DISSERTATION ON

“GLOBALIZATION AND ITS IMPACT ON

MARKETING STRATEGIES”

OBJECTIVE OF STUDY
The objective of this research is to gain a better understanding of the effects of globalization on
firms’ international marketing cooperation and performance of firms, both in developed and
emerging economies.
This dissertation mainly focus on two questions, first is does globalization affect firm
performance? And second is the relationship between global market opportunities and
performance stronger than the relationship between global market threats and performance? By
answering these questions, the study indicates the extent to which firms in two different
economic contexts are affected by globalization. It also shows which dimension of globalization
effects tends to have stronger impact on the performance of firms that are located in very
different market environments.
SCOPE OF THE STUDY
The emphasis of this dissertation is on how the degree of cooperation in co marketing alliances enables
firms to manage globalization effects and stay competitive in international markets. As suggested in past
literature, globalization makes alliances an essential part of a firm’s strategy in order to stay competitive
and to achieve superior performance. To better capture global opportunities, firms tend to cooperate with
other firms to capitalize on and leverage their limited resources since it is impossible for one firm to “do it
all and go it alone. Similarly, in order to cope with increasing global competitive threats, firms are likely
to form alliances .Based on the classical industrial organization perspective—the market power, firms
form alliances to reduce competition and uncertainty. Through such cooperation, companies gain market
power that helps alleviate competition and improve its competitive position.
Therefore, the next two research questions of this dissertation are: 1) Does globalization affect the degree
of cooperation in co-marketing alliances? and 2) Do co-marketing alliances influence firms’ international
performance? Guided by these two broad research questions, a more specific emphasis of this paper is on
the degree of cooperation in international marketing activities of the co-marketing alliances among firms.
Past literature also suggests that firms from emerging economies usually possess characteristics which
distinguish them from those of developed economies. Therefore, empirical investigation son the
relationships among globalization effects, degree of co-marketing alliances, and performance of firms
from Thailand and the U.S., which possess different backgrounds and characteristics, are undertaken by a
primary data approach. The data collection using survey technique is thus used.
TRODUCTION
Overview
Globalization has caused dramatic changes to business practices around the world. Companies
Such as IBM, Intel, Microsoft, and Philips have started to outsource specialists from various
parts of the world, causing job shifts and changes in companies’ structures. Alliances among
automakers (e.g., GM-Ford- DaimlerChrysler, Ford-Mazda, and GM-Honda), petroleum
manufacturers (e.g., BP-Mobil, NUPI-Chevron Texaco), and airlines (e.g., star alliances) are
other examples of changes driven by this phenomenon. Therefore, this dissertation investigates
the effects of globalization on business firms with a particular interest on how it affects firms
from both emerging economies (i.e., China, India, Thailand), and developed economies, (i.e.,
the U.S).
In this study, “globalization” refers to the process of increasing social and cultural inter-
connectedness, political interdependence, and economic, financial and market integrations that
are driven by advances in communication and transportation technologies, and
trade liberalization.
The dissertation is comprised of three related studies. The first study is empirical research
designed to examine the effects of globalization on the performance of exporting firms in
Thailand and in the U.S. The second study examines the relationships between the effects of
globalization and the degree of co-marketing alliance and international marketing performance
of firms. The last study makes an empirical investigation of the effects of globalization on the
Degree of co-marketing alliance and international marketing performance of firms from two
distinct economic contexts—developed and emerging economies, which are represented by
American and Thai firms, respectively. Thailand and the U.S. are appropriate research settings
since these two countries differ greatly in their degree of globalization level of economic
development, and national competitiveness. While the U.S. is highly globalized, Thailand is
considerably less globalized. According to the survey conducted by AT Kearney and EDS
Company in cooperation with Foreign Policy Magazine Thailand is ranked 48th, and the U.S. is
ranked 7th on the globalization index. Thailand is classified as a lower-middle-income economy,
one in which the Gross National Income (GNI) per capita is between $736 and $2,935, while the
U.S. is considered a high income- economy whose GNI per capita is above $40,000.
Furthermore, the national competitiveness of these two nations differs dramatically. The U.S. is
The second most competitive country in the world whereas Thailand is ranked number 40 on the
national competitiveness index.
In this introduction, the phenomenon of globalization, including the effects of globalization on
businesses, is first described. The purpose of the study, the major research questions, and the
scope of the study are then presented. Finally, the organization of the dissertation is provided in
the last section.
GLOBLISATION
Globalization (or globalization) describes the process by which regional economies, societies,
and cultures have become integrated through a global network of political ideas through
communication, transportation, and trade. The term is most closely associated with the
term economic globalization: the integration of national economies into the international
economy through trade, foreign, capital flows, migration, the spread of technology,
and military presence. However, globalization is usually recognized as being driven by a
combination of economic, technological, socio cultural, political, and biological factors. The
term can also refer to the transnational circulation of ideas, languages, or popular
culture through acculturation. An aspect of the world which has gone through the process can be
said to be globalized.

