Market Globalization

According to the Levin Institute (2001), the term globalization refers to the increasing connections people, companies and states are forming around the world. The process of forming social and economic ties across vast distances is nothing new historically; however, technological improvements and liberal trade agreements have increased these connections greatly in contemporary times. One of the primary drivers of globalization has been in respect to market forces, whereby many consumer goods and services are now universally available, no matter one's geographic location or social setting. As a result of international marketing campaigns and corporate brand promotions, consumer desires and lifestyles around the world are increasingly converging.
Marketing globalization is a synergistic term combining the promotion and selling of goods and services with an increasingly interdependent and integrated global economy. It makes companies stateless, without walls, with the Internet an integral marketing and cultural tool. Understanding consumer needs within target countries helps formerly ethnocentric companies build a global marketing mix where product, price, place and promotion are geared toward specific country needs (Levin, 2001).
Market globalization has led to many economic globalization aspects. Economic globalization refers to increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, service, technology and capital. Whereas globalization is centered around the diminution of international trade regulations as well as tariffs, taxes, and other impediments that suppresses global trade, economic globalization is the process of increasing economic integration between countries, leading to the emergence of a global marketplace or a single world market. Depending on the paradigm, economic globalization can be viewed as either a positive or a negative phenomenon (Roger, 2010).
Economic globalization comprises the globalization of production, markets, competition, technology, and corporations and industries. Current globalization trends can be largely accounted for by developed economies integrating with less developed economies, by means of foreign direct investment, the reduction of trade barriers as well as other economic reforms and, in many cases, immigration (Roger, 2010).
Economic liberals generally argue that higher degrees of political and economic freedom in the form of free trade in the developed world are ends in themselves, produce higher levels of overall material wealth. Globalization is seen as the beneficial spread of liberty and capitalism. Jagdish Bhagwati (2001) , a former adviser to the U.N. on globalization, holds that, although there are obvious problems with overly rapid development, globalization is a very positive force that lifts countries out of poverty by causing a virtuous economic cycle associated with faster economic growth. Economist Paul Krugman (2006) is another staunch supporter of globalization and free trade with a record of disagreeing with many critics of globalization. He argues that many of them lack a basic understanding of comparative advantage and its importance in today's world (Krugmann, 2006).
Aside from market drivers, globalization can be attributed to other causes, including cost drivers, such as innovations in information technology and transportation; government drivers, whereby many governments have reduced trade tariffs and have embraced free trade agreements; and competitive drivers, which have seen corporations and businesses increasingly compete for market share around the world (Kevin, 2001).

