[Dr Michael Dorsch is the associate professor of Department of Marketing, University of Business and Behavioural Science, Clemson, USA. Dr. Dorsch’s work has appeared in the Journal of the Academy of Marketing Science, Journal of Personal Selling and Sales Management, Journal of Business Research, Journal of Financial Planning, Journal of Professional Service Marketing, and various national proceedings.]
1. How has marketing evolved over the last decade and how is it different from the marketing that was practised in the 1980s and 1990s?
Marketing has experienced quite a bit of change over the past two decades. During the 1980s, marketing witnessed increasing and vigorous interest in several areas including services marketing, relationship marketing, brand equity, and pricing. Prior to this time, marketing efforts focused primarily on physical goods and on marketing transactions. In addition, during the 1990s and 2000s, marketing experienced a renewed interest in the use of technology for strategic marketing decision-making; thus the notion of marketing engineering was born. Furthermore, the introduction and growth of the Internet has fuelled marketing interest in employing technology in reaching and serving customers. The past two decades have also witnessed increased attention on marketing in a global context. Technological advancements along with social and political changes have resulted in an enhanced interest in appealing to a global marketplace. More recently, the marketing discipline is beginning to place a renewed emphasis on the customer with the notion of customer relationship management and customer equity.
2. Can you emphasise the role of technology in shaping marketing thought in the 21st century?
Technology will continue to play an important role in shaping marketing practices during the 21st century. Technology refers to both expertise/knowledge and the tools (e.g., equipment and machinery) needed to accomplish marketing activities. Consequently, reliance on the role of technology will extend beyond the machinery to include attention to how the technology may be employed by both customers and businesses to make more informed decisions. I expect that businesses will use some technology to further develop their organisational learning systems. For instance, some technology is likely to be used to help businesses learn more about the market (e.g., customers, competition, and other environmental factors) in order to make more informed and timely marketing decisions (e.g., web blogs, discussion groups, customer loyalty programs, decision support systems and so on). Other technology will be used to deliver the marketing plan (e.g., e-commerce, tracking tools for monitoring the distribution of products, the use of web cookies to store information about customer preferences) and regulate the marketing plan (e.g. customer relationship programmes). Still other technologies will be used by customers, who are likely to increasingly rely on the Internet to search product information, make purchases, track their expenditures, and so on. It is also likely that consumers will increasingly rely on technology to communicate with others and to become informed of local, regional, national, and global events.
Both businesses and consumers are likely to place great importance on learning the benefits of certain types of marketing transactions, their ease of usability, and their security and privacy characteristics. Moreover, an increasing reliance on technology will require both businesses and consumers to change their marketing-related behaviours. In some instances, the behavioural changes will be minor and easily adapted. In other instances, businesses and consumers will be required to make more significant changes in their shopping/purchasing behaviours, which is likely to slow the acceptance of technology.
3. Considering the current trends, what will be the shape of marketing in the next 10 years? What will be the major forces that will drive marketing efforts in the next decade?
Given the rate of change that is occurring worldwide, it is difficult to confidently describe the shape of marketing during the next ten years. However, a few trends seem likely. In particular, the world is expected to continue to change at a fast rate in a number of environmental areas such as the technological, social, political factors. These changes are expected to significantly influence marketing activities used to appeal to the ever- changing marketplace. Moreover, the world is becoming smaller as it is easier and quicker to learn about and experience other societies. Correspondingly, it is likely that consumers in the future are likely to exhibit more global awareness (i.e., diversity). Furthermore, information is also increasing at an increasing rate, which means that data are becoming more readily available and may be acquired and processed more quickly (e.g., in real time). This trend has important implications for businesses and consumers. Businesses, for example, will need to develop more effective and efficient methods for managing their organisational learning systems (e.g., data bases). In addition, the increasing availability of information to consumers indicates that consumers are likely to become more knowledgeable about the products that they purchase and more discriminating in their choices. As consumers become more sophisticated customers, their standard of living is also likely to increase and they will be more interested in the quality of the experience rather than focusing attention on the quality of materials (e.g., products) used to create the experience. As a consequence, it is likely that experiential marketing may become increasingly important approach to serving the market.
4. How has globalisation affected marketing practices of Multinational companies? How are multinational firms dealing with the growth of emerging countries like India and China?
Globalisation is likely to have a very significant impact on the marketing practices of multinational companies, especially in terms of effectively serving diverse markets. More specifically, many countries are not at the same level of economic development, which is likely to influence the type of market offerings desired by each country. Likewise, differences in the cultural practices of each country will influence the marketing practices. Accordingly, the marketing activities that are successful in one country may not be successful in another country. Similarly, the political and legal environments also influence marketing practices. As a result, MNCs that are interested in serving emerging countries like India and China are advised to become intimately knowledgeable about the countries before formally entering market. Recognising that learning about a country before formally entering it may take considerable time and money, MNCs may benefit from developing strategic alliances with companies already serving the countries or, possibly, the country’s government itself. In this way, the MNC may make use of the existing knowledge of its strategic partner to help become established in the country that it wishes to enter. The use of strategic alliances is likely to become an increasingly common practice among MNCs.
