Consumer Behaviour: Globalization Impact

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Questions and Answers

What characteristic distinguishes global companies from local ones in terms of mindset?

Emphasis on local branding strategies

Focus solely on domestic markets

Adherence to strict local traditions

Need for a cross-cultural vision (correct)

Which factor has significantly accelerated the globalization phenomenon recently?

Decreased interest in international trade

Advances in transportation and communications (correct)

Growth of local startups

Increased agricultural production

What is one consequence of globalization on consumer behavior?

Increased preference for local brands

Greater exposure to global brands (correct)

Resistance to international brands

Reduction in product variety

What is a common error companies make when internationalizing their brands or products?

Adopting a one-size-fits-all approach Signup and view all the answers

What is meant by the term 'denationalization of brands' in globalization?

Brands losing their local identity Signup and view all the answers

What is one significant advantage of competition in the market?

Better products at better prices Signup and view all the answers

How does offshoring affect less developed countries?

It brings wealth through employment opportunities. Signup and view all the answers

Which of the following is NOT a disadvantage of globalization?

Greater economic equality Signup and view all the answers

What is a consequence of global branding?

Cultural homogenization Signup and view all the answers

What perceived advantage do global brands have over local brands?

Higher aura of prestige Signup and view all the answers

What is one of the primary advantages of running a single ad campaign globally?

It provides significant economies of scale in marketing. Signup and view all the answers

Which challenge is most associated with positioning global brands in diverse markets?

Cultural differences leading to variable brand positioning. Signup and view all the answers

Why do some multinational companies prefer not to create their own brands in new markets?

Due to significant market share already held by local brands. Signup and view all the answers

What is a notable characteristic of local brands compared to global brands?

They are perceived as being closer to local consumers. Signup and view all the answers

What is a common downside to global branding in terms of local market dynamics?

Difficulty in adapting to unique consumer tastes and preferences. Signup and view all the answers

What is a primary characteristic of global brands that successfully integrate into local markets?

They become perceived as local brands by consumers. Signup and view all the answers

In the second stage of brand denationalization, how do consumers perceive a foreign brand?

They possess a clear understanding of its foreign nature. Signup and view all the answers

What factor could make a foreign brand desirable in a local market?

The reputation of the brand's country of origin. Signup and view all the answers

What signifies the third stage of the brand denationalization process?

Consumers no longer consider the brand's foreign origin as relevant. Signup and view all the answers

How might multinational companies develop their brand strategies?

By combining global and local brand strategies based on various factors. Signup and view all the answers

Study Notes

Consumer Behaviour: Market Situation - Globalization

Topic: Consumer behaviour in a global market
Market Situation: Globalization
Speaker: Silvio Addolorato
Institution: Universidad Europea
Objectives: Understand globalization, its consequences on consumption, global and local brands, and challenges in internationalization.

Index of Consumer Behaviour

Topic 15: Market situation: globalization
- Presentation
- Learning objectives:
  - Define globalization
  - Explore consequences of globalization
  - Analyze global brands
  - Examine local brands
  - Identify errors in internationalization
  - Understand globalization in the fitness sector
- Bibliographic references

Consumer Behaviour Objectives

Understand the phenomenon of globalization, especially in the economic field
Analyze consequences of globalization on consumption
Recognize characteristics of local and global brands
Identify common mistakes in brand internationalization

Globalization as a Presentation Topic

Globalization is a fact; today large corporations operate internationally
Advances in transport and communication resulted in accelerated globalization particularly in recent decades
The same globalization trend, although somewhat later, significantly impacts the sports sector, particularly the fitness industry.

Companies in the Globalized World

Companies succeeding globally need a different mindset compared to local companies
Global companies need to be aware of adapting to cultural differences by adapting their cross-cultural product and service vision.
Strategic decisions in marketing should be made centrally at first, then locally adapted to culture specifics

Globalization Definition

Globalization is a fusion, integration, and interaction of people, cultures, governments, and businesses.
This fusion results in interdependence among nations across economic, social, and political fields and aspects
International trade agreements have diminished national autonomy in economic matters

Example of Globalization: European Union

Free movement of capital, products, and people creates many transnational competitors for companies in the EU.
Companies that historically had few local competitors are now challenged by many global players.