EFFECT OF GLOBALIZATION ON DIFFERENT ASPECTS

Globalization is an interesting phenomenon since it is obvious that the world has been going
through this process of change towards increasing economic, financial, social, cultural, political,
market, and environmental interdependence among nations. Virtually, everyone is affected by
this process. Given these changes, globalization brings about a borderless world. Globalization
drives people to change their ways of living, prompts firms to change their ways of conducting
business, and, spurs nations to establish new national policies. Events transpiring in different
parts of the world now have dramatic consequences to other parts of the world at a faster pace
than anyone could imagine in the past. For example, the Asian financial crisis in 1997 has
severely affected businesses around the world and the outbreak of SARS (Severe Acute
Respiratory Syndrome) in 2003 has shown how globalization permits the rapid spread of the
disease, which affects many airlines, the hospitality industry, and other businesses around the
globe.

On the positive side, globalization enables firms to outsource and find customers around the
world, e.g., the auto and electronics industries. The globalization of production and operations
benefits firms through the realization of economies of scales and scope. Hence, no one can deny
that globalization has changed the way we conduct business.
Although globalization is a worldwide phenomenon, the extent to which each country is
globalized is not identical. To measure the degree of globalization of each nation, a globalization
index was recently developed by cooperation between Foreign Policy Magazine, AT Kearney
and EDS Company. The index indicates that some small developing countries in emerging
economies such as Singapore and Malaysia were among the top twenty most globalized nations
from 2001 to 2004 with Singapore being ranked as the most globalized nation. Thus, it is clear
that globalization is an important phenomenon, one that cannot be simply ignored, because every
nation—regardless of size or level of development—is globalized and affected by globalization.
With the prevalence of this worldwide phenomenon, it is not surprising that businesses are
inevitably affected.
Throughout this dissertation, the effects of globalization are classified into two broad
Categories:
1) Global market opportunities and, 2) global market threats.
These two major effects are chosen to be investigated here because they are frequently cited in
the past literature as the most apparent and immediate effects of globalization. Global market
opportunities refer to the increases in market potential, trade and investment potential and
resource accessibility. Global market threats refer to the increases in the number and level of
competition, and the level of uncertainty.
NEW GLOBAL CUSTOMERS
Two billion new consumers from the developing world will enter the global economy by 2030.
Who is the “new consumer” who will drive future global growth?
Key Points
• Armed with information technology, consumers become impatient and omnipotent; they drive
costs down and quality up, whether in education or food or text-messaging services
• The new consumer is predominantly female – women make 85% of all purchases; they are
savvy, demanding, value hassle-free shopping and are multi-loyal among brands and stores
• The new consumer demands sustainability, and will punish or reward companies based on their
market behavior, well beyond what the law or political regulations require.
• There is no single, broad-based “new consumer”, but rather many diverse segments
in differentiated markets
• The “what” and “where” of consumer goods is increasingly giving way to the “how”
those products and services have been produced, packaged and delivered
• Not all new consumers want more – in recession-struck economies of Europe and North
America, consumers are more frugal, and baby boomers value leisure more than material things
The sheer numbers are sobering, as the Earth’s population will surge to 8.3 billion people
in2030. By then, each individual will eat 45 kilograms of meat per year, twice as much as the
1965average, and the world will collectively burn 105 billion tons of oil. The expanding
economy and burgeoning demographics offer new opportunities for businesses, but impose
heavy burdens from savvy consumers who demand sustainable products and services.
Even without all the newborn babies coming into the world each day, the demands of consumers
are being unleashed in ways that are transforming the global marketplace from the bottom up.
Company executives and even government officials who fail to listen, re-engineer and deliver on
these demands will soon find themselves driven out of the marketplace.
Human aspirations have always been high, but technology is now rewriting the rules and the
pace of the game. What used to take 50 years to achieve is now expected to be accomplished in
five; an item that formerly cost US$ 100 must now be sold for US$ 5. Not long ago, one dollar
would buy delivery of eight text messages; now companies are being asked to send 8,000 for the
same price.
It would be a mistake to broad-brush the new consumer as any one type or category. Depending
on the goods or services and market, there are millions of differentiated new consumers. For
example, many do not check or care if a label says “Made in China”. Some value “made locally”
for everyday products, but even they likely prefer “Made in France” for luxury items such as
perfume. What’s more, in some countries the new consumer does not want any additional stuff,
but may even be trading down, saving money for retirement, and shrinking his or her
economic footprint.
One potent segment of a global new clientele that is not trading down, however, appears to be
women. Their purchasing power has grown alongside technological and political empowerment.
They have growing aspirations – for themselves, their children and their spouses – that range
from education and mobility to tools for becoming self-employed. Their loyalty to family does
not extend to the marketplace, however; unless they find goods and services that are fact-based,
emotional and fun, they will turn elsewhere. Fast moving retailers must show what is safe,
available, sustainable and affordable.
Some argued that because of widespread risks, regulations on behalf of consumers would be
inevitable. Panelists generally agreed, with two caveats. First, even regulations must involve
society and be responsive to consumer demands, not unilaterally imposed by a few experts.

