecks due to infrastructural problems etc. If the market size is small, a separate production unit for the market may be uneconomical. Foreign investment also entails political risks.

7. Assembly Operations

As Miracle and Albaum point out, a manufacturer who wants many of the advantages that are associated with overseas manufacturing facilities and yet does not want to go that fat may find it desi desira rabl blee to esta establ blis ish h over overse seas as asse assemb mbly ly faci facili liti ties es in sele select cted ed mark market ets. s. In a sens sensee the the establishment. of an assembly operation represents a cross between exporting and overseas manufacturing.

Having assembly facilities in foreign markets is very ideal when there are economies of scale in he manufacture of parts and components and when assembly operations are labour intensive, and labour is cheap in the foreign country. It may be noted that a number of U.S. manufacturers ship the parts and components to the developing countries, get the product assembled there and bring it back home. The U.S. tariff law also encourages this. Thus, even products meant to be marketed domestically are assembled abroad.

8. Joint Ventures

Joint venture is a very common strategy of entering the foreign market. In the widest sense, any form of association which implies collaboration for more than a transitory period is a joint venture (pure trading operations are not included in this concept). Such a broad definition encompasses many diverse types of joint overseas operations, viz, 1. Sharing of ownership and management in an enterprise. 2. Licensing/franchising agreements. 3. Contract manufacturing. 4. Management contracts. Three Three of the above have have already already been discus discussed sed in the preceding preceding sectio sections. ns. The follow following ing  paragraphs are confined to the first category referred to above, i.e. joint ownership ventures. What is often meant by the term joint venture is joint ownership venture. The essential feature of a joint ownership venture is that the ownership and management are shared between a foreign firm and a local firm. In some cases there are more than two parties involved. A joint ownership venture may be brought about by a foreign investor buying an interest in a local company, a local firm acquiring an interest in an existing foreign firm or by both the foreign and local entrepreneurs jointly forming a new enterprise.

9. Third Country Location

Third country location is sometimes used as an entry strategy. When there are no commercial transa transacti ctions ons betwee between n two nation nationss becaus becausee of politi political cal reason reasonss or when when direct direct transa transacti ctions ons  between two nations are difficult due to political reasons or the like, a firm in one of these nations which wants to enter the other market will have to operate from a third country base. For  example, Taiwanese entrepreneurs found it easy to enter People’s Republic of China through  bases in Hong Kong. Third country co untry location may also be helpful to take advantage of toe friendly trade relations between the third country and the foreign market concerned. Thus, for example, Rank Xerox found it convenient to enter the erstwhile USSR through its Indian joint venture Modi Xerox. There are several cases of countries not having direct commercial transactions. For  example, it was true of Israel and Arab Countries. In the past, government of India did not permit trade with South Africa and Mauritius.

10. Mergers and Acquisitions

Mergers Mergers and acquisitio acquisitions ns (M & A) have been a very important important market entry strategy strategy as well as expansion strategy. A number of Indian companies have also used this entry strategy. Mergers and acquisitions have certain specific advantages: It provides instant access to markets and distri distribut bution ion networ network. k. As one of the most most diffi difficul cultt areas areas in intern internati ational onal market marketing ing is the distribution, this is often a very important consideration for M & A. Another important objective of M and A is to obtain access to new technology or a patent right. M and A also has the advantage of reducing the competition. Mergers and acquisitions may also give rise to some   probl problems ems which arise arise mostly mostly because because of the defici deficienci encies es of the evaluatio evaluation n of the case for  acquisition. Sometimes the cost of acquisition may be unrealistically high. Further, when a enterprise is taken over, air its problems are also acquired with it. The success of the enterprise will naturally depend on the success in solving the problems.

11. Strategic Alliance

Strategic alliance has been becoming more and more popular ininternational business. Also known by such names as entente and coalition, this strategy seeks to enhance the long term

competitive advantage of the firm by forming alliance with its competitors, existing or potential in critical areas, ‘instead of competing with each other. “The goals are to leverage critical capabilities, increase the flow of innovation and increase flexibility in responding to market and technological changes.” Strategic alliance is also sometimes used as a market entry strategy. For example, a firm may enter a foreign market by forming an alliance with a firm in the foreign market for marketing or  distributing the former’s products. A U.S. pharmaceutical firm may use the sales promotion and distribution infrastructure of a Japanese pharmaceutical firm to sell its products in Japan. In return, the Japanese firm can use the same strategy for the sale of its products in the U.S. market. Strategic alliance, more than an entry en try strategy, is a competitive strategy. There are different types of alliances according to purpose or structure. Based on the description of the generic forms of coalitions by Michael Porter ‘and Mark Fuller, Magsaysay classifies alliances according to purpose as follows. 1. Technol Technology ogy develo developme pment nt allian alliances ces like like resear research ch consort consortia, ia, simult simultane aneous ous enginee engineerin ring g agreements, licensing or joint development agreements. 2. Marketing, sales and service alliances in which a company makes use of the marketing infrastructure etc., of another company, in the foreign market, for its products. This may help easy penetration of the foreign market and preemption of potential competitors. 3. Multiple activity alliance which involves the combining of two or more types of alliances. While While marketing marketing alliances alliances are often single country alliances, as internatio international nal firms firms take on different allies in each country, technology development and operations alliances are usually multi-country since these kinds of activities can be employed over several countries. 4. Multiple activity alliance involves the combining of two or more types of alliances. While marketing alliances are often single country alliances, as international firms take on different allies allies in each each countr country, y, techno technolog logy y develo developme pment nt and operat operation ionss allian alliances ces are usuall usually y multi multi-country since these kinds of activities can be employed over several countries.

12. Countertrade

Although the major reason for the substantial growth of counter trade is its use as a strategy to increase exports, particularly by the developing countries, countertrade has been successfully used by a number of companies as an entry strategy. For example, Pepsi Co, gained entry to the USSR by employing this strategy. Countertrade is a form of international trade in which certain export and import transactions are directly linked with each other and in which import of goods are paid for by export of goods, instead of money  payments. In the modern economies, most transactions involve monetary payments and receipts, either immediate or deferred. As against this, “countertrade refers to a variety of unconventional international trade practices which link exchange of goods - directly or indirectly - in an attempt to dispense with currency transactions.”

10 STEPS FOR GOING GO ING GLOBAL GL OBAL

As with any sound business plan, the first step is doing your homework. Here are ten action steps for taking on the world: 1. Conduct market research research to identi identify fy your your prime prime target target markets. markets. 2. Sear Search ch out out the the data data you you need need to predi predict ct how how your your produ product ct will will sell sell in a spec specif ific ic geographic location. 3. Update your your database database rigorousl rigorously y with a view view to focusing focusing more closely closely on those those products products or services which are in demand and dropping those which are not. 4. Articulate Articulate your business business plan plan for accessing accessing global global markets markets.. 5. Get company companywid widee commit commitmen ment. t. 6. Build a web site site and implement implement your intern internationa ationall plan sensibl sensibly. y. 7. Factor in a two year year lead lead time time for world market market penetrati penetration. on. 8. Make personal personal contact contact with your your new targets targets armed with with culture culture specific specific information information and courtesies, professionalism and consistency. 9. Value the relati relationship onship more more than the deal; deal; the individual individual is more more important important than than closing the deal under discussion. 10. Welcome Welcome the unknown. unknown.

