A NEW THEORY OF MARKETING

In this book we will offer a framework for rethinking the marketing approach for the transnational organization. We will look at some of the basic aspects of marketing-such as customer relations, market research, branding, etc. By treating culture as a context rather than a factor, we will consider the dilemmas faced by organizations when locating themselves in new markets.

For this purpose we need to extend the earlier definition of marketing. It now needs to include the system of activities which facilitates human interaction and information between products/services on the one hand and markets on the other. Therefore it goes beyond the original, Anglo-Saxon, meaning of how to get a product or service into a market.

There has been much discussion as to whether markets will ever globalize . Even when products and services tend to become more similar over time, and there is no doubt that this is happening, customers seem to have different reasons for buying similar products. Indeed the cultural factor is so dominant that some authors doubt there will ever be a converging taste across all customers, around the world.

In 1986 Michael Porter was very precise in observing dramatic change in international trade patterns. He concluded that within business, multidomestic home markets were themselves developing into global markets. In this respect, Usunier agrees with Porter that this development is much more of a "push" from organizations trying to integrate their production processes on all levels of the value chain, than a pull from the consumer (Usunier, 1997).

Obviously these trends have been dependent on the continued lowering of trade thresholds such as GATT and recently the European Union. In a freely competing world market, many organizations are forced to enter the international competitive arena in order to create synergies and lower costs by economies of scale. Add the internationalization of media to this process and there is little that can stop the push for an organization to internationalize.

It is difficult to ignore the fact that this process of increasing global competition has been increasing over the last three decades or so. Macroeconomic data support the proposition that international and regional trade has increased significantly faster than the accumulated GNPs of those countries trading. Economic integration across cultural boundaries and, therefore, global competition has increased significantly as a result. Similar macroeconomic data suggest that this situation has occurred even more so in many regions -Europe in particular, with the fall of the Berlin Wall and the integration of European markets. Nonetheless similar patterns are also unfolding in the Asia-Pacific region and in North and Middle America (NAFTA).

The reasons for this type of globalization have typically been based on internal business economic strategies. The first phase, in the 1960s and 70s, was initiated by multinationals who delegated much of their authority to their local generating companies in order to be as close to the market as possible. The country managers, being lords of local fiefdoms, exploited their authority by emphasizing that decentralization was the most relevant strategy in order to have the ability to able to react properly to their unique local market circumstances. Then in the 80s, under the doctrines of McKinsey and the like, a big centralization move was initiated. It was claimed that multi-local approaches needed to be replaced by centralized processes in order to achieve any global economies of scale. Here we can see the fundamental dilemma of globalizing. On the one hand, globalization is stimulated by production processes that are consistent throughout the organization to save costs; on the other hand, we find the obvious responses for sales and marketing people to adapt their products and services to the needs of local customers.

This dilemma hasn't vanished, despite the fact that two interesting global developments have occurred since the 1980s. Firstly a further increase of global integration, especially in the late 90s, occurred across cultural and company borders with the merger and acquisition wave. Secondly, and also in the 90s, there was a fundamental increase in the mobility of people. Within Europe this particularly came after the fall of the Berlin Wall, but there has also been an enormous influx of immigrant labor moving from (Northern) Africa to the European continent . In major cities like London, Paris, Amsterdam, or Berlin a significant part of the population do not have native-born parents.

There has also been a fundamental breakthrough of both mass media (aimed at particular groups, like MTV and CNN) and the Internet. This, obviously, has affected the internationalization of marketing. However it would be too easy to say that the markets have driven organizations to globalize. Globalization, even today, is still driven by increased global competition and simultaneous global restructuring processes. Patterns of consumption are simply difficult to globalize without any adaptation, due to national external factors such as legal, advertising, and distribution. However markets do appear, in some ways, to globalize as well-look at the converging patterns of fashion, consumerism, music, and education. For example a typical marketing organization such as Unilever rationalizes its number of brands and McDonald's continues to open new outlets outside the USA. But is there enough evidence to claim that the globalization of marketing is going hand-in-hand with the corresponding organizational processes of global integration (in spite of pressure groups who are against globalization at any cost)?

Research in the late 1970s and 80s has shown that there is considerable delay between new market penetration and the global consolidation of the infrastructure to support it. Hansen and Boddewyn (1975) and Picard, Boddewyn, and Soehl (1989) showed that between 1973 and 1989 there was a significant decrease in the degree of standardized marketing policies of American multinationals in Europe, in durable consumer goods. In non-durable consumer goods-except branding-there is an opposite trend. For a similar period, Ryan and Ratz (1987) observed a high level of standardization in the advertising world in terms of common themes across campaigns , their creative application, and the use they made of the media.

In contrast, Usunier (1997) is much more reserved about drawing the conclusion that, in the course of time, a global customer will emerge as a result of all the globalization processes. According to him global markets evolve more through globalization on the supply side. However, the demand side is much less willing to give up their own unique needs and wants. According to Clark (1987) the customer will never want to be a universal punter at the mercy of a global producer. Consumers buy a local brand and don't care if it is also offered elsewhere.

In our research at THT we have helped marketers elicit the dilemmas they face in their work and those that are faced by their organizations. Using face-to-face interviews as well as our web-based systems, we have accumulated over 6,000 basic dilemmas. Applying clustering and linguistic analysis techniques we quickly begin to see a number of fundamental dilemmas that are faced by organizations as they reach out to new markets. They are discussed in detail throughout the body of this book but can be summarized holistically, like this:

On the one hand...	On the other hand...
Should we sell what we can make (push)?	Or make what we can sell (pull)?
Do we strive for standard, global products?	Or do we try to sell unique products adapted to the needs and tastes of local markets?
Do we satisfy existing customer needs?	Or can we create new customer wants?
Do we sell to individuals?	Or do we sell to groups, thus creating fashion and trends for others to join in?
Do we sell functional benefits (it works)?	Or do we sell intangible benefits (status-look at "me")?
Is each transaction a unique, one-off sale?	Or is each sale part of a series in an ongoing relationship with a (long- term ) customer?

And even more fundamentally,

On the one hand...	On the other hand...
Do we maintain a market orientation and always put the customer first?	Or do we satisfy our people and stakeholders?

In our parent book to this series, Business Across Cultures, we introduced some aspects of marketing across cultures. There is inevitably some overlap in order to make this more comprehensive and dedicated book on marketing readable without constant reference to the parent publication, and we have also drawn on some of the interviews in 21 Leaders for the 21st Century (2001), which offer helpful and relevant insights.

We also need to avoid a list of "dos and don'ts." So, firstly, we will develop and explain our overall conceptual framework for categorizing value orientations. It is the differences across these orientations in different cultures that generates dilemmas. We can then extend our framework for reconciling these dilemmas to produce win-win solutions that transcend any particular culture or set of differences. Many of these dilemmas and their solutions will be illustrated with case studies taken from our research and consulting practice at THT. Again we see our role as providing a focus on a marketing knowledge framework for cultures, rather than one simply of cultures. We trust that our framework will offer practical help to marketers and strategists as they cope with an increasingly oligopolistic global marketplace .

Marketing professionals are becoming increasingly aware of the need to take account of culture when working in diverse markets. The issues of branding for different cultures and of how to develop a marketing strategy for the global market are current fundamental questions for us all. Our methodological framework based on the recognition, respect, and reconciliation of cultural differences offers an approach to addressing these challenges.

Initially we'll uncover some fundamental issues in marketing across cultures. Then we will use our seven dimensions model of culture to explore value systems and how these can help to explain cultural differences and the challenges they generate for marketers.

In later chapters we explore how dilemmas arise across the activities of marketing, including market research, branding, franchising, ethno-marketing, e-marketing, and strategic marketing planning. We'll give many examples of products and brands that have faced fundamental dilemmas when moving from local to international markets, and then on to global and finally fully transnational brands. We'll discuss how brands integrate the variety of value orientations into an integrated system of meaning. In Chapter 10 there are some exemplar cases for you to reflect on how well you have followed the thinking that pervades the whole book; you can check out your answers by going to the website

• www.cultureforbusiness.com

that supports this book and offers some further interactive content.