The Concepts And Practical Applications Of Glocalization In Global Marketing: A Study Of Nestle And Hershey’s Food Corporation

Literature Review

The study of global marketing lies with various theoretical concepts of various fields of business including strategic ways of local marketing management and global marketing procedures. The concept of Glocalization is a combination of global business management along with concerning the local market and its credentials in business (Robertson 2013). Glocalization is adaptation of global products likely with the characteristics of local cultural aspects in which the products get sold. There are various companies operating in the food industry, clothes industry that practices with the tactics of the globalization along with the local or regional cultures (Singh 2016).

The essay concerns about the concepts of Glocalization along with reviewing various literatures on the researches of global into local marketing tactics of various organizations all over the world. The essay also conceptualizes the critical analysis of various factors influencing the global marketing mix strategies of two global leaders operating in the Food Industry of UK and other countries. The two companies are Nestle and Hersey’s Food Corporation. The company Nestle has been established in the year 1866 with the products ranging in the category of condensed milk. Presently the company is operating with many product chains that categorizes as the coffee, dark chocolate, milk chocolate, baby food, tea and confectionery, dairy products, frozen foods, ice creams, Pet foods and many more (Nestle.com 2017). On the other hand, the Hersey’s Food Corporation founded in the year 1894 and the products of the company ranges in the category of Chocolates and chocolate drinks (Thehersheycompany.com 2017).

The essay is presenting the entire discussion on globalization theories and its practical applications in two major parts. The first part of the essay discusses on the literatures scholarly written by researchers who are working on the crucial facts of globalization. The second part of the essay conceptualizes the literature review by practical examples of Nestle and Hersey’s Food Corporation. This part has been focused to find out the marketing tactics and trends of the food industry along with both of the companies.

The literature review is a systematic discussion on various scholarly written research articles, journals which includes the realistic evaluation of the facts and figure of a particular subject. The literature review discussion in this essay focuses on some crucial facts about the concept and practices of Glocalization in food industry and various other industries (Booth, Sutton and Papaioannou 2016).

The word ‘Glocalization’ is a combination of the two words ‘globalization’ and the ‘localization’. The use of two words in a combined way summarizes the exact usefulness of the concept in business point of view and develops the strategic thoughts to describe the products or the services of a company by targeting the global and the local customers.  

Glocalization in the Food Industry

The global companies use to distribute their campaign along with the cultural structures of various regions to get a tailor made view for each regional customer for the same product (Fan 2017). The strategies applied for this purpose conceals with the local or regional laws, customs and the perceptions of the customers. In various researches, it is found that the strategic Glocalization use to act more efficiently for the global leaders in the local markets and the profit maximization is also concern with the model of ‘global with local’ view (Ritzer and Dean 2015). However, there are various sub factors included in the conceptualization of the ‘global with local’ view.

According to the article by Gobo published in the year 2016, Glocalization is never less than a practical approach except the theoretical point of view of many researchers (Gobo 2016). The study of trends of business concepts from the research conducted on various companies can only build the structural Glocalization study. The concept of Glocalization can be added to the social-scientific vocabulary to analytical frame the crucial factors.

Global Marketing

Global marketing is a vast study under lying with the concept of international marketing. The multinational organizations use to reconcile the strategic global marketing to take commercial advantages along with the global operational differences (Drakulevski and Nakov 2016). The global marketing strategies of the multinational organizations give them various opportunities of sustainability in the competitive context of business operations and customers acquiring. The global marketing strategies focus on the global objectives of various companies in different regions along with the country trends of marketing (De Mooij 2013).

The global marketing is a evolutionary process and there are several factors influencing the international position of the company. In the past years, the internationalized market place has been transformed due to various changes in the marketing styles of the big companies around the world. However, the new technological enrichments also helped the global companies in acquiring the transformed trading techniques and the standardized practices of product and services marketing (Keegan and Green 2015).

The study conducted by Tsukamoto in the year 2013 states that, the concepts of Glocalization lies with various factors and one of the major factors id the fiscal localism. The definition of fiscal localism comprises the localized exchange of monetary credentials. However, it can be considered as an obstacle with the global capitalism and economic globalization. The market structure also gets influenced due to the effective fiscal localism in various countries (Tsukamoto 2013).

Case Study Analysis: Nestle

The fiscal localism consists of the activities of local purchasing and the complex institutions of currency exchanges. The fiscal localism can contribute in the development of the credit unions and the local currency communities for the transactional ease in the business (Alcántara-Pilar 2015).

The Fiscal localism is entrenched in the model of decentralization and it is used for the creation & continuance of a regional economy with the support of the communities for the sustainable development of the organization. The unique currencies used by a particular region often backed by a national currency (Moore 2017).