GLOBAL MARKET OPPORTUNITIES AND FIRM PERFORMANCE Global market opportunities can be defined as increases in market potential, trade and investment   potential and resource accessibility resulting from globalization. Developments in information technology, removal of trade and investment barriers, privatization, and deregulation of trade and invest investmen mentt polici policies es have have provid provided ed firms firms seekin seeking g intern internati ational onal market marketss with with treme tremendou ndouss opportunities. Such changes in the business environment enable firms to not only access new markets but also lower costs by relocating their operations and exploiting cheap resources around the world. Firms can outsource their production in various locations to lower their costs. Market transactions have also become more efficient due to globalization of technology. These new market opportunities have eventually fostered rapid growth in various economic sectors in many regions around the world (Graham, 1996). A large volume of cross-border flows of trade, investment, and technology during the 1990s and early 2000s is excellent evidence of increasing opportunities driven by globalization. As discussed earlier, globalization increases market potential, trade and investment potential and resource accessibility of firms. It has become easier for firms to outsource their production to different locations to gain benefits from location advantage since less trade and investment  barriers are present in today’s global marketplace. Firms are able to reach out and serve many new untapped markets around the globe. Liberal movements of financial and human capital also facilitate facilitate their their business business transactio transactions. ns. Moreover, Moreover, advances advances in communicati communication on technology technology and information systems also lower search costs and improve efficiency. Hence, it is clear that globalizati globalization on makes resources resources necessary for a firm’s firm’s growth and success success more abundant. Given that these opportunities are likely to enhance the firm performance, the first hypothesis of this study can be stated as: Firm performance is positively influenced by global market opportunities.

GLOBAL MARKET THREATS

AND FIRM PERFORMANCE

Global market threats can be further categorized into 1) global competitive threats and 2) global market uncertainty. Global competitive threats are defined as the intensified competition in global markets resulting from larger numbers of competitors in the global marketplace. Along with higher competition, another threat posed by globalization is global market uncertainty, which refers to the increasing complexity and demand uncertainty in the market. These two types of global global market market threat threatss and their their hyp hypoth othesi esized zed relati relations onship hipss are discus discussed sed in detail detail in the following sections.

GLOB GL OBAL ALIZ IZAT ATIO ION N

EFFE EFFECT CTS, S,

CO-M CO-MAR ARKE KETI TING NG

ALLI ALLIAN ANCE CE

AND AND

PERFORMANCE

Due to the emergence of global market opportunities and global market threats, firms have been forced to respond quickly to these effects. Unlike other environmental changes, the effects of  globalization are far more pervasive—affecting every individual, business, industry, and country Thee envi Th enviro ronm nmen entt surr surroun oundi ding ng busi busines nesss toda today y is chara charact cter eriz ized ed as a “hyp “hyper erco comp mpet etit itiv ive” e” environment environment—a —a faster faster and more aggressive competitive competitive environment environment.. Major forms of business business restructuring in response to the dramatic changes brought by globalization include, for example, invest investmen ments ts in new technol technologi ogies, es, downsiz downsizing ing and reengi reenginee neerin ring, g, the format formation ion of strate strategic gic

alli allianc ances es and and netw networ orks ks,, and a shif shiftt from from inte intern rnat atio ional nal and and mult multin inat atio ional nal to globa globall and and transn transnati ational onal strate strategie gies. s. Among Among these these variou variouss forms forms of busine business ss restru restructu cturin ring g design designed ed to manage globalization effects, alliance formation is considered the most remarkable business trend of the past decades. Therefore, it is of interest to both academics and practitioners to explore how alliances help firms achieve superior international marketing performance in the globalization era. Since Since global globaliza izatio tion n makes makes allian alliances ces an integr integral al part part of a firm’s firm’s strate strategy gy to better better satisf satisfy y customers and to achieve sustainable competitive advantage, the proliferation of alliances in recent years is not surprising. It has become difficult for firms to stay competitive in this era without allying with other firms. Moreover, to achieve superior marketing performance in the  present business environment, firms need to manage relationships with partners, customers, and different parties in the value chain. As a result, there has been an increasing trend towards more cooper cooperati ation on among among firms, firms, both both vertic verticall ally y and horizo horizonta ntally lly.. Such interinter-fi firm rm cooper cooperati ation on is especially important for firms to compete in the global marketplace. In order for firms to succeed in international markets, they need cooperate with other firms and or governmental agencie. Thus, Thus, the purpose purpose of this this paper paper is to explor exploree whethe whetherr global globaliza izatio tion n affect affectss the degree of  international marketing cooperation of firms participating in co-marketing alliances, a type of  strategic alliance in which partners cooperate in one or more marketing activities. Specifically, we prop propos osee to inves investi tiga gate te the the infl influen uence ce of glob global aliz izat atio ion n effe effect ctss on the the degre degreee of firm firms’ s’ cooperation in co-marketing alliances, and the relationship between such cooperation and the firms’ international marketing performance.

VIEWS OF O F DIFFERENT DIFFE RENT COMPAN C OMPANIES IES

Strategies adopted by Various Companies

How Johnson & Johnson is winning in this environment. Specifically, the shift in economic activity to developing nations, along with the associated rise of the middle class, which is  projected to significantly increase levels of consumer spending. How Johnson & Johnson is maintaining its competitive edge in a global environment, citing its recent acquisition of Pfizer  Consum Consumer er Healt HealthCar hCaree and the geogra geographi phicc expansi expansion on of Splenda Splenda.. The Pfizer Pfizer acquis acquisiti ition on effectively doubled the size of Johnson & Johnson's OTC market, with 50% of this market now located outside of the U.S. Furthermore, in only five years since its launch, Splenda is now distributed distributed in 33 countries worldwide. worldwide. While the core brand footprint footprint - the look and feel of the product - is consistent from region to region, Johnson & Johnson tailors the approach and positioning of Splenda to local markets. The company's global reach and focus on local market dynamics has enabled it to successfully enter these new markets.

In addition to learning from keynote addresses, ranging from health and wellness to the evolution of market research. The "Branding Strategies: The Challenge of Going Global and Staying Local" panel explored what what market marketers ers can do when when expandi expanding ng product product lines global globally ly to protec protectt their their brands brands and improve the chances of successfully launching products. Rob Warren, Senior Vice President of Global Tequila for Diageo, explains that in taking a brand global, the core essence of the brand and what it stands for must remain consistent. However, the way that Diageo brings a brand to life for consumers may be tailored to specific cultures.

Sylvia Sylvia Lin, Lin, Associ Associate ate Direct Director or of Global Global Oral Oral Care Care Long Long Term Term Innova Innovatio tion n for ColgateColgatePalmolive, noted that companies should determine how to gain a competitive advantage in a new market. market. For example, Colgate-Pal Colgate-Palmoli molive ve conducts conducts extensive extensive research research to determine determine whether  Colgate toothpaste should be marketed in English or in local languages. "In some instances it makes sense to leverage the American brand; in others, it simply does not," explains Lin. The "Health and Wellness: Trends in a Global Marketplace" panel discussed how marketers can react

to and capitalize on health and wellness trends when developing competitive marketing strategy. Sharon Fox, Director of Marketing of Beverages at Kraft Foods, discussed a holistic health and wellness trend, explaining that customers "desire balance in mind, body and soul; it is not just about what they eat, but about overall healthiness." Kraft has developed a Sensible Solution Flag for over 500 products that meet specific health related criteria, like 100-calorie-packs and Crystal Light. Brian Brian Graybi Graybill, ll, Direct Director or of Market Marketing ing of Tostit Tostitos, os, descri describes bes how Frito Frito Lay respon responded ded to changing changing consumer consumer preferences preferences by launching its Flat Earth products, snacks that include half a serving of fruits or veggies per ounce. He also stressed the importance of engaging children in healthier food options. However, Mr. Gray noted that lifestyle is more of a challenge than calorie intake with kids. This led Frito Lay to launch "America on the Move," a program dedicated to educating children about active, healthy lifestyles.

