Question:

Critically evaluate one economic, one political, one social and one cultural issue that could be significant to organizational international and global marketing approaches in 2020

Answer:

Introduction

By the year 2020, major changes are expected to have occurred with regard to the approaches being used by marketers at the global level. These changes relate to a number of factors including economic development, income, and consumer spending. The aim of this paper is to critically evaluate one economic, one political, one social and one cultural issue that could be significant to organizational, international, and global marketing approaches in year 2020. The political issue relates to a recent trend in which many countries are increasingly abandoning protectionism in favor of free market economies. The economic issue under analysis is the rise of China as the world’s leading economy. The paper also examines a social issue relating to the rise of social marketing. Lastly, a discussion is presented on how different local cultures are expected to have converged leading to the emergence of an international culture by 2020. The underlying objective is to demonstrate that in 2020, global marketing approaches will have to be aligned with changing circumstances for them to be effective.

Political issue: A global shift from protectionism to free market

In recent times, globalization has emerged as a powerful force for business. It influences the way countries interact with one another businesswise. Goods and services can today “flow freely” from one country to the other. The notion of protectionism is becoming increasingly outdated. Goods and services are not the only the components of production that are flowing freely. Capital and knowledge is easily being transferred across national boundaries. Many countries have been compelled to revise their trade policies to reflect these changing realities.

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Throughout the 20^th century, the US has enjoyed the ability to dictate its preferences to other countries (Chorev, 2007). Indeed, this has been an important component of the globalization narrative. In a world where China is increasingly liberalizing its markets, the US occupies a position of lower degree of dominance on global affairs. At the same time, China’s economy has been growing very fast, and many countries are heading east for the best business deals. It is estimated that by 2017, China will have become the world’s leading economy in purchasing power parity (terms). In the recent past, China was notorious for its protectionist policies that made it extremely difficult for foreign companies to do business in the country. Today, the country is increasingly becoming an integral component of the global business community. By 2020, this trend is likely to have persisted.

Protectionism has not been a reserve of China alone; in the US, certain institutional arrangements used to favor protectionism while others used to promote the free-market approach (Chorev, 2007). In this case, those institutions that promoted free trade tended to prevail. Proponents of protectionism were often driven by arguments on the need to conserve environment locally as well as create employment to US citizens (Chorev, 2007). The biggest break in terms of institutional arrangements came with the establishment of the World Trade Organization. This transformation created a scenario where trade policy decisions would no longer be made in a politicized location such as Congress. Instead, judicial and bureaucratic arenas would henceforth be used. In these arenas, a legal logic would be expected to dominate and citizens would not be directly represented.

The recent global recession brought about a sharp slump in world trade. It also led to greater competition that was inevitably accompanied by increased global protectionism. According to Hollensen (2007), global protectionism is a threat to future trade relations between the US and China. In the post-recession years, these two countries have been trading accusations, with each country accusing the other of protectionism. Chinese industries have suffered following the introduction of several protectionist measures introduced by other countries especially the US. Hollensen (2007) observes that toy and tire industries are the most affected industries as far as China is concerned. By 2020, it is expected that leading economies will have put in place measures that enable them avoid the need to impose restrictions on trade interactions.

Griffith (2010) uses the term multi-level institutional convergence in reference to the shift towards the free market. In 2020, this convergence will have created numerous opportunities for the standardization of marketing strategy. Companies operating in different countries or heterogeneous national markets with different segments will be desperate for a marketing model capable of coordinating the operations of these segments. According to Griffith (2010), the goal of coordination will be achieved only if marketers will be willing to adopt an oversimplified approach in their bid to solve problems arising from the complexities of convergence. Consequently, Griffith (2010) recommends the use of a multi-level institutional model to address the convergence effects that will have arisen by 2010.

The era when managers of many small and medium-sized firms held the view that international marketing is the reserve of large multinational companies is long gone (Winters, 2007). Many small firms are increasingly participating in the global market. This has been made possible by the information and communication technology tools as well as by globalization. This new phenomenon has transformed the way marketing is carried out. Large corporate players are facing growing competition from unlikely tech-savvy rivals that continue to redefine the world of international marketing.