Consumer Behavior in Global markets

The A-B-C-D paradigm and its application to Eastern Europe and the third world, the focus is to
provide a comprehensive view of consumer behavior in global markets,Especially in relation to
the countries of Eastern Europe and the third world. Consumer behavior is likely to be somewhat
different in developing countries since it is largely influenced by social, political and economic
conditions. It provides a framework that can be used to study consumer behavior in global
markets, this framework is applied to examine and understand consumer behavior in countries of
the third World and Eastern Europe. Besides this it offers generalizations and recommendations
to those wishing to market their products/services in the Third World and Eastern Europe.
Theories/models have played an important role by detailing how various factors influence
consumer behavior. In this article it presents the A-B-C-D paradigm. The four stages are termed
access, buying behavior, consumption characteristics, and disposal. A thorough understanding of
each stage is essential for the global marketer since the overall effectiveness of the marketing
function is contingent on all four stages being facilitated within any culture. First there are short
definitions of each stage:
(1) Access
The first step in global marketing is to provide access to the product/service for consumers,
within a culture. Access pertains both to physical access as well as to economic access.
(2) Buying Behaviour
This stage encompasses all factors impacting on decision making and choice within a culture.
Examples of these factors include perceptions, attitudes, and consumer responses such as
brand loyalty.
(3) Consumption characteristics
The specific products/services that are purchased and consumed may be different in each culture.
The cultural orientation (traditional versus modern) and social class distribution, among other
factors, will determine consumption patterns within a culture.
(4) Disposal
Most countries, including the developing countries, are becoming more environmentally
conscious and moving away from throw-away products. Hence marketers need to design systems
to facilitate the safe disposal, recycling, resale or manufacturing of products. They must also
meet their social responsibilities in other countries, especially in relation to public safety and
environmental pollution.

A different rationale for the A-B-C-D paradigm: First, since the four stages are universally
applicable, the paradigm offers a general framework to understand consumer behaviour within
any global market. Second, in order to understand the broadest possible range of consumer
behaviour within any culture, the paradigm encompasses all aspects of purchase and
consumption within a simple framework. Third, the four stages of the paradigm are arranged in a
hierarchical fashion from the consumers' viewpoint. And fourth the A-B-C-D paradigm is
consistent with the concept of business process reengineering, which encourages business to
improve corporate performance by using a cross- functional perspective.
The practical application of consumer behaviour findings in international markets has often
posed a problem for marketers for two reasons. First, most consumer research in international
markets has used a piecemeal approach. Second, there has been no comprehensive framework to
integrate the findings in a meaningful manner.

