A critical assessment and comparison of opinions of five experts on the global marketing strategy of Espoir Cosmetics Essay

A critical assessment and comparison of opinions of five experts on the global marketing strategy of Espoir Cosmetics Essay

It is intuitive that organisations that can foresee trends and are capable of adapting to the changing environmental conditions should prove to be huge successes in their respective domains. It is this unparalleled capability that provides them with the unique edge in their competitive set. With the recent advent of globalisation supplemented by the advancements made in information-sharing technologies, it is very natural for multinational firms like Espoir Cosmetics to put efforts into moving in sync with the trends of the shrinking world. Hence, the student feels that Natasha Singh, the executive vice president and the global marketing officer of Espoir Cosmetics, is right to look at penetrating globally scattered markets.

 

Indeed, Natashas visions are seconded (in the case study) by the president and CEO of PepsiCo Beverages International, Peter M. Thompson, who asserts, Singh correctly sees the consumer and retailer needs for achieving some global consistency. However, like any transformation, the attempt to commence a global marketing programme brings with it a need to assess the factors that could work for it, and equally significant, work against it as well. Thus, while Natashas long-term visions are appreciable, she should revise her assumptions and assess the compromises she may have to make to realise those visions.
The need for managers and marketers seeking to jump onto the globalisation bandwagon to realise these potential barriers. He suggests that while new geographies may bring opportunities of expansion, these opportunities are accompanied by cultural, political and legal differences. These variations tend to make the process of expansion more complex and, hence, challenging. For instance, as Jennifer Aaker says in the case study, preying on the local consumers needs requires a more focused approach than the global strategy. These thoughts are also echoed by Manwani, Clift and Thompson.

In a slightly similar vein, Kotabe outlines another hassle that globalisation and consumer tastes or choices can pose. He stresses that while the entities on the supply side are assisted by the rise of e-commerce, the internet has also extended the reach of the individuals on the demand side. This implies that even if a local marketing strategy is adopted, the target consumer has options to make purchases from other territories. The modern consumer operates not only in a local territory but in the world as a whole and is characterised by an integrated process of purchasing, thereby highlighting the enhanced buying power of the customers. Hence, it becomes mandatory for marketers to conduct an accurate appraisal of the consumer choices and requirements.

Thomas (2005) observes the variance of consumer choices and behaviour in different countries and assesses the role that direct marketers have to play in taking the business to these customers. As an advocate of the need for local discretion in marketing matters, Thomas asserts that it is the local managers who are closer to the customer and in a better position to connect with them. To quote Thomas, Combining central strategic management and planning with flexible local implementation can deliver the best of both worlds to global clients.

Similarly, as if almost collectively, the experts who comment in the case-study in question have stressed on the importance of providing flexibility and freedom of jurisdiction to the local offices. Thompson suggests that the global headquarters should outline the mission and short-term objectives, but leave it upon the local team to achieve the set goals. At most, the interference from the headquarters should be limited to providing a range of options and guidelines to the local offices and then leave it to the discretion of the latter to make choices suitable to their task environments.

Hollensen (2004, p. 459) shows a scenario of how a common strategy for all geographical markets could be damaging to the business. He considers the possibility that a product or a brand may well be in the growth stage in a home market but only in the infancy or introductory stage in another market. Given these conditions, it would be unwise for the headquarters to issue a similar set of directives to the regional offices around the globe.

Kotabe explains the concept of local freedom in a slightly more detailed manner. He employs the classic 4P model or the marketing mix to support his views. He suggests that Espoir Cosmetics and other companies looking to globalise their reach should renovate their product line to contain both globally standard and locally adapted products. Similarly, Natasha Singh, in her capacity as a global marketing officer, should offer guidelines for promotional campaigns but let the local officers handle the execution. The student identifies with this thought as he feels that this would also provide degrees of freedom and a necessary sense of authority and accomplishment to the local managers. Kotabe furthers his use of the 4P model by asserting that managers would do good to assess and re-assess the price tags attached to Espoir products. While high prices may repel the local buyer, low prices may lay foundations for grey markets in other countries. Lastly, Kotabe speaks about the retail and distribution (place) framework within each region of operation and suggests the need of resonance amongst all distribution networks. The student feels that while this could enhance consistency in logistics, it would also lead to cost efficiency.