Companies that do not operate in the world market at one point or the other may be said to exist in an environment of isolation (Nolan, 2002). In essence, whether willing or unwilling, companies are increasingly being compelled to contribute to global world affairs (Walters, 2003). Companies that fail to reorient themselves for this changing business environment end up failing to survive in the harsh international business environment (Walters, 2003). Whenever companies fail to yield the expected returns, most of the blame is often heaped on marketing specialists. Therefore, it is imperative for scholars to examine in depth how the rise of the free market will affect international marketing practices in 2020.

Economic issue: The rise of China as the world’s leading economy

By 2017, China will have become the world’s leading economy by purchasing power parity terms (PWC, 2013). This growth will be in line with the current trend in which many emerging economies such as India, Indonesia, Vietnam, South Korea, and Mexico are growing more rapidly than the advanced economies such as the US, UK, France, and Germany (Wong, 2003). As the current decade ends, it is expected that China’s growth rate will be maintained at the government’s target of 7 percent, thereby enabling the Asian giant cement its place as the world’s leading economy (PWC, 2013). At the same time, China’s population will have rapidly aged, meaning that it will gradually turn into a consumption-driven economy (PWC, 2013). These changes will have far-reaching effects on how global marketing approaches are conceptualized and implemented.

Social issue: The rise of social marketing

One of the most radical changes in the world of marketing is the rise of the social media as the most powerful marketing platform. A majority of the world’s population has access to the internet and social media. Websites like Facebook, Twitter, and Google+ provide people from different countries opportunities to interact and share ideas about different products and services. One should expect that by 2020, many more similar websites will have been established as technology entrepreneurs compete for the social media market. This means that social marketing will have become a mainstream platform for advertisers the world over just the way the television has been for decades.

The world is facing a scenario where companies will be competing on an international scale (Thøgersen, 2005). In 2020, international presence will be more important than national presence as far as the operations of companies is concerned. This is because e-commerce will have become an institutionalized platform, leading to the emergence of a large online marketplace. Companies will be better off looking for customers in the online marketplace than in the brick-and-mortar premises established at the local level. After all, it is more expensive to maintain brick-and-mortar premises than to maintain an online platform.

Social marketing is unique in that it entails the participation of real people in real-life contexts in efforts to change purchase behavior, consumption trends, and consumer preferences (Thøgersen, 2005). In 2020, most large companies will be expected to have set the way in mastering and entrenching this approach. They will have adopted social marketing as a structure or framework that draws from different bodies of bodies, including sociology, anthropology, psychology, and communications theory to create a better understanding of people’s behavior.

Commercial marketing technologies will be relied upon by many companies to analyze, plan, execute, and evaluate programs that influence the behavior of audiences not just to achieve marketing-related ends but also to transform society. This type of marketing has in the recent past become a very powerful tool because it emphasizes on voluntary change of purchase behavior (Moisander, 2002). More importantly, it is unique in that it emphasizes on exchange between the customer and the marketer. This exchange is based on real-life issues, which are addressed just at the time when they happen. Moreover, it allows room for critical appraisal. Customers who have purchased the products of a particular company are able to give their views regarding quality and customer service. This feedback is useful because it provides guidelines to other consumers who may be contemplating buying the product. It also gives the seller the opportunity to make improvements on the product in accordance with the concerns raised by consumers.

Two major concerns relating to social marketing have been raised in recent times (Andreasen, 2006). The first one is the failure by senior executives of large companies to refuse to recognize its importance (Andreasen, 2006). This field is widely accepted by practitioners who must rely on its influence at the operations level. Consultants also recommend its use whenever practitioners turn to them for help. However, both consultants and practitioners often lament the tendency by major government agencies and many large organizations to fail to appreciate the importance of social marketing in day-to-day organizational operations. Today, top managers have started expressing willingness to appreciate the important role of social marketing. By 2020, social marketing will be at the core of marketing strategies of virtually all established business organizations seeking to compete favorably in the international environment.

