Glocalizaton concept and its relation to standardization-adaptation debate in marketing literature review
What is glocalization
Glocolization is a term that was introduced in early 90s by Robertson, it comes from combination of two words; globalization as well as localization. The globalization refers to the flexibility that is brought about by countries allowing the international forces to have impact on their local market environments, so as to attain some economic growth. Furthermore the term localization refers to the reiterating that is brought about by regions in order to maintain and protect some local culture and local conditions from them being carried away completely by the globalization forces. Therefore, glocalization attempts to balance the two approaches so as to cater for the local preferences and tastes, while trying to focus on the international corporate philosophy as well as vision that firms have (Reshmi, 2014, 427).
Contextualizing this concept in relation to Globalization
According to Jonathan (2011, 668) glocalization tend to be a theoretical idea that is two words mélange; globalization as well as localization. Therefore, glocalization actually refers to interface of global as well as local, the cooptation of global as well as local, dynamics of the cultural homogenization as well as heterogenization (Eric, 2007), as well as the conflation for universalization and the particularizing tendencies. While globalization stresses on cultural or corporate cultural process omnipresence globally, glocalization stresses the particulanism of global idea, service or product (Ritzer, 2007).
Glocalizatin is merely not another niche-marketing take, now worldwide. Rather it also adds some accuracy toward the current globalization approach amongst practitioners and scholars (Svensson, 2001). The glocalization theory bonds relationships, harmony and balance between cultural heterogenization and homogenization, adaption and standardization, tailoring and homogenization, divergence and convergence, particularism and universalism (Robertson, 1995).
The increasing realization amongst companies that are going into globalization that a one strategy that fits all approaches that they already have attempted to work on, can just be not the right path to take. A complete array for the research articles have even gone to delineating the significance of incorporating local preferences, tastes, cultural differences when dealing with the external consumers as well as addressing a competition (that may again not be considered as entirely global). But again, only not external environment, there are several discussions that is being also focused on adaptation that can be needed to be prepared in the terms of a working environment, practices and norms within a given organization that is treading on a global path. The glocalization era indeed has set in, just like indicated by experience of many successful companies within a global front (Reshmi, 2014, 427).
Discussing how this concept relates to ‘Global’ and ‘Local’ Business/Marketing strategies
The globalization involves flexibility that is brought by countries allowing the international forces to have influence on local market environment, so as to attain some economic growth.(Goran, 2001). At the other side of localization, regions attempts to reiterate so as to maintain and protect a fraction of the local culture and local environment not to be fully carried away by globalization forces. Therefore, glocalization attempts to balance the two approaches so as to cater for the local preferences and tastes, while trying to focus on the international corporate philosophy as well as vision that firms have (Reshmi, 2014, 427).
This related advantages and standardization attained through globalization also however brings up some arguments against this very idea of having joint global strategy of firms per se. While agreeing that the strategies emphasizing on standardization for marketing mix components i.e. place, price and promotion can be of benefit under some circumstances and bring forth increased returns, Kotler urgues that it can prove also to be very detrimental in a firm at a certain circumstances when crossing the boundaries with an attempt to be global bandwagon part. Kotler also places the approach of Levitt towards the globalization like a backward direction step when considering the present modern approaches of marketing, which harps onto understanding as well as fulfilling in accordance to local preferences and tastes and other contextual demands of a consumer and a customer. Meaning that a single approach that is being applied by companies and businesses that are going global began to be questioned (Reshmi, 2014, 428).
Reflecting how these concepts relate to ‘standardization-adaptation debate’ (regarding the marketing mix) that prevails in marketing literature
The standardization of many activities and products across some industries such as information and technology and automobile have indeed helped firms in reducing barriers that exist in the terms of changes required or product improvement, furthering establishment of the value networks past geographical boundaries. The government policies are internationally woven around fully to these standardization and similarities, transforming the entire world into a small global village. When companies starts to compete globally, they adds more pressure on domestic players for them to withstand the additional competition (as it becomes a huge concern about their growth as well as survival), hence making almost all companies across nations to begin strategizing and competing globally so as not to be left out (Reshmi, 2014, 428).