Once a multinational firm decides to enter a new country it must carefully weigh its decisions to utilise a single marketing strategy to be applied to all countries it services or to develop unique marketing strategies that appeal to particular countries. While the first approach, i.e., a globa
l marketing strategy, is likely to be less expensive – to be successful the global brand must symbolise common desires and practices across the countries to which it applies. With the latter approach, individual brands would be created that emphasise and match more closely those unique desires of individual countries. However, the development of marketing plans that closely match the uniqueness of each country is likely to be very expensive, as unique marketing plans would need to be developed. At issue is whether the incremental costs of serving each of several countries are offset by the incremental revenue/profit realised from the incremental increase in demand. The decision of whether to use a global marketing strategy or a set of individualised marketing strategies depends on the similarities of countries being served. The more similar the countries are in terms of their environmental factors (e.g., cultural, economic, political, and technological), the more likely that a global marketing strategy will be successful. In contrast, when the countries are more diverse, country-specific marketing strategies are likely to be more effective.
5. What are the characteristics of a global brand? How does a marketer build such a brand? What challenges does he face in the process?
Most research on branding and brand equity has focused attention on branding within a single country. The notion of a global brand is relatively new and research on the creation of global brands appears to be in its infancy. Nevertheless, it may be possible to offer some insights into the development of a global brand by drawing on existing knowledge about branding. A brand is basically the name that a company assigns to one of its product offerings. The value of the brand name to the customer, which has been referred to as customer-based brand equity, depends on the type of associations that customer evokes about the company’s product offering when the brand name is mentioned.
Businesses may help customers develop strong positive associations for their brand names through promotional efforts, including favourable customer word-of-mouth communication (i.e., buzz marketing) and ensuring favourable customer experiences related to the purchase, use, and disposition of the product. From this perspective, it may be argued that the creation of a global brand requires businesses to develop a set of similar and consistent positive associations (opinions and beliefs) that connect the customer to the brand of a particular company, irregardless of the country in which the product is offered. Consequently, the development of a consistent set of customer opinions and beliefs about the brand is likely to be based on a common set of characteristics and/or experiences that are desired by each country. In this regard, a global brand may be described as being based on a set of associations that are shared across countries.
One advantage associated with a global brand is that it communicates to a common set of customer expectations that is not altered by country effects. For instance, customer expectations of a “McDonalds experience” is the same, regardless of whether they visit a McDonald’s in the US or India. Correspondingly, companies that are interested in building a global brand may need to downplay the unique characteristics and experiences associated with a single country. In this regard, it may be argued that a global brand is bleached of the uniqueness associated with the culture of a specific country.
The bleaching of a brand of those characteristics that are unique to a particular country represents a potential disadvantage associated with a global brand. Even though, customers desire consistent expectations when using a product, they also enjoy variety. Thus, bleaching a brand of country-specific associations inhibits the uniqueness of experience desired by many customers. For example, many US tourists prefer eating at McDonalds when travelling in other countries simply because they expect the dining experience to be similar to that enjoyed in the States. Similarly, many other US tourists tend to avoid McDonalds for the same reason. When travelling outside of the US, these customers seek unique experiences that are not readily available within the US and thus avoid those businesses that resemble those in the States.
6. What are the chief behavioural differences between consumers in India and those in the US? Are there any similarities? How can MNC’s from both countries manage dissimilarities in cultures while exploiting similarities between consumers of the two nations?
I am unable to provide informed opinions about the similarities/dissimilarities between US and Indian consumers or about actions that MNC may take to efficiently and effectively target consumers in each country. However, from a very general perspective, it is very likely that people, regardless of culture, have similar basic needs for food, clothing, shelter, protection, and so on. In addition, it is likely that people, in general, have a desire to be respected, to take care of family, make effective use of their resources (money, time, labour), and to self-actualise (i.e., achieve their potential and to make a difference). As a result, MNCs increase their chances of success by recognising common benefits (or improvements) sought by their consumers, regardless of culture, and then adjusting their marketing efforts (i.e., price, promotion, distribution, and product form/packaging) to match the unique circumstances of each culture. The uniqueness of a country may be attributed to many factors including geographical climate and terrain, distinctions in the cultural philosophies that guide the behaviours of a country’s inhabitants, the political climate of the country, and so on. The process is analogous to the concept of mass customisation, whereby the basic market offering is similar across cultures, but the specifics of the market offer are customized to the unique circumstances of each country.
7. What, according to you, are the strengths and weaknesses of the “Made in India” tag? What best practices would you suggest to Indian companies that wish to become internationally competitive?
This is a difficult question to answer for two reasons. First, I am unsure of the image that India has within the US. In addition, research on Country-of-Origin issues has produced mixed results. Some research indicates that the use of “Made in” labels have influenced consumer perceptions and purchase behaviours, whereas other research indicates that no relationship exists. More recent research suggests that “Made in” labels become more important when consumers are not very knowledgeable about the product and little other product related information is available. In contrast, “Made in” labels appear to be less effective when other product information is available to the consumer. In addition, the effectiveness of “Made in” labels appears to be influenced by the type of market offering. When using “Made in” labels to evaluate market offerings, consumers oftentimes base their assessments on their perceptions of the country itself. In these instances, consumers use their perceptions of a country to determine whether the manufacturing country is likely to produce a high quality form of the product. Whether a country is truly capable of manufacturing a high quality product is oftentimes less relevant then the consumer’s perception of the country’s capability. These perceptions may be derived from a number of sources including the consumer’s personal experience, experiences of others, or stereotypes created through the media. Consequently, a country’s products are more likely to be favourably received by consumers if the consumers believe that the country has the technological capabilities and expertise to manufacture the market offerings.