International Marketing Strategies, Example: Coca Cola

by: Christina Dost

1. Introduction – The history of globalization 3

2. Globalization 5

2.1. Role of international marketing 5
2.2. “Going International” 6
2.3. Concept of Globalization 9
2.4. Globalization Drivers 9

2.4.1. Market Drivers 10
2.4.2. Cost Drivers 13 10
2.4.3. Government Drivers 11
2.4.4. Competitive Drivers 13 11

2.5. Multi-domestic Strategy 11

3. Global Strategic decisions 12

3.1. Explanation of the term 12
3.2. The market lesson decision 12

4. Coca-Cola 16

4.1. Story of Coca Cola 16
4.2 The first steps to the worldwide success 19
Why is Coca Cola the best known and most popular brand of the world? 25
4.3 Global Player Coca Cola 26

5. Conclusion 29

The marketing process at the example "Coca Cola of Christmas program" 30

Literature list 32

1. Introduction – The history of globalization

Since the word has both technical and political meanings, different groups will have differing histories of "globalization". In general use within the field of economics and political economy, however, it is a history of increasing trade between nations based on stable institutions that allows firms in different nations to exchange goods and services with minimal friction. ¹

The term "liberalization" means the acceptance of the neoclassical economic model which is based on the unimpeded flow of goods and services between economic jurisdictions. This led to specialization of nations in exports, and the pressure to end protective tariffs and other barriers to trade. The period of the gold standard and liberalization of the 19th century is often called "The First Era of Globalization". Based on the Pax Britannica and the exchange of goods in currencies pegged to specie, this era grew along with industrialization. The theoretical basis was David Ricardo′s work on Comparative advantage and Say′s Law of General equilibrium. In essence, it was argued that nations would trade effectively, and that any temporary disruptions in supply or demand would correct themselves automatically. The institution of the gold standard came in steps in major industrialized nations between approximately 1850 and 1880, though exactly when various nations were truly on the gold standard is contentiously debated. ¹

In the "First Era of Globalization" is said to have broken down in stages beginning with the First World War, and then collapsing with the crisis of the gold standard in the late 1920s and early 1930s. Countries that engaged in that era of globalization, including the European core, some of the European periphery and various European offshoots in America and Oceania, prospered. Inequality between those states fell, as goods, capital and labour flowed remarkably freely between nations. ¹

Since World War II the era of Globalization has been driven by trade negotiation rounds, originally under the auspices of GATT, which led to a series of agreements to remove restrictions on "free trade". The Uruguay round led to a treaty to create the World Trade Organization or WTO, to mediate trade disputes. Other bi- and trilateral trade agreements, including sections of Europe′s Maastricht Treaty and the North American Free Trade Agreement have also been signed in pursuit of the goal of reducing tariffs and barriers to trade. ¹ Globalization/internationalisation has become identified with a number of trends, most of this they have developed since World War II. These include greater international movements of commodities, money, information, and people; and the development of technology, organizations, legal systems, and infrastructures to allow this movement. ²

At no time before globalization has reached the present extent. Current technological, economical, and political developments in form of new transport-, information-, and communication-technologies, deregulated capital and goods markets, as well as an increasing loss of importance of national borders in politics and society led to the situation that a global exchange takes place. 2 On the following pages we will explain the globalization and the appearing problems as well as come closer on the necessity of the international marketing.

2. Globalization

2.1. Role of international marketing

“To understand the role of international marketing in the firm it is necessary to consider decisions being made on the continuum outlined above and not discrete components corresponding to the various madalities used to transfer assets internationally.” ³

Interest in international marketing as a sub-discipline of marketing is a relatively recent phenomen. It appears that practitioners of international marketing are much further advanced in their thinking than are researchers. Research in the area has built upon theories and paradigms developed in other areas, especially international trade theory, industrial organization and strategic marketing. Valuable insights into conditions under which international exchange of assets occurs may be gleaned from international trade theory, especially the effect of fluctuating exchange rates on marketing programmes. From industrial organization theory the role of the firm in the internationalization process and especially the reasons for foreign direct investment may be understood. Because the firm international markets must deal with relatively high transaction costs it is necessary to consider various ways of transferring assets abroad. The different modes of foreign market entry identified are exporting, comtetitive alliances based on licensing, joint ventures and foreign direct investment. It is necessary to examine each in the context of a theory or set of paradigms.

A number of marketing theories and paradigms were identified and discussed, many of which have components which are relevant to the firm in international markets. The interaction pragadigm in the context of a systems-exchange framework appears to hold high promises, with this it is possible to identify the transactions costs and measure the attainment of other non-financial marketing objectives. ⁴

2.2. “Going International”

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1 Cp. http://en.wikipedia.org/wiki/Globalization, 26.05.06.

2 Cp. Czinkota, M.R.; Ronkainen, I.A. (2004), p. 421 c.a.

3 Bradley, F. (1991), p.58.

4 Cp. Czinkota, M.R.; Ronkainen, I.A. (2004), p. 346 c.a.