The theoretical concepts behind the community currency introduce the statements of complementary currencies which is used by the localities and it is designed as per the needs of the local people. The strategies behind the use of Community currency lies with the sue of money in a frame to achieve the social an various environmental objectives and it also contributes in accessing the financial potential build up of a firm in a particular region (Seyfang and Longhurst 2016).

For the Glocalization purposes, paper scrip is issued for the various purposes and used by participating businesses. However, the community currencies encourage the spending of the local entity of the global businesses. This also enhances the economic state of the country. Apart from that, the sustainability of a global business firm also depends on the community currencies theory and the socio-technical innovation also conceptualized in the context of the community currency in Glocalization.

According to the study by Michel and Hudon conducted in the year 2015 states that, Local currencies, local exchange trading schemes and the time banks are few facts about the characteristics of community currencies. The sustainability of the organization partially depends on the niche-level activities relating with the community currencies and the socio-technological innovations are also important in this aspects (Michel and Hudon 2015).

However, there are 12 similar community currency niches which can influence the market stability of an organization. The article concluded that, the community currency systems contribute to the development of the sustainability position of a company in a extensive competitive market of a country. There are many economic benefits too to implement strategies regarding the community currencies in a particular region.

The forex market makes trading activities 24 hours in a day and the spread is around the world. The overlapping trading hours in various countries use to make it easier for the trading purposes (Khondker 2013). Though there are various risks also involved in the global trading for the international organizations. Hence the globalization along with the localization concept lies with various businesses and trading risk in the multi-country aspect (Ahoniemi, Fuertes and Olmo 2015).

Case Study Analysis: Hershey’s Food Corporation

According to the study by Barrett and Scott conducted in the year 2004 states that, the trading activities and expertise of the global leaders influence their position in different market places. The global trading activities also help in minimizing the threat losing market share due to the domestic players in a competitive market. Thus, the glocalization needs the skill based trading opportunities for the global leaders in the various countries in which they are operating (Barrett and Scott 2004).  

The concepts of glocalization reflect the standardization and adaptation controversies. The study by Yap and Yazdanifard conducted in the year 2014 states that, the sales and distribution of the product and service line of a company can be globalised along with local markets. The products profiles can be standardized in the characteristics of the global levels along with the expectations of the local customers (Yap and Yazdanifard 2014).

However, the concepts of globalization along with the local market terms have become homogeneous since last decades. The dimension of the complexity along with the multidimensional notion of glocalization lies with the adaptation of the local contributive role of an organization in the business context. Along with that, there are various terms of glocalization depending on which the process of stranderisation of the products and the services in the global market. Along with that, it approaches towards satisfying the local customers by accepting the taste and preferences of the regional people. Such terms relates with the factors of the glocalization such as Overnight trading activities, community currency and the fiscal localism. The article by Drori, Höllerer and Walgenbach extracts three core themes of globalization on the basis of standardization and adaptation of marketing mix namely ‘what’, ‘who’ and ‘how’. Along with that, the study discusses about several components of the glocalization namely abstraction and the adaptation and the adaptation, construction of the equivalency (Drori, Höllerer and Walgenbach 2014).

According to the studies of various articles and journal, the strategic approaches of the multinational organization for the global marketing can be listed as below –

• Strategic description of the products of the services;
• Acquiring competitive advantages in the market;
• Increase awareness among the target customers of various countries along with community currencies and effective pricing strategies;
• Adaptation of marketing trends of different countries along with standardization of the product quality and features as per the global characteristics (Drakulevski and Nakov 2016);
• Localization of the communication along with globalised brand image building;

• The major advantage of these global marketing strategies is the enabling of extensive efficiency to leverage the economies of scale for the company (Hill, Jones and Schilling 2014).
• Along with that, the global companies use to sell their product worldwide, hence they use to have opportunities to get the raw materials in bulk and potentially less price tags which will enable them to minimize the cost of goods sold and the profit maximizes with no of sales (Cavusgil et al 2014).
• The product life cycle also depends on the profitability statement of the company’s branches around the world and the sustainability of the organization become stable due to that (Stark 2015).
• The global marketing strategies enable the global organization to approach for the increasing market shares with effective competitive marketing strategies differing in regional context (West, Ford and Ibrahim 2015).

However, with the advantages of the strategic approaches, there are few disadvantages too.

• Due to focus on regional customer bases, an organization has to analyze the customer needs, usage pattern in every single phase of time which is more difficult than concentrating a single trend (Johanson and Mattsson 2015).
• The marketing trends of various competitors in different regions make it difficult to frequently change the strategies and activities as per the response of the customers of the target region’s marketing mix elements.
• The advertisements and various other promotional activities need to abide by the government regulations and the legal guidelines. Thus, the control over different markets perhaps looses from the entities of the organization (Baker 2015).
• Apart from these all, the multinational organizations use to face various administrative obstacles in implementing the marketing activities in various regions (Ghemawat 2013).