Adidas provides a very simple example to highlight the line between the corporate level, global strategy and the strategies pertaining to different local level business units. While the corporate level strategy is to use prominent sports personalities in promotional campaigns, it is left up to the local offices to choose the most suitable sports person that people can relate to. For example, an ad campaign featuring Wilkinson may not work in countries like India, where an advertisement featuring Tendulkar would keep the youth glued to the television. Similarly, while Reebok maintains its Planet Reebok punchline in its campaigns globally, its campaigns cater to the taste of the local culture. For instance, Reebok refrains from depicting boxing scenes in its French campaigns as the community finds violence (delete as) highly repulsive (Keegan and Green, 2005, p. 528). In a similar vein, a campaign associated with Dianas She Devils may not strike a chord with many of Espoir Cosmetics target markets. Manwani and Clift seem to support this concept when they stress that the local units can be directed to use celebrity endorsements, though, the selection of the celebrity is best done by the unit based on the local preferences and trends.

Kanter, Stein and Jick (1992, p. 11) argue that any innovation or change is best brought about by affecting the underlying character of the organisation. In other words, it is important for a change-seeking corporate level manager to align all the business units in a single direction of change. This is what Aaker implies when she says, successful global marketing companies make sure that their definition of a global brand, and their vision of global brand building, is widely understood within the organization. The author feels that this is also the coherence that Manwani and Clift speak about in their evaluation. They assert that even if a company succeeds in distinguishing the tasks of the global headquarters and the local offices, it should not fail in maintaining a resonance between the two layers. Thus, a hybrid of global and local strategies should be adopted to realise the ultimate objectives of globalisation. Similar views are offered by Thompson who speaks of developing a shared vision of […] global brand building model and goes on to identify tasks that can be allotted to the two levels of hierarchy within the organisation.

The student here wishes to raise his own thoughts about the local competition that the businesses stand to face an issue that hasnt found much mention in the case-study. Natasha Singh, occupied by the operations of Espoir Cosmetics on the global scale, may have limited knowledge of the individual local markets and hence could only possess an objective, birds-eye perspective. In light of this remark, her directive to the local units should be to position the brand keeping the local competitors in mind but also to maintain the chief promotional essence of Espoir which revolves around the smart woman.

McDonalds would not have made a big impact in the Indian market had it persisted with its U.S. product line that included beef products. Moreover, McDonalds repositioned the brand as family-oriented and children-friendly, catering to the traditional Indian middle-class segment that finds pride in its family culture and is especially conscious of childcare (Dash, 2005).

Another instance demonstrating the ignorance of local tastes in the wake of globalisation features the multinational mobile phone makers, Nokia. Nokia had tasted success with its soap-bar designed phones and ceased producing the flip phones that consumers found irritating to use (Zaccai, 2005). However, the firm overlooked the local tastes within its Asian target market. Consumers in Korea and Japan had grown fond of the flip-phone which had assumed the place of a status symbol. While local firms like Samsung were clever to cash-in on this aspect by producing what the customers identified with, Nokia missed a trick. As a result, Samsung is now gaining on Nokia and has the advantage of momentum with it. Zaccai further indicates that a mix of global brands and local feel is not just a growth strategy. Instead, its one of the threshold competencies with almost all firms looking to walk the line.

Thompson and Aaker also speak about the need for companies to install procedures to evaluate their progress with the globalisation programme. Thompson suggests that to increase the measurability and objectivity of the programme, managers could pursue a cost-benefit analysis and determine its profitability. Aaker adds that this method will help further to facilitate comparisons between the local and global strategies and provide quantitative guidelines to managers to make decisions. Engle (2005) conducted a study on two anonymous companies regarding the measurability of their globalisation techniques. According to his findings, both the firms now embrace the use of global and local marketing scorecard and have taken recent steps to move the concept to other departments and also are developing business-wide global and local scorecards. In effect, this remark adds weight to the suggestion put forth by Thompson and Aaker regarding the need of quantifiable techniques to measure progress.