The Indust Industry ry believ believes es that that while while flavor flavor prefer preferenc ences es may vary vary region regionall ally, y, philos philosoph ophies ies and general trends in health and wellness are global in nature. Companies worldwide are addressing widespread health problems like heart disease, diabetes, and obesity. Some People dedicated to the media industry, "Ready to Sweep out Traditional Media?" focused on the impact of new media such as user-generated media and mobile marketing on consumers' purchasing behaviors. The panelists also addressed whether they believe believe new media will soon supplant traditional traditional off  -line media.

Eliz Elizabe abeth th Poon, Poon, Regi Region onal al Brand Brand Deve Develo lopm pment ent Manag Manager er for for Unil Unilev ever er,, beli believ eves es in the the effe effect ctiv ivene eness ss of new new medi mediaa in devel developi oping ng consu consume merr inte intera ract ctio ion n with with a bran brand. d. Unil Unileve ever  r  established consumer interaction with its Dove brand through an online contest for women to create a 30-second Dove advertisement. The winning video from this popular contest was aired during the 2007 Oscar broadcast and generated serious industry buzz. According to Ms. Poon, "consumers always had power and intent to contribute; only now they have the tools."

Panel Panelis ists ts agree agreed d that that while while newer newer medi mediaa has advan advanta tages ges in its its acco account untab abil ilit ity y and and in the the

immediacy of results, traditional media still has its place. "It's not a matter of new versus old; integration is the bottom line."

Some Some other other Indust Industry ry expert expert explore explored d the changin changing g landsc landscape ape of market market resear research. ch. Paneli Panelists sts discussed how technology, such as online and adaptive surveys, online focuses groups, consumer  auctions, and data mining have affected the field.

Dan Salzma Salzman, n, Global Global Vice Vice Presid President ent of Market Marketing ing Resear Research ch in Consum Consumer er Healthc Healthcare are for  Johnson & Johnson, believes that technology has made research faster, cheaper, and allows companies to answer questions in non-intrusive ways. In addition, the targeted nature of new technologies allows researchers to "no longer seek to get accurate averages, but tailored solutions for customers."

Steve Nollau, Partner of Brado Cuneo Nollau, believes that a cost-saving advantage related to technological advances in marketing research. New technology has enabled companies to test  product concepts at an early stage in the development process, "preventing lots of money from  being spent on bad ideas and promoting investment in viable ones."

Last, the effects of the Internet and globalization on consumers, as they are provided increasing access to product information, purchase outlets, and overall purchase options. This evolving landscape landscape presents both challenges challenges and opportuniti opportunities es in consumer consumer loyalty and retention retention for the retailer, manufacturer, and marketer.

HOW GLOBAL BRANDS COMPETE Consumers in most countries had trouble relating to generic products, so executives instead strove for global scale on backstage activities such as production while customizing product features and selling techniques to local tastes. Such "global" strategies now rule marketing.

Global branding has lost more luster recently because transnational companies have been under  siege, with brands like Coca-Cola and Nike becoming lightning rods for anti globalization  protests. The instinctive reaction of most transnational companies has been to try to fly below the radar. But global brands can't escape notice. In a research project involving 3,300 consumers in 41 countries, the authors found that most people choose one global brand over another because of differences in the brands' global qualities. Rather than ignore the global characteristics of their   brands, it's critical for firms to manage those characteristics, because future growth for most compan companies ies will will likel likely y come come from from foreig foreign n market markets. s. Consume Consumers rs base base prefer preference encess on three three dimensions of global brands--quality (signaled by a company's global stature); the cultural myths that brands author; and firms' firms' efforts to address address social social problems. problems. The authors authors also found that it didn't matter to consumers whether the brands they bought were American--a remarkable finding considering that the study was conducted when anti-American sentiment in many nations was on the rise.

GLOBAL LOBA L BRANDING V/S V/ S LOCAL LOCA L MARKETING MARKETIN G Day by day, global branding is becoming a bigger challenge. Why? Because it's no longer   possible to isolate a brand and its reputation. Companies might think you've created an excellent strategy for your brand in one local market, only to realize that the rest of the world has access to that same local communication. This exposure destroys any possibility of separating your local  branding strategy from your global branding strategy. This unavoidable exposure of company’s local brand-building strategy in the international arena is part of the growing difficulties that attend attend global brand building. Related to this complication complication are the internal issues that arise. For  example, how can corporations handle the local and global mix in their marketing departments?

Is every local marketing department now obsolete? Can local marketing be taken over by a single department of centralized marketing functions? Such issues are the result result of the speed and spread spread of communicati communications. ons. The Internet Internet has enabled enabled every consumer to access every piece of communication in the world. Good old concepts like running test markets have been dramatically altered because of the increasing proximity among markets. True separation among markets has disappeared. When

Coca-Cola

selected Australia as the test market for the first non-Coca-Cola drink it had

launched in years, most of the world watched the experiment, and almost as many people  participated in the experiment from outside the test market. This might very well have been the strategy's intention. However, if the objective was to test a new product in a local market, the strategy clearly failed. Global communication is more or less forcing brand builders around the world to adjust their  approaches. They're having to forego the strategy that provides local marketing teams with full autonomy. So, how should we handle the brand challenge? First of all, the local brand is not dead. But some of the activities that are used to promote it are now obsolet obsolete. e. I would would separa separate te local local brandbrand-bui buildi lding ng activi activitie tiess from from global global brandbrand-bui buildi lding ng activities on the promotional side, as

McDonald's

has done. Ronald McDonald is the key in-store

 promotional figure. Very seldom do you see him on television commercials and, when you do, you see him publicizing in-store promotions. Ronald, very cleverly, has become McDonald's point of differentiation in each market. He celebrates Christmas in Northern Europe and the Chinese New Year in Hong Kong. He promotes McDonald's wine in France and McDonald's Filet-o-Fish in Australia. But he never appears in globally accessible media. McDonald's' global messages come through television commercials. The corporation produces local adaptations of these, too. But you can see McDonald's local twists are substantially stronger in the in-store promotions than on television. The purpose of global brand management is to conceive of and control a brand's global direction, and this is done by defining and communicating the brand's core values. The execution of this communication lies in devising and consistently applying a specific style, tone, and image. The role of local brand management is to refine the communication of the brand's core values by adjusting their execution to communicate meaningfully with each local market. If a local event like the Chinese New Year is taking place, it's the local brand-builder's task to ensure the brand

leveraging on it. Local brand building depends on an acute awareness of local trends; it's all about leveraging knowledge that the international marketing department has no access to or  sympathy with. The global marketing department is the strategic group. The local team is the tactical group. Both need to work hand in hand.

Managing Brands in Global Markets: One Size Doesn't Fit All Global companies need global brands to some extent. But global branding is not an all-ornothing proposition. There is a continuum along which firms can decide how global they wish their brands to be -- with a single global brand at one extreme and an assortment of nothing but local brands at the other. Global and local brands can be part of a successful marketing mix at any spot along the continuum. Decisions to use a combination of local and global brands -- what the Wharto Wharton n profes professor sorss call call the "hybri "hybrid" d" approach approach -- depend depend on many many factor factors, s, includ including ing  products, industry, local cultures and the nature of the competition. There are "various levels of being truly global. It is not always achievable, nor desirable, to go the full extent. Some form of local adaptation may be necessary, either in the product/service that is offered or in the positioning relative to competition." Big Brands, Big Money Which Which global global brands brands are most most valuabl valuable? e? Accord According ing to the 2004 Busine Business ss Week/I Week/Inte nterbr rbrand and survey, Coca-Cola tops the list of the 10 most valuable global brands ($67.4 billion), followed by Micros Microsoft oft ($65 ($65 billi billion) on),, IBM ($53.8 ($53.8 billio billion), n), Genera Generall Electr Electric ic ($44.1 ($44.1 billio billion), n), Intel Intel ($33.5 ($33.5  billion), Disney ($27.1 billion), McDonald's ($25 billion), Nokia ($24 billion), Toyota ($22.7  billion) and Marlboro ($22.1 billion). These brands and others share some common features: They have a consistent name that is easy to pronounce; corporate sales are globally balanced with no dominant market; the essence and  positioning of the brand is the same the world over; they address the same customer needs, or the same same target target segmen segment, t, in every every market market;; and there there is great great simila similarit rity y in execut execution ion (prici (pricing, ng,  packaging, advertising) across cultures. What kinds of products do not lend themselves to global brands? Food is one category where, literally, differences in tastes from culture to culture compel global companies to adapt to local conditions, according to Day. At the other end of the spectrum is a company like Intel, whose