The global marketing mix operations, which are involving a single or even more international marketing mix choices and decisions, are very critical for prosperity of several organizations that operates today in the competitive as well as globalized economy (Leonidou, Barnes, Spyropoulou and Katsikeas, 2010).
In Ali et al (2014, 615) on basis of the managers interview, it is found that whereas product colour, concept as well as packet are adapted, brand name and label are all standardized within the global markets. For instance, one of the managers indicated that whereas the teenager groups tend to be exported to the European nations mostly, the sitting groups are mainly exported to the African countries. Another manager explained that the products that are produced in dark for Romania, they are produced in white colour for Netherlands and Germany. Additionally, armchairs increases their distributive costs due to its little money yield, although occupies a huge space. In such a case, it is indeed not preferable for it to be sent into other nations other than the ones that are nearby. In this regard, the product mix are adapted based on their market properties, distributive costs, and customer preferences. At the other side, the managers did note that brand names and labels are standardized in order for a company to create brand equality and brand reorganization in the international markets.
Critical discussion of the advantages and drawbacks of these different strategic approaches in Global Marketing
Strategies of global and globalization to tread globalised path resulted to several businesses advantages across the global and id at a position of continuing in coming times. However, as many experienced globalized businesses globally realized, this oneness pursuit of being worldwide cannot achieve the true potential of the business in the sense of business, without the differences at national and regional level being considered. As part of globalization, standardization should be integrated with local preferences and tastes preferences, work culture, customs etc adaptation as strategies of businesses for long-term growth and survival in this world of business moving the way if globalization. There is need by businesses to realize sooner, that going worldwide is a future mantra, because includes in global is glocal as well (Reshmi, 2014, 430).
Review, analysis, comparison and discussion of the Glocalization application
Choice of 2 companies
The two chose businesses are Disney and the Wall-Mart.
Analysis of the extent to which these 2 companies apply a ‘glocal strategy’ (standardize and adapt their marketing mix) to their marketing programme and illustration this analysis by using the ‘dot plot table’
Various multi-national and global corporation included Disney, Panasonic, Wal-Mart, McDonald, MTV, etc. The highlights by Matusitz of the Paris Disneyland and Hong Kong Disneyland classic cases. Wherein, initially Disney experienced big failure trying enforcing strategies giving them success within US, onto Chinese as well as France market and importance not being given to influence of requirements of local market and local culture. This led to change of direction by Disney in following approach with four pronged which included, reduction of prices, menu being organizes according to eating habits and tastes of the locals, adjusting the setting and décor to preference of the locals and becoming flexible in working policies and practices related towards local employees, thereby success was achieved (Reshmi, 2014, 430).
The main challenge of Disneyland of Hong Kong was to tailor its own corporate philosophy as well as niche attractions towards Chinese environment, culture and mindset whereas maintaining the theme of Disney intect, a thing that has indeed proved very challenging to the Disney executives (Marr, 2007).By it integrating into Chinese context, Disney`s goal was so as to avoid the problems of customs, traditions and cultural blackish. The key glocalization changes which have made Disneyland very successful includes:-
The reduction of prices
At the time when Hong Kong Disneyland was opened on 2005 on September, that area had not yet completely recovered from the Asian financial problems of the late 1990s(Wiseman, 2005) in the price reduction. (2) Adaptation to the visitors’ local customs; (3) change of the décors as well as settings beginning, the theme park admission ticket was very high for the local visitors. Since China overall still was a country having low levels of income, and the lack of the vacation experience of affordability at Disney was not of any help (Marr & Fowler, 2005).
Theme park also sold tickets which the visitor could only use in one day, without making any holiday schedule for China. The Hong Kong Disneyland executives latter realized that coming up with strategies to lower prices, and then come up with a fitting national income standards as well as schedule was indeed necessary(Marr & Fowler, 2005). The present prices of US$38 (HK$295) for the adults’ admission tickets during a weekday are cheaper than the rest of Disney parks (Year of the Mouse, 2005). Since Hong Kong Disneyland is and was the smallest global Disney Park, another good reason for enhancing these off-peak low prices was to try and control crowd-the prices were higher during the holidays and the weekends. The Hong Kong Disneyland offers even lower prices to the seniors. Presumably, this is an effect of a culture that is family-oriented in Asia regarding the senior citizens (Zhibin& Ratliff, 2006). The third reason of lowering the prices is because China has many theme parks 9 even though several of them tend to be struggling financially or are forced to even close). The Company of Walt Disney conveyed a message that this parks are very different from those more traditional thrill-ride parks which are today`s Chinese standard (Marr & Fowler, 2005).