The second concern is the poor “brand positioning” of social marketing (Andreasen, 2006). For a long time, there was a lack of clarity regarding the real meaning of social marketing. Many business leaders, influential people, and opinion leaders argued that the concept contained several undesirable characteristics. First, the image of this field was fuzzy because no single definition of social marketing existed. Second, there was a growing perception of a lack of differentiation from core competition in favor of social marketing. The impression created in this case was that other methods of marketing such as customer relationship management were more suited to contemporary business environment than social marketing.

Today, social marketing has evidently triumphed over its competition (Straughan, 2010). Companies are increasingly refocusing their energies by investing in e-commerce infrastructure and then popularizing it via social media (Straughan, 2010). By 2020, it is highly likely that very few companies will have opted to be left behind in the great paradigm shift towards social marketing and e-commerce. This paradigm shift will be necessitated by the emerging trend in which companies are moving away from mass markets to personalized product design and service delivery. This new trend can only be supported and sustained through social marketing.

In the US, social marketing has radically changed the way companies do business. It is being used to bring about a change of behavior among citizens. For example, Peattie (2009) highlights a trend in the US whereby conventional marketing theory is being used to promote social marketing with a view to promote sustainable consumption, reductions in consumption, and sustainable lifestyles. In these attempts, social marketing is said to have achieved the intended goals when products are successfully “de-marketed” (Peattie, 2009). In 2020, sustainability issues are likely to drive companies into using social marketing to derive greater value from fewer purchases following successful efforts to bring about a society-wide drop in consumption levels. A good example is that of a study of 37 US colleges where alcohol consumption levels were found to have drastically reduced following the introduction of social marketing interventions (Wechsler, 2003). Similar outcomes will have been achieved in the international business environment by 2020. Other examples include the “green consumer” movement (Ginsberg, 2004 Ottmana, 2006; Moisander, 2007; Prakash, 2002), healthy eating (Grier, 2004), organic movement (Raynolds, 2000), and the anti-smoking movement (Hastings, 2004).

Cultural issue: Convergence of different cultures into the emerging international culture

Since the onset of globalization, cultures of different localities have been merging gradually to form an emerging international culture. Quanjude roast duck is a product of Quanjude Restaurant, a Chinese company with a heritage that is so rich that it has become synonymous with the country’s culinary culture (Ashton, 2012). For many years, managers of this restaurant have been marketing its products with the most crucial selling point being its rich cultural heritage. Consequently, many international tourists who visit China know one or two things about Quanjude roast duck (Ashton, 2012). This is a good example of how companies are participating in the process of cultural convergence whose apex is the emergence of international culture.

To market its roast duck, Quanjude relies heavily on the internet. This explains why many Western tourists have come to know about this restaurant and its rich cultural heritage via the internet. Today, marketing practices of Quanjude Restaurant constitute the exception rather the rule as far as efforts to market products in the virtual online space are concerned. By 2020, companies that will be marketing its products via the internet will constitute the rule rather than the exception. One may notice that for Quanjude, and indeed many companies of today, the internet is yet to be made into the primary avenue for marketing activities. In 2020, the virtual space will be more important than the physical space for most companies that have accorded secondary importance to the issue of online marketing.  This transformation is expected to lead to the emergence of an international culture that will be as a result of convergence of different local cultures.

Conclusion

In conclusion, it is evident that new opportunities and challenges for international marketing will have arisen by 2020. Consequently, marketers will have to look for new global marketing approaches. They will have to address changes in economic development, income, and consumer spending patterns. These changes will come at a time when a global shift from protectionism to free market will have taken shape. Economically, China will have become the world’s leading economy in purchasing power parity terms. Socially, social marketing will have become a dominant tool as individuals, companies, and governments seek to influence people’s consumption behavior in line with the need for enhanced quality of life, reduction in consumption, and maximum use of internet technology in the virtual space. Culturally, a convergence of local cultures into an international culture will have occurred. All these issues will require a change of tact and strategy for marketing specialists as a way of adapting to the changing business environment.

 

References

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