 products and markets make it easier for executives to establish a truly global brand with a memorable catch-phrase: "Intel inside." It's much easier for a company like Intel to establish establish a global brand, brand, Intel has a smaller number  of buyers [than many other global companies] and all of those buyers are using computer chips for the same purpose. And all of Intel's competitors are global. Intel is a global brand without sign signif ific icant ant loca locall adap adapta tati tion. on. Th Thee same same hold holdss true true for for Disn Disney ey,, whic which h stan stands ds for for fami family ly entertainment in all cultures.

Forces against Globalization

One such force is the inherent market differences that can exist from country to country. For  example, KFC, formerly Kentucky Fried Chicken, has 5,000 restaurants in the U.S. and 6,000 in other countries. It has learned that it cannot open restaurants globally based on its U.S. model. In Japan, KFC sells tempura crispy strips. In Holland, it features potato-and-onion croquettes. In China, KFC's chicken gets spicier the farther inland one travels. Another countervailing force is entrenched local brands. Conditions favoring local over global  brands include unique market needs; low frequency of purchase, so that brand loyalty passes from one generation to another through family traditions; and the relative unimportance of  advertising, which makes it harder for global companies to change loyalty patterns. A third force mitigating against global brands is the growing concentration of retail buying  power -- labeled "growing channel power" by the authors -- which can lead to heightened price sensitivity on the part of the buyer. Wal-Mart's goal to offer low prices every day can constrain companies wishing to sell their products through Wal-Mart stores. Finally, criticism of global brands by activists opposed to globalization can also limit global  branding. A 1999 book titled No Logo, by Naomi Klein, alleged that global brands and excessive corporate power were chief contributors to poverty around the world. Well-known logos of firms such as Nike, Disney, Shell and McDonald's became symbols of a host of complaints about globalization. Targeted companies responded by establishing codes of conduct and improving labor labor practi practices ces,, but the anti-g anti-glob lobali alizat zation ion moveme movement nt served served notice notice that that high-p high-prof rofil ilee brands brands carried risks.

1600 Brands In a chapter titled "Managing Brands in Global Markets," the authors trace the paths of two global brands, Unilever and Music Television Networks (MTV). Both companies exhibit the various challenges faced by global firms to sell their products and services worldwide. The experiences of these two firms also show that developing brands for global markets is more complex complex and nuanced than Levitt's portrait portrait of an inexorable march toward globalizati globalization on would suggest. In the 1990s, Unilever was struggling under the weight of some 1,600 brands in more than 50 countries. Revenues were lopsided -- 3% of the brands provided 63% of revenues -- and the company was not growing. In 2002, Unilever launched a program to reduce its number of brands to 400 "core" brands so that it could concentrate its resources on fewer products. The company combined branding strategies by placing the 400 in three categories: international brands (such as Dove and Lipton), regional brands (such as a spread called Flora in the United Kingdom and Becel Becel in German Germany), y), and local local brands brands with with strong strong positi positions ons in single single countr countries ies (inclu (includin ding g Wishbone salad dressing in the United States and Persil detergent in England). MTV might appear to be the kind of company that could establish the type of uniform global   brand brand that that Levitt Levitt envisi envisione oned. d. MTV entere entered d Europe Europe in 1987 with with pan-re pan-regio gional nal progra programs ms in English. Programming was provided to cable operators at no charge, and all revenue came from advertising. Within a few years, however, things changed. Advertisers called on MTV to offer  local programs, either because they could not afford pan-European coverage, their products were available only locally, or their products were not uniformly branded in all countries. At the same time, strong local competitors emerged, such as VIVA in Germany and MCM in France. MTV responded to the change in climate. Today, MTV Europe (MTVE) has a presence in 41 countries with multiple languages and formats and nearly 50% local programming. For one thing, MTV realized that the local advertising sales market was much bigger than the  pan-European market. Moreover, changes in technology allowed separate satellite feeds to each countr country. y. Hence, Hence, MTV managed managed to addres addresss local local conten contentt and advert advertisi ising ng concer concerns, ns, while while simultaneously leveraging its powerful global brand identity -- the anti-establishment voice of  young people.

EFFECT OF GLOBALIZATION ON INDIAN INDUSTRY Effects of Globalization on Indian Industry started when the government opened the country's markets to foreign investments in the early 1990s. Globalization of the Indian Industry took   place in its various sectors such as steel, steel, pharmaceutical pharmaceutical,, petroleum, petroleum, chemical, textile, textile, cement, cement, retail, and BPO.

Globalization means the dismantling of trade barriers between nations and the integration of the nations economies through financial flow, trade in goods and services, and corporate investments  between nations. Globalization has increased across the world in recent years due to the fast   progr progress ess that has been made made in the field field of technol technology ogy especi especiall ally y in commun communica icatio tions ns and transport. The government of India made changes in its economic policy in 1991 by which it allowed direct foreign investments in the country. As a result of this, globalization of the Indian Industry took place on a major scale.

The various beneficial effects of globalization in Indian Industry are that it brought in huge amount amountss of foreig foreign n invest investmen ments ts into into the indust industry ry especi especiall ally y in the BPO, BPO, pharma pharmaceut ceutica ical, l,  petroleum, and manufacturing industries. As huge amounts of foreign direct investments were coming to the Indian Industry, they boosted the Indian economy quite significantly. The benefits of the effects of globalization in the Indian Industry are that many foreign companies set up indust industrie riess in India, India, especi especiall ally y in the pharma pharmaceut ceutica ical, l, BPO, BPO, petrol petroleum eum,, manufa manufactu cturin ring, g, and chemical sectors and this helped to provide employment to many people in the country. This helped reduce the level of unemployment and poverty in the country. Also the benefit of the Effects of Globalization on Indian Industry are that the foreign companies brought in highly adva advanc nced ed tech techno nolo logy gy with with them them and and this this help helped ed to make make the the Indi Indian an Indu Indust stry ry more more technologically advanced.

The various negative Effects of Globalization on Indian Industry are that it increased competition in the Indian Indian market between between the foreign companies and domestic companies. companies. With the foreign foreign

goods being better than the Indian goods, the consumer preferred to buy the foreign goods. This reduced the amount of profit of the Indian Industry companies. This happened mainly in the   pha pharm rmac aceut eutic ical al,, manuf manufac actu turi ring ng,, chemi chemica cal, l, and and stee steell indu indust stri ries es.. Th Thee nega negati tive ve Effe Effect ctss of  Globalization on Indian Industry are that with the coming of technology the number of labor  requir required ed decrea decreased sed and this this result resulted ed in many many people people being being remove removed d from from their their jobs. jobs. This This happened mainly in the pharmaceutical, chemical, manufacturing, and cement industries.

The effects of globalization on Indian Industry have proved to be positive as well as negative. The governmen governmentt of India India must must try to make make such such economi economicc polici policies es with with regard regard to Indian Indian Industry's Globalization that are beneficial and not harmful

EFFECT OF GLOBALIZATION ON RURAL MARKETING

Rural Agricultural Marketing - Impact of Globalization: Contract Marketing

The macro level changes due to the New Economic Policy have had a direct impact in the field field of agricultural marketing. So the impact of globalization has been highlighted here.