THE EFFECT OF GLOBALIZATION ON CONSUMER BEHABIOR

Global consumer segments are beginning to emerge. Often it is thought that because of
globalization the world is becoming one global market. Like in the article of Lifelong &
vanRaaij where the research proved a trend towards a conversion to a more similar macro-
marketing environment and macro- marketing mix in the EU nations, but this is just partly due to
the effect of globalization. This is however just proof for the European market and can certainly
not be generalized to the whole world. Suh & Kwon researched the difference in buying behavior
for foreign products between an Asian country and the US. They introduced the term global
openness as a measure for globalization. Global openness is the construct incorporating the
impact of globalization and so reflecting a self-conscious level of globalization as a process of
Increasing consciousness and sensitivity to other people and cultures. They researched the effect
of global openness on consumers' ethnocentric tendencies in a certain cultural context
Consumer ethnocentrism generally plays an important role in determining the magnitude of
reluctance to buy a foreign product, and product judgments also play a part but only in a western
culture, where consumers' reluctance to buy foreign products might have been decreased by
perceived product quality, lowering consumer ethnocentrism, and directly developing global
openness. It is concluded that consumers in a different culture, who are fundamentally different
in their tastes and preferences, perceptions, ordering of needs and motivations to consume, are
still sufficiently different even after being exposed to the enormous wave of globalization (Suh
&Kwon, 2002). The article is concludes that globalization is not creating one big market and that
different cultures still differ to a great amount. Both studies are not completely comparable
because of the different aim and different countries studied. The countries studied differ and the
European countries are geographically near to each other and have a more similar or interwoven
background than Korea and the US have.
Globalization affects the buying behavior of consumers but not every country is affected the
same. There are several different patterns of cosmopolitan behavior, varying both with
thesituation and the consumer. Every market has relatively central or relatively
peripheralconsumption contexts. Because one and the same product can be in one country in the
relatively central context but, because of cultural differences, in the other country in relatively
peripheral consumption contexts. (An example could be French wine, which is not easily
substituted by another wine in France, but in the Netherlands South- African wines are able to
gain market share as well, so in France French wine has a central consumption context and in the
Netherlands French wine has a peripheral consumption context) in every market, consumer
behavior encompasses conservative consumption contexts, which are difficult to penetrate for
non-traditional products, and areas which are more open to globalization and modernization.
Those consumption contexts are referred to as relatively central or relatively peripheral
consumption contexts. The general level of openness to change of a society is reflected in the
degree of modernization of the consumption situations in general, but also that the effect of
modernization depends on the cultural importance of each of the particular consumption
situations. The different degree of resistance of the consumption situations implies that
innovation is unevenly distributed, and that it has its strongest impact in the culturally important
areas.
An example of a framework for studying consumer behaviors in global markets is the ABC- D
Paradigm, the four stages are universally applicable, and the paradigm offers a general
framework to understand consumer behavior within any country.
Conclusions
The preceding definitions of globalization show that there is some general equality, but no
formal uniform definition. Most definitions are on the Macro-level. Globalization is facilitated
by developments like, better communication tools, easier travel etc.
Globalization should not be confused with cosmopolitism. A cosmopolitan is a type fiction for a
consumer which can have both a global as well as a local mindset. The question posed in the
synthesis chapter, whether the effect of globalization creates a large connected market or
individual small segments, can be answered. The effect of globalization is that borders are fading
GLOBALIZATION AND BUSINESS
Globalization has melted national borders, free trade has enhanced economic integration and the
information and communications revolution has made geography and time irrelevant. The role
and functions of entrepreneurship in the new global economy have taken on added significance
and face compounded challenges. We live in a challenging environment of rapidly changing
economic events, where the private sector has become the most important engine of economic
growth and the public sector has shrunk in importance and influence. Entrepreneurs are defining
the new rules of engagement on the economic landscape as they come to grips with
contemporary challenges and new opportunities. In this new environment, entrepreneurs need to
articulate a pragmatic vision, exercise effective leadership and develop a competent business
strategy. They should create the synergies that will allow them to integrate the interactive
