The Future of Marketing: Thriving on the Global Arena - 2008-09-29

Activities have been in top gear ahead of the Global Marketing Strategy Conference being put together by M2 in collaboration with Global Marketing Network (GMN). Among the distinguished speakers at the conference is Svend Hollensen, an Associate Professor of International Marketing at the University of Southern Denmark and a GMN Faculty. In this online interview intended to serve as a teaser, Hollensen gives the basis for which businesses can be built around the global concept. He also touches on the marketing profession in general as well as the vision of GMN as an international marketing association. Ofuma Agali provides excerpts.

What is your relationship with Global Marketing Network and what benefits are available to its members globally?

I met Darrell Kofkin, the Chief Executive of Global Marketing Network, four years ago and from an early stage, we discussed  how to get the marketing, and especially the global marketing profession, back into the board room. Over the years, they have been thrown out by the product innovation specialists and it is time to get them back into the forum of the key decision makers in an international company.

We have waited a long time for an initiative like Global Marketing Network. Globalisation is no longer a choice for a company. It has become a necessity  for survival. Global marketing has become a fact of life. In this environment of 24/7 contact, long-distance teams, and extensively extended enterprises, the  successful marketing manager has to be flexible, multidimensional, and needs to have a global mindset.  With a well-structured concept Global Marketing Network will help global marketing to  achieve this point,  by offering programmes that will develop and strengthen their global marketing competencies.

Can you let us into your experience with marketing so far?

I have a Ph.D and I am an Associate Professor of International Marketing at University of Southern Denmark (Sønderborg). I have practical experience from a job as International Marketing Coordinator in a large Danish multinational enterprise as well as from being International Marketing Manager in a Danish company.

After working in the industry I received my Ph.D. from Copenhagen Business School (CBS) in 1992.

I am also the author of the following globally published textbooks: Essentials of Global Marketing, 1st ed., Pearson Education (UK), 2008; Global Marketing, 4th ed., Pearson Education (UK), 2007; Marketing Management - A Relationship Approach, Pearson Education (UK), 2003; Marketing Research - An International Approach (together with Marcus Schmidt), Pearson Education (UK), 2006; Marketing Planning  A Global Perspective, McGraw-Hill, 2005.

I have also worked as a business consultant for several multinational companies, as well as global organisations like World Bank.

You will be coming to Nigeria for the Global Marketing Strategy Conference in October this year. What are your expectations and what are you going to offer?

I am going to offer the participants a complete overview of the global marketing process. What should the manager be aware of and how can he or she overcome these hurdles?

I will show the participants how they can make an international marketing plan and how they can transfer it into cross-national financial metrics.

What is your assessment of the marketing profession, its history, the present, and its future?

The marketing profession has a great future, especially as being a representative for the customers' view. In five years time, companies' largest customers will be represented at the Board of Directors,  that is the ultimate understanding of integrating the customers' needs and wants into the core global strategy.

Although marketing acts as the live wire of every business, it most times does not receive the attention it deserves in terms of business spend. Why is this so?

Most CEOs are, for instance, engineers and they have followed the growth of the company through many product introductions. Basically, engineers have grown up with product development (up-stream) in the company, and they have seen marketing (downstream) more as an expense, instead of a value creator. 

Drawing from your experience in developed economies, what challenges will companies in developing nations who are looking to building global brands face?

Main challenge: The Internet has leveled the global playing field to such an extent that New York Times columnist Thomas Friedman titled his latest book The World is Flat. Many flourishing enterprises employ network business models that are quite different from conventional corporate command and control hierarchies.

What are the latest trends on global marketing today?

There are two main trends: One is 'Born Global'. One of the consequences of the “Flat World” is the “Born Global”, which is a company that is global right on from its birth. It is no longer the case that a company must establish itself in its home market before venturing overseas, and then only through tentative steps in neighbouring countries.

A number of SMEs (Small and Medium-sized Enterprises) successfully internationalised right from the start and go global very quickly. Here is the blueprint for high-speed internationalisation: (1) The company's products are unique, ingenious and innovative. They are also revolutionary and offer new ways of doing things. (2) The company's founder or others with a major role have wide experience and extensive contact networks from previous work in similar industries. (3) The company has strong relationships with key personnel from large and successful organisations. (4) The company has good relationships with influential figures in the industry who can provide support and insight in any areas where it lacks expertise (e.g. research institutions). (5) All the personnel are very much involved in the company and are eager for it to succeed.

The other trend is Global Account Management (GAM). Global Account Management can be understood as a relationship-oriented marketing management approach focusing on dealing with the needs of an important global customer (or account) in the business-to-business market. Consequently, GAM can be defined as an organisational form (a person or a team) in a global supplier organisation used to coordinate and manage worldwide activities, by servicing an important customer centrally from headquarters.

The importance of GAM strategies will grow in future because of the consolidation (M&As and global strategic alliances) which take place in most industries. This development means that big multinational customers are getting even bigger and more powerful with increasing buying power. At the Global Marketing Strategy seminar in Nigeria, I will discuss what the supplier can do about this development.

Is it possible for a local brand to develop its brand architecture to reflect the multicultural thinking and still retain its relevance in the local market?

One of the ways of creating a balance between local and global branding is to use the Franchise Marketing concept. A franchise is a symbiotic relationship between local entrepreneurs and an enabling institution. Franchisors and franchisees jointly own and co-develop the rights to a brand, technology or some other form of intellectual property. Franchises are businesses that have been systematised for replication. Most franchise networks create a long-term mentoring relationship between and among the franchisor and the various franchisees.

Franchising is democratic capitalism. It distributes ownership, wealth and power widely within a target demographic. People living in poverty yearn for jobs, but most have no choice other than high risk, low return self-employment in the informal sector. In developed economies, the relatively few naturally-gifted entrepreneurs create businesses which employ non-enterprisers. In the developing world, the formal economy creates so few jobs that most people are forced into low-productivity, copycat micro enterprises that rarely employ anyone other than the struggling owner/operator. Franchises almost always generate higher levels of employment than individually-owned businesses.

Tiny civil wars are going on everyday between individuals and factions all over the developing world. Franchises by their very nature require a co-operative win/win/win relationship between the franchisor, the franchisee and customers. Franchises supplying a critical social good such as essential medicines, clean water or renewable energy technology can even create a quadruple win.

Financing SMEs is a challenge in most developing countries. Franchise systems frequently offer creative financing packages to prospective franchisees.

If an individual franchisee fails, the franchisor will often take over that location temporarily as a company store until a new franchisee can be recruited. This operational continuity, called “conversion” in franchise parlance, secures creditors and reduces lending risk. Many franchise systems have such consistent performance that equity funding is available in addition to debt financing. Private capitalists exist in India, for example, who will jointly venture a new franchise location as an owner/investor in partnership with the franchisee owner/operator.

Far too many regions and countries in the developing world suffer low or even negative rates of real economic growth. Franchises can inject life into stagnant economies.

Microfranchising is proving to be a highly appropriate way for many MNCs to engage the local customers, suppliers, and business partners. The franchise business model is well-known and thoroughly proven.

Most MNCs already utilise it somewhere in their global value chain. Micro-financed and franchised networks of small, locally-owned businesses in emerging markets can complement traditional business units in mature markets. Shell, Unilever, Microsoft, and Vodafone, for example, are all experimenting with this approach.

What are the communications challenges open to local brands looking to play on the global scene and craft an exquisite conceptual structure that can survive majority of scenarios?

At the Global Marketing Strategy session in Nigeria, I will explain how viral Marketing can supplement existing communication media to create new value and buzz.