As a result of globalization substantial investments in new ventures are being made by national as well as international corporations. A number of foreign companies are slated to enter the Indian market through collaborations with the well known Indian companies like Eagle Agrofarms, Maxworth Orchards, etc. It is clear that the wholesaler in the fresh products market as well as the processor will prefer contract marketing tie-ups with the farmers for sourcing his supply requirements. The concept of contract farming is not new to India. Several years back, contract marketing was successfully tried in respect of "Hima peas". 'MARKFED' of Punjab also operated a scheme of  contract marketing for green peas, Agrecotec proposes to setup country-wide retail network of  shops for fresh fruit vegetable vegetable marketing. marketing. ,Direct marketing marketing to consumer is already already being done  by the Mother Dairy through its outlets in Delhi.

The successful integration of production and marketing under Apni mandi' scheme in Punjab and the marketing managements of 'FRESH' in Hyderabad are clear signs that contract marketing is going to be increasingly resorted to in the years to come. “Pepsi Foods" also an another example of contract farming of potatoes and tomatoes. Under this farming farmers will be producing specific varieties or qualities tailored to meet the requirements of the processor or the fresh  produce market. The potential benefits of the contract farming are:- producers can reduce the market risk, post harvest losses can be reduced, technology can be transferred to the producers, contract serve as a security for increased access to credit by both producers and processors, contract may create a greater sense of common interest among the producers and induce greater involvement in group activities etc. Common problems may be volatility in market price, there is risk that the processors may manipulate the quality standards, coordination problems may be there regarding delivery of  inputs inputs or produc produce, e, proces processor sorss may lack the competence competence or capacit capacity y to delive deliverr the requir requiree technical assistance, producers may become tied to a contract relationship by virtue of debt, spec specia iali lizat zatio ion, n, or the the disa disapp ppear earan ance ce of othe otherr mark market etss and may may be unabl unablee to adju adjust st thei their  r   production activities to changing conditions etc. Many of these problems of contract farming will not arise where goodwill and credibility exist  between the farmers and the concerned company. Major Areas of Concern in the Rural Marketing Sector

1. Government should assume a more dynamic role in the field of agricultural marketing that of a strong buffer between global forces and local needs. 2. Emphasize value addition by giving a thrust to agro-processing industries at farm level so that the benefit of value addition is transferred to the producer. 3. There is a need for professionalizing agricultural marketing as a subject of great practical application.

4. Creation of an effective market intelligence network, right from the importer in the global market to the producer in the remote corner of the rural India. 5. Institutional linkages should be emphasized upon to integrate the markets, for easy movement of goods and also to facilitate the inter-state trade. 6. Regular surveys and analytical studies on agricultural marketing should be conducted, so that appropriate policy adjustments and refinements whenever necessary. 7. Decentralization in the marketing system. 8. To introduce social marketing for bringing about a change in the behaviour and attitude through social advertising and social communication. Some fertilizer companies and commercial  banks are taking up Village Adoption Programme under the social marketing.

9. A design frame work for information technology based Agricultural Marketing Network is essential. Computer installations at State as well as district marketing boards enhances the availability of trade information. 10. Econom Economic ic incent incentive ivess should should be offere offered d to the farmers farmers to encour encourage age them them during during low economic conditions.

RESEARCH & METHODOLOGY 

RESEARCH WORK 

Research in a common parlance refers to a search for knowledge. Research can also be defined as scientific and systematic search for pertinent information on the specific topic. So research means careful investigation on inquiry especially through search for new fact in branch of knowledge. Research is an academic activity and as such as term should be used in a technical sense. sense. “Resea “Research rch compri comprises ses defini defining ng and redefi redefinin ning g proble problem, m, formul formulati ation on hyp hypoth othesi esiss or  suggested solution, collection, organizing and evaluating data, make deduction and research conclusion and careful testing the conclusion to determine whether they fit or not ”. Research  purpose is to discover answer to question through the procedure of scientific procedure.

Research Design

The study is descriptive and empirical in nature with applied bias. Descriptive Study:

Descriptive studies are utilized when the researcher attempts to describe the state of affairs without controlling the variables causing change. This study includes the survey and fact finding inquires of different kind. The major purpose of descriptive research was description of the state of affairs that exists in Globalization and its marketing strategies.

Empirical Studies:

An empirical research relies on experience or observation alone often without due regard for  system and theory. It is the data research coming up with the conclusion which is capable being verified by observation and experiment. Analysis Pattern

The nature of the project is of the subjective nature so for the analysis of the available data, the use various statistical and mathematical and graphical techniques was not required. There were no additional statistical and technical tool were considered for suitability of the procedure &  problem in order to achieve the desire objective. The study was of the qualitative aspect not the quantitative. All the data was collected through interviews a secondary data so not tool were used It has been found that firms from emerging economies usually possess characteristics which distinguish them from those of developed economies. Therefore, empirical investigations on the relationships among globalization effects, degree of co-marketing alliances, and performance of  firms from India and other countries, which possess different backgrounds and characteristics, are undertaken by secondary data approach . In Secondary data, external research was done through Internet website & published books were consulted.

PERFORMANCE OF SOME GLOBALISED FIRMS:-

Local success on a global scale

MC CAIN OF CANADA & MC DONALD OF US

Much of the debate about global branding has centered on the question of whether global brands should should attempt to speak with one voice around the world, world, or whether whether they should adapt to local cultures. A popular strategy for many brands has been to globalize logos, brand names and trademarks, while introducing product variations at the local level. But a few global brands have gone the extra mile and achieved what must be the best of all possible worlds—acceptance as local local brands brands nearly nearly everywher everywheree they they do busine business. ss. Most of the brands brands that have have achiev achieved ed multilocal status have been around for awhile, although the tie-in is not completely obvious. One modern modern Americ American an brand brand that that has achieved achieved widesp widesprea read d local local accept acceptance ance overse overseas as is McDonald's. The American fast food chain has become such a routine part of the landscape in  parts of Asia, for example, that kids may not even be aware of the company's foreign origins. In the book "Golden Arches East," Emiko Ohnuki-Tierney relates a story of Japanese Boy Scouts who were surprised, when traveling abroad, to encounter a McDonald's in Chicago (edited by James L. Watson, Stanford, 1997). McDonald's began expanding internationally in 1967, twelve years after it began franchising in the US. By 1996, 1996, the restau restauran rantt chain chain was operatin operating g restau restauran rants ts in more more than than 25 foreig foreign n countries. In contrast to Singer and Philips, however, McDonald's became multi-local in the absenc absencee of trade trade barri barriers ers and at a time time when when global global commun communica icatio tions ns were were not practi practical cally ly instantaneous; nor have McDonald's overseas restaurants operated independently of the home office. Although the restaurant chain has made numerous efforts to localize its menu (it offers, for  example, salads in the US, lamb burgers in India, vegetarian burgers in the Netherlands, teriyaki   burgers in Japan, salmon sandwiches in Norway, frankfurters in Germany, and poached egg  burgers in Uruguay), it did not gain local acceptance worldwide by marketing local specialties. As Harvard's James L. Watson argues in Golden Arches East: McDonald's in East Asia , the secret to the restaurant's global popularity has almost certainly been its French fries, which he writes are

"consumed with great gusto by Muslims, Jews, Christians, Buddhists, Hindus, vegetarians, communists, Tories, marathoners, and armchair athletes." McDonald's fries have resonated with local tastes in dozens of countries—a fact that is not surprising when one considers that potatoes, consumed by over a billion people around the world, are one of the most recognized foods on earth. But there's even more to the potato story. According to the University of Western Ontario's Dawa Dawar, r, McCa McCain in Foods Foods of Cana Canada da is the the larg larges estt inte intern rnat atio iona nall suppl supplie ierr of Frenc French h frie friess to McDonald's. Meanwhile McCain, which markets frozen potato specialties in 100 countries, has itself achieved multi-local acceptance in many of the countries where it does business. The company localizes its product by calling it chips in the UK for instance and developing local advertising advertising for markets and managers by region. In Australia, Australia, people think of McCain McCain as an Australian company. In England, people think of McCain as an English company. In Canada,  people think of McCain as a Canadian company... McCain is a very local brand in each of the markets in which it operates.