The discussion in the previous literature review part can be analyzed with the practical marketing mix examples of two major MNC brands Nestle and the Hersey’s Food Corporation.

Glocal Marketing strategies of Nestle

The company has established a unique identity for the market of UK as a division company name as Nestle UK Ltd. The company executes various product lines in the cities of UK such as the butter and cheese, Cocoa powder and chocolate confectionary and other various food products. The company has introduced the packages and processed food market of UK with various product ranges with globalised packaging strategies for every product. The functionality somehow differs from the category of standardization to localization; the product functionality adapts the mix strategy for the global market (Nestle.co.uk 2017).

Discussion

Nestle has product ranges mainly focusing the temptation of the taste buds of the customers and hence they focus on the taste and preferences of the customer. However, the brand has unique recipes or it can be called as policies which satisfies the taste and preferences of the customers all over the world. The market positioning strategy of the products of Nestle lies with the pricing strategy of the company. The community currency concept is used for the pricing strategy of the brand since they approach their target customers of different countries with different price ranges.

However, they use to put the pricing tags as pet the analysis of the prices ranges of the competitors’ products. The company has the sales distribution in various areas of UK and similarly other various countries and the company uses the localization strategies for this purposes. Along with that, they use the promotional strategies as per the local or regional market trends (Nestle.co.uk 2017).

Marketing Mix	Subcategories of Marketing Mix	Standardization		Adaptation
Product	Packaging	·
Functionality		·
Price	Positioning			·
Strategies			·
Place and Distribution	Sales distribution			·
Channel distribution		·
Promotion and communication	Promotion			·
Media buying			·

(Source: Created by author)

Glocal Marketing strategies of Hersey

The company Hersey use to deal with various chocolate products. The packaging for the products uses to maintain the global standardization. However, the functionality of the products is also the same for every regional area. The company use to maintain their global image all over the regions of various countries and they maintain their price ranges accordingly. The strategies behind the pricing are to build a luxury brand image for their products.

However, they follow the local pricing and currency too. The sales and distribution of the company is as per the global regional aspects. The company has a distribution network following the global standard and this effect in their pricing too. For the promotional purposes they follow the current market trends of each and every region and they opt for the local and national media buying rather global, to minimize the cost of global marketing (Hersheys.com 2017).

Marketing Mix	Subcategories of Marketing Mix	Standardization		Adaptation
Product	Packaging	o
Functionality	o
Price	Positioning		o
Strategies			o
Place and Distribution	Sales distribution		o
Channel distribution		o
Promotion and communication	Promotion			o
Media buying			o

(Source: Created by author)

Both the company follows the Glocal marketing concepts to strategize their marketing and business models. However, Nestle focuses more on the localization concept rather globalization. The Hersey focuses on building the global or international brand value in front of their global customer base.

The Nestle uses the community currency concepts along with the global marketing and local approaches concepts for all of their products. The fiscal localism is also accepted business concept for Nestle. However, Hersey also follow the community currency concept for their products.

Conclusion

Though both of the companies have implemented various marketing concepts in acquiring the target customers but Nestle has gained more profits and success in business with the localization concepts. Henceforth, in can be concluded as the localization concepts are more beneficial in such Glocal marketing practices for the MNCs.

Conclusion

The essay has focused on the various structures of the global marketing and the theoretical concepts of the glocalization with marketing mix and business operations. The report discusses on the various factors of the glocalization with the help of various literatures, articles and point outs the facts and figures in implementation of the global along with local business models.

For the discussion purposes the study has gone through various models of marketing analysis to understand the marketing mix and Glocal marketing strategies of two major MNCs which are operating in various countries including UK.

Both of the companies belong to the processed food industry and have global presence with high product value and brand image in front of the global customers’ base. The study has focused on comparing the findings of the literature review with the business model and strategies of the company. The research concludes that, there are various advantages and disadvantages of considering the global business along with the local context.

However, the potentiality of the advantages is much more beneficial for the expansion and sustainability purposes of the multinational business of both that companies.

The research also concludes that, there are various ways of controlling the business operations with the help of strategic management to increase the effectiveness of the Glocal marketing strategies rather the effect of the obstacles.

The essay ahs focused on the credibility of both of the companies with the help of the Dot Plot table and concludes that, the company Nestle has more potential business model than the Hersey’s Food Corporation. The reason behind such conclusion is that, the company Nestle focuses more on the adaptation of the local marketing policies and brand building rather global standardization. Whereas, the Hersey’s Food Corporation focuses on their global image in their marketing campaigns and the company believes to build a global brand image rather local conceptualizations.

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