The adaptation to visitors’ local customs
Individuals from the China mainland have got very varied expectation than the ones from other places globally. Generally, the mainland visitors travel on a packaged tour including a group dinner. Initially, Hong Kong Disney was not able to accommodate large groups like those. Additionally, the prices for the tickets did not initially have enough commission for tour operators. Hence, few of those included the Disney into their itineraries. The Hong Kong Disney used to be very unpopular such that even the neighboring transvestite bars were attracting even more visitors coming from mainland (Holson, 2005).
Theme park today has greatly improved its own collaboration together with the tour companies that are currently benefiting from the share of attraction as well as steer their customers towards them. The marketing executives of Disney also have been training the travel agents of Asian for months, from where the park is expecting 1/3 of the revenues to emanate from (Martin, 2007). Within the similar vein, the efforts by Walt Disney Co. to improve the Hong Kong Disney theme park attendance have involved adding more local entertainment and attraction offerings in the year 2008. For instance, the seasonal entertainment, like Haunted Halloween Disney (that was actually established by the Ocean Park), New Year for Disney`s Chinese, Sparkling Christmas, are all shown in a park in order to cerebrate the key Chinese festivals. Actually it is very truism that some gun works and fireworks were both invented there in China (Sardar & Masood, 2006). Because of this reason, then manger of Disney made very wise decisions by holding the fireworks extravaganza at Hong Kong Disneyland.
In order for it to be of benefit to its own guests, the Hong Kong Disneyland attempted to come up with adjustments to the local food preferences and eating habits. One key challenging decision was to put in its own menu, a traditional, though very expensive dish of Chinese; shark’s fin soup. At some instances, it may be as expensive as HK$3,120 (US$400) for just bowl. Together with that soup sliced abalone and roast suckling pig were planned as inclusive wedding ceremonies that were being promoted by that firm at its two Hong Kong Disneyland hotels.
Change of settings and decor
Another globalization move that was important which was adopted by Disneyland Hong Kong was changing settings and decors to fit the more the culture of China. Feng shui, which is an ancient arrangement disciple, is now taking a major role in design of theme park. For instance, main park’s entrance was moved so as it would face right direction. During the building of this new entrance, executive of Disney shifted the front gate angle by 12°.. Also added to the park was curve in walkway from train station to where the gate is for “chi” (or energy) doesn’t flow into South China Sea.Thus, chi would not slip past entrance to China Sea. Experts of otherfeng shui were hired for laying out rides.A dazzling nods and visual to Disneyland Hong Kong cultural differences may be much if marketing strategy (Holson, 2005), but consultants of feng shui said that the changes ensures parks prosperity (Year of the Mouse, 2005). When each building creation was finished – one of main ballrooms purportedly was 888 m2 in size – there was burning of incense; the number 8 in the Chinese culture signifies good luck.. On other hand, number 4 signifies bad luck according to Chinese cultural believes. Due to this, fourth-floor buttons are not there in any elevator at Disneyland Hong Kong (Holson, 2005). Other modifications by feng shui have included cash register being brought along walls or closer to the cornersm (Jonathan, 2011).
On the other hand, Wal-Mart retail business went into glocalization mode with the aim of achieving success within China. Among the meanings that were major there for Wal- Mart, was that by understanding local Chinese habits, environment and culture was important for its success in retail in China, more than its prowess in information technology use and location. The outstanding success that was gotten by the Wal-Mart was attained through globalization necessity realization by organization at its outset as well as being in position to cater for preferences and tastes that are sharply differing within such country as China that is very large (Reshmi, 2014, 430).