ingredients of the new economy in order to enhance their competitive advantage. Their business
strategy should embrace flexibility, a quick response time and a proactive approach to economic
Opportunities. This paper will also enumerate the entrepreneurial abilities, skills, competencies
and perspectives that are essential pre-requisites for success in the new global economy of the
twenty-first century. In short, the economic heartbeat of the new economy is the global
entrepreneur with an international mindset.
The economic gains of the Industrial Revolution were associated primarily with economies of
scale. Economies of scale accrue when the cost of producing a unit of output decreases as the
output rate increases prior to diminishing returns setting in. This is a result of the incremental
decrease in per unit cost, as the per unit fixed cost is distributed over a larger number of total
production output. Economies of scale arise from specialization and the division of labor that can
be attained more effectively by each business' internal structure of the production process co-
ordination, rather than in market co-ordination. The mass production of consumer durable goods
using the assembly line method of production is a good example of gains from economies of
scale during the Industrial Revolution. More specifically, car manufacturers have been the
beneficiaries of economies of scale through the use of cost saving machinery and highly
specialized labor, along with targeting increases in production output levels.
The role and functions of entrepreneurship in the new global economy of the 21st Century have
taken on added significance and face compounded challenges. Today we live in a challenging
environment of rapidly changing economic events, where the private sector has become the most
important engine of economic growth, and the public sector has shrank in importance and
influence. In this context, the entrepreneur has a primary role to play in promoting national well-
being through the enterprise of the private sector. Entrepreneurs are defining new rules of
engagement on the economic landscape as they come to grips with contemporary challenges and
new opportunities. New ideas, new directions, and new initiatives are the signature mark of
the21st Century. In this new environment, entrepreneurs need to articulate a pragmatic vision,
exercise effective leadership, and develop a competent business strategy. They should have
personal qualities to integrate the interactive ingredients of the new economy, viz. globalization,
trade liberalization, and the information technology and communications revolution, in order to
enhance their competitive advantage. Their business strategy should embrace flexibility, a quick
response time and a proactive approach to economic opportunities
The pervasive economic integration that has taken place in the new global economy has
compounded the interdependence of nations, and enhanced the linkages of production and
marketing. At the very heart of this transformation is the birth of the global entrepreneur. In other
words, the ability to adopt a global mindset in the exercise of entrepreneurial initiatives. Indeed,
in addition to a new global vision, new competencies and new skills are necessary tools for the
modern entrepreneur. Among those new skills are the ability to cope with the tidal wave of
frequent and repeated change, more cost-effective production methods, improving the quality of
products, having a faster response time to changing market conditions, selling at lower prices,
and being more aggressively competitive. In order to strategize globally, the contemporary
Entrepreneur must extend his/her mindset to incorporate multidimensional relationships and
Complex social, cultural, economic and political realities.
One of the most important entrepreneurial requirements is the ability to have a global
perspective. Globalization has for all practical purposes melted national borders and made
geographical location irrelevant. Entrepreneurs with a global vision have the advantage of
reaching out to embrace economic opportunities world-wide. Conducting business in a local,
regional or national milieu is significantly different from doing business internationally. For
example, it requires up scaling from a national image in the market place to a global image. This
involves endorsing the same standards of quality throughout the world on a consistent basis, but
at the same time incorporating the flexibility to tailor packaging or the image of the product to
suit the customs and traditions of the local market.
Second, the new global entrepreneur must have the ability to meet the challenges and take
advantage of the opportunities associated with human diversity. This requires the adoption of a
progressive multicultural approach in terms of one's workforce as well as one's product clients.
The contemporary entrepreneur must develop a knowledge and appreciation of the cultural,
social, and economic differences that influence how people perceive and interact in their
environment and its relationship to community development. It requires being constantly
sensitized to the different cultural values, attitudes and approaches to problem solving and
decision-making. A proficiency in managing diversity domestically and internationally is
essential for harnessing the multicultural profile of the workforce and ensuring optimum levels
of productivity. The cultural diversity of the workforce is an economic asset that must be
