By students, for students.

Global Marketing Management: One world, one voice? (part 4)

In Management, Marketing on March 24, 2013 at 5:25 pm

External conditions required for standardised advertising

currencies

Advertisers can only speak effectively with ‘one voice’ if we live in ‘one world’. Market connections and advanced communication technologies are creating a single marketplace. Yet, in 2012, we are finding that business remains relatively concentrated.[1] The following sections investigate the integration of national economies, cultures and consumer habits across the world to determine whether the age of standardised advertising has come.

Economic integration

Friedman’s ‘Golden Arches Theory of Conflict Prevention’ amusingly demonstrates the interdependence between multinationals and the development of nation-states, observing that no two countries with McDonald’s franchises had fought against one another (1999).[2]

Figure 4, shows international trade increasing into the 21st century, albeit at different regional rates. The most important drivers of the global economy are the triad nations – Japan, the EU15 and the USA. In 2008, they accounted for 73.6% of foreign direct investment (FDI) around the world (Rugman and Collinson, 2012).

In the same year, UNCTAD found upwards of half of the investment in developing countries goes to Brazil, China and India suggesting that investment is global and national economies with the greatest potential are rewarded. With these exceptions, however, recipients of FDI tend to be found in clusters around triad members. The USA invests in Latin America.  The EU15 seek markets in Eastern Europe.  Japan invests in Singapore, China and Thailand. FDI clusters often share financial practices and trading agreements, examples being NAFTA and ASEAN.

world exportsFigure 4 Source: Bureau for Economic Policy Analysis

National economies are grouped through trade with the world’s leading investors and traders. This suggests that businesses based in the triad nations might profitably standardise advertising across a FDI cluster as these markets will already be exposed to the values and consumer habits that pervade the region. HSBC has embraced local practise, positioning itself as ‘the world’s local bank’. The extent of cultural integration between countries is examined in the next section.

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