Globalization: Additional Aspects

Social, ecological, and other movements spread across borders
Modern technology allows geographically dispersed teams and individuals to simultaneously work on projects.
Globalization is an indisputable fact, with ongoing impacts despite various opinions and perspectives.

Globalization as a Continuing Trend

Globalization is not something new; humans have historically worked to reduce distances; trade routes existed early on.
Advancements in technology, particularly 20th-century transportation (air travel), media (TV), and the internet in the latter half of the 20th-century, have markedly increased globalization's rate.
Globalization is prominent within the fitness sector: large chains today try to reach international audiences, and this has been increasingly dramatic

Globalization Consequences

Globalization is an unavoidable process; only its consequences can be analyzed.
Some consequences give companies opportunities, while others present threats
Example: Both positive and negative impacts of globalization on the fitness sector have impacted the demand for athletic products and services, and the way they are distributed and marketed.

Globalization Advantages

Increased competition prompts innovation and better consumer products at lower prices
Lower labor costs lead to cost reductions.
Increased employment opportunities for emerging economies occur through outsourcing

Globalization Advantages (continued)

Technological development arises from competitive pressures and cost reduction; research and development (R+D)
Easier access to goods in areas with lower development indexes promotes economic development and quality of life.

Globalization Disadvantages

Unemployment in developed nations due to outsourcing of employment
Increased income inequality
Diminished opportunity for small competitors

Global and Local Brands

Globalization promotes cultural homogenization, leading to a greater emphasis on standardized, global brands
Global brands usually command a higher level of prestige
Economies of scale are an advantage of global marketing strategies

Global Brands: Advantages

Prestige: perceived higher quality
Marketing synergies (cost savings): unified image leads to reduced marketing costs
Economies of scale in marketing: running a single ad campaign globally saves money
Global consumers: people recognize global brands across different countries

Global Brands: Disadvantages

Cultural differences: brands must consider that different cultures have different norms and perspectives
Established local brands: adapting to local tastes and preferences
Positioning challenges: brands might need to adjust their positioning in each market due to cultural differences

Local Brands

In the age of globalization, companies choose to maintain local brands
Some large multinational companies that produce consumer goods use both global and local brands

Local Brands: Example

Multinational fitness company entering the Spanish market might study the already well-established Spanish fitness chains.
If it is too expensive to create a new brand, the company may buy an existing local brand

Local Brands: Approach

Local brands are perceived as closer to the market and consumers.
Global companies often use mixed strategies, combining global and local brands depending on the product or consumers involved in the target market.

Denationalization of Brands

Global brands can penetrate local perception intensely to become local brands through cultural adaptation
Brand successfully becoming culturally integrated leads to success in the market.
Global brands can be thought of less as foreign when successfully denationalized

Denationalization of Brands (stages)

Stage 1: Initial awareness of the brand
Stage 2: Brand is available in the market, but still seen as foreign
Stage 3: Brand is accepted as local
Stage 4: The brand's origin is less noticeable because of local production
Stage 5: The brand has lost its national connotations and is fully accepted globally

Internationalization Mistakes

Product: Brand products may not match tastes, preferences, or habits of consumers in different countries
Communication: Global marketing campaigns may not consider cultural nuances
Pricing: Price differences in purchasing power across countries can result in problems depending on local needs
Distribution: Variations in buyer habits and customs can be significant in different geographical regions.

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Description

This quiz explores the implications of globalization on consumer behaviour. It focuses on defining globalization, analyzing global and local brands, and understanding the challenges in internationalization. Participants will gain insights into how globalization affects consumption patterns in various sectors, including fitness.