deployed to strategic business advantage. It translates into an ability to communicate in the
languages of many different countries, and familiarity with local customs, traditions, business,
and financial habits. Marketing strategies must understand the role of languages and cultures as
they attempt to introduce new products in foreign markets. The failure to take local preferences,
packaging, branding, local conditions, and economic infrastructure into account can result in
poor strategic decisions. An imperative for effectively managing cultural diversity is cultural
sensitivity. The modern entrepreneur requires a comfort level that is conducive to utilizing the
multicultural, multiracial, multi linguistic, and multipath character of the workforce. This is a
profound economic advantage in such areas as international trade, identifying export markets,
overseas business contacts, opening doors of economic opportunity, establishing a presence in
overseas markets, facilitating foreign direct investment, integrating advanced technology, and
assessing the business risk of operating in a foreign market. A global perspective involves a
holistic view of workforce inclusiveness whereby all employees are treated fairly and equitably,
and are provided with equal opportunities and equal rewards. It requires the effective integration
of diverse cultures in the business network in a productive and trusting environment. In short,
this is about creating people synergy, where the outcome is greater than the inputs, because of
the strategic co-ordination of a diverse and pluralistic workforce.
The third axiom of successful entrepreneurship in the new economy depends on pushing the
frontiers of innovation in a persistent and deliberate manner. Integrating innovation has become a
constant objective for economic efficiency and the development of a successful business
strategy. The maxim "if it isn’t broke don't fix it" should be replaced with "if it isn’t broke
improve it". The modern entrepreneur must embrace the role of a catalyst for innovative change
on a continuous time frame. In this respect, entrepreneurs must seek opportunities for achieving
economies of scale and economies of scope. Global enterprises can ascertain these economies by
extending their reach to global markets. In doing so, they extend the potential of their domestic
market and enhance the scope of their innovation initiatives through research and development,
the development of new products, improving quality, and reducing the cost of existing products.
It should be noted that developing global niche market requires a long-term customer oriented
focus. In order to compete in the contemporary global market, products and services must be
sensitive and responsive to local market needs and customer preferences. Furthermore, in the fast
paced world of business, even the long term is getting shorter. Given the diversity of market
requirements and needs, the dispersion of manufacturing and out sourcing, the importance of
research and development leadership, and the recognition of technological advances for product
and process innovations; learning and the transfer of knowledge are key to global success.
Business organizations that are successful must be able to co-ordinate, transfer, and use
knowledge gained rapidly and effectively.
New corporations with an international focus must embrace an organizational vision that has a
global reach. There must be an administrative model that facilitates the corporate vision and has
the plans to implement it effectively and consistently throughout the entire organization. It is in
this regard that product quality takes on added significance. The culture of the modern enterprise
must be to adhere to high quality standards that are company-wide and permeate throughout the
entire enterprise, not just parts of it.
The economic profile of the new global economy has been driven by technology, fuelled by
innovation and entrepreneurial initiative, and is based on new ideas, new perspectives and new
business strategies. It has opened the door to new investment opportunities and acted as a
catalyst for employment creation. At the same time the new economy has altered the economic
landscape and realigned the linkages between different sectors of the economy. In short,
technological innovation and entrepreneurial initiative is alive and well in the new global
economy of the 21st Century.
The new economy has markedly transformed the structural parameters of the economic
landscape and contracted the prism for time and space. The role of information technology in the
new economy has been pivotal. It is particularly potent in the changing structure of international
production. International economic transactions that formerly were conducted between
independent entities are now being internalized within a single firm or multinational corporation.
The new technological infrastructure has empowered services to be delinked from production,
and traded or performed remotely. In this contemporary venue, the market for a growing number
of internationally integrated but geographically dispersed business enterprises is global, rather
than national or regional. The internationalization of production is necessitated by the economics
of profitability. In other words, the high cost of information technology and the highly skilled
labor used in the production process, require a marketing niche that caters to a global market
rather than a smaller national market. The economic heartbeat of the new economy is the global
entrepreneur.