Nowhere is marketing globalization felt more than in the stock market. Stocks rise and plummet on the "news" that a product or service is not faring well in some part of the world. Take crude oil as an example. If the cost per barrel rises, prompting gas prices to shoot through the roof, some stocks will still fall. If one country's political machine decries another nation's goods or services are bad, but societal demand runs rampant, stocks run amok. Marketers plan with damage control in mind. So they "brand" products and services, or get the name of the product or service known, to promote them in as many countries as possible, with particular cultures in mind Kevin, 2001).
1.1 Global Capital Markets Integration
Capital markets have to do with raising and investing moneys in various human enterprises. Increasing integration of these financial markets between countries leads to the emergence of a global capital marketplace or a single world market. In the long run, increased movement of capital between countries tends to favor owners of capital more than any other group; in the short run, owners and workers in specific sectors in capital-exporting countries bear much of the burden of adjusting to increased movement of capital. It is not surprising that these conditions lead to political divisions about whether or not to encourage or increase international capital market integration (Roger, 2010).
Those opposed to capital market integration on the basis of human rights issues are especially disturbed by the various abuses which they think are perpetuated by global and international institutions that, they say, promote neoliberalism without regard to ethical standards. Common targets include the World Bank (WB), International Monetary Fund (IMF), the Organization for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO) and free trade treaties like the North American Free Trade Agreement (NAFTA), Free Trade Area of the Americas (FTAA), the Multilateral Agreement on Investment (MAI) and the General Agreement on Trade in Services (GATS). In light of the economic gap between rich and poor countries, movement adherents claim “free trade” without measures in place to protect the non-capitalized will contribute only to the strengthening the power of industrialized nations (often termed the "North" in opposition to the developing world's "South" ( Rajesh, 2008).
1.2 Globalization in Emerging African Markets
There is a growing trend of investment in the African continent spurred by many diverse factors and players. The world’s rising demand for hydrocarbons and precious metals for high-tech devices means that the search for these resources will continue to penetrate regions that were under explored or cut off to the West and East due to import substitution policies of the latter part of the 20th century. In Africa, the relative stabilization of the political scene has meant that foreign companies are more likely to invest than before. The lack of ideologically polarized governments that had been prevalent in region during the Cold War also allows businesses to pursue market-driven objectives rather than kowtow to their national governments’ political orientation. The investors in the continent range from EU businesses seeking new markets now that the taint of colonialism has begun to wear off, to American energy companies seeking to diversify their holdings away from the politically and ideologically charged Middle East, to emerging countries seeking to find new markets for their growing industrial and services industries (Rappa, 2006).
Most notably, China has been the focus of much coverage of African investment. This trend has been reflected on by Africans who see in China a new south-south partnership that will reinvigorate African markets, as well as Western countries who see China as a new competitor for the consumption of resources. With this emphasis on China, many observers have failed to recognize the importance of the current hegemon in Africa: the Republic of South Africa. Though the Rainbow Nation may not possess the GDP or growth rates of China, or the other prominent emerging markets of Brazil, Russia, and India, the former apartheid state has significant trade links with the continent, especially in Southern Africa (Lynch, 2000).
This hegemonic status has been recognized by the other emerging nations by an invitation to South Africa to join their multilateral organization, BRIC (Brazil, Russia, India, China), in the spring of 2011. This move was questioned by the originator of the term BRIC, Jim O’Neill, who serves as chairman of Goldman Sachs Asset Management International, because of how small the South African economy measured compared to the original BRIC members.
However, he said that South Africa as a representative for the African continent made much more sense because the scale of the continent’s economy compares favorably to Brazil and Russia (Hervieu). South Africa is positioning itself as the Gateway to Africa, a theme repeated by President Jacob Zuma, so that it may gain access to BRIC markets and BRIC investment. As an entrance to the potential one billion consumer base, South Africa would appear to be a able partner in enabling countries to set up a base of future expansion onto the continent. When this expansion occurs, the BRICS will find that in many of the nascent African economies South Africa is already the dominant player. To further examine South Africa’s relationship with Africa, this paper will set out to cover the size of South Africa’s involvement, in which sectors this involvement takes place, and why the BRICS are interested in the Republic (Rajesh, 2008).
The formation of the BRICS singles an increasing interconnectedness between the Global South, namely a body that represents previously underdeveloped, colonized, and aid-dependent states. The ravages of globalization have been felt most acutely among these nations, but as the Global North recovers from the recent financial crisis, these nations are well-positioned to use their strengthened links to consolidate a place at the table of global power. Understanding the BRICS’s position in the world will lead to better analysis of what the new South-South alliance means for world geopolitics and trade (Gilpin, 2006).
Globalized markets may be changing too quickly to provide the security enjoyed by manufacturing workers in the 1950s. Setting up trade barriers in an attempt to slow the pace of change is not an appropriate response, as they would in effect throw out the baby (efficiency) with the bathwater (inequality). But a much better job can be done to soften the blow for those who are adversely affected and help workers adjust to the demands of a rapidly changing global economy (Rajesh, 2008).
1.3 The Global Marketing Mix
Known as the 4 P's of Marketing, product, price, place and promotion become greater challenges when applied to global marketing. If your company's marketing efforts are constrained by keeping domestic and international marketing messages the same, the challenge of branding, pricing in international currency, foreign distribution channels and promotional advertising may not translate well. Colgate once marketed Cue toothpaste in France without knowing Cue was a well-known porn magazine. Clairol's Mist Stick did not fare well in Germany since "mist" in German means "manure." And Italy's Traficante mineral water didn't fare well in Spanish-speaking countries as "traficante" means "trafficker" (Gilpin, 2006).
Full immersion is the best way for global marketers to get a feel for the target country. Take advantage of what are there established storefronts, factories, workers — if it is in your company's budget to purchase local venues and to hire local workers. Understand the language and the slang and research what consumers want and need. If budgetary constraints prevent full immersion into the target country, immerse yourself virtually through social networking, online meetings and Internet research (Gilpin, 2006).

1.4 The Evolution of Marketing Globalization
Companies evolve into global markets in four stages: domestic, international, multinational and global. Marketing strategy begins domestically at the home office and goes international by extension, usually because the company decides to export its products. After products go international, marketing mixes must change or adapt to multinational strategies. The global framework then expands to emerging global markets, which can be unpredictable, but opportunistic. Simply put: the domestic stage hosts the most controllable marketing strategies because the strategies play in one country only. Once you begin to market globally, you add more players into the mix. International adds exports, multinational adds companies on foreign soil and global is all of the above. Global marketing means that strategies must provide for volatile international markets and keep abreast of acquisition and logistical opportunities that affect the marketing mix (Rooger, 2010).
1.5 Positive effects of Market/Economic globalization
There are at least three positive financial effects of market globalization. "Per capita GDP growth in the post-1980 globalizers accelerated from 1.4 percent a year in the 1960s and 2.9 percent a year in the 1970s to 3.5 percent in the 1980s and 5.0 percent in the 1990s. This acceleration in growth is even more remarkable given that the rich countries saw steady declines in growth from a high of 4.7 percent in the 1960s to 2.2 percent in the 1990s. Also, the non-globalizing developing countries did much worse than the globalizers, with the former's annual growth rates falling from highs of 3.3 percent during the 1970s to only 1.4 percent during the 1990s. This rapid growth among the globalizers is not simply due to the strong performances of China and India in the 1980s and 1990s—18 out of the 24 globalizers experienced increases in growth, many of them quite substantial (Gilpin, 2006).

