Advertising and Globalization

What is “globalization?” An expansion of global linkages, the organization of social life on a global scale, and the growth of global consciousness. Globalization is the economic and cultural consolidation of world society.

What is “globalization?” “the inexorable integration of markets, nation-states, and technologies to a degree never witnessed before--in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before . . . . the spread of free-market capitalism to virtually every country in the world " --Thomas L. Friedman, The Lexus and the Olive Tree, 1999, p. 7-8.

What is “globalization” It is the international system that has replaced the Cold War system. The dominant symbol of the Cold War era was the Berlin Wall, (a sign of division—West. vs. East), and its counterpart today is the world wide web. The Cold War was characterized by division. The world was a divided place, and corporations did not see the potential for one global market. Globalization is characterized by integration. The world is connected, open, one market.

Why is globalization happening? Globalization is an economic imperative: corporations seek markets outside their national borders when there is insufficient opportunity for expansion at home. This is a known way to increase profits; e.g. Phillip Morris “Altria” selling cigarettes in Asia Market domination is another important reason. The manufacturer of a brand that is successful in one country must sell everywhere or see a competitor take the idea, manufacture the product, and lock the original manufacturer out of the market.

The pace of globalization Globalization has increased steadily since 1945 and shows no signs of slow-down It is a logical result of advances in electronic media that allow corporations to do business globally, communicating instantaneously through the web and satellites with people all over the world

What is the current debate about globalization? Globalization used to be widely celebrated as a new birth of freedom: better connections in a more open world would improve people's lives by making new products and ideas universally available, breaking down barriers to trade, resolving tensions between old adversaries, and empowering more and more people

What is the current debate about globalization? By the late 1990s, the term “globalization” was associated with concern about the consequences of global change for the well-being of various groups, the identity of countries and cultures, the economic disparities among peoples, and the condition of the environment. Advertising is an engine of global change, bringing western images and cultural values to other parts of the world

Globalization and Advertising --The opening of international markets to U.S.-based corporations and their advertising agencies has brought American (and European and Japanese) products and culture to the world.

Globalization and Advertising 1967: Advertising executive Arthur Fatt published an article in the Journal of Marketing that observed that international advertising can overcome cultural traditions and should speak to universal values like the desire for beauty, health and the good life. Foreshadows global ad campaigns

Globalization and Advertising Trend toward global advertising heated up in the 1980s, following publication of Theodore Levitt’s controversial 1983 article: “The Globalization of Markets” in the Harvard Business Review. Levitt urged companies to move to global marketing strategies. “Sell the same thing, in the same way, everywhere.” –Theodore Levitt

Advertising and Globalization Supporters of global ad campaigns argue that national and regional differences are now “superficial.” They see the world as one large, unified market with similar consumers who want the same products. Levitt believed that improvements in worldwide communication and transportation made consumer demands universal and cultural differences unimportant. He argued that consumer similarities are now more important than national differences.

Advertising and Globalization Are people of the world moving closer together in terms of their “sameness?” Ad executives point to international trends that drive consumer behavior: Aging populations Falling birth rates Increased female employment Increasing wealth More leisure time New technology Awareness of different lifestyles

Cross cultural cohorts In anthropology, people who share consumer commonalities would be called cross cultural cohorts—people who have a distinct, common set of needs and wants regardless of their culture or nationality.

Lifestyle consumers Advertisers are less concerned today with national/local boundaries because, for example, international urban dwellers may be more alike than local nationals Advertisers conceptualize global consumers along “lifestyle” types or cultural-ethnic lines Lifestyle consumer groups like “business travelers” transcend national borders

Cultural-ethnic similarities Examples: “Hispanic market”; lumps together Mexicans, Spanish-speaking Europeans, South Americans, Central Americans, Puerto Ricans; “Greater China” market lumps together citizens of China, Taiwan, Singapore and Hong Kong

Advantages of global ad campaigns Significant cost savings when all or parts of ad campaigns are “standardized” across borders, reduces copy development and production costs. Uniform international image A global campaign can build a strong and coherent global image for the firm and/or its products worldwide. Use of the same image in different countries builds familiarity and generates synergies across world markets. It allows utilization of good ideas and creative talent (both of which are scarce commodities) on a worldwide basis. Multiple local campaigns can result in inconsistent brand images across countries and confusion in consumers' minds with regard to the benefits offered by the brand and corporate image.