Globalization tend to refer to strategic choices that MNCs (multinational corporations) makes in order to adapt their services and products in the foreign markets so as to influence acceptance by the local consumers- where the real “Wal-Martization” already is happening. Catering to tastes and customs of the local culture has for nearly two decades been the Wal-mart Strategy e.g. in China, Canada, U.K and Japan. Basically, the high tension that is between diffusion as well as glocalization is a representative of tension that exist between the aspiration of preserving the local culture (together with their preferences and customs) and the building pressure from globalization(Williams, 2002).
The very first country where Wal-Mart ventured overseas was Mexico. This is called the Wal-Mart de Mexico. Initially when this company entered to Mexican market back in the year 1991, it tried to enforce the Wal-Martization to the local customs of Mexico. Put simply, the company maintained the U.S strategy for management practices, low wages, employees standards, everyday-low pricing (EDLP) for the buyers, anti-union policy, employees standards, as well as aggressive tendencies for expansion. History shows that the hardnosed and unyielding approach for Wal-Mart has actually failed in some few countries like Korea and Germany, making the ventures to pull out eventually (Landler and Barbaro 2006). Globalization and diffusion have indeed proved as the blended formula which made the Wal-Mart de Mexico successful in Mexico. In this very style, Wal-Martization does not just advance the Mexico`s economic status but acts also like a catalyst on the cultural change cusp.
Wal-Martization is one and the same with image of unstoppable discount, one whoch came to town, “big box” retailer, reshaped habit of shopping, and drain viability of local traditional shopping centers or the shops that are mom-to-pop. The main bulk contributor “drainage” of mom-to-pop lies with competitive pricing of Wal-Mart. Prices is reduced by Wal-Mart by half because it simply has the ability and power to do it (Bosshart 2007).
Comparison and discuss how the 2 companies’ global marketing programmes differ/not differ. Which company is more local/ global compared to the other?
Application of the theory of globalization to successful adaptation of Disney in Hong Kong. The park’s theme is referred to as the Disneyland Hong Kong. When it opened for the first time in the year 2005, there very many mitigated responses that net it. Among the major reason was that traditional method by Disney imposing its products from US from its headquarters in Burbank, CA to the local content of Chinese was not working. Amid criticisms that were many the employees complained of Disney’s restaurant, labour practice and a number of outlets were not enough “Chinese”, and Disney shows, rides, as well as events did not appeal to visitors who were Chinese. To locals, this confirmed too much imperialism by Western cultural. As result, executives of Disney attempted creating the local context of Chinese and this was the reason the globalization perspective was adopted by the author. Globalization means the interface of the local and global, a local and global cooptation, the cultural heterogenization and homogenization dynamics, as well as the conflation of particularizing and universalizing tendencies. From the time Disneyland in Hong Kong proved to be fairly successful: attendance of the park as well as revenue from the growth have both increased (Jonathan, 2011, 667)
China as a nation is not only where Wal-Mart had to mostly globalize: China as well is the market that is fastest growing globally. Therefore this analysis will bring insights that are fresh into globalization process realities of today. One of consequences of the globalization strategies of Wal-Mart is that globalization contributes to its ‘consumption cathedral’ status and more (Dumitrescu and Vinerean, 2016).
Wal-Mart mainly focuses on one key goal-offering low prices-established what has now become one of the largest as well as powerful companies globally. Traditionally, what comes from the company’s core value notably are low wages, products that are produced cheaply in quality & good prices, pressure on the suppliers, as well as off-shore jobs . The Mexican Wal-Martization if normally felt through enforcement of AC systems and new lighting at its stores. The main objective is for advocating the U.S-style ease and comfort when shopping (Abboud and Biers 2007).
Critical reflection of the 2 companies’ global marketing approaches by drawing on the literature review
In view of the analysis it can be considered that Disney has had much glocalization in comparison with the Wallmart. That is because the analysis indicates Disney to have applied the compact in various of its marketing strategies and aspects. In that view, as Disney applied the concept in its pricing, addressing locall xustoms as well as settings and décor, the wall Mart approach was mainly a consumption cathedral that refers to global success magnitude which is incomparable and achieved only by major corporations that gives rise to display of excess and abundance and consumer religion
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