Despite many analysts' concerns about the inequality gap between developed and developing nations, there is no evidence to suggest that inequality increases as international trade increases. Rather, growth benefits of market globalization are widely shared. While several globalizers have seen an increase in inequality, most notably China, this increase in inequality is a result of domestic liberalization, restrictions on internal migration, and agricultural policies, rather than a result of international trade (Kevin, 2001).
Market globalization also has helped to decrease poverty around the world. Poverty has been reduced as evidenced by a 5.4 percent annual growth in income for the poorest fifth of the population of Malaysia. Even in China, where inequality continues to be a problem, the poorest fifth of the population saw a 3.8 percent annual growth in income. In several countries, those living below the dollar-per-day poverty threshold declined. In China, the rate declined from 20 to 15 percent and in Bangladesh the rate dropped from 43 to 36 percent (Kevin, 2001).
The final positive effect to be mentioned is the narrowing gap between the rich and the poor. Evidence suggests that the growth of globalizers, in relation to rich countries, suggests that globalizers are narrowing the per capita income gap between the rich and the globalizing nations. China, India, and Bangladesh, who were among the poorest countries in the world twenty years ago, have greatly influenced the narrowing of worldwide inequality due to their economic expansion (Kevin, 2001).
1.6 The negative effects of Market globalization
The Economic Commission for Latin America and the Caribbean (ECLAC) has proposed an agenda to support conditions for developing countries to improve their standing in the global economy. Economists have theories on how to combat the disadvantages faced by developing countries. However, the advantaged countries continue to control the economic agenda. In order to rectify the social injustice dilemma, international economic institutions (such as the World Bank and the International Monetary Fund) must give voice to developing countries. A solution is to issue global rules that protect developing countries. It is still difficult for leaders of developing nations to influence these global rules.
The influx of international corporations not only brings positive advantages regarding global financial transactions. Some may emphasize that the multinational corporations may raise education levels as well as the financial health in developing countries, but that only applies to the long term effects of economic globalization. In the short term, poor countries will become poorer and unemployment rates may soar. Automation in the manufacturing and agricultural sectors always follows the appearance of multinational corporations. This lessens the need for unskilled and uneducated workers thus raising unemployment levels. Also, in the developing countries where this phenomenon occurs, infrastructure to re educate these unskilled workers are not properly established which means a redirection of the government’s focus from social services to education (Rappa, 2011).
In order to create better economic relations globally, international lending agencies must work with developing countries to change how and where credit is concentrated as well as work towards accelerating financial development in developing countries There is a need for social respect for all persons worldwide. The Economic Commission of Latin America and the Caribbean suggests that in order to ensure such social respect, the United Nations should expand its agenda to work more rigorously with international lending agencies. Despite their title, international lending agencies tend to be nation-based. The ECLAC suggests that international lending agencies should expand to be more inclusive of all nations and they propose that there is a need for universal competitiveness (UN Marketing report, 2001).

Key factors in achieving universal competition is the spread of knowledge at the State level through education, training and technological advancements. Economist, Jagdish Bhagwati (2004), also suggests that programs to help developing countries adjust to the global economy would be beneficial for international economic relations.
Several movements, such as the Fair Trade movement and the Anti-sweatshop movement, have worked towards promoting a more socially just global economy. The Fair Trade movement has played a significant role in alleviating exploitation due to economic globalization. For example, Fair Trade sales account for 1.6 billion US dollars each year. The Fair Trade movement works towards improving trade, development and production for disadvantages producers. Furthermore, the movement works to raise consumer awareness of exploitation of developing countries. Fair Trade works under the motto of “trade, not aid”, to improve the quality of life for farmers and merchants by participating in direct sales, providing better prices and supporting the community (Lynch, 2003).
1.7 Conclusion
There are several definitions and all usually mention the increasing connectivity of economies and ways of life across the world. The Encyclopedia Britannica says that globalization is the "process by which the experience of everyday life ... is becoming standardized around the world." While some scholars and observers of globalization stress convergence of patterns of production and consumption and a resulting homogenization of culture, others stress that globalization has the potential to take many diverse forms. In economics, globalization is the convergence of prices, products, wages, rates of interest and profits towards developed country norms. Globalization of the economy depends on the role of human migration, international trade, movement of capital, and integration of financial markets. The International Monetary Fund notes the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions, free international capital flows, and more rapid and widespread diffusion of technology. Theodore Levitt is usually credited with globalization's first use in an economic context.