Problems faced by Global brands

Companies find it difficult to succeed in new markets that are culturally unfamiliar. •

They often underestimate differences in the patterns of daily life in the new markets.

•

This makes it difficult to develop products and services that fit peoples’ lives,

•

It is difficult to extend their brand, and manage culturally diverse teams.

STRATEGY ADOPTED

BY

COCA-COLA

Coca-cola : Global is Out, Local is In • Initia Initiall setbac setbacks ks in 80s the benefit benefitss of global global integrat integration ion are sought sought and the need need to adapt adapt  products to local markets is largely ignored. • Coke is instituting a strategy of ‘think local, act local’ by putting increased decision making in the hands of local managers. • Make model citizen by reaching out to the local communities and getting involved in civic and charitable activities. Better understanding and appealing to local differences.

DISNEY: LEARNING TO SAY OUI NOT YES

Before:

• Workers were required to speak English, even if most people in attendance were French. • Liquor was not sold in the park; they have a drink with w ith lunch or dinner. • Many of the exhibits and rides did not have a local theme; they were the same as those in Disneyland USA and thus did not appeal to Europeans. After:

• began creating European-specific attractions

• Started to serve alcoholic beverages A series of changes, abandoning its global approach, and substituting one that appealed to local tastes.

EGIONAL FOCUS AND GLOBAL COORDINATION P&G: R EGIONAL

Procter & Gamble (P&G) with annual sales of almost $4 0 billion has operations in virtually every country of the world.

Strategy:

• The firm employs employs a strategy strategy that combines combines high national national responsiveness responsiveness with high economic integration. • Strategies being developed and implemented locally and/or regionally. In particular, product delivery and marketing are local.

• The ‘back office’ of payroll, financing, human resource management and other general services and processes is coordinated on a more global basis, in order to achieve internal economies of  scale. Result:

• Economic efficiency and localization.

ANALYSIS & FINDINGS

ANALYSIS

EFFECT OF GLOBALIZATION ON INDIA’S EXPORT SECTOR   No doubt that in the age of globalization and liberalizations, Export has became of the most lucrative business in India. Government of India is also supporting exporters through various incentives and schemes to promote Indian export for meeting the much needed requirements for  importing modern technology and adopting new technology from MNCs through Joint ventures and collaboration. Export Sector of Indian Economy has improved immensely over the years and has earned US

$ 125 billion in the current fiscal year. The goods exported from India mainly include wide variety of agricultural products, chemicals, jewelry, garments, leather goods and so on. India has developed business relations with a number of foreign countries like the member  countries of SAARC, some Eastern European countries as well as African countries, Members of  EU. The impressive list of countries includes: •

Russia

•

UAE

•

USA

•

Hong Kong

•

UK 

•

Japan

•

Germany

•

Singapore

•

Belgium

•

Malaysia

•

 Netherlands

•

Bangladesh

•

Italy

•

Thailand

•

France

•

Australia

•

Belgium

The export sector of Indian economy has always delineated impressive growth in all the areas of  export, like the chemical industry in the financial year 2005-06 recorded US $ 12677.21million from exports, whereas the export earnings from gems and jewelry was US $ 13705.44million in the same fiscal. The engineering industry has been performing consistently over the years in the arena of exports as it secured the second position in terms of the earnings from exports in 200405, amounting to US $ 10516.45million, which increased to US $ 14587.37million in the next fiscal. The performance of textile industry has fluctuated a little as the earning of the textile industry from exports in the financial year 2004-05 was US $ 12204.71million which came down to US $ 12017.46 million in 2005-06. USA has turned out to be the most significant export partner of India and the export sector of  Indian Indian economy economy earned earned approxi approximat mately ely US $ 13265.60 13265.60 million million in 200 2006-0 6-07. 7. UAE has stood stood second only to USA as UAE contributed 9.7 out of the total Indian earnings from exports in 2006-07. UK and China has exchanged their positions in the current year as China's share among the exports figure in India in 2006-07 has improved by 6.3 % in comparison to 2005-06. In 200405 Belgium and Italy contributed substantially to the earnings from exports, with a contribution of US $ 2442.09 million and US $ 2160.83 million respectively. The major export products of India hail from the following divisions within the export sector 

of Indian economy like: •

Engineering Goods

•

Agricultural Products

•

Chemicals

•

Marine Products

•

Petroleum products

•

Leather Goods

•

Textiles

•

Plantations

Among the agricultural exports of India include Indian rice, raw cotton, cashew, sugar, tobacco, spices, coffee, wheat and tea have become very popular in the international market on account of  their variety variety and excellent excellent quality. quality. The engineering engineering industry serves to export electronic electronic goods , transport equipments, iron and steel, and various machineries and the textile industry is engaged in the export of readymade garments, jute, cotton yarn, carpets, woolen yarn, coir, artificial fabrics and so on. Other significant export products include paints, rubber, iron ore, plastic,  pharmaceuticals etc.

The export barriers in India have been hampering Indian exports to a great extent and most of  such barriers have been announced by the European Union regarding certification requirements, application of pesticides, dumping of waste products. But the most significant export barrier  faced faced by the Indian Indian export exporters ers is red tapism tapism which which is mostly mostly accompani accompanied ed by corrup corrupti tion. on. However, the government of India has considered plans to liberate the Indian exporters from the cumbersome paper works and simplify the required procedures. The export sector of Indian economy made comprehensive progress over the last decade. The exponential growth of the export sector of Indian economy can be attributed to the liberal Government of India economic policy. Indian exports have an ambitious target of US 160 billion in 2007-08. The achievement came to the Indian exports in the last fiscal despite the odds against the exports, minimizing the gains. In the first two months of 2007-08 exports grew by 20.3%, which was a little lower than the previous year over the same period a year ago.

The Government of India latest export policy for the exporters will help in stabilizing the export growt growth h level levelss atta attain ined ed in the the 1st 1st quart quarter er of 200 20077-20 2008 08.. Ores Ores and mine minera rals ls expo export rtss grew grew moderately to 12.9% against 37.4% in 2005-06. Similar trend was also observed in the exports of  manufacturing sector. The exports of manufactured goods from India grew moderately by 15% in the first quarter of 2007-2008 as compared to 21.2% in the last fiscal year. High value commodities like engineering goods and rice registered very high growth rate in the 1st quarter  of this fiscal against the same period last year. The overall exports suggests that the Indian export exportss grew grew conside considerab rably ly across across all major major exporti exporting ng desti destinat nation ions. s. The Indian Indian exports exports to Pakistan, UAE and Italy showed remarkable growth in the first quarter of the current fiscal year.

The astronomical growth of the Indian export sector was led by the following industry •

Information Technology

•

Information Technology Enabled Services

•

Telecommunications hardware

•

Electronics and hardware

•

Pharmaceutical and biotechnology products

•

Consumer durables

•

Textiles

•

Construction machinery

•

Power equipment

•

Food grains

•

Iron and steel

•

Chemicals and fertilizers

The robust overall growth of export sector of Indian economy led to secondary growth of the following economic parameters -

•

India's economy grew at 9.3% in quarter April-June and it was driven by manufacturing, construction and services sector and agriculture sector 

•

GDP factor for the first quarter of 2007-08 was at Rs 7,23,132 crore, registering a growth rate of 9.3% over the corresponding quarter of previous year 

•

Exports grew by 18.11% during the 1st quarter of 2007-2008 and the imports shoot up by 34.30% during the same period

•

India's FOREX reserves (excluding Gold and SDRs) stood at $219.75 billion at the end of July ' 07

•

The annual inflation rate was 4.45% for the week ended July 28, 2007

•

India's Balance of Payments is expected to remain comfortable

•

Merchandise Exports recorded strong growth

•

According to reports, productivity growth rate of Indian economy is estimated to be around 8% and above until 2020

At this stupendous growth of the export sector of Indian economy, it is expected that India will  become the second largest economy in the world after China. Exporting items from India is as profitable as importing things to India. You can easily import the traditional art and crafts of the country, of which you will find great variety and number. These items are in great demand in the western countries and good quality products sell for really high prices. You can also export natural products like silk, flax seeds and jute fiber. These are  products that are already exported by India in large quantities. Indi Indiaa is a larg largee expor exporte terr of alum alumin inum um and alum alumin inum um ore. ore. Sinc Sincee alum alumin inum um take takess a lot lot of  electricity to extract, India mainly exports the ore to other countries where power is cheaper. Power is not abundant in India and there is a definite deficit in that area. As mentioned earlier, India is a large exporter of handicraft and some clothing items also fall within this category. India is known for providing some of the best embroidery works in the world. Indian embroidery has various styles that are unique to the country and cannot be found

anywhere else. That is why they are prized highly by fashion designers all over the world. There are also other traditional textiles and clothing that India exports in large quantities.

CLASSIFICATION OF EXPORT ITEMS CATEGORY CONSTITUENTS ➢

Food and Live Animals

1. Cereals and Cereal Preparations a) Wheat  b) Rice c) Others 2. Cashew Nuts Raw 3. Spices 4. Others ➢

Beverages and Tobacco

1. Tobacco, Unmanufactured 2. Others ➢

Crude Materials, Inedible, except Fuels

1. Crude Rubber Incl. Synthetic and an d Reclaimed 2. Cotton 3. Jute 4. Wool and Other Animal Hair excl. Wool Tops 5. Manmade Fibres and Waste thereof  6. Synthetic Fibres suitable for Spinning

7. Matalliferrous Ores and Metal Scrap 8. Crude Fertilisers and Crude Minerals 9. Others ➢

Mineral Fuels, Lubricants and Related

1. Petroleum Crude and Partly Refined 2. Petroleum Products 3. Others ➢

Animal and Vegetable Oils and Fats

1. Vegetable oils, fixed 2. Others ➢

Chemicals

1. Chemical elements and compounds 2. Dyeing, tanning and coloring materials 3. Medicinal and Pharmaceutical Products 4. Fertilizers, manufactured 5. Others ➢

Manufactured Goods Classified Chiefly by

1. Pearls, Precious and Semi-Precious Stones 2. Paper, Paperboard and manufactures thereof  a) Newsprint paper   b) Others 3. Textile Yarn, Fabrics, Made-up Articles and

Related Products 4. Iron and Steel 5. Non-Ferrous Metals 6. Manufactures of Metal, n.e.s. 7. Others ➢

Machinery and Transport Equipment

1. Machinery, other than Electric 2. Electrical Machinery, Apparatus and Appliances 3. Transport Equipment a) Railway Vehicles  b) Others

ALTERNATIVE CLASSIFICATION OF EXPORT ITEMS CATEGORY CONSTITUENTS ➢

Primary Products

A. Agriculture and Allied Products 1. Tea 2. Coffee 3. Rice 4. Cotton Raw including Waste 5. Tobacco 6. Cashew including Cashew Nut Shell S hell Liquid 7. Spices 8. Oil Meals

9. Fruits and Vegetables 10. Processed Fruits, Juices, misc. Processed Items 11. Marine Products 12. Sugar and Molasses 13. Meat and Meat Preparations 14. Others B. Ores and Minerals 1. Iron Ore 2. Mica 3. Others ➢

Manufactures Goods

1. Leather and Manufactures 2. Chemicals and Allied Products a) Drugs, Pharmaceutical and fine Chemicals  b) Others 3. Plastic and Linoleum Products 4. Rubber, Glass, Paints, Enamels and Products 5. Engineering Goods 6. Readymade Garments 7. Textile Yarn, Fabrics, Made-ups etc. a) Cotton Yarn, Fabrics, Made-ups etc.  b) Natural Silk Yarn, Fabrics, Made-ups etc. c) Others

8. Jute Manufactures 9. Coir and Manufactures 10. Handicrafts a) Gems and Jewellery  b) Carpets (Handmade excluding Silk) c) Works of Art (excluding Floor Coverings) 11. Sports Goods 12. Others ➢

Petroleum Products

➢

Others

COMMODITY COMPOSITION OF EXPORTS:Over the past decade, exports (measured in rupees) have grown by 21.7% on an average. Some commodities have enjoyed much faster export growth than others. Given below is the export ex port  performance, in Million US$, of some commodities during 1994-95 and its change in percentage terms over levels in 1993-94.

Composition of India's exports

(Percentage shares) Commodity Group

Apr-Sept

Apr-Sept

1994-07

2007-08

2008-09

2009-2010

I. Agriculture & allied

16.0

19.2

16.1

2 0 .6

1. Tea

1.2

1.1

1.1

1.0

2. Coffee

1.3

1.4

1.6

1.6

3. Cereals

1.5

4.7

3.5

4.1

5. Spices

0.7

0.7

0.7

0.9

6. Cashew nuts

1.5

1.2

1.3

1.3

7. Oil meals

2.2

2.2

1.5

2.1

8. Fruits & vegetables

0.7

0.7

0.7

0.6

9. Marine products

4.3

3.2

2.8

3.0

II. Ores and minerals

3.8

3.7

4.0

3.7

11. Iron ore

1.6

1.6

1.8

1.4

13. Other ores and minerals

1.0

0.9

1.1

1.1

III. Manufactured goods

78.1

75.4

77.8

7 3 .5

14. Leather & manufactures

4.0

3.6

3.8

3.1

15. Leather footwear

2.1

1.8

1.2

1.1

16. Gems & jewellery

17.1

16.6

16.9

1 4 .0

3.2

3.1

3.3

1.5

1.6

1.6

2.7

2.6

2.6

3.0

22. Primary & semi-finished iron & 1.6

1.6

1.8

1.3

17. Drugs, Drugs, pharmac pharmaceut eutical icalss & fine fine 3.0 chemicals 18. Dyes / intermediates & Coal tar  1.8 chemicals 19. Manufactures of metals

steel 23. Electronic goods

1.6

2.1

2.0

2.4

24. Cotton yarn, fabrics, madeups etc

8.5

8.1

8.2

9.2

25. Ready made garments

12.5

11.6

12.0

11 .3

26. Handicrafts

3.9

3.5

3.8

3.5

IV. Crude & petroleum products

1.6

1.4

1.6

1.6

V. Others & unclassified items

0.6

0.4

0.5

0.6

Grand Total

100.0

1 0 0 .0

100 .0

100.0

GROWTH OF EXPORTS OF MANUFACTURED GOODS Sector

Exports

Exports

Contribution

1994-95

2009-10

(1994-95 (1994-95 to 2009-

US million Leather

&

$ US

$

10)*

million

%

leather   1278.2

3433.38

2.45

related 1581.3

14944.95

15.20

36619.31

39.09

9528.17

7.98

manufactures Chemicals

&

 products Engineering goods Textiles

2256.57 (excluding 2512.46

readymade garments)

Readymade garments

2215.54

9496.69

8.28

Other manufactured goods

3401.17

27128.86

26.99

Manufactured goods

1 324 5 .25

1 0 115 1 .4

1 0 0 .0 0

GROW GROWTH TH RATE RATE OF EXPO EXPORT RTS S OF SE SELE LECT CTED ED MANU MANUFA FACT CTUR URED ED PRODUCTS Product group

Exports

Exports

1994-95

2009-10

US

$ US

million Primary & semi-finished iron & 92.21

CARG CARG,,

1994 1994-9 -95 5

to 2009-10 (%)

$

million 4157.51

26.88

steel Non-f n-ferr errous ous metals

105 105.38

3055. 55.71

Iron & steel bar/rods

62.43

1293.04

20.85

Ferro alloys

72.53

1113.99

18.62

Mach Machin iner ery y & instr nstrum umen entts

585. 585.76 76

8724 8724.7 .77 7

18.3 18.39 9

Manu Manufa fact ctur ures es of met metals als

487. 487.81 81

7027 7027.5 .5

18.1 18.14 4

23. 23.42

Transp nsport ort equi quipment

500 500.11

7029. 29.16

17. 17.96

Inorganic/organic/agro

201.88

2733.95

17.69

267 267.21

3230. 30.73

16. 16.86

934.29

16.68

7241.44

16.45

2699.12

14.27

chemicals Electronic nic goo goods

Resi Residua duall chem chemic icals als & alli allied ed 79.2  products Drugs, pharmaceuticals & fine 633.46 chemicals Dyes Dyes interm intermedi ediate atess & coal tar  319.31 chemicals Paints/enamels/varnishes

91

657.21

13.15

Project goods

18.85

128.34

12.74

Machine tools

47.79

300.14

12.17

Residual ual engineering items ems

16. 16.49

89.34

11. 11.14

Cosmeti etics/toiletr etries

256 256.45

678.9 8.93

6.2 6.27

Merchandise exports have been increasing quite rapidly in recent years .Between 2001-02 and 2007-08 manufactured exports have increased at the compound annual rate of growth (CARG) of  20%. But the share of manufactured goods in total exports has declined from 73.6% in 1994-95 to 63.6% in 2009-10. The growth in exports has been interpreted as a success of the reforms process since 1994.

But as Table shows, more than 50% of the growth of exports during 1994-95 to 2009-10 has  been accounted for by engineering engineering goods (39.1%) and chemicals chemicals and related related products products (15.2%). Again within these two sectors, the products for which exports have been expanding rapidly are  primary & semi-finished iron & steel (CARG 26.88% between 1994-95 and 2009-10), Iron & steel bar/rods (20.85%), Machinery & instruments (18.39%), Drugs, pharmaceuticals & fine chemicals (16.45%) etc. These are precisely the industries which were created and developed in the pre-reforms period through active state intervention. Consider, for example drugs & pharmaceuticals. This industry is considered to be one of the success stories of independent India. A conscious industrial policy worked behind the development of the pharmaceutical industry in India. Among the instruments used were regulation of foreign capital, promotion of indigenous enterprises, patent reforms,  public investments in manufacturing and R&D.

INDIA’S EXPORT

From the above chart it can be seen that india’s export has significantly grown from from 2005-06 to 2009-10 and . the export sector in india has continuously grown from 2005-06 to 2009-10. In 2004-05 the export was 83.5 USD billion dollar, it increased to 103.4 in 2005-06 and then it increased to126.3USD dollar in 2007-08. In the year 2008-09 and 2009-10 also the export sector  in india is growing. There was a sharp rise in export from the year 2008-09 to 2009-10.

FINDINGS

The findings of this study indicate that globalization drives more collaboration among firms, allowing them to better cope with higher global competitive threats and market uncertainty. Such cooperation eventually increases international marketing effectiveness of firms engaging in comarketing alliances. Whereas an increase in cooperation is influenced by higher global market threats (i.e., both compet competiti itive ve threat threatss and uncert uncertain ainty ty), ), it is not affect affected ed by global global market market opportu opportunit nities ies.. The absence of any effect of global market opportunities on alliance cooperation can be attributed to the fact that ample opportunities in the markets may result in the lack of collaboration among firms. Moreover, it is found that increased cooperation in co-marketing alliances helps firms enhance international marketing effectiveness but not efficiency. Since higher expenses may arise from such cooperative attempts, efficiency becomes difficult to realize. In sum, these results validate globalization-alliance literature by showing that globalization actually drives more cooperation among firms. Managers should be prepared to cope with these diverse effects by capitalizing on global market opportunities while carefully managing the inherent threats. Alliance participation and cooperation presents a viable option for firms to navigate successfully in this new competitive landscape. From both theoretical and practical perspectives, globalization is a complex  phenomenon.

LIMITATION

LIMITATIONS OF THE STUDY

This study is among a very few empirical studies of globalization effects. Therefore, the results of this study must be viewed with these limitations. The scales to measure globalization effects were newly developed. The scope and domain of our formative measure for the degree of  cooperation in co-marketing alliances represents another measurement concern. Although these scales were developed from a careful literature review, they are new, and thus need further  verifications and applications. Several variables were not included in this study, but are worth incorporating in further studies. The roles of trust and commitment in the co-marketing c o-marketing alliances should be investigated. As stated in Dyer, the transaction costs of the firms vary based on the choice of safeguarding mechan mechanism ismss used. used. For instan instance, ce, higher higher commit commitmen mentt betwee between n exchang exchangee partne partners, rs, higher  higher  econom economies ies of scale scale and scope scope of exchang exchangee relati relations onship hipss and higher higher interinter-fir firm m inform informati ation on sharing can help lower transaction costs (Dyer, 1997). Since levels of trust and commitment may affect the degree of cooperation and satisfaction of each partner, further studies could investigate the relationships between the two and its effects on firms’ efficiency. Other research avenues may include comparative studies of differences in the degree of comarketing alliances and their performance implications among firms from emerging economies themselves. Although most emerging economies appear to possess similar characteristics, they tend to differ in various ways (e.g., political regimes, levels of economic development, and managerial styles). Moreover, empirical studies of firms in different emerging markets are scarce. Thus, studies comparing firms from different emerging economies are worth ex ploring in the future.

CONCLUSION

CONCLUSION

This project is related to the effects of globalization on firms. Firstly it represents the advances   pri prior or knowl knowled edge ge on glob global aliz izat atio ion n and and busin busines esss by empi empiri rica call lly y inve invest stig igat atin ing g how this this

 phenomenon affects firm performance. Secondly it has been seen, during the research work, that various companies which were fighting for their existence and also had the doubt of failing in the international market due to exposure to various competitors but globalization itself became a  boom to them and help them in achieving their prominent positions. So according to this, yes it is stronger market opportunities and its performance stronger than the market threats. Studying further explores the role of firms’ cooperation in alliances in enhancing their performance amid globalizati globalization on by specifical specifically ly focusing focusing on co-marketi co-marketing ng alliances alliances and internatio international nal marketing marketing   performance of firms. A particular emphasis is paid to this type of alliance since superior  marketing is crucial for firms to build a sustainable source of unique competitive advantage. Such advantage eventually enables firms to achieve long-run success in a hypercompetitive terrai terrain n under under global globaliza izatio tion. n. While While studyi studying ng the object objective ive it shows shows a concept conceptual ual framew framework  ork  relati relating ng global globaliza izatio tion n effect effectss to firm firm perfor performanc mancee and tests tests the propos proposed ed relati relations onship hipss in developed and emerging economies (i.e. India and the other countries).

BIBLIOGRAPHY

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