Manwani and Clift make an important observation about the possibilities of conflicts that already seem to be arising in Espoir Cosmetics. Keegan and Green (2003, p. 418) offer two broad categories of marketing strategies that multinational companies could assume: extension strategy and adaptation strategy. While the former relates to pushing the globally successful programme into local markets, the latter is in line with re-aligning the marketing strategies with the local set-up. As mentioned before, the experts in the case-study advocate the use of a hybrid of these two strategies. However, as Manwani and Clift realise, this requires the global and local teams to work in tandem which, in turn, depends on the organisational structure. Aaker realises that though Espoir Cosmetics has employed a global marketing officer, the firm lacks a proper formal structure that could have aided Natasha Singh in her ventures.

Paik and Derick (2004) observe how Toshiba Corporation tackled the problem of global vs regional conflict that threatened to rise in its perusal of a globalised strategy. The authors report that Toshiba underwent a major overhaul within its organisational setup by forming double-tiered regional headquarters. While one tier handled the non-technical aspects of human resource and legal managements, the other oversaw the manufacturing, marketing and distributing procedures, both in sync with the global marketing strategy.

To further the discussion on enforcement of global corporate strategies by the headquarters versus the desire for regional offices to deploy local experiences and skills, the student introduces research carried out by Zhou and Belk (2004). Zhou and Belk provide us with the perspective of the Chinese consumer by assessing their preferences amongst a host of advertisements and promotional campaigns. They deduced that while the consumers associated the global campaigns with status and social appeal, they sought immense pride in clinging to the traditional, cultural and patriotic values through the local campaigns. The student is tempted to believe that given the flow of adrenalin that a sense of patriotism triggers, there is a good possibility that local promotional strategies may outweigh the global counterparts. Though it may be very probable that this behaviour is specific to only some countries including China, the research reveals the need for companies to conduct a buyer-research before proceeding to formulate strategies.

Conclusion

The case-study and the expert comments that followed it elicited some important observations that managers intending to pursue a globalisation-based approach to expand their businesses would do good to take heed of. Natasha Singh, the global marketing manager of Espoir Cosmetics, proved that she is a trendy manager aware of the necessity of a globalised programme. However, as Kotabe says, her methodology requires some revision. Her top-down, directive-based approach had tendencies to raise conflicts more than it had the potential to gel the various regional outfits. The experts almost jointly hold the opinion that companies should put their knowledge-sharing systems in place and make sure that the regional offices understand the need of globalisation and the associated visions of the headquarters thereby bringing about an evolution from the grass-root level. However, the local experts are likely to be in the best position to assess their markets and hence develop the most suitable plan. Also, the companies should have a monitoring system in place by which they can evaluate and forecast the performances of the regional SBUs. Neither an absolutely global viewpoint nor a complete local approach would work for the two tiers to work in tandem. Rather, it is the capability of the company managers to strike a balance between the two viewpoints that could prove to be the most vital ingredient for success. Moreover, to quote Thomas (2005), […] balancing acts are never easy. For both global brands and agencies that serve them, it is time to walk the line.

References

Bramm, K. (June 2005), Running a True Global Marketing Campaign, Response, Vol. 13 Issue 9, p40-40.
Dash, K. (2005), McDonalds in India, Thunderbird: The Garvin School of International Management, p1-25.
Engle, R. L. (2005), Global Marketing Management Scorecard: A Tale of Two Multinational Companies, Problems & Perspectives in Management, Issue 3, p128-136.
Hollensen, S. (2004), Global Marketing: A Decision-oriented Approach, 3rd edition, FT Prentice Hall:England.
Kanter R. M., B. A. Stein. and T. D. Jick (1992), The Challenge of Organizational Change: How Companies Experience It and Leaders Guide It, The Free Press:New York.
Keegan W. J. and Green M. C. (2003), Global Marketing, 3rd edition, Prentice Hall:New Jersey.
Paik, Y. and Derick J. H. (2004), Strinking a blance Between global integration and Local Responsiveness: The case of Toshiba Coporation in redefining Regional Headquarters Role, Organizational Analysis, Vol. 12 Issue 4, p347-359.
Thomas, C. (September 2005), Global Brands Require Flexible Local Networks, Precision Marketing, Vol. 17 Issue 45, p14-14.
Zaccai, G. (August 22nd, 2005), Global or Local? Make It Both, Business Week Online.
Zhou, N. and Belk R. W. (Fall 2004), Chinese Consumer Readings of Global and Local Advertising Appeals, Journal of Advertising, Vol. 33 Issue 3, p63-76.

Related Essays

Leave a Reply

Your email address will not